Norway-Asia Business Review 2016-03 by Thai-Norwegian Chamber of Commerce

ISSUE 3 2016

NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

NORWAY ASIA BUSINESS REVIEW The Magazine of the Norwegian Business Associations in South and Southeast Asia

Norwegian Business Association opens for Business in Sri Lanka Brexit: Impact on Norway S P E C I A L

E N E R G Y

R E V I E W

SN Power in Asia: The Long Game Aibel and Statoil: Thailand Delivers Johan Sverdrup Electric Cars: Norway vs. Asia

NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

NORWAY ASIA

BUSINESS REVIEW The Magazine of the Norwegian Business Associations in South and Southeast Asia

Norwegian Business Association open for Business in Sri Lanka Brexit: Impact on Norway S P E C I A L

E N E R G Y

R E V I E W

SN Power in Asia: The Long Game Aibel and Statoil: Thailand Delivers Johan Sverdrup

Electric Cars: Norway vs. Asia

Cover Story

Norwegian Ambassador to Sri Lanka, Thorbjørn Gaustadsæther and newly elected President of Norwegian Business Association Sri Lanka welcoming Norwegian investors to the country. There is a small but thriving Norwegian business community in Sri Lanka, where players across many industries are making positive impacts to their local business communities. Pages 5-7 Editor: Axel Blom Journalists: Harvey Brock, Anton Bentzon, Sofie Lisby, Henri Viiralt and contributions from guest correspondents Operational Management: Vibeke Lyssand Leirvåg Director of Sales: Anders Magnusson Art Director: Pansak Chintanapakdee Production: Graphics-Related Co., Ltd. Concept Design: Spaulding & Associates Published by: Thai-Norwegian Chamber of Commerce in co-operation with Norwegian Business Association (Singapore) and other Norwegian Business Associations in Asia Editorial & Advertising: Norway-Asia Business Review, Thai-Norwegian Chamber of Commerce Mahatun Plaza, 14th Fl., 888/142 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Norway-Asia Business Review reaches Norwegian-related business executives and decision makers throughout the region including the diplomatic missions as well as government ministries in Norway and Norwegian sector-based organisations. Business Review is a quarterly business magazine and the contents reflects this. Each magazine has a main theme and the articles are centred around this theme. The magazine focuses on Norwegian-related stories from the region and issues that have impact or interest for Norwegian related businesses. Business Review is available in print as well as digital form through Issuu and Pressreader. Copyright © Thai-Norwegian Chamber of Commerce

NORWAY ASIA BUSINESS REVIEW ISSUE 3

2016

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5 FOREWORD President of Norwegian Business Association Sri Lanka, Finn Worm-Petersen welcomes investors to Sri Lanka

6 SPECIAL ENERGY REVIEW 16 SN Power is aiming to play a key role in developing Asia 17 Thailand is facing a tough trade-off as natural gas accounts for 70% of its power generation 20 Statoil has continued its relationship with Aibel Thailand for platforms designed for the Johan Sverdrup field

CONTENTS

14 Katja Nordgaard of Norway’s MFA gives us insight into how the ministry lends a helping hand to Norwegian businesses abroad 32 A Safe Harbour to capitalise on the vast array of opportunities in the booming Philippines

36 Yara recently a competing fertiliser business in India. We look at what the expansion means for Yara 38 Trawling for Sustainability: Norway is working with Thailand to improve its fisheries management

24 Electric Cars; we look at how Norway has become a world leader in the EV segment and what Asia can learn

42 High demand for competent airline pilots in Asia and the elite standards of Pilot Flight Academy make the two a natural match

6 ARTICLES

44 What If... Moving abroad for work is a reality but many fail to properly prepare not only for the stay abroad but also for their return

10 Brexit: Impact on Norway. What will it mean for Norway if the UK seeks a so-called Norwegian model?

34 Høst has made a lucrative business out of turning waste matter into high quality fertilisers

40 The India Clean Seas Conference brought together decision-makers within the marine and oceanology markets

8 Onwards and Upwards New President of NBAS, Leo Stornes, reflects on the Association’s role and future aspirations

12 Two distinguished professors reflect on using pollution controls as Infrastructure Investment

23 Aibel Thailand uses a practical approach to health and safety training to create a safer working environment and help attract new clients

New opportunities await Norwegian companies in Sri Lanka

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47 STATISTICS Norway and Asia

48 DIRECTORY Norway in Asia

S P E C IA L ENERGY R E V IE W

The unrelenting demand for energy is felt across the region. In Myanmar, the lack of reliable electricity supply means investors are reluctant to move forward. Neighbouring Thailand is in a tight spot since 70% of the energy supply comes from imported gas. The Philippines is facing frequent brownouts hampering business. Norway has valuable technology and expertise that can alleviate the situation.

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NORWAY-ASIA BUSINESS REVIEW

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FOREWORD

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Sri Lanka Joins the Ranks

ear readers, It’s with great pleasure and pride we D xwrite this foreword from Colombo, Sri Lanka to mark the establishment of the Norwegian Business Association Sri Lanka on 1 June 2016, the latest Norwegian chamber of commerce in Asia.

Many of us here in Sri Lanka have a long history and have seen ups and downs in the Norwegian-Sri Lankan relationship over the years, but matters have improved significantly since the war ended six-and-a-half years ago. Today we see a small but thriving Norwegian business community in Sri Lanka, where players across many industries are making positive impacts to their local business communities. Come and visit us and experience the ambiance, our lovely seafood and the genuine Sri Lankan hospitality while meeting exciting Norwegian business ventures and fully-owned companies in sectors like maritime and fishing, innovative agriculture, and beautiful hotels and creative hospitality ventures. There are of course a number of great companies in the IT sector, and I have established two companies in that industry over the years. This year we established a firm cooperation between IKT Norge and SLASSCOM. As a result NMFA has decided to support an initiative from IKT Norge to bring the “Lær Kidsa Koding” programme (Teach the Kids to Code) to Sri Lanka. This is an incredibly exciting project that links directly with Sri Lankan authorities’ (ICTA) ambition to bring coding into the curriculum and IT literacy to the young masses.

PHOTO: KIM WORM-PETERSEN

When I came to Sri Lanka in 1999 I did so to find costeffective solutions for our software development needs in Oslo. We had some second thoughts about the ethics of “buying the best brains” and exporting the results to the benefit of our home economy, but 17 years later that picture has changed a lot! Today, we see former employees and young talent right out of the universities starting their own companies and taking the knowledge industry further, with great potential to help solve many local challenges in transport, clean energy, waste management and other areas. We also see our applications and services competing well in emerging markets as Asia economies begin to digitise and countries provide better education, health care and public services to their growing populations. Sri Lanka is a great stepping stone to Asia for Norwegian companies and we look forward to welcoming you here! Sincerely, Finn Worm-Petersen President Norwegian Business Association Sri Lanka

NORWAY-ASIA BUSINESS REVIEW

Collective of entrepreneurs mend old wounds between Norway and Sri Lanka while creating new opportunities for both countries to develop

Best Foot Forward

June 2016, marked an important day for strengthening ties between 1Association xSri Lanka and Norway, by the official launch of the Norway Business of Sri Lanka (NBASL) in Colombo. HENRI VIIRALT

The initiative, which will guide new Norwegian businesses arriving to Sri Lanka and act as supporting body between existing Norwegian companies and the Norwegian Embassy, was ratified and launched by visiting Norwegian Deputy Foreign Minister Tore Hattrem and Deputy Minister of Foreign Affairs Harsha De Silva, at a special event in Colombo. Both recognised the huge potential for business communities of both countries to closely collaborate in key sectors such as ICT, tourism, agriculture, manufacturing, oil and gas, for mutual benefit. “The future for your country, as I see it, lies in the modernisation of the economic sector and opening up for

foreign investments. It is my conviction that Sri Lanka can and will play an important role in the global value chain. A nation could hardly be placed more strategically in terms of geography than you are,” stressed Mr Hattrem while addressing the local press at the event. The launch of NBASL is not only important for the business sector, but can be seen in the context of reinvigorating the close ties and bilateral cooperation that both countries once enjoyed. Their relationship became strained during the civil war when Norway played the role of a mediator between the Sri Lankan government and the Liberation Tigers of Tamil Eelam in penning a peace treaty. Due to the conflict, Sri Lanka seemed an unsafe environment

ISSUE 3 2016

for tourists and investors alike – an image that the country is now trying hard to change. Spearheaded by Mr Finn WormPetersen, Group CEO of Exilesoft Corporation, a software development company headquartered in Colombo, NBASL began as an initiative by a small group of Norwegian businessmen and the Norwegian Embassy in Sri Lanka. With Ambassador Thorbjørn Gaustadsæther as a major driving force, discussions on forming the association began late last year, followed by formal talks in January 2016, and culminating with the signing in June. “The process of setting NBASL up got started after we got a new ambassador last year. Thorbjørn Gaustadsæther is perhaps the first ambassador we’ve seen with a very strong business agenda. He’s very practical and results oriented, so we immediately formed a mutual understanding. The same goes for Børge Brende, the current Minister of Foreign Affairs in Norway, who has a very strong vision on creating jobs and opportunities, and growing Norwegian business interests outside of the country. There’s been a paradigm shift in the Ministry of Foreign Affairs, as a whole the way I see it,” Mr Worm-Petersen said.

NORWAY-ASIA BUSINESS REVIEW

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PHOTO: ISTOCKPHOTO

He points out that the initiative serves the interest of both the business community and the embassy as the latter lacks a commercial arm, so it benefits them directly by acting as a gateway to the commercial sector and the key issues that the business community is facing. “I think as Norwegians, we’re a bit introverted as people. What we try to achieve with NBASL is to create a better network and the reception between people on the ground and those that have just arrived,” Mr Worm-Petersen expands. “Previously we’ve seen people arrive to Sri Lanka on delegations without actually meeting the local business community. We try to create an environment where they come in, have a lot of contact points and can quite quickly find out what works and what doesn’t, what the embassy can do for them and what are their own responsibilities.” One of his initial motivations was an idea to connect industries in their respective countries, and as an ICT professional his plan was to link the Sri Lanka Association of Software and Service Companies (SLASSCOM) and its counterpart, ICT Norway. Ambassador Gaustadsæther promoted the idea of sending an application through the Ministry of Foreign Affairs with a letter

to ICT Norway. They returned with a very favourable response, which helped push things forward and also became validation for the initiative’s ability to get things done. As a result, a few programmes have already been submitted and put into place through the MFA and ICT Norway, such as the Lær Kidsa Koding (Teach Kids to Code), a coding club for kids aged 5-18 all around the island. The first batch saw 40 young coders making their first functional Android app. Mr Worm-Petersen sees a lot of potential for vocational training and collaborative projects in Sri Lanka moving forward. “We’re making a big push in the maritime industry since Norway has hundreds of years of experience to leverage on, and we would like our government to become more heavily involved, perhaps by having research conducted in Sri Lanka. Rather than focusing on pure trade, we would like to deliver permanent mutual value.” Reflecting back on his 17 years in Sri Lanka, Mr Worm-Petersen says he was initially torn between what they were doing, as it had both a positive and a negative effect. He and other Norwegian tech entrepreneurs were bringing in

competence and salaries to build the knowledge economy in the nation, but at the same time they were taking the best brains in Sri Lanka and exporting the results to benefit foreign parties. A case in point is Facebook and the London Stock Exchange, both of which are running on Sri Lankan technology, but other than bringing in salaries it has a very limited effect on the economy. However, Mr Worm-Petersen is now seeing a trend where the 70,000 strong IT workforce is becoming more inward looking, giving rise to 1,000 start-ups and spinning off to a myriad of local businesses, a move he believes will benefit the Sri Lankan society as a whole. “I came here with the idea of sourcing talent at low cost and exporting the results outside, but now Asia is fast becoming my biggest market. I think that opportunity has not been observed by Norwegian businesses – we still think we need to be successful on main street Oslo before we can go anywhere. My view is now totally different. If you’ve proven your product, get the hell out because Norway is too small and Asia is opening up in so many sectors. This region is the new proving ground and the future for Norwegian businesses.”

NORWAY-ASIA BUSINESS REVIEW

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PHOTO: NHST MEDIA GROUP

A couple of months into his new position as President of the Norwegian Business Association Singapore (NBAS), Leonard Opitz Stornes reflects on the Association’s role today and in the future.

Onwards and Upwards

eo Stornes is no stranger to the world of international business. As the L xManaging Director and board member of NHST Media Group in Asia he is responsible for the groups businesses in Asia, a fast paced media SOFIE LISBY

organisation with international reach.

The group own renowned titles including Norway’s leading business daily, Dagens Naeringsliv, as well as TradeWinds, Upstream, Intrafish, Recharge, Mynewsdesk and Nautisk. “NHST Media Group is a media owner and news provider operating in all the core industry segments where NBAS members are engaged – predominantly within shipping and maritime, energy and oil, renewable energy and seafood,” explains Mr Stornes. “We have a strong focus on new media and digital related development. It is important to understand the trends and current driving forces within the various industries in order to adopt a holistic overview, understand how our members experience

the current operating environments” A core part of the work of NBAS has always been to provide a forum for Norwegian organisations, their executives and their employees to meet, network and discuss the current business environment. Forums, seminars and talks will remain core activities, according to Mr Stornes. “We organise a series of breakfast and lunch talks where we aim to have speakers and organisations presenting topics related to market updates and new knowledge and tech developments of relevance,” he says. “The aim is to provide our members with updates that are of relevance for their businesses in Singapore. The focus areas can

be anything from tax, pensions and legislations both in Norway and Singapore, to micro and macro updates on the many markets and industries where Norwegian owned businesses in Singapore are active within Asia. “We also invite our members to present their current activities and business activities towards the Norwegian business community in Singapore at large. We organise social gatherings where newcomers to Singapore can network and get to know the established Norwegian business community. We also help stage larger annual events as Norway Asia Business Summit and the annual Seafood Dinner.” According to Mr Stornes the nature and extent of Norwegian businesses in Singapore has changed over the years, in part testament to the city state’s welcoming businesses environment. “Twenty years ago many Norwegian companies setup business entities in Singapore due to the tax incentives,” explains Mr Stornes. “Many are today motivated to have representation in Singapore because “everyone else is here” and Singapore is one of the easiest places in the world to establish a company”. “Singapore remain the country outside of Norway with the most Norwegian owned businesses, which today count close to 250 companies. Team Norway in Singapore is represented by the Embassy, Innovation Norway, Norwegian Seafood Council and NBAS. Together we represent know how and can coordinate activities that aim to benefit all Norwegians and Norwegian owned businesses in Singapore. NBAS is also blessed with a very professional secretariat that ensure we operate as a very effective business association.” NBAS places a high emphasis on staying current and relevant to the needs and wishes of the Norwegian business community, explains Mr Stornes. That means staying on top of trends and developments and knowing what affects businesses in Singapore and Norway. “There are many factors influencing our operating environment in Singapore and Asia overall,” says Mr Stornes. “Obviously the current status of the shipping, oil and energy industry segments has a profound impact on all companies operating in these and related industries. The supply and service related companies within oil and shipping have experienced pressure from many different angles and the focus is geared towards defining market opportunities and innovation and exploring where and how core competencies can be applied to spark renewed business growth.” Mr Stornes points out that the key for NBAS to stay relevant and supportive is to engage with members and understand their changing needs. “As an example, we see a trend of smaller Norwegian-owned consultancies and

setups seeing potential for growth in Asia and using Singapore as a base. NBAS aims to be a resource both for large and smaller companies; this is also reflected within our board where we have a cross section of industries and functions represented to help us understand the current driving forces and how we can further improve what NBAS can offer the Norwegian business community in Singapore, regardless of organisational size and industries.” In the years to come more and more companies are looking to Asia, and for good reason, according to Mr Stornes. “Asian markets collectively represent incredible potential for growth capitalisation. The growing middle class drives demand for products and services that consumers could not afford in the past. The rapid digitalisation in Asia also represents opportunities for companies geared towards establishing products and services that are tailored the digital growth trajectory in Asia.” However, the relationship and growing interaction between Asia and Norway also benefit companies at home and Mr Stornes highlights the potential for research and knowledge generation. “We utilise the communication channels available to us and developed over a long period of time,” he notes. “We also want to better explore how current micro and macro trends in Singapore and wider Asia can be better explored via the many talented Norwegian students taking their bachelor or master degrees at universities in Singapore. It is important to engage with research institutions to better define an issue we want a better understanding of or a holistic overview on current status quo and possible future opportunities. Much of what potentially can be concluded from research done locally in Singapore can be channelled to others both in Asia and Norway.”

Facts

One of the main activities of the Norwegian Business Association Singapore (NBAS) is the annual Norway-Asia Business Summit, arranged in association with the Norwegian business associations and chambers in Asia. In 2017 the Philippines Norway Business Council will host the seventh edition of the Norway-Asia Business Summit. Started by the Norwegian Business Association (Singapore) in 1998, the Norway-Asia Business Summit has evolved into a meeting place for Norwegian industry in the region, the support apparatus of the Norwegian government and the diplomatic missions in the region. The Summit will present opportunities for Norwegian companies in the region, as well as for colleagues coming from Norway, for a rich mix of discussions on business in Asia, Asian economics and Asian politics.

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NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

What will it mean for Norway if the UK seeks a so-called Norwegian model?

Brexit: Impact on Norway

arely had the last votes in the UK’s historic referendum on EU B xmembership been counted before pundits left, right and centre were discussing the question on everyone’s lips: now what? One possible SOFIE LISBY

outcome gained momentum: the prospect of the UK pursuing the socalled “Norwegian model”. The term refers to Norway’s special relation with the European Union through its membership of the European Free Trade Association (EFTA), which, besides Norway, counts Iceland, Liechtenstein and Switzerland. The EFTA (minus Switzerland) is brought together with EU’s single market by the European Economic Area (EEA) Agreement, an international agreement which enables the three EFTA states of Norway, Liechtenstein and Iceland to participate in the single market. The EEA Agreement covers the so-called four freedoms, i.e. the free movement of goods, capital, services and persons, plus competition and state aid rules and horizontal areas related to the four freedoms.

Pros and cons

One of the main points – and contention point, seen from a UK

standpoint – of the Norwegian model is that Norway, and any of the 31 EEA member states for that matter, must allow the free movement of labour from within the EU, something that Leave voters in the UK find hard to swallow. In addition, Norway still sends hundreds of millions of Euros to Brussels each year (the figure ranges anywhere from €447 million to €860 million depending on whom you ask), and, as Ben Chu, economic editor of the Independent newspaper puts it, “to have access to the single market a non-EU country also has to play by single market rules”. In other words, Norway implements most of the EU laws domestically – around 75 percent, to be precise – yet has no say in the making of these laws. The country has no representation on the European Commission, no Europeans parliamentarians and no spot around the European Council table of ministers.

So why does it make sense for Norway to have this model? One of the main differences between full EU membership and EEA membership is that the EEA Agreement does not cover the EU’s complex and often criticised Common Fisheries and Common Agriculture Policies, and states are no longer bound by the EU’s VAT Treaty, meaning they can regulate their own VAT rate to stimulate the economy. The EEA Agreement also does not cover the EU Common Trade Policy; the Common Foreign and Security Policy; the Customs Union; Justice and Home Affairs (although EEA countries are part of the Schengen area); or the Monetary Union.

Welcome to the club – or not

These are some of the topics that the UK will need to discuss in the coming months and years. However, even if the British population decides on a Norwegian model, it is by no means guaranteed that Norway will welcome the UK into the EFTA with open arms. As a founding member of the EFTA and by far the association’s largest member, Norway enjoys special privileges and bargaining powers within the bloc and acts as a common voice for EFTA in the EEA. If the UK – a much larger country by any measurement – were to join, that position may be threatened. In an email to the Independent newspaper, Monica Mæland, the Norwegian industry minister, said it is far from a clear-cut case that Norway should welcome the UK into the EFTA. “Britain

With the compliments of 11 ISSUE 3 2016

NORWAY-ASIA BUSINESS REVIEW

On the bright side

PHOTO: ISTOCKPHOTO

must first clarify its position,” she said in the email. “Then the EU must decide how they want to work with this and then we need to decide on our position. So it’s too early to decide on a possible expansion of EFTA.” Likewise, in an interview with Norwegian daily Aftenposten, Elisabeth Vik Aspaker, the Norwegian minister for EEA and EU Affairs said, “It’s not certain that it would be a good idea to let a big country [such as the UK] into this organisation [the European Free Trade Association]. It would shift the balance, which is not necessarily in Norway’s interests.” Decisions in the EFTA are made by consensus, effectively giving each member state veto rights. As pointed out by the Guardian newspaper, by keeping the UK out of the EFTA, Norway would in effect block the UK from entering the EEA Agreement as only EFTA and EU countries can enter the EEA Agreement. Several experts argue that a UK entry into the EFTA would shift the balance of the agreement; one of the concerns is that the UK could want changes in the accord and use its clout to drive them through. The combined population of current EFTA nations is 14 million, compared with the UK population of 65 million. Another concern is that EFTA has signed bilateral trade agreements with 38 countries and that if the UK joined, those trade agreements might have to be renegotiated and become more complex as a result.

Others point to the benefits of having the UK as a EFTA member state. According to the Guardian newspaper, Audun Lysbakken, the leader of Norway’s Socialist Left party, has argued that the EEA agreement should be renegotiated with the UK’s help, saying countries “outside need a better model for cooperation with the EU than the current EEA Agreement”. He said he was amazed that his government did not want to have an open debate about a new relationship with the EU. “Throughout the spring, the government has been adamant that the EEA is not a good model and it is not something they would recommend to the British. Now they suddenly want to leave it as it is,” Lysbakken said. Raoul Ruparel, co-director of Open Europe, an online source for upto-date analysis on the UK referendum, also points to some ways in which Norway can benefit from having the UK at the table. “Trade between UK and Norway accounts for around 16 percent of total Norwegian trade – more than all the other countries outside of the EU with which it has trade agreements combined,” he writes on Open Europe. “As such, it would be a quick way for Norway to secure a free trade agreement on good terms with a key trading partner. Furthermore, it could also help boost EFTA’s profile and leverage in future trade negotiations.”

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Facts

The European Free Trade Association (EFTA) is an intergovernmental organisation set up for the promotion of free trade and economic integration to the benefit of its four Member States. The association was founded in 1960 by Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom. Finland joined in 1961, Iceland in 1970 and Liechtenstein in 1991. In 1973, the United Kingdom and Denmark left EFTA to join the EC. They were followed by Portugal in 1986 and by Austria, Finland and Sweden in 1995. Today the EFTA Member States are Iceland, Liechtenstein, Norway and Switzerland. The Agreement on the European Economic Area, which entered into force on 1 January 1994, brings together the EU Member States and the three EEA EFTA States — Iceland, Liechtenstein and Norway — in a single market. The EEA Agreement provides for the inclusion of EU legislation covering the four freedoms — the free movement of goods, services, persons and capital — throughout the 31 EEA states. In addition, the Agreement covers cooperation in other important areas such as research and development, education, social policy, the environment, consumer protection, tourism and culture, collectively known as “flanking and horizontal” policies.

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Game theory techniques and regarding pollution control as infrastructure could end haze over Indonesia’s palm oil industry

Pollution Controls as Investment

il to the fire: Indonesia's slash-and-burn method to produce palm oil O xspreads haze through the region, forcing neighboring Singaporeans to wear masks EUSTON QUAH AND JOERGEN OERSTROEM MOELLER. REPRINTED WITH PERMISSION OF YALEGLOBAL ONLINE OF THE MACMILLAN CENTER AT YALE, YALEGLOBAL.YALE.EDU

Despite political pressures over many years and various enforcement measures, palm oil producers in Indonesia continue to slash and burn to clear land, harassing neighbouring countries with transboundary pollution. Simple economics may offer a new approach for slash-and-burn agriculture, which if successful might also have relevance for similar environmental encroachments. Farmers and plantations must find it profitable to ditch slash and burn, and those demanding a haze-free life must contribute financing. Benefits and costs must be designed in such a way that no alternative exists making countries better off – creating a win/win situation for everybody taking part. Palm oil is the world’s most competitive vegetable oil with global production more than doubling since 2000 and expected to grow even more as advanced economies favour natural oils over artificial trans-fats for health reasons. The palms, native to Africa, were transferred to Malaysia in the 20th century and later to Indonesia. Today, that region produces more than 80 percent of the world’s palm oil.

Economic losses in health, tourism and cancelled flights along with school and business closures are an indisputable consequence of haze, but do not hit those responsible. The Asian Development Bank estimated the 1997 costs of haze to be USD 9 billion, and that does not include the negative images of deforestation and pollution, highlighted by activists and in turn leading to decreased foreign direct investment. Often, the burning of fields gets out of control, triggering wildfires with impacts that are difficult to estimate. The cost of switching to nonburning methods is estimated at USD 1.2 billion. The only way to change producers’ behaviour is bridging the cost difference between slash-and-burn versus nonburning methods. Those who resent the pollution must invest D 1.2 billion to avoid the D 9 billion in costs. Uniform cross-the-board measures won’t work. About 40 percent of the haze originates from plantations run by large corporations and 60 percent from small landholders including subsistence and indigenous farmers. The large corporations have the financial resources

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PHOTO: ISTOCKPHOTO

to ditch slash-and-burn methods, but the small operators do not and cling to traditions. Market forces won’t work. Slash-and-burn is less costly than environmentally friendly methods relying on manpower, heavy machinery or new technologies. Under current market conditions – low prices due increasing supply amid falling demand as well as currency volatility and competition from soybean oil – the initial investment will, at best, be profitable only in the long run and burden the producer with a shortterm cash drain.

Market forces won’t work. Slash-and-burn is less costly than environmentally friendly methods.

If forced to switch to expensive methods and if the governments could enforce regulations, small operators would close. Lacking coordination or influence, small farmers cannot easily hike the market price for palm oil and they resist pressure, legislation and rules. Politicians are understandably reluctant to target a major contributor to the domestic economy, estimated at about 5 percent of Indonesia’s GDP. Governments and environmentalists could disrupt the economic calculus by paying rewards or subsidies to small landholders that use haze-free methods. Such a system anchored in financial rewards or subsidies, aiming to improve methods and increase enforcement, would change the economic calculus. High rewards

NORWAY-ASIA BUSINESS REVIEW

for those who act swiftly could create a group of pioneers who demonstrate the advantages. New technologies and synergies might eventually reduce cost differences and the need for subsidies, but development of new technology is held back by a lack of economic incentives. Such a system would not avoid payouts to large corporate plantations, and organizers could borrow from methods in European countries that encourage collecting waste to generate energy.

It may seem unfair – like extortion – to ask the victims to pay out to avoid being harmed.

The large corporations could do more to reduce haze, but many hide behind the small farmers and the government is lenient. Media reports this year disclosed fires in concession areas managed by six companies. The only solution is to finance the costs for small stakeholders to switch methods of land clearance. It may seem unfair – like extortion – to ask the victims to pay out to avoid being harmed. But realistically, many in Southeast Asia may be willing to pay to end the annual choking haze that can last three to four months. Such a policy conforms with welfare economics: A policy enhances welfare if those who are better off can compensate those who lose and still be better off. If such a policy were left to countries directly involved in financing, then the amount should be distributed according to relative negative impact. A 2004 study suggests that about 94 percent of the victim damages are in Indonesia,

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5 percent in Malaysia and 1 percent in Singapore. Game theory economics suggests that if victims share the costs of controlling pollution in proportion to their damages then no country would be worse off, no country should be better off by leaving the agreement and no alternatives exist that make some countries better off. But political realities rarely work as smoothly as economic theory. Haze has so far been classified as an environmental problem, relevant only for those producing the pollution and those suffering from the effects. Such a narrow focus might be replaced by classifying such haze as an element in economic and social development. As such, preventing the burning and the economic consequences belongs among the many activities undertaken by developed countries as well as international institutions like the World Bank, the Asian Development Bank and the newly born Asian Infrastructure Investment Bank under the label of development assistance.

A rewards system for farmers could serve as a template for cross-border environmental problems.

Lending expertise and financial support would improve environmental conditions in Southeast Asia, saving the region’s countries billions of dollars while modernizing production methods used primarily by small landholders. The benefits of transforming this agricultural sector in Malaysia and Indonesia might deliver spinoffs to other sectors in the economy including agricultural machinery. And over the long term, the

health benefits might be considerable as is the case for switching to a more modern production structure and obliterating the image of a sector mired in outdated methods. Another substantial if nontangible benefit: Accusations by activists about the sector not being a good corporate citizen would no longer be warranted. The world is trying to get a handle on climate change and environmental problems with limited success. Agreements to limit carbon dioxide emissions as a result of the Paris agreement, to go in effect in November, are encouraging but not enough. A rewards system for small stakeholders in economies may serve as a template for similar cross-border environmental problems to analyse production methods, technology and market structure and develop financing and enforcement systems, making it profitable for polluters to switch into cleaner production methods. The underlying assumptions include that people are willing to pay for not enduring pollution, small stakeholders will respond to economic incentives, and international financial institutions are prepared to classify reduction of pollution as infrastructure improvements and therefore eligible for support. If so, the world may have a much-needed tool to act against global pollution. Euston Quah is professor and head of economics with Nanyang Technological University, Singapore. He is also president of the Economic Society of Singapore. Joergen Oerstroem Moeller is visiting senior fellow, ISEAS Yusof Ishak Institute, Singapore. He is also adjunct professor with the Singapore Management University and Copenhagen Business School and an honorary alumni of the University of Copenhagen.

Upper left: A hazy day on Thailand’s Andaman coast. The haze is caused by forest and peat fires on Sumatra island. Above: A tropical forest fire causing plenty of smoke.

PHOTO: ISTOCKPHOTO

NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

PHOTO: THAI-NORWEGAIN CHAMBER OF COMMERCE

One of the core activities of the Norwegian Ministry of Foreign Affairs is assisting Norwegian business abroad.

A Helping Hand

atja Nordgaard, Director of the Section for Economic and K xCommercial Affairs, Norwegian Ministry of Foreign Affairs, gives us insight into the Ministry’s work. SOFIE LISBY

On 10 October this year, Singapore’s President Dr. Tony Tan Keng and his wife stepped off a plane in Oslo in what was Singapore’s first official state visit to Norway. The visit – an invitation from His Majesty King Harald V – was aimed at strengthening cooperation between the two countries in general and more particularly in industries such as maritime, offshore, education and research. It is also the latest example of Norway’s increased focus on developing and supporting businesses at home and abroad. “For Norway as for many other countries, being part of the global economy is extremely important and key to the development of our economy,” explains Ms Katja Nordgaard, Director of the Section for Economic and Commercial Affairs. “In an interconnected world, economies, big and small, rely on trade and interaction with the outside world. The Norwegian economy has always been open and relying on trade with other countries but we have become increasingly aware of the need for transforming our economy

from relying very heavily on our oil and gas industry to shifting the focus to new sectors. We also need to attract foreign investors and competence to Norway in order to further develop our industries and research environments. Promoting Norway as a tourist destination is of course part of this.”

Tight cooperation

To help businesses tap into global potential, the embassies play a key role. The Norwegian Ministry of Foreign Affairs works closely with various industry-related organisations to better support businesses abroad in a network referred to as Team Norway. Innovation Norway (IN) is an important instrument for innovation and development of Norwegian enterprises and industry with offices all over Norway and in more than 30 countries. The Norwegian Seafood Council helps develop new markets for Norway’s extensive seafood industry. Likewise, Intsok – Norwegian Oil and Gas Partners, a network of over 220 businesses and organisations in the oil and gas industry, provides support in

more than 15 key markets through advice, meetings, workshops and seminars. And the list goes on. “It is the role of the Section for Economic and Commercial Affairs to help create the best possible assistance for Norwegian businesses abroad by making sure that our embassies have the right tools and knowledge,” says Ms Nordgaard. “Our focus on economic diplomacy and the importance of assisting Norwegian companies on the international scene has increased in importance. It is crucial that the Ministry of Foreign Affairs and other partners of Team Norway do what it takes to assist companies in their internationalisation process. The embassies and IN offices are also key actors in discovering new opportunities in their countries both when it comes to investment possibilities, as well as talent pools and interesting research environments that can complement what is going on in Norway. This, of course, requires that we have a good understanding of Norwegian business sectors and their needs and potential. According to Ms Nordgaard, the efforts of the Ministry of Foreign Affairs abroad vary depending on the country in question – in some countries entering the local market is more straight forward and businesses in a wide range of industries do well on their own. However, in some markets there may be various barriers such as differences in business culture and structure, language issues or differences in political systems. Presence through embassies provides the necessary

NORWAY-ASIA BUSINESS REVIEW

insight for Norwegian businesses and they can play a major supporting role for companies trying to enter the market. “Offering support is best done in a joint effort from the Ministry, our embassies and general consulates and other agencies within Team Norway,” explains Ms Nordgaard. “Our aim is to create long term value for Norwegian companies and society, but also for the countries in which they operate. In practical terms that could mean giving advise on local conditions and frameworks, how to go about finding local partners, making sure businesses have trustworthy relationships with local actors and facilitating access to environments where new businesses normally don’t have access. It can be very difficult and expensive for a small company in Norway to access relevant information and networks on their own.”

A holistic approach

However, help on the ground is not the only way in which the Ministry of Foreign Affairs can help business abroad. According to Ms Nordgaard, the Ministry takes an increasingly holistic approach, looking at a wide range of initiatives, including official visits, business delegations, industry-specific research trips, seminars and familiarisation trips, amongst others. The Ministry also arranges media trips to Norway in order to create greater awareness abroad of the country. “The work of the Section for Economic and Commercial Affairs is not just about supporting businesses abroad but also about how our embassies can be even more visible and supportive in attracting investment and competence back to Norway,” explains Ms Nordgaard. “Recently, we have seen an increased interest in cooperation with the MFA from some of the 40 Norwegian industry clusters– like for example the Norwegian Medtech and Edtech clusters. It all breaks down to taking care of national interests and value creation through international cooperation.”

ISSUE 3 2016

IT technologies for example,” says Ms Nordgaard. “We have a lot of competence in Norway, which has developed around our oil and gas industry and we are confident this can be redirected towards other sectors. We also have know-how in maritime industries, fisheries and aquaculture and the conservation of the sea, sectors that are high on the global agenda. It is essential that we continue to lead in these areas in order to continue to develop the economy and attract investors to Norway.”

The Norwegian way

The issue of sustainable business practices is always part and parcel of every effort and initiatives such as business delegations and seminars where the Ministry and the Section for Economic and Commercial Affairs are engaged in. There is a clear expectation from the government that Norwegian companies and organisations abroad exercise best practices and have a clear understanding of corporate social responsibility with respect to the environment, employees and the local community. So to what extend is the work of the Section for Economic and Commercial Affairs political? “I wouldn’t say our work is political as such,” says Ms Nordgaard, “but there is a clear understanding that in order to reach the new Sustainable Development Goals or to fulfil the Paris agreement on climate change, the private sector needs to play a vital role. There is also a strong message and an expectation form society and from the government that businesses are operating in a manner that is consistent with agreed international standards. It can be tough competition

if others are not playing by the rules, but I am convinced that responsibility and good values throughout the business chains is a long-term gain and a competitive advantage in the end. Young, resourceful people want to work for companies that are responsible and sustainable so it is also a matter of attracting the best talent. In addition, very often Norwegian companies have a flat organisational structure, which can be very motivating; people feel they are seen and are given opportunities and can take part in the decision making. I believe these aspects act as competitive advantages for Norwegian companies and that this model will help us attract international talent and being successful on the international market in the future.”

. .

Facts

The Norwegian government expects Norwegian companies, private and public, at home and abroad, to adhere to best international practices. That means taking responsibility for the climate and the environment, human rights and workers’ rights as well as taking measures against corruption, in line with the OECD Guidelines for Multinational Enterprises; the UN Guiding Principles on Business and Human Rights and UN’s Global Compact initiative. Transparency and reporting requirements are key tools in the development of best practices and large companies are obliged to report on their corporate social responsibility efforts.

The need for change

As the Norwegian economy changes, so does the demands on how the Ministry of Foreign Affairs operates. The Norwegian economy has seen a downturn as a consequence of the falling price of oil and there is a growing acknowledgement in both the private and public sectors of the need to diversify interests through innovation and alternative ways of investment and value creation. The Ministry of Foreign Affairs is not oblivious to this. “The world is heading in a direction of more carbon free industries and we see that the Norwegian economy and business sectors need to reorient themselves and expand into new sectors, such as renewable energy, bio and new

PHOTO: NORWEGIAN MINISTRY OF FOREIGN AFFAIRS

Upper left: Katja Nordgaard, Director of Section for Economic and Commercial Affairs at the Ministry of Foreign Affairs at the Norway-Asia Business Summit during her tenure as Norwegian ambassador to Thailand in 2014. Above: Norway’s Ministry of Foreign Affairs located in central Oslo.

NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

PHOTO: SN POWER/JAN CEDERWALL

Global power developer with more than a hundred years of experience is aiming to play a key role in developing Southeast Asia

The Long Game

n 2002, two Norwegian state entities joined hands to establish a Iplayer xhydropower company that would eventually become an international a mandate to contribute to economic growth and sustainable HENRI VIIRALT

development in emerging markets. Statkraft Norfund Power Invest AS (SN Power) was a 50/50 joint venture between Statkraft and Norfund (Norwegian Investment Fund for Developing Countries), which even in its first few years of operations managed to enter Sri Lanka, Peru, India, Chile, Nepal and the Philippines in rapid succession. Although it is looking at other renewables as well, when it was decided that the company would stretch outside of the Nordic region, it would bank on its core competence, hydropower, which currently makes up 19% of the global electricity supply and nearly 98% in Norway. In 2013, Statkraft and Norfund signed an agreement to restructure and prolong their cooperation within the renewable energy sector, creating a new company, SN Power AS, with a focus exclusively on developments in Southeast Asia, Africa and Central America. Jan Cederwall, Country Director, Myanmar, draws upon 25 years of power development expertise ins Southeast Asia, having developed gas, coal and hydropower projects for SN Power and its predecessors Nordic Power Invest and Nordic Hydropower. “This entire Southeast Asian region needs power. It’s growing very quickly and electrification is still at a very low level. We know that

power is a key element in the development in any country, and currently only 1/3 of the population in Myanmar has access to it. There is a lot of untapped potential here,” Mr Cederwall said. He is quick to point out how crucial it is to develop projects in a sustainable way, not driving people off their lands and destroying natural habitats. All the projects that are being considered need to satisfy a variety of technical, ecological, social and financial criteria, and play an overall part in developing the host country. “Identifying projects is a long and careful process. There have to be certain natural elements present, such as rivers and mountains with enough water flowing downstream; that’s the starting point. If you look at a map of Southeast Asia, the centre part is largely flat. The mountains, creating a horse shoe around Thailand, are in Laos, Myanmar and Vietnam, and these countries have a lot of hydropower to harness.” Once a potential site is confirmed, the next phase will deal with identifying what impact the project may have on the surrounding flora and fauna, not to mention the local communities. If there will be an impact, is there a way that SN Power can mitigate it, or will the project do more harm than it’s worth?

This study phase will typically take anywhere between 2-5 years. Working in a country like Myanmar can be extremely challenging at times and take a certain leap of faith as the country is going through decades’ worth of changes in a matter of years, which means that predictability becomes of the utmost importance. That being said, there is no “preset formula”. Each project is unique in its own ways. SN Power builds on Statkraft’s more than a hundred years of developing hydropower and the partners are chosen to in one way or another compliment that knowledge. “The most feasible way to work in a fast developing countries is to try and partner with governments. In Laos we’ve managed to do just that and we’re trying for a similar setup in Myanmar. These investments are huge and their impact is also considerable, so it makes sense to have them as a partner. If the rules and regulations suddenly change, we can stand to lose a lot of money.” Therefore, having a very close, interactive dialogue with the host government is one of the key ingredients of a successful project. However, Myanmar has an inherent need to develop power and they need to do it on their own terms, but Cederwall says that it’s always good for the government, too, to have a strong partner with relevant experience to consult with. As such, this symbiosis achieves a measure of predictability and risk mitigation for both sides. As of now, SN Power has signed a memorandum of understanding with the government of Myanmar for its first power plant in the country, called Middle Yeywa. It’s located on the Myitnge (Nam Tu) river, upstream of the operating 790 MW Yeywa Hydropower station, in Shan State. The prefeasibility findings show that the project “appears to be technically, socially and environmentally viable”, and estimated to deliver approximately 3.2 TWh annually. This inherent need to quickly ramp up power supplies in the country to match the fast pace of development can create a situation where foreign companies will try to pitch and win projects, regardless of the impacts they will have. There are several power projects in Myanmar that have received strong criticism in the media, mostly due to their lack of communicating with local communities, something that he considers absolutely essential. Indeed, even the Middle Yeywa project has had its nay-sayers in the press, but for slightly different reasons. “Some people are saying that we shouldn’t go to Shan state before there is peace there, but the way we see it is that if you let the difference in development between Shan and neighbouring states become too great, it will only add to the social tension. Having electricity and the business environment that will naturally grow around it is to benefit all people in

NORWAY-ASIA BUSINESS REVIEW

the area, regardless of where they come from or what their ethnicity may be.” The business environment that Mr Cederwall is talking about comes in the form of job creation, business and infrastructure. “In our negotiations with the Shan state, they are actually very welcoming of the project since they understand that we’re bringing business there, which will spur further growth and development. Social and environmental problems are extremely important for us and we would never build a project without having a social license to do so, we need to make sure the people are cared for, but also to have a platform to disagree with one aspect or another. Perhaps our biggest strengths, as a company, is that we’re always working with local communities.” In some cases, where some mitigation of negative effects has to occur for the project to move forward, the cost of building new housing, roads, clinics, schools are all factored in the framework. Once the construction of the plant is finished, these structures will remain there to be taken over and run by the local communities. “We’re aiming to bring much more than merely power to the people. They still need to eat, somewhere to stay, clothes on their back. In Laos for example, there’s a 5,000 people strong village outside of the plant. It didn’t exist before we built the plant.” Of his plans for Myanmar, Mr Cederwall remains optimistic for the country as a whole but recognises the challenges ahead. The country is still full of fractions and uniting them will take time, dedication and a whole lot of hard work. “When we started in Laos two decades ago, we were working on the first privately financed hydropower project in the country. We’re now among the first comers in Myanmar. Will we ultimately be successful? Check back in 10 years.

PHOTO: SN POWER/JAN CEDERWALL

Upper Left: Middle Yeywa on the Myitnge (Nam Tu) river is SN Power’s first project in Myanmar. Above: Mr Jan Cederwall, SN Power’s Country Director for Myanmar.

ISSUE 3 2016

PHOTO: ISTOCKPHOTO

Coal and nuclear power appear unfeasible in Thailand, and with renewable infrastructure still amping up, dwindling LNG reserves are forcing the country to import more.

Imports as Only Choice

hailand is focusing on liquefied natural gas (LNG) as an energy T source while government plans to expand coal and nuclear facilities continue to flounder. Egat and PTT appear as Thailand’s HARVEY BROCK

only choice.

PTT, the country’s oil and gas conglomerate and sole importer of the gas, was granted permission by the government to build a USD 1 billion LNG receiving terminal in Rayong province with an initial capacity of 5 million tonnes a year. It is scheduled to be ready for operation by 2022, said Energy Minister Anantaporn Kanjanarat. PTT is raising capacity at its existing LNG import terminal at Map Ta Phut to meet rising energy demand. An additional THB 1 billion is being invested to raise capacity by 1.5 million tonnes a year to lift total capacity of the terminal to 11.5 million tonnes by 2019. Natural gas accounts for roughly 70% of the country’s power generation, but Thailand’s proven reserves are dwindling quickly. The Department of Mineral Fuels reported last year the country has 8.5 trillion cubic feet of proven reserves, or seven years of power production at 2015 rates. Thus the urgency to expand Thailand’s LNG facilities. In September the Thai government approved PTT’s request to purchase 2 million extra tonnes of LNG annually for 15-20 years to ensure the country’s energy security. PTT is expected to import 3 million tonnes of LNG this year, rising to 5 million tonnes next year. The plans are to buy 1 million tonnes each from Shell Eastern Trading Ltd and BP Singapore PTE Ltd for a total of THB 115 billion over the course of the deal, or 20% lower than previous LNG import agreements. Thailand is at risk of being short 6,300 megawatts of electricity in 2021

because of a possible disruption of up to 9 million tonnes of LNG stemming from the lack of further investment in the Erawan and Bongkot gas fields, said the Energy Policy and Planning Office (Eppo), reported the Bangkok Post. Production concessions for the two blocks — Bongkot, operated by PTTEP, and Erawan, operated by Chevron — are due to expire in 2022-23. Production is falling and the two operators are unlikely to invest more, forcing Thailand to increasingly rely on imported LNG for power generation. Thailand’s LNG storage terminal capacity is only 11 million tonnes a year, while demand stands at about 20 million tonnes, said Prasert Sinsukprasert, the Eppo directorgeneral, to the Bangkok Post. The Electricity Generating Authority of Thailand (Egat) plans to set up a new business to import LNG and challenge PTT’s longstanding monopoly in the sector. Egat wants to develop floating storage regasification units (FSRU) in the Gulf of Thailand to provide imported gas to the South Bangkok Power Plant and North Bangkok Power Plant via its new pipeline. Egat expects to import around 5 million tonnes of LNG annually. This year the Energy Regulatory Commission freed up regulation to allow other companies besides PTT to operate gas businesses. Saharat Boonpotipukdee, a deputy Egat governor, told the Bangkok Post it should take the company about five years to develop facilities before it can start operating a gas business.

NORWAY-ASIA BUSINESS REVIEW

With its natural gas reserves dwindling, Thailand is planning to import more liquefied natural gas and improve its renewable energy contribution, particularly from biomass and biogas

Changing Thailand’s Power Portfolio

gas accounts for roughly 70% of the country’s power Natural xgeneration, but Thailand’s proven reserves are dwindling quickly. HARVEY BROCK

The Department of Mineral Fuels reported last year the country has 8.5 trillion cubic feet of proven reserves, or seven years of power production at 2015 rates. PTT, the country’s oil and gas conglomerate, constructed the nation’s first receiving terminal for liquefied natural gas (LNG) in Map Ta Phut in Rayong province, with an initial capacity intake of 5 million tonnes a year. It opened in the third quarter of 2011 with PTT signing a deal to buy 1 million tonnes of LNG a year from Qatar, with additional purchases from spot markets. The company is raising capacity at the terminal by 1.5 million tonnes per year with an investment of THB 1 billion, scheduled to come online in 2019. PTT was recently granted permission by the government to build another LNG receiving terminal, this time worth USD 1 billion in Rayong with an initial capacity of 5 million tonnes

a year. It is scheduled to be ready for operation by 2022, said Energy Minister Anantaporn Kanjanarat. Thailand’s Power Development Plan (PDP) for 2015-2036 projects the country importing 22 million tonnes of LNG a year, up from 3 million now. PTT was also approved recently to increase its LNG imports to 5 million tonnes per year, signing 15-20 year contracts. The country is the second-largest net oil importer in Southeast Asia behind Singapore. Thailand has proven oil reserves of 3.86 billion barrels. Most of the Thailand’s natural gas fields are offshore in the Gulf of Thailand, and it imports a hefty chunk from Myanmar. PTT’s upstream subsidiary PTT Exploration and Production has a stake in many of Thailand’s operational natural gas fields, including Bongkot, the country’s largest. But foreign companies supply the bulk of the country’s natural gas output, with Chevron accounting for

ISSUE 3 2016

PHOTO: ISTOCKPHOTO

70% from 22 offshore fields. Some 70% of Thailand’s energy comes from natural gas, followed by 10% from lignite, 5% from imported coal, 4.5% from Laos hydropower, and 4% from local hydropower. The government has set extremely ambitious goals for increasing renewable energy usage with a target of 25% of total consumption by 2021, up from 10% now. Biomass is expected to provide over 60% of this energy, reflecting Thailand’s dependence on the agricultural sector and its access to large amounts of agricultural waste. Energy analysts believe Thailand has the biomass sources to generate between 4,000 megawatts and 7,000 MW per year. But folks in the biomass industry remain frustrated by a lack of government support, citing community resistance to biomass plants because of a lack of public participation. Natee Sithiprasasana, the Federation of Thai Industries vicepresident, told the Bangkok Post the country lacks mechanisms that bring business leaders and communities to the table to discuss and exchange information before investors buy land and seek government concessions. Locals refuse to accept biomass power plants in their communities without environmental impact assessments, even from small projects of less than 10 MW, he said. This lack of interaction leads developers to keep their projects secret for fear of community protests or

NORWAY-ASIA BUSINESS REVIEW

speculators driving up land prices. The government needs to facilitate exchanges between communities and developers if it wants the latter to help build the country’s energy capacity, said Mr Natee. Though Thailand has vast biomass source material, pioneers in the industry have complained that supply of that material is wildly inconsistent and the price also varies considerably, holding back development of the sector. In addition to setting up an LNG importing business, the Electricity Generating Authority of Thailand (Egat) aims to develop another 2,000 MW of renewable energy capacity by 2026, up from its current total of 2,948 MW that is mostly from hydropower plants. Thailand is one of the world’s top 10 players in Clean Development Mechanism (CDM) with 64 registered projects with the UN Framework Convention on Climate Change. The Thailand Greenhouse Gas Management Association has approved 155 CDM projects with a combined capacity to lower carbon dioxide emissions by 9.47 million tonnes a year. Biogas projects dominate the registrations with a 60% share while biomass makes up 23%. CDM is the mechanism that allows industrialised nations to buy carbon credits from projects in developing countries to meet their emission reduction commitments under the Kyoto Protocol by 2012. The government supports the development of renewable and nonconventional electricity production through its Small Power Producer (SPP) programme. SPPs can sell electricity to Egat for distribution or directly to consumers near their plants provided it is generated using hydro, biomass, or thermal co-generation. The buyback rate is based on the cost to Egat. For example, the Energy Ministry promised to buy back wind power from SPPs for 3.5 baht per unit for 10 years. The tariff has since risen to 6.06 baht per unit. Since the introduction of its SPP programme in 2006, Thailand has signed contracts to develop 6,300 MW of renewable generation. Some 1,800 MW are for solar energy but only 1,300 MW is online, while 2,452 MW is from biomass. The Energy Ministry’s Alternative Energy Development Plan calls for 3,000 MW of wind energy by 2036, but Thailand currently has only 224 MW of installed capacity (see Table 1). The programme used the bonus model of feed-in tariff design where the final tariff paid is composed of several adders on top of the avoided wholesale cost of generation. In 2016 the scheme changed to a feed-in tariff plus a premium for biomass, biogas and solar power projects of 10 MW and below. The tariff programme contained a specific adder or bonus for offsetting diesel-fired generation. There was also

ISSUE 3 2016

a location adder or risk premium for projects in the Deep South and an adder to compensate for fossil-fuel price volatility. To increase project diversity, Thailand provided government-backed loans at 4% interest up to THB 50 million per project. In the future, levelised electricity costs are projected to be in the range of LNG. As attempts to initiate nuclear and coal plants domestically face vociferous opposition, Thailand appears wedded to natural gas imports. The country wants to increase its natural gas contracts in Myanmar from 5,500 MW, especially with the massive planned deep-sea port in Dawei receiving substantial Thai investment. And Egat expects 1,220 MW of its 7,000 MW supply contracted from Laos hydropower to come from the controversial Xayaburi dam slated for commercial operation by 2019. The Energy Ministry recently delayed plans for five nuclear plants by three years to 2023, and postponed plans for nine coal-fired plants to 2019. Egat wants to expand the capacity of its Mae Moh coal-fired complex in Lampang, up to 2,400 MW from 600 MW now. The company plans to switch to a clean coal IGCC system with instruction from Japan. Thaioil, a refinery in which PTT owns 51%, plans to spend USD 300 million to build two co-generation power plants that were recently granted licences from Egat. Opponents of nuclear power and coal have questioned the PDP’s forecasts calling for Thai electricity demand to average growth of close to 2000 MW per year through 2021. Electricity demand over the last decade has increased 4.9% per year, plateauing the last few years, according to the Energy Policy and Planning Office. Load growth appears to be slowing and the government’s Energy

Fuel

Efficiency Programme aims to reduce energy usage by 30% (from 2010 levels) by 2036. Egat claims renewable energies need to be more reliable and less costly to make up more of the country’s power portfolio, as solar panels have to be imported and the capital required for renewable projects is massive. Government incentives will enable renewable energy to increase, but the sector makes up such a small portion of the country’s capacity it is likely to be insufficient to meet demand in the near future, said Egat. In Krabi province, where the government’s plan to locate a coalfired power plant has faced poisonous opposition, a local group called the Public Policy Foundation released a Green PDP that showed renewables, mainly biomass and biogas, could generate enough capacity after three years of operation to power the entire province. The renewables could provide 287 MW, roughly double the peak energy demand of the province in 2015. But the government has stopped buying energy from biomass producers because it says the power lines are full, charged the Krabi Provincial Administration Organisation. The Provincial Electricity Authority must install more power lines to encourage the renewable industry, said the organisation. Safe Energy Group, the biomass power plant operator, is spending THB 1.2 billion to expand production in the Deep South where it operates 40 MW. The group plans to bid for 36 more MW of biomass power plants in the region, which are bid out by the Energy Regulatory Commission this year. State agencies are expected to call bids for a combined 400 MW of biomass and biogas power plants this year.

Percentage in 2014

Percentage in 2026

Percentage in 2036

Imported hydro power

10-15

15-20

Clean coal including lignite

20-25

Renewable energy including hydro

10-20

15-20

Natural gas

45-50

30-40

Nuclear

0-5

Diesel/Fuel oil

Estimation of Fuel Mix for Power Generation in Thailand’s Power Development Plan 2015.

SOURCE: THAILAND’S MINISTRY OF ENERGY

NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

PHOTO: STATOIL/KJETIL EIDE

Statoil has continued its relationship with Aibel Thailand, this time for platforms designed for the Johan Sverdrup field, because of the latter’s training, HSE programme and attention to detail

Drilling Into the Details ibel Thailand, which is building modules for Statoil’s oil platforms A xat its new Johan Sverdrup project in the North Sea, is on target for delivery to Norway by July 2017. HARVEY BROCK

Leif Heiberg, the site construction manager for Statoil’s Thai projects, said the company’s experience with Aibel was one reason it received the contract for the Johan Sverdrup platforms. “Statoil has completed previous jobs with Aibel Thailand, the first stretching back 14 years ago,” he said. “Two others followed in 2009 and 2012. I have been impressed with how Aibel’s operations improve every year.” “A large operation like Aibel has a very good record on health, security and environment [HSE]. Their record in this field was part of the selection criteria.” Aibel recently built a state-of-theart HSE training centre, and Mr Heiberg said the culture and training systems at the company were to be admired.

“I appreciate how at Aibel they are constantly focused on improvement. The structure of their work is very detailoriented. And this focus on details is deeply ingrained in their work culture,” he said. Aibel is the single biggest exporter of goods from Thailand to Norway. The company is producing the modular support frame for one of Statoil’s offshore platforms at their yard in Laem Chabang, Chon Buri province. This includes the deck for a drilling platform, the base and support, said Mr Heiberg. The frame is about the size of a football pitch, 100 metres long by 66 metres wide, he said. It is 16 metres high and weighs 10,500 tonnes, including the drilling equipment.

The Johan Sverdrup project represents one of the largest oil fields ever discovered on the Norwegian continental shelf, said Mr Heiberg. The field lies 140 kilometres northwest of Stavanger, the headquarters of Statoil. Statoil, which has almost 50 years of experience in the oil and gas field, is the operator of the Johan Sverdrup. The Johan Sverdrup is projected to hold between 1.9 and 3.0 billion barrels of oil, and Statoil believes the field is in 110 to 120 metres water depth, with the reservoir at 1,900 metres depth. “The Johan Sverdrup will comprise 25% of total oil production in Norway once in full production,” he said. The initial stage of development will see a four-platform hub in the field. The recent nosedive in oil prices has not changed Statoil’s priorities or schedule for the Johan Sverdrup project, said Mr Heiberg. “On the contrary, Statoil already had a project in place to reduce costs before oil prices started their decline,” he said. “We have several initiatives related to reducing costs,. We are always asking whether the costs justify the benefits when we look at new projects.” Mr Heiberg moved to Thailand in December 2015. He found several of the

NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

practical the Thais are. “My time here has been an adventure and I enjoy how friendly the people are. “One of the biggest lessons we have to teach visitors from Norway that come here is how to behave and deal with traffic in Thailand. It’s very hectic here, with lots of motorcycles. You have to behave differently around traffic than you do in Norway and pay more attention to your surroundings.

. . . . .

Facts

Above, 3D illustration of the Statoil installation at the Johan Sverdrup field. Left: Drilling has started at the Johan Sverdrup field.

Photo: Alan O Neil

PHOTO: STATOIL

“For instance, in Norway we have a very different organisational hierarchy than here. It’s a very flat organisational structure in Norway and employees are encouraged to speak up if they have something to say. In fact it’s expected in Norway. Thailand doesn’t have that, so that’s another challenge we work with in our training. “Most surprising to me is how

Passion. Passion. Passion. PerhapsPerhaps our greatest our greatest Photo: Alan O Neil

Photo: Alan O Neil

Perhaps our greatest source of energy. of energy. sourcesource of energy. Photo: Alan O Neil

Photo: Alan O Neil

Statoil isStatoil an international energy with operations inwith more than 30incountries. world The world Statoil isenergy an company international energy company more than The 30 countries. is an international company with operations in more thanoperations 30 countries. The world needs energy, and our itmission ismost tosustainable supply it inand theresponsible most sustainable and needs energy, andmission our mission is to supply in way. It’s not anresponsible needs energy, and our is to supply inthe themost sustainable and responsible way. It’s not anway. It’s not an we easy strongly believe thatstrongly with the right people, passion curiosity — passion it’s possible. task, butthat we that with theand right people, — it’s possible. easy task,easy buttask, webut strongly believe with thebelieve right people, passion and curiosity —and it’scuriosity possible. Learn more on statoil.com Learn more on statoil.com Learn more on statoil.com Statoil. The Power of Possible

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Photo: Alan O Neil

differences between his new location and his homeland enlightening and challenging. “The language is an obvious obstacle, but we find ways to overcome that with our communication,” he said. “We try to align with some of the Aibel folks that speak English and Statoil trains their own Thai employees so they understand our corporate culture.”

The Johan Sverdrup field is located offshore in the Norwegian North Sea at Utsira High in blocks 16/2 and 16/3 at 59.22°N 2.49°E The filed was discovered in 2010 and is estimated to start production in late 2019 Johan Sverdrup is estimated to contain 1.93.0 billion barrels of oil equivalents. Statoil has commissioned Aibel to build the modular support frame including the deck for a drilling platform as well as the base and support Work in Thailand is estimated to be completed by July 2017.

Statoil is an international energy company with operations in more than 30 countries. The world needs energy, and our mission is to supply it in the most sustainable and responsible way. It’s not an easy task, but we strongly believe that with the right people, passion and curiosity — it’s possible. Learn more on statoil.com

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ISSUE 3 2016

PHOTO: AIBEL THAILAND

Aibel Thailand uses a practical approach to health and safety training, enhanced by its new HSSE centre, to create a safer working environment and help attract new clients

Training Founded on Demonstration

ibel Thailand has a reputation for their safety standard, which it A xenhanced with the recent opening of a state-of-the-art training centre. The company feels its record in this segment has helped it win HARVEY BROCK

recognition from firms around the world. “Aibel has a long tradition for its work in the oil and gas industry,” said Eirik Mork Knudsen, the health, safety, security and environment manager (HSSE) for the company. “We aim for zero incidents as our long term goal, including a high focus on incidents with potential for injury.” “In our corporate values, worker safety and respect of the environment is paramount. When you demonstrate good HSSE values, it certainly helps to get the attention of new clients. He indicated he was lucky to be at Aibel during a time when it had the resources available to build a new HSSE training centre. The facility is 572 square metres with one big classroom and seven discipline training rooms for piping and structure including hydro testing, mechanical, electrical work (EIT), rigging, insulation, surface treatment and sand blasting.

The centre opened in March and Aibel Thailand has only had one medical treatment injury at the yard this year — dust in the eye — and no serious incidents. “I cannot prove our good record is because of the new training centre, but we definitely try our hardest. We investigate every incident we have, even minor ones, to determine how they happened and what we can do to prevent them in the future,” said Mr Mork Knudsen. “Most of the injuries we’ve had here have been in the first three months of employment. I would say 50-80% of the accidents fall into that category, especially with welders and fitters, which is why we decided to build the training centre. As there is a lot of turnover within these disciplines, it is essential to set the safety expectations for new workers from day one.”

“We work hard on training with the equipment we use, particularly at preventing falling objects. We have a workshop on how to work safely at height. Our training is geared towards more practical, hands-on learning. Safety is not always the most exciting subject for some people, so we try to educate them through demonstration.” He said that teaching about HSSE is not particularly costly and is in practical terms a requirement, almost a licence to operate in the industry. “You have to prove you can work in a safe and responsible manner,” said Mr Mork Knudsen. “HSSE not only concerns safety of personnel, but also the health and safety of the external and the working environments.” Aibel has logged several repeat customers in part because of its stellar HSSE record, he said. A prominent one is Statoil, which turned to Aibel to build the main modular structural frame for one of its oilrigs to be used at its Johan Sverdrup project. Production of the platform is taking place at Aibel’s yard in Laem Chabang. The Johan Sverdrup order is the biggest in Aibel Thailand’s history, said Mr Mork Knudsen. The company has several other large prospects in the pipeline, so it is not experiencing a slowdown despite the recent drop in oil prices.

NORWAY-ASIA BUSINESS REVIEW

Norway has successfully weaned a large proportion of drivers off petrol and diesel-fuelled cars and is now a world leader in electric cars per capita. What are the lessons for Asia?

Electric Ride

romsø, commonly known as the “Gateway the Arctic”, has seen a T xflurry of international journalists in recent years. They come not to marvel at the northern light or the sun never setting in summer. Rather, SOFIE LISBY

they come to experience first hand one of the world’s most ambitious government programmes to wean drivers off fossil fuels. The validation? Tesla’s recently opened showroom, its most northernly outpost.

Norway is a world leader in electric cars per person, and a concerted and continued government effort over the past 20 years has resulted in some impressive statistics. According to the BBC, Norway is the fourth country in the world to have more than 100.000 electric cars on the roads only topped by the United States, Japan and China, all countries with considerably larger populations. It is also Tesla’s biggest foreign market in terms of units sold. The country made headlines around the world earlier this year when newspaper Dagens Næringsliv reported that the populist right-wing Fremskrittspartiet, or Progress Party, had agreed to ban sales of all new petrol and

diesel-fuelled cars by 2025. While a law has not yet been passed, the stance says something about how far the Norwegian government and population have come in the transition from petrol and dieselfuelled cars to electric ones. According to information provider IHS, in the first three months of 2016, Norway registered 11,124 pure electric and plug-in hybrid electric vehicles (PHEVs), representing 24.4 percent of all new vehicles. PHEVs combine a conventional gasoline or diesel engine with an electric motor and a rechargeable battery. By comparison with other advanced economies, only 2,244 or 1.8 percent of vehicles newly registered in the Netherlands, Europe’s second-biggest

ISSUE 3 2016

PHOTO: NORSK ELBILFORENING

per capita buyers of electric vehicles, were PEVs. In France, the number was 1.5 percent, in the UK 1.3 percent and in Germany 0.7 percent. According to the BBC, there are some 14,000 electric cars on Oslo, representing around 30 percent of the market.

Not just a green conscience

The popularity of electric cars is not solely due to Norwegians’ commitment to the environment. The government has introduced a number of highly effective incentives and subsidies that make the choice to buy an electric car an economic one rather than an environmental one. For instance, there are no purchase taxes on electric cars and buyers are exempt from the 25 percent VAT on purchase. Furthermore, the annual road tax is low for electric cars and there are no charges on toll roads or the many ferries that support infrastructure in this sparsely populated country. And the list continues: owners of electric cars get free municipal parking, can drive their cars in the bus lanes, get a 50 percent reduction in company car tax and don’t have to pay VAT on leasing. According to a calculation made by The New York Times, in money terms the incentives mean that at the Møller Bil Ryen Volkswagen dealership in Oslo, a standard diesel Golf retails for about Norwegian Kroner (NOK) 330,000, or

NORWAY-ASIA BUSINESS REVIEW

about USD 40,000. After tax breaks, a comparably equipped version of its electric cousin, the e-Golf, sells for NOK 250,000, or just under USD 31,000. It is all about making electric cars attractive to consumers, says Christina Bu, head of the Norwegian Electric Vehicle Association, which advocates for both consumers and manufacturers. “People aren’t so green that they want to pay a lot extra to buy an electric,” she said in an interview with The New York Times. The Norwegian system works, Bu said, because “it is constructed to make the least-polluting cars the most attractive.” The incentives have been so effective that Norway met its target of 50,000 zero-emission vehicles on the road three years early, in April 2015.

The trouble with charging

Norway’s impressive record of electric car use is all the more significant when considering the country’s unique energy make up. It is Western Europe’s biggest oil producer so success to affordable oil is there. It is also the world’s third largest exporter of natural gas. In other words, Norway is rich enough to subsidise its electric car lifestyle. What is probably a stronger argument for electric cars than the funds to subsidise, is the fact that Norway gets almost 100 percent of its electricity from renewable and cheap hydro power production, thanks to the country’s many rivers and water ways. That has enabled the country to offer free charging for electric vehicles at the country’s extensive charging station network, which is a further impetus for car owners to switch to an electric car. According to the Norwegian Electric Vehicle Association, even if all three million cars on the country’s roads were electric, they would suck up just 5-6 percent of the annual hydro power electricity production.

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PHOTO: NORSK ELBILFORENING

Lessons for Asia

Asia is no stranger to electric cars. The world’s most popular electric car is Japanese Nissan’s Leaf, and Japan and China very much drive demand. According to a report released by HSBC Global Research in July this year, electric vehicles could make up 35 percent of new car sales in Asia by 2040, driven by a significant reduction in battery prices and a rapidly changing mindset among consumers, industry and governments. The report said the boom was driven by strong demand in China since Volkswagen’s emission scandal, the launch of the more affordable Tesla model, and a sharp reduction in the cost of lithium-ion batteries, which currently account for 30-40 percent of the price of an electric car. At a glance, that is great news. However, in relative terms, countries in Asia are still far behind the numbers seen in Norway. And challenges still remain. China is one of the world’s largest emitters of greenhouse gasses so a switch to electric cars should be a good thing. However, the reality is not that simple. According to a report from IDTechEx, a market research and business intelligence

provider, if Chinese people purchased a large number of plug in electric cars over the next five years it would significantly increase global warming because today most of the power stations in China are inefficient and coal fired. In addition, the Norwegian model with heavy tax subsidies and other incentives, including an extensive charging station network, is not easily mirrored in a country the size of China. Critics in Norway are already complaining that the number of charging stations cannot keep up with the number of electric cars on the roads and consumers regularly complain about long queues at the stations. These would certainly be issues in less developed countries in Southeast Asia for example. Another reason that Norway has been so successful in making a large proportion of the population transition from petrol and diesel-fuelled cars to electric ones is a concerted and consistent government effort that has been underway for more than two decades. With many Southeast Asian countries experiencing less stability in their political make up, making and implementing the right long-term decisions may prove more difficult.

Facts

The Norwegian EV market has doubled from 2011 to 2014. However, recent figures show that the marked share for battery electric vehicles (BEVs) is stabilizing around 20 percent, while the market share for plug-in hybrids (PHEVs) is still growing. By the end of 2015 there was close to 75.000 BEV and about 12.000 PHEV registered in Norway. Nissan Leaf is the bestselling EV model with over 22.000 Norwegian registered cars in February 2016, followed by Volkswagen e-Golf with about 12.000 registered vehicles and Tesla Model S with about 10.000 registered vehicles in February 2016. The typical Norwegian EV owner buys his or hers electric car as an addition to their petrol or diesel car. Twenty-three percent of the respondents claim that they manage well with just an electric car in their household.

. .

PHOTO: NORSK ELBILFORENING

Above left: Electric cars have access to bus lanes in Norway. Shown a Nissan Leaf, the top selling plug-in electric car from 2011-2013. Above right: Norway is the Model S largest overseas market thanks to the country's comprehensive incentives for the adoption of pure electric cars. Above: Potential customer ponders on which one to buy; from left to right: Nissan, Renault, BMW or Volkswagen

NORWAY-ASIA BUSINESS REVIEW

Analysts and government officials recognise the need for decadeslong strategies and subsidies to develop the EV industry in Asia

The Slow, Steady Race to EV Acceptance everal countries in Southeast Asia have stated their intent to become S xelectric vehicle (EV) manufacturers, noticing the enormous growth potential for the market. But none are in a position to develop such HARVEY BROCK

production hubs without more vigorous state support, say analysts. Thailand, Malaysia and the Philippines have all indicated that they want to become manufacturing centres for production and assembly of EVs, but none of them have decided on financial incentives that would draw EV companies to invest there. The vehicles would have to be manufactured for export as there is almost no market for them in Southeast Asia yet. The Thai government has made EV production a national priority, listing it as one of 10 industry clusters to be the focus of the country’s next growth phase. Though it has vowed strong support, the Board of Investment has not decided on investment privileges yet while the Energy Ministry is writing a plan to build

EV facilities such as charging stations. The problem is it doesn’t make sense for the government to offer enough incentives to offset the high cost of EV batteries to make EVs affordable, thus creating demand and encouraging further investment, Vichai Jirathiyut, president of the Thailand Automotive Institute, told the Bangkok Post. “Relying on such privileges could create a huge burden for the government. And the Thai government is unlikely to provide a subsidy to lower EV prices and support sales since it requires a huge budget,” he said. Siam Commercial Bank’s Economic Intelligence Center predicts successful market penetration of EVs

ISSUE 3 2016

PHOTO: STEVE JURVETSON - FLICKR: TESLA AUTOBOTS

in Thailand would take a decade. The research house notes manufacturers still cannot agree on technology that would best meet consumer demand and EVs remain pricey, largely because of the cost of batteries. As of last year, EV sales account for less than 1% of global car sales. Thai Deputy Prime Minister Somkid Jatusripitak insisted the country must forge ahead as this technology is the future and shows huge consumer demand. To increase consumer awareness, the government recentlyallowed imports of completely built-up EVs provided importers invest in domestic production of the same model within a few years. The Energy Ministry set a goal for EV units in Thailand to rise to 1.2 million by 2036, but this would require a huge outlay to build up EV infrastructure, specifically hundreds of charging stations, said Mr Vichai. The ministry, energy flagship PTT Plc, and several major automakers signed a memorandum of understanding to develop EV charging stations across the country. Thailand currently has four charging stations. Most of the early Thai government purchases of EVs are for buses and minibuses. Hiroyuki Fukui, president of Toyota Motor Asia-Pacific, said policymakers in Thailand and ASEAN need to make the public understand the importance

NORWAY-ASIA BUSINESS REVIEW

of environmental concerns if the region wants to become an EV hub. That lack of recognition along with the higher cost of EVs has limited their sales in Southeast Asia, Mr Fukui told the Bangkok Post. Thailand had 70,285 hybrid and plug-in hybrid EVs registered in 2015. Before Japan was able to sell 4.38 million hybrid EVs domestically, the Japanese government and carmakers had to map out a 20-year strategy for the automotive sector including environmental innovation, CO2 reduction, traffic flows in big cities and green manufacturing plants, Hisashi Nakai, public affairs spokesman for Toyota Motor Corp, told the Bangkok Post. The government’s strategy also utilised research and development, demonstration programmes and longterm market support such as artificially creating niche markets for targeted technologies, he said. Toyota eventually introduced its Prius hybrid in 1997 thanks to generous government tax breaks and subsidies. In the Philippines, industrial giant Ayala Corp is looking to partner with foreign automakers to produce EVs. The economy is booming there and new car sales in the first half of this year grew 28% year-on-year. Annual EV sales in India are paltry at less than 1,000 units, but automaker Mahindra & Mahindra is keen to enter the segment as well. And Chinese online entertainment firm LeEco announced in August it plans to start making EVs with an investment of USD 3 billion. Like Ayala, LeEco has no prior automotive experience. China may well lead the way for

the EV market in Asia, with a raft of new startups betting that the urban mass market will develop a taste for electric cars. LeSEE, NextEV, Future Mobility, Qiantu Motor, and WM Motor are all angling to take advantage of Chinese government subsidies that it hopes will develop the market. Many Chinese startups see a market for affordable EVs with mobile internet connectivity, made from lowcost, high-quality parts from China, that can be shared or leased when needed for city dwellers, reports Asia Times. Singapore envisions a similar model and the transport minister for the citystate recently announced a scheme that will see 1,000 EVs introduced as part of a car-sharing programme along with 2,000 charging stations. The government also provides carbon rebates to EV owners in cash after the cars pass CO2 emissions test for the electricity generated to charge the cars. The Singaporean government may also introduce EV buses soon, but Transport Minister Khaw Boon Wan reiterated public transit is the greenest form of transportation because even though EVs produce no tailpipe emissions, the process of generating the electricity they consume emits carbon, he told www.eco-business.com. Malaysia’s Amber Dual Sdn Bhd signed a joint venture agreement in May with China’s Beijing Auto International Corporation (BAIC), one of the global leaders in EV production, to develop a manufacturing plant in the country. Output is expected to commence next year. BAIC already has a plant in Malaysia that performs completely knocked down vehicle assembly for cars

ISSUE 3 2016

with normal engines, hybrids and EVs. There are four platforms of EVs. Hybrid electric vehicles and plugin hybrid electric vehicles were first developed with two systems, electricity/ petrol and electricity/diesel. Battery electric vehicles were later developed, which are fuelled purely by electricity. Fuel-cell electric vehicles represent the latest technology. There has been tremendous interest in EVs globally. Within three days of Tesla offering its new “affordable” Model 3 sedan, the company had received deposits for 276,000 orders. And in Norway roughly one-third of new car purchases are EVs, with the segment reporting 71% growth in 2015.

. . . . .

Facts

It only took the developed world ten years to switch to fossil-fuel cars at the beginning of the last century. The Paris e-mobility declaration of 2015 calls for 400 million EVs, of which 100 million are cars, by 2030 (still only 5% of the global fleet) China has sold about 300 million electric two-wheelers and 75,000 EV cars Sri Lanka is one of the global leaders in hybrid EVs, with almost half of all new vehicles sold last year hybrid EVs (UN Environment Programme) Norway aims to have 100% of all new passenger cars, buses and light commercial vehicles zero-emission by 2025, the same for the Netherlands, and India is targeting 2030. Germany wants 1 million EVs on its roads by 2020.

As of June 2016, the Nissan Leaf (left) is the world's all-time top-selling highway-legal all-electric car (over 228,000), and the Chevrolet Volt (right) is the world's best-selling plug-in hybrid (about 117,300).

PHOTO: MARIORDO

31 N O R W A Y - A S I A B U S I N E S S R E V I E W

The Philippines has been in the news this year as much for its economic potential as its freshly elected leader. With next year’s Norway-Asia Business Summit on the horizon in Cebu, the magazine had a conversation with Dr Ronald Mendoza, dean of the Ateneo School of Government in Manila.

Islands of Opportunity

usiness Review: Several analysts believe the Philippines has the B best short-term economic growth prospects of the ten countries in Asean. Why do you think that is? Are these conditions sustainable? HARVEY BROCK

Dr Mendoza: In recent years, the Philippines has proven resilient against external shocks, usually buoyed by remittances and a robust business process outsourcing (BPO) industry. The country’s macroeconomic fundamentals remain strong, with its debt-to-GDP ratio at its lowest in over 20 years, and foreign reserves at a historical high of well over USD 85 billion. On top of this, the Philippines is presently undertaking a dramatic infrastructure spending buildup which has been long anticipated. This will not only pump prime the economy, it could also help address longstanding competitiveness issues in other high-growth-potential areas in the country. The latest World Bank, IMF and S&P assessments of the Philippine economy continue to acknowledge its strong growth prospects. BR: The new president in your country has garnered much of the headlines recently from the Philippines with his bluster and protectionist rants. Should investors treat this as populist noise or is the nation really going to take a more inward focus, retreating from its international agreements? DM: The Philippines can be a considered a small open economy, with

external linkages that are an integral part of its development trajectory. There are many stakeholders in the Philippine economy that depend on these links. Protectionist rhetoric could nevertheless send harmful signals, so it’s important that evidence-based discussion continue to guide our economic policies. BR: The Philippines has a long history of collaboration with Norway on maritime industry and issues. Can we expect this mutually advantageous arrangement to continue and what is the Philippines doing to address training weaknesses that have become a concern for shippers? DM: The maritime economy in the Philippines is one of the sectors with strong growth potential. Already, Philippine manpower underpins a large section of the global maritime industry. The growth of education and training institutions in this sector will be key in its continued growth and competitiveness. BR: For readers who may not be familiar with the Philippines, can you explain why the country would be a desirable location for companies or investors? DM: The Philippines has a young population, with a median age of about

ISSUE 3 2016

PHOTO: STAFF OF THE PHILIPPINE PRESIDENTIAL COMMUNICATIONS OPERATIONS OFFICE

24 years old. Significantly strengthened social protection, education and health policies are expected to boost the country’s human capital and innate competitiveness for decades to come. With pipelined infrastructure and energy investments, longstanding growth constraints could finally be lifted. A resurgence in the tourism, manufacturing and agro-industry sectors could finally rebalance and diversify the economy to include more growth engines across the country. And with relatively benign macroeconomic conditions, the Philippines is poised to make its economic development takeoff. Before joining Ateneo School of Government in Manila, Dr. Mendoza previously did research work with the UN, UNICEF, UNDP, Federal Reserve Bank of Boston, and the Economist Intelligence Unit.

Facts

The World Bank, IMF and Asian Development Bank all predict the Philippines to have 6.4% economic growth this year, one of the highest levels in ASEAN. The outlook for next year is 6.2% growth. The Philippines is the third-largest English-speaking country in the world with a population of 100 million. Among ASEAN nations, the Philippines is No.1 in marine diversity, voice call centres, sailors and seafarers, and musicians, No.2 in BPO, and No.4 in gold reserves and shipbuilding. The country qualifies for investment incentives from both the EU’s most favoured nation status and the Generalised System of Preferences Plus status. The Philippines also has its own investment board, PEZA, that offers incentives.

. . . .

NORWAY-ASIA BUSINESS REVIEW

Scandinavian expats are encouraging compatriots to capitalise on the vast array of opportunities in the booming Philippines

A Safe Harbour

aal Utvik, a Norwegian naval architect with 20 years of experience P xin the shipping and offshore sector, has led a colourful life to say the least. His career got started in the US and South Korea, before HENRI VIIRALT

moving to China to finish his MBA.

He remained there after completing his studies for nearly a decade to work in business development and investment analysis in the maritime sector. In 2012, Mr Utvik decided to leave his position as the head of business development at Grieg Shipping Asia in Shanghai to join forces with his friend David Wu, also a shipping and offshore oil & gas specialist, in establishing a company called Landmark Capital, which was to facilitate Chinese investments and financing for projects within the maritime sector. Landmark Capital became “relatively successful” and the duo was able to launch their own investment firm from the proceeds, managing their own investments in startups and assets in shipping and offshore. After setting up the first oversea shop in Singapore, Utvik and Wu

partnered with others in several locations, in order to have local presence in the most significant regions for the industry. Singapore was somewhat “stale and boring”, Mr Utvik says, and I decided to move to Manila in order to, yet again be hands on - on the ground. That’s the only way to recognize real opportunities. “I got together with two gentlemen, Knut Ove Nytre and Joeran Noestvik, whom I’ve known for a while, all of us with slightly different backgrounds, but in one way or another connected to the maritime industry and also all of us having served as local representatives of foreign companies. Together we started discussing what is interesting and doable in the Philippines. With a population of 100 million and an economy expanding at 6% per year,

ISSUE 3 2016

PHOTO: ISTOCKPHOTO

there is a lot that can be done, especially in terms of infrastructure.” After further investigation, it became clear that there is a strong need for foreign investment, but there wasn’t anyone in the market with relevant expertise and the ability to bridge projects with financing. As a result, EntryPoint Partners was established, specialising in business advisory, financial consulting, identification of maritime and renewable energy investments, as well as technology solutions across various industries. The company is part of the extended network of the Landmark Group. “Our aim is to help foreign companies set up operations in the Philippines, and to match them with local partners. This can be quite risky if you’re not on the ground as you need to navigate bureaucratic red tape and local ownership structures. In addition to bringing funds to the Philippines, we can act as the local partner for Scandinavian companies that are looking to bring their products and services here, but don’t want to spend USD 1 million per year on setting up the legal structure and running a small office. Essentially, we’re the boots on the ground that manage and build your business here as required.” Mr Utvik considers risk mitigation, much less capital intensive entry, local

NORWAY-ASIA BUSINESS REVIEW

expertise and their network of offices around the globe that their clients can tap in at any time to be the key reasons for partnering with EntryPoint Partners. Mr Utvik notes that the Philippines is the most westernised out of all the ASEAN countries, and that the culture along with the Catholic background provides mutual understanding. English being the official language, in addition to Filipino, makes a huge difference as well, as it eliminates the need for translation of official documents that other countries in the region require. This can oftentimes create misunderstandings due to interpretation of jargon as the local language will always supersede translations. Some of the challenges of doing business here include an unpredictable legal system, low trust and transparency, overall fragmentation and security, as the Philippines is considered as one of the more unsafe countries in the region – which makes having a local expert on the ground all the more valuable. There is also the question of uncertainty as the internal political situation, at least viewed through the lens of international media, paints a rather dire picture, noting that a lot of foreign investors are pulling out. At the same time, President Duterte’s approval ratings are at an all-time high (Bloomberg writes on 12 October that Philippine voters

have given President Rodrigo Duterte a job-approval rating of 86% after three months in office, despite international criticism of a deadly drug war that has seen more than 3,000 people killed). “While westerners may find him controversial and unpredictable, the people absolutely love him, and it could be speculated that he’s bringing himself, and by proxy the entire country, under the media spotlight on purpose. As a by-product of his outspokenness, there seems to be a renewed interest and attention on the country. Lately I’ve had people calling me from China, South Africa and Brazil, all looking to invest after investigating the country out of curiosity because of the media frenzy.” During President Duterte’s recent state visit to China, wherein the two governments signed economic and trade agreements worth USD 24 billion, Mr Utvik noted an increased eagerness from Landmark Capital’s network in China to do business in the Philippines. The recent historic trip may have resulted in a golden opportunity to assist Chinese investors with M&A transaction services in the Philippines. Mr Utvik says that western investors pulling out is not a huge issue since the Chinese are much quicker to invest, especially in largescale infrastructure projects rather than westerners who mostly invest in smaller projects and the

ISSUE 3 2016

stock market. The country’s investment grade, too, remains rock solid. Back in April, Fitch ratings agency affirmed the Philippines at BBB- with a positive outlook on the back of its robust economic growth. The economy has expanded by an average of 5.9% from 2011 to 2015, and it is forecast to accelerate further to 6% this year and next. Other countries with a similar credit rating typically grow by only 3.3%. For growth areas in the coming years, Mr Utvik is looking towards power generation as a key area for his clients and his personal investments because there is a severe deficiency in power and a huge opportunity in utilising the country’s natural capabilities for renewables, such as wind and solar, but also the vast potential for replacing coal with LNG. Aside from those, the maritime industry is one that shows great promise. “The Philippines is comprised of 7,000 islands and the whole maritime culture is deeply engrained in them, so it creates a strong common ground especially with Norwegians. Another commonality between the two is agriculture, and there is a massive, untapped opportunity for fish farming and seafood in general. Norway and the Philippines have had a decades long relationship, build largely on providing cheap labour, but it could be so much more.”

The Philippines, a country of close to a 100 million people, is not only one of the largest English speaking countries in Asia, but also a booming domestic market. Above: Manila has developed into a modern business metropolis, but has still kept much of its tropical greenery.

PHOTO: ISTOCKPHOTO

NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

PHOTO: HØST ASIA

Høst has made a lucrative business out of turning waste matter into valuable high quality fertilisers and soil enhancers with the aim of improving soil fertility. In 2011 the company entered the Vietnamese market.

The Value in Waste

orn out of a vision to combine age old agricultural practices of reusing B xorganic waste to fertilize the soil with today’s technological advances, Høst aims at finding new and innovative ways to make better SOFIE LISBY

and safer use of agricultural, industrial and household waste. The company was established in Norway in 2000 as a public private entity and has in a short time become one of the leading companies in Norway with an annual production of more than 250,000 tonnes of bio-residues and crop care products. In 2010 the company started to look at opportunities abroad, starting with joint ventures in Armenia and China. As production grew, the company started to look overseas and, following a trip to Vietnam in 2011 as part of the Business Match Making Program, funded by the Norwegian Agency for Development and Co-operation (Norad) and implemented by Innovation Norway, they started investing in various projects in the country. “During 2013 to 2015 we investigated different dimensions of the Vietnamese fertiliser market and we decided to focus on organic fertilisers to be produced from organic manner” explains Vu Nguyen, Høst‘s Vietnam Chief Representative. “In 2016, we have selected several local partners and will launch a new product by the end of this year, which will utilise a by-product from Elkem’s silicon processing. In the beginning, we will export fertilisers from Norway to Vietnam

but we plan to have a production facility in the region within five years.” Last year Høst introduced industrialised biosolid fertilisers to Asia, a project that had been underway since 2007, and the company is working on establishing Høst Asia by 2017. According to Vu Nguyen, the company will be the first 100 percent Norwegian-owned subsidiary in Asia and will be responsible for developing Høst’s businesses in the region. One of the main focus areas will be to introduce high quality crop-care products using organic-based fertilisers and soil-conditioners made from household and industrial wastes. “Our core products are bioresidues based fertilisers for private and professional end users, i.e. farmers,” explains Vu Nguyen. “One of our main products is the MINORGA product concept: mineral organic fertilisers, which can be used as complete alternative to NPK [made macro-nutrients nitrogen, phosphorus and potassium, red.] and mineral fertilisers We strongly believe this shall be the key development in fertiliser markets in Asia where farmers need to use more organic materials to recover the degradable soil, but also need

a solution to achieve good yield for their crops. With mineral organic solutions, farmers shall get same nutrient values as other mineral-based products, yet fertilize the soil with organic substances. This can be considered as sustainable agriculture practice for the future.” In Norway, Høst’s activities are manifold. The company uses shellfish and sediment waste from the maritime sectors such as fish farming and mariculture in its fertilisers and offer a diverse range of solutions for industry, agriculture and official institutions to better their waste management. The company has a research and development department where microbiologists and agronomists research and develop a wide range of user-specific soil products and solutions for agriculture and industry. It is using that expertise to expand in Vietnam. “Vietnam is the largest agriculture and fertiliser market in South East Asia, making it the first option to enter for many fertiliser companies,” explains Vu Nguyen. “Currently, the farming practice in the country make the soil vulnerable to the changing climate with overuse of mineral salts and oil-based fertilization for long periods of time. Most of the large-scale production of organic fertiliser in the country is based on peat as the main material, which is considered a non-renewable resource and may impose significant land degradation. Peat also releases high amount of green house gasses to the atmosphere in its mining and application. Recycled organic residues, such as biosolid – the active ingredients in our solution – is the valuable organic material that helps to reclaim the bad soils and provide the farmers with inhabited land for growing their crops. With a R&D centre and sales operation in Vietnam, we hope to build a good relationship with the Vietnamese farmers with a portfolio of different products adapting to tropical crops condition. Høst Asia is also responsible for sales to other neighbouring countries, and a regional hub for our new factories in Vietnam or the regions. “The potential is huge, considering Vietnam is among the most powerful global agriculture nations,” points out Vu Nguyen. “The Vietnam fertiliser market has seen robust growth in recent decades with a stable annual growth rate of between 8-10 percent. Moreover, when a number of bilateral trade agreements such as the TTP, the EVFTA, the VKFTA and the VJFTA etc. come into effect, the fertiliser market is expected to boom. We are especially interested in a market segment of greener agriculture products. Consumers are becoming more conscious about their groceries, and demand cleaner and safer products. The farmers, therefore, look for better and sustainable alternatives in fertilizing their crops. MINORGA®, our trade mark

of mineral organic fertiliser, will provide Asia famers with not only a better quality of products, but also better productivity.” However, challenges remain, according to Vu Nguyen. “In my opinion, there are five major challenges in Vietnam fertiliser market. The first challenge are regulations. Recently, the Vietnamese government has updated regulations often and huge changes have been made. It is difficult for us to catch up with these updates and modify our business plan accordingly. The second challenge is that distribution networks and processes are too lengthy, and local distributers are so powerful that our products become costly for end-consumers. The third challenge is corruption and red-tape issues. Local companies have different practices towards this issue; we have a zero-tolerance policy, which makes competition unfair for companies like us. The fourth challenge is finding the right partners, which consumes a lot of time and efforts. The last challenge has to do with human resources as it is not easy to find good local employees and keep them with us for a long time. To overcome the last challenges, we apply the FK program, which allows us to exchange technicians with our overseas subsidiaries. The FK program works well in China, where we put Chinese technicians to work at our Norwegian office for a year, then place them back to be pioneers at our office in China. We plan to do the same for Vietnam.”

Upper left picture shows Vu Nguyen, Høst‘s Vietnam Chief Representative with happy farmer.

. . . . . .

Facts

The East Asia subregion is the largest fertiliser producing and consuming region in the world. Any development in East Asia and South Asia in regard to fertiliser application affects the global demand/supply situation significantly. The share of East Asia in global consumption of total fertiliser nutrients is 38.4 percent. The share of the subregion in nitrogen consumption is 39.5 percent, phosphate 36.7 percent and potash 36.6 percent. Nitrogen, phosphate and potash consumption is expected to grow at 1.0, 1.2 and 2.6 percent, respectively, per annum during 2014 to 2018. The potash supply in the region continues to be far lower than the demand. With the increasing demand for potash, import demand would grow significantly during the period.

Exploring Asian opportunities. Together. The opportunities in Asia are vast and varied. There is ample terrain for your aspirations, and we want you to realise those ambitions. As the leading Nordic corporate bank in the area, we are on the ground to support you. With decades of experience and offices throughout the region, we are well-placed to meet your corporate, financial institution and private banking needs. Let us explore Asian opportunities. Together. sebgroup.com/corporations-and-institutions

Source: Food and Agriculture Organization of the United Nation

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2016-09-19 11:45

NORWAY-ASIA BUSINESS REVIEW

This well-operated plant and its highly skilled employees will make an excellent addition to Yara’s global production system.

Yara's Indian Expansion ara International ASA has entered into an agreement to acquire Y xthe Tata Chemicals Ltd (TCL) Babrala urea plant and distribution business in India’s Uttar Pradesh State for USD 400 million. MAHNAAZ KHAN

“This acquisition represents another significant step in our growth strategy, creating an integrated position in the world’s second-largest fertiliser market. India has strong population growth and increasing living standards, and significant potential to improve agricultural productivity,” said Svein Tore Holsether, president and chief executive of Yara. The plant has annual production of 700,000 tonnes of ammonia and 1.2 million tonnes of urea, and generated revenues and EBITDA of USD 350 million and USD 35 million respectively in the financial year ended 31 March 2016. The plant was commissioned in 1994 and is the most energy-efficient plant in India, with energy efficiency on a par with Yara’s best plants. “We are impressed with the worldclass operations we have seen in Babrala. The workforce is committed to high HESQ standards, and has a solid safety track record. This well-operated plant and its highly skilled employees will make an excellent addition to Yara’s global

production system,” said Holsether. Yara in India – a young company with a long history. Yara has operated in India since the 1990s, focusing in recent

ISSUE 3 2016

years on premium product sales in the west and south of the country, delivering strong volume growth and margins well above Yara’s average for the region. We have partnered with some of the leading Indian fertiliser companies to provide high-quality products to Indian growers. However, to fully implement the Yara Crop Nutrition concept and to serve Indian farmers with the necessary quality, it was important to have a presence on the ground. In 2011, Yara India was established with headquarters in Pune, Maharashtra. We now have a firm footprint in Maharashtra and work closely with fruit, vegetable and plantation crop growers

PHOTO: YARA INDIA

Mr Terje Knutsen, Senior Vice President and Head of Crop Nutrition, Yara International ASA and Mr R Mukundan, Managing Director, Tata Chemicals Ltd. proudly present the signed agreement.

NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

PHOTO: YARA INDIA

to improve their yields and profitability, all while safeguarding the environment. Yara India is growing steadily and has expanded its presence in southern and western India as well as Himachal Pradesh. “In a market where we are competing with highly subsidised fertiliser inputs, it was important for us to demonstrate the value Yara Crop Nutrition can create. Every year we do over 500 demonstrations on farmers’ fields, supported with university trials. Since inception, we have followed a very farmer-centric approach. The Yara Crop Nutrition concept combines our knowledge, diverse portfolio of differentiated and unique fertiliser products as well as our application competence to deliver value to growers,” said Sanjiv Kanwar, managing director of Yara India. “In 2015, in our area of operations we did close to 1,000 organised farmer meetings and contacted over 100,000 farmers through our various activities.” Yara India maintains strong contacts with farmers through our extensive farmer training programmes, crop seminars, demonstrations and field days, and participation in local agriculture fairs and exhibitions. Today the Yara brand is synonymous with quality, trust and reliability, providing industry-shaping service to farmers. In an era of globalisation, our well-informed Indian growers in crop segments like grapes, apples, coffee and sugarcane value Yara’s knowledge and expertise in these crops worldwide.

Yara’s global experts have visited India and shared their knowledge and best practices regarding these crops. The most recent example was Danie van der Merwe from Yara South Africa visiting the Nashik grapes region. In 2016, Yara India also facilitated a black pepper study tour for Karnataka Planters’ Association members to Vietnam, a leading peppergrowing country. Yara India has successfully integrated digital tools in its value offerings to growers. The company has digital apps like YaraCheckIT that enables growers to diagnose nutrient deficiencies in their crops. Yara is one of the leading agri-input companies in India in using social media like Facebook and WhatsApp to engage with growers and share knowledge. The Yara India Facebook page has over 25,000 growers representing a diverse range of crops and the number is increasing every day. “This is an important forum to share knowledge and good agricultural practices and provides us a real-time interface with growers. It allows us to understand farmers’ needs better so that we can improve our solutions and offerings to farmers,” said Kanwar. “Our aspiration is to be the leading provider of sustainable crop nutrition solutions, supporting farmer profitability through knowledge, quality and productivity.” “Our growth in India can be accelerated with this acquisition, creating a larger market footprint for Yara and enabling increased premium product sales in particular. We will place great emphasis on successful integration

of the operations, and will put in place an integration team consisting of highly experienced TCL and Yara employees, the latter from both our existing India operations and our regional management,” said Terje Knutsen, senior vice-president and head of Yara Crop Nutrition. The agreement will be subject to regulatory approvals and sanctioning by the relevant courts in India, a process that is expected to take nine to 12 months, after which closing of the transaction can take place.

Facts

Yara’s knowledge, products and solutions grow farmers’, distributors’ and industrial customers’ businesses profitably and responsibly, while protecting the earth’s resources, food and environment. Our fertilisers, crop nutrition programs and technologies increase yields, improve product quality and reduce the environmental impact of agricultural practices. Our industrial and environmental solutions improve air quality by reducing emissions from industry and transportation, and serve as key ingredients in the production of a wide range of goods. We foster a culture that promotes the safety of our employees, contractors and societies. Founded in 1905 to solve emerging famine in Europe, today Yara has a worldwide presence, with close to 13,000 employees and sales to more than 150 countries.

. . . .

NORWAY-ASIA BUSINESS REVIEW

Norway is working with Thailand to improve its fisheries management, imparting some of the knowledge it has learned in restructuring a key sector

Trawling for Sustainability

hailand decided in recent years it wants to reform its fisheries T xindustry to become more sustainable. Having collaborated with Norway in the past, Thailand approached the country about sharing some HARVEY BROCK

lessons from its experience in this field. To that end, the two countries set up a technical cooperation project in Phuket through the assistance of the Royal Norwegian Embassy, the Norwegian Agency for Development Cooperation, Norway’s Institute of Marine Research and its Fisheries Department. The results of the project were improved governance of marine aquaculture in Thailand, use of new technologies involving hatcheries including cage farming and value chain development, and creating regulations for fish health and environmental health impact assessments. “Fisheries have been an important part of our economy for some time,” said Songphol Sukchan, Director General of the European Affairs Department in the Foreign Affairs Ministry. “Thailand is still the largest exporter of canned tuna in the world. Twenty-four of our 77 provinces have a coastline and there are a lot of fishermen employed in this sector.”

“In the past, economic stability and sustainability were not motivating factors, and this led to overfishing in some instances. “The government looked into the issue and decided we needed to reform the industry. In the past two years we have passed 190 laws related to fisheries. Last year a new Royal Ordinance was issued on fisheries, the first in 40 or 50 years, so many of these new laws were updating regulations designed decades ago. “Of course much of this impetus for change was driven by the EU’s yellow card for illegal, unregulated and unreported [IUU] fishing issued in 2015. This led to the formation of the Command Center to Combat Illegal Fishing [CCCIF], chaired by the Thai Royal Navy. “One major change was the fishing licensing plan was changed from open access to limited access. Licensing cannot exceed the marine area’s capacity

ISSUE 3 2016

PHOTO: ISTOCKPHOTO

to produce animals, meaning the amount of catch is limited. “The amount of time during the year you can fish is also limited in order to allow fish to breed. We also limit some fishing tools that are known to be detrimental to the fish stock. “In addition we have set up all ships with over 30 gross tonnage with vehicle monitoring systems that provide a record of where the vessels travel and improves the traceability of the fleet. “We also established 24 port-in, port-out check-in centres in 22 provinces that check the licence, registration, fishing gear, crew and seaman’s service book of every ship that enters and leaves the ports. We want to use FAO [Food and Agriculture Organization of the UN] port measures as a guideline for our port-in, port-out regulations. Our goal is to add four more centres by the end of the year. “The government is also preparing regulations to be admitted to the UN Fish Stocks Agreement. It is very important that we keep our stock sustainable if we want the industry to last.” The cooperation project produced recommendations for some of these changes. Other suggestions included a freeze on the number of trawler and push net licences issued, the installation of artificial reefs to allow habitat to rehabilitate, imposing minimum legal mesh sizes for trawls and purse seiners, and promoting community-based fisheries management. Recommendations for governance included improved monitoring and enforcement to stop IUU fishing and using acoustic equipment to measure fish

NORWAY-ASIA BUSINESS REVIEW

stocks. In August this year the Thai government joined with Norway to organise a seminar here on fisheries sustainability that brought in Vidar Landmark, the Director General of the Fisheries and Aquaculture Department from Norway’s Trade, Industry and Fisheries Ministry. They held a workshop that focused on quota systems, hatcheries and nurseries. Mr Landmark also offered some advice on cooperating with neighbouring countries, as most marine resources have shared borders. He said there should be an agreement on shared stock allotment and there should be some basic principles such as a discard ban, protection of juveniles, and reduction of unwanted by-catch. Neighbours should build trust through close contact over time and establishment of joint scientific programmes, said Mr Landmark. Mr Songphol said the Thai fisheries industry is working to adopt some of these changes but the process takes time, a fact Mr Landmark conceded in noting Norway is at a different stage of development in this sector. “The industry is working to improve its traceability systems,” said Mr Songphol. “They are not perfect yet, but we are adding an online catch certification system that lets a consumer know which ship the catch came from and how long it’s been at sea.” “The government has already registered 150,000 migrant fisheries workers from border countries so they

can be recognised and won’t be exploited. We have also increased our inspections on fishing boats and at factories to ensure there are not undocumented workers. “We are working with neighbouring countries on a memorandum of understanding to recognise migrant labourers so they will not be taken advantage of in any country. Fisheries reform is a top priority for the government and Prime Minister Prayut Chan-o-cha has made it one of his pet projects, so it will not slip off the radar. “Ultimately the authority for all these changes is going to reside with the Fisheries Department. They are trying to restructure the department now and increase its manpower. In the meantime, reform will be driven by the CCCIF with help from the Agriculture Ministry. “Norway has had a presence in the Phuket area since 2005, helping teach Thais about large-cage fish farming technology. Recently they started teaching us about floating cage technology. One of our goals is to develop a coastline research centre to create a hub for these methods. Thailand is sending post-graduate students to Norway to learn about some of these technologies. “Of course whenever you try to reform a whole industry there is going to be outcry from stakeholders. Some local fishermen have asked the government how are they going to put food on the table tomorrow if there are quotas. It is a process that takes time to educate people across the supply chain about the importance of sustainability, but

ISSUE 3 2016

the government is committed to that process. I noticed that Iceland withdrew its application to join the EU because of fishing quotas. “Sometimes change is painful. We have had stakeholders complain that the impact of the changes is too severe. The CCCIF has a channel to evaluate complaints if the effect of rule changes is immense. A panel will look at potential remedies and try to adjust policies. “In Thailand many of the large seafood companies are coordinating with the government to fight IUU fishing. The Thai Frozen Food Association, the Fisheries Association Coalition, the Thai Chamber of Commerce, the Federation of Thai Industries and the Joint Standing Committee on Commerce, Industry and Banking signed a memorandum of understanding to work with the government to combat illegal fishing and make the industry more sustainable. “For example, a couple of months ago a major producer found out that pre-processing of shrimp it uses was being done by illegal migrant labour. It ended that relationship and brought preprocessing in-house. “Now when a company is unsure about the source they’re buying from, they might buy from a different supplier in another country. The goal is to improve traceability throughout the supply chain. “The government is holding meetings with the Overseas Fisheries Association too. It appears that everyone is on board with the same agenda.”

Above left: Several Thai fishing boats are moored together offshore on the Andaman Sea. The spotlight has recently been on these vessels for allegations of slavery and human trafficking. Above: School of mackerel in Asian waters.

PHOTO: ISTOCKPHOTO

NORWAY-ASIA BUSINESS REVIEW

India has evolved as a diverse nation with a multicultural background, and a prominent contributor is its maritime character and geo-strategic location that has defined her growth and development over the decades.

Clean Seas and Sustainable Shipping?

he country’s inextricable connection to the seas can be linked to her T xprominent peninsular location and bordering islands that it shares. Being governed by high mountain ranges and hilly terrain in the north, MAHNAAZ KHAN

the seas are its primary means of trade links with the world. Maritime trade accounts for over 90% of total trade by volume and 70% by value. India has witnessed an increase in the last decade in its economic, military and technological strength. The country’s global interactions have extended its national security obligations and its political interests now stretch beyond the Indian Ocean. To address the objective of working towards sustainable marine development, the India Clean Seas International Conference & Exhibition took place in Goa, India (22-24 September). The Norwegian Business Association, India mobilised a delegation of five Norwegian companies along with Innovation Norway and the Royal Norwegian Consulate General, Mumbai to support the conference. A sustainable marine environment remains of great interest to Kongsberg India, Jotun India, Goltens, Water Mist and Wallem

Ship Management, all major players in maritime India. The India Clean Seas Conference focused on bringing together strategic decision-makers within the marine and oceanology markets. Analysts and government representatives worked collectively to develop action plans to protect the world's oceans. The conference was an excellent platform for Norwegian companies to share their expertise with important stakeholders in India and get an overview of the developments for the creation of Clean Seas. Seminars and panel discussions were organised with a focus on: 1) Ocean dumping of wastes and its treatment 2) Deep sea mining and environmental impacts 3) Hazardous waste management, and safe and environmentally friendly ship recycling including aspects such as:

ISSUE 3 2016

PHOTO: NORWEGIAN BUSINESS ASSOCIATION INDIA

• green shipping, ballast water management- its treatment and challenges, • reduction of GHG emissions from ships • LNG as fuel for the future and conservation of coastal habitats An intensive session on the Global Maritime Convention was held with an impetus on sustainable shipping techniques and compliance in helping the marine environment. The conference also imparted awareness on decommissioning of assets, subsea jackets and pipelines and the environmental challenges concerning them. One emphasis was on emerging approaches towards prevention of corrosion, oil spillage and protection of marine ecosystems. Norway’s influence on the cause of sustainability and environmental issues was highlighted. The contributions of Norwegian companies in sustaining a healthy and safe marine ecosystem were addressed. Advanced measures adopted by Norway in this field like ratification of the Hong Kong Convention on Safe & Environmentally friendly recycling of Ships were studied at the conference. Maritime is among Norway's most global, innovative and forward-looking industries. It’s a labour-intensive sector that leads to value creation and spills over to other industries. The Norwegian government aims for sustainable growth and value creation in the maritime industry as a major policy goal.

NORWAY-ASIA BUSINESS REVIEW

The government wants to stimulate a blue revolution for the Norwegian maritime industry as well as the use of environmentally friendly technology and alternative fuel for vessels. It has ambitious conservational goals for the maritime industry that will contribute to strengthening value creation and offering a competitive edge. Use of more environmentally friendly fuel and energy-efficient vessels is a key factor in solving the environmental challenges of shipping. In September 2015, the 193 member states of the UN unanimously adopted the 2030 agenda for sustainable development. Norway welcomes that a goal for the conservation and sustainable use of the oceans and marine resources has been included in the agenda. The conference focused on replacing the use of plastic and treating plastic debris in the ocean more effectively. Plastic can absorb toxic chemicals from ocean pollution, poisoning whoever or whatever eats it. If necessary actions are not taken, by 2050 plastic pieces will outnumber fish in the oceans. Ocean trash endangers the health of humans and aquatic life as well as the livelihoods that thrive on a healthy ocean. It also threatens tourism

and recreation, creates navigational hazards that obscure shipping and transportation. This makes it crucial that local, regional, national and international authorities collaborate to adopt preventive measures. A few simple actions like using biodegradable and reusable plastics, creating public awareness, careful handling at pre-production and industrial sites, regulating source reduction schemes such as bans and fees, regular beach clean-up activities, and regulating and minimising plastic debris loads from shipping and other sea-based activities can control marine pollution. One of the best ways to prevent marine debris is to educate the masses about stringent regulations and why ecological consciousness is important. It is equally essential communities take responsibility in ensuring that governments and businesses change their attitudes towards marine debris, taking measures to curb it. If India does not manage its plastic waste, in a decade it will be among the top five contributors of marine pollution. As 70% of the earth is covered with water, some people assume marine pollutants will be diluted or disappear. But this is a myth.

ISSUE 3 2016

All four oceans have suffered as a result of human actions for a long period, but the damage has accelerated the past few decades. Oil spills, toxic waste, floating plastic and various other problems have all plagued the oceans. If we are to preserve their natural beauty, drastic measures have to be taken to combat pollution and keep our oceans clean and safe. Sustainable development cannot be achieved without a focus on shipping. Ultimately every nation has a responsibility to adopt appropriate measures to keep its marine environment clean.

Upper left picture shows Norwegian delegation to INDIA CLEAN SEAS-GOA From (left to right) Mahnaaz Khan (Head of Secretariat-NBAI), Prasad Padhye, Mukesh Shukla (Marine Head-Jotun Paints) Thor Eric (PresidentKongsberg Maritime India), Capt Navin Passey (MD-Wallem Ship management), Stefan Micallef (IMO’s Director of Marine Environment), Dilip Mehrotra (Secretary, Indian Ocean Memorandum Of Understanding On Port State Control), Tor Dahlstrøm (Consul-Norwegian Consulate, Mumbai), Pankaj Patil (Innovation Norway, Market Advisor-Maritime)

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NORWAY-ASIA BUSINESS REVIEW

High demand for competent airline pilots in Asia and the elite standards of PFA make the two a natural match.

Pilot Flight Academy Alights in Asia viation is growing rapidly in Asia and there is huge demand for pilots. A Boeing estimates Asia-Pacific will need more than 230,000 new pilots by 2035. Airbus and Boeing have a backlog of more than 13,000 HARVEY BROCK

aircraft to be delivered within the next seven to eight years, and most of them are going to Asia. The International Air Transport Association reported passenger growth in Asia-Pacific was 8.2% from June 2015 to June 2016, making up 35% of the global market and rising rapidly. The highest growth is in Southeast Asia, with many of these countries having annual passenger traffic growth of more than 20%. The average load factor for airlines in this region is close to 80%, exceeding averages during broad expansions. To handle this uptake in passenger traffic, airports are either expanding or new airports are being built. In India the number of airline passengers is expected to grow from 106 million in 2016 to 421 million in 2020, making it the thirdlargest aviation market.

Frode Granlund, chief executive of Pilot Flight Academy (PFA) in Sandefjord, Norway, has travelled to Asia several times this year to meet with airlines, flight schools and universities in India, Indonesia, Singapore, South Korea, Oman, Thailand, Vietnam and the UAE to gauge the interest in pilot education in Norway. The first question is always “Why Norway?” because it is perceived as an expensive, remote country. But the academy makes sense for many Asians when you dig a little deeper. PFA is a training organisation approved by the European Aviation Safety Agency (EASA), following the highest global standards recognised in every country. This means EASA

ISSUE 3 2016

pilot licences allow operation in nearly any country, while licences from the US, Canada and Australia must be converted to the higher EASA standard for operation from a European and some Middle Eastern bases. In some countries in Asia, local pilot licences are of a lesser standard, meaning pilots can only fly for airlines in their home country. The academy was established in 2007 and is now one of Europe’s most modern flight centres with around 100 students and 30 employees. The students come from over 10 countries and all education is in English. Runar Vassbotten and Frode Granlund, the two founders, still retain full ownership. Education in Norway, including pilot education, is not subject to valueadded tax (VAT). With Norway’s VAT currently at 25%, education is still quite affordable minus the tax, especially when factoring in the undisputed quality and the operating environment of PFA. The academy is located at Sandefjord Torp airport, a 1½-hour drive from Oslo. Sandefjord is an international airport with real live airline movements meaning students get right into the airline environment. This pairs well with PFA’s core value of “Pilot from Day One”; students are treated as pilots and expected to conduct themselves as professionals from day one. Training flights are conducted in an international environment all over

NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

PHOTO: PILOT FLIGHT ACADEMY

northern Europe, including some of Norway’s airports with mountains, severe weather conditions and four distinct seasons, providing a challenging training ground. The academy hangar features some of the most modern aircraft available on the market — Austrian Diamond DA40s and DA42s — in addition to a state-of-the-art Boeing 737800NG simulator. “Our mission is to educate what we call ‘airline-ready pilots’ that are ready to start their career as first officers in an airline directly after finishing the twoyear programme,” said Mr Granlund. “We have invested NOK65 million in new facilities, aircraft, simulators and a modern curriculum.” “PFA has developed a competencybased pilot education that includes flight training in the academy’s advanced Boeing 737NG simulator. Trained by airline pilots, PFA students develop the professional pilot skills required by airlines, turning new cadets into airlineready pilots.” During his travels and many meetings throughout Asia this year, Mr Granlund found the educational training system for pilots in Asia is not equipped to handle the demand in the region. In many Asian countries, the education provided also does not meet the requirements of airlines or international aviation standards. These lower standards limit the choice of airline careers for

graduates in Asia as pilot licences are often only valid in the country in which they are issued. More attractive airline career choices abroad are often off limits without an EASA pilot licence. “Moving into Asia, Innovation Norway has been a great partner for us. We knew there was a huge market, but I never looked seriously at the region before and would not have known where to start. Innovation Norway conducted research for us and booked meetings with decision-makers at the right level of both potential partners and customers. By understanding the local languages and cultures in the respective countries, they could also guide us in the right direction and we are truly grateful,” said Mr Granlund. PFA is planning a stepwise approach to the Asian market and has already secured its first Asian students at the academy. It is negotiating training agreements with airlines in Asia and plans to set up local ground schools in the region. “Hopefully we can establish the first two ground schools in Asia next year. Students who finish ground school in Asia will then come to Norway for one year of flight training,” he said. “Our next step is to train the trainers. We must train groups of Asian students in Norway to become pilots and qualified flight instructors with European standards. They will be our resource for

the next step, which is the development of full-fledged flight academies in Asia. We also hope to find good educational partners such as universities and Asian airlines for this development.” PFA believes it can contribute to the development of good aviation standards in Asia while growing the company’s competency-based pilot education regime in the region.

.. .

Facts

Pilot Flight Academy established in 2007 30 employees, 100 students Fleet: 8 new Austrian Diamond DA40 NG and DA 42 NG aircraft, the most modern types of training planes on the market. All aircraft are equipped with Garmin G1000 glass cockpits, autopilot, traffic alert systems (TAS) and flight directors. Advanced MPS Boeing 737-800W Class 6 simulator used for Multi-Crew Cooperation Course (MCC) and Jet Orientation Courses (JOC) Pilot Demand: Boeing estimates that 558,000 pilots will need to be employed from 2015 to 2034. Of these, over 40% will come from the Asia-Pacific region. For every short-haul aircraft like a Boeing 737 or Airbus A320, the airlines require 10-12 pilots per aircraft to keep them flying seven days a week. Long-haul aircraft require 24-30 pilots for every aircraft.

. . .

NORWAY-ASIA BUSINESS REVIEW

ISSUE 3 2016

Moving abroad for work is a reality for an increasing number of Norwegians but experience show that many fail to properly prepare not only for the stay abroad but also for their return to Norway.

What If...

ith provisions for unemployment, pension, disability, sickness and W xdeath, the Norwegian social security system is amongst the best in the world. For Norwegians living and working in Norway that is. For SOFIE LISBY

many Norwegians working and living abroad, rights change drastically – oftentimes without people realising. With provisions for unemployment, pension, disability, sickness and death, the Norwegian social security system is amongst the best in the world. For Norwegians living and working in Norway that is. For many Norwegians working and living abroad, rights change drastically – oftentimes without people realising. “When moving abroad, people are often more concerned with housing allowances, schools, cars and stuff like that and not so much with their social security,” notes Vigdis Haug, Partner and General Manager of ScanRisk, a leading consultancy specialising

in employee benefits and global risk management for Norwegian expatriates and third country nationals. “Questions about social security may be boring in comparison but they are the most important questions to ask.”

Insufficient cover

Established in 2009, ScanRisk has grown to become one of the leading consultancies for Norwegian individuals living and working abroad and the companies that employ them. As Norwegian companies enter new markets around the world, an increasing number of Norwegian nationals take

up employment outside of Norway for a number of years. However, far from everyone are aware of the changes in their social security status that may happen as a result of their overseas employment. “Nowadays, full expatriate packages where the company still contributes to the employee's National Insurance Scheme are very rare because it represents a relatively high cost for the company,” explains Vigdis Haug. “A lot of companies employ Norwegian nationals on a local contract, which in most cases means that unless the employee has made his or her own provisions, he or she is left with no social security at all.” Vigdis Haug estimates that only around half of the Norwegian companies employing Norwegian nationals abroad have sufficient insurance policies in place. For example, she says, if a company suffers a terror attack or another unforeseen event, and an employee dies or becomes disabled, it is far from certain that the company insurance will be able to step in as many insurances have special clauses in the event of war or terrorism. It is therefore important that individuals are proactive when it comes to securing their own rights and options. However, even under less dramatic circumstances many employees are illprepared for their expatriation abroad. “A

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lot of people fail to ask even the simplest questions,” notes Vigdis Haug. “What happens to your social security when you move abroad and what are your rights when you come back?” Vigdis Haug notes that there are two parts of the Norwegian Social Security: One is related to medical and health issues and the other is related to pension, including disability and retirement pension. One can be member of both or choose to be member of one of them during an expatriation. Mandatory members have to be members of both Ask the right questions and ask them early. According to Vigdis Haug, one of the first steps in any overseas employment process should be to determine whether you will still be covered by the Norwegian social security scheme or not. “People should find out whether they are able to still contribute to the National Insurance Scheme and if they are, to what extend they are covered,” she says. “Does the cover include the most basic things such as doctors and hospitals as well as risks related to long term sickness, disability and even death? What about retirement funds? People should also consider the costs of remaining a member of the National Insurance Scheme, which can

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be quite substantial, so can the money be spent better on alternative solutions? These are some of the things people need to discuss before leaving Norway.” One of the main misconceptions that people make is assuming that because they still pay tax in Norway, they automatically keep their National Pension and Insurance Scheme benefits, highlights Vigdis Haug. And any insurance products in Norway are only valid if the insured person is also a member of the National Social Security System. “People tend to think that they are still members of the National Pension and Insurance Scheme because they still pay taxes in Norway but in a lot of cases it is not that simple,” she says. Vigdis Haug notes that in order to continue the membership in the National Pension and Insurance Schemes as a voluntary member, employees must have been a member in three of the five last calendar years. “If you are away for less than five years there is a waiting period of one year before they have rights to a disability or spouse pension,” Vigdis Houg says. “If you have been out of the Norwegian Social Security System for more than five years, there is a three year waiting period. In this period you can not be sick. After the waiting period you will be entitled to benefits but they can be reduced due to lack of membership or a failure to meet the total number of years in the Norwegian Social Security System. If you have been out of the Norwegian Social Security System for more than five years and get disable, you will most likely never get anything form the social security at all.” People looking to open their own business are also excluded from cover, Vigdis Haug points out. “The National Insurance Scheme is only for Norwegian companies or Norway-related companies, so if you go to Singapore to open your own business for example, chances are you will not be covered and you have to look into alternative insurance,” she says.

What about the family?

Another important area that is often overlooked is insurance for the family. Oftentimes family members have limited rights under the National Pension and Insurance Scheme because they do not have an income. “A non-working wife might have some rights in the National Pension and Insurance Scheme but the benefits can be very low,” says Vigdis Haug. “We often see that spouses believe that they are well covered if they are a voluntary member but the reality is that the benefits can be extremely low, if there are any at all. Children accompanying their parents will also need additional cover after 18 years, especially if they move for studies. Oftentimes, it is easier to establish

insurance solutions when they are young and if they suffer chronic conditions such as diabetes, it is not possible to get an insurance without exclusions in cover. “I would really like people to look into disability insurance for non-working wives; it is extremely important. People also have to think about things like “what happens if we get divorced, or if someone gets sick? What will happen to the children?” They are uncomfortable questions to ask but they are necessary.” With so many different combinations and with each employer having different provisions and types of insurance, Vigdis Haug agrees that it can be difficult for individuals and families to navigate the system. She gives the following advice: “Understand if you are a member of the social security system or not. In both cases, make sure you understand what exactly your rights are. Think about worst case scenarios like disability and death. If you are a family, think as a family. Get the proper medical insurance for the whole family and make sure to cover non-working wives as well. Consider what happens in the case of a divorce. Plan every step of the expatriation, before, during and after. Think about the return to Norway. Find out if there is a waiting period before being able to use various services.”

Facts

Being a Norwegian citizen, paying taxes to Norway or being registered as resident in Norway may have no bearing on employees' rights with the National Insurance Scheme. Even payment of social security contributions together with taxes in Norway, does not result in automatic membership of the National Insurance Scheme. Employees' rights while working outside Norway depend on the regulations of the National Insurance Scheme and the regulations of our agreements with other countries. Employees are compulsorily insured, if they are employed in Norway or shall work for their Norwegian employer outside Norway while their wages are paid from Norway, their employer pays the employer’s contribution off them in Norway, and the working period outside Norway will be less than 12 months. When, after finishing your employment outside Norway, you move back to Norway, your membership with the National Insurance will start from day one. Please notice that some of the benefits require that you have been a member of the National Insurance Scheme for a certain time.

. . . .

Source: The Norwegian Labour and Welfare Administration (NAV)

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The Graphs to give the readers Ithenanorder understanding of where Asian countries are in their

development, we have assembled an overview of various indicators for Norway, USA and the most important South and Southeast Asian markets. The graphs in the two right columns are the result. Countries are listed by their two-letter ISO 3166-1 code. The data has been assembled from a number of sources. See below for a full list.

Basic Figures Norway (2015) Export Growth 2015 2.3% Export Growth 2016 projected 2.4% Trade Balance NOK 233.7 bill Current Account Balance NOK 55.0 bill International Reserves NOK 520.4 bill Unemployment 4.3% Corporate Income Tax 28% Value Added Tax 25%

Norway’s Top 10 Exports 2015

%/value NOK bill Petroleum 29.1% 246,410 Gas 28.5% 241,538 Engineering products 13.2% 111,711 Seafood 8.5% 72,035 Chemicals 6.1% 51,727 Non-ferrous metals 5.1% 43,449 Scientific instruments 1.9% 16,163 Raw materials 1.9% 15,896 Iron and steel 1.5% 12,832 Others 4.2% 35,982 Total (-5.6% vs 2014) 847,744

Geography Geographic Area: 385,199 sq. km Highest peak: Galdhøpiggen 2,469 m Inland water areas: 16,360 sq. km Coastline: 25,148 km

Demographics Population Norway: 5.0 mill Population Oslo: 875,000 Life expectancy M/F NO: 80/84 Inhabitants per sq. km land area: 17 Population Growth: 1.1%

Mobile Telephone Penetration 2015

Sources: 250% 200% 150% 100% 50%

HK SG MY ID VN TH JP KE PH LK CN BD IN MM

0% NO US

GDP/Capita: Wikipedia/IMF; GDP Growth: Wikipedia/CIA Factbook; Global Competitiveness: World Economic Forum; Inflation 2015: CIA; Ease of Doing Business and Days to Start a Business: World Bank; Corruption: Transparency International; Democracy Index: Economist Intelligence Unit; Mobile Telephone Penetration: World Bank; Electric Consumption: International Energy Agency; Norway Trade: Statistics Norway. Data has been downloaded from sources on 23 October 2016

STATISTICS

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Norwegian Chambers of Commerce and Business Associations are established in most major Asian countries. The organisations work to create venues and channels for exchanging and sharing information, to improve local business conditions and opportunities for Norwegian companies and to increase trade between their respective host countries and Norway.

Norway in Asia Indonesia Norway Business Council

Norwegian Business Association (India)

Norwegian Chamber of Commerce, Hong Kong

C/O Royal Norwegian Embassy Menara Rajawali 20th Floor Jl. DR Ide Anak Agung Gde Agung Lot #5.1 Kawasan Mega Kuningan Jakarta 12950, Indonesia W: www.inbc.web.id E: execsec@inbc.web.id T: +62 2157 63343

c/o Innovation Norway 92, Golf Links New Delhi 110 003 India W: http://www.nbai.in E: nbai@nbai.in T: +91 1149 099200

Rooms 1510-1512, West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Central, Hong Kong. W: http://www.ncchk.org.hk E: info@ncchk.org.hk T: +85 2254 69881

Norwegian Business Association (NBA), Korea

Norwegian Chamber of Commerce, Japan

Royal Norwegian Embassy 13th fl. Jeong-dong Building 21-15 Jeongdong-gil Jung-gu Seoul 100-784, South Korea W: http://www.norway.or.kr E: yky@mfa.no T: +82 0272 77157

c/o Innovation Norway in Tokyo, 5-12-2 Minami Azabu, Minato-ku, Tokyo, Japan 106-0047 W: www.nccj.or.jp E: michal.berg@nccj.or.jp T: +81 3344 09935

Malaysia Norway Business Council c/o Royal Norwegian Embassy, P.O. Box 10332, 50710 Kuala Lumpur, Malaysia W: www.mnbc.com.my E: malaysianorwaybc@gmail.com T: +60 3217 10000

Myanmar-Norway Business Council c/o Royal Norwegian Embassy Nordic House No. 3, Pyay Road, 6 Miles Hlaing Township Yangon, Myanmar W: www.myanamr-norway.com E: contact@myanmar-norway.com

Nordic Chamber of Commerce and Industry c/o Maersk Bangladesh Ltd. 4th Floor, Plot 76/A, Road 11 Block M, Banani, Dhaka 1213 Bangladesh W: http://nccib.com E: info@nccib.com T: +88 0171 5991907

Nordic Chamber of Commerce Vietnam Petroland Tower, 17th Floor No. 12 Tan Trao Street, Tan Phu Ward, District 7 Ho Chi Minh City, Vietnam W: http://nordcham.com E: contact@nordcham.com T: +84 85 416 0922

Norwegian Business Association Shanghai Royal Norwegian Consulate General Rm. 1701, Bund Center, No. 222 East Yanâ&#x20AC;&#x2122;an Road, Huangpu District, Shanghai 200002, China W: http://www.nbash.com E: nbash@nbash.com

Norwegian Business Association (Singapore) c/o The Royal Norwegian Embassy 16 Raffles Quay #44-01 Hong Leong Building Singapore 048581 W: http://nbas.org.sg E: admin@nbas.org.sg T: +65 6622 9100

Norwegian Business Association Sri Lanka (NBASL) c/o Exilesoft 201, Sir James Peiris Mawatha Colombo 02 T: +47 95923712

Norwegian Business Forum, Beijing (NBF) Rm. 1701, Bund Center, No. 222 East Yanâ&#x20AC;&#x2122;an Road, Huangpu District, Shanghai 200002, China W: http://norbachina.com E: secretary@norbachina.com T: +86 1305 1611164

Philippines Norway Business Council c/o The Royal Norwegian Embassy 12th Floor, DelRosarioLaw Centre 21st Drive corner 20th Drive Bonifacio Global City, 1630 Taguig City, Metro Manila Philippines W: http://www.pnbc.ph E: info@pnbc.ph T: +63 2317 2700

Thai-Norwegian Chamber of Commerce 14th Fl., Mahatun Plaza 888/142 Ploenchit Road Bangkok 10330, Thailand W: www.norcham.com E: contact@norcham.com T: +66 2650 8444

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