JAKARTA - The Thai economy is expected to grow by an average of 3.4 percent per year by 2024-2026, up from 2.5 percent in 2023 and close to the country's long-term potential, but below 3.7% seen in the decades before the outbreak of the COVID-19 outbreak.
Thanks to the recovery of the electronics industry and increased delivery of agriculture, Thai exports increased over six consecutive months in January 2024. Exports, which is the main driver of the country's economic growth in Southeast Asia, jumped 10 percent last month from the previous year to 22.64 billion US dollars, the strongest rate in 19 months, according to data released by Thailand's Ministry of Commerce.
In the midst of positive economic growth, it is important for the 'Thailand Industrial Business Matching' event, which was jointly organized by the Department of International Trade Promotion (DITP) and the Jakarta Thai Trade Center (TTC) at Kempinski Hotel, Jakarta, May 2, 2024.
At the event, Thailand's trade and investment potential will be explored in the electronics, construction, and household appliances industries, including AC, refrigeration machine, and automotive in the Indonesian market.
Thailand has had a mature manufacturing sector since the 1980s. Despite the presence of foreign multinational companies, the industrial sector in the country remains a major player in Asia, especially in Southeast Asia. What are the market opportunities and potential collaborations with similar companies in Indonesia?
"Thailand Industrial Business Matching" will facilitate a direct meeting between Thai and Indonesian entrepreneurs to explore business potential and opportunities. The event was attended by around 20 Thai entrepreneurs from various sectors, especially the electronics and household appliances industry, including AC, cooling machines, and automotive.
Meanwhile, from Indonesia, this event is supported by businessmen from related industries, such as the Indonesian Automotive Small and Medium Industry Association (PIKKO), the Association of Indonesian Household Electronics and Electrical Equipment Companies (GABEL), as well as the Indonesian Chamber of Commerce and Industry (Kadin), an Indonesian entrepreneurial organization engaged in the economy.
"The landscape of the Thai industry offers various opportunities for expansion and cooperation. With a solid manufacturing basis and expertise, Thailand seeks to explore synergies with business partners in Indonesia to increase market penetration and take advantage of existing business opportunities," said Mrs. Hataichanok Sivara, Director of Thai Trade Center, Jakarta, in his statement, Thursday, April 25.
This event also serves as a platform to strengthen strategic alliances, facilitate dialogue between industry leaders, and explore more in-depth cooperation on market dynamics. Related parties from Thailand and Indonesia will gather to explore opportunities for cooperation, explore market potential, and design strategies to take advantage of their respective strengths for the sake of mutual growth and success.
What products are produced in Thailand? Although Thailand has a large manufacturing sector, there are several industries that account for most exports.
Electronics And Potential Industri AC
Thailand plays a key role as one of the largest exporters of electrical and electronic equipment (E&E), which contributes 24% of its total exports. This sector not only contributed 10.4 percent to Gross Domestic Product (GDP), but also houses 800,000 workers nationwide, with the presence of around 2,500 companies.
The products produced include washing machines, air conditioning, computers, semiconductors, and display panels.
The value of the air conditioning market in Thailand reached US$1,645.21 million in 2023 and is projected to grow rapidly in the estimated compounded annual growth rate (CAGR) of 5.93 percent until 2029. The AC market in Thailand has experienced significant development and innovation in recent years.
The AC market and cooling machines in Thailand are not only triggered by demand from the housing sector, but also from the commercial and industrial sectors, including hotels, shopping centers, and manufacturing facilities.
Automotive Industry Offers Bright Prospects
Thailand is the center of automotive parts and vehicle manufacturing, and is the largest exporter in ASEAN. The country is known as the 12th largest vehicle exporter globally, with the industry accounting for about 10 percent of total GDP.
In the 1960s, Japanese vehicle manufacturers entered markets with brands such as Mitsubishi and Toyota, followed by American and German companies. With the development of the auto industry for decades, Thailand is sometimes referred to as Asia's "Detroit".
Despite the pandemic, the auto industry is experiencing significant growth as other industries decline. Vehicle production is expected to surpass 2 million units per year by 2024, with an estimate that 50% of locally produced vehicles will become electric vehicles (EVs) by 2030.
Mrs. Hataichanok Sivara, Director of Thai Trade Center Jakarta, noted that the support provided by the government for the automotive industry, as well as increased market penetration, would make Thailand an attractive destination for automotive vehicle manufacturers and spare parts.
Innovation, collaboration, and the ability to adapt to market changes are considered the key to success in this dynamic business environment. Thailand has proven itself not only as an important regional player, but also as an influential global actor in the automotive industry.
Thailand's Economy And Construction Industry
The construction industry has proven to be one of the important pillars for the Thai economy. Construction work in Thailand can be divided into two categories, namely the public and the private sector. In general, the infrastructure sector accounts for more than 80 percent of the total development activities in the public sector. In addition, this sector also includes other public infrastructure and residential development for government officials.
Thailand's construction market volume is estimated at 26.68 billion US dollars in 2024, and is expected to reach USD 34.05 billion by 2029, growing with a combined annual growth rate (CAGR) of more than 5 percent during the estimated period (2024-2029).
According to Mrs. Hataichanok Sivara, Director of Thai Trade Center Jakarta, the growth of the construction industry was partly driven by demand for residential units. In addition, there has been an increase in the construction of domestic shopping centers and restaurants to meet consumer needs. Increased demand for residential units also encourages increased supply of condominiums, especially in Bangkok and its surroundings.
Currently, the Thai government aims to form several regions into special economic zones that focus on industrial growth. This policy has the potential to be a driving force for larger construction growth in Thailand.
Without a doubt, Thailand has now maintained its reputation as a strong industrial force. Through cooperation with Indonesian companies, new opportunities for innovation, market expansion, and sustainable growth are wide open. The "Thailand Industrial Business Matching" event, which will be held at the Kempinski Hotel, Jakarta, on May 2, 2024, is ready to accelerate these efforts, paving the way for a mutually beneficial partnership between the two countries, Thailand and Indonesia, in the field of industrial excellence.
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