Thailand is witnessing an infrastructure boom. Transport infrastructure development, in particular, is a key priority of the Thai government, which wants to boost its regional connectivity and strengthen its position as a manufacturing hub.
In 2017, Thailand announced a five-year public-private partnership (PPP) strategic plan worth 1.62 trillion baht (S$66.2 billion). Of the total budget, about 95% is for transport infrastructure investment, and the rest for education and public health1.
Here’s what you need to know – transport projects under the strategic plan will be divided into two groups: projects for which the government wants the private sector to contribute specific skills to, such as high-speed trains, rail systems in Bangkok and ports for shipping goods; and projects in which the government is encouraging the private sector to invest in, such as airports and motorways2.
Infrastructure developments along the EEC are also key focus areas. Multiple projects have been initiated to build up foundational infrastructure structures, but also link the cities along the EEC to other regions and provinces so as to facilitate trade flow. Core development projects include the U-Tapao International Airport, the high Speed Train Linked 3 Airport project, Laem Chabang Deep Sea Port, Map Ta Phut Port, Sattahip Commercial Port and the Double-Track Rail Lines that will connect to Laem Chabang Map Ta Phut and Sattahip Deep Sea Port.
Given our strong infrastructure ecosystem, Singapore companies are well-positioned to fill Thailand’s infrastructure gap. If you are a Singapore company in infrastructure development, you can look for opportunities to partner local conglomerates to bid for and participate in PPP infrastructure projects.
1 “Thailand plans 1.62t baht public-private partnership projects”, The Business Times, 30 August 2017
2 “Three projects look to get on PPP fast-track”, The Bangkok Post, 22 May 2018
Accounting for 36% of Thailand’s total GDP and 15% of the workforce, manufacturing remains a key economic pillar. In 2018, the industry saw a 1.6% growth. The government’s push for Industry 4.0 creates opportunities for businesses who can provide innovative solutions for manufacturing processes.
Chachoengsao, Chonburi and Rayong provinces have also been designated as part of the EEC, Thailand’s future technological manufacturing and services hub. It is expected to be completed by 2021, boost GDP growth to 5% yearly, and create over 100,000 jobs.
Higher value-add sectors include Automotive and Electrics & Electronics. In 2018, the country’s output increased by 2.6% and 11.2% respectively.
Thailand has the largest market in ASEAN for the automotive sector. In the face of tough business competition, auto-part makers are diversifying and investing into Research & Design to match market demand.
For the electrics & electronics sector, there is a growing demand for products such as semiconductor devices, transistors and diodes; this is a result of the growing number of Smart City projects in Thailand that are currently ongoing.
Under Thailand’s National Digital Economy Masterplan, the Thai government has made it a priority to develop digital infrastructure.
The Masterplan lays out a 20-year strategy to capture growth opportunities in the rising digital economy. It aims to broaden the outreach of digital technology in Thailand and usher the country into the Thailand 4.0 era – a new digital economic model launched in 2016.
This makes Thailand an attractive market for Singapore tech companies in sectors such as agritech, e-commerce, enterprise services, fintech and healthtech.
However, one of the key challenges for the Thai technological sector is a shortage of talent. Computer science graduates in Thailand are highly sought after by multinational corporations and other companies every year. This is an area Singapore companies can make up for, by providing related solutions in areas such as database management, software engineering, and systems and networking to bridge market gaps.
Thailand’s consumer economy is on the rise. On average, the country has a low unemployment rate of 1% and a purchasing power of approximately US$6,0003. Thailand has the 4th largest consumer market in ASEAN after Indonesia, the Philippines and Vietnam.
The EEC Initiative is also expected to boost the country’s GDP and contribute to industries relating to tourism, retail and real estate. Purchasing power outside of Bangkok has also grown over the years. Thai retailers have tapped growth trends by building strong portfolios in key cities such as Phuket, Chiang Mai and Hua Hin.
Tourism growth has also created more demand for hotels. In addition to affordable and inexpensive accommodation, more luxury hotels are due to open its doors.
3 The World Factbook, Central Intelligence Agency
Increasing urbanisation and changing lifestyles have led to the growing incidence of non-communicable diseases such as heart disease, stroke, and cancer in Thailand. This, accompanied by an aging population, has fueled a growing demand for healthcare.
Thailand’s healthcare market is the second largest in Southeast Asia as of 2015. According to Deloitte’s economic outlook, the country’s 2018 healthcare spending increased by 7 percent due to the aging population trends. Healthcare expenditure per GDP is projected to rise to 6.8% by 2021.The market is poised for further growth.
As part of the Thailand 4.0 digital economy strategy, there is a nation-wide push to invest in IT infrastructure. In 2017, the Ministry of Public Health (MoPH) published an e-health strategy that provides a framework for driving digital technology in healthcare. Projects include connecting 9,000 sub-district hospitals nationwide with fibre optic cables, centralising databases with patients’ health profiles, and developing big data analytics capabilities. There will also be continued focus on medical tourism. Popular healthcare services among medical tourists include cosmetic surgery, dentistry, cardiovascular disease treatment, and orthopaedics.