Kingdom must cement role as north Asean hub, KBank exec says
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Kasikornbank foresees competition for foreign direct investment (FDI) getting more intense under the Asean Economic Community, which means Thai enterprises should implement strategic moves now to maintain the country's position as the centre of the region
Songpol Chevapanyaroj, executive vice president of KBank, said yesterday that every member of Asean would compete to attract massive investments from overseas including Japan, China, Europe and the United States. Each Asean country has different advantages and levels of readiness.
Thailand’s wage costs are lower only than Singapore’s, but the cost of office rental in Thailand is competitive when compared with Singapore, Myanmar and Vietnam, he said.
FDI from outside Asean has been various industries, showing this region’s potential for accommodating entire production chains and becoming one of the world’s manufacturing hubs.
Cambodia, Laos, Myanmar, Vietnam and Indonesia are crucial production bases and raw-material sources for foreign enterprises. Indonesia is the main rival of Thailand in attracting FDI even though that country is facing depreciation of its currency and soaring inflation. Countering these disadvantages, Indonesia has instituted flexible policies to draw investment.
Thailand meanwhile needs to implement strategies to secure its position as Asean’s northern hub, because Japan, which is the Kingdom’s biggest investor, is looking for additional bases, focusing on Indonesia, Vietnam and Myanmar.
Thailand has a competitive advantage in upper Asean in terms of market size, economic stability, and investment in industrial sectors. Yet some Thai businesses need to relocate their production bases to enhance manufacturing efficiency and competitiveness, Songpol said. Labour-intensive industries are in most need of thinking about relocation, but beyond that, sharing production bases is a way to improve manufacturing efficiency. In this regard, business matching with the right partners is key to success.
He said that to support trade and investment activities in Asean, KBank would assist Thai enterprises in three main areas – food and beverages, food technology, and consumer products – for business matching when it hosts an “International Summit and Business Matching” event from November 25-26. In collaboration with more than 30 partner banks from Japan, South Korea, Germany, Italy, Vietnam, Indonesia, Cambodia and Laos, KBank expects 400 business matching deals at the event, he said.
