Thailand Board of Investment

In Bangkok at the Thailand Board of Investment, I wrote industry overviews and profiles of multinational companies, emphasizing the country’s advantages as a global production base. Here are a few of my reports.



Published in print June 2001 in The Thailand Investment Review newsletter and online at the Board of Investment’s website:

Advance Asian Strives to Improve Society with Eco-Friendly Products

In everything that it does, the biotech firm Advance Asian Co. Ltd puts emphasis on improving society while preserving nature. “We research and develop high-yield rice, energy and paper crops that are friendly to the environment. This plays an important role in the world of today and tomorrow,” said Mr. Suwira Songmetta, chairman and owner of Advance Asian.

Established in 2008, the 100% Thai company aims to help local and global society prosper. As such, corporate social responsibility (CSR) is a high priority. “CSR is extremely important to us,” Suwira noted. “It would not be fair if our company benefitted while communities suffered.”

Advance Asian believes that everyone is a winner from CSR activities. One example would be where the company donates saplings to poor farmers, temples and schools in rural areas. With income generated from these saplings, the farmers can improve their livelihoods, the monks can maintain their temples, and the schools can buy food and supplies.

Under the project, Advance Asian is helping more than 2.5 million Thai farmers earn additional income by planting the company’s Paper Tree along their paddy ridges or at unused spaces between other crops.

These special trees, a eucalyptus breed with an exceptional growth rate, represent the start of a communal chain for making furniture, charcoal, woodchips and even biomass fuel for electricity generators. The company’s sustainable development efforts also include providing rural communities with jobs in tree cutting and log transport and processing.

Besides the Paper Tree, other patented products developed by Advance Asian are its Energy Tree for biomass power plants, and breakthroughs in the use of cassava roots for gasohol and palm oil for biodiesel. It has also produced a new kind of rice.

“This naturally violet-colored rice is unique in the world. It is enriched in iron, protein, omega3 and anti-oxidant properties,” Suwira said.

The rice is marketed as a premium product under the company’s Rice for Health label. Advance Asian also extracts the bran of grain for Rice for Beauty cosmetics in its Sinin line.

With 20 researchers and 425 research assistants, Advance Asian is the biotechnology R&D arm of the Shaiyo-aa Group, extending the corporation’s reach as an agro-business specialist. The group has more than 100 facilities worldwide, with 10,000 employees in Thailand and 1,000 overseas.

The headquarters and state-of-the-art lab center of Advance Asian are located at the Thailand Science Park near Bangkok. With a total of two laboratories and four plants across the country, it also runs facilities in the provinces of Khon Kaen, Roi Et, Prachinburi, Nong Khai and Nakhon Ratchasima. In addition, the company has operations abroad in Laos and Vietnam.

Covering 80 acres, the Thailand Science Park is a world-class center for R&D in biotech engineering. More than 1,600 full-time researchers work at the laboratories, incubator units, pilot plants and greenhouses of the park. Using the park as a base presents benefits to Advance Asian.

“There are many facilities at the Thailand Science Park, including some very special types of high-tech equipment that we may need only one or two times a year. It is more cost-efficient to use those types as needed instead of to purchase them,” Suwira said.

The Shaiyo-aa Group, of which Suwira’s wife Mrs. Siriwan Songmetta is president, was one of the first biotechnology enterprises in Thailand. Shaiyo-aa owns 26 woodchip mills in the country, each turning out 1,000 tons per day.

Every year the group produces over 4 million tons of farmed-tree woodchips, all for export. It also cultivates more than 300 million saplings per year for contract farming.



Published in print August 2011 in The Thailand Investment Review newsletter and online at the Board of Investment’s website:

Investment Opportunities Ripen in Thai Pharmaceuticals Industry

With the world growing more health-conscious, demand for pharmaceuticals made in Thailand is on the rise. Investment opportunities, as a result, are ripening across the local industry, which offers a cost-effective research and production location.

Research and development in particular is a wide-open opportunity. While Thailand does produce 25 active ingredients such as sodium chloride, camphor and menthol, local drug companies pour less than 1% of total costs into R&D. As such, most active ingredients have to be imported from manufacturers overseas, mainly in the United States, Germany and Switzerland, leaving much room for new pharmaceutical investors.

With upstream, intermediate and downstream sectors, Thailand’s pharmaceuticals infrastructure supports R&D of new drugs to meet medical demand or cure emerging illnesses. Joint ventures play a major role in the industry, especially with the midstream companies where active ingredients can be produced as this requires significant technology and investment.

Thailand’s pharmaceuticals market is currently valued at about 129 billion baht, with sales absorbed 78% by hospitals and 12% by drugstores. Strong growth prospects are expected to push value above 255 billion baht by 2019.

The strategic direction in the local industry is for value-added products. This includes encouragement for R&D on enhanced influenza and hepatitis C vaccines, blood pressure and anti-HIV drugs, herbal antiviral and anti-cancer treatments, and supplementary products such as for weight loss. Amid the upgrade to added value, governing agencies continue to achieve progress in GMP and WHO standards compliance, stamping out counterfeiting and unethical practices, speeding up the patent approval process, and opening the local market wider.

As an indication of Thailand’s advancement in health care, the country has been chosen to host the 74th International Congress of the International Pharmaceutical Federation (FIP) in 2014. A federation of national associations representing 2 million pharmaceutical scientists around the world, the FIP said it is bringing the event to Thailand because the country’s vibrant pharmaceuticals industry is driven by high standards, competition and innovation. To take place at the Bangkok International Trade and Exhibition Center, the world congress is expected to attract 2,500 international delegates and generate more than 210 million baht for the country.

The strategic direction in the local industry is for value-added products. This includes encouragement for R&D on enhanced influenza and hepatitis C vaccines, blood pressure and anti-HIV drugs, herbal antiviral and anti-cancer treatments, and supplementary products such as for weight loss. Amid the upgrade to added value, governing agencies continue to achieve progress in GMP and WHO standards compliance, stamping out counterfeiting and unethical practices, speeding up the patent approval process, and opening the local market wider.

As an indication of Thailand’s advancement in health care, the country has been chosen to host the 74th International Congress of the International Pharmaceutical Federation (FIP) in 2014. A federation of national associations representing 2 million pharmaceutical scientists around the world, the FIP said it is bringing the event to Thailand because the country’s vibrant pharmaceuticals industry is driven by high standards, competition and innovation. To take place at the Bangkok International Trade and Exhibition Center, the world congress is expected to attract 2,500 international delegates and generate more than 210 million baht for the country.

Deep History of Healing

Thailand’s health care sector offers a deep history of healing, uniquely combining the best of traditional practices and modern techniques. With its strategic geographic location at the heart of Asia, world-class technology infrastructure, and quality care at a fraction of the cost in developed countries, Thailand is a recognized leader in the provision of medical services.

As Thailand develops rapidly toward becoming the medical hub of Asia, the country’s pharmaceuticals industry is riding the coattails of that success. Pharmaceutical businesses are seeing heightened demand resulting from expanded care services, more medical facilities, and the increase of medical tourists. The Kingdom’s number of public and private hospitals is approaching 1,400, and each year 2 million foreign patients visit for everything from routine check-ups to bypass surgery. With incomes and health awareness on the rise throughout the region, opportunities for pharmaceutical companies operating in Thailand will continue to expand.

Moreover, member countries of the Association of Southeast Asian Nations (ASEAN) are growing in economic power and becoming more interconnected as trade barriers are knocked to the wayside. A key center of production and business, Thailand’s pharmaceuticals industry will see great expansion as the region forms a massive single market of 600 million consumers called the ASEAN Economic Community by 2015.

Pharmaceuticals trade in Thailand at present leans heavily on imports. Bolstered by the country’s robust chemicals industry and movement toward greater biodiversity, Thailand imports more than US$1 billion worth of pharmaceutical products each year. The major source countries are France, the United States, Germany and Switzerland. Together they account for 45% of inbound shipments. Annual exports are about US$268 million. The main destinations are Vietnam, Myanmar, Belgium, Cambodia and Malaysia, which absorb around 57% of Thailand’s pharmaceutical exports.

The Thai pharmaceuticals industry has seen exports rise robustly by 66% and imports by 65% since 2006.

Major international pharmaceutical companies either have manufacturing facilities in Thailand or source products from Thai drug manufacturers. The local industry produces a wide range of drugs for the human and veterinarian sectors, spanning the entire pharmaceuticals alphabet, from antibiotics, epinephrine and interferon to nitroglycerine, vitamins and zinc methionine.

Thailand’s production and business advantages so far have attracted 714 local and foreign pharmaceutical corporations to establish operations in the country. Of these companies, 79.4% are Thai-owned. Switzerland accounts for 7.3% of investors, and significant representation also comes from Japan, France, the United States, the United Kingdom, the Netherlands and Denmark. Among the major enterprises in the Thai industry are Hitachi, Greater Pharma, Inova, Siam Pharmaceutical, Biolab, Thai Meiji, Pfizer, Sanofi-Aventis, GlaxoSmithKline, Merck and Novartis.

Founded in 1966, the Government Pharmaceutical Organization (GPO), which is under Thailand’s Ministry of Public Health, also manufactures about 300 pharmaceutical, biological and natural products to help meet domestic and export demand. Currently, a GPO focus area is the formulation of antiviral and cardiovascular drugs, as related diseases are among the top causes of death in the country.

Promoting Investment and Health

To achieve sustainable development of the industry and promote good health generally, the Thailand Board of Investment grants incentives to pharmaceutical investors. Companies engaged in the manufacture of pharmaceutical products or active ingredients are eligible for generous tax holidays and a range of non-tax benefits, including privileges on imported equipment duties.

Consistent support of the industry also comes from the Food and Drug Administration of the Public Health Ministry, the 82-year-old Pharmaceutical Association of Thailand under Royal Patronage, Thailand Science Park, National Center for Genetic Engineering and Biotechnology, National Science and Technology Development Agency, Ministry of Science and Technology, National Innovation Agency, Health Systems Research Institute, and Thailand Center of Excellence for Life Sciences. A fleet of research schools are also doing their part. These include the pharmaceutical science faculties at Chiang Mai, Hauchiew Chalermprakiet, Khon Kaen, Mahidol, Naresuan, Prince of Songkla, Rangsit, Silpakorn, and Srinakharinwirot universities.

Thailand’s numerous intellectual property-related laws, led by the Copyrights, Patent, Traditional Medicine and Practice, and Trade Secret acts, also help entrepreneurs and scientists protect hard-earned pharmaceutical laboratory breakthroughs.



Published in print August 2011 in The Thailand Investment Review newsletter and online at the Board of Investment’s website:

Mead Johnson Achieves Vigorous Growth for Children, Bottom Line

Vigorous healthy growth is the guiding principle at Mead Johnson Nutrition Co. (MJN), both in providing nutritional products to give children the best start in life and in developing the company.

With headquarters in the U.S. state of Illinois near Chicago, MJN is truly a global company as two-thirds of its revenue now comes from Asia and Latin America. Thailand is already one of the company’s top 10 markets. MJN also carries out production here through the subsidiary Mead Johnson Nutrition (Thailand) Ltd. Sales in the country started in 1972, early compared with many American companies in terms of cultivating emerging markets, and production in Thailand commenced in November 2001. MJN also operates its Asia regional headquarters out of Bangkok.

MJN’s roots go way back to when Edward Mead Johnson, one of the co-founders of Johnson & Johnson, created his own business in 1895. Renamed Mead Johnson in 1905, the enterprise was acquired by Bristol-Myers Squibb in 1967, ultimately split off as an independent public company in 2009 and now trades on the NYSE.

“We have really been in one business for 105 years, which is nourishing children through developing, manufacturing and marketing science-based pediatric nutrition products,” said Mr. Stephen W. Golsby, president and chief executive officer of MJN.

The company’s “Enfa” series is the world’s leading brand in nutrition products for infants and children. The line features Enfapro containing nutrients found naturally in breast milk for infant’s balanced nutrition and brain and eye development, Enfagrow for toddlers transitioning from infant formula or breast milk, and Enfakid to strengthen the immune system of children 3 to 6 years of age. Other popular products are Nutramigen for children with food allergies or colic, Lactum children’s nutrition supplement providing 100% of required daily nutrients, Sustagen as a nutritionally balanced milk supplement, and the Choco Milk supplement blending 23 vitamins and minerals.

Competition in this industry is fierce, as the world’s top five pediatric nutrition companies are all household names: Mead Johnson, Nestle, Danone, Abbott and Pfizer. But while others have diversified for scale into product lines such as water, ice cream or pet food, MJN is the only company among the top players that is focused entirely on infant and children’s nutrition. Besides running deep with a century of experience developing nutritional science for children, the company also has an unwavering commitment to quality. “Our history and focus give us a huge edge,” Golsby said.

The trend across the pediatric nutrition industry is toward premium brands as more regulators and parents are demanding leading-edge science and highest-quality products. MJN is well-positioned at the forefront of this. Although it is certainly an industry poised for strong and long growth worldwide, especially in developing markets with favorable demographics, the road ahead is not without obstacles to progress. “The biggest challenge to competitiveness will be finding ways to offset rising costs while continuing to improve productivity and efficiency,” the CEO noted.

Experience and Insight

Golsby was recently named an Honorary Investment Advisor (HIA) of the Thailand Board of Investment (BOI). “I am very flattered by this. I see the HIA opportunity as a way to share insight and information regarding Thailand, both from my positive personal experience living and working in the country and from Mead Johnson’s success in doing business here,” he said.

Being married to a Thai, having lived in the country for 10 years, and with MJN’s operations here, Golsby certainly possesses strong links to Thailand. “As CEO of an S&P 500 company that is fast-growing and which has extensive international operations, I can help position Thailand to potential foreign investors in a way that can support the BOI’s mission,” he said.

His deep expertise in consumer product companies and emerging markets includes previous management positions at Unilever, one of the world’s largest conglomerates. After joining MJN in 1997 and moving up the ranks to the top job, Golsby has steered the company to a several-fold increase of its sales in Asia.

Golsby will also be participating in the CEO Forum of BOI Fair 2011. Running from Nov. 10-25, the fair in Bangkok will be part of nationwide celebrations marking the auspicious occasion of His Majesty King Bhumibol Adulyadej’s 84th birthday.

One of the biggest international exhibitions in Southeast Asia, BOI Fair 2011 will showcase Thailand’s industrial capacity, modern technology and knack for innovation. The event’s CEO Forum brings together top corporate leaders from around the world to discuss Thailand’s investment future and business opportunities.

Golsby said MJN sees Thailand as an excellent operating base for many reasons. These include the country’s welcoming culture, competitive costs and ease of doing business, strong investment environment, good infrastructure and strategic business location at the heart of Asia.

Situated in the Amatanakorn Industrial Estate of Chonburi Province, the Thailand plant is one of seven MJN manufacturing facilities around the world, with two others in the United States, and one each in Mexico, the Netherlands, China and the Philippines. The Chonburi factory accounts for 10% of total output.

Production at the Thailand facility, which in July 2011 received OHSAS 18001:2007 certification for workplace health and safety systems, is split almost 50-50 between exports and the domestic market. The main overseas markets supplied by the plant are Malaysia, Singapore, Vietnam, India and Sri Lanka.

With 6,500 employees globally, MJN has 500 full-time staff and several hundred temporary workers in Thailand. Along with this are the 400 nutritional consultants who work in the country’s supermarkets to educate consumers to the science of MJN’s products.

“Our ability to attract workers with the appropriate skills to support our operations in Thailand has always been strong,” Golsby said. “As ours is a high-science business, we also encourage the government to continue building capabilities in science and engineering. When providing nutrition for precious infants, you can always benefit from a bigger supply of microbiologists, chemists and experts in quality.”

He also sees Thailand as an excellent place for conducting R&D. In fact, most of the scientists at the company’s Bangkok and Chonburi facilities are Thai. They develop infant formulas and supplements, and prenatal nutrition products that pregnant and lactating women take.

Strong Growth for Company, Industry

MJN is in an impressive growth trajectory. Its global sales last year topped US$3 billion and are projected to exceed US$3.5 billion in 2011, with first-half sales already showing a strong 20% increase and earnings up by 16%.

The pediatric nutrition industry, while not immune from a global economic downturn, is somewhat protected from it. “This is because parents will compromise just about everything else before compromising the nutrition they provide to their children,” Golsby noted.

China is currently MJN’s single-largest market, having overtaken U.S. sales. The one-child policy in China is actually a great boon to the company. Golsby explained: “That one child has two parents and four grandparents, all of whom are funneling money down to the child to give him or her an edge over peers. They equate the highest-quality international nutrition products with an advantage. Because of our leading science and quality, Mead Johnson is seeing real benefits from that.”

The whole of Asia, including Thailand, is at the very core of MJN’s growth strategy as more babies are being born into middle-class families in the region. “Parents now able to buy premium nutritional products want to give their children a better start in life than they had,” Golsby noted.

MJN is at a point where further investment needs to be made to support its strong sales growth. As part of this, the company plans to initiate the move of the manufacturing of its products for Indonesia to Thailand within the next year. Reasons for the move include the Thai plant being modern and efficient, Thailand’s logistical advantages to regional markets, and MJN’s cost-effective skilled workforce in the country.

Social care and concern for the environment are very important to MJN. To give back to the local communities where it operates, the company carries out numerous such projects. Among these is the “Helping Hands for Special Kids” program, together with the Chaipattana Foundation and Srinakarinwirote University, through which underprivileged children in Thailand receive medication at no cost. The company also provides metabolic product donations and lactating rooms at government hospitals. Its “Green Dream” project involves planting 1,365 trees in Chonburi Province.

“We are very proud of our history in Thailand,” Golsby said.



Published in print September 2010 in The Thailand Investment Review newsletter and online at the Board of Investment’s website:

Inventive Spirit Powers Thailand’s Development in Alternative Energy

An inventive spirit, not only among private entrepreneurs but also in the halls of government, is pushing Thailand’s development of alternative energy. But “alternative” might not be the best word. With fossil fuels depleting and tomorrow’s generation certain to have a robust appetite for energy, perhaps “necessary” is more appropriate. Necessary energy sources in coming years include biofuel, solar, wind, waste and water, among possible others as yet unimagined.

Industry experts are confident that Thailand’s investment in alternative energy will increase steadily with the government, industry and private citizens all showing greater concern over pollution caused by petroleum products.

From a standpoint of economic survivability, it makes good sense for Thailand to cultivate renewable energy sources. Currently, the country still relies heavily on imported oil, even though Thailand itself has 78 petroleum fields. And the threat always exists that oil prices could go skyward. Petroleum products account for about 57% of commercial energy consumption in Thailand. Diesel and gasoline power 72% of transport.

This draws attention to the fact that Thailand also possesses a large agricultural sector, representing ample raw material for development of the ethanol and biodiesel sectors. This agri-advantage is being tapped, as output of biofuels has shot up since oil prices soared in 2004.

High petroleum costs have made biofuel development one of the most active sectors of Thailand’s alternative energy industry. Progress is being achieved with ethanol made from cassava and sugar, biodiesel from vegetable oil, gasohol, biogas and other forms.

According to the Office of Agricultural Economics, the planted area of cassava totals nearly 4 million rai and covers 19 northeastern provinces. The country also has 11 ethanol plants that rely on sugar molasses as raw material. Thailand may be the world’s No. 1 exporter of cassava products and No. 2 for sugar, but there is still plenty of opportunity for using these crops as a renewable energy source locally. Out of the total annual harvest of nearly 30 million tons of cassava, an estimated 3.7 million tons is available as stock for ethanol production.

However, one challenge that authorities and change advocates must monitor is whether the increasing use of farmland for energy crops is having a negative effect on the national supply and price of food.

Currently, five ethanol plants approved by the Thailand Board of Investment (BOI) are being established at a combined cost of 16.5 billion baht. These projects are located in Nakhon Ratchasima, Ubon Ratchathani, Chaiyaphum and Kalasin.

Ethanol consumption in the country is approaching 2 million liters per day, according to the Ministry of Energy. Projections are for that to climb steadily to 9 million liters/day by 2022. Proponents of biodiesel, which is running at about 1.35 million liters/day in 2010, see that segment rising to 4.5 million liters/day over the same period.

Diesel B2 was enforced nationwide in February 2008, and B5 will follow suit in 2011 as palm-oil cultivation expands to 2.5 million rai. Consumption of gasohol, a blend of mostly ethanol with some petrol, is expected to top 12 million liters/day in coming years.

The Swine Raisers Association of Thailand is leading the way in efforts to use biogas from livestock manure fermentation as a fuel source.

Biomass is yet another part of the complex formula for success in overcoming reliance on fossil fuels. Biomass is material derived from residue such as dead trees, yard clippings, rice husks and garbage that can be burned to produce heat and generate electricity.

Although this promising sector is still in its infancy, biomass will see increased attention in coming years because it is a completely renewable source of energy. More trees can be grown and waste is a constant in society. However, further breakthroughs are required in conversion technologies to make this a feasible energy source on a large scale.

Even though natural gas has been on the energy scene in Thailand since the early 1980s, it is actually a very attractive area for new development. Today only about 6% of the energy used in the nation’s vibrant commerce sector comes from natural gas. But vast potential exists. Of Thailand’s 50 natural gas fields, nearly 30 are not in production.

As the alternative energy movement picks up speed, the reverse effect will be seen with pollution problems as vehicle emissions and waste water from factories subside. Thailand has signed several environmental conventions and joined “green” organizations. In addition, the government’s strategic long-term plan on climate change emphasizes R&D, institutional capacity, clean technologies and public awareness.

According to figures from PTT Public Co. Ltd, Thailand’s national energy provider, as of October 2009 the country had 351 NGV (natural gas vehicle) stations and 165,800 low-polluting NGVs, including taxis, tuk-tuks, personal and corporate cars, vans, trucks and buses. The number of servicing stations is expected to increase to 595 in 2012.

The enthusiasm to constantly look to new horizons is vital for growth in the alternative energy industry. Clean and efficient, nuclear power looms as a possibility.

The Ministry of Energy is already conducting a feasibility study on what would be Thailand’s first 2,000-megawatt nuclear power plant, with three possible sites under consideration. Public awareness programs on nuclear power are also being carried out.

Findings from the study will be reviewed by the government. Once the proposed facility gains approval, construction will cost an estimated 160 billion baht. The nuclear plant could go on-stream by 2020.

Wind power, an ancient method with Egyptian roots, also stands as a huge opportunity in Thailand. For alternative energy proponents, an encouraging goal is the government’s target to elevate the generation of wind power to 800 megawatts by 2022. That represents an exponential increase from current capability. Yearly wind speeds in Thailand average between 4.4 and 6.4 meters per second, with the southern part of the country boasting the best conditions for wind power. That region would also benefit from new jobs coming from the construction of wind turbines and the installation of related technologies.

Solar energy in Thailand is not on an impressive scale right now, although some private companies are starting to market solar roofing and small systems for residential and even commercial use. Demand is expected to rise, however, as the need for renewable energy grows and public awareness increases. The country is a producer of solar panels but most of output is for export.

Technological innovation is also taking place in regard to the use of hydrogen as an energy carrier. The gaseous chemical element can power fuel cells and batteries. Thailand has already enacted laws as a framework for safely generating power from hydrogen, mainly the Hydrogen Transportation Act. Hydrogen production plants are on the drawing board as related technologies and infrastructure undergo development. Testing is being carried out in various locations across the country.

Hydropower is among the cheapest forms of energy produced in Thailand. For many years, in fact, water has been harnessed to create power in the country, although mostly on a small scale. Much room for development remains, as hydropower at present contributes only about 5% of the nation’s energy production. To boost this figure significantly and ease the burden of other energy types, the government continues to engage in negotiations on hydropower plants for cities and villages.

Government support of alternative energy trial and development is wide-ranging in Thailand. Nearly 20 agencies and organizations are involved, and funding comes from many pockets.

Alternative energy is one of the newer industries being promoted by the BOI. Approved projects can receive tax breaks and special deductions on transportation, electricity and water supply costs.

In 2009, the board received 402 applications for promotion incentives from investors planning alternative energy projects. That is a robust leap from 62 the previous year. The 2009 applications represent 229.1 billion baht in investment, well above 19.9 billion a year earlier. From 2006 to 2008, the BOI approved 170 renewable energy projects with a total investment value of 104 billion baht.

As a framework for success, the government in 2008 laid out a mammoth 15-year alternative energy plan. Objectives of the master plan are to shape a renewable energy culture in Thailand, strengthen the country’s energy security by slashing dependence on imported oil, promote green communities across the nation, and support R&D of high-efficiency technologies for alternative energy.

The target by 2022 is to increase alternative energy’s share of national energy consumption to a solid 20%. This is to be achieved through clean-development legislation for a low-carbon society and switching to reliable sources of power. Besides achieving energy security, the plan will uplift local society by creating jobs in rural areas, generating extra income for farmers, and generally improving the quality of life for the Thai people.