Thai’s BOI to open branches in Myanmar and Indonesia in push for investment abroad

THE BOARD of Investment plans to open branches in Myanmar and Indonesia next year as a priority measure to encourage Thai companies, and small and medium-sized enterprises in particular, to invest overseas.

This will improve their opportunity to invest in new production plants in new export markets to boost income growth for the long term, BOI secretary-general Hirunya Suchinai said yesterday.

The BOI’s 14 existing branches overseas will also expand their traditional role of promoting foreign businesses to invest in Thailand, by studying ways for Thai corporates to invest abroad, she said.

The agency has a budget Bt30 million this year to support Thai companies wishing to take such a step, she said, adding that this is 50 per cent higher than last year’s promotional budget.

The first three groups of countries to be promoted for overseas investment are CLMV (Cambodia, Laos, Myanmar and Vietnam) plus Indonesia; other Asean countries, especially the Philippines, Malaysia and Brunei; and “new” potential markets such as India, Bangladesh, Sri Lanka, Mongolia, Uzbekistan and Uganda.

The industries seen as having the greatest potential for investing overseas include agro-industry, automobiles, garments, food processing, and construction materials.

“We are encouraging Thai industrial firms to invest abroad, as it is a challenge for them [especially SMEs] to expand into new markets,” Hirunya said.

According to a survey by the fDi Intelligence unit of The Financial Times Ltd, Thai companies from 2006 to 2015 invested in a total of 550 projects abroad with an investment value US$58.54 billion (about Bt2 trillion).

Thai investment in coal, oil and natural gas accounted for the highest proportion during the period, at $11.78 billion, followed by chemicals with an investment value of $10.15 billion, and real estate with $7.28 billion.

The survey found that the top five countries for Thai companies’ foreign investment during the period were Vietnam, with an investment value of $10.64 billion, China ($9.08 billion), Indonesia ($9.03 billion), Myanmar ($8.2 billion) and the Philippines ($3.9 billion).

Meanwhile, Thai investors ranked second among those applying for tax incentives from Myanmar’s Directorate of Investment and Company Administration, recording an investment value of $10.28 billion from 1988 through 2015.

In Vietnam, the Kingdom ranked 10th in terms of receiving incentives from the Planning and Investment Ministry, with an investment value of $6.8 billion from 1989 to July last year.

Thailand also ranked second in terms of the value of applications for incentives from Laos’ Planning and Investment Ministry, recording a total of $4.4 billion from 1989 until the end of 2014.

Hirunya said the BOI would support companies considering overseas investment via seminars and courses, and would also work with the investment authority in each market to make the application process as smooth as possible for them.

Of the 333 companies that have participated in the training courses to date, 30 have invested overseas. The agency’s target is for at least 10 of the new trainee firms this year to decide to invest abroad, and for least 10 companies that have joined its training programme to expand abroad annually, she said.

Meanwhile, the agency will hold its second “BOI Forum” in Bangkok in August to promote foreign investment by corporates in CLMV markets plus Indonesia, the secretary-general said.

Lersan Dulthamaphirom, president of Seiko Advance (Thailand), said: “I have the opportunity, thanks to the BOI, to expand my company’s investment in China and India. It is a challenge for SMEs to find new production bases and markets for sustainable growth when domestic demand is limited.”

The company participated in the BOI training, and is one of those that have already taken the step to expand via investment overseas.

 

Source: The Nation

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