Sun Shines Again on Thailand

After devastating 2011 floods, the Land of Smiles (and great food) resumes its quest to be 'kitchen of the world.'

By Erin Erickson, Sr. Digital Editor

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To many, Thailand is a culinary dreamland. Staple ingredients – such as sweet basil, galangal, curry paste – combine for exquisite aromas, rich textures and flavorful sauces, a perfect symphony of the senses.

There has been concern over both the agriculture and manufacturing lost in last year's devastating floods. It's hard to believe, but flooding began at the end of July, during the country's monsoon season, and continued for months, not days. Parts of capital city Bangkok were inundated in October, and some areas of the country remained under water until January of this year.

It resulted in at least 815 deaths and 13.6 million people affected. Sixty-five of Thailand's 77 provinces were declared flood disaster zones, and more than 7,700 sq. mi. of farmland was damaged.

So the Thailand Board of Investment (BOI) was eager to prove to a dozen North American journalists in January that its country was recovering and remains open for all kinds of business, from food processing to high-tech manufacturing.

We started off our tour not with a food plant visit but with a trip to the Bang Pa-In industrial estate, where we met John Coyne, president and CEO of California-based Western Digital. The company's Bangkok manufacturing facility had just completed an intensive rehab after flood waters nearly ruined the plant that provides hard drives and other digital equipment to companies throughout the world. (See coverage at on the New York Times website)

Within 46 days of the floods, Western Digital had relocated its machinery to a decontamination zone, sanitized every inch of its plant and machines and reloaded it all into the same facility.
Coyne credits the nearly 3,000 Thai employees who worked around the clock to get the facility up and running again. You can see Coyne's presentation online via PDF.

The centerpiece of our visit was the Thailand Board of Investment Fair, where we met company Charoen Pokphand (www.cpfworldwide.com), which began in 1978 as a producer and distributor of animal feed in southern Thailand. Now the company operates an agro-industrial business using animal farming and food manufacturing as its main sources of revenue. The company's business operations are mainly located in Thailand.

Charoen Pokphand Foods Public Co. Ltd., the food manufacturing arm of the company, has one vision: to become the “kitchen of the world.” It's part of a bigger vision that Thailand, as a country, shares with all of its food and beverage manufacturers.

As one of the world's largest producers and exporters of processed food products, Thailand hopes its abundant natural resources and ample R&D combined with its investments in international quality standards will some day turn Thailand into the “sole net food exporter” in Asia, as the BOI put it.

So far, the land of smiles appears to have something to smile about. According to the Board of Investment, Thailand's export-oriented food industry generated $27 billion in 2010. That was a 30 percent increase from 2007. It is expected to surpass $33 billion within the next two years.

The country is a major food producer not only regionally but also worldwide, dominating a number of food export sectors. Thailand ranked first in the world in 2010 for rice, cassava, tapioca, canned pineapples and seafood products.

According to the BOI, more than 10,000 companies – including Nestle, Cargill, Unilever, Jelly Belly and Dole – have at least one manufacturing plant in Thailand. Manufacturers not only have adequate resources within arms' reach – many plants source up to 80 percent of local raw materials – they also have access to high-tech R&D centers like Thailand's Food Export Center.

High-tech is what Thailand and the members of the Association of Southeast Asian Nations (ASEAN) are hoping will attract more manufacturers to ASEAN countries. Speaking at the BOI's CEO Forum on Jan. 17, former Prime Minister of the United Kingdom Tony Blair spoke about the current trend of power shifting to Eastern countries. Blair added that technology is posing challenges not only for people, but also for countries and governments; those countries that recognize the importance human capital and its development will be well poised for growth in the future.

As an American listening to other countries talk about their needs and wants for domestic and global tranquility, I was captivated by the discussions of ASEAN countries needing to improve their residents' quality of life. In Thailand, where the reported unemployment rate is less than 1 percent, nearly every able-bodied person has a job. On the flipside, many of those jobs include 10-hour work days six days a week.

It presents a quandary for American manufacturers. In Thailand, an American company can set up manufacturing facilities where the resources and tax incentives are plentiful. The risk in going global, some say, is earning the reputation for not staying closer to home and keeping the jobs in the U.S.

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