Lamphun province has requested the Interior Ministry expand the purple zone, designated for industrial activities, to pave the way for investment expansion by Japanese companies.
Lamphun governor Unsit Sampuntharat said the province recently submitted its request to revise provincial town planning to expand the industrial zone.
"The revised town planning will help Thailand ensure electronics investments stay here and do not relocate to Vietnam," Mr Unsit said.
Many companies want to increase production, asking for plots of 3,000-5,000 rai for such expansion, he said.
The province needs to assess the infrastructure supply, other facilities and the environmental impact of such a change, Mr Unsit said, reiterating that industrial zone expansion should not affect the existing cultural zone.
Japan's Murata Electronics Thailand Co has proposed the province revise town planning because it wants to develop a 500-rai plot near an existing factory in the Northern Region Industrial Estate, which spans 1,788 rai and is home to 98 factories.
The company expects to invest 1 billion baht to expand electronics manufacturing.
"An expansion by Murata Electronics will create more jobs in the province, while production is projected to generate more than 100 billion baht in annual revenue," he said.
Murata is a global leader in design, manufacturing and supply of advanced electronic materials, specifically components and multi-functional, high-density modules. Its innovations can be found in a wide range of applications such as mobile phones, home appliances, cars, energy management systems and healthcare devices.
Lamphun contributes annual gross provincial product of 142,000 baht per person. The province has a high income because it has two industrial estates with 80,000 employees in total.
Mr Unsit said infrastructure in the province is expected to improve with the planned development of a bypass road and a new airport. The bypass road is to run from Chiang Mai airport to Lamphun, worth 700 million baht from the fiscal 2018 budget, and is projected to be completed within two years.
The road will help improve traffic going to Lamphun province, he said.
The cabinet meeting in Sukhothai province on Dec 26 also approved in principle the building of a second airport for the Chiang Mai area, located in between San Khamphaeng district of Chiang Mai and Ban Thi district of Lamphun.
Mr Unsit said the Office of Transport and Traffic Policy and Planning plans to provide a budget to conduct the study and design of the new airport, with construction taking 10 years. The office is also drafting an investment plan to propose to the Transport Ministry.
The ministry forecasts passenger capacity at Chiang Mai airport to reach 20 million in 2025, necessitating further airport capacity.
Lamphun needs to prepare because 70% of the plots for the new airport are in the province, Mr Unsit said.