Thailand has seen an influx of German investment over the past few years. This encapsulates both German imports and exports to and from Thailand. According to an ASEAN report, in 2018, Germany exported goods worth US$5.98 billion to Thailand while imports from Thailand to Germany reached US$7.2 billion.
Both represent an increase from the preceding years. The consensus is that this positive trend is likely to continue in the coming years.
Thailand makes an ideal place for German investment for a number of reasons. It has an annual growth rate of three percent, and ranks 27th out of 190 countries when it comes to ease of doing business.
In addition, Thailand’s US$504 billion economy looks appealing when compared to that of some other ASEAN countries such; as Vietnam (US$244 billion GDP) and Myanmar (US$71 billion GDP).
Skilled workforce and relatively cheap
“The favorable economic situation in Thailand compounded by the country’s skilled workforce and relatively cheap wages are some of the main draw cards that are attracting German companies,” said finance expert from FITFORMONEY, Ida Becker.
Furthermore, Thai government’s “Thailand 4.0” plan is likely to make the country more appealing to investors in a range of business sectors. The initiative has the goal of elevating Thailand from the middle-income bracket to the status of a developed nation.
The “Thailand 4.0” strategy has opened up further investment opportunities for Germany in the fields of digital economy, infrastructure and research.
Thailand has already captured the interest of German car manufacturers such as Volkswagen, Mercedes Benz and Daimler. All of which have set up their regional hubs in Thailand. “Thailand is more or less in the center of the ASEAN region with 647 million potential customers.
Moving their operations to Thailand
Thailand is establishing itself as a logistic hub in the region. If the companies come here, they don’t just cover the 69 million people living in Thailand. However they can reach out to the whole region,” the executive director of the German-Thai Chamber of Commerce, Roland Wein, told Pharma Boardroom.
German companies that supply parts and components to car manufacturers, such as Schaeffler Manufacturing, have already expressed interest in moving their operations to Thailand. This move would put them in a closer proximity to the production facilities.
Another sector that German companies are increasingly more involved in is medical equipment. With the emergence of Thailand as a medical tourism destination. German exports of medical equipment to the country have been growing annually by around eight to nine percent.
“Thailand is eager to attract foreign direct investments,” said Wein. “The Board of Investment offers very attractive benefits for targeted industries. With these targeted industries, one goal is to develop Thailand into a medical hub. And also the other one is to make Thailand into a hub for wellness and medical tourism.
All these targeted industries offer opportunities for many German companies… We also have… regional scheme for development offering all the necessary supply chains, the infrastructure, the people, and the workforce.”