Thailand’s Food Sector Remains Resilient With Increasing Investments Despite COVID-19
Wednesday, August 5th, 2020 | 552 Views
In the first half of this year alone, some 5.84 billion baht worth of investment applications were filed for the sector, despite the impact of COVID-19 on business thus demonstrating Thai and international food companies’ confidence in Thailand’s resilient, innovation-focused food sector, according to the Thailand Board of Investment (BOI).
These new investments cover the manufacturing of products including seasonings, plant-based proteins, semi and ready-to-eat food, frozen meats and fruits, processed salmon, cricket powder, healthy drinks, UHT yogurt, etc.
Moreover, from January 2019 to June 2020, international and local investors have filed 116 investment promotion applications for food processing and drinks manufacturing projects in Thailand, representing a total value of 18.8 billion baht (ca. 600 million US dollars).
Food industry revenues account for more than 20 percent of Thailand’s GDP and last year the value of food exports totaled $33 billion.
Thailand, with a population of almost 70 million, is Southeast Asia’s second largest economy and is one of the fortunate few countries in the world that can produce far more food than it consumes – including the world’s most sought-after staple, rice. The country is also at the center of the ASEAN economic community, a trade grouping of 650 million consumers.
Thanks to Thailand’s effective management of the COVID-19 crisis, the country’s food factories remain open and food supply chains intact. And even as economies around the world ground to a halt, international demand for many Thai food products actually increased.
In May, Thailand’s agricultural and agro-industrial exports grew by 2.5 percent despite overall merchandise shipments falling due to severe disruptions in the global economy. Frozen and processed fruit and vegetable exports jumped by 83 percent. Overall, the proportion of food exports to total shipments from Thailand jumped from 16 to 22 percent – a level that will likely be sustained in a post-COVID world, according to Pimchanok Vonkorpon, director-general of the Commerce Ministry’s trade policy and strategy office.
Under the government’s “Thailand 4.0” strategy to become the innovation hub of Asia, high-tech food processing is one of the key industries the government has selected to promote. The BOI is offering a suite of incentives to investors in this sector, including exemption of corporate income tax for up to 8 years and so-called smart visas that enable investors and key employees to stay in the country for up to four years.
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