Sector intelligence - The industries in High Growth Markets 

Liz Claydon
UK Head of Consumer Markets
KPMG in the UK

With many parts of the world still grasping for growth, and global unemployment rates at historic highs, major companies ought to have their pick of the talent.  So why are so many struggling to fill roles, particularly in emerging economies? 

Tudor Aw

Partner

KPMG in the UK

KPMG's latest Technology Innovation Survey, 2012 found that more than 4 in 10 predicted that the world's technology innovatuon centre will shift from Silicon Valley to another country in the next four years.  Of the 40 percent group who believe Silicon Valley will not be the tech centre of the future, 44 percent pointed to China as most likely to take the lead as the world's leading innovation hub in only four years.

 
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John Leech

Partner

KPMG in the UK

China continues to maintain its position as the world’s largest producer and consumer of automobiles. As a result, most global automakers have increasingly focused their businesses and expansion plans on this exciting market. However, the automotive industry in China is now reaching a critical juncture, with overcapacity emerging as one of the greatest development risks it faces. KPMG’s recent Global Automotive Executive Survey 2012, which interviewed over 200 senior executives from the world’s leading automotive companies, found that 68.5 percent of survey participants believe that China will build up the most capacity by 2016.

Chris Stirling

Partner

KPMG in the UK

Western companies have been keen to enter the burgeoning East and South Asian markets, and they have typically done so through a variety of partnering arrangements with local players and government backed entities. These arrangements have provided mutual benefits to both parties: domestic partners have gained access to advanced western manufacturing technology and knowledge while Western partners have typically gained access to feedstocks and, importantly, local markets and knowledge.

Such relationships provide an attractive means for entering the market, but unless they are set up effectively they create complexities from a portfolio management perspective, and limit access and transparency of management information to the owning partners. We expect to see a continuation of the establishment of new JV structures, but we also anticipate a movement towards simplification and consolidation of existing ownership models to reduce complexity and drive efficiencies. Indeed, in recent years alternative methods for foreign entry have become more extensively available, including the wholly foreign owned entity.

Andy Cox

Partner

KPMG in the UK

One of the major predictions in KPMG’s renewable energy M&A report - Green Power 2011 was that 2011 and 2012 would witness a major increase in outbound investment from East Asia. This prediction looks increasingly accurate. This 2012 edition of KPMG’s report, Green Power 2012 found Asian companies announced 29 acquisitions of companies based outside Asia totalling US$2.1bn in 2011, a 50%+ increase on the 18 deals totalling US$1.3bn announced in 2010.

This trend for Asian outbound investment is certainly one that we expect to continue. East Asian international investment may grow rapidly in the coming years but it will not be the all-curing funding panacea for European and North American renewable energy companies.

Liz Claydon
UK Head of Consumer Markets
KPMG in the UK

Founded in Guangzhou, China, in 1906, Li & Fung, is the sourcing and logistics company that provides the operational heft behind China's dominance of consumer goods.  The company has become increasingly vertically integrated and now offers everything from product design and material sourcing to shipping services for retailers and manufacturers including Walmart, Toys "R" Us and Avon, distributing in more than 40 countries.

However, the landscape is shifting: multinationals looking to eke out growth in a reshaped economy must consider their options carefully.  It also means Li & Fung must stay on top of a changing marketplace while it juggles its own internal restructuring.  In this interview Dr William Fung discusses where Asian sourcing, and his company, will go next. 

Glynn Bellamy

Partner, Aerospace & Defense

KPMG in the UK

With UK, European and North American defence budgets under increasing pressure, the UK defence sector is looking beyond traditional markets to drive growth. It is certain that the traditional core domestic and North American markets for many UK defence suppliers are being impacted by public sector spending cuts of 10 to 20 percent.

The US is following a similar pattern, with more than US$100 billion in US defence savings. Against this backdrop, it is clear that UK corporates in the defence sector need to take advantage of Eastern markets to fill the vacuum left in the West – and India represents a particular opportunity.

Peter Latos Director, Transactions & Restructuring KPMG in Russia

Chris Croft Senior Manager, Transactions & Restructuring KPMG in the UK

In October 2011 the UN announced that the world’s population had increased to 7 billion – growth of more than a billion people in little more than a decade. 

Pendar Ostovar

Market Entry Specialist, Banking

KPMG in the UK

Banks are increasingly following their corporate clients into emerging markets to deepen relationships and mirror growth strategies. Deep knowledge of the local banking markets, the available entry options and regulatory frameworks are critical to successful entry. This global expansion trend creates an attractive opportunity for banks to leverage their existing client relationships to generate profits in growth markets, particularly through the provision of fee-based services.