The International Monetary Fund has cut global growth forecasts twice since April 2012. Despite widespread economic woes, security is keeping its momentum in certain regions, with Southeast Asia being particularly noteworthy given its game-changing population, rich natural resources and urgent needs for both public and private infrastructures.
The International Monetary Fund has cut global growth forecasts twice since April 2012. Despite widespread economic woes, security is keeping its momentum in certain regions, with Southeast Asia being particularly noteworthy given its game-changing population, rich natural resources and urgent needs for both public and private infrastructures.
The American Chamber of Commerce estimated that close to US$1 trillion worth of infrastructure projects will be opened to foreign investment in Asia over the next 10 years. "As APAC continues to attract investments from IT companies, we are expecting to see advanced electronic requirements from such companies in 2013," said Alan Parker, Director of Global Accounts and Vertical Markets for Asia, Tyco International.
Indonesia and Thailand, in particular, should not be overlooked. “Government expenditure in security is unlikely to decrease,” said Patrick Lim, Director of Sales and Marketing for Ademco Security Group. “Businesses that have done well will continue to spend on security, especially the ones dealing with expensive parts and high-value goods.”
Terrorist attacks, large-scale natural disasters and rising crime rates have raised the general public's security awareness; government initiatives are also helping fuel the demand and market for security systems and services.
Indonesia
In Indonesia, the demand for security equipment stems from the growing needs of various verticals, which range from the government sector to the booming construction, commercial, industrial and residential sectors. In particular, demand for security and safety equipment in industrial plants, commercial buildings, public facilities, oil/gas facilities, mining operations, airports and seaports has increased substantially.
On May 27, 2012, President Susilo Bambang Yudhoyono announced the country's Master Plan for Acceleration and Expansion of Indoneisa's Economic Development (MP3EI), which will carry the country through to 2025. The MP3EI aims to make Indonesia, the 17th largest economy in the world, one of the world's 10 biggest economies by 2025, by taking GDP to $4.5 trillion and increasing the per capita income from the current $3000 to $15,000. In 2012, for example, the Indonesian government planned for 110 projects worth almost $41 billion for the eight designated sectors in MP3EI — agriculture, mining, energy, industrial, marine, tourism, telecommunications and the development of strategic areas. This creates a pressing need for infrastructure development and a huge potential market for the security industry to tap into.
Thailand
Having recovered from the devastating floods of 2011, the Thai economy is expected to grow 6 to 8 percent in 2013, estimated US Commercial Service. Not just another high-growth market in Asia, Thailand is also the largest security market in Asia with plenty of security opportunities. The Thai security market was expected to grow 30 percent by the end of 2012; the Thai government would account for 70 percent of this growth.
Government needs for security stem from a recent counternarcotics drive; border tensions with Cambodia that require higher technology in surveillance and transport infrastructure; a general increase in security expenditure for Bangkok and the south due to ongoing violence since 2004; and rising crime rates. According to US Commercial Service estimates, government verticals account for a large share of the security market at 50 percent, while retail and office complexes account for 30 percent, and industrial facilities and universities take the remaining 20 percent.
Over the last two years, growth in the adoption of IP-based security technology has been phenomenal. This trend is expected to continue, especially with a nationwide fiber-to- the-home project that will rev up data speeds to 100 Mbps. Hence, the IP market is expected to grow 30 to 40 percent; not only are private sectors seeing more IP-based product adoptions, but government projects are also specifying IP-based systems.
In the following year, major projects that will bring opportunities to the security industry include the following. The Thai government has pledged up to $5.6 billion over the next five years for the development of its railway systems. There are also plans to expand the Bangkok Mass Transit, the Laem Chabang Port, the Suvarnabhumi Airport, and to invest in high-speed train networks, along with two new prison facilities. In the prison vertical, the government is planning to introduce electronic prisoner monitoring and combat the smuggling of contrabands such as mobile phones.
Commercially, industry experts estimate that the completion of four large shopping complexes in Bangkok, namely Central Plaza Rama IX, Terminal 21, Mega Bangna and Central Embassy, will generate 750,000 square meters of additional retail space in need of security systems and services.