United Overseas Bank Ltd (UOB) and Guangxi LiuGong Machinery Co Ltd renewed their memorandum of understanding to facilitate machinery financing for LiuGong's customers as it expands its operations in Southeast Asia. UOB believes that Southeast Asia will protect it from the escalating trade war between China and the United States.
The two companies are partners since July 2018 in expanding machinery financing solutions for vendors and customers of LiuGong in Southeast Asia.
Under the collaboration, UOB is tasked to develop an end buyer financing credit framework and offer asset financing and hire purchase or lease financing to LiuGong's customers in Indonesia and Thailand. The bank also secures the supply chain of its partner including other financial solutions such as cash management, trade finance, working capital loans, and hedging facilities.
LiuGong said that the financing support for the company's customers will help it drive the export of its construction equipment to Southeast Asia, thereby growing its revenue. LiuGong Group Chairman Zeng Guang' an said that the company is excited to continue its partnership with UOB.
He explained that as LiuGong continues to expand its overseas business, one of its key goals is to provide customers with complete solutions beyond its machinery and financing is a large part of these offerings. He added that UOB gives us this opportunity in Southeast Asia.
Chief Executive Officer Wee Ee Cheong said in an interview at UOB headquarters in Singapore that he considers the ASEAN as a safe haven for the UOB.
The company is driving a different path away from its competitors that are focused on Hong Kong and mainland China. The current developments in the United States-China trade war are expected to hit Asia's biggest economy.
Mr. Wee bets on the ASEAN combined economy which is bigger than India's and is forecasted as the fourth largest in the world by 2030. The ASEAN is composed of 10 nations and around 650 million people. The projections of Standard Chartered said that the ASEAN will have three of the seven fastest-growing economies over the next decade.
The chief executive emphasized the booming Southeast Asian investments of Japanese automakers. He said that Suzuki Motor Corp. is targeting Thailand and large car manufacturers are going to Myanmar. The company plans to use digital technology and artificial intelligence, rather than acquisitions in its plan to expand in the region. It is planning to roll out its TMRW digital bank in Thailand and to introduce it in Vietnam, Indonesia and possibly Malaysia.
