Asia: Three decades of corporate achievement
Asiamoney has recognized the most impressive companies across Asia-Pacific for the last three decades, publishing the Best Managed Companies Awards, the Corporate Governance Poll and Asia’s Outstanding Companies Poll. For our anniversary edition, we have tallied the results to identify the best corporations in the region over the last 30 years.
By Morgan Davis
Australia differs from the other countries in Asiamoney’s outstanding companies polls. While other countries’ winners reflect the technology revolution that has shaped Asia’s boom in the last three decades, Australia’s winners come from more traditional sectors. In the 1990s, mining company BHP and National Australia Bank topped the charts. In the 2000s, it was a three-way tie between Australia and New Zealand Banking Group, upmarket department store David Jones and mining company Rio Tinto.
Australia’s annual GDP grew more than fourfold, from $299.3 billion in 1989 to $1.32 trillion in 2017, according to the World Bank. Past winners partly reflect the country’s mining boom, which lasted roughly from 2003 until 2013. But more recently, packaging company Amcor has won Asiamoney’s attention as a winner during the 2010s.
Amcor’s history dates back to the 1860s, when it got its start as a paper manufacturer. In the 1970s and 1980s, it pushed into the packaging business, officially changing its name from Australian Paper Manufacturers to Amcor in 1986. Today, the company provides packaging for all kinds of goods, from pet products to medical equipment.
However, the economic outlook for Amcor is uncertain. In the first half of 2018, the Australian economy saw an annualized growth rate of 3.8%, well above average, according to Deloitte. But by the second half of the year, the rate was down to just 0.9%, the lowest since 2008.
Industries linked to the housing market and consumer spending are slowing, while those that benefit from government spending, or from demographic and technological changes, are on the rise. Amcor’s business is tied to the former group.
Amcor stumbled a bit in 2018, with a dip in demand and high raw material prices. The company’s total assets decreased by about $36.6 million, due in part to foreign exchange rates. But the company is striving, like many of its compatriots, to increase its appeal to consumers by turning to sustainable practices. For instance, in January 2018 the company became the first global packaging business to commit to making all of its packaging recyclable or reusable by 2025. Amcor also promised to use more recycled materials for its own products.
Sustainability has become a priority for many individuals, companies and investors in Australia. Last year, a study from HP Australia found that more than 90% of Australian consumers and businesses are concerned about sustainability, while only half believe that they’re doing what they can to protect the planet. Research from the Responsible Investment Association Australasia in 2017 found that 90% of Australians believe sustainable investing is important.
The rise of China is the big story of the last three decades and the winners of the Asiamoney polls across those years illustrate how China’s economy has developed. The 1990s outstanding Asian corporate was Hisense Kelon, a manufacturer of refrigerators, air conditioners and other appliances; a decade later, it was China National Offshore Oil Corp (CNOOC).
Manufacturing and commodities remain important pillars of China’s economy, but the service sector is now the strongest. The 2010s saw a tie between China Merchants Bank, a pilot bank set up in 1987 as China promoted industry reform, and internet conglomerate Tencent.
Tencent was founded in 1998 by Ma Huateng, also known as Pony Ma. The company tapped a market that China wanted to develop in response to the internet boom in the west, setting up an instant messaging platform and later web portal.
Tencent is now one of the most famous internet companies in the world, sitting alongside Jack Ma’s Alibaba Group, founded in 1999, and internet company Baidu Inc, founded in 2000, as the pride of China’s burgeoning technology sector. Tencent is probably best known for WeChat, an app that encompasses messaging, social media and mobile payments. Since being released in 2011, it has developed a monthly active user base of more than one billion people.
In many ways, WeChat is still a mystery to those outside China, who struggle to grasp how completely a single app can permeate everyday life. WeChat has become the messaging app of choice for most Chinese, in addition to being their social network, a gaming platform and an easy way to pay for everything from taxi rides to restaurants.
Tencent reported that its total daily payment transaction volume surpassed one billion transactions in 2018, with commercial payments representing more than half of the transactions. It reported revenues of about $312.7 billion in 2018, up from $237.8 billion the previous year.
The next challenge for Tencent will be whether or not it can push its business model internationally as China expands its influence in Asia and globally. Just last October, Tencent launched a cross-border mobile payment service for WeChat Pay users in Hong Kong to make renminbi transactions funded by Hong Kong dollars. Similarly, it launched WeChat Pay Malaysia last year to cover both online and offline transactions. And Chinese tourists can now use their apps to obtain tax refunds at more than 80 airports.
But Tencent isn’t just focused on its own core businesses. It has also invested in more than 700 companies, 100 of which were valued at more than $1 billion each. The internet firm will undoubtedly continue to be a company to watch in the coming years as its sphere of influence widens.
Even though it is now part of China, Hong Kong is host to a very different set of company winners. In the 1990s, Sun Hung Kai Properties was its outstanding company. The following decade HSBC moved to the top. And in the most recent decade, Asiamoney found a tie between cosmetics retailer Sa Sa International Holdings, conglomerate Far East Consortium International and HKEx, which runs the Stock Exchange of Hong Kong.
Sa Sa has been around for more than 40 years and is well known not only in Hong Kong but also in Macau, China, Singapore and Malaysia. It sells more than 700 brands and operates as the sole agent for a number of international brands in Asia; it has gross profits of nearly HK$3.5 billion ($446.6 million) and a gross profit margin of 42.1% for 2018.
Far East is best known for its property business, but it also operates in hotels, car parks, securities and financial product investment, and gaming operations across Asia, Australia and Europe. The company develops large mixed-use properties, as well as residential properties, targeting the affluent middle class and Chinese buyers looking for overseas real estate.
The company, which was listed in Hong Kong in 1972, has revenue of HK$5.8 billion and a gross profit of HK$2.6 billion for 2018.
Hong Kong and its companies have played an important role over the years, giving outsiders access to China. As China and its markets opened up to foreigners, Hong Kong had to adapt to remain relevant.
That has been particularly apparent for HKEx, which was formed as a merger of the Stock Exchange of Hong Kong, the Hong Kong Futures Exchange and Hong Kong Securities Clearing Co in 2000.
Hong Kong has since made itself an attractive listing market for the many Chinese companies seeking investors. The Shanghai-Hong Kong Stock Connect, established in 2014, has allowed international investors to invest in the mainland through Hong Kong.
The HKEx also created a bond trading link in 2017 to boost international participation in China’s domestic debt market.
HKEx has become an important player not just in Asia, but globally. Hong Kong was the world’s biggest IPO market in 2018; as of the end of the year, it has 2,315 listed companies and a total market cap of $29.9 trillion. In 2019, the city may find itself similarly ahead, as Alibaba is said to be planning a $20 billion Hong Kong listing this year.
The bourse is forward-thinking, with a strategic plan that recognizes Hong Kong’s need to attract large overseas issuers.
“We believe Hong Kong’s international relevance and importance will continue to rise, as the weighting of China equities and bond markets on international indices further increases,” HKEx chief executive Charles Li wrote in a recent blog. “At the same time, strong economic development in the region, particularly in southeast Asia, will drive more global investments to the region.”
Over the last three decades, India has carved a niche for itself as an IT hub. In the 1990s, technology services and consulting firm Infosys tied with HDFC Bank to lead Asiamoney’s outstanding companies. A decade later, in the 2000s, Infosys alone held the title. And in the 2010s, IT services company Tata Consultancy Services (TCS) won the award, under chair N. Chandrasekaran..
HDFC Bank, which was incorporated in 1994, has grown to operate more than 5,000 branches across India. The bank reported a total income of more than Rp11.6 trillion ($167.1 billion) and net revenues of nearly Rp6.6 trillion for the fiscal year ending March 31, 2019. Twenty years earlier, in 1999, the bank’s income was just Rp44.42 billion, up 47% from the previous year. The two corporations on this list have clearly benefited from an increasingly business-friendly environment in India, which has been opening up ever since Asiamoney first published in 1989.
“Right up to the mid 1980s, it was an extremely hostile environment, and very, very difficult to do business,” says Kedar Shirali, global head of investor and analyst relations at TCS. Tech companies faced many hurdles at the time – importing computers required a slew of documents – and high associated costs. Businesses also had to focus on exports to make money.
“In India, there really wasn’t a market for tech services at that time,” says Shirali.
But the liberalization of technology in the middle of the 1980s changed the market.
“The 1980s was all about the democratization of technology,” says Shirali.
The government loosened regulations, easing the importation of computers and creating a domestic client base for tech companies such as Infosys and TCS. The government’s changing attitude carried on into the 1990s as the telecom revolution took hold, widening the market further.
“The early 1990s, post-liberalization, was a time when we really expanded our business,” says Shirali.
Since then, new technology has been developed, creating more business opportunities, and India has continued its economic reforms, making it a friendlier environment for companies. For Indian regulators, “it’s a no-brainer now” to encourage such growth and the expansion of companies outside of India, says Shirali.
TCS’s revenues of $20.9 billion in the 2019 fiscal year mark an increase of 9.6% on the previous year. Infosys, which works with clients in 45 countries, has revenues of $11.8 billion, and year-on-year growth of 7.9%.
The few industries that still face barriers to expansion because of heavy lobbying, such as retail shopping, won’t be held back for long, he reckons.
“All of this is just a matter of time,” says Shirali. “Little by little you wear down the resistance.”
And there’s still plenty of room for growth in India.
“The opportunities are phenomenal,” says Shirali. “We are very, very bullish on the prospects for this economy in the next decade.”
In 1990s Indonesia, conglomerate Astra International was Asiamoney’s outstanding company, while department store company Ramayana Lestari topped the list in the 2000s.
Astra has been a large player in Indonesia since its start in 1957. The company made a name for itself as the sole distributor of Toyota vehicles, Honda motorcycles and Fuji-Xerox office equipment in the country in 1969 and 1970. Astra continued its expansion, adding a variety of businesses up to its 1990 initial public offering in Indonesia. The company’s net revenue of Rp239.2 trillion ($16.7 billion) in 2018 is up 16% from Rp206 trillion the previous year.
Established in 1978, Ramayana Lestari provides apparel, shoes, accessories and supermarket products for retail buyers. The company operates 113 stores in 54 cities in Indonesia, targeting the average shopper with affordable products. Ramayana Lestari’s revenues of Rp5.74 trillion in 2018 are little-changed from the previous year, but net income is up 44.4% to Rp587.11 billion.
These two companies might appear obvious plays for a fast-growing economy. But in the most recent decade, a very different firm stood out: Bank Central Asia.
While BCA has ridden the rollercoaster of Indonesia’s economy since its founding in 1957, the last few years have created the biggest opportunities for the bank. In 1989, Indonesia had a GDP of about $94.5 billion; in 2017, it had surpassed $1 trillion, according to the World Bank.
President Joko Widodo, who was recently re-elected, has made reform a priority and has encouraged financial inclusion. When Widodo assumed office in 2014, only 36% of Indonesian adults had access to financial services. The World Bank found last year that number had risen to 49%, showing far more growth than anywhere else in east Asia. Gender inequality is low as well, meaning that men and women are equally likely to have an account.
With the growth in financial technology and the prevalence of mobile use in the region, it’s even easier for banks to reach new customers in less traditional ways. Digital penetration in Indonesia is 58%, about 1.6 times the 2014 rate, according to McKinsey. The consulting firm also found in its survey of financial services customers that banks’ efforts to encourage and explain online banking were the top reasons for respondents trying digital channels.
BCA has boosted its internet and mobile banking platforms, using new products such as an e-wallet app called Sakuku or an e-money Flazz card, designed for small payments like those for public transport or fast food. Digital transactions made through the internet or mobile platforms account for 98% of the bank’s transaction volume, according to its 2018 annual report. Mobile banking made up 30.3% of transactions last year, with a volume increase of 66.4%. Meanwhile branch transactions make up just 2.4% of transactions, showing a 2.5% decrease in volume.
There is still ample scope for BCA and other Indonesian banks to see more growth through digitalization. Not only has the number of digitally active banking users soared in the last four to five years, but these customers have also proved to be the most loyal, according to McKinsey. BCA can now look forward to the next decade.
Technology has been at the forefront of Japan’s development in the last 30 years. Household names Sony and Toyota won Asiamoney’s outstanding company awards for the 1990s and 2000s, respectively, but it’s Nidec, a lesser-known name but big company in its own right, that caught Asiamoney’s eye in the last decade.
Nidec, a manufacturer of electric motors, has a history that parallels those of other Asian tech companies, demonstrating the growth of tech in the region and globally over the last 30 years, as well as how tech has broken down barriers in trade.
Nidec’s business has morphed, following the growth of the personal computer industry in the 1980s, and later moving to smartphones and tablets.
“We have grown, mainly because the key market we serve has grown rapidly,” says Masahiro Nagayasu, general manager of the investor relations and CSR promotion department at Nidec.
The company supplies parts to companies including Apple. As technology boomed in Japan, manufacturing has moved overseas.
“Today, we have almost no manufacturing in Japan,” says Nagayasu of Nidec’s business. The company has joined many others in moving its manufacturing to southeast Asia, while at the same time acquiring companies around the world to better tap markets abroad. For Nidec, that means that less than 10% of its more than 100,000 employees are in Japan. Nagayasu says that it’s similar across the industry in Japan.
“This market is not just one country’s market, it’s a global market,” says Nagayasu. “Today, a smartphone produced in China will be shipped to every corner of the world.”
The global diversification of Japanese businesses does lead to some misconceptions from outsiders though. With trade talks dominating the news, many consumers are concerned about the costs of products, as well as foreign exchange rates, says Nagayasu. With robots helping cut down on labour charges, Nagayasu reckons that some Japanese companies may start to bring manufacturing back to Japan and closer to the markets where the products will be sold, as a way of cutting back on export and import costs.
The 1990s winner Sony, which was set up in 1946, continues to lead the development of products ranging from radios and televisions to digital cameras and robots. Today, Sony has sales and operating revenue of ¥8.54 trillion ($78.89 billion), phenomenal growth for a company that began with start-up capital of ¥190,000 for the research and manufacture of telecommunications and measuring equipment.
Toyota is also a long-standing Japanese brand, having first started producing cars in the late 1930s. By 1947, the company’s cumulative Japan production reached 100,000 vehicles, and it grew to surpass 100 million in 1999. While still best known for its cars, which are driven all over the world, Toyota also operates in other sectors including financial services and housing. Toyota Motor Corp’s net revenues of ¥29.38 trillion in the fiscal year ending March 31, 2018, are almost ¥1.8 trillion higher than in the previous year.
There was little competition for our polls and awards in South Korea over the last three decades – every time, Samsung Electronics came top.
Since its founding in 1969, the tech company has become a household name around the world, known for gadgets from televisions to tablets. Samsung got its footing in the growing home electronics business when the sector was just taking off and quickly became a leading exporter.
Like other established technology businesses, Samsung faced tough competition in the 1990s. But even when many of South Korea’s companies were hammered by the 1997 Asian financial crisis, Samsung continued to grow. Since then, the company has evolved with new technology, mass-producing products that have captivated consumers around the world.
Samsung’s growth and industry dominance has come as South Korea made a name for itself as a home for quality tech companies. LG and Hyundai are just two other examples.
These global tech leaders have benefited from the South Korean government’s support of innovation through the ministry of strategy and finance’s tax and other incentives. The country has free-trade zones and free economic zones to bring in foreign investment. South Korea has also eased the visa process for skilled technology workers to immigrate.
The government plans to invest W2.2 trillion ($1.86 billion) in AI projects by 2022. Some funds will be used for universities to develop graduate school programmes focused in teaching and developing AI. The country is looking beyond its tech leaders of today to stimulate the growth of startups in the country as well. In February, for instance, the Seoul government announced plans to invest more than $1 billion in fintech and blockchain startups by 2022. The city even established a blockchain governance team this year to look at the potential in government.
While start-up investments may mean competition for the likes of Samsung, it also means continued leadership from South Korea as a tech hub.
Genting Group dominated the Asiamoney polls in the 1990s and British American Tobacco (BAT) in the 2000s.
Genting has been a presence in Malaysia for more than 50 years, and started out as a hill retreat known as Genting Highlands Resort. The group has since expanded its operations from hotels and resorts to plantations, cruises, power generation and biotechnology research. The combination of those initiatives allowed Genting to report revenue of RM20.9 billion ($4.99 billion) in 2018.
Tan See Leng,
BAT’s history spans more than a century. It began as a joint venture between the UK’s Imperial Tobacco Company and the American Tobacco Company. Today it sells its tobacco and nicotine products in more than 200 markets around the world. In addition to traditional tobacco products, the company now offers customers vapour, tobacco heating and oral products. BAT has been in Malaysia since 1912, and is the largest tobacco company in the country. BAT Malaysia’s revenue exceeded RM2.8 billion at the end of 2018.
IHH Healthcare is our poll leader for the 2010s: it encompasses what were once four standalone companies: Acibadem, International Medical University, Pantai and Parkway. The company has grown from its first hospital built in Malaysia in 1974 to having operations in Malaysia, Singapore, Turkey, India and Greater China.
Malaysia’s GDP has grown from $38.9 billion in 1989 to $314.7 billion in 2017, according to the World Bank. During that time, the country’s population has risen and poverty levels have dropped. Life expectancy at birth has gone from just over 70 years in 1989 to nearly 75.5 in 2017.
With a growing and aging population, the opportunities for growth in IHH’s home country have been nudged along by the Malaysian government. The country has been happy to invest in medical infrastructure, particularly in the last 10 years, driving Malaysian hospitals to be on a par with those in well-developed countries, according to insurance company AIA. As a result, Malaysia is a destination for medical tourism.
There’s still more room for growth: Fitch Solutions Macro Research found that the country’s healthcare market will grow 127% to RM127.9 billion in 2027, from RM56.3 billion in 2017.
In the Philippines, San Miguel led in the 1990s and telecommunications provider PLDT led in the 2000s. In the 2010s, the country’s top company award was split between conglomerate Ayala Corp and its subsidiary, the country’s largest property developer, Ayala Land.
San Miguel has kept its Philippine roots since it was set up in 1890 as southeast Asia’s first brewery, growing to become a top 10 beer brand globally. While continuing to hold onto its brand as a beer company, San Miguel has diversified its business into food, packaging, real estate, energy and more, helping to boost its earnings to record levels. The company had consolidated revenues of P826 billion ($15.87 billion) in 2017, up 21% from 2016.
PLDT is also a long-standing Philippine name, founded in 1928 as the Philippine Long Distance Telephone Company. PLDT, which has one of the largest capitalizations among Philippine-listed companies, has revenue of more than P164.7 billion in 2018.
Ayala Corp has been around since 1834, but its property business was spun off in 1988. It is one of the most diversified businesses in the Philippines, encompassing banking, water, power, healthcare, education and more. In 2018, the company recorded a net income of P31.8 billion, up from P8.1 billion in 2009.
As is the case elsewhere in Asia, the Philippines felt the economic crunch in 2018, brought on by the US Federal Reserve’s interest rate hikes, the uncertainty surrounding the US-China trade war, as well as weakened investor confidence in general.
The Philippine economy expanded 6.2% in 2018, a bit slower than the previous year’s growth of 6.7%. Despite the effects of rising oil prices, food supply issues and a weaker peso, Ayala Corp is optimistic for 2019 in its most recent annual report, hoping to capitalize on an increase in investment spending as a percentage of GDP to 27% last year, the highest level in more than 20 years.
While Ayala Corp keeps a diversified portfolio, allowing it to find success in a number of sectors, it is directing resources into new businesses. The bulk going to AC Energy, a renewable energy company. AC Energy is already financially self-sufficient, and no longer needs capital from Ayala Corp to continue its expansion.
It is also one of the fastest-growing power companies in the region, contributing about 10% of Ayala Corp’s earnings in 2018.
As one of the most developed economies in Asia, Singapore is home to a number of the region’s leading companies. In the 1990s and 2000s, Singapore Airlines, still regarded as one of the best airlines in the world, topped Asiamoney’s most outstanding companies list. In the 2000s, real estate company CapitaLand tied for first place. And in the most recent decade, palm oil company Bumitama Agri and DBS Bank topped the list.
Bumitama Agri, listed in Singapore since 2012, is a leading palm oil and palm kernel producer. Its operations are in Indonesia. It only began planting its trees in 1998, after acquiring its first land bank in 1996. With such young trees, the company can look forward to more production in the years to come. Bumitama Agri’s revenue is nearly Rp8.4 trillion for 2018, up 3.1% from the previous year.
While Bumitama Agri’s story is linked in many ways more to Indonesia, DBS’s growth is a unique reflection of Singapore’s development. DBS was established as a development bank in 1968, since when it has morphed into a fully fledged commercial bank. The bank’s current name was adopted in 2003 as it moved further from its beginnings as the Development Bank of Singapore.
Since DBS’s formation, Singapore has “developed into an international financial centre,” says Shee Tse Koon, Singapore country head at DBS Bank. Local companies became bigger, spreading their influence; at the same time multinationals moved to the city, using it as a regional hub.
“Singapore as a country, as a nation, has a prominent brand name,” he says. “Singapore wasn’t just a beneficiary of [Asian growth], it led the transformation. The entire development of the country really started taking off in the 1980s.”
That shift led DBS to develop into a regional commercial bank, ready to meet the needs of the city’s burgeoning middle class. DBS has taken that model and run with it, moving into 18 markets today. In the last 10 years the digital revolution has defined the region, and DBS has moved to keep up, making itself known as a digital bank. For instance, DBS set up digibank in India, and had a million accounts in just a year.
“There has been a massive transformation over the last 30 years, and the last 10 even more so,” says Shee.
Taiwan’s outstanding company has topped Asiamoney’s polls in all three of the decades in consideration. Taiwan Semiconductor Manufacturing Company (TSMC) has consistently blown the competition out of the water with its domination of semiconductor manufacturing.
Since 1987, TSMC has pushed itself in a growing sector, innovating the semiconductor business model and making itself an indispensable supplier for companies around the world.
Like other tech companies in Asia, TSMC kept itself relevant by staying flexible in its business model. For TSMC that meant shifting its business after its first 10 years to focus on its own process technology; that decision, in the late 1990s, gave TSMC more control over its technology.
“Without us making that very important decision, we wouldn’t be where we are today,” says Elizabeth Sun, senior director of the corporate communications division at TSMC.
The advent of the smartphone presented new opportunities, something TSMC has tapped into with clients that include Apple. As digital consumer unit shipments have slowed, TSMC has also increased its semiconductor production for the auto industry, as well as the much-touted arrival of the internet of things, which includes technology such as smart wearables.
TSMC’s client base is mainly outside its home territory. Sun estimates that 90% of TSMC’s business comes from outside of Taiwan.
“We are literally everyone’s foundry,” she says. “The market is global, the players are global, [and] the competition is global.”
But reaching the global stage took time.
“In the early years, Taiwan was not known to be a tech leader,” says Sun. “Twenty years ago, when you told people that [Taiwan] is a tech leader, they just looked at you politely.”
Today Taiwan is known as a home to world-class technology companies.
Thailand’s top companies have come from a variety of sectors over the years, with Bangkok Bank leading the charge in the 1990s and state-owned oil and gas company PTT dominating the 2000s.
But it’s the diversity seen in Asiamoney’s 2010 winners that truly shows how far Thailand has come as a stable economy in Asia, fostering the growth of companies with an international reach. Bangkok Dusit Medical Services, 7-Eleven operator CP All, property company LPN Development and seafood product producer Thai Union Group make up the four-way tie for winners in the last decade.
For these companies, support has come from the very top, with the Thai government making internationalization a priority.
“The government has definitely had a focus on enabling trade,” says Darian McBain, group director of corporate affairs and sustainability at Thai Union.
Projects such as the Eastern Economic Corridor Development Plan aim to make Thailand more of a powerhouse in the region. These efforts have been consistent, despite political uncertainty.
With one eye on foreign clients, Thai companies have had to raise their standards, collaborating with the government to create more sustainability and transparency to open more trade routes, says McBain.
Thailand’s GDP has risen from $72.3 billion in 1989 to reach $455.3 billion in 2017, according to the World Bank. The population has grown from 55.8 million to 69 million during that same time, while the labour force grew by about 9 million.
“Thailand has had to go over and above the basic international standards to prove that it plays at an international level,” says McBain. That in itself is a shift from where Thailand stood just a few years ago.
“Thailand suffered in the past, from the perception that the quality wasn’t as good,” she says. “But that perception has changed.”
McBain says: “Overseas customers are often blown away by the high standards that exist here.”