Industrial Land Sales in Thailand Increase by 182%
Thanks to supply chain shifts and government investment efforts, industrial land sales in Thailand have seen a significant increase of 182%.
Record Growth in Industrial Land Sales
During the fiscal year from October 1, 2022, to September 30, 2023, the Industrial Estate Authority of Thailand (IEAT) managed to sell 5,693 rai (910.88 hectares) of industrial land, surpassing the target of 2,500 rai (400 hectares). The revenue for the past fiscal year reached 8.5 billion baht (230 million USD), with a profit of 3.7 billion baht (100 million USD).
Factors Driving the Growth
According to Veeris Ammarapala, Director of the IEAT, the increase in land sales can be attributed to both the relocation of factories by multinational corporations and increased investments in the Eastern Economic Corridor (EEC) along with long-term visa policies. The EEC accounted for 4,724.8 rai (755.97 hectares) of land sales, while the remaining 967.7 rai (154.83 hectares) were outside the EEC.
The Eastern Economic Corridor (EEC) – A Hub of High-Tech Industry
The EEC, consisting of the provinces Chon Buri, Rayong, and Chachoengsao, is set to become the center of high-tech industry in Thailand. It encompasses twelve industries, including the production of next-generation automobiles and smart electronics.
Future Targets and Operations
The IEAT aims to sell 3,000 rai (480 hectares) of industrial land in the fiscal year 2024, with the EEC projected to make up the highest sales at 2,700 rai (432 hectares). Currently, the IEAT manages 68 industrial estates nationwide, as well as the deep-sea port of Map Ta Phut in Rayong. These industrial estates house a total of 4,828 factories, with accumulated investments amounting to 10.8 trillion baht (292 billion USD) and employing 994,696 workers.
Foreign Direct Investment (FDI) in Thailand
The Thailand Board of Investment (BOI) reported a significant increase in FDI, with 304 billion baht of foreign direct investment in the first half of the year. This represents a 141% increase compared to the same period in 2022. China topped the list of investors with 61.5 billion baht (1.67 billion USD), followed by Singapore with 59 billion baht (1.6 billion USD), and Japan with 35.3 billion baht (956 million USD).
FDI Growth in the Automotive Industry
The BOI credits the surge in FDI to investments in the automotive industry and related activities, with 80 investment projects totaling 19.6 billion baht. As Thailand is already a major automotive production hub in the region, the country aims to become a leading electric vehicle production center in Southeast Asia.
For example, Thailand offers generous incentives to electric vehicle manufacturers, such as a subsidy program of 24 billion baht (0.7 billion USD) for battery producers, along with a 40% reduction in import taxes for electric vehicles and a price reduction of 70,000 to 150,000 baht (1,900 to 4,000 USD) for buyers.
As a result, leading Chinese electric vehicle manufacturers, including BYD, Great Wall Motor (GWM), and SAIC, have all established production lines in Thailand due to its strategic position in the automotive supply chain and the generous subsidies provided by the country.
Business Today