Panasonic moves automated equipment manufacturing base to Thailand

BOI secretary-general Narit Therdsteerasukdi said applications for investment privileges from electrical appliances and electronics companies had grown more than seven times in the first five months of this year compared to the previous year.

Narit explained that the closure of Panasonic Eco Solutions Co Ltd in Samut Prakan province last month was part of the restructuring and business strategy plan of the Panasonic parent company in Japan.

The plan includes consolidating factories with similar products into large-scale facilities and closing down small-scale factories. This would result in the closure of small-scale factories in Thailand, but at the same time, there would be additional investments in several other product lines, Narit added.

Currently, Panasonic Group in Thailand owned 11 factories — four large-scale, accounting for 80% of the group's total sales, and seven small-scale factories, accounting for 20% — as of 2020. Of the small-scale factories in Thailand, three have gradually closed down to be merged with larger factories manufacturing the same products.

The small-scale factory in Samut Prakan, which was closed last month, manufactured ventilation fans under the name Panasonic Eco Solutions. The remaining three small-scale factories are important facilities that will continue to manufacture products, he said.

The four large factories make infotainment systems for vehicles, flashlight batteries, and industrial equipment. They continue to progress in production and expand investments continuously, with the closure of factories in foreign countries to utilise their production capacity in Thailand, he said.

Recently, Panasonic Industrial Devices Thailand Co Ltd, a company from Japan and China that manufactures electronic measuring instruments and automation equipment such as programmable logic controllers, has relocated its production base to Thailand. These are technologically advanced products and require skilled labour. This has resulted in the higher use of raw materials and a significant increase in labour hiring within Thailand.

Furthermore, there has been an expansion of production capacity for automotive switch products in Khon Kaen province. Additionally, there are regional offices in Thailand for the business of producing switches, LEDs, lighting devices, and research and development centres for Infotainment products in the automotive industry.

The electronic components industry is one of Thailand’s “target industries” to attract investment for sustainable growth in the country's industrial sector. Due to geopolitical conflicts affecting the supply chain of electronic components, international companies have adjusted their business strategies. Panasonic has chosen Thailand as a production base for high-tech products such as PLC, electronic components for automobiles, and research and development of products. This demonstrates confidence in Thailand as a destination for investment, Narit said.

Particularly noteworthy is the readiness of the supply chain and the continuity of business operations, as well as the potential for growth of the high-level electronic components industry, which would be a crucial foundation for other future industries such as electric vehicles and digital technology, he said.

During the past five months (Jan - May), the BOI has promoted 79 projects with a total investment value of 143.86 billion baht in the electrical appliances and electronics industry, which is more than seven times higher than in the same period last year, Narit said.

In addition to Panasonic's investment projects, there are other interesting investments in the electronic components industry. For example, investments from China in the production of components for fibre-optic telecommunication systems and power chips for electric vehicles, which have decided to invest in Thailand, Narit added.