Government expects 10 percent rise in new factories
Despite a tepid global economy, the number of new factories slated to open in Thailand in 2020 will be 10 percent higher than last year, according to a forecast by the Industrial Works Department, thanks to investment incentives and megaprojects.
Should the projection prove accurate, it would represent a strong vote of confidence in the medium- to longer-term prospects of Thailand among domestic and foreign investors. Thailand has a long history of welcoming and attracting investment in manufacturing.
The Industrial Works Department said it expects the number of newly registered factories to rise 10 percent to 4,817 and investment value to climb 3.4 percent to $16.4 billion in 2020. The department credited the government’s investment incentives and policies as one of the reasons for the improving performance.
Other factors drawing investment are the development of the Eastern Economic Corridor (EEC), the country’s new advanced industry zone where many manufacturers are choosing to locate, and the government’s massive infrastructure-building program that requires suppliers.
Prakob Vivitjinda, Director-General of the Department, said the three EEC provinces – Chachoengsao, Chonburi, and Rayong – are the premier locations for new factories. “Chonburi is the most famous because most logistics megaprojects are located in that province to facilitate both the industrial and tourism sectors,” he said.
Prakob said the time is right for firms to invest in new or expanded factories. He said that the country’s currency, the baht, has risen to its highest value in many years. While the strong currency has made some Thai exports less competitive, it also has the effect of reducing the prices on imported machinery and equipment to outfit new factories.
Thai policymakers believe the strong currency is a temporary phenomenon, and that as infrastructure building takes off, the baht will weaken, restoring competitiveness to some exports.