Thailand and other Asia Pacific countries hold great opportunity for their economy to grow and for Baker Tilly to expand its presence here after the London-based global accounting firm posted a record revenue of US$1 billion from this region last year, executives say.
In an interview with the Bangkok Post, chief executive Francesca Lagerberg said Baker Tilly has "cautious optimism" about Asia whereas other parts of the world are facing high interest rate, inflation, cost of living crisis partly driven by the war in Ukraine.
"The resilience of this part of the world was shown in the past few years. We have seen significant growth in many of our clients and some of the transactions slowed down during Covid-19 are beginning to move again. This is a good symptom of how the APAC region is really coming back in terms of its business activities," she said during a recent visit to Thailand.
Last year, Baker Tilly grew the global revenue by 13% to achieve $4.7 billion, cementing its position among the top ten largest organisations of its kind. Revenue from Asia Pacific increased by 10% in line with the growth in Europe, Middle East and Africa (EMEA) geography. Thailand, specifically, was noted as among half a dozen or so countries worldwide to have achieved in excess of 15% organic growth across 2022.
"We are now looking at how to make the year 2023 even more successful than 2022," noted Ms Lagerberg. "As always say there are such a fantastic range of opportunities in so many sectors in Asia Pacific. You've got entrepreneurs and great range of talents. That has been through over the last decade. Asia have still got a great opportunity."
"I think the situation in Asia and other regions is very different. Trading condition has been difficult in many parts of the world. The hope would be if we do have a recession or global recession, it's shallow and short as supposed to," she added.
Globally, Baker Tilly operates in 147 countries, including 20 plus markets in Asia. The company has an office in almost every market in ASEAN, except for Brunei, with Thailand, Malaysia, and Singapore being the top three markets.
"I think we will have extremely good growth this year. The signs are promising in Asia because we see businesses do more transactions. We are looking at both organic and non-organic growth opportunities so both growing within our existing practices and also the mergers that they do," Ms Lagerberg pointed out.
"In each and individual firms, they are looking at expansions and merger opportunities. That would help us grow as well," she added.
In Thailand, Baker Tilly has a presence for 20 years starting in corporate advisory and expanding to tax, accounting, audit, HR consulting and business optimization. Over the years, the Thai unit has worked with more than 100 clients in many sectors including G Steel Plc, Sahaviriya Steel Industries Plc (SSI), Saha Farm, and KlongchanCredit Union Cooperative (KCUC).
"We do a whole range of things but specializes in audit, tax advisory, corporate finance and other related practice," Ms Lagerberg explained. "We really specialize in how the mid-tier companies work across boarders so if there are more than one or two countries that global network can really help them, that are our sweet spots.
Yundyong Thantiviramanon, managing partner of Baker Tilly's Thai unit, said the company has been involved in debt restructurings and non-performing loans (NPLs) sales over the past two decades.
"The banking sector in Thailand is very strong since the 1997 financial crisis. The banking system and the banks are operating well. But some companies have been affected by either internal or external factors. They have an inappropriate financial structure or pursue a bit too aggressively in some areas," he said.
Due to this financial crisis Thailand has developed one of the most sophisticated markets for dealing with debt and NPL's. The country is now more prepared to deal with sudden crisis's, as banks will routinely lower their exposure while having more expertise in dealing with corporate recoveries. Baker Tilly has been a big part of this process, which has helped the economy bounce back quickly when there are setbacks in Thailand.
"We have been working in 32 cases of debt restructuring with total liabilities of 253.78 billion baht. Since 2007, we have successfully advised creditors and debtors in debt restructuring for 17 cases, both voluntary debt restructuring and rehabilitation under the bankruptcy court, with total liabilities of 161.28 billion baht, representing 16% of the accumulative country's debt restructuring value," he said.
Baker Tilly Thailand has also actively been assisting several commercial banks in selling NPLs such as Bank of Ayudhya (BAY), Export-Import Bank of Thailand (EXIM), Kasikornbank and TMBThanachart Bank (TTB) to improve their capital adequacy ratios, enhancing their lending capacity. "Since 2007, we have assisted commercial banks in NPLs portfolio sale totaled 144.35 billion baht, accounting for 11.2% of the country's total NPLs sale.
Following the debt restructuring, Baker Tilly Thailand also provides performance and cash monitoring services to ensure the creditors that the debtors' receipt and use of funds aligns with the approved budgets and debt restructuring plans. At present, the company is providing these services to 5 debtors with a total debt restructuring value of 113.46 billion baht.
"Baker Tilly is helping companies that have financial difficulties. We help them restructure and bring in new capital, new strategic partners, for them to survive instead of companies becoming bankrupt or liquidated. If those companies can survive and sustain, there will be a lot of jobs saved. That will help the economy in a way," cited Mr Yundyong.
On the micro level, Baker Tilly has done transaction advisory, including merger and acquisition (M&A). Besides, valuation and due diligences for companies on the stock market are of its services.
CORPORATE CHALLEGES POST-PANDEMIC
As the economy is bouncing back, thanks partly to China's reopening, Ms Lagerberg said challenges emerged around how companies are going to capture the growth opportunities post-Covid. In China and other economies, it will take months for businesses to adjust and be able operate effectively.
"China's opening up is good for everybody not just in Asia and I think it's bold to open up," she said. "(But) it has been a long time that they had been locked down so there is a little bit of nervousness when it begins to open. As boarder control is lifted, there is a little bit nervous for people moving in and out but I'm sure it won't take too long."
ESG (environmental, social, and governance) is another challenge facing Asian companies.
"For companies that begin to look at this area (ESG), I think they have genuine intention to do something different not just they have to do it. It's because they want to be able to showcase to the stakeholders and to attract talents," noted Ms Lagerberg.
Globally, the whole ESG shift is partly being led by regulations with Europe probably leading the way. There are recent conversations in the US how they could make some of these things legitimacy rather than sort of a choice.
"I think the whole is waking up to the fact that you don't have to wait for the regulations to do the right thing. Many corporates still don't want to wait to be told you've got to do this," she pointed out.
"To make sure the policy work well, you need to talk to people who already been down this road what you need to do and what is going to make sense. This kind of conversation is pretty much everywhere in the world."
Mr Yundyong agreed, saying that several clients of Baker Tilly Thailand want to be included in Dow Jones' substantiality index.
"ESG involves a lot of transformation about how the company is doing the business and run their operations. That involves lot of complicated details that they have to do and benchmark with international practice. Those are the things Thai companies have to do in the medium term," he said.
As Baker Tilly is a mid-size accounting firm, Mr Yundyong said the Thai practice uses different strategies to grow the business.
"Our partner and senior staff always work actively and closely with the team in every assignment we undertake." he said. "We focus on something that we do best and offer the best service and best advice to clients in areas of restructuring, Non-Performing Loans, financial & tax advisory, accounting & audit, HR consulting as well as new trend of digital transformation, by using capability of our team in collaboration with those of the network."
