Sanet PULSE: Thailand becomes even more appealing for European Companies

In 2018, Thailand moved up from 46th to 26th place on the list of ideal investment locations. Both World Bank and the Swiss Institute for Management Development (IMD) credited Thailand with having made massive advancements in the quality of its logistics and digitalization as well as in “Ease of Doing Business”.

Thailand’s significance as an industrial location is also reflected in its export successes. Following an increase of 9.7% in 2017, growth numbers reached 8.1% for 2018. China heads the list of Thailand’s customers at 22.2 billion USD, followed by the USA at 20.6 billion and Japan at 18.6 billion.

It is their success in exporting to hi-tech countries that has become a staple of the performance and quality standards of the Thai industry. Just consider the products being exported: although Thailand is known for its “kitchen of the world”, more than 60% of the Thai export supply comprises hi-tech products such as vehicles and vehicle parts, computers and computer parts, chemical products as well as electronics and machine parts. The country also exports jewelry, plastics, and rubber, as well as oil and steel products.

Enticing cost and tax structures top off the deal: corporate taxes cap off at 20% progressively and are typically waived entirely for investors for 5-8 years. The legal minimum wage is around 1.25 USD per hour and only rarely do even the best qualified production employees make more than 20 USD per day. Graduating technicians from the numerous universities in Thailand start out at around 500-600 USD per month.

Generally speaking, Thailand has already been classed among the most important industrial nations in Asia for quite some time now. It maintains free-trade agreements with China, India, Japan, Korea, Australia and 12 other states.

Thailand is, without a doubt, one of the best gateways for European companies when it comes to the sale and production of their products in Asia.

In the month of March, the Sanet Group offers European SMEs once again the opportunity to receive free initial consultation about Southeast Asia at their company’s premises.

From 11. – 15. March in Germany
From 18. – 20. March in Belgium and the Netherlands
From 21. – 22. March again in Germany

Sanet Top Consultant Mr. Alexander Alles informs interested companies about their respective sales potential in the ASEAN-Region, how to choose the most efficient legal set up for sales in the region as well as about the general conditions for setting up a production facility in Southeast Asia.

In order to schedule an individual appointment at your company’s premises just contact info@sanet.co.th and we will get back to you as quickly as possible.

The packaging sector is the main customer for the largest plastic industry in Southeast Asia (8,700 kilotons processed annually) and guarantees the plastic industry sustainable growth. However, as radical changes are on the sector’s horizon, it may open up a big opportunity for European machine manufacturers.

The trend towards new bioplastic technologies has caught on noticeably in Thailand as well, which is yet another reason the German Consulting Group Sanet in Bangkok sees chances for machine and systems manufacturers, especially since 85% of the 2,800 companies processing plastic are mid-size companies. They are often still working with old gear and are looking to upgrade their setup.

The investment risk for the companies is minimal: considering the sustainable growth and the increasing demand of more and more buyers, such as from the medical technology, electronics and automobile sectors, one shouldn’t worry too much about a swift amortization of new systems. All these industries are noticeably making the transition to bioplastic components.

The fact that 25% of Thai plastic production goes is exported is not to be taken lightly. Even China is doing their shopping in Thailand nowadays, as prices and quality standards are often superior to its own domestic industries. China is the number one export buyer in the sector at 3 billion USD per annum, followed by Japan (1.7 billion) and the US (600 million).

German-led industrial and corporate consultant group Sanet – more specifically, the group’s company Sanet Trade and Services Co. Ltd. – helps western companies in finding trade partners and setting up their own sales offices.