Japanese investors views Thailand as ASEAN Economic Community hub

30202413-01_bigJapanese investors still consider Thailand as a manufacturing hub and will continue to use the country as a gateway to penetrate emerging markets in Southeast Asia.

Seiya Sukegawa, vice-president of the Japan External Trade Organization, said Thailand will continue to be the main production base for Japanese firms to facilitate operations of their subsidiaries in Laos and Cambodia.

Thai managers are also capable of providing technical training to Laotian and Cambodian staff, he said.

Nonetheless, Japan no longer views Thailand as a low-cost manufacturing base following the hike in the daily minimum wage.

Japan has already invested 40% of its foreign direct investment in the region and is likely to increase its portfolio here once the Asean Economic Community takes effect in a couple of years.

Geographically, Thailand is an ideal logistics centre for accessing the Greater Mekong Subregion, he said.

Since the Asean economy consists of emerging markets with growing populations and rising purchasing power, Japanese firms see good business opportunities to increase their investment and services here.

The labour markets in Laos and Cambodia provide Japanese manufacturers with a cheaper alternative to set up production plants as China’s labour and investment costs continue to rise, said Mr Sukegawa.

He added that Thailand must address issues that can affect investors’ confidence such as political instability and the lack of skilled technicians.

Bonggot Anuroj, executive director of the Investment Marketing Bureau of the Board of Investment of Thailand (BoI), said Japanese investors still have confidence in Thailand despite the impact of the 2011 flood crisis.

Japanese companies might relocate their manufacturing plants to eastern and northeastern provinces to avoid inundation in the future, she said.

Ms Bonggot said Japan will continue to invest in the automotive and electronic sectors.

But the 300-baht minimum wage policy might have a long-term effect on foreign direct investment because the wage hike adds to other expenses manufacturers have to shoulder, she said.

According to the BoI, Japanese investment totalled 150 billion baht in the first four months of this year, up from 93 billion baht a year earlier.

Last year, Japanese investors accounted for 872 projects in Thailand with a combined value of nearly 374 billion baht.

Source : Bangkok Post | June 18, 2013

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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