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Growth opportunities in Thailand


OBG talks to Celina Chew, the managing director of Bayer Thai, about opportunities in agriculture, research and development, and pharmaceuticals.

OBG: How will demand for key crop sciences and animal health products progress in light of government support for the agricultural sector?

CHEW: There is a positive correlation between crop commodity prices and demand for crop science products, since farmers tend to invest in high-quality products if they are more confident they can achieve an attractive income for their produce. If farmers can only sell their produce at low prices, they would generally try to minimise their input costs. Of course, crop prices are determined not only by free markets but also by other factors, such as Thailand?s price supports for rice farmers.

Farmers are also looking for crop science products that are highly effective against key pests and resistant pests, low in toxicity, environmentally friendly, and fit well into the Integrated Pest Management concept. With regard to animal health, government support for the livestock industry is focused on lobbying efforts overseas to lift import bans on products such as raw meat from Thailand. The government also provides support for the still-very-small dairy industry for local supply in Thailand.

In general, the livestock industry in Thailand (poultry, pig and shrimp) is well-developed and well-positioned to further increase exports of such livestock to overseas markets. The combination of this solid foundation, as well as the lifting of import bans in places such as Japan and the EU, means that we expect the Thai livestock industry to grow further. Since much of this growth will be focused on export markets, the requirements regarding the quality of livestock will be high. Therefore, we are optimistic there will be further growth for agricultural products.

OBG: What are the strengths and weaknesses of Thailand as a base for research & development?

CHEW: Thailand has yet to position itself as the location of choice as a research and development (R&D) base in the minds of multinationals. Among the ASEAN nations, Singapore and Malaysia lead in R&D activities. Thailand has several strengths that promote it as an R&D base. It has a strategic location, close to China and India, as well as being in the middle of a connectivity centre in the ASEAN bloc.

Thailand?s robust economy, bright economic future, relatively stable political situation, qualified and skilled workforce, strong manufacturing sector and stable export-driven economy make it a good choice for an innovation centre. Furthermore, the growing awareness of ASEAN in the global economy increases Thailand?s attractiveness as a potential base for innovation, as well as manufacturing.

On the other hand, Thailand lacks the level of infrastructure development and talent pool that would propel it to the top of the candidates? list as an innovation centre. Enhancement in the areas of intellectual property (IP) protection, data protection, and effective enforcement of IP and patents would also be welcome.

OBG: What are the key drivers of growth for multinational pharmaceutical sales in Thailand in the coming years, particularly given the ageing population?

CHEW: According to the ?Population Ageing in Thailand Report? of the UN Population Fund, the Thai population is ageing more rapidly than any other country in South-east Asia. Older persons (over 60 years of age) represented more than 10% of the total Thai population in 2010 and may increase to nearly 30% by 2050.

Thailand?s low fertility rate of 1.7 children per woman will lead to a reduction of people in the 0-14 age group, while the over-65 age group will expand at an average annual rate of 3.8%. It is also expected that the average life expectancy of Thai people will gradually increase over the coming years.

This will increase the prevalence of age-related diseases, including certain types of cancer, cardiovascular diseases and diabetes. This, in turn, will increase the demand for treatments for such ? mostly chronic ? diseases. This will be a growth driver for the Thai pharmaceutical market in terms of related products and treatments.

In response to the issue of our ageing population, the Thai government has developed the National Long-Term Plan of Action for the Elderly (NLTPAE), which covers health, education, income and employment, as well as social and cultural aspects. The second NLTPAE (2002 -21) focuses on preparation for quality ageing, the well-being of older persons, social security for older persons and research to support related policies and programmes. Health promotion and prevention for the elderly is also in the NLTPAE. The ageing demographic would tend to support the self-medication trend we are now seeing in Thailand.


Source; oxfordbusinessgroup

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