Infrastructure investment to drive Thai welding market

Thailand is an export driven economy and the second largest (after Indonesia) in Southeast Asia. Abundance of resources such as tin, rubber, and natural gas, along with its proximity to developing Southeast Asian countries makes Thailand a preferred destination for overseas investors. The revenue of the total welding equipment and consumables market in Thailand was $ million in 2013 and is expected to grow at a CAGR of % between 2013 and 2018.

Key Findings

The largest user of welding equipment and consumables in Thailand is the construction industry, which accounts for % of all revenue generated in the market. The use of iron and steel in the construction industry has a strong correlation to the performance of the welding industry, as most welding applications include working on structural and architectural requirements of a project (piping, girders, and so on). Arc welding, which accounts for % of the revenue generated among welding equipment and consumables, is the most widely used welding technique, as it is cheaper and can be used for a variety of applications. There are several small scale welding equipment manufacturers in Thailand who do not adhere to quality standards. Safety and security of personnel is also compromised in many situations. However, smaller companies price their products lower, thereby, creating opportunities in the local market. Consumption and investment are expected to rebound in 2015, aided by low domestic interest rates. This will also result in better international economic prospects.

Thailand's Manufacturing Industry

Manufacturing is the most important sector and accounts for more than one-third of the GDP. The production of electrical and electronic equipment, including appliances and computers and integrated circuits, became significant in the late twentieth century, causing a substantial rise in the per capita gross domestic product. Other major industries in Thailand include oil and gas, automotive, etc. Thailand is among the leading producers of automobiles in the world. The country produced close to million cars in 2012 and is expected to achieve a production ofmillion units by 2015. Australia and Indonesia are the major destinations of automotive products from Thailand.

The Prevailing Scenario

Currently, Thailand is facing economic and political uncertainty, which has caused apprehension among investors and analysts. Moderate recovery in exports of goods could not offset falling domestic demand. In early 2014, the World Bank cut its growth forecast for Thailand from % to %. The National Economic and Social Development Board forecast that the economy would shrink in the first half of 2014. However, recovery is expected in 2015 as a result of efforts to reinvigorate the economy. 

Business and Investment

Private limited companies are the most popular business set ups in Thailand. The government has formulated a few regulations that foreign investors have to adhere to while operating in Thailand. In order to attract investors, the Thailand Board of Investment (BOI) has classified a few industries as 'priority activities' which will be granted tax incentives such as exemption of import duties on machinery, 8-year corporate income tax exemption for all zones, and so on.

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