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Partnership opportunities for Singapore companies seen in Thailand: IE
THAILAND, with its sizeable population of 67 million and an upper-middle income economy, offers attractive investment opportunities for Singapore companies despite its challenges, IE Singapore said on Friday.
"While challenges remain, there are opportunities in infrastructure, consumerism and manufacturing sectors in the market," said Seah Moon Ming, IE's chairman. He was speaking at IE's "Global Conversations" dialogue with Thailand Prime Minister Prayut Chan-o-cha in Singapore.
Mr Seah noted that Thailand, which plays a central role in the global supply chain for electronics and automotive assembly, parts and components manufacturing, is well placed in the heart of Indochina.
"It is an ideal launch pad for companies looking to go into adjacent markets in Cambodia, Laos and Myanmar. As the largest economy in Indochina, Thailand would benefit greatly as we move towards a single market under the Asean Economic Community (AEC),'' Mr Seah said.
Opportunities are seen within the rail, aviation and cruise sectors as the Thai government seeks to improve connectivity with neighbouring countries under the 3.3 trillion baht (S$132 billion) Infrastructure Development Plan.
Bangkok is pushing ahead with several rail transit projects where the government will invest in civil works while the private sector invests in the rolling stock, equipment and operating systems. In addition, opportunities will arise with the expansion of Suvarnabhumi International Airport to increase passenger handling capacity by 20 million, as well as the potential development of cruise ports in Thailand to capture high-value cruise passenger segments, estimated to be worth US$36 billion in 2013.
"Leveraging the strong foundation in airport and cruise in Singapore, our companies can offer expertise in areas such as project management, mechanical & electrical consultancy, operations and maintenance as well as the supply of equipment,'' Mr Seah said.
IE highlighted that Thailand's growing disposable income also offers opportunities for Singapore companies to explore.
Thailand is Singapore's third largest investment destination in Asean, after Indonesia and Malaysia, with a cumulative S$19 billion worth of direct investments as at end 2013. Despite political uncertainties and weak export sentiments, Thailand's gross domestic product is expected to grow by 3.5 per cent in 2015, up from 0.8 per cent in 2014. Its long-term growth potential is estimated to average 4 per cent over the next decade, comparable to the rest of Asean-5.
Sunningdale and TWG are among some of the Singapore small and medium-sized enterprises that have set up shop in Thailand.
Sunningdale will be setting up a plastic injection moulding plant in Rayong to produce parts and components for the consumer/IT and automotive industry in Thailand. TWG, whose major shareholder is Osim, set up its first outlet in Bangkok in 2012 and has since grown to six outlets in Bangkok. It expects business in Thailand to grow by almost 50 per cent in 2015, with sales forecast of 250 million baht.