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


About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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