BOI steps up promotion of target industries

The BOI is confident of drawing investments of 600 billion baht this year and believes pending political factors should not hinder investments.

The BOT is preparing to propose new measures to the government to address investment obstacles and showcase Thailand's investment opportunities, which have been attracting attention from various countries, including digital and EV industries.

In the past five years (2018-2022), foreign direct investment (FDI) from China was valued at 450.085 billion baht, followed by Japan at 320.367 billion baht, Singapore at 122.332 billion baht, Hong Kong at 119.289 billion baht, and the United States at 107.026 billion baht. With the change in the Thai government this year, foreign companies are closely monitoring political developments.

According to the BOI secretary-general, Narit Therdsteerasukdi, the BOI is currently preparing an investment attraction plan to propose to the new government. The plan primarily focuses on non-tax measures to support the creation of a favourable investment environment in Thailand, such as improving the ease of doing business and promoting five target industrial clusters:

1. Bioeconomy, circular economy, and green economy (BCG)

2. Electric vehicle (EV) industry

3. Smart electronics

4. Digital industry

5. Creative economy

Additionally, the BOI will promote the establishment of international headquarters (IHQ) in Thailand and develop the workforce to support future industries and technologies, Narit said.

China-Japan road show

This year, the BOI plans investment road shows to attract investment in several countries.

This consists of road shows in the western part of China, including Chengdu and Chongqing, followed by another road show in Japan and one on the East Coast of the United States, which is the base for bio-tech, automotive, and electronics industries.

Foreign investment trends in Thailand have been consistently positive. In the first quarter of this year, there were investment promotion applications worth 180 billion baht, he said.

The value of investment promotion applications in the second quarter of this year is expected to show continuous growth. It is also projected that the investment promotion applications for the year will reach no less than 600 billion baht, Narit said.

Political stability

Although Thailand is going through a government transition, foreign investors making decisions to establish production bases consider long-term investment factors. Investors prioritise other crucial factors over political factors, such as the country's economic fundamentals, readiness of infrastructure, supply chain preparedness, investment locations, and the benefits that promote investment, he said.

Thailand currently has good opportunities to attract foreign investments. Political factors have some influence, but investors who look to Thailand tend to focus on investing in manufacturing facilities and establishing regional headquarters, Narit said.

Additionally, Thailand is well-prepared to accommodate industrial labour, is competitive with other countries in this region in terms of readiness factors. 

Many countries are seeking new manufacturing bases in this region free from trade war conflicts, while European investors are interested in relocating their production or establishing new factories in Thailand to reduce risks associated with the conflicts between Ukraine and Russia.

Thailand is ready to support foreign direct investment (FDI) and has supplier chains in various industries, such as automotive, petrochemicals, and electronics, which support production, he said.

As for FDI in Vietnam and Indonesia, they are mostly investments in labour-intensive manufacturing, or large-scale retail businesses which serve a growing population.

Meanwhile, the EV industry is gaining momentum. Apart from investments in the electric train manufacturing and related industries, which have been growing significantly in Thailand, vehicles manufacturers have shown great interest in investing. There will be announcements of additional investments in Thailand by vehicles manufacturers in the near future, he said.

Another industry with high investment promotion requests is the central water electronics industry. Investments will be made in both production lines and research and development (R&D) to enhance production capabilities in the future, Narit said.

Moreover, many businesses that have invested are data centres and cloud computing companies that invest based on the conditions of providing clean energy for electricity generation, according to the guidelines of companies in the "RE100" group. There will be more investments in this industry as well. The area that needs further effort is attracting investments in upstream electronics to complete the supply chain of the electronics industry in Thailand.

Deputy Prime Minister and Energy Minister Supattanapong Punmeechaow has instructed the BOI to reassure investors that Thailand's investment promotion policies will still be accommodative under the next Thai government. Soon, more investors from China will increase their investments in the electric vehicle (EV) and bioplastics industries.

From the assessment of long-term economic policies of each political party, it is believed that the policy direction is consistent, including export promotion and promoting free trade through negotiations for free trade agreements (FTAs) with other countries, Supattanapong said. The role of political parties is to instill confidence in investors regarding Thailand's potential to accommodate investments.

The formation of the government should not take much longer. The most important task at the moment is to build confidence with investors during the transition period to a new government, Supattanapong said, adding, the policies of all parties seem to have little difference in terms of promoting industries that are expected to grow in the future. However, there is a need to further develop human resources to meet the satisfaction of investors who want to invest in Thailand, Supatthapong said.