Foreign Direct Investment in Thailand

By: EconomyWatch   Date: 30 June 2010

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Foreign direct investment in Thailand has picked up in the recent years with the advent of a number of international companies in the South-East Asian country. Fisher & Paykel Appliances, which is the largest dryer and washer maker of New Zealand, has invested in Thailand. Arcelor-Mittal, which is among the leading steel companies of the world, has decided to invest in Thailand. However, issues related to cost of business in Thailand has made them reconsider their decision. Tata Motors, one of the most respected automobile companies and a part of the Tata Group of Companies has also been in the beeline of the investors willing to put their money in Thailand. Tata Motors has basically taken the lead from the giants of the automobile industry – General Motors and Honda.

Nissan, which is among the leading car manufacturers of Japan, has already declared that it would invest 20 million yens. This investment is supposed to be made into Siam Nissan Automobile Co that is the Thailand subsidiary of Nissan. The main purpose of the investment is to introduce 1 liter small cars that are highly fuel-efficient. These cars are being made for the economically developing nations. Chevron has stated that it is going to initiate the natural gas investment project in Thailand. This project is worth $3.1 billion and is expected to produce 420 million cubic feet natural gas on a daily basis. It aims at reaching the one billion per day mark in the near future.

Ricoh Co Ltd., which is one of the leading office equipment manufacturers of Japan, has declared that it intends to invest $94 million in Thailand. Volkswagen, one of the leading automobile companies of the world has been showing plenty of interest in the Thai automobile market. They intend on making 10,000 units and then selling them in Thailand. Chery Automobile Co., the biggest car manufacturer in China, has decided to invest $28 billion in Thailand in a joint partnership with Charoen Pokphand Group. They intend on producing 5,000 vehicles.

The Dutch banking giants Internationale Nederlanden Groep have recently won the rights to invest in the Thai Military Bank. This deal is worth $618 billion and would ensure a 25.2% ownership in the company. Tsingtao Brewery Co. of China has met with the necessary approval for initiating production by setting up the first offshore manufacturing facility of the company over there. Tsingtao has decided on the investment on the back of their impressive sales of Tsingtao products in Thailand. In the year 2006 the figure was 2.1 billion liters. Babcock & Brown, the second biggest investment bank of Australia has decided to invest in buying 33% stakes in Muang Tollway Pcl for $115 million.

As per available reports, the Thai national government is not in a hurry to ease the regulations that apply to the foreign investors in Thailand. This has been confirmed by Surapong Suebwonglee, the Thai finance minister. He is inclined towards getting added information prior to coming at any decision on these matters. He stated concern regarding the effects of the appreciation of the Thai currency, Baht.

Previously the Thai Prime Minister, Mr. Samak Sundaravej had stated that his new government would make sincere efforts to do away with the restrictions that had been placed on the capital inflow coming from outside Thailand. These restrictions were placed in 2006 and limited the chances of the growth of the Thai economy by denting the confidence of the overseas investors in Thailand as an investment destination. In the recent times the national government of Thailand has increased the term of the lease it had provided to Chevron up to 2022. The lease was meant for the production of natural gas in the coast of Thailand.


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