Dutch investments in Thailand keep growing, companies' sales increase and they undertake new investments. Among European countries, the Netherlands is the single largest investor in Thailand.
With so much negative news around nowadays, we tend to forget some of the great stories investors in Thailand have to tell. Several world market leaders from the Netherlands have chosen Thailand as their base in Asia. And they keep growing and investing in Thailand. Included are some of the big names, such as Philips, ING and Heineken. But, smaller and medium-sized companies also contribute significantly to Thailand' economic growth.
How did all this happen? A short history
The foundation for relations between Thailand and the Netherlands was laid over 400 years ago when Dutch traders first arrived in Pattani and Ayutthaya. Mutually beneficial business remains a strong element underpinning the continued success of the relationship even today.
The Netherlands may be small in size, but in Europe it is the country to beat when it comes to international trade. The strategic geographical location, excellent infrastructure, and its expertise in logistics and transportation, make the Netherlands a preferred location to service markets throughout Europe. Therefore the Netherlands has become the largest export destination within Europe for Thai products (some 4 billion US dollars per year).
The Netherlands is not only "Big" as an export destination for Thai products. It also ranks first when it comes to foreign investment into Thailand averaging 38 percent of all investment from the European Union over the past three years.
The Netherlands and Thailand: many similarities
Whereas the Netherlands is the hub for access to Europe, Thailand plays a similar role in South-East Asia. The airports of Amsterdam Schiphol and Suvarnabhumi are the 14th and 18th busiest in the world. The Thai and the Dutch royal families enjoy a very close relationship. In terms of water management the low lying areas in both countries need protection: in the Netherlands, 60% of the population lives below sea level; In Thailand, the Chao Praya Basin and the Gulf of Thailand coastline need protection from flooding and rising sea levels. And finally, both Thais and Dutch love their flowers: the orchid for Thailand and the famous tulip for the Netherlands.
Dutch business in Thailand
The largest Dutch industrial investor in years has announced plans for significant expansion in Thailand. Purac, the world market leader in lactic acid, chose Thailand to build the world's largest and most competitive plant. The new plant is a miracle of engineering, built from scratch, with the latest technologies, innovation and best-practice operations from all Purac plants worldwide. In addition to the plans for capacity expansion, plans are also in the make for the construction of a Lactide plant. Lactide is the basis for the production of a biodegradable plastic that can replace petrol-based plastics. The investment signifies the trust Purac has in Thailand, as the base for Biotechnology, supported by the government of Thailand and the BOI, through their investment promotion policies.
Some well-known Dutch companies are absolute market leaders in Thailand: Philips is the leader in lighting in Thailand for more than 50 years. Heineken has a share of more than 90% of the premium beer market. Foremost is the top dairy company in Thailand. And, Unilever is the undisputed leader in detergent and shampoo.
Other successful Dutch companies operate in areas as different as agriculture, machinery, finance, retail, real estate and manufacturing (everything from furniture, umbrellas to magic boxes).
Magic Boxes? In Chonburi a company called Hanky Panky Toys conceives, develops and produces magic boxes that are exported all over the world. The kind that enables kids to play card tricks, pull plush rabbits out of hats, read minds and make balls disappear. 2008 was a record year for Hanky Panky in terms of both sales and profitability. Given the level of this year's booked and pre-advised orders, the company is confident that 2009 will be another record year. Also, in 2009-2010, Hanky Panky plans its largest investment since coming to Thailand in 1998: in new warehousing, equipment and automated machinery.
Thai farmers are growing more and more "Prik Ki Nu" chilies from seed by Dutch company East West Seed. The company recently opened the largest vegetable biotech R&D centre in South East Asia. East West Seed is headquartered in Thailand and spends more than 15 percent of its total sales on R&D, mainly working on improving disease resistance by equipping plants to fight off disease better. In 2009, company will launch a total of eight improved vegetable varieties in Thailand for what promises to be another record year.
Other Dutch companies known for their commitment to Thailand include ING, ranked # 1 financial institution by Fortune 500 Global List in 2008. ING has acquired 30% of TMB Bank and is rapidly growing its ING Life and ING Funds divisions.
The list continues: Dutch SME Stamex set up an assembly facility in Khorat to serve the Thai starch market. It is now exporting European-quality equipment at Thai prices to Europe and various Asian countries. ECC International Real Estate is investing USD 80 Million for the construction of Promenada Chiang Mai, the future shopping and entertainment landmark in the region.
And finally, car service company B-Quik is adding new stores continuously. You may have seen the yellow B-Quick stickers on the back of many cars driving around Thailand's cities. Sales in 2008 increased by 24% whereas the 2009 plan targets an additional 21% growth in revenue. According to the plan, another 10 to 12 stores in both Bangkok and the provinces will be built.
What all these companies have in common is that they have seen record growth in 2008/2009 and that they will continue to invest in Thailand. What a vote of confidence.
