Minister of Industry H.E. Pongsak Ruktapongpisal delivers the keynote speech at the seminar "Industry and Investment: Strategy to Global Cometitiveness"

Simultaneously translated into English and Japanese, speakers and panelists urged the foreign and Thai business communities to work together and with government in collaborative problem-solving. “Of course companies must compete with one another, but in order to take on the global market, we must all join together,” stated Minister of Industry Pongsak Ruktapongpisal in his opening speech. “In the 21st century Thailand and other countries are creating knowledge societies and entering the knowledge economy,” stated Minister Pongsak and noted that involves producing for consumers, understanding their infinitely complex and quickly changing needs, concentrating on R&D, and collaborating so that human resources are developed to meet the needs of the industrial sector to be ready for changes in free trade. Pongsak urged government and entrepreneurs to develop their cluster systems, even regional-level clusters, and expand capacity building to move products.

A main focus of the daylong seminar was the necessity to balance industrial needs with those of the environment, increasingly important with the expanding economy. “Preserving and recycling our resources on a continuous basis is imperative for sustainable development. We as an emerging industrial country have to take this into account,” Pongsak stated, noting the need for a campaign to promote ISO14000 standards.

Other strategies to build sustainable competitiveness included the development of industrial estates in border regions to take advantage of low labor costs; efforts to reduce industrial water costs; adopting international standards and developing Thai standards; upstream-to-downstream production; changing laws to improve competitiveness, such as those to assist assessment companies; tax-free zones to increase investments; and incentives for relocating companies as a means for environmental and industrial problem-solving.

As a key speaker in the seminar, BOI Secretary Satit Sirirangkamanont announced record-high investment statistics for 2004. “656 billion baht [US$16.4 billion] of requests for investment promotion is recordbreaking,” stated Secretary General Satit. “We went from annual 3-5% increases to a sudden 115% increase.” Noted areas of increased investments included transportation, petrochemicals, logistics, utilities, and services, as well as ship- building and the aircraft industry. Petrochemicals alone jumped from 56 billion baht [US$1.4 billion] to 123 billion baht [US$3.0 billion]. At the same time electronics entrepreneurs, especially foreigners, continued to see Thailand as a competitive place to invest.

Acknowledging the extraordinarily large investments in China, Satit stated, “Not all investments are going to China. A lot are staying here. Our HDD (hard disk drive) production is growing and has the #2 spot in world. The Detroit of Asia initiative attracted 60 billion baht [US$1.5 billion] last year. Steel smelting plants and agro-processing continue to be high growth areas as well.” Noting the long-term commitment of investors to the country, he stated that about 50% of all investments are by investors expanding.

Looking at the breakdown of total investments, the Secretary General reported that one-third were 100% foreign-owned, 35% were wholly Thai-owned and 38% were joint ventures, achieving a balanced distribution. The Board of Investment estimated that over 200,000 new jobs were created by these projects. By country, Japan maintained its dominant spot with almost three times the amount invested than either the United States or the European Union, the next two largest investors. The Secretary General also emphasized that the BOI actively promotes small and medium-sized enterprises (SMEs) and not just large-scale companies. “As part of our dual track investment policy, we are providing attractive investment incentives for companies, from SMEs to multinationals. This dual track investment policy is key to building sustainable competitiveness,” stated the Secretary General.

- By Renee Santo