(Source: Thailand Investment Review, August 2018)
With a growing population and climate change becoming topics of ever-increasing importance for governments across the world, policymakers have increased their efforts towards creating domestic sustainability agendas. This global shift has given rise to what is now commonly referred to as the bio-economy, i.e. the production and conversion of renewable resources into alternate products such as food or energy sources. With more than 50 countries officially pursuing policies related to the bio-economy, especially in relation to the UN’s Sustainable Development Goals (SDGs) and the 2030 Agenda, it looks certain that the industry will continue on its path of considerable growth.
For over a decade, Thailand has directed significant government resources towards the creation of, and engagement with, sustainable economic development practices. This includes a move towards greater engagement in the biofuel, biochemical and biotechnology sectors. In 2004, Thailand instituted a National Biotechnology Framework that helped to create the conditions and capacity for the nation to pursue its biotechnology objectives. This was followed by the 2012-2021 National Biotechnology Policy Framework, which aimed to encourage innovation, boost overall competitiveness and generate greater productivity throughout the bio-economy. Other subsequent policies include the 2012 Alternative Energy Development Plan and, since 2015, the Thailand 4.0 growth plan.
A leading producer and exporter of raw materials
According to Krungsri Research (2017), Thailand is a global leader when it comes to the production and export of raw agricultural products used in the bio-economy. Most notably, Thailand produces more than 50% of the world’s cassava and approximately 9.4 % of the world’s sugar – adding a staggering 5.15 billion USD to the national income in 2017 alone. Thailand is also a significant exporter of rice and palm oil. As these raw agricultural products are essential components required for the production of bioplastics and biofuels, it is anticipated that they will remain a significant driver of Thailand’s growth in the global bio-economy for the foreseeable future.
Due to Thailand’s favorable location in the heart of ASEAN and the Indo-Burma biodiversity hub, the country is also home to an abundance of natural resources and biologically diverse ecosystems. For example, it is estimated that Thailand hosts 8-10% of the world’s microorganism species and approximately 8% of the world’s plant species. As such, Thailand remains a rich source of various agricultural products and other soft commodities that are in high demand in the global marketplace.
Three leading sub-sectors
In an attempt to address a range of pressing domestic concerns such as environmental degradation, energy shortages, and food security, the Thai government has invested significant resources in recent years in three specific bioindustries i.e. bioenergy, biopharmaceuticals and biochemical. Also identified in the 2012-2021 National Biotechnology Policy Framework, these sectors are considered the backbone of the government’s roadmap to build greater sustainability and generate future economic growth.
Bioenergy: With more than 55% of Thailand’s energy consumption purchased from abroad in 2017, producing a stable domestic energy supply remains a government imperative. By generating renewable electricity domestically, it is envisaged that Thailand can gradually reduce its dependence on neighboring countries’ resources. In addition, Thailand would also increase its ability to create domestic economic stability. It is projected that by 2036 approximately 24% of Thailand’s energy consumption will come from local bioenergy production.
Biochemicals: As one of the world's leading exporters of agricultural products, Thailand is investing significant resources in the expansion and development of
the biofuel and biochemical sectors. Under the direction of the Ministry of Industry, it is expected that infrastructure investments over the coming years in Khon Kaen, Nakhon Sawan, and Kamphaeng Phet will total more than 11 billion USD. As part of a series of public-private partnerships, the production capacity of Butanediol and lactic acids will dramatically increase, cutting down the reliance on external biochemical commodities. With the use of bioplastics in shopping bags and single-use packaging also expected to increase by more than 25% in the coming years, the government has also made the necessary investments in biomaterial production technology.
Biopharmaceuticals: Current data from the Council of University Presidents of Thailand (CUPT) indicate that more than 98% of Thai citizens are unable to
afford medicines that are imported from abroad. To reduce this statistic and to
alleviate the dependency on foreign countries for medicine, the sector has recently received significant funding for research and development and other technical advancements. This investment has already paid dividends with the development of a range of domestically produced vaccines including for dengue, diphtheria, tetanus, pertussis, hepatitis B and meningitis. A number of well-known stem cell studies and research projects have also been conducted by Thai companies including BioNet-Asia and Siam Bioscience.
The BOI and Thai government’s support offerings
To encourage continued growth in Thailand’s bioeconomy-industry, the Thailand Board of Investment and the Thai government currently offer a range of tax and non-tax incentives for investors. These incentives apply to certain activities that align to national development objectives and fall within the bioenergy, biofuel, bioplastics and biotechnology research & development sectors. Tax incentives include corporate income tax exemptions for 5-8 years and import duty exemptions. Non-tax incentives include the permission to own land, the ability to acquire visas for foreign staff, and the permission to take/remit money abroad.
In order to provide additional support to create a highly skilled and competent workforce, the Thai Government has also committed resources towards increased research and development. By partnering with a range of academic institutions and the private sector, it is envisaged that Thailand will remain a driving force behind the continued development and growth of Thailand’s bio-economy industry.