ASEAN KEY DESTINATIONS
As attractive as ever for big time investors
Satit Chanjavanakul, Secretary General, Board of Investment, Thailand, insists in his interview with ASEANAFFAIRS that Thailand still is a hub for investment in Asean despite all the talks about political uncertainty.
Thailand has a lot of things to offer. It is a perfect opportunity for them. For example, we have a well-developed industrial sector in automotive, tourism, petrochemical, metal and steel, hotels and resorts, harbour service sector, etc. As an investor you are not just looking at the cost of labour but you are also looking at many, many other things. For instance, Thailand can claim to be the largest automotive hub in Asean. It is strong in component manufacturing and the supporting industries. If you look at
Q: Which sectors are likely to draw more attention in the coming years?
Obviously, it will be the automotive sector. Automakers such as Ford and Mazda have already announced another round of investment to produce passenger cars in Thailand with the capacity of 100,000 units a year, which is an addition to 175,000 units of cars and pickup trucks already being rolled out. We also expect the hard disk drive manufacturing to get busier. Recently all the major players announced their investment plans, which have now been approved by the BOI.
Q: What else? Which are the major areas?
One area which seems to be an opportunity for Thailand is the Halal food production. It is a $300 billion industry, a huge opportunity. Thailand is a big exporter in the food market but a very small player in the Halal food segment. Some Thai companies are already trying to start Halal production, but they are getting blocked by Malaysian Halal authorities in terms of certification. Malaysian counterparts are very keen to set up all those processes in Thailand, to come and work with Thai companies hand in hand to teach them on the Halal process and thereby export to the Middle East market. Outbound investment. Is that something you are also looking at? We have a policy to promote Thai investors to go overseas to other regions. Of course we have to focus on our neighboring countries Cambodia, Lao, Vietnam, or Myanmar or go to southern China. That will be our primary focus for our investors … they should go because the demand for product and services in those countries are going up. But then for some particular sectors you may need to go there because you need parts and raw materials which Thailand does not have enough or has some problem.
Q: There are a lot of Thai investors in Vietnam and the numbers are growing. How are they doing?
We were one of the largest investors in Vietnam a long time ago and our investment in Vietnam seems quite profitable. We are more into production but some are also into infrastructure, some are investing in hotels, in apartments and so on.
Q: Can tourism be one area where Thai companies can invest because of your experience?
Hotels could be, like in Cambodia for example: golf courses, food processing, housing, infrastructure and things that Vietnam doesn’t have experience. But when you compare these industries to Thailand’s, in case of Thailand it were the Thai investor but in case of those countries there are many other foreign investors.
Q: The political turmoil in Thailand apparently affects investment and economic development? With the coming of the new government, how high are the prospects for investment and growth rebound?
Since the beginning of 2006 we have been going through this - the political uncertainty, but we don’t believe there has been any adverse impact on investment. You can run your business as usual as long as demand is growing. If there is demand why shouldn’t there be investment? The only thing I see as an impact is the strong local currency. But then most investors have somehow adjusted to it.