Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Supply chains for the future – from HSBC Asia Pacific Trade Exchange
18 Plays4 years ago
As the global economy fragments, multinationals are building resilience by diversifying production around the world, and there is growing importance of ESG factors towards supply chains. Where are the opportunities in Asian economies and how will the supply chains of the future evolve? Listen now to HSBC and industry experts from Coface, Indorama Ventures, Sustainlytics and Vestas.
This episode was recorded in February 2021 from the HSBC Asia Pacific Trade Exchange. During the event, we have explored the current landscape of trade, shared ideas, and discussed what the future holds alongside thought leaders from across the world.
For more information about anything that you have heard in this podcast and to view related content, click here
Hosted on Acast. See acast.com/privacy for more information.
Recommended
Transcript
Introduction to HSBC Global Viewpoint Podcast
00:00:00
Speaker
This is HSBC Global Viewpoint, your window into the thinking, trends and issues shaping global banking and markets.
00:00:09
Speaker
Join us as we hear from industry leaders and HSBC experts on the latest insights and opportunities for your business.
00:00:18
Speaker
A heads up to our listeners that this episode has been recorded remotely, therefore the sound quality may vary.
00:00:24
Speaker
Thank you for listening.
Introduction of Guest Speakers
00:00:30
Speaker
So we have Nick Gandolfo from Sustainalytics, a global leader in ESG and corporate governance research and ratings.
00:00:39
Speaker
Nick is a director of sustainable finance solutions, heading the business in APAC and is based in Singapore.
00:00:46
Speaker
He's over 15 years experience in the region across countries as diverse as Australia, Hong Kong, China, Indonesia, Cambodia and Singapore and worked in the private and seven government sectors in both developed and emerging markets.
00:01:00
Speaker
Next, Bupesh Gupta.
00:01:02
Speaker
Bupesh is president and CEO of COFAS in the APAC region, a position he's held since 2016.
00:01:12
Speaker
And he brings an extensive experience across a wide range of financial products across large ticket leverage and project finance, trade and consumer finance.
00:01:22
Speaker
He's had a number of senior roles in GE Capital and is a board director for JV's Hyundai Capital in Korea and Cosmos Bank in Taiwan.
00:01:33
Speaker
Ashok Jain.
00:01:34
Speaker
Ashok is Head of Corporate Finance at Indorama Ventures, one of the world's leading petrochemicals producers, and is based in Bangkok in their head office.
00:01:43
Speaker
Ashok has been with Indorama for over 15 years, covering corporate strategy, investor relations and ECM roles, and has been in his current role for the past four years, where responsibilities cover banking and finance, taxation and M&A.
00:01:59
Speaker
And lastly, Michael Nielsen.
00:02:01
Speaker
Michael is the regional head of supply chain for Vestas Asia and responsible for ensuring the fulfillment to global locations of finished goods and components.
00:02:11
Speaker
He's based in Singapore and has over 15 years experience in the region, including stints in both India and China.
00:02:20
Speaker
Please feel free to submit questions via the Q&A functionality whilst we hold the panel discussion and we'll be holding a Q&A session at the end where I'll be able to put your questions to the panel.
Impact of Geopolitical and Economic Challenges on Supply Chains
00:02:36
Speaker
So, with a less predictable geopolitical environment, macroeconomic challenges, increased regulatory pressures, currency volatilities and most recently COVID, building and managing resilient supply chains, including their financing, has never been more the subject of scrutiny, focus and change as it has been over the past couple of years.
00:03:02
Speaker
be it working capital optimization, changing structures, risk management, ESG or innovation, and therefore increasingly the focus of corporate C-suites and boards.
00:03:14
Speaker
But it does present great opportunities for those that are able to manage this well.
00:03:20
Speaker
So my first question to the panel is, over the past year, the preservation of cash has become a priority for all corporates, with working capital efficiencies playing a critical role.
00:03:34
Speaker
What trends around this theme have you seen emerging?
00:03:38
Speaker
And how do you see this evolving in the future?
Trends in Working Capital and Cash Management
00:03:42
Speaker
Ashok, perhaps I could start with you.
00:03:44
Speaker
Yeah, thanks, Stephen.
00:03:47
Speaker
Good afternoon to everyone.
00:03:50
Speaker
So we have gone through a situation over the past 12 months, which was more health driven rather than any structural reasons, which we went through in the 97 ASEAN crisis or in the 2008 global crisis.
00:04:08
Speaker
During the past 12 months, whenever there are times, whenever times are uncertain, there is a push to keep liquidity.
00:04:19
Speaker
And obviously because of the nature of working capital, that is the first thing that the corporates would look at.
00:04:27
Speaker
So what we have seen is within the supply chain, there was an impact from destocking.
00:04:36
Speaker
So everyone was moving from produce to stock to produce to order.
00:04:42
Speaker
So
00:04:46
Speaker
That destocking resulted in release of cash from working capital.
00:04:53
Speaker
The other aspect during such times is credit risk management.
00:04:59
Speaker
There is a large portfolio of receivables and you never know between which of your exposures there could be risk emanating.
00:05:10
Speaker
And at the same time, where you are well covered
00:05:16
Speaker
the counterparties may reduce the, may decide to decrease those limits for you.
00:05:23
Speaker
So that is another aspect you need to very regularly monitor.
00:05:29
Speaker
What has been useful is that because of the governments, there was a lot of liquidity in the market and the yields came down.
00:05:39
Speaker
So there was an opportunity to lock in
00:05:43
Speaker
funding for long term and short term at low cost of financing.
00:05:49
Speaker
So primarily what we see as a trend is that with how supply chains are moving, whether we need to look at our cash cycles more closely and whether we need to change to the new normal our cash cycles rather than what we were doing in the past.
00:06:14
Speaker
Yeah, Stephen, that's all.
00:06:14
Speaker
Thanks, Ashok.
00:06:14
Speaker
Bupesh, perhaps I could pass the question over to you as well, please.
00:06:18
Speaker
Thank you.
00:06:19
Speaker
Sorry about that.
00:06:20
Speaker
We've been doing this for so long, still make the same mistakes.
00:06:21
Speaker
I was just saying that kind of a sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-sh-
00:06:42
Speaker
Ashok put his thumb on the right thing, which is, you know, you've got to fundamentally protect cash, right?
00:06:49
Speaker
So banks provide cash, but it's really bridging, right?
00:06:53
Speaker
It's people like Ashok and their constituents and stakeholders who actually generate cash.
00:06:59
Speaker
People like us, COFOS, if you don't know, we issue policies that protect about $700 billion of receivables across the world at any point of time, right?
00:07:07
Speaker
So our job is to protect cash.
00:07:09
Speaker
We've seen a couple of trends here, right?
00:07:11
Speaker
And one of them surprising.
00:07:12
Speaker
When we started the year, kind of the end of the first quarter, beginning of the second quarter, when we thought, you know, COVID is going to be worse than we initially assumed, you know, kind of greater China and the region, it's going to affect the world.
00:07:26
Speaker
There was a scramble, as Ashok put it, you know, to make sure we had the right limits.
00:07:30
Speaker
We had, you know, not been overexposed to things.
00:07:33
Speaker
And, you know, we did what we had to.
00:07:36
Speaker
The surprising thing for me during the year has been not only us, but kind of all my fellow companies who are part of the burn union have actually paid out 16% less this year, or rather in 2020 compared to 2019.
00:07:55
Speaker
One was what Ashok mentioned, the fact that there was much more liquidity from government, but there was also direct support protection for debtors against creditors, et cetera.
00:08:05
Speaker
But that has been the biggest trend we've seen actually in this year has been the willingness to accommodate.
00:08:11
Speaker
Buyers, sellers have been accommodating each other more than we have ever seen.
00:08:14
Speaker
We've had overdues where people have said, look, can you just give us an extension of dates so we can work this out amicably?
00:08:21
Speaker
Because obviously when we pay claims, then we've got to go out and recover.
00:08:25
Speaker
That has helped.
00:08:26
Speaker
The issue is if this keeps going and we still aren't seeing the exact end of the tunnel, I think we know it's there with the vaccinations going on.
00:08:35
Speaker
We don't know when either of these things start to stumble.
00:08:38
Speaker
If you have in the chain of accommodation and one or two people stopping to do that, you're going to have issues.
00:08:44
Speaker
Comes back to our job.
00:08:46
Speaker
We've got about a thousand people who are monitoring on a daily basis.
00:08:51
Speaker
Thousands and thousands of buyers across 200 countries.
00:08:54
Speaker
You've got to keep your eye on that ball.
00:08:56
Speaker
You've got to continue to manage the risk, whether it's, you know, we are seeing some movements to documenting credit where there used to be open accounts.
00:09:04
Speaker
But on the whole, so far, I would say things are sticking together.
00:09:09
Speaker
And I hope that for the next six months, we're going to get through this and we'll be all fine.
00:09:13
Speaker
I think, but those are the trends that I'm seeing here is, you know, more accommodation than I've ever seen in my life.
00:09:18
Speaker
I went to the GFC and took billions of dollars of losses.
00:09:21
Speaker
This is not like that.
00:09:23
Speaker
It's actually going to come out and I kind of, our slogan is, you know, beat COVID together.
00:09:27
Speaker
And I think that's what we've got to do.
00:09:30
Speaker
Great, no thanks very much, Pupesh.
Corporate Sustainability and ESG Goals
00:09:33
Speaker
So perhaps now moving on to another question and moving on from working capital efficiencies, there's now a really clear focus on sustainability priorities.
00:09:48
Speaker
and no longer seen I think as as optional considerations for corporate boards.
00:09:54
Speaker
What are the trends you're seeing and what are the steps being taken by corporates to help them achieve their sustainability goals?
00:10:04
Speaker
Perhaps I could start with Nick on this particular subject.
00:10:09
Speaker
Yeah, thanks, thanks Stephen.
00:10:10
Speaker
And again, good afternoon to everybody.
00:10:12
Speaker
So I think you're absolutely right.
00:10:14
Speaker
In addition to the different constraints on liquidity and the difficult COVID environment revolve, and the stresses that that's put on value chains and supply chains,
00:10:24
Speaker
it's enhanced, focused, accelerated, emphasized the E environment, S social and the governance perspective.
00:10:33
Speaker
So the context is really intensified.
00:10:37
Speaker
And I guess some of the trends that we see, some of them are regulatory imposed, such as Modern Slavery Act, in particularly the UK and Australia, which demands some corporates to really get into more of the details in their supply chains and have an active program on how to deal with some of those issues.
00:10:54
Speaker
The other thing that's really intensified too is this whole movement towards decarbonisation, net zero, transition.
00:11:02
Speaker
And what that has meant is that a lot of corporates need to focus on what we call scope three emissions.
00:11:07
Speaker
So where's the emissions in their value chain?
00:11:09
Speaker
The topic of today is the supply chain aspect of that.
00:11:12
Speaker
And that's really intensified.
00:11:14
Speaker
So some of the certifications...
00:11:16
Speaker
in the market about science-based targets and having a really robust plan to reduce your emissions you actually need to take these things into consideration or you can't actually get some of those uh certifications so they're they're two big ones probably the other two things that i think is happening and being exacerbated by covid and just the ongoing context and importance of sustainability is
00:11:38
Speaker
I'd say leadership.
00:11:39
Speaker
So more and more corporates wanting to show leadership through their procurement spend, through their investments, through their interactions, because a lot of corporates are obviously sourcing and working with suppliers in some difficult markets who don't maybe have the best enabling ESG opportunities.
00:11:57
Speaker
regulations and support.
00:11:59
Speaker
So I think there's a real opportunity for leadership there and we're seeing it.
00:12:02
Speaker
So some corporates really using that influence through that procurement spin.
00:12:08
Speaker
The other thing is transparency.
00:12:09
Speaker
And we've seen that in the green bond, label bond, social bond, sustainable finance markets of which HSBC is a huge, a huge player.
00:12:19
Speaker
And that's transferring to, I'd say, sustainable supply chains as well.
00:12:25
Speaker
So us as consumers, we demand more of companies now.
00:12:28
Speaker
We want to know where our products we're buying comes from.
00:12:31
Speaker
So there's been lots of different announcements from companies like Unilever and many others about how robust their supply chain is.
00:12:40
Speaker
management is, how they've integrated sustainability.
00:12:44
Speaker
So there's push from banks, there's push from investors, and there's really push for consumers.
00:12:48
Speaker
So I think all of that as sort of trends, that they're not...
00:12:53
Speaker
in the absence of, or just come out of nowhere.
00:12:56
Speaker
COVID highlights these, some of these trends have been building for some time and now it's just intensified.
00:13:02
Speaker
So lots of different things that we see in the market and it's a real growth area for our business and talking to clients about lots of these different aspects.
00:13:14
Speaker
Great.
00:13:14
Speaker
No, thanks, Nick.
00:13:16
Speaker
Michael, with Vestas being an industry leader in sustainable energy solutions and at the forefront when it comes to sustainability, it would be great to sort of get your views and hear from your thoughts around this subject.
00:13:33
Speaker
Yeah.
00:13:35
Speaker
Good afternoon to everybody.
00:13:36
Speaker
I think Nicholas did a very good job of explaining what are the key things that's going on at the moment across the board.
00:13:43
Speaker
I think maybe to mention two examples of how those things go over and beyond, because even though we are a sustainable product, it takes the whole value chain, as Nicholas mentioned, to make it work.
00:13:53
Speaker
And in that aspect, of course, we have our own internal goals of how we become a carbon neutral company by 2030 by doing various actions.
00:14:01
Speaker
But it's also how do we make sure that the value chain becomes and how do we ensure that the partners we work with get enabled to do it?
00:14:10
Speaker
So we do have, for example, like Vestas Ventures,
00:14:13
Speaker
but we actually collaborate with other people in the power industry or supporting sustainability where if the battery life needs to get longer, how do we make sure that we work, collaborate with the right people to evolve in that space of it?
00:14:26
Speaker
How do we work to improve the capability of turbines as well?
00:14:31
Speaker
And then we are still a young industry, so to say, in sustainability.
00:14:37
Speaker
So actually what we're also working on right now and something you'll be seeing coming over the next couple of weeks is the
00:14:43
Speaker
collaboration, not only with our industry peers, but also partners that is suppliers to us to see how do we work on actually making reverse logistics sustainable.
00:14:53
Speaker
So as we start to see more repowering happening, old turbines being taken down, being reused, how do we take this forward looking of knowing what is coming tomorrow and ensuring that that also becomes sustainable.
00:15:05
Speaker
So there's consortiums now being established across the value chain to make sure we become as an industry more sustainable than
00:15:12
Speaker
our product is today.
00:15:14
Speaker
So again, it takes a lot of collaboration.
00:15:17
Speaker
I know that Nicholas mentioned that the consumer, but it's also in the business to business that just something like safety of employees during the COVID times.
00:15:25
Speaker
Safety is already for employees of our utmost importance, but actually being able to translate that to customers, what we're doing, being able to collaborate with partners, telling them what we're doing.
00:15:35
Speaker
I think there's a lot of soft, so let's call it leadership.
00:15:38
Speaker
I'll call it, there's a lot of soft things in the SDGs as well that we need to be aware of that we're working on as well to enabling everybody in the value chain.
00:15:47
Speaker
So I think there's a lot of good things happening across industries in consortiums as well as within companies.
00:15:55
Speaker
Great.
00:15:56
Speaker
Thanks very much, Michael.
00:15:59
Speaker
Perhaps I'll pass over to Ashok.
00:16:04
Speaker
Welcome any sort of thoughts and views from you, particularly for petrochemicals industry perspective.
00:16:12
Speaker
Yes.
00:16:13
Speaker
So I think Nicholas and Michael have covered it well.
00:16:17
Speaker
Since we are part of an oil group chemical industry, so there are a lot of expectations on the ESG front.
00:16:25
Speaker
from our industry and there are expectations of structural changes in the longterm within the industry.
00:16:33
Speaker
So we need to prepare for that, which we are doing.
00:16:38
Speaker
At the same time, I think what we have seen is that ESG has gained more relevance over the past 12 months.
00:16:48
Speaker
As we have seen, the skies have become more blue
00:16:52
Speaker
I used to never see a blue sky in Bangkok in the day, but I do see it over the last 12 months.
00:16:59
Speaker
So that is a change.
00:17:01
Speaker
Of course, that is because people go out less, they travel less.
00:17:07
Speaker
So I think within the industry, everybody is trying to come out with their own ESG strategy, primarily, which is centered around reducing the carbon footprint.
00:17:22
Speaker
whether that carbon footprint is in manufacturing or is in supply chain and distribution.
00:17:31
Speaker
And secondly, I think everybody is setting up their targets.
00:17:35
Speaker
Everybody is preparing for 2040, 2050, how to become, how to get to zero GHG.
00:17:46
Speaker
And at the same time, since we know that electric vehicles
00:17:50
Speaker
are coming and up to 2040-50 is a long period within which probably if the electric vehicle industry picks up, there could be an infrastructure which can be set up for that.
00:18:06
Speaker
So that, so there is a lot of preparation within the industry going on, as I mentioned in the beginning, that it has potential to structurally change the oil to chemical industry over a period of 20 to 30 years with what is happening around us.
00:18:25
Speaker
Great.
00:18:25
Speaker
No, no.
00:18:26
Speaker
Really appreciated those thoughts, views, Ashok.
00:18:30
Speaker
Bupesh, I'm really interested in how you see this from a COFAS's perspective.
00:18:38
Speaker
Look, I think there are two aspects of that.
00:18:40
Speaker
I think we're
00:18:41
Speaker
we're pretty well subscribed to the fact that we want to be, you know, an organization with a strong ESG culture, right?
00:18:47
Speaker
And we're doing lots of things.
00:18:49
Speaker
We just signed up to an LGBT charter to ensure, you know, inclusiveness, not across, you know, sexes, but also across, you know, things like that.
00:18:59
Speaker
But I think from looking out at my clients, I see a change, right?
00:19:06
Speaker
And the change is kind of, you know, I think it's not the beginning, but it's kind of somewhere closer to the first quartile of a change from what we used to see 20, 25 years ago, which was a tick the box mentality.
00:19:21
Speaker
I need to tick enough boxes so I can stay out of trouble from the regulators to a mentality which is more looking now like a virtuous evolution of corporate culture.
00:19:31
Speaker
Right.
00:19:32
Speaker
More and more organizations are really believing in this.
00:19:35
Speaker
I think there are two reasons for that.
00:19:37
Speaker
One is I think the millennials demand that of us.
00:19:39
Speaker
If you're going to employ millennials, you're going to have to think and act differently.
00:19:46
Speaker
There's no winking going on.
00:19:47
Speaker
They're part of the organization.
00:19:48
Speaker
They want to be part of organizations that have a strong ESG culture.
00:19:52
Speaker
I think there's another one which comes out from them.
00:19:54
Speaker
We are actually seeing a number of our clients that come to us and say, we'd like to understand your ESG culture to decide whether we want you to be an insurer.
00:20:02
Speaker
This is not a trend that I'd seen five years ago, right?
00:20:04
Speaker
People say, okay, you're a financial institution.
00:20:06
Speaker
You do what you need to, you know, I'll carry on my business.
00:20:09
Speaker
So when people start demanding that their partners have a similar ethos and culture as them, you start seeing the start of an evolution or could become a revolution.
00:20:19
Speaker
So I think from my point of view, we see much more of that.
00:20:22
Speaker
We try and be fully compliant.
00:20:24
Speaker
We try and be socially active.
00:20:26
Speaker
Our motto is for trade.
00:20:28
Speaker
We believe trade brings peace, prosperity, and stability across the world.
00:20:33
Speaker
So we do our own bit.
00:20:34
Speaker
We're a small organization, but it's good to see others following that.
00:20:39
Speaker
Yeah, great.
00:20:40
Speaker
Thanks, Bupesh.
00:20:41
Speaker
I think this whole piece around the millennials and what they demand and having to, you know, we're all looking to attract the best talent.
00:20:51
Speaker
And as you say, I think there is very much a real movement where people, as you say, generally care about this and less the tick the box exercise.
00:21:02
Speaker
So perhaps we can just move on to, I think, the final sort of question we have for the panel before we move into sort of Q&A.
Digitization in Supply Chain Management
00:21:12
Speaker
And this really is looking at the digitization of supply chains.
00:21:19
Speaker
And I guess what you see is the key shifts that innovation is driving.
00:21:27
Speaker
And how, it's always a difficult question, how do we see this defining the future?
00:21:33
Speaker
So perhaps if I could throw this one over to Ashok to have a sort of stab at, thank you.
00:21:44
Speaker
Okay, so I think how I see it is it's how we are looking at it is now more as in
00:21:51
Speaker
end to end solution with a more visible supply chain.
00:21:56
Speaker
When I say visible, earlier it was more information driven, now it is more visibility driven.
00:22:02
Speaker
And the objective remains the same to have a better customer experience and optimization opportunities.
00:22:10
Speaker
How the consumers have shifted over the last many years is that there was a time when they had more
00:22:19
Speaker
options means more products on the shelves from which to pick from then they had more options in terms of retail formats so instead of home stores it went into different types of segments of retails and now what we see is that now it has become digital so there is an option of e-commerce as well where again there are multiplicity of platforms
00:22:48
Speaker
from which they could pick the products.
00:22:52
Speaker
So taking a cue from there, if there is a consumer and that consumer needs to be satisfied as we are going forward, I think what would be required is that besides the ERP platform, probably a lot of networking on cloud computing between the entire value chain.
00:23:13
Speaker
so that you could see those shifts and you could move the product.
00:23:18
Speaker
This may be more relevant for particularly for somebody who is in a consumer good industry rather than in an industrial good industry.
00:23:28
Speaker
At the same time, there is a lot of, to have so much of flexibility, obviously your logistics need to be tracked closely.
00:23:39
Speaker
You need to have
00:23:41
Speaker
means there are supporting industries which are also evolving, which is in terms of tracking of the logistic systems, having 3D printing RFID, because there is a need for labeling, digital labeling on every product so that they could be captured on the systems.
00:24:02
Speaker
So I think where we are heading towards is
00:24:08
Speaker
probably the shift of consumer will drive more and more towards the innovation within towards digitization.
00:24:20
Speaker
And I'll just share with you an example in Bangkok that during the lockdowns, the home delivery of food business has gathered steam.
00:24:30
Speaker
And there are so many organizations which are providing that.
00:24:35
Speaker
And every
00:24:36
Speaker
Means even coffee shops need to link to these networks now so that people, if they want to buy a product, they could get to this.
00:24:45
Speaker
So I think the digitalization is affecting the entire supply chain.
00:24:50
Speaker
And I think the COVID-19 has pushed a lot of the smaller retail formats up to the larger manufacturing organizations and the retail formats to move into this.
00:25:03
Speaker
So I think that's, I will end with that.
00:25:08
Speaker
Great insights, Ashok.
00:25:10
Speaker
Michael, perhaps I can pass over to you.
00:25:15
Speaker
Welcome your thoughts around the digitization.
00:25:22
Speaker
We see it in three factors and then I would like to add an example of what Ashok meant because there's an expansion of the home delivery as well.
00:25:29
Speaker
But the first one is your predictive maintenance.
00:25:33
Speaker
So I think it's a lot of session and feedback loop you'll get from the demand of what is being used at your customer's location.
00:25:39
Speaker
That is enabling you to have a more efficient supply chain and you could do maybe predictive of when you want to do maintenance and make sure you have the right stock at the right place.
00:25:47
Speaker
So that feedback loop in terms of digitalization is now out most important.
00:25:51
Speaker
And you're seeing that in the most equipment that's coming out.
00:25:56
Speaker
The other one is also digitalization also is the key for us to have decision making.
00:26:01
Speaker
So during the COVID crisis, I think a lot of companies who had the visibility to where you had your finished goods, where you had your suppliers, where you were to deliver.
00:26:10
Speaker
So taking the demand chain versus the supply chain and actually have the ability to reroute it where possible during those periods to actually fulfilling your customers demand.
00:26:21
Speaker
That is the second part where it becomes critical.
00:26:25
Speaker
And then a third part where I think now we're in a finance forum where digitalization is becoming important is
00:26:31
Speaker
Hedging, exchange rates, to sourcing, final consumption, how to utilize the free trade agreement.
00:26:40
Speaker
There's a lot of things that ties into the supply chain that is potentially not anchored into when we take supply chain decisions because we keep talking physical factories, components,
00:26:50
Speaker
But sometimes there's more money in the sourcing and deliveries if you're actually understanding the global networks of the free trade agreements and the collaboration across countries.
00:27:03
Speaker
So it's very important that those get integrated from a digitalization part of it.
00:27:07
Speaker
And then Ashok mentioned an example, and we've seen the same thing for where I sit about the food industry and deliveries.
00:27:15
Speaker
But that also creates an enormous supply because people only eat breakfast, lunch and dinner.
00:27:21
Speaker
So people who actually in the supply chain is now identifying those people that works in the scooter.
00:27:26
Speaker
What are they doing from 10 to 12 from people are not consuming?
00:27:29
Speaker
How can I utilize these to do fulfillment of other things?
00:27:32
Speaker
So whatever comes out new also create opportunities for others.
00:27:35
Speaker
So these cross industries collaboration is also going to help us reduce the CO2 emissions and contortions to align.
00:27:42
Speaker
So just an example how we can collaborate as well with others.
00:27:46
Speaker
I know it's tough to put a turbine on a motorcycle in Bangkok, but for others who are delivering smaller items, there are opportunities for collaboration.
00:27:56
Speaker
So that's why we're seeing it today.
00:27:59
Speaker
That's really insightful, Michael, thanks.
00:28:03
Speaker
Nick, I'll pass that one to you.
00:28:06
Speaker
Yeah, I think I'd agree with a lot of things that the other panelists have mentioned and connected to the themes of digitization and visibility.
00:28:14
Speaker
I think there's two things that we really see and that we're building our business for and actually speaking to a lot of customers about.
00:28:21
Speaker
It's about risk and then impact.
00:28:23
Speaker
So on the risk side, a lot of it is about data.
00:28:26
Speaker
How do you assess suppliers?
00:28:28
Speaker
How do you do it efficiently?
00:28:30
Speaker
If there's no data that exists, have you got a digital platform to enhance that, to enable it?
00:28:36
Speaker
So I think from a risk perspective, I think digitization is very important.
00:28:43
Speaker
The other side too,
00:28:46
Speaker
around sort of visibility cuts two ways.
00:28:48
Speaker
I think from an impact point of view and also risk as well.
00:28:51
Speaker
So we work with a lot of clients who want to get into the lower tiers of their tier two, tier three, tier four and beyond in some complicated supply chains.
00:29:02
Speaker
How do you do that?
00:29:03
Speaker
I think that's pretty difficult without some systems, some digitizations and some of these other trends, I think are going to enhance that.
00:29:10
Speaker
So what's the core need as far as ESG or sustainability goes is visibility for risk and then visibility for impact.
00:29:17
Speaker
And the flip side of that is we're speaking to a lot of customers about how you quantify that.
00:29:23
Speaker
how you measure it, how you quantify it, and certainly digitization under that banner of visibility is going to help multiple issues that we see in these supply chains because
Government Support for SMEs During the Pandemic
00:29:34
Speaker
they're complicated.
00:29:34
Speaker
The world's only getting a more complicated place.
00:29:38
Speaker
So yeah, probably end on that, just those things in a very dynamic environment.
00:29:44
Speaker
Great, thanks Nick.
00:29:46
Speaker
Just before we go to Bupesh, just to remind the audience, if you've got any questions for the gentleman, please do drop them on the Q&A functionality you've got on the webinar.
00:30:00
Speaker
But perhaps I'll just finish with you Bupesh on this particular subject, I guess how you see this from a COFAS perspective.
00:30:12
Speaker
Thanks, Stephen.
00:30:13
Speaker
Look, I think digitization is something that happened a few years ago, right?
00:30:17
Speaker
If it had not, I don't think we guys would have survived the last 12 months.
00:30:22
Speaker
We were all able to, you know, especially people like us, you know, across the region and eventually across the world, we had 80, 85% of our people working from home.
00:30:32
Speaker
Without a change in response time, we were able to deal with, you know, customer credit approval requests.
00:30:37
Speaker
We were able to pay claims.
00:30:39
Speaker
We were able to do everything we know I'm going to do.
00:30:41
Speaker
There were some teething issues in terms of internet connection or power outages, especially with our center in India, but honestly, I don't think anyone felt it.
00:30:52
Speaker
So I think it comes back, the trends that I'd probably say I would like to see more happening are kind of related to what Nicholas said, data definitely.
00:31:00
Speaker
But for me and for my clients, it's becoming the ability to analyze, interpret, and predict on the basis of non-conventional data.
00:31:09
Speaker
So can I take
00:31:10
Speaker
all the customs records in a country and can I take all the energy consumption records in a country and can I correlate them to my buyers and say, if these guys are consuming energy and they're buying the product,
00:31:28
Speaker
They must be doing okay, especially if the product's not piled up in a warehouse.
00:31:32
Speaker
I think there's some AI, machine learning, whatever, that needs to take us to that level where you would really get efficient in being able to provide the cover and for you, even provide the financing based on that perspective.
00:31:46
Speaker
And I can see some of that starting to happen.
00:31:48
Speaker
It's right now a little bit, you know, not as organized as I would like to see.
00:31:51
Speaker
I think the other thing that we'd probably like to see more of is the application of blockchain for the purpose of, you know, supply chain flows.
00:32:02
Speaker
We see a lot of fraud there.
00:32:04
Speaker
We see copies of bills of lending.
00:32:06
Speaker
It just means we're going to have to step away from the edge of the cliff and be more cautious, which means, you know, people who could be insured or people who could get financing suffer.
00:32:15
Speaker
So I think those two evolutions are starting to happen and I see a trend when they will accelerate.
00:32:24
Speaker
Great.
00:32:25
Speaker
Thanks.
00:32:25
Speaker
I really appreciate it, Pupesh.
00:32:27
Speaker
So look, gentlemen, thank you for your insights here.
00:32:36
Speaker
We now sort of would move into the Q&A session and
00:32:41
Speaker
Looking at questions submitted so far, I think it's a reflection on how you've answered these questions that I think, you know, some great insights that you've given the audience into the topics we've discussed today.
00:33:02
Speaker
As things currently stand, we don't have any questions from the audience.
00:33:11
Speaker
So perhaps what we can do is perhaps look to start to wrap up the breakout session today.
00:33:25
Speaker
I think there is in terms of what I would like to say is firstly a huge thank you to each of you for your time this afternoon and the insights you've provided.
00:33:40
Speaker
Clearly, you know, it's an unprecedented time for change.
00:33:44
Speaker
And I think we've seen the ability to drive through change in supply chains at speeds unimaginable only 12 months ago.
00:33:53
Speaker
But I think businesses can clearly look beyond the myriad of challenges.
00:33:58
Speaker
We'll really be in a strong position in whatever the new normal that emerges post-pandemic.
00:34:05
Speaker
So I think the next step is really to I think there are some some logistics that I need to remind you the audience of.
00:34:17
Speaker
Actually, actually, before we do that, we have actually one.
00:34:25
Speaker
One question I can probably ask the audience, sorry, the panel before we disappear, we have a couple of late questions come in.
00:34:36
Speaker
So, and this is a bit of a tricky one to answer, but I'll open it up to anyone who wants to have a stab at this.
00:34:47
Speaker
What are the roles being played by various governments in supporting SMEs, vaccine diplomacy,
00:34:54
Speaker
and support from the public sector.
00:34:57
Speaker
Has anyone brave enough to have a go at this before we wrap up?
00:35:13
Speaker
I think... Sorry.
00:35:14
Speaker
Go ahead, Nicholas.
00:35:16
Speaker
I was just going to say a very brief comment.
00:35:18
Speaker
I think SMEs are a very important piece of the puzzle as you dig into supply chains more, more of the impact, sometimes more of the risk, but maybe more of the opportunities to work with these type of companies there.
00:35:29
Speaker
So I think it is a huge opportunity to engage right along that value chain and even with SMEs.
00:35:34
Speaker
So Singapore, the MAS has some programs that the banks can tap into to support different types of sustainability, you know, financing for SMEs.
00:35:43
Speaker
And hopefully we see that extend to
00:35:46
Speaker
you know, being more specifically connected to trade and supply chain as well for the SME.
00:35:52
Speaker
So a really important part.
00:35:54
Speaker
And some governments are being a bit more progressive on that.
00:35:57
Speaker
Sorry, Michael, I cut you off there.
00:36:00
Speaker
No, I think I was about to say similar about how Singapore is supporting it, but I think what we're also seeing in a sustainability effort from countries is that they're also driving to have more local content, creating the impact to support the SMEs to actually deliver the final products that are to be erected or produced in certain countries.
00:36:20
Speaker
So I think also the governments are right now collaborating and trying to understand with the inability for people to
00:36:27
Speaker
physically move across borders and even though we are able to work from home how can we go and support actually the smes and also corporates to to develop it in the countries with the talent available so i see that there's a lot of support for the countries to support this meet not just in singapore but also india australia thailand so i think there's a there's a lot of good efforts putting in by all the countries to make sure we get through this well as humanity
00:36:53
Speaker
Yeah, thanks, thanks, thanks, Michael.
00:36:56
Speaker
Thanks, thanks, Nick.
00:36:57
Speaker
A huge thank you to my to my panel today.
00:37:01
Speaker
And thank you also to you, the audience, for joining today's discussion.
00:37:06
Speaker
I hope you found it as insightful and interesting as I did.
00:37:10
Speaker
So thank you, everybody.
00:37:12
Speaker
Thank you for listening today.
00:37:14
Speaker
This has been HSBC Global Viewpoint Banking and Markets.
00:37:18
Speaker
For more information about anything you heard in this podcast or to learn about HSBC's global services and offerings, please visit gbm.hsbc.com.