More foreign investors are expected to invest in fragrance oil and aroma compound production in Thailand, which has the potential to develop the cosmetics industry, says the Federation of Thai Industries (FTI).
The prediction comes after a French company decided to make fragrance oil from Thai flowers, said Ketmanee Lertkitcha, chairman of the health and beauty sector at the FTI.
"We believe Thailand can convince more foreign companies to invest in fragrance oil here because the unique scents of Thai flowers are in high demand in the global market," said Ms Ketmanee.
She said Thailand is a suitable location to develop the health and beauty industry because it is rich in raw materials.
The government is promoting bio-, circular and green economic development, which aligns with circular beauty, a trend in the cosmetic industry, said Ms Ketmanee.
Circular beauty refers to the upcycling of ingredients in cosmetics processes to minimise waste, benefiting the environment.
She said Thailand is the largest cosmetics market in Asean.
Last year the market value increased by more than 11% year-on-year, up from 240-260 billion baht.
The country usually exports 60% of beauty products, while 40% are sold domestically.
"Last year Thailand exported beauty products worth 86 billion baht. The value is expected to increase every year," Ms Ketmanee said.
The FTI wants the government to amend laws to facilitate the use of ethanol-derived alcohol, she said.
There are strict controls on using ethanol as a raw material to produce alcohol, barring the use of ethanol-derived alcohol in industries such as cosmetics production.
Earlier the Tapioca Ethanol Association announced it would team up with processed herb and cosmetics makers to push for what it called "free trade" of ethanol-derived alcohol.