Thailand improving incentives to attract investments, boosts agriculture and sustainable businesses
By Chalermlapvoraboon Valaiporn
BANGKOK, NNA - The Thailand Board of Investment (BOI) has announced sustainable measures and incentives to grow the agricultural sector and plans to draw investments as supply chains are diversifying following disruptions caused by the coronavirus pandemic.
It also approved five large-scale projects ranging from industrial and energy to tourism-related facilities worth 41.8 billion baht ($1.35 billion).
The projects and extension of incentives for agriculture will generate jobs, boost incomes and growth for the country as it moves away from heavy dependency on exports.
The latest moves are also part of measures to counter the adverse impact of the pandemic as the country begins its recovery.
The investment board said on Wednesday that it has tweaked policies and investment incentives to support local business practices based on the BCG -- Bioeconomy, Circular Economy, and Green Economy -- model that it has adopted for a sustainable economic growth
This would encourage the development and adoption of technology and innovation to add value to agriculture output and help improve productivity, BOI said in a media statement.
It has added plant factories to the list of businesses eligible for BOI incentives such as corporate tax exemption for five years.
A plant factory can ensure steady production of high-quality vegetables all year round with a technology that artificially controls the cultivation environment. It can improve the quality and quantity of agricultural produce for domestic consumption and export.
The scope, terms and benefits for certain types of agriculture related activities had been amended to encourage the use of technology, innovation and sustainable development. They include pet food and animal feed, the grading, packaging and storage of plants, vegetables, fruits or flowers, and products from agricultural wastes.
The BCG model will also be applied to the medical and wellness sector, bio energy, biochemical and biomaterial industries as well as tourism and creative trades.kid
Earlier this week, Deputy Prime Minister Somkid Jatusripitak urged BOI to focus on enhancing the strong sectors and fine-tune policies to attract investors to them.
They include the food industry, agriculture, processed food, medical services, tourism, logistics and digital technology. Collectively, they can make Thailand the investment and agriculture hub of CLMTV -- Cambodia, Laos, Myanmar, Thailand and Vietnam -- region.
In an interview published on Friday, the minister told Bangkok Post that investors from China, Taiwan, Hong Kong and Japan looking to relocate production have shown interest in food production, farm product processing and medical equipment manufacturing in Thailand. BOI has been instructed to prepare investment packages to help such businesses relocate to the country.
Mr Somkid also directed BOI to play a role in changing the economy's structure. Rather than heavily relying on the net export sector, the country should focus more on the production and domestic service sectors while supporting investments for local start-ups that produce innovations, reported Bangkok Post.
Meanwhile, large scale projects approved by BOI include Sammitr Group's production of battery electric vehicles (BEV) in Phetchaburi province. With an investment value of 5.5 billion baht, the plant will have an output of 30,000 vehicles per year, mainly for distribution in the domestic market.
Also given the greenlight is Thai Oil PCL's 24.1 billion baht power project to generate 250,000 kilowatts of electricity using oil waste. Located in Si Racha in Chonburi province, the facility will have an annual output of 80,300 tons of sulfuric acid.
Envico Co. received approval too, for an investment of 2.476 billion baht to produce food-grade recycled plastic pellets, used in the manufacture of beverage and food containers, and recycled plastic pellets (HDPE type) used in packaging for body care and household products. The project is based in Asian Industrial Estate in Rayong province.
Also given approval is B.Grimm Power (Laem Chabang) 1 Co.'s power plant. With an investment of 6 billion baht, the natural gas-fired power plant will have a capacity of 157,320 kilowatts and 75 tons per hour of steam. The produced electricity will be sold to the Electricity Generating Authority of Thailand and to manufacturing facilities in Laem Chabang Industrial Estate in Chonburi province.
The board also accepted Bangkok Arena Co's plan to invest 3.745 billion baht to build a convention hall to cater to the MICE industry -- meetings, incentives, conferences and exhibitions -- and the development of tourism. It will be built at Bangkok Mall Building in the outskirts of the kingdom's capital.
Thai Oil, Envico and B.Grimm Power are already operating under the BCG model, a BOI spokesman told NNA.
The four vital sectors, namely agriculture and food; medical and wellness; bioenergy, biomaterial and biochemical; and tourism and creative trades currently contribute 3.4 trillion baht or 21 percent to the Thai economy, said Suvit Maesincee, the Minister of Higher Education, Science, Research and Innovation told local news outlet, Thairath.
While the adoption of BCG model these numbers will rise to 4.4 trillion baht or 24 percent of the economy while providing more job opportunities to 20 million workers, he added.
BOI has been encouraging Thai manufacturers to produce hybrid electric vehicle parts as the country plans to launch 1.2 million electric vehicles in the local market within five years, according to KPMG.
The investment board also hopes to attract more foreign electronic companies to Thailand.
“In May alone, investments made in smart electronics amounted to the first three months of this year,” said Duangjai Asawachintachit, secretary general of the BOI, said in a video media conference.
“Many industries are relocating due to COVID-19 and we hope Thailand will attract them as we strongly believe in the resilience for our supply chain,” she added.
She was heartened to see investment activities continuing in Thailand despite the scourge of coronavirus pandemic.
"It is very encouraging to see that despite the global economic situation due to COVID-19, Thailand, which has done well in containing the outbreak, sees a continuous flow of investment," she said in a statement in BOI press release.
Meanwhile, Deputy Prime Minister Somkid said in an interview with Bangkok Post that a massive budget will be allocated to rejuvenate the economy in the fourth quarter to help the country in post-pandemic recovery.