BoI positive about subcontractors

Unit expects 5-10% growth in 2016

The Board of Investment (BoI) remains upbeat about the prospects of the subcontracting industry for the automotive sector despite the unfavourable local and global economy.

Sonklin Ploymee, director of the BoI Unit for Industrial Linkage Development (Build), said the automotive sphere was still the industrial sector’s key driver. Thailand is a production hub for global auto manufacturers, with more than 25 car and motorcycle makers operating in the country, he said.

The BoI unit expects Thailand’s subcontracting industry to grow by 5-10% this year to 52.2-54.7 billion baht.

Ms Sonklin says the automotive sector represents 80% of the total market value for the subcontracting industry, with electronics and industrial machinery accounting for the rest.

Thailand has long been considered one of the world’s most attractive subcontracting destinations.

Years of experience among Thai manufacturers, coupled with the country’s relatively developed infrastructure and cheap, skilled labour force make it a highly competitive manufacturing location in Southeast Asia.

Build reported the subcontracting industry grew 4.85% last year to 49.7 billion baht, below its target of 52-54 billion baht.

The sector only grew by 3.06% to 47.4 billion baht in 2014, primarily because of political turmoil in the country. In 2013, the industry surged 17% to 46 billion baht. Exports made up 30% of the total.

Ms Sonklin said Build would hold about 20 business matching events annually and is planning roadshows in Asian countries such as Japan and Indonesia.

Build, which has helped establish links between foreign buyers and Thai manufactures for 20 years, is developing Thailand’s supporting industries to maximise industrial competitiveness.

Meanwhile, Build is partnering with UBM Asia (Thailand) and the Thai Subcontracting Promotion Association to host Subcon Thailand 2016 at the Bangkok International Trade and Exhibition Centre on Bang Na-Trat Road from May 14-16.

The event is expected to bring together 5,000 businesses for matching and generate transactions worth 8.5 billion baht. Participants include Isuzu, Mercedes-Benz, Canon and Siam Kubota, with potential overseas buyers from 450 firms representing 20 countries.

UBM will also hold an industrial event — Intermach 2016 — on the same dates at the same venue. Over 1,000 companies from 35 countries are set to showcase 150 innovative machines and devices. It expects 45,000 visitors to attend the two events.