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Published on August 27, 2007

Covering eight countries in continental Europe, the role of the Thailand Board of Investment's Frankfurt office is to attract potential investors to Thailand, but despite its having been operating for 32 years, the office's director, Wisan Tanthawichian, says there is still much to be done.

"Don't expect locals to know what the Board of Investment [BoI] is. In fact, many do not even know Thailand," Wisan says, after heading the BoI's first overseas office for the past two years. He refers to the open-ended nature of the job by saying it is impossible to close deals immediately.

"Investment is not a one-time deal like selling Thai products, where a customer places an order and decides later whether he wants to continue purchasing. Investment is about bringing millions to a country over the course of a few years. So investors consider the prospects and challenges very carefully," he says.

"My job is not selling; it's more like marketing. We plant seeds that we hope will yield results in the following one to two years."

According to the BoI's figures, Europe is now the second largest foreign investor in Thailand. However, it is way behind Japan in first place. From January to July this year, 196 out of a total of 768 projects approved by the BoI were Japanese. Ninety-two were European. Last year 210 Japanese projects were approved, compared with 68 from Europe.

With most of the large companies in his territory having already established production lines in Asia, Wisan's targeted customers are small and medium-sized enterprises (SMEs) in eight industries, including aerospace, automobiles, information and communications technology, logistics, metal work, machinery, biotechnology and environment science, "because these industries will also bring know-how to Thailand," he says.

He meets these potential "customers" in a variety of situations, for example in seminars that the BoI organises in conjunction with local partners, including chambers of commerce and other economic bodies. The BoI also stages exhibits at various fairs, and Wisan and his staff seek out decision-makers from targeted companies.

After discussing their interests and needs, the companies are categorised into three groups.

"Group A is for prime customers. They are really keen to invest in Thailand and are ready to sign the application," Wisan says, referring to the application for BoI investment support and tax exemption. However, such clients are rare, and most fall into groups B and C.

"Group B is for those who express interest and are gathering information, but foreign investment is not yet their priority. Group C is for those who don't even know where Thailand is. If they are interested at all in foreign investment, it's only in India or China," Wisan says.

Then the BoI's staff send them information. On many occasions this involves information about the market size and demand of the Asean region as a whole, and not just Thailand.

"First you must understand that when European companies want to expand their investment, they will not go far from their own market. So if they want to supply the European market, they prefer to go to Eastern European countries.

"But if they want to go to Asia, that means they want to enter the Asian market. So our challenge is convincing them to go to Asia. We have to tell them that Asean has a population of more than 500 million and so on, which will help them to make a decision," Wisan says. "So at BoI in Frankfurt we are not only delivering information about Thailand; we are selling the entire region."

While the tasks are rather mundane and intangible, Wisan insists that instilling information about Thailand is critical.

"Some of these SMEs are so small that they don't have the budget to survey the market for themselves. So we fill in that missing information for them," Wisan explains. Most importantly, one can never tell when a company will decide to expand its investment abroad.

"You never know when the board members will decide to invest in a foreign country. Should they do so, they usually have several alternatives. If information about Thailand and the business opportunities in Thailand does not reach these people, they will go and invest in another country. Therefore we must be proactive in providing information and keeping in touch with them," he says.

The BoI also organises "biz-matching" several times a year. It pairs up interested Thai and foreign companies that have the potential for cooperation. "We take them to Thailand and let them talk to different potential partners, so that they may find a counterpart and feel more at ease about investing in Thailand."

Together with his proactive strategies, Wisan has also revamped the in-house IT system at BoI Frankfurt into an updated online database, with minimal need for maintenance. The number of clients listed in the database has risen from 1,000 to 10,000 in two years.

"We are now able to distribute information about seminars and products to our potential customers, both within Germany and outside, via e-mails and newsletters," Wisan says.

While the allure of China, India and Vietnam has been attracting the attention of investors, Wisan points out that European investments in Thailand are still rising. (See chart.) He cites Thailand's ready infrastructure, public transportation, economic stability, skilled labour force and hospitality as contributing factors. "At this moment, we are more attractive than Indonesia and cheaper than Singapore."

As for the rise of Vietnam, Wisan says the lack of infrastructure there and the high cost of living for expatriates are major stumbling blocks.

He argues that Vietnam is not yet able to compete with Thailand but admits that it cannot be ignored. "Within three years they may be able to beat us if we don't do anything," he says.

Above all, if Thailand is to continue to successfully attract foreign investment, it must solve domestic issues.

"The problem with Thailand is that we always have problems within the country," Wisan says, citing recent bad news from Bangkok, including the military coup, the Foreign Business Act, bombings and so on, which Wisan has to explain to his customers.

"Thailand is a great place in which to invest. We don't have to compete with other countries. However, it is up to us to show the world that our country is an interesting, appropriate, suitable place to invest," Wisan says. For his part, he is advertising Thailand in the outside world with as much energy as he can muster.

Sopaporn Kurz

The Nation

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