BOI : Industry focus

Sturdy infrastructure keeping Thailand at forefront of business

Thailand’s well-developed infrastructure acts as the strong shoulders carrying the country forward in the 21st century. For industries from agriculture to automotive, the facilities are in place to ensure smooth-running business operations.

The sturdy infrastructure remains a key reason that Thailand is the world’s No. 1 exporter of cassava products and natural rubber, the 12th biggest carmaker, and a leading production hub in many other vibrant sectors such as petrochemicals, alternative energy, machinery and electronics.

Reliable power, communications and transport are why many of the world’s top companies, from Baxter to Nestle to Toyota, continue seeing Thailand as an essential base.

Thailand offers a stable and dependable electricity-generating system that provides power at reasonable prices to citizens and industrialists. To satisfy local society’s ever-increasing demand for electricity, the government is pushing forward with a power development plan that sets goals through 2030. The emphasis is on electricity generation with greater efficiency, decreased reliance on imported fossil fuels, increased use of technologies for renewable and alternative energy, and reduced impact on the environment. Target national capacity by 2030 is 65,547 MW. This makes Thailand’s energy sector ripe with investment opportunities in areas such as biofuel, solar, wind, waste and water power.

The Electricity Generating Authority of Thailand is the state operator of the industry and the Ministry of Energy is the governing body.

Keeping business transactions swift and reliable, Thailand’s telecommunication services are at an international standard. Office and residential fixed telephone lines, mobile phones and Internet are abundant in local society. The Bangkok metro area is served by two fixed-line operators: the state-run Telephone Organization of Thailand (TOT) and the private firm True Corp., both of which

install phones quickly. TOT and TT&T, a private company, handle locations outside the capital. The nation’s fixed- line network has a capacity of over 8 million lines.

The international telecommunications infrastructure, including gateway, satellite and submarine cable connections, is owned by state-run CAT Telecom. Reaching virtually every country, international calls are handled by the Communications Authority of Thailand.

TOT’s network of more than 2 million telephone lines features sophisticated digital switching and long-distance equipment. Besides basic coverage, nationwide value-added services range from telefax, cellular and on-line data to radio telephone, videotext and ISDN.

In recent years, mobile phone ownership has soared to 98% of the Thai population. The country now has five times as many cellular phones as landlines. Key players in the mobile sector include AIS, DTAC, True Move, Hutch, DPC and Thai Mobile. Interconnection charge agreements between mobile phone operators guarantee smooth cross-network calling for users.

Internet service is available throughout Thailand, with the exception of some remote villages where satellite dishes can fill in. Broadband is branching out to most places in the country. Among the 20 companies providing the service are CS Loxinfo, INET, ISSP, Ji-Net, KSC, 3BB Broadband, Pacific, Samarts, TOT and True. Out of Thailand’s 20 million Internet users, 6.7 million are on Facebook and 450,000 use Twitter. Computer penetration stands at 29.3 per 100 inhabitants.

Elevating Thailand’s telecommunications industry to the next level, in the fourth quarter of 2011 the country launched its first 3G wireless services. Development of the young 3G framework will diversity information services and help smartphone consumers better enjoy online entertainment.

Regional Transport Center With 37 commercial airports, Thailand has a thriving aviation industry for business and leisure travel. There are six international airports, 27 domestic facilities and three private airports, besides one naval facility. Efficient air travel in and out of the country helps the business community stay profitable. International services are provided by many carriers, with flights to most countries. Domestic services are available to all regions of Thailand. Overseeing air travel in the country, the state-run Airports of Thailand Plc is under supervision of the Ministry of Transportation.

The country’s largest commercial facility, Suvarnabhumi International Airport plays a big role in facilitating Thailand’s role as a regional aviation hub. Opened in 2006, the facility near Bangkok now accommodates over 100 flights per hour. When completed by 2019, expansion projects will boost Suvarnabhumi’s annual capacity to more than 100 million passengers. Located off the beautiful southwest coast of the country, Phuket International Airport ranks second in terms of passenger volume. Its main draw is the beach resorts of Phuket, Thailand’s biggest island. Chiang Mai, known as the gateway to scenic northern Thailand, is among other cities with international airports.

A network of world-class ports keeps Thailand ahead of competing production centers in Asia. Positioned along the country’s 3,219 kilometers of coastline, the eight international deep-sea ports are in Bangkok, Laem Chabang, Map Ta Phut, Ranong, Phuket, Songkhla, Sattahip and Sriracha.

Development and management of deep-sea ports is carried out by the Port Authority of Thailand. The agency has launched projects to expand port capacity and enhance services for cargo- bearing vessels. Under one innovative measure commenced in 2011, radio frequency identification (RFID) technology is used for real-time transfers of electronic documents and e-forms to the authority. This is reducing the time involved for importing and exporting processes.

Regional river ports in Chiangrai and Ranong provinces also facilitate trade throughout Thailand’s 4,000 kilometers of inland waterways and with bordering countries. For even better logistics, the Transport Ministry’s Marine Department has likewise set forward new projects.

The country’s road network, which follows left-hand traffic, has expanded to 390,026 kilometers and counting. Some 98% of this is paved, either by concrete

or asphalt. Municipal thoroughfares account for two-thirds of the system, with national highways and motorways at 13% and rural roads comprising 10%. Even more intercity motorways are being constructed to shorten driving time.

Making land transport of goods more convenient, new highways throughout Thailand will become part of the Greater Mekong area’s East-West Economic Corridor connecting the South China Sea with the Bay of Bengal, North-South Economic Corridor linking Singapore and Kunming, and Southern Coastal Economic Corridor from Thailand to Cambodia and Vietnam.

Thailand and the five other countries that comprise the Greater Mekong Subregion (Cambodia, Laos, Myanmar, Vietnam and China) are also looking at completion of six more economic transport corridors by 2017. Together the many corridors represent several thousand kilometers of linked commerce. Such interconnection bolsters Thailand’s competitiveness as a regional hub for production and trade with the single-market ASEAN Economic Community taking shape by 2015.

Extensive Rail System A vital part of the transportation chain, Thailand’s far-reaching rail system is another competitive advantage for the country. The rail network spans 4,346 kilometers. Single tracks account for 93%, double tracks 4.3% and triple tracks 3%. Domestic rail transport has a deep history, with the Royal State Railways of Siam established in 1890. Today the State Railway of Thailand, under the Ministry of Transportation and Communications, is responsible for building, operating, and maintaining the country’s tracks. In Bangkok, the country’s financial capital and seat of government, getting around is super-efficient with the aboveground Skytrain and underground MRT commuter systems. Bangkok also now offers businessmen and other travelers the Airport Rail Link, a new line for rapid transit from downtown to Suvarnabhumi International Airport.

Targeting 2025, a master plan for high-speed rail development has been hammered out by the government. This involves 3,039 kilometers of tracks and speeds ranging from 120 to 250 kph, compared with current rail travel of between 60 and 80 kph. The high-speed trains will enable linkage to tourism locations, business destinations and satellite cities to become even more expedient.

From a Greater Mekong Subregion perspective, planners are also considering the best practices for connecting railways between neighboring countries to achieve increased prosperity through integration.

Thailand’s international-standard water supply is yet another key part of the country’s well-developed infrastructure. Resources include 3,000 dams, 25 river

basins and annual rainfall of between 1,200 and 2,700 millimeters. The water supply is more than sufficient for electricity generation, irrigation, and residential and industrial applications.

To encourage more facilities of all types, in mid-November 2011 the government approved tax breaks for state enterprises that establish infrastructure funds. Such investments would bolster the country’s telecommunications, mass transit, highways, airports, seaports, power plants and water supply, according to the Ministry of Finance. Besides fortifying these networks, use of the funds will also stimulate Thailand’s overall economic development.