ASEAN KEY DESTINATIONS
Thai firms looking abroad
Thai Union Frozen's acquisition of France-based MWBrands in July, enabling it to triple sales in Europe and own several famous canned seafood brands, was the latest major move.
Strong economic growth and the liberalisation of capital accounts in the early 1990s pushed the Thai manufacturing and service sector to seek overseas opportunities. But the advancement of outward foreign direct investment (OFDI) was significantly retracted in the 1997 Asian economic crisis.
Based on an Unctad estimate, Thailand's OFDI stock last year stood at US$16 billion (477 billion baht), 40 times its level in 1990.
Of the 476 companies listed on the Stock Exchange of Thailand from 1999 to 2008, just 173 reported making overseas investments.
The success of Thai firms in international expansion would increase their leverage in the global arena, but key competitors include newcomers such as China and India rather than the traditional players.
Local firms' competitiveness in the international arena would diminish if they were slow to expand overseas.
Thai firms are at a disadvantage against some peers as there has been no clear policy to promote outward direct investment, experts say.
Thai companies expand abroad in many ways, some build comprehensive manufacturing bases, some set up representative offices and some establish part of their production network.
Land & Houses leads local firms in terms of value of investment overseas based on SET data, at $344 million, followed by Delta Electronics, Saha-Union, Charoen Pokphand and PTT Chemical. Siam Cement comes first in terms of overseas affiliates, totalling 82 branches, followed by Charoen Pokphand, Minor International, Banpu and Delta.
Overseas investment swelled in 2000 and 2001 when the economy recovered from the Asian financial crisis.
Policies to promote overseas investment are inadequate to spur investors to venture abroad. A policy framework that seeks to promote research and development and free competition are needed to push firms to expand, experts say.
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