Thailand’s Eastern Seaboard, the region east of Bangkok and spanning the eastern shore of the Gulf of Thailand, is emerging as an economic powerhouse. The flat topography lends itself to an extensive road network handy to rail and port facilities and the region has transformed from a sleepy coastal area into a thriving hub for industry and business. Axel Blom, Asian Insiders partner for Thailand offers some explanation as to why and how Thailand’s Eastern Seaboard has become one of the fastest developing industrial zones in the world.
The development of Thailand’s eastern seaboard, also known as the Eastern Economic Corridor (EEC) began in the 1970’s when the Thai government initiated the Eastern Seaboard Development Project, one element of a broader strategy to promote economic growth and industrialisation. Officially established in January 2017 as the Eastern Special Development Zone, the government recognised the regional potential due to its proximity to the Gulf of Thailand and to international shipping lanes passing through it. To attract early investment, the government in 1982 created the Eastern Industrial Estate (EIE), offering a range of incentives to international investors, including preferential access to land, tax privileges and streamlined regulatory processes. These incentives succeeded in attracting several significant investors, initially from Japan and South Korea looking to locate further manufacturing facilities elsewhere in Asia.
Now in 2023, Thailand’s eastern seaboard is a major industrial and business hub and is home to a range of major multimillion dollar investments, especially in automotive, electronics, consumer appliances, food processing and petrochemical. Contributing approximately 15% of Thailand’s total GDP, It is also a major centre for logistics and transportation, with close access to deep-sea ports and airports that serve domestic and international markets. The governing body is the Eastern Special Development Zone Policy Office, an independent public agency, reporting directly to the Prime Minister.
There are currently 26 industrial estates and two industrial clusters, hosting major international brands including Toyota, Honda, Samsung along with other global brands and industrials. The Thai Board of Investment (BOI) proactive policies have ensured the region’s industries are strongly export oriented.
- Thailand’s eastern seaboard, along the Gulf of Thailand, enjoys a location as an ideal hub to Southeast Asia with its nearly one billion consumers. The nearby Laem Chabang Port, Thailand’s largest, along with Map Ta Phut Port offers critical support with capacity currently being expanded.
- The Thai government has made significant investment in regional infrastructure, aided with further investment by some of the major corporations in the region. The road, rail and digital network along with reliable power supply, water and wastewater allow safe planning for the future. The Chinese Belt and Road Initiative (BRI) has ensured a considerable further influx of major Chinese investment in capacity.
- The region now enjoys a large and skilled resident population. Along with civil infrastructure, urban development has been strong with hospitals, schools and recreation areas available to a workforce largely transplanted from the rural northeast. Bangkok, once an arduous bus journey away, allows access to a further large workforce of qualified professionals.
- The Thai BOI continues to offer plenty of attractive incentives to incoming investors and operators. Thailand’s Board of Trade (BOT) and the BOI, along with the Thai Chamber of Commerce and the Joint Foreign Chambers of Commerce provide an active nurturing environment for major investors and senor staff with a wide range of supporting programmes and opportunities for networking.
- Manufacturing – Thailand’s eastern seaboard has become a major manufacturing hub for commercial and consumer electronics, automotive, including major new investments in EV manufacture (see link here), intelligent electronics and next generation tech, meaning advanced automation and robotics for various onshore and offshore industries, eg, the energy sector.
- Petrochemical – Proximity to natural gas reserves in the Gulf of Thailand has led to large investments in Thailand’s energy future. Once an energy exporter, Thailand’s recent large scale industrial and urban growth has led to considerable development in Thailand’s energy future (see link here), particularly in green and alternative energy sources.
- The government along with private sector partners are investing considerable effort into advanced agriculture, agriscience and biotechnology including its ‘food for the future’ programme.
- Logistics and Transportation – as previously mentioned, infrastructure has greatly improved in the region, aided also by improved land connections to neighbouring countries like Cambodia and Laos. Further the wide-scale adoption of ecommerce by Thais themselves has led to an explosion in fulfilment centres and delivery networks through the region.
- Impacted heavily by Covid, Thailand’s famous tourism and hospitality sector is making a strong comeback with Bangkok again the most visited major city in the world. Thailand’s eastern seaboard is a favoured playground for tourists and travellers with a wide range of picturesque towns, islands, coastal resorts and attractions. Included within this category also are Thailand’s aspirations for high-value and medical tourism.
More recently the Thai government approved a USD 44 billion plan to further develop the EEC into a regional financial hub and world-class smart city by 2037. Estimates are that this further development will accommodate 350,000 more people and create a further 200,000 jobs by 2032.
This rapid scale of development has led to issues that are being addressed and managed by the Thai government in areas like environmental and social protection as well as traffic congestion. Discussions between public and private sector interests are ongoing and supported by the new incoming government.
Thailand’s eastern seaboard is a well-established Special Economic Zone enjoying significant focus from the government, from various multi-national corporations and with major benefits available for future participants. Thailand’s proximity to large nearby markets buttressed with Thailand’s 14 FTAs including the Regional Comprehensive Economic Partnership, as well as to major supply networks makes this SEZ a strong option for a Southeast Asian base for future operations.
Asian Insiders is available to support clients with comprehensive information and tailored reports on Thailand’s eastern seaboard. For a no-obligation call, please contact Jari Hietala, Managing Partner: jari.hietala(at)asianinsiders.com or Axel Blom, Thailand Partner, axel.blom(at)asianinsiders.com