KBank wants Thai corporates to study AEC markets before investing

Gaining an understanding of the AEC market is crucial for business sustainability and improving competitiveness, said Vasin Vanichvoranun, KBank executive vice president.
While the bank is ready to provide financial backing to Thai enterprises wishing to expand into the AEC, the challenge facing these businesses, especially medium-sized companies, is how to gain understanding of the markets, he stressed.
“Thai enterprises should be cautious on establishing production bases outside Thailand because they will run up against different regulations in each country, while hidden costs and productivity of employees are important to manufacturers as well,” he said.

For clients who want to cash in on the AEC but might not know the markets well, KBank will suggest that they begin through the collaboration of 10 regional partner banks to secure markets for their products. Investment in setting up manufacturing plants is the next phase.
KBank sees four Asean countries as attractive for Thai firms’ expansion: Indonesia, Myanmar, Vietnam and Singapore. The first three countries have growing domestic consumption with large population bases and strategic logistical locations, while Singapore is the financial centre for many corporations, he said.
Thai businesses in agricultural goods, food and beverages, construction materials and chemical products are among the first that should prepare for the regional opportunities. He said those four industries were paramount among the 400 projects worth Bt1.55 trillion in offshore investment by major Thai firms over the past three years. Most of these projects are in Cambodia, Laos, Myanmar, Vietnam and Indonesia.
In addition, urbanisation is the key to domestic consumption and a foundation of the Thai economy this year, which has enabled the bank to maintain its targets for corporate-loan growth and total revenue.
Outstanding loans to corporate business this year is expected to grow by 8 per cent to Bt389 billion.