Thailand prepared for AEC as Thai companies invest overseas
Several leading Thai corporations are growing so rapidly that they are finding the Kingdom’s economy is too small to support their ambitions and are aggressively expanding across the Southeast Asian region and beyond, providing evidence that Thailand’s private sector is well prepared for the newly launched ASEAN Economic Community.
Thai corporations invested nearly $2 billion in business ventures in other countries in the Association of Southeast Asian Nations (ASEAN) through the first nine months of 2015, according to the Bank of Thailand, equal to 27 percent of all Thai investment overseas and more than twice the percentage of total foreign investments compared to a decade ago.
Corporations that have already established a strong footprint across the ASEAN Economic Community (AEC) include SCG (Siam Cement Group), Charoen Pokphand, Bangkok Bank, Thai Beverage Corporation, PTT, Banpu and many others. Last week, Singha Corporation, brewer of Singha beer, announced it will invest $1 billion in Viet Nam’s Masan Group, one of the largest business groups in that country with holdings in consumer goods, banking and natural resources.
“Masan’s strong distribution platform, which reaches all corners of Vietnam, will allow Singha to access a fast growing market of more than 90 million consumers and support the expansion of newer categories,” said Palit Bhirombhakdi, chief executive of Singha Asia.
Vikrom Kromadit, the founder and executive chairman of Thailand’s Amata Corporation, which has invested extensively in building and operating industrial estates in Viet Nam, said that country has a lot of potential because of its huge population of young, hard-working people and political stability.
Construction and real estate firms have also been expanding across the region in order to balance their investments and provide resilience. “We have been expanding our investment abroad since 2010 as part of our aim to boost annual revenue to [about $3 billion] by 2020. This is also a way to learn how to do business overseas to balance our portfolio,” said Thongma Vijitpongpun, president and chief executive of Pruksa Real Estate.
While large corporations with their vast resources are confident that they can capitalize on the opportunities afforded by the AEC, small and medium sized businesses, which make up 70 percent of Thailand’s 600,000 registered companies, have been cautious or fearful about their prospects as trade barriers fall.
To allay their fears, the Commerce Ministry has conducted over 200 training courses since 2012 for an estimated 25,000 small and medium-sized entrepreneurs, farmers, educators and government officials so that they will be prepared and positioned to reap the benefit from freer trade and investment.
On a government regulatory level, “Thailand is at the forefront in complying with the AEC Blueprint,” Achara Deboonme, business editor of The Nation newspaper wrote last week. Thailand has implemented more than 80 percent of the measures outlined in the blueprint, according to the Commerce Ministry.