KUALA LUMPUR: The cost pressure to pharmaceutical and healthcare industries is increasing in Southeast Asia, where traditionally companies enjoyed a lucrative private sector, according to a Roland Berger study.
Roland Berger, in its Operations Efficiency Radar (OER) 2019 study published jointly with the International Association of Controllers, said the evolvement of private insurance and employer-sponsored insurance in the region was a key driver for private sector growth.
“But those payers are not the same as traditional wealthy patients,” Roland Berger partner and Southeast Asia healthcare head Yoshihiro Suwa said in a statement today.
The firm said many companies were having to reassess their budgets for 2019 as they failed to factor in the risk of a downturn when calculating the budget figures back in the final quarter of 2018.
It said half of all finance directors now expect the economy to cool off with chief financial officers in the automotive industry are the most pessimistic.
Roland Berger partner Oliver Knapp said many companies have operated very successfully over the past decade owing to the availability of cheap money.
“But now, political instability and growing protectionism are fanning fears of a downturn,” he said.
One in every two of the executives polled for the OER anticipated a deterioration in their business in 2019 – a clear reversal of the views expressed one year previously.
“The outlook is seen as particularly troubled in the automotive industry and the engineering sector, where as many as 93 per cent and 56 per cent of respondents, respectively, anticipate an economic downturn in 2019,” it said.
Roland Berger said many corporate functions viewed the continuing disruption of their industry as a chance to reposition themselves strategically within the company.
"Sadly, digitalisation is often seen as synonymous with automation. But not only are there different mechanics at work, the consequences are also quite dissimilar.
“Functions that focus on automation to the exclusion of all else will end up eliminating themselves before too long,” said Knapp.