Dow Chemical Co is pouring an additional US$125 million into its Thai operations, strengthening the country’s role in transforming the US-based firm from a manufacturer of basic chemicals to a maker of specialty products.
The new investment follows the recent completion of Dow’s $3-billion Thai Growth Project that began in 2006.
The new projects, both set to finish construction this year, are a $100-million propylene glycol (PG) plant and a $25-million polyolefin encapsulant film factory to produce materials for solar panels.
The PG plant, with an annual capacity of 150,000 tonnes, will be used in the manufacture of pharmaceuticals, food and health products.
Andrew Liveris, Dow’s chairman and chief executive, cited Thailand’s pro-investor policies and pool of talent as reasons for the company’s continued investment here.
“For Dow, we select investment locations where we can access the market, talent, and research and development for innovation,” he said.
Thailand is taking steps to upgrade itself from a low-cost production centre to one with more value-added manufacturing, he added.
Mr Liveris was commenting during a visit to the opening of the Thai Growth petrochemical complex at the Asia Industrial Estate in Map Ta Phut last week.
Built with investment partners Siam Cement Group and the Belgium-based Solvay, the complex comprises five downstream plants producing polyethylene, specialty elastomer, hydrogen peroxide and propylene oxide.
The investments have made Thailand the largest manufacturing centre for Dow in Asia-Pacific.
During his visit, Mr Liveris met Prime Minister Yingluck Shinawatra and recommended Thailand become an advanced manufacturing base. He has been appointed one of Thailand’s honorary investment advisers.
Thailand is inching closer to Japan as an advanced manufacturing base, as low-cost production is moving to Vietnam, Indonesia and Bangladesh, Mr Liveris noted.
But Thailand in his view should invest more in education and R&D and promote more financial resources such as venture capital to drive innovation.
Countries like Singapore, Saudi Arabia and Germany have invested substantially in innovation.
As Asean forms a single market under the Asean Economic Community in 2015, Mr Liveris said Thailand will remain a key focus of Dow even as it aggressively looks for opportunities in the region, especially in Indonesia.
Nonetheless, the CEO pointed out that political instability and institutional changes could affect Thailand’s attractiveness in the eyes of foreign investors.
Last year, Dow posted total revenue of $60 billion, of which $10.5 billion (17.5%) was generated in Asia. Including an additional $3 billion from joint ventures, the region contributed $14-15 billion, with the Thai unit accounting for $300 million.