DC Velocity - September 2017

ic pack. To avoid this fate, Thailand has launched an ambitious economic growth plan designed to kick-start its economy and future-proof its workforce and industrial base. Known as “Thailand 4.0” (the initiative is the fourth iteration of the government’s ongoing growth plan), the program is essentially a strategy for transforming a trade-based economy into a technolo-gy- and innovation-driven one.

“To gain economic growth, we need to introduce size and innovation,” says Dr. Bonggot Anuroj, senior executive adviser with the Thailand Board of Investment.

As part of the effort, the government of Thailand is now finalizing plans that

2022. Once the plan is approved (which

GROWTH INDUSTRIES

As for where the money will go, government leaders in Thailand have identified five industries “of existing strength” for further investment: automotive, intelligent electronics, advanced agriculture and biotechnology, food processing, and tourism. They have also identified five emerging growth areas for further development: aviation, biofuels and biochemicals, medicine and health care, digital technologies, and—of particular importance to the supply chain profession—robotics and advanced automation.

Dr. Anuroj says the latter will also play a critical role in addressing Thailand’s future labor needs. Much like Japan and other developed Asian nations, Thailand is facing an aging population. “We may experience a lack of manpower in the future. So we are looking to grow our automation and robotics capabilities. These will be new engines of our growth,” he says.

With respect to geography, almost all of the investment
will be concentrated in three provinces on the eastern
shore of the Gulf of Thailand. Known as the Eastern
Economic Corridor (EEC), the target region includes the
provinces of Chonburi, Chachengsao, and Rayong, which
all lie within 150 miles of Bangkok. This area has been the
industrial heart of Thailand for more than 30 years. Most
of the major automotive manufacturers, including Honda,
Toyota, Ford, General Motors, and BMW, have plants in
the region. The area also boasts the world’s 20th-busiest
port, Laem Chabang. In addition, it is home to a healthy oil
and gas industry as well as a second port, Map Ta Phut, that
handles bulk commodities.

Thailand believes that further infrastructure investment within this region will help it compete with Asia’s other top logistics centers, like those in China, Japan, and Singapore. “We want Thailand to be a logistics hub,” says Dr. Anuroj.

WHAT WILL BE BOUGHT WITH BAHT

All this will come at a hefty cost. To position the Eastern Economic Corridor as a major logistics center, Thailand’s government will invest 1. 5 trillion Thai baht (US$43 billion) in the area over the next five years.

One beneficiary of the spending will be the deep-sea cargo port of Laem Chabang, which is already one of the region’s busiest. Its container operations currently handle 7. 6 million TEUs (twenty-foot equivalent units) annually, and it does a robust roll-on/roll-off (Ro-Ro) business of 1. 2 million automobiles a year.

“Our goal for Laem Chabang is to be one of the top 15 ports in the world and to be the prime gateway to Asia,” says Kamit Sangsubhan, secretary general for the EEC Office of Thailand.

New rail connections are already under construction at Laem Chabang that will provide the capacity to haul 2 million TEUs annually between the port and Bangkok. Plans also call for the addition of six on-dock tracks for building trainloads.

The port will soon enter Phase III of its development project. This phase, which is expected to take seven to eight years to complete and will come at a cost of US$2.5 billion, will include the addition of a new basin and terminals to service ships.

The channel at Laem Chabang will also be deepened from its current 16 meters to 18. 5 meters (just over 60 feet). Capacity will increase to 18. 1 million TEUs. Other planned enhancements will boost the port’s Ro-Ro capacity to 3 million vehicles annually.