While Thailand, Vietnam, Singapore and Malaysia surge ahead, their fellow, ASEAN nations face slower or uncertain growth. ASMAG.com takes a look at the Southeast Asian markets in general before focusing on specifics.
A number of trends can be observed in the Southeast Asia region, especially in access control, said David Rees, Regional Manager, APAC, Salto Systems. The majority of office installations in SE Asia are still in premises owned or rented by multinationals; however, locally-owned companies are fast catching up with this trend of investing in access control in their offices.
Serviced office is one growing vertical; major multinational companies use these, as they offer high-level services; allow tenants who do not want a permanent office to be on short-term leases; allow them to rent small, fully equipped and serviced office space; and are thus ideal for new entrants to the SE Asian market. In these, the front door is an access control credential which is also used for the door of the individual room that is rented to the tenant for short-term or long-term occupancy.
Office buildings are turning to online combined with offline access control systems. Most installations are done in new buildings. In university campuses and hospitals, however, installations are mostly add-ons to existing systems; and the latter is a much less active vertical than the former in Thailand and Malaysia. For example, whereas in two other regions in the area, namely Australia and Hong Kong, access control is being used everywhere, including cabinets which house Class A drugs, this trend has not been seen in the SE Asian countries other than in Singapore.
Singaporeˇs university campuses are increasingly investing in access control, Rees continued; and its secondary schools and international schools look certain to follow suit. In Malaysia, this growth is starting to show, but not as prominently as in Singaporean campuses. In the Bangkok area in Thailand, international schools are becoming more interested in installing access control, but many find their budget does not allow for it. In Indonesia, expat parentsˇ worries of possible kidnappings have led to some growth in the international schools vertical.
Effect of the U.S. Economy on SE Asia
The U.S. economic slump is definitely having an effect on the SE Asian economies, Rees believes. ¨There seems to be a slowdown in many of the regionˇs countries; inflation is rising; there is a credit squeeze; the cost of living is rising; and reduction in sales is being experienced in various industries. Investment from overseas is also taking a hit. The weak dollar is affecting pricing in the security industry as well, because vendors who price their wares in Euros find that their products work out to be more expensive than those of their dollar-priced [U.S.] competitorsˇ, when cost in Euros is converted into dollars.〃
The present sub-prime meltdown in the U.S. and the global inflationary pressure on oil, food and raw materials affect every market, said Stewart Yen, CEO of Secom Singapore, although this is not so apparent in Singapore at the moment. "High-end office and residential buildings are currently at record prices, so people are still willing to spend on security equipment. However, this may turn very quickly if the global share markets continue to weaken or experience a sharp drop in the near future. When the economy is bad, the first thing people try to save on is security, especially in Singapore as it is generally perceived to be a very safe city."
"The current U.S. economic slump is already affecting the economies of Singapore and other SE Asian countries," said Claus Hansen, Asia Vice President, Security Business, Gemalto. "We do not foresee that the security market will suffer any worse than other IT businesses. The political climate of each country defines the need and the level of security but overall there is a global trend calling for greater security features and the necessary legislations to put these in place. For example, the illegal use of non-secure ID documents can come at a great cost."
Singapore is a nation that is heavily focused on security, said Rees, and in constant development in terms of new construction. New technology and applications are seen in a positive light, all the way from the government down. Singapore is currently looking to attract foreign workers and residents to its island nation, and there is competition between estate developers and companies wishing to acquire quality tenants and employees. Security technology can act as an added attraction. Many expats who choose to live in Singapore are doing so for the safety of their children, and the high level of security awareness (coupled with a low crime rate) may be one reason why the country has a high proportion of foreign citizens when compared with neighboring nations.
Singapore is also developing many new residential and office buildings; there is a lot of construction around the two new casino developments; train extensions are ongoing; and Sentosa island is the focus of a flurry of new hotels and resorts activity. The government wants to attract investment from companies who are looking to develop new technologies, such as in the fields of biotechnology or IT, from a Singapore base (plants or R&D facilities). Some of these may be associated with one of the local universities.
Driving Factors for Surveillance
Singapore is touted as a safe city and has heavy video surveillance adoption, said Jafizwaty Ishahak, Research Manager, Electronics & Security & Smart cards, Asia Pacific, Frost & Sullivan. High saturation, small population and geographic size, stable political scene, and a highly secure environment in the country are the reasons for the growth of video surveillance in this market which is slower than other markets in the region.
Nevertheless, key drivers for adoption of video surveillance are proactive efforts by the government in terms of regulatory policies and strong IP infrastructure that is set in place. Being a regional business hub, global events are constantly hosted at Singapore, elevating the need for security. As a mature market with excellent infrastructure development, Singapore is expected to grow well in adoption of IP-based surveillance. Transportation is the largest vertical in Singapore, with spending on highways, train stations, and bus stations. Surge in gaming activity is also expected in the Singapore market.
Projects and Infrastructure
A key infrastructural development is the Marina Bay, said Arya Varma, Managing Director of Isolectra Far East. Other than a hub for financial institutions, it will also have a comprehensive range of amenities including shopping, dining, cultural and entertainment. The government has committed more than US$3.3 billion to date to provide excellent infrastructure, which includes the Rapid Transit System; the Common Services Tunnel, which houses services and utilities such as electrical and telecommunication cables and a district cooling system; and public facilities and amenities such as waterfront promenades and pedestrian bridges.
The area has attracted total investment of US$12 billion dollars. Key developments include the Marina Bay Sands Integrated Resort; One Raffles Quay; The Sail at Marina Bay; the first phase of the Marina Bay Financial Centre; and new office developments at Marina View. The recently completed Marina Barrage will also convert the existing waterbodies at Marina Bay into a large freshwater reservoir, complete with a series of gardens collectively known as Gardens by the Bay.
In transportation, projects are aimed to improve economic competitiveness as well as the quality of public transport in Singapore. The Changi Airport Terminal 1 upgrade commenced in May 2008 and will continue until 2011. At an estimated cost of $340 million, Terminal 1 will see major improvements to the passenger areas, creating a more integrated and appealing environment for travel, shopping, dining and entertainment.
The Downtown Line (DTL) will be the fifth Mass Rapid Transit line in Singapore. When fully completed, the line will be about 40 kilometers long with 33 stations. It will be a fully-automatic and driverless system similar to the North East Line and the Circle Line, and will be mostly underground.
Seaports such as Pasir Panjang Port Terminal (PPT) is also expanding with new berths and new cranes. The expansion plans will make space for 16 additional berths in the terminal, which will have an annual handling capacity of 14 million standard containers. Work is expected to be completed by 2013. There is also a plan to build a Cruise Centre at Marina South, estimated at $71 million.