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The Panel Discussion Thailand’s Attractiveness as an Investment Destination

September 21, 2013 Destination Thailand No Comments Email Email

MBKET hosted a Panel Discussion on ‘Thailand’s Attractiveness As An Investment Destination’ with panelists, the President of Japan External Trade Organisation (JETRO) & Chief Representative for ASEAN and South Asia, the Vice Chairman of the Federation of Thai Industries (FTI), .

the Assistant Governor of the Industrial Estate Authority of Thailand (IEAT) and the Director and Managing Director of Ticon Industrial Connection PCL (TICON) with the Managing Director of Maybank Kimeng Securities Thailand, Sukit Udonsirikul, as moderator.

Our conclusion after the discussion with the 4 panelists as representatives of Japanese investors, the government industrial estate developer, manufacturer, and private industrial estate developers, reaffirmed foreign investor confidence in investments in Thailand, especially by Japanese investors. We have found fast growth among Chinese investors in Thailand, also. Hence, the auto and industrial estate sector’s growth will be sustained over the long term. However, foreign investors are still 250x250TICBannerconcerned on the tight supply at industrial estates, skilled labour and the delayed in EIA and HIA processes.

Below are the Key Takeaways from the Panel Discussion

Japanese investors: Based on the latest Bi-Annual Survey conducted by the Japanese Chamber of Commerce (ongoing for 29 years) most Japanese investors remain positive on Thailand. Thus far currency movements have not been factor in investment decisions. A few investors have indicated plans to increase investments. The positive feedback is borne by the 18.2%YoY rise in the 1H13 net applications submitted to the BoI by Japanese investors. They have concerns that include road infrastructure Improvements (62% of respondents), connectivity with neighboring countries (38%), rail infrastructure improvements (37%) and education (33%). Labor competency is of particular concern among manufacturers (36%). The auto sector will remain the biggest component of Japanese investments, but there is also an increasing flow of SME industries, value-added companies observed by TICON and IEAT.

FTI is optimistic: The Federation still considers economic expansion of 5.5% achievable in 2013 based on: 1) the recovery of the global economy, 2) a recovery of the global market for computers & electronic goods, 3) the expansion of private consumption supported by the recovery of the production sector, 4) the government expenditure particularly on investment, and 5) the low level of inflationary pressure. To navigate through future changes, the FTI has grouped the various industries into 11 clusters. The Cluster Approach will be the way forward to develop, to innovate and to remain competitive. The Paper/Packaging Cluster appears to have a natural advantage – as the industry is integrated back to plantations and product demand is supported by strong agri-based manufacturing industries especially in food. TICON is also seeing more investments in facilities for value added foods and condiments.

Industrial Estates in tight supply: IEAT hints that there is a tight supply in the big industrial estates, and the HEIA, EIA requirements are extending development periods for the estates. The Chinese (HK and mainland Chinese) investments have been rising, though there are operational issues to be ironed out. This group of investors could be the next wave into Thailand. Recent reports that Chinese investors are looking into the area around Prachinburi province as a location for a “Chinese Auto City” that will manufacture autos (esp. trucks) for export. The local content requirement means that existing auto parts makers are well-placed to benefit from this move.

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