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INTERVIEW

Thailand 'still attractive base for foreigners'

By Petchanet Pratruangkrai

The Nation

Seen in photo: Thalis Asia Pacific's business development director Patrick Bernard, left, and the company's director of operations Eric Vavasseur foresee big potential in Thailand for establishing foreign business headquarters.

In spite of "some negatives" and political conflict, Thailand remains an attractive place for foreign-owned service providers to set up headquarters to do business in other Asean countries and China.

This, say the executives of a French trading company, Thalis Asia Pacific, is due to Thailand's sustainable economic growth and good infrastructure development.

The company has recently been licensed to qualify for Board of Investment investment incentives.

Its director of operations Eric Vavasseur said Thailand's high potential to serve as a headquarters location for foreign investors would be realised if the country liberalised its laws to promote investment.

As a trading company specialising in machinery parts and supplying many industries such as food processing, aerospace, packaging, pharmaceuticals and manufacture of PET bottles, Thalis Asia Pacific moved its office from Malaysia to Bangkok in 2002 with an initial capital investment of Bt4.1 million. It generated revenue of about Bt136 million last year.

Vavasseur said Thailand was considered the most attractive destination for foreign firms to do business, particularly for service providers. Despite the political turmoil, Thailand's lower logistics costs, good basic infrastructure development and competitive labour costs continued to draw investors.

"Our firm will keep on investing here as long as there are no serious negative factors to affect our investment," he said.

Compared with other Asean countries, Thailand has lower labour costs with higher labour skills. Logistics operations also have a "better platform" than other countries.

He said that although labour costs were lower in China, the country would soon lose that edge because inflation there was on the rise. China has also focused on production volume rather than quality.

Thalis Asia Pacific's business development director Patrick Bernard said Thailand should amend its Foreign Business Act to liberalise provisions related to service businesses. This would promote and facilitate growth in foreign investment and ensure the country's adoption as a base for foreign firms.

The government should also eliminate custom barriers that have obstructed the growth of trade. Despite the Asean Free-Trade Agreement, complicated rules of origin have obstructed export growth, he said.

Growth in trade is also being obstructed by the strength of the baht compared with other currencies - in particular the euro. At present, more than 99.5 per cent of the company's trading value has to be conducted in other currencies.

If the baht is weaker and more stable, Thailand will attract more investors, he said.

As it is, Thalis Asia Pacific's quotations to customers must involve higher prices than competitors. However, customers' trust in quality control and punctual shipments means the company firm stills enjoys sustainable annual growth.

Since 2002, the company's revenue has risen from Bt38 million to Bt136 million.

Bernard said that even during the global economic crunch, the company's income had grown gradually, thanks to orders from France, the United Kingdom and China.

Thalis Asia Pacific is currently trying to increase its distribution channels by finding customers in new markets, including the Middle East, Asia and Africa.

The company's key customers include KLM Cargo, Turbomeca, Sidel, Cermax, Mema, Thomson, Lina Pack, Nestle Waters, Novac, Atlas Pacific, Microturbo, Norden and IWKA.

-- The Nation 2010-08-13

Edited August 13, 2010 by webfact