According to the state owned agency BOI, Thailand is positioned to become the leader of MRO in Southeast Asia by supporting a rapidly expanding aerospace sector via incentives
The Thailand Board of Investment (BOI) has approved investment promotion incentives for companies that choose Thailand as their base of aircraft maintenance, repair and overhaul (MRO) activity.
Thailand’s MRO expenditure from 2015-2024 has been forecasted to reach a total amount of USD $10.6 billion, with airframe, engine and component MRO being specifically targeted.
As Thailand hosted a record 38 million visitors in 2018, and expects 40 million in 2019, its aerospace sector is growing at an astounding rate uniquely positioning the Kingdom to lead ASEAN in MRO activity.
“As the global aviation market shifts east and demand for air travel is increasing in Asia, a significant number of new opportunities in the aerospace manufacturing and MRO industries are being created”Mr. Chokedee Kaewsang, Deputy Secretary General of the Thailand Board of Investment
“Thailand’s geographic position and strong expertise in the aerospace industry are why global companies choose us when they’re ready to expand their operations to Asia.”
Thailand’s MRO flagship will be the Eastern Airport City (Aerotropolis), anchored by U-Tapao airport, in the country’s Eastern Economic Corridor.
The Aerotropolis project, part of a 15- year aviation development plan for Thailand, calls for an expansion of U-Tapao’s passenger capacity from 5 million passengers to 54 million in the next 30 years.
The Aerotropolis will serve as an MRO hub and will be connected by rail, roadway, and sea to other major airports including Suvarnabhumi and Don Mueang International Airports.
One of the reasons why aerospace companies continue to choose Thailand as their ASEAN regional base, aside from the skilled workforce and the size of the market itself, is the generous support of the Thai government.
8 years corporate income tax exemption
Companies that expand to Thailand receive investment incentives such as 8 years of corporate income tax exemption, plus an additional 5 years of 50% reduction of the corporate income tax rate after the exemption period. BOI offers another 2-4 years of corporate income tax exemption for investment projects based in the Aerotropolis that pair with local educational institutions on workforce development initiatives.
Global aerospace brands have been present in Thailand for decades, and the Kingdom shows no signs of slowing down in attracting large multinational companies.
Recently, a leading aircraft manufacturer announced plans to establish a new MRO facility at U-Tapao Airport, in a joint venture with Thai Airways.
Similarly, Revima, the French APU and landing gear MRO specialist, has started construction of a new landing gear overhaul facility in Chonburi, Thailand. The 12,000m 2 facility will focus on Airbus A320, Boeing 737 and ATR family landing gears.
It will be equipped with state-of-the-art machines and will include all necessary special processes for full in-house repair & overhaul of landing gears. Another investor, BOSA, a UK-based aircraft component maintenance services provider, has launched a joint MRO venture, BOSA-Thayaan Aircraft Service (BTAS), to perform line maintenance operations at U-Tapao Airport.
This April, a delegation led by Mr. Punlop Punyasiri, Director of Industry Linkage Development Division at Thailand BOI will attend MRO Americas 2019 in Atlanta, Georgia. The delegation plans to further showcase Thailand’s aerospace industry and introduce plans to expand the Kingdom’s MRO sector.
Why Foreign Firms Struggle to Break Into China
In 2017, an analysis by Goldman Sachs found that while S&P 500 companies earned 30 percent of their revenues outside of the United States, China accounted for only 1 percent of their revenues.
Thailand rolls out new package to attract foreign investors
Thailand endorsed a package of measures, called ‘Thailand Plus’ which aimed at attracting more foreign investment, especially to expedite investments from companies seeking to relocate as a result of the ongoing trade war
Thailand’s economic ministers meeting on Sept. 6, 2019 endorsed a package of measures, called ‘Thailand Plus’ which aimed at attracting more foreign investment, especially to expedite investments from companies seeking to relocate as a result of the ongoing trade war, Kobsak Pootrakool, Deputy Secretary-General to the Prime Minister, said after the meeting.(more…)
More manufacturers to relocate from China to Southeast Asia
JLL anticipates the trend to accelerate as the China-US tariff war are driving more companies in China to relocate their operations to other countries to avoid US tariffs and maintain their competitiveness.
Bangkok, 11 July 2019 – More manufacturers have relocated from China to Southeast Asia over the past few years largely because The Red Dragon’s labor costs have become less and less competitive. This trend has been reinforced by the China-US trade war that began in 2018.(more…)
Thailand Ecommerce Market: Shooting For Success
At present, the Thai ecommerce market is valued at USD 3.5 billion. According to a Google Temasek study, Thailand’s e-commerce...
Aspire Set to Become First SME Neobank in Southeast Asia with US$32.5 Million Raise
The recent financing has been led by Mass-Mutual Ventures Southeast Asia with participation from Silicon Valley’s Arc Labs and existing...
How is Thailand Bringing Technology to the Table?
In Asia, a country like Thailand has taken the initiative to implement agricultural biotechnology in its industry. The country has...