Businesses step up pace of overseas investments

Chokedee Kaewsang, deputy secretary-general of the BOI, said that of the total overseas investment by Thai business operators, about 50 per cent have been in the Asean region. Vietnam is the top choice, followed by Myanmar and Cambodia.

 Outside the region, Bangladesh is a popular investment destination for Thai companies, which are drawn to its large market, low wages and its gateway role for South Asia. In Africa, Thai investors like Kenya, Nigeria, South Africa and Sudan.
“Among Asean countries, Thailand comes third in overseas investment after Singapore and Malaysia,” Chokedee said.
The main reason for Thai investment overseas was to reduce production costs in wages and raw materials, while expanding markets. Thai investors, mostly large companies, have invested in the Europe and the United States to secure technologies.
Chokedee said that the BOI previously trained 479 SME operators, about 104 of which have established businesses overseas.
Of 104 Thai business overseas, 25 are in the food and processed agriculture sector, 14 are in the construction, decorative items and furniture sector, and 12 are in textiles and garments. Most of the investment has been directed to Asean countries including Vietnam, Myanmar, Cambodia, Indonesia and Laos, followed by South Asian countries including India, Bangladesh, and China.
According to the Bank of Thailand (BOT), in 2017, of total Thai direct investment overseas of Bt3.48 trillion, Bt1.03 trillion was made in Asean, led by Singapore (Bt628 billion), Vietnam (Bt107 billion) and Malaysia (Bt77.8 billion).
About Bt393 billion of total Thai direct investment overseas was made in the European Union (EU), led by the Netherlands and Britain, while Bt444 billion was in Japan, Bt242 billion in Hong Kong, Bt139 billion in mainland China, and Bt298 billion in the US.

In the first quarter of this year, of total Thai direct investment overseas of Bt724 billion, Bt198 billion was made in Asean, Bt120 billion in Japan, Bt60 billion in the EU, Bt57 billion in Hong Kong, Bt57 billion in the US and Bt27 billion in mainland China.
Don Nakornthab, BOT senior director, said that Thai private sector was likely to continue making investments overseas, taking advantage of economic recoveries. However, the investment amounts may be lower compared with the past one to two years.
“We see the upward trend but not much as we have seen relatively many big deals in the past one to two years. There may be no much chance to see such giant deals," he said.

Naris Sathapholdeja, executive officer at TMB Analytics of TMB Bank, said that in the past one to two years, Thai business operators have made more overseas investment due to low returns on investment in Thailand in light of the weak economy.
Thai businesses have found investment opportunities in new markets, while seeking cheaper resources, raw materials and wages to reduce their production costs, he said.
From now, Thai investment overseas is expected to remain steady after improvement of the local economic recovery and easing political situation, which could attract Thai investors to invest and expand businesses more in the country. Naris cited the revised regulations to support business activities in the Eastern Economic Corridor (EEC).

Roongrote Rangsiyopash, president of Siam Cement Group (SCG), said that SCG's Asean businesses in Asean accounts for a quarter of the group's total businesses and the proportion is estimated to increase to 40-50 per cent of total income in no more than seven years. The company is Thailand's largest industrial conglomerate,

Somporn Vongvuthipornchai, chief executive officer at PTT Exploration and Production (PTTEP), said that the company may have to increase its weight of overseas investment if it wins auctions for one or both local petroleum fields to be in line with the company's 2025 business plan.
The regions that PTTEP focuses on are Asean, where it has production bases, and the Middle East.