Georgia’s business relationship with Thailand operates with little fanfare, with only a few Thai-owned companies working here and little public knowledge of how locally based multinationals are tapping into the Southeast Asian economy of 70 million people.
But the Thailand Board of Investment sought to change that this week. Officials held an Atlanta event on the sidelines of an aviation conference to pitch Thailand as a manufacturing powerhouse in the 10-country ASEAN region of 600 million consumers whose economies can trade together largely tariff-free. Thailand also sits near India and borders China, giving investors a prime location adjacent to the growth engines of the 21st century.
“You can use Thailand as a gateway to emerging countries with increasing purchasing power,” Punlop Punyasiri, director of industry linkage development at the Thailand BOI, told attendees during a breakfast at the Westin Peachtree Plaza.
Thailand is looking to upgrade its manufacturing base with a focus on innovation while diversifying its economy. Target sectors include biofuels, digital economy, medicine, automotive, aerospace, logistics, robotics and more.
Beyond a relatively low 20 percent corporate tax rate, foreign firms can also qualify for an eight-year tax exemption, plus a 50 percent exemption over an additional five years in certain areas.
The BOI this year is heavily pushing investments into the Eastern Economic Corridor, an area encompassing three coastal provinces where the government has embarked on a $44 billion infrastructure spree fueled by foreign investment and public-private partnerships.
Last year, Thai leaders underscored the ECC’s compatibility with China’s Belt and Road initiative, a massive plan to develop infrastructure on strategic land and sea routes. Some 70 countries have signed on, though some have been reconsidering amid concerns that Chinese loans put key assets like ports and highways at risk of repossession by a foreign power.
One part of Thailand’s ECC plan is to link three airports with (Chinese-built) high-speed train lines while also boosting air travel capacity and dramatically expanding the country’s aviation maintenance and repair overhaul capabilities with a new purpose-built MRO complex.
Most such investments are to be concentrated at the Eastern Airport City (Aerotropolis) springing up around U-Tapao Airport, which over time is aiming for a tenfold increase from the 5 million passengers it hosted last year. Thailand is already a hub for low-cost airlines, with the Bangkok Suvarnabhumi Airport allowing travelers to reach most Asian capitals within four hours. At 58 million passengers, the iconic Bangkok hub is already among the top 20 busiest in the world.
“We think that the aerospace sector will upgrade our country,” said Vorachart Choochom, senior investment promotion officer at BOI. He expects the sector to follow the path of the auto industry, where Thailand is home to 18 foreign brands that churn out 2 million cars per year, 60 percent of them for export.
“If you invest in the aerospace industry, you are most likely to get the highest incentives package from us,” he said.
Mr. Choochom and Mr. Punyasiri led a Thai delegation attending MRO Americas, an annual convention held this week in Atlanta.
They touted the BOI’s many services like a single-window for foreign investors and local sourcing assistance for manufacturers. Since February 2018, the government has also offered the SMART visa program, which issues visas within days to skilled workers, executives and startup founders, along with their families.
But after their own pitch to a group that included medical device, drug, technology and manufacturing companies, the BOI also brought in some local voices to provide testimonials.
Duluth, Ga.-based FiberVision Corp. found Thailand to be the perfect place for a new plant making polyester fibers that go into hygienic products like baby wipes and diapers, said CEO Tom Zaiser, who also runs a joint venture with a Japanese partner that completed the Thai investment.
FiberVision is a subsidiary of Indorama Corp., a global manufacturer of polyethylene and polypropylene, which gave Mr. Zaiser access to cost data from 100 facilities in 31 countries.
Thailand proved more competitive than FiberVision’s two existing China plants, which had experienced double-digit wage inflation over 20-plus years and were facing challenges retaining workers.
It helped that Thailand had the massive Map Ta Phut petrochemical complex near the Laem Chabang container port in the province of Rayong, which gave FiberVision ready access to raw materials and an easy avenue for exports. Nearby India and Indonesia are among the top growth markets for the diaper customers that take delivery of shipping containers stuffed with what look like white bales of fibers. The neighborhood, in other words, is good for business, Mr. Zaiser said.
“The wealth creation in Asia is unbelievable, and people are buying the convenient things that make life easier,” he said, noting that the company will likely eventually have a plant in India.
Although the decision to locate in Thailand came in 2015, before President Trump’s trade war with China, it also provided vital diversification that made him look like a genius when tariffs struck.
That was luck, he acknowledged, but Thailand paid off in other subtle ways: The workforce has proven excellent from management down to the factory floor, and turnover is a third of the rate of his Chinese factories.
“We actually have a problem that (Thai workers) want to work too much overtime,” he said.
Mr. Zaiser said the Thailand BOI was especially helpful, facilitating a land transaction that saw FiberVision in effect buy a plot from one of its suppliers. The $43 million plant took about two years to build, and it’s now poised to support further growth.
“We built the plant there twice as big as it needed to be,” Mr. Zaiser said.
Thailand is known more for its tourism sector than its robust industrial base, but hospitality bleeds into business interactions as well, said R. William Ide III, a corporate attorney at Dentons in Atlanta who serves as Thailand’s honorary consul general in Georgia.
“You want to go where people care, where they’re industrious and where they’re talented. That’s Thailand.”