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Philippines 4.0 Skills Conference | 20-21st Nov

Philippines 4.0 Skills Conference | 20-21st Nov

In conjunction with Philippine Trade Training Center, Global MSME Academy, Thames International and accelebator, 2iB Partners will be speaking on Emerging Trends in Retail, HR Transformation and how to internationalize your business. 

 

Learn from 12 different tracks hosted and supported by experienced professionals and business men! The event will be held in the Philippines and attended by more than 300 other delegates. Find venue details below.

Venue:

Philippine Trade Training Center

Roxas Blvd.

corner sen. Gil Puyat Ave,

Pasay City,

Philippines

Date: Nov 20-21st, 2019

2iB Partners in brief

2iB Partners is a specialist M&A and management consultancy firm that has extensive networks with strategic buyers, MNCs, listed companies, investment networks and funds from US, UK, China, Philippines, India, Vietnam, Myanmar, etc.

 

2iB Partners help companies scale up and internationalize through inorganic growth, joint ventures or management consultancy. Through Singapore as a strategic base, 2iB Partners helps companies outside of Asia gain market access and companies in Asia expand internationally and regionally. 2iB Partners also provide ad-hoc entrenchment of highly qualified professionals and experienced businessmen to solve complex business problems through experience and insight.

 

For partnerships, speaker and general business enquiries with 2iB Partners:

Contact Person Dylan Tan
Designation Chief Operating Officer
Email Dylan@2ibpartners.com

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3 Key Notes Before Entering a New Market [Video & Transcript]

3 Key Notes Before Entering a New Market [Video & Transcript]

The above is a video taken during one of 2iB Partners master class where our advisor Mr. Richard Eu answers a question on “3 Key Notes Before Entering a New Market” by a business owner, Mr. Peh Zheng Yang.

 [Begin Transcript]

Mr. Peh: You mentioned something like for more traditional businesses, like my retail business with a product and when you’re looking to expand regionally, you talked about either buying or organic growth. So, well you mentioned that there are very key differences to look out for. So, I’d like to know, what are 3 important things to look out for – perhaps like processes to look out for or potholes we need to avoid.

 

Mr. Richard Eu (2iB Partners):

The People Problem

 

Actually, the main thing is the people problem. You get the right person, anything can work. In most cases it is very hard to find the right person, that’s one.

 

Aligning existing operations

 

And the other thing is that, if you start out in a new country, you have got to give a lot of effort, backing and support from your existing operations. So are your existing operations prepared to do this and spend time doing stuff, not beneficial for them, you know and to help out this new territory. So I come, you know, in my case, we have situations where the people from one country wouldn’t support the other one because they are looking at their own bottom line. So you have got find a way of aligning everybody else in the organization to ensure the success of that operation. So it is some compensation scheme you have to think of, right?

 

Navigating regulatory issues

 

And then the third one I would say is probably, in our case particularly – regulatory, getting over regulatory issues. But generally speaking, every time I go to a new territory, requirements will be different and you’re going to need somebody who can navigate the stuff locally. I won’t say paying bribes, but you’ve got to know who are the right people to deal with. Especially in the emerging countries, it’s a lot more difficult to do that.

 

[End Transcript]

 

2iB Partners goes to Silk Road Summit 2018 in Zhang Jia Jie, China

2iB Partners goes to Silk Road Summit 2018 in Zhang Jia Jie, China

15th Oct, 2018 – 2iB Partners attended the Silk Road Summit Conference in Zhang Jia Jie, China along with some other Singapore delegates.

From left to right: Mr. Dylan Tan, Director of 2iB Partners. Mr. Yang Yen Thaw, Managing Director of 2iB Partners, Dr. Lai Leng Tham, Executive Director of Meinhardt Infrastructure Pte Ltd, Mr George Abraham, Chairman of The GA Group Pte Ltd, Mr. David Chew and Mr. Shawn Toh

The conference was attended by Delegates from more than 80 countries attended the Summit, including former politicians, government leaders, about 40 diplomats, business associations from more than 50 countries, and representatives of international organizations such as UNESCO, UN World Tourism Organization, UN Industrial Development Organization, International Standardization Organization, Black Sea Economic Cooperation, etc.

The event had also attracted great attention from Chinese and foreign media. China Business News of CCTV reported the grand summit; Xinhua News Agency and China News Agency published news release; Phoenix Satellite TV also carried a series of featured reports on the summit. Media including China Global Television Network (CGTN), Philippine News Agency, Asia Pacific Daily, Manila Bulletin and Manila Standard Today (MST) carried out frequent and extensive coverage to the global audience.

The conference was an informative one and gave delegates a better sensing on chinese sentiments towards the One Belt One Road (OBOR) initiative.

Deputy Governor of the Hunan Provincial Government He Baoxiang addressed and announced the opening of the summit. Vice Chairman of China Chamber of International Commerce and former Vice Chairman of China Council for the Promotion of International Trade Zhang Wei, Deputy Director of CPPCC Sub-committee of Social and Legal Affairs and President of China Association for Friendship Chen Zhimin, former Assistant to Minister of the International Department of Central Committee of CPC and Vice President of China NGO Network for International Exchanges Dou Enyong, Deputy to the National People’s Congress of China and Chairman of Silk Road Chamber of International Commerce (SRCIC) Lu Jianzhong, former President of Croatia and SRCIC senior consultant Stjepan Mesić, delivered welcoming speeches at the opening session chaired by Secretary of Zhangjiajie Municipal Party Committee Guo Zhenggui.

Minister of Environmental Agriculture of Georgia Levan Davitashvili, Executive Dean of Chongyang Institute for Financial Studies, Renmin University of China Wang Wen, Chairman of the Board of the Union of Arab Banks Sheikh Mohamed El -Jarrah El- Sabbah, Vice President of China NGO Network for International Exchanges and Chairman of Chinese Culture Promotion  Society Wang Shi, and Commissioner of Korea World Travel Fair Shin Joong Mok delivered keynote speeches.

2iB Partners endeavors to bridge businesses between Singapore and Belt Road countries by fostering good relationships and networks within these countries. To a certain extent, the recent European Union And Singapore Free Trade Agreement (EUSFTA) and European Union And Singapore Investment Protection Agreement (EUSIPA) will help to facilitate many of these relations.

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[Video] 2iB Partners Speaks at Southeast Asian M&A and Corporate Investment Conference 2017

[Video] 2iB Partners Speaks at Southeast Asian M&A and Corporate Investment Conference 2017

In the above video, Managing Director of 2iB Partners, Mr. Yang Yen Thaw delivers a 50 minute speech on Legal issues in cross-border Mergers & Acquisitions (M&A) and a new approach to M&A.

2iB Partners formed part of a repertoire of experts hailing from MNCs, mainstream banks, advisory firms and funds with substantial AUM.

 

 

Speaker line-up included:

Sanjay Mathur Chief Economist – Southeast Asia and India ANZ Bank
Sikh Shamsul Ibrahim Investment Director Malaysian Investment Development Authority (MIDA)
Greg Ohan Director Jones Lang Laselle, Vietnam
Hector Wang Investment Director China-ASEAN Investment Cooperation Fund
Edwin Vanderbruggen Senior Partner VDB Loi Co.,Ltd
Jonathan Fein Vice President BDA Partners
Ryoichi Nishizawa Head of M&A Advisory Mitsubishi Corporation
Yang Yen Thaw Managing Director 2iB Partners
Kevin Murphy Managing Director Andaman Capital Partners

Panelists include:

Kate Holgate Partner and Head Brunswick Singapore
Aaron Howell Managing Director Rothschild
Robert Rosen Co-CEO Kenon Holdings
Kala Anandarajah PBM Head Competition & Anti-trust and Trade Rajah & Tann
Dag Ove Solsvik Head of Group Legal, Middle East and APAC DNV.GL

The room was filled with more than a hundred people representing big listed companies, billion dollar funds and conglomerates from all sectors taking a strategic interest in the Southeast Asian region.

 

Mr. Yang Yen Thaw addressing “Why M&As go Wrong”.

Legal strategy in M&A

Mr. Yang Yen Thaw engaging the audience in an open floor discussion. CoAggregation® in action!

Message from the Director:

2iB Partners continues to build its reputation and broaden international networks with MNCs, strategic buyers, listed companies, funds and networks in US, UK, China, India, Phillipines, who have taken a strategic interest in the Southeast Asian market. We also understand that there are a significant number of small and medium enterprises (SMEs) in the region that are looking to scale up and regionalize in SEA or gain market access into China.

With regards to these 2 different channels of companies, we have the appropriate networks and expertise to assist them with their expansion plans whether through joint ventures, inorganic growth or general business consultancy. We see ourselves in a strategic position to assist these stakeholders in their internationalization and growth plans in or out of the region through Singapore.

From a macroeconomic perspective, the ASEAN story is generally positive and is one of the fastest growing regions with projected 4.9% GDP growth this year compared to projected global growth of 3.5%. Fast growing Myanmar is also projected for a growth of 7.5% next year, though for this country, regulations may slow the advancement of certain sectors. The ASEAN growth is projected to outperform that of global growth rate for the foreseeable future with relative political stability and increased connectivity in terms of both investment and trade.

Global trade has also re-emerged and as a result, Asia, that is the most export dependent has benefited substantially. Indicators suggest that domestic demand is also improving post slow down but it would take awhile before this reaches a steady state. This could suggest investment opportunities in the medium to long term.

Inflation is behaving and the region as a whole is not sitting on any large imbalances. Therefore, with regards to concerns on fed hikes, as long as they are well introduced and earnings growth is faster than the rise in cost of capital, we should sift through the shifts in global monetary conditions.

The ASEAN Economic Community (AEC) blueprint which aims for tax collaboration by 2025 and reduction in trade transaction cost by 2020 also point to significant improvements in opportunities.

-Data from FocusEconomics and World Economic Outlook.

Last but not least, we would like to express our thanks to Mr. Tony Huang and ValueTang LLC and look forward to greater and deeper collaboration in time to come.

 

Dylan Tan

2iB Partners – Director

 

 

For partnerships, speaker and general business enquiries with 2iB Partners:

Contact Person Dylan Tan
Designation COO
Email Dylan@2ibpartners.com

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Is it the right time to expand your business?

Is it the right time to expand your business?

Today’s conquerors

Expansion, empire building, conquest are hard in-grained into the champions of each era. In the times before, there was Qin Shi Huang, there was Genghis Khan and Alexander the Great. Today, there are entrepreneurs.

Expansion into foreign markets is by itself a strategic task and should not be made without considerable thought and investigation. More often than not, the move fails to meet expectations and adhere to the company’s long term strategic goals. The planning and implementation should be the task of a company’s management and not a mere reaction to a certain event. If anything, it should be a carefully thought out process with a clear motive of the strategic intent behind the action.

Here are some things to consider, amongst many others:

War chest

One obvious consideration when contemplating expansion is cost. Expansion often requires a significant commitment of corporate resources- both financial and human. In a smaller company, the owner’s personal finances may also be involved. Chances are, only the business owner’s skin is in the game. In some cases, you must be able to sustain the bleed before it becomes profitable.

A good move can bring a company to greater heights but a bad one can bring pain and ruin immediately. Having an investor would help to diversify risks and also bring about more financial muscle. An investor’s interest is also heavily aligned with that of the business and is likely to help if he/she has any connections in that market to help.

Hired Directors

Hired directors and advisors bring fresh, new ideas to a company and can provide valuable insight about strategic matters. They might also bring with them experience and network in the particular market. The last thing you want is to break into a new market with absolutely no connections

Many smaller companies aggressively pursue expansion when, in fact, they are not prepared to do so. Entrepreneurs are brilliant, daring and change agents which is why they have what it takes to build a business from scratch. In that first stage of growth, entrepreneurs are like heroes that defy common expectations and bring about unprecedented peace. After that however, comes another stage of growth, one where the entrepreneur may be lacking the skills to deal with.

Corporatization, or to take the previous analogy, peace-time. In times of peace, there are no need for heroes. It is a stage of creating a sustainable business. It is a stage of corporatization where specialist talents are brought in. Often, an entrepreneur becomes “stuck” in the hero mode, a company’s first stage of growth, when it is time to move on to the corporatization mode. This mode involves the creation of robust systems, processes and the right people. Strategy also means something much deeper than during the first phase.

An easy example would be the listing of a company. You will require a full board of directors governing investor relations, corporate secretary, compliance, governance amongst many others. Suddenly, everything becomes paper warfare.

Know your weakness

From time to time, it is important to go through a period of self-reflection. In corporate jargon, this is known as a strategic audit. This assessment can reconfirm or even inform management of the strengths within the company that management may have taken for granted. Assessment also brings out the weaknesses within the organization that management must act upon.

Whether it is a simple SWOT (Strength, weakness, opportunity, threat) analysis or a porter’s 5 forces exercise, it will reveal immediate action points or contingency plans that need to be made in case a fateful event were to happen.

Knowledge and information

Anyone blessed with common sense would know that charging in blind would be a fatal mistake. One should have armed himself with as much knowledge as possible. -From differences in accounting treatments, tax, legal to who are the people that you need to meet. Requiring 100% of knowledge to make a decision is pure insanity but jumping into the water without knowing if there are rocks below is not a very smart thing to do. There needs to be a fine balance and your strategy should address that.

Digital, a borderless solution?

Buzzwords are ricocheting around and one of them is the 4th industrial revolution. Sky-high valuations are based on the belief on incredible scalability through the www. The believers are religious that tech will disrupt traditional businesses and the secular ones are adamant it will not affect businesses.

It will but not in the way that you think. Tech will have an effect on the way business is done. For instance, the digitization of marketing services. Social selling, SEOs and digital marketing in general is an example of digitization. However, this does not mean that traditional marketing has been wiped off the earth. Traditional media buy-sell-placement still exists, banners and large television ads still play a big role. It simply means a change in the way business is carried out.

As entrepreneurs, you have to be ahead of the times and be able to look 3 or more years into the future. The business that survives and owns the revolution will be the ones that embraced technology and digitization. However, that being said, building a tech team is an incredibly risky play that most businesses are not able to afford.

Do you think it is the right time for you to expand?

  1. Have you built a strong international management team?
  2. Have you developed a strategic plan, and does the proposed expansion fit in with your overall strategic goals?
  3. Do you have the necessary resources – financial and human – to handle an expansion?
  4. Have you reflected on the impact that digital capabilities can bring you?
  5. Do you have a digitization plan?
  6. Do you have the necessary knowledge and connections in your target market?

 

CoAggregation® is a business model evolved by 2iB Partners that helps you overcome these problems through collaboration. We help you reduce costs, scale up, internationalize and future proof disruption. If you want to be a co-owner in a global company and become a disruptor instead of the disrupted, drop us an email at info@2ibpartners.com to have a confidential preliminary discussion.

Your partners, in the truest sense

 

 

Dylan Tan – Director, 2iB Partners

For partnerships, speaker and general business enquiries with 2iB Partners:

Contact Person Dylan Tan
Designation COO
Email Dylan@2ibpartners.com

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Transcending the conglomerate discount and turning it into a premium

Transcending the conglomerate discount and turning it into a premium

The Conglomerate Discount

In a conglomerate model, one entity buys out many disparate entities resulting in one top management/board that all companies report upwards to.

In 1981, conglomerates had already gone out of fashion. Analysts were keen to distinguish between the failures of the conglomerate model and the leveraged buy-outs (LBOs) and mergers of the 1980s. Investment managers were skeptical on grounds that conglomerates were not transparent and disallowed investors the ability to allocate within sectors. It appeared that investors preferred a “pure play” compared to conglomerates. Instead of putting together chunks of unrelated sectors which complicated management and investment, investors preferred focused companies true to their core competencies. They wanted simple and easily understandable investment propositions.

General Electric, an S&P 500 listed company, is one of the notable conglomerates that is involved in a great variety of businesses. What was observed in the 1980’s, however, was that the PE of GE was trading equal to or less than the S&P 500. Hence there was an inherent pressure for divestments, spin-offs and carve-outs that resulted in much more efficient, customizable and nimble units.

The conglomerate discount concept refers to the stock market’s tendency to undervalue the stocks of a conglomerate businesses. It is calculated by adding an estimation of theintrinsic value of each of the subsidiary companies in a conglomerate and subtracting the conglomerate’s market capitalization from that value. The conglomerate discount arises from the sum-of-parts valuation, and it is the reason why many conglomerates spin-off or divest subsidiary holdings. -Investopedia

Investors tend to undervalue large, diversified conglomerates due to the natural limits of one board governing such a large business and those that do not have a core focus. The quality and smoothness of corporate strategy execution, to a large extent, is heavily dependent on the company’s internal corporate governance mechanisms. It is thus an indispensable task of that one board to ensure that the company’s organizational structures (e.g., the group functions), the style with which group-level management interacts with the business units, as well as the management systems (e.g., corporate planning and controlling systems, incentive systems, IT systems) are well aligned with the corporate strategy.

The board faces further difficulty since the business groups within a conglomerate sometimes lack strategic coherence and overall transparency. This can foster inefficiencies in internal and external resource allocation. Such management inefficiency is also due to the many layers of approval leading to slower decision making. A centralized conglomerate is thus less nimble and customizable in their offerings and often stifles the creativity and efficiency of each of the moving parts. Furthermore, finding cost efficiencies and reducing bureaucratic inefficiencies becomes more difficult as a company moves into more diversified and dispersed lines of business. On some occasions, these inefficiencies lead to the company receiving a conglomerate discount. Large companies, such as Apple, Exxon and JPMorgan Chase & Co., may not be subject to the discount because despite being very large, they still operate focused businesses true to their core competencies. Some examples of U.S. conglomerates that may have been treated with this discount include Proctor & Gamble and Honeywell International Inc.

Merging to form conglomerates is attractive on the surface, especially from an accounting perspective: when faced with 4 balance sheets and P&Ls, it makes perfect sense to centralize everything and squeeze out every dollar. It is widely known, that most M&As and roll-ups fail due to egos and cultural incompatibility. They also create more bureaucracy laden entities, which defeats the promise of efficiency.

Emotion also plays a role in M&A, especially with small businesses. In small business M&A, it is often a more emotional thing rather than just a pure transaction. The business owners and staff are more emotionally tied into their company. Generally, people dislike change and this includes staff and customers alike.

Merging Through a holdco structure

This is a structure involving a number of complementary companies under a holding group which may or may not be listed. However, the key premise is that all of these companies are ring-fenced and kept independent of each other with the autonomy to run their business as is. Integration wise, these companies maintain their identities and brand equity. On the holdco level, the services are integrated on a project by project basis like a jigsaw with many permutations.The philosophy is that great things happen when great minds come together.

Small to medium companies do not have the resource and the capacity to conduct an IPO and more so the rigor of running a publicly listed company. Together, with a pool of resources, they now can hire first rate talent and build the systems and processes needed to maintain the public holdco structure.

Transcending the Conglomerate Discount

Business process activities in particular can benefit from centralization: there are great benefits in shared services and out-sourcing of day to day routine operations such as payroll, finance, accounting, HR and anything administrative –even having one central secretarial pool. If a business is freed from the dead weights of such administrative tasks, it can focus entirely on profitability and growth.

By creating a company comprised of high performing, complementary, autonomic small businesses, the market is offered something unique: an industry specific conglomerate that does not suffer from the traditional downsides of a centralized conglomerate. Since each business is high performing and maintains its effective leadership, the conglomerate discount becomes a premium: the company is worth more than the sum of its parts, since it enhances the value of each of the small businesses in the group.

Instead of forcing a consummation, synergies happen by themselves in an environment where creativity and innovation are encouraged rather than stifled. Decisions are made much faster and each moving part works autonomously which makes delivering much more efficient. Each of the business owner remains in full control of their business which makes efficiency more possible. At heart, entrepreneurs are free spirits and out of the box thinkers.

Many books on management and leadership always talk about giving control and a sense of ownership. It is something really simple but very few people do it! As an entrepreneur that has built a good, solid, multi-million dollar business, they probably know their industry better than you.

Leverage on a Global platform

Standard procurement practice dictates that you would not be able to qualify for a tender if you are not of a certain scale or capacity. However, by coming together, companies now have a much larger global footprint and financials to leverage on. By leveling the playing field, a smaller business can now have a chance at the larger contracts.

By having sister concerns in different markets, this effectively gives you market access into those markets. They know their market well enough and have the contacts needed to help you get off to a good start. This is in stark contrast to going in completely blind with a million and one counter-party risk.

 

Dylan Tan Director – 2iB Partners

-John Nikolaou contributed to this article

For partnerships, speaker and general business enquiries with 2iB Partners:

Contact Person Dylan Tan
Designation COO
Email Dylan@2ibpartners.com

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