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Australian businesses choose Thailand
Following the successful lead of many of their compatriots, more Australian businesses are taking advantage of the Thailand-Australia Free Trade Agreement (TAFTA) along with strong support from Austrade and the Thai Board of Investment (BoI) to move their manufacturing bases to Thailand.
Precision Valves Corporation, the world’s largest manufacturer of aerosol valves (which has its Asia-Pacific Regional office in Australia), for example, has recently expanded its investment by launching its new manufacturing facilities at the Eastern Seaboard Industrial Estate in Rayong province.
The company has chosen to set up its new manufacturing facilities here, due to the benefits it has gained under TAFTA, namely an elimination of import tariffs.
John Abplanalp, President of Precision Valves, said at the recent opening of the facility that the Thai manufacturing base would produce up to 300 million valves a year, 10 per cent of which would be for export.
“We can expect many years of quality output from this plant in Thailand,” Mr Abplanalp said.
Tuta Healthcare International Co., Ltd, manufacturer of high quality medical devices is another Australian company that has recently set up a manufacturing plant in Thailand to cope with its rapid growth. The new plant will manufacture and export high quality medical devices that will complement its range of products for the Australian and New Zealand markets.
“We came to Thailand not because of cheap labour but because of TAFTA, its strategic location and skilled staff,” General manager Paul C Coffey, said.
“Austrade is also our good, reliable business partner with contacts around the world. With its continuous support and wide global network, it is much easier for us to organise a trade show or set up a manufacturing base overseas,” said Paul.
Australian Trade Commissioner, Jodie McAlister, who recently visited the plants, said that high cost structures in Australia and a shortage of skilled labour have driven the move of business expansion offshore. As the Australian Government’s Trade Promotion Agency, Austrade looks forward to enticing and supporting additional Australian investors to Thailand confident that the business model works.
According to the BoI, Australia is the sixth largest source of foreign investment in Thailand, with 14 project applications (Bt1 billion in total value) granted during the first half of this year alone. Last year, 11 project applications by Australian businesses worth Bt934 million were granted BoI privileges.
Robert Saunders, Managing Director of Tri-Motive Asia Pacific, a leading manufacturer of auto parts, echoed the positive sentiments about Thailand.
“While other Asian countries such as China and Malaysia also offer investment incentives, they are nothing compared to the tax exemption package and strong support we get from the BoI here (in Thailand),” he said.
Tri-Motive Asia Pacific, a subsidiary of Melbourne-based TriMas Holdings Australia Pty Ltd., has set up a facility at Amata Nakorn Industrial Estate in Chonburi province. It manufactures around 700 units of various products a day. In addition, the company has constantly been building up a new local customer database in Thailand, the largest manufacturer of one-tonne pick-up trucks in the world after the United States.
“We came here with no customer base but it is growing. The investment atmosphere here is very welcoming and the attitude of the Thai people is magic,” Mr Saunders said.