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Thai Electronics Manufacturing Hub Wooed by Keen Mainland Suppliers

With Thailand's status as one of Southeast Asia's leading electrical and electronics manufacturing hubs now widely acknowledged, would-be suppliers from China and beyond dominated the recent Bangkok Electric & Electronics show.

Photo: Big fans: With Thai manufacturing soaring, Chinese businesses are keen to supply components.
Big fans: With Thai manufacturing soaring, Chinese businesses are keen to supply components.
Photo: Big fans: With Thai manufacturing soaring, Chinese businesses are keen to supply components.
Big fans: With Thai manufacturing soaring, Chinese businesses are keen to supply components.

Apart from a scattering of Thai and overseas solar companies, the recent Bangkok Electric & Electronics event was dominated by Chinese companies, with the majority of them looking to sell components to local electronics manufacturers. Overall, the large number of Chinese suppliers in attendance highlighted the fact that Thailand is now one of Southeast Asia's leading electrical and electronics manufacturing hubs.

Indeed, the country's ascendance in this sector has also been reflected in its official trade figures. According to Thailand's Board of Investments, the country's sum total of electrical and electronics exports was valued at US$55 billion in 2015 (the most recent year for which records are available), making the sector one of the key drivers of Thailand's economic growth.

Among those looking to capitalise on Thailand's pre-eminence in this sector was Xuzhou Angel Electronics, a Jiangsu-based manufacturer of temperature and humidity controllers, data loggers, displays and LED lights – all of which are standard components of air conditioners and refrigerators. In terms of its appeal to Thai manufacturers, the company was majoring on both the quality of its products and their comparative affordability.

Outlining its proposition, Foreign Trade Clerk Lucy Lu said: "We already work with a few local manufacturers and we are keen to expand on that, possibly by setting up a distributorship here. Overall, our quality and prices are very competitive and we also comply with all of the relevant international standards."

Another Chinese company that was bullish about its prospects in Thailand was the Jing Jiang Yong Rong Hardware Factory, a Jingjiang-based specialist in the manufacture of shaded pole motors and micro-motors, components frequently found in home appliances, communication devices, automobiles and water pumps.

Explaining why his company was so intent on making inroads into Thailand, General Manager Zhu Yindong said: "We have observed Thailand's manufacturing sector growing over the years and we want to be a part of that growth.

"We can either supply Thai manufacturers directly or we can partner with local distributors, depending on the way the market develops. Compared with other manufacturers, our motors are safer, more reliable and quieter, while also guaranteed to have considerable longevity."

Although mainland companies clearly dominated the show, that didn't entirely deter suppliers from elsewhere in Asia. Keen to fly the flag for South Korea, for instance, was Daesung Maref, a Hwaseong-based manufacturer of refrigeration and air-conditioning components. Aiming to be established as a truly global business, the company is already working with two of the largest manufacturers in the refrigeration sector – Munich-based Guntner and Ohio-based Emerson.

Taking a realistic view of the task ahead for his company, Director Yun Hong-sun said: "Competing with Chinese manufacturers in Thailand will, no doubt, be challenging. We believe, however, that the efficiency and quality of our products is quite superior to anything else available on the Thai market."

One thing that united local, Chinese and other overseas businesses was a desire to establish their green and sustainable development credentials. Among the mainland contingent majoring on this was CMEC Renewable Energy, a Jiangsu-based manufacturer of solar panels, solar pumps, LED systems, solar street lights and portable off-grid systems.

Clearly upbeat about the business' future prospects, Sales Manager April Xu said: "We offer solar panels that are designed for both on- and off-grid use, while our overall focus is on meeting quality standards and securing the relevant certifications. As Asia has many islands, while also extending across a lot of mountainous terrain, these inaccessible areas offer real opportunities for solar companies."

Photo: Thaico: Export-minded.
Thaico: Export-minded.
Photo: Thaico: Export-minded.
Thaico: Export-minded.
Photo: Mitron CE: Savings-led LED.
Mitron CE: Savings-led LED.
Photo: Mitron CE: Savings-led LED.
Mitron CE: Savings-led LED.

Another mainland business looking to compete with the local solar-energy sector was Beijing-headquartered Ilamps International Trade. Established in 2009, the company has built its name through manufacturing high-quality PCBs, solar energy products and HVAC control systems.

Dismissing the notion that Chinese manufacturers cannot compete in quality terms with companies from other countries, Project Manager Durian Liu said: "All of our range is CE and UL approved. We pride ourselves on providing the kind of high-quality products that can establish long-term relationships with customers. As a result, I believe we can give Thai manufacturers a strong brand they can rely on."

In terms of the local market, Ilamps has particularly high hopes of its fan-coil thermostats and controllers, HVAC components, sensors, transmitters, damper actuators, ball valves and full plastic exhaust fans. According to Liu, all of these products are already regularly exported to customers throughout the Americas, the Middle East, Europe and Asia.

Another business that was notably optimistic about the opportunities in the local solar sector was Fosera Thailand, a subsidiary of German's Fosera, a long-established provider of sustainable and affordable solar systems. At present, while all research and development activity is handled out of Germany, all of the manufacturing for the local market takes place in Thailand.

During the event, the company was particularly keen to showcase its 12-watt solar television, an innovation that allows those living off the grid in remote areas to keep up with the local soaps. Coming next from the company is a solar-powered refrigerator, which will surely add the chill to any remote resident's existing access to Netflix.

Assessing the importance of the Thai market, Leonides Lechoncito, the company's Sales Manager for the Asia Pacific region, said: "It is a strategically significant territory us, as it is near to both Hong Kong and Japan, the two territories where we source our raw materials.

"One of our core undertakings is to help close the gap between the developed and the poor countries. We want everyone – including those that are off-the-grid – to enjoy affordable comfort."

One local solar company present at the fair was Thaico Products, a manufacturer of solar panels and solar-powered water pumps and refrigerators. With many overseas companies keen to crack the Thai market, company President Kamjorn Khunvapanichkul was confident he could turn the tide and actively start exporting.

Outlining his ambitions for the business, he said: "There is a huge market for our products in countries where there is limited access to electricity. While, in terms of price, we cannot compete with China, when it comes to quality we are on a par with many of the global firms, while also offering better value for money and a five-year warranty."

By contrast, Samut Sakhon-based Mitron CE, one of Thailand's leading LCD and LED assembly businesses, was focusing primarily on the domestic market. This year, its stand was dominated by its range of LED bulbs and ceiling lights, all squarely targeted at energy-saving-minded Thai consumers.

For his part, Rattana Wongsupeng, the company's Sales Manager, sees bright prospects for LED lighting in the local market, with the majority of businesses and government departments expected to adopt this environmentally-friendly form of illumination over the coming years. Citing other likely factors for their increased uptake, he said: "Home owners are now more inclined to use LED bulbs thanks to their reliability and efficient power consumption."

Indeed, he may well be right. According to the Thai government's own estimates, the country's LED market is expected to grow by an average of 30% a year for the period 2015-2020.

Photo: Bangkok Electric & Electronics: A key marketplace for Thai manufacturers.
Bangkok Electric & Electronics: A key marketplace for Thai manufacturers.
Photo: Bangkok Electric & Electronics: A key marketplace for Thai manufacturers.
Bangkok Electric & Electronics: A key marketplace for Thai manufacturers.

Bangkok Electric & Electronics 2017 was held from 7-10 September 2017 at the Bangkok International Trade and Exhibition Center.

Geoff de Freitas, Special Correspondent, Bangkok

Content provided by Picture: HKTDC Research
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