The pandemic and the subsequent lockdowns have wreaked havoc on global supply chains, particularly in China, the world's manufacturing hub.
The Map Ta Phut Industrial Estate in Rayong is part of the EEC, which touts a supportive environment for industrial investment.
China's decision to shut down factories in the early days of the pandemic spooked many international corporations that have relied on China as a manufacturing base for decades and caused them to consider moving factories to where there is less risk, a trend already in progress due to the US-China trade war.
This seismic shifting of global supply chains provides a once-in-a-generation opportunity for Thailand, already a regional hub for manufacturing, to attract multinationals looking for a new home.
Kriangkrai Tiannukul, vice-chairman of the Federation of Thai Industries (FTI), said the global economy is continuing to contract because of the outbreak hitting so many economies and making any timeline for recovery uncertain.
Most businesses have revised their investment plans for this year and are looking at new business models and revenue streams to cope with the crisis.
Mr Kriangkrai said global supply chains were already on shaky ground before the pandemic because of the US-China trade war and have been stretched further beyond their breaking points.
Many companies have been looking for alternatives to China to manufacture goods, originally to get around US tariffs. After many essential goods could not be delivered from China following the outbreak in Wuhan, countries and businesses were shown the dangers of relying too heavily on one country as a manufacturing base.
"China has closed factories in many cities, halting production and delaying shipments worldwide, so businesses will rethink localising their supply chains," Mr Kriangkrai said.
In the past, many businesses have focused on global sourcing and supply chain optimisation to minimise costs. Reducing inventories and boosting asset utilisation have enabled companies to deliver more products to customers at the lowest prices with the highest profits.
"The pandemic is disrupting many businesses and supply chains and shows that having one supplier can be risky to operations for a company located halfway across the world," Mr Kriangkrai said.
ASEAN ALTERNATIVE
The FTI expects many companies, especially Japanese and multinational ones, to move their manufacturing out of China and into Asean. The outbreak will only accelerate this trend.
"Thailand and Vietnam are magnet countries in Asean for investment and business expansion," Mr Kriangkrai said.
Thailand has been a major base for Japanese investment in Asean since the government developed the Eastern Seaboard scheme to lure foreign direct investment and manufacturing.
"Thailand has advantages like its strong location in the centre of the region and has the infrastructure required to support foreign investment," Mr Kriangkrai said.
But Thailand cannot compete with Vietnam, which has a younger and cheaper labour force.
"Thailand should improve its labour skills to boost competition because the industrial sector has upgraded to high technology following the S-curve scheme," Mr Kriangkrai said.
The FTI expects a number of new businesses and factories to move to Thailand from China in the coming months.
"Japanese firms and multinational companies from other countries want to move production to Asean to reduce risk and diversify supply chains," Mr Kriangkrai said. "We are going to see massive restructuring of supply chains."
PRICE NO OBJECT
While many sectors have been hit hard by the outbreak, electronics parts have seen supply chains particularly disrupted, due to much of the manufacturing being centralised in China. Downstream businesses that rely on electronic parts have seen considerable shipping delays.
Gritsada Supteuychone, vice-chairman of the Electrical, Electronics, Telecommunication and Allied Industry Club, said buyers are seeking new markets outside China to buy electronic parts.
"Today the electronics parts buyer wants to diversify business risk and expand market sources for electronics parts to serve their businesses for automotive, home components and the digital segment," he said.
The trend is for buyers from the US and Europe to seek electronics parts from companies located in Asean.
"The costs of electronics parts in Thailand and Vietnam may be higher than in China because labour and operating costs cannot compete, but buyers from Europe or the US are willing to pay more money if necessary to break from their reliance on China," Mr Gritsada said.
Signs that global companies will diversify their supply chains in the future, instead of relying only on China, mean that Thailand and Vietnam are likely to benefit from the paradigm shift.
ATTRACT AND INCENTIVISE
Viboon Kromadit, chief executive of industrial estate operator Amata Corporation Plc, said industrial estates in Thailand should take advantage of the pandemic and start wooing international business leaving China.
"The government should have more attractive investment incentives to attract investors to Thailand," he said.
Mr Viboon is concerned that neighbouring countries will take advantage of the outbreak to draw in foreign investors because they have advantages over Thailand such as lower wages, larger labour pools and lucrative investment incentives.
The government has the Eastern Economic Corridor (EEC) scheme and five infrastructure megaprojects that will support foreign investment in Thailand.
The projects include a high-speed railway linking three airports (225 billion baht); U-tapao aviation city (290 billion baht); a maintenance, repair and overhaul (MRO) centre (10.6 billion baht); the third phase of Laem Chabang seaport (114 billion baht); and the third phase of Map Ta Phut seaport (55.4 billion baht).
CRISIS AND OPPORTUNITY
Warawan Chitaroon, deputy permanent secretary of industry, said Thailand's strong healthcare system and its status as one of the few countries that managed to control the outbreak and bring the daily infection rate to zero are incentives for companies looking to move their manufacturing bases.
Thailand ranks high globally in terms of health security and has proved its placement in the past few months with the virus response.
"Thailand is coming out of the pandemic far better than the US or Europe, which will only increase confidence of investors," Ms Warawan said. "Recently, South Korea's government asked the ministry about Thailand's situation and easing lockdown measures because South Korean investors want to expand and invest in Thailand."
Overseas investors are of course waiting for the opportunity to travel to Thailand, an impossibility at the moment due to the government's ban on incoming flights for non-Thai nationals.
The government will continue to promote the EEC and focus on the S-curve scheme, which were designed by the government to promote trade and innovation.
The ministry expects Thailand to be a prime location for new investment in sectors like healthcare and tourism.
"The outbreak will create many new opportunities for investment and industry," Ms Warawan said. "Many foreigners will travel to Thailand for medical treatment, boosting the healthcare and tourism healthcare industry in the future."