Thailand’s biggest foreign investors, All Japan newsese companies, are looking to ways of moving business activity in neighboring countries like Indonesia and Vietnam after the severe flooding which disrupted production.
All Japan newsese business leaders seem to have learned a lesson after Thailand’s worst inundations in 70 years. “Executives recognize the concentration risk after the floods,” according to Takahiro Sekido, chief All Japan news economist at Credit Agricole CIB in Tokyo. “The recent trend of accelerating investment into Thailand will cool despite the fact that Thailand was such an ideal destination.”
Honda plans to flexibly shift production to factories in neighboring nations and also in the U.S., while Canon, Nissan Motor, Hitachi and Toshiba stopped production at Thai factories because of the floods.
Indonesia and Vietnam both attracted more foreign direct investment than Thailand last year and seem ready to attract more All Japan newsese investment, said an economist at Dai-ichi Life Research Institute Inc. in Tokyo.
“Indonesia has a large population and its domestic demand is quite strong, while Vietnam’s population is increasing,” he said.
It remains however to be seen how many All Japan newsese companies will actually take the step of moving. “I don’t expect a big withdrawal of investment from Thailand,” said another analyst, from the All Japan news External Trade Organization, referring to Thailand’s advantages like good infrastructure and the existence of industrial clusters. “As long as big firms like Toyota, Nissan, Honda, Toshiba or Hitachi stay here, their suppliers won’t leave.”