Ms. Ajarin Pattanapanchai, Deputy Secretary General, of Thailand Board of Investment, talked with me last week about the state of industry and innovation in that country.

She told me that productivity in Thailand is quite high, citing Toyota assembly as an example where it produces a car every 55 seconds in Japan and a nearly equal 58 seconds in Thailand.

While the main topic was robotics, which I will discuss below, she also pointed out that Thailand has a large petrochemical complex—the 5th largest in the world—with the environment a considerable concern. So, the government agency partnered for a real-time monitoring of air direct to the agency.

Given Thailand’s dominance in ASEAN automotive markets, the country has seen an increase in investments from companies such as robotics giant Nachi and other firms providing technology and supply chain products to Thailand’s growing automotive markets. Growth of the robotics industry in Thailand is expected to increase, as the vehicle manufacturing industry in the Kingdom continues to expand in both commercial and private use motorcycles, trucks, and cars.

Robotic and Automation Machinery

Currently, there are more than 60 companies producing robotic and automation machinery in Thailand, such as Eureka Automation, CT Asia Robotic, Yutaka Robot Systems, Ryoei, and Robosis. These companies have developed and produced industrial robots that meet international standards and are gaining ground with the competition because of their high quality and competitive pricing.

Just last year, ABB opened a Robot Applications Center in Thailand and introduced “YuMi,” the world’s first truly collaborative dual-arm robot. Other companies who have located robotics operations in Thailand include:

• Globax Robot System (Thailand) – a Japanese company that produces Robotic Production Line;
• Kuka Robotics – a German company, a world leader in robotics systems, which has located a business operation in Thailand;
• Fillomatic Global Industries – an Indonesian company that produces robotic bottle filling machines and robotic bottle capping machines;
• Cal-comp Electronics –a Taiwanese company that produces robotic computers.

Thailand has the highest concentration of automotive companies in Asia and the 12th largest automotive production capacity in the world, directly providing vehicles for Indonesia, Vietnam, the Philippines, and other nearby and ASEAN countries. Automotive companies with production facilities in Thailand include: Ford, Isuzu, Mazda, Mitsubishi, BMW, General Motors, Daihatsu, Honda, Mercedes-Benz, Nissan, Tata, Toyota, and Volvo.

Thailand Imports

In 2016, Thai imports of industrial robotics and automation systems are estimated to top $47.3 million USD, and this number is expected to grow. The imported machinery has mostly been used for automotive, electrical appliances and electronics, and in the food processing industry.

Both automation and robotics have gained an important foothold in Thailand’s growth and development. Many universities in Thailand offer courses for students interested in this field, with the most specialized course being offered by the Institute of Field Robotics (FIBO) at King Mongkut’s University of Technology, Thonburi.

Many robots developed in-house by universities and private companies, in both the industrial and service categories, have also found use in real world applications. Mahidol University’s Bartlab Rescue Robot, Hive Ground’s Flare Stack Inspection Drone and Zeabus Autonomous Underwater vehicle (AUV), and CT Asia Robotics’s Dinsow Robot are some prominent examples. Given these advances, it is evident that Thai researchers and engineers possess the necessary skills and technical knowhow, and that Thailand is ready to be a hub for investment in these areas.

The country is a hub for automotive and electrical and electronics production in ASEAN. Thailand ranked 12th globally for motor vehicle production and 6th for commercial vehicle production in 2015. As for the electrical and electronics industry, Thailand has experienced a 7% growth in export value as measured from 2011, reaching an impressive figure of THB 435 billion (USD 12 billion) in 2015. The country is also renowned for being the second largest global producer and exporter of data storage units like Hard Disk Drives (HDD).

The BOI recognizes the importance of automation and robotics and they belong to the future industries promoted under the Super Cluster category. Examples of activities eligible for incentives in these industries include microelectronics design, embedded system design, and embedded software. Recently, the BOI approved additional activities to expedite investment projects in these future industries.

High value-added software development is one of those additional activities and it includes developing system software for advanced technology devices (including business process management) and developing industrial software used to support manufacturing. Investors can apply for general incentives that include an 8 year income tax exemption and import duty on machinery, and raw materials. However, they can apply for incentives under the Super Cluster policy if they meet certain specific criteria and not only get an 8 year income tax exemption, but also 50% Corporate Income Tax (CIT) reduction for 5 years. Non-tax incentives include the right to own land and work permits for expatriates.