Bangkok--14 Jun--TMB
TMB Makes THE Difference with its viewpoint on AEC, asserting that the Community could make Thailand a business and investment hub for ASEAN and boost growth opportunities for local businesses without venturing abroad
Providing four business strategies and extending full support for Thai entrepreneurs to meet AEC challenges
TMB recently held a seminar series entitled “ Borderless on Stage” which was aimed at increasing the competitiveness of Thai businesses. The latest theme, “Preparing Thai Businesses...Creating an AEC Hub”, shared new perspectives for Thai entrepreneurs to meet the challenges of the approaching integration of the ASEAN Economic Community. The forthcoming change in the economic landscape within the region will serve as an opportunity for local corporations to grow and increase their business potential w ithout having to venture abroad. Thailand fundamentally has a competitive advantage over its neighboring countries due to its strong agro-business, manufacturing and service sectors, thus making it well suited to become a gateway for the region.
In an address at the seminar, Mr.Boontuck Wangchareon, Chief Executive Officer of TMB Bank Public Company Limited, said that “after the AEC is officially launched in 2015, Thailand should emerge as the most attractive country for investment in the region, thanks to its strategic location and strong economic foundation. As many local operations now look abroad for investment opportunities, TMB sees Thailand as having the strongest potential for investment and being the most qualified country to serve as the AEC hub. Thailand’s potential in terms of products and services to meet market needs in the region makes it a lucrative place to invest and thus offers a great opportunity for Thai entrepreneurs to expand their businesses.”
“Instead of encouraging Thai businesses to invest abroad with the opening of AEC, which is one dimension of looking at the arising opportunity, TMB has a somewhat different viewpoint; all sectors should encourage local businesses to prepare themselves and get ready to respond to the investment and growth opportunities that will come with AEC.”
Mr. Boontuck added that Thailand’s geographic location is a key advantage for the country to become the gateway for ASEAN. Within the country, the logistics and transportation links to other ASEAN countries are the most convenient in the region, providing easy access to China, India and Japan. Furthermore, Thailand also possesses a strong manufacturing base for agricultural products, electronic components, and food and beverages, as well advanced service sectors, such as with regards to trade and acting as an export center, raw material sourcing and tourism. According to the Global Competitiveness Report, Thailand’s infrastructure system ranks number three in ASEAN, putting it in good standing to serve as the transportation and distribution center for the region, which has a combined population of more than 600 million, or approximately 10% of the world population.
Mr. Boontuck advised entrepreneurs take steps to increase their competitiveness in preparation for Thailand becoming the AEC hub by adjusting their business strategies in four areas:
1. Creating innovation. Thailand currently spends about US$1.46 billion, or 0.25% of its GDP, on research and development (R&D), placing it number three in ASEAN, behind Singapore (2.2% of its GDP) and Malaysia (0.63% of its GDP) and 41 in the world. In comparison, South Korea spends 3.74% of its GDP on R&D, Japan (3.67) and China (1.97%). Agricultural products should be among main target areas for R&D, particularly rubber as Thailand is the number one exporter of rubber in ASEAN. However, it rubber exports are largely in the primary product level and the changes from raw rubber to value-added products remains very limited. Further R&D to support the transformation of the rubber industry is indeed needed.
2. Eco-economy. This is another aspect of business that entrepreneurs must take into serious consideration as it demonstrates the corporate responsibility to the world environment. Presently, 190 local companies have been granted carbon footprint labels on their products, mainly manufacturers of food, beverages, textiles, construction materials and plastics.
3. Connectivity. Focus should be placed on industries whose connectivity can be created, such as the automobile industry. Thailand can elevate itself to become the center of the ASEAN automobile industry as in 2012, automobile production, in Thailand, Indonesia and Malaysia was ranked number 9, 17 and 23, respectively. The combined production of these three countries totaled 4.2 million cars, or 5% of the world production. Another high potential sector worth considering in this area is the tourism industry. Thailand has a competitive advantage in becoming the aviation hub of the region. Notably, the country’s well-developed tourism industry can serve as a connecting point for tourists heading to other ASEAN countries, such as Malaysia, Laos and Myanmar.
4. Efficiency. Thai entrepreneurs must address the issue of production efficiency as a way to help them add value to their products. For example, the textile industry traditionally uses manual labor for production. It could achieve greater productivity and efficiency with the help of machines and development of labor skills and product design. This improvement could potentially elevate Thailand’s textile industry to a more advanced level. Meanwhile, even though Thailand’s food industry is ranked number one in terms of exports among ASEAN members, there many facets of it that need to be upgraded, including, among others, manufacturing standards, stringent quality control, product and packaging development and food safety certification.
In conclusion, Mr. Boontuck reiterated that the quicker Thai entrepreneurs adjust their business strategies in these four areas, the more benefits they will reap from the opening of AEC. TMB is confident that Thailand with its strong economic foundation and infrastructure system will emerge as the ASEAN business and investment hub. In its role as a financial institution committed to making the difference, TMB is prepared to extend its full support in helping local businesses achieve sustainable growth as a result of the integration of ASEAN economies.
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Tel: +66 2 299 1061, +66 8 9967 1411
Corporate Communications, TMB