Industry Trends in Thailand

In recent years, Thailand has emerged as an attractive destination for industrial factories and investments from various countries. Several factors have drawn entrepreneurs to relocate their production bases or expand their investments in Thailand. According to UNCTAD, in 2024, Asia is expected to see foreign direct investment (FDI) exceeding $600 billion, with Southeast Asia alone experiencing a 10% increase, reaching over $200 billion. This reflects that countries in Southeast Asia, including Thailand, continue to attract foreign investors. The following factors make Thailand appealing for industrial investment:

1. Trade Wars and Trade Barriers

The trade war between the U.S. and China has prompted many Chinese entrepreneurs to seek ways to avoid the impacts of tariffs imposed by the U.S., which have made products manufactured in China less competitive. Relocating production to Thailand is one solution, as Thailand is part of several free trade agreements (FTAs), including RCEP (Regional Comprehensive Economic Partnership), which helps reduce tariffs and facilitates trade between Thailand and member countries.

2. Strategic Location and Access to the ASEAN Market

Thailand's central location in the ASEAN region makes it a crucial hub for manufacturing and distribution. Investing in Thailand allows entrepreneurs to easily access the high-growth potential ASEAN market, especially for industries looking to expand into consumer markets in the region. Additionally, Thailand's infrastructure, particularly the Eastern Economic Corridor (EEC) development project, supports high-tech industries and various sectors, making Thailand an attractive investment option.

3. Investment Promotion Policies and Government Incentives

The Board of Investment (BOI) has policies that promote investment and offers various incentives to attract foreign investment. These incentives include corporate income tax exemptions, tax reductions, land ownership rights, and facilitation in obtaining various permits, especially in targeted industries such as electric vehicles (EV), electronics, and other key sectors.

4. Infrastructure and Supply Chain

Thailand has continuously developed its industrial infrastructure, including modern industrial estates, interconnected transportation networks, and utilities that support various industries. Additionally, Thailand has a relatively complete supply chain in several sectors, such as automotive and electronics.

Industries with Growth Potential

The overall industrial outlook in Thailand for 2025 is expected to remain stable, but certain industries are projected to grow. According to the Federation of Thai Industries, the following industries are expected to expand in 2025 compared to 2024:

Industries expected to grow over 10% include shipbuilding and repair, sugar, petroleum exploration and production, aerospace, and electrical and electronics.

Industries expected to grow by 6-10% include plywood, thin wood and sheet materials, cosmetics, and dietary supplements.

Industries expected to grow by 1-5% include rubber, sawmills and wood drying, footwear, automotive parts and components, and cement.

Industries with growth potential (unspecified %) include pharmaceuticals, creative crafts, glass and ceramics, gas, and biotechnology.

Although many industries in Thailand face challenges from competition and other factors, these challenges present opportunities for Thai entrepreneurs to adapt and develop to meet future changes and cope with impacts from other factors such as environmental measures and trade policies.

Source: https://unctad.org