ASEAN KEY DESTINATIONS
Brunei-Canada trade at US$17m
TRADE between Brunei and Canada reached US$17.8 million in 2014, according to Canada’s Department for Foreign Affairs, Trade and Development.
Despite this modest trade volume, there are a number of Canadian companies active in the market with investment projects in sectors such as aviation and pharmaceuticals, the department said in a market outlook report for 2015-2017.
Brunei’s imports from Canada comprised mostly aerospace products, machinery and equipment, while its export to the North American country was mainly methanol.
The department named the sultanate as a “priority emerging market” under Canada’s Global Markets Action Plan, saying the country’s stable political climate, combined with its regional air connections and strong telecommunication infrastructure, making it an attractive regional hub.
The report identified key sectors where there are opportunities for investment, including aviation, halal product manufacturing, education, ICT and sustainable technologies.
In 2014, the Canadian aviation firm, CAE, opened an integrated training facility in Rimba as part of a joint venture with the Brunei government. The centre aims to be a regional hub in civil and defence aviation training, particularly for emergency management as well as oil and gas operators.
The centre represents one of the highest non-oil and gas investments in Brunei, valued at over US$100 million.
The department said the local aviation industry remains highly-regulated and underdeveloped, resulting in “extremely long processing and approvals”.
“While Brunei has the infrastructure and well-equipped industrial hangars for large-scale maintenance, repair and operations, the lack of skilled and qualified technicians and professionals means that these facilities are not being used to capacity,” the report read.
“Despite these challenges, Brunei is committed to nurturing this sector, which should allow Canadian companies to remain active and take advantage of opportunities in this traditionally important sector.”
Another Canadian company, Viva Pharmaceuticals, partnered with private equity fund Aureos (Brunei) Capital Sdn Bhd and a group of local investors to create the $26 million drug manufacturing plant, Simpor Pharma, in 2012. The facility was established to produce halal pharmaceutical products for export to Muslim markets in Asia.
Business Monitor International said although Brunei’s pharmaceutical sector is still in its infancy, it possesses “huge potential for growth and development”.
According to research firm, the sector was valued at US$100 million in 2013 with a compound annual growth rate of nine per cent over the next five years.
The department added that the conclusion of the Trans Pacific Partnership will bring more opportunities for growth between the two countries, as barriers to trade and investment will be eliminated.
In the report, the department stressed that foreign direct investment remains the key to Brunei’s economic diversification, with the plunge in global oil prices leading the economy to contract in 2014.
“Brunei’s government revenues will continue to be almost entirely dependent on oil and gas over the near-to mid-term future… Industry watchers caution that remaining oil and gas reserves in the country are limited and new offshore deposits will be more costly to extract than those currently in production,” the department said.
“Since the revenues from this industry fund economic activity in other sectors, including infrastructure, defence, aerospace and life sciences, there is concern that falling oil revenues could cause stagnation of the entire economy in the longer term.”--The Brunei Times
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