Long a darling of the industrial investment community, Thailand offers an attractive pairing of investment incentives and world-class industrial infrastructure. Its industrial development strategy has, over the last two decades, attracted more than US$124.5 billion of Foreign Direct Investment (FDI) compared to just US$104.6 billion in Cambodia, Laos, Myanmar and Vietnam combined. Special Economic Zones have developed across the country to accommodate the influx of industry and as the country has climbed the production value chain, prices have risen in tandem.

In Tractus’ annual Cost of Doing Business (CODB) study of 10 countries in Asia, Thailand comes in as the 4th most expensive place to manufacture, less costly than only Singapore, Malaysia and China.

Responding to rising costs of production, investors have begun to look further afield at up-and-coming industrial investment destinations such as Myanmar, Vietnam and Cambodia. Among the lowest cost manufacturing destinations in Asia, Vietnam, Myanmar and Cambodia come in as the 1st, 2nd and 5th lowest cost production centers in Tractus’ CODB study. Vietnam, the lowest cost manufacturing destination was estimated at just 61% of that of Thailand. Sharing borders with Thailand, Myanmar and Cambodia present attractive sources of low-cost labor and natural and agricultural resources.

Since 2014, Special Economic Zones have sprung up along the Cambodia and Myanmar borders in response to the opportunity, varying dramatically in size from the 50 km2 Trat Special Economic Zone along the Thai-Cambodia border to massive 1,419 km2 Tak Special Economic Zone on the Thai-Myanmar border 545 km east of Myanmar’s commercial capital of Yangon by road. Three more are planned for 2016. Already, nearly 60 direct investments have been approved or started operations in existing zones with a heavy focus on commodity processing of agricultural goods imported from Cambodia and Myanmar and labor intensive garment manufacturing.

Existing and planned Special Economic Zone's on the Thai borders with Myanmar and Cambodia
Thailand Border Area Special Economic Zones

Special Economic Zones along Cambodia and Myanmar’s border benefit from abundant access to low-cost migrant labor without forfeiting the advantage of Thailand’s high quality infrastructure. While supply chain, skilled labor availability and many more issues need to be considered, Thailand’s border zones can offer attractive industrial location opportunities for certain industries and certain companies.

Founded in Thailand in 1995, Tractus has been advising on industrial investment decisions in the country and across developing Asia for nearly two decades and today operates from offices in China, India, Thailand, Vietnam, Myanmar and Indonesia. A wealth of practical experience, data collection and rigorous analysis underpins Tractus’ leadership as a resource for companies making investment decisions in the region. Having advised on more than 700 projects and US$5 billion of FDI decisions, Tractus is an expert resource for companies seeking data-backed site selection analysis to make the right decision about how and where to invest in Asia.

About the author

Joshua is Tractus’ lead manager for the company’s Myanmar office and was Tractus’ first full time employee dedicated to the country. Since 2012, Joshua has led Tractus’ engagements in Myanmar including advising on more than US$31.5 million in direct investment decisions in the mining, porcelain, animal feed, garment and pharmaceutical sectors. Recent projects have included investment cash flow modeling, risk probability analysis, industrial site selection, supply chain analysis and government advocacy on licensing and approvals among others. Joshua sits on the Executive Committee of the American Chamber of Commerce Myanmar Chapter and is an active member of both the American Chamber of Commerce in Thailand and Thai-Canadian Chamber of Commerce as well as the Canada Asean Business Council. Joshua has spoken extensively on the topic of Myanmar including at forums in Toronto and New York as well as in Hong Kong, Vietnam and Singapore. As one of the earliest business advisors on the ground following the suspensions of US sanctions, Joshua’s opinions are regularly sought after and have been printed in regional media as well as the Washington Post and Christian Science Monitor.

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