Siemens looks for business in South East Asia to diversify from China.
Siemens is looking for investments in Southeast Asia to diversify away from China, as corporations try to decrease supply chain risks amid geopolitical tensions between the West and Beijing, Financial Times reported.
The company is hiring staff and considering building factories in countries such as Thailand, Vietnam, and Indonesia, according to Judith Wiese, chief people, and sustainability officer at Siemens.
She noted that the region was varied but had “a lot of potentials,” adding that “with the world talking very much about the US and China from a diversification perspective, it is very interesting for us”.
The move comes as many multinationals seek to reduce supply chain risks. The US’s attempts to limit China’s access to technology, along with the country’s Covid-19 policy and slowing growth, have made businesses wary of their dependence on China.
Such concerns have prompted firms to look at new markets, with Southeast Asia emerging as an attractive option. Countries such as Indonesia, Thailand and Vietnam are the world’s fastest-growing economies and offer significant growth potential.
Siemens, one of the world’s largest industrial conglomerates, has already diversified its operations in recent years, including spinning off its energy business in 2020 to focus on digital industries. The company has also invested heavily in electric mobility, smart infrastructure, and cybersecurity. With its search for opportunities in Southeast Asia, Siemens can further expand its reach and continue to mitigate the risks of overreliance on any single market.
As geopolitical tensions show no signs of easing, companies are likely to keep looking for ways to reduce their exposure to risks.
This is especially true for firms that have significant operations in China. By expanding its operations in Southeast Asia, Siemens can ensure it remains competitive while mitigating any potential supply chain disruptions that may arise.
Same category news
Khanh Vu and Francesco Guarascio