February 2024 / Thailand

28 Febbraio 2024

Thailand, 2023 Investment Applications up to USD 24 Billion as Large FDI Projects Soar

The Thailand Board of Investment (BOI) announced today that applications for investment promotion in 2023 reached a five-year high of 848.3 billion baht in combined value (ca. USD 24 billion), an increase of 43% from the previous year’s adjusted number, led by large foreign investments in the five priority sectors in the BOI’s new Investment Promotion Strategy, which represented more than half of the combined pledges.

The relocation trend in key industrial sectors driven by ongoing geopolitical issues and the Thai Government’s aggressive investment promotion policy accelerated a huge growth of Thailand’s FDI to 663.2 billion baht, representing a 72% increase in the FDI value compared to 2022.

“Thailand’s potential and readiness, together with the new 5-year investment promotion strategy and measures, have attracted large investment by companies seeking to relocate to a safe and resilient long-term base for their investments. Moreover, the fact that the Prime Minister Srettha Thavisin, himself, led several investment promotion roadshows, has significantly raised investors’ confidence and put Thailand on the radars of key investment communities.” Mr. Narit Therdsteerasukdi, Secretary General of the BOI, told reporters at a press conference held after a Board meeting at Government House in Bangkok. “Looking forward to 2024, it is predicted that the Thai economy will expand, supported by the expansion of exports and tourism revenue. We also believe investments are likely to grow due to the continued flow of FDI, especially in our priority sectors.”

The Board meeting, chaired by H.E. Mr. Parnpree Bahiddha-Nukara, Deputy Prime Minister and Chairman of the BOI, also approved four investment promotion applications worth a combined 29.7 billion baht for projects comprising two data centers, the production of steel wire for the tyre industry, and the production of steam for industrial use.

2023 Investment Pledges up 43%

The total number of applications for investment promotion filed last year by investors, both local and foreign, increased 16% to 2,307 projects, worth a combined 848.3 billion baht investment, up 43% from a revised 591.5 billion baht in 2022. The rise in total value reflects the growing number of large projects, mostly from overseas.

The five priority sectors defined by the new strategy the BOI enacted last year, namely BCG (Bio-Circular-Green), electric vehicles (EV), smart electronics, digital and creative, together attracted 759 applications, worth a combined 492.5 billion baht of investment, or 58% of the total value of investment pledges.

FDI Applications

The year 2023 saw foreign investors file a total of 1,394 applications for investment promotion, an increase of 38% from the previous year, and an increase of 72% in combined investment value to 663.24 million baht, due to a significant number of large projects.

Like in the previous year, investment applications from the People's Republic of China came first in the ranking of FDI sources by investment value, with 430 projects worth a combined investment of 159.39 billion baht, or 24% of the total value of FDI applications in the period, boosted by Chinese investments in the electronics industry, and the automotive supply chain, including EV.

Singapore came in second with 194 projects worth a combined 123.39 billion baht of investment, boosted by large projects applications from Singapore-based affiliates of international companies in sectors including solar cells and electronics.

Investments from the U.S. ranked third with 40 projects worth a combined 83.95 billion baht.

Japan came in fourth with 264 projects representing a combined value of 79.15 billion baht, a 60% increase from the previous year.

Taiwan ranked in fifth position with 54.6 billion baht from a total of 94 projects.

In terms of the regional distribution of investment, the Eastern Economic Corridor (EEC), Thailand’s prime industrial area comprising Chonburi, Rayong, and Chachoengsao provinces, again led the ranking with 460.5 billion baht worth of investment, accounting for 54% of the total pledges. It was followed by the country’s central region which attracted around 262 billion baht worth of investment, or 31% of the total.

Project Approvals

The investment applications approved by the board include the following projects:

- NextDC, a leading Australian data center operator, received approval for a 13.76 billion baht investment in a new hyperscale data center which will be located in Bangkok.

- CtrlS Datacentres (Thailand) Co., Ltd., a unit of CtrlS Datacenters LTD, a global data center operator based in India, received approval for a 5.04 billion baht investment in a new hyperscale data center which will be located in the Digital Industry and Innovation Promotion Zone (EECd) in Chonburi province.

- Xingda Steel Cord (Thailand) Co., Ltd. received approval for a 6.66 billion baht investment in a new factory to produce steel cord, bead wire and steel wire mainly for use in the manufacturing of tyres, with an annual production capacity of 260,000 tons. The plant, which will be located in Chonburi province, is expected to export 50% of its output, and will further strengthen Thailand’s automotive sector supply chain.

- TPI Polene Power PCL received approval for a 4.24 billion baht investment in the production of steam for distribution to power and cement production plants. The facility, to be located in Saraburi province, will have a production capacity of 480 tons of steam per hour, and will run on power generated from waste (refuse-derived fuel, or RDF).

Source: BOI News

3 Febbraio 2024

IPEF Supply Chain Agreement Enters Into Force

The U.S. Department of Commerce today announced that the Indo-Pacific Economic Framework for Prosperity (IPEF) Agreement Relating to Supply Chain Resilience, generally referred to as the Supply Chain Agreement, will enter into force on February 24, 2024. This is a critical step in bringing the landmark, first-of-its kind agreement into action and promoting coordination among the IPEF partners on building resilient, efficient, productive, sustainable, transparent, diversified, secure, fair, and inclusive supply chains.

The 14 IPEF partners – the United States, Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam – negotiated the IPEF Supply Chain Agreement to establish a framework for deeper collaboration to prevent, mitigate, and prepare for supply chain disruptions, such as those experienced in recent years from the COVID-19 pandemic.

“I am thrilled to see the continued commitment and enthusiasm of the IPEF partners to make concrete progress and deliver tangible outcomes in record time,” said U.S. Secretary of Commerce Gina Raimondo. “With the IPEF Supply Chain Agreement shortly entering into force, we will now move forward and work collaboratively through this innovative framework with the goal of strengthening our supply chains and preventing potential disruptions before they arise for the collective benefit of our countries’ workers and businesses.”

Since the signing of the IPEF Supply Chain Agreement in November 2023, five IPEF partners – Fiji, India, Japan, Singapore and the United States – have deposited their instruments of ratification, acceptance, or approval, triggering the Agreement’s entry into force provision. With the Agreement’s entry into force on February 24, 2024, the focus in the coming months will turn to various milestones set out in the Agreement related to establishing three supply chain bodies – the Supply Chain Council, Crisis Response Networkand Labor Rights Advisory Board, including:

  • Identifying the representatives to the Agreement’s three supply chain bodies by no later than March 25;
  • Selecting the Chair of each of the supply chain bodies by no later than April 24;
  • Each body adopting the terms of reference by no later than June 23;
  • Identifying and notifying partners of each country’s list of critical sectors and key goods for cooperation under the Agreement by no later than 120 days after the date of the entry into force for each country; and
  • Developing the guidelines for the facility-specific reporting mechanism on labor rights inconsistencies in IPEF supply chains by no later than August 22.

The IPEF Supply Chain Agreement was negotiated pursuant to the Ministerial Statement on Pillar II (Supply Chains) released during the IPEF Ministerial meeting in September 2022 in Los Angeles, California. Negotiations were substantially concluded in May 2023 after approximately six months of negotiations. The text of the agreement  was made public in September 2023. On November 14, 2023, Secretary of Commerce Gina Raimondo and her counterparts formally signed the landmark agreement in San Francisco, California.

Source: US Department of State

19 Febbraio 2024

PM on drawing foreign trade and investment, and increase export of Thai agricultural products

February 19, 2024, Government Spokesperson Chai Wacharonke disclosed that Prime Minister and Minister of Finance Srettha Thavisin has a policy to promote tangible international economic cooperation through the Free Trade Area (FTA), as part of the Government’s “proactive economic diplomacy”, in a bid to attract inward foreign trade and investment, expand markets for Thai agro products, and enhance the country’s competitiveness in the global market.

Statistically, Thailand is currently ASEAN’s top and world’s 7th largest agro product exporter. The country also ranks 3rd in ASEAN and 11th in the world as exporter of processed agricultural products in 2023.
According to Ministry of Commerce’s data, Thailand’s export of agricultural products to FTA trade partners in 2023 increased by 4% with the value of USD19,563 million (73% of total exported agricultural products). The export of processed agricultural products to FTA trade partners in 2023 also increased by 2% with the value of USD15,074 million (67.3% of total exported agricultural products). Among Thailand’s FTA trade partners, China is the largest importer of Thai agricultural and processed agricultural products in 2023. The export of agro product to China last year has increased by 11%, accounting for 42% of total agricultural and processed agricultural product export. This was followed by the ASEAN market which expanded by 5%.
Exported Thai agricultural and processed agricultural products that was the most popular among FTA trade partners is rice (an increase of 92% in Indonesia, Philippines, and Malaysia markets), followed by coffee (an increase of 43% in Cambodia, Japan, and China), and fresh, chilled, frozen and dried fruits (an increase of 23% in China, Malaysia, and Vietnam).
The Government is now collaborating with Thai and foreign experts in working on a plan to reduce cost and increase productivity and earnings of the farmers under its policy "Market-Led, Innovation-Driven, Triple Farmers' Income". On February 14, 2024, Thailand Trade Representative (TTR) has met with the management of Huawei (Thailand) Company Limited and executives from the Ministry of Agriculture and Cooperatives to discuss utilization of innovative solutions of the Huawei Corporation to improve the agricultural sector. The new techniques would help in reducing the cost of electricity supply for small-scale farmers, creating large-scale database in agriculture and trade to initiate the latest trend-based plans, and developing “Pirunraj application” as a trading platform with the “From farm to Table” format.
According to the Government Spokesperson, the Prime Minister strives to leverage Thailand’s FTA with trade partners to draw foreign trade and investment and increase export of Thai agricultural and processed agricultural products to the global market. Innovations and trend-based market planning have also been adopted to ultimately uplift quality of life of the Thai farmers and entrepreneurs.