BoI tells Thai firms to look at expanding into Asean
Thailand's Board of Investment (BoI) is encouraging Thai investors to invest more in several Asean countries to capitalise on growing demand at a time when labour costs in these countries remain low.
Speaking at the "Thailand Overseas Investment Forum 2017" yesterday, BoI secretary-general Hiranya Suchinai said there were great opportunities for Thai businesses to expand further, particularly in Cambodia, Laos, Myanmar and Vietnam, known as the CLMV group.
"Expanding business in Asean countries would provide at least three positive outcomes for Thai companies. It is an opportunity to create a new production hub, an opportunity to reduce labour, energy and raw material costs and an opportunity to access Asean market," Ms Hiranya said.
She said having production bases elsewhere in the Asean region would also help enhance their market access capacity to other regional market via Asean trade ties with other global trade blocs.
This would allow Thai companies to access other markets with lower tariffs or with other markets in general via special trade benefits Asean has with other regional trade agreements.
"The government wants Thai companies to take advantage more of Asean trade agreements," she said.
The BoI has set up training courses to help Thai companies wanting to expand into neighbouring countries, she added.
So far, around 400 Thai companies have signed up for the courses and 89 firms have already started investing elsewhere in the region, mostly in the CLMV group.
According to BoI deputy secretary-general, Chokedee Kaewsang, Thai investment abroad totalled US$13.3 billion, (463 billion baht) as of 2016.
"Singapore currently holds top spot among Thai investors," Mr Chokedee said.
Thai firms that have started investing aboard include food and food processing companies, retail outlets, banking and insurance firms, and mining and construction companies.
Thailand Development Research Institute president Somkiat Tangkitvanich said Thai firms wanting to invest in neighbouring countries should focus on consumer behaviour in the countries they are targeting to account for cultural differences and seek local partners.
He said the Asean country with the strongest potential at the moment is Vietnam.