Overseas direct investment by Thai listed firms doubles

The growing global reach of successful Thai companies was quantified last week when stock market officials announced that net outward direct investment by Thai firms listed on the Stock Exchange of Thailand and Market for Alternative Investment more than doubled in 2016 to over $5.3 billion as cash-rich Thai companies stepped up acquisitions of foreign firms and expanded their presence in markets in the United States, Europe and Asia.

The lion’s share of the outward flows came from a few large investment deals, according to Patamaporn Nitichai, assistant manager-research specialist at the Stock Exchange of Thailand (SET). Chief among them was the takeover by Charoen Pokphand Foods of United States-based Bellisio Foods for $1.08 billion.

Food and agro-industry firms accounted for the largest share of outward investment, Patamaporn said, totaling $1.84 billion. Another major acquisition in that category was Thai Union, the world’s largest tuna company, buying a 49 percent stake in the Red Lobster restaurant of the United States for $575 million.

Two other large deals outside of the food sector were state energy company PTTEP’s $656 million investment in one of its subsidiaries in Canada, and a $447 acquisition by Indorama Ventures of a chemical factory in Alabama in the United States. Indorama Ventures is the world’s largest producer of PET plastic, which is used to make plastic bottles.

A total of 198 listed firms engaged in investing beyond the Kingdom’s borders, which was equal to 39 percent of all listed companies. Last year saw 192 companies investing abroad for a total value of $2.23 billion. It was the larger listed firms that did the bulk of the investing, as the 198 firms have a total market capitalization of $319 billion, equal to 71 percent of total market capitalization.

Most outward investment remained regional. The other nine countries of the Association of Southeast Asian Nations (ASEAN) were the most popular investment destination last year with 78 percent of the 198 companies investing in the region. Of those firms, 116, or 59 percent, invested in Cambodia, Laos, Myanmar and Vietnam, with Myanmar being the top investment destination.

But companies that invested in North America and Europe made larger investments on average. The average investment in North America was $268 million, and in Europe it was $53 million. The average investment in ASEAN, however, was $23.8 million.