According to a community member, Indonesian and Thai companies you gain more from investing in the manufacturing supply network industries.
The Indonesian Embassy and the Indonesian Investment Ministry’s” Business Forum 2024: Purchase Options in Manufacturing Supply Chain Industries of Indonesia” were just held by the Indonesian Embassy and the Indonesian Investment Coordinating Board to entice Thai buyers, particularly in the fuel and metal areas.
Fuad Adriansyah, the Indonesian Embassy’s Deputy Chief of Mission, said the manufacturing sector is the largest contributor to the gross domestic product ( GDP ) of the Association of Southeast Asian Nations.
It generated US$ 760 billion ( about 25.3 billion baht ), accounting for 21 % of the Asean total GDP in 2022.
For Indonesia, he said the state has been enriched with abundant natural resources, particularly in coals and materials.
” Minerals such as copper, tin, ore and copper have fuelled many production companies, especially in the fields like electrics and electronics, automotive and the new market of electronic vehicles”, he added.
In contrast, the Indonesian government promoted funding in the supply chain sector because the government has shifted away from primarily exporting natural materials as a result of the restrictions on metal exports in 2020 and the metal export restrictions in 2023.
” While the transition has created some challenges, it still creates the opportunities for investors to build supply chain industries ]in Indonesia ] supported by an abundance of, comparatively, local labour and proximity of raw material sources”, he added.
He said Thailand is a key investor in Indonesia. From 2017–2022, Thai investors poured US$ 1.52 billion ( about 54.2 billion baht ) into about 1, 400 projects across Indonesia. In the first half of 2024, Thai investment value reached US$ 225 million.
He claimed that the Thai business sector has knowledge of developing the global supply chain, which accounts for more than half of Thailand’s production of supply chains.
With Thailand’s comparative advantages, Thai businesses can pursue better collaboration and grow together with Indonesia, he said.
As Asean members, Thailand and Indonesia, according to Tanita Sirisup, executive director of the Foreign Investment Marketing Division of the Thailand Board of Investment ( BoI ), recognized the importance of enhancing economic integration across all Asean nations.
With the 10 Asean countries ‘ combined nominal GDPs estimated at US$ 3. 6 trillion, she claimed Asean stood out as a promising location for foreign investment despite the uncertainty surrounding global trade.
It is projected to reach US$ 4.5 trillion driven by the rising domestic consumption, export-oriented manufacturing and the young workforce.
Asean nations must further deepen economic integration, advance sustainability and digitalisation, and expand trade and investment relations, she said.
Indonesia is one of Thailand’s most important trade and investment partners. With total investment applications worth US$ 230 million, primarily from projects in the air transport sector, it was ranked among Thailand’s top ten investors in the first half of this year.
For Thai investment in Indonesia, many Thai companies invest in energy, mineral mining, retail sectors and agriculture. She said there is still room for further investment.
It is crucial to concentrate on future growth engines that will promote sustainable development in both countries while both countries continue to strengthen their partnership.
She said the Thai government focuses on promoting investment in strategic industries including bio-based and renewable energies, smart electronics, new energy vehicles, digital and creative industries, and regional headquarters and international business centres.
Because both countries have high potential to create a resilient supply chain by utilizing their raw materials, natural resources, manpower, and available markets, Thailand and Indonesia can work together to achieve economic and industrial development goals, she said.
Thailand and Indonesia have the potential to collaborate with the manufacturing sector, which accounts for 34 % of Thailand’s GDP and contributes to exports, in light of the global shift in supply chain dynamics and the growing need for resource security.
Indonesia can make use of Thailand’s strong supply chain in automotive, electronics, chemical and petrochemical, as well as agro-processing. Likewise, Thai companies can benefit from Indonesia’s rich natural, agricultural and fishery resources and large domestic market.
” Together, the countries can work to produce value-added products for Asean and the world. Moreover, areas such as renewable energy, digital transformation, and infrastructure development offer further opportunities for investment and collaboration.
Both countries are putting more emphasis on sustainable development, and Thai businesses have a great opportunity to invest in the country’s growing green economy, she continued.