Thailand’s industrial systems and seasoned workforce are its strongest competitive advantages as companies look to diversify production across Southeast Asia.
But infrastructure bottlenecks in grid capacity, green energy and high-end technical skills need to be addressed to help drive future investment, according to Jan Metzger, global head of coverage banking at Standard Chartered.
“Converting investment commitments into bankable projects requires sound commercial fundamentals,” Mr Metzger told the Bangkok Post.
“Lenders need confidence in demand and cash flows, supported by credible customer or offtaker commitments, appropriate financing tenor, and access to critical utilities and infrastructure.”
For digital infrastructure and hyperscalers, which demand round-the-clock power together with international zero-carbon mandates, energy reliability and sourcing are key.
“For power-intensive developments, project assessment must also address electricity supply, grid capacity, renewable-power access, water management, land use and the regulatory environment,” Mr Metzger said.
“For EV [electric vehicle] manufacturing, the same discipline extends across energy use, environmental requirements, and the sustainability of the wider supply chain.”
The Thai government has pushed for new investment in future technologies, including data centre hyperscalers, cloud service providers, and EV manufacturers.
This year the Board of Investment also tailored the incentives offered to foreign investors to focus more on green standards, domestic supply-chain integration and a “fast pass” process for strategic tech projects.
Overseas interest has boomed this year, with foreign direct investment applications during the first nine months reaching 1.55 trillion baht, up 62% year-on-year. Digital investments from companies such as TikTok System and Global Switch accounted for nearly 70% of the total project filings in value terms, according to the BoI.
Mr Metzger said that across Southeast Asia, different markets offer different strengths.
“Vietnam has strong momentum in export-oriented manufacturing, Malaysia has established capabilities in semiconductors and higher-value electronics, while Indonesia combines a large domestic market with natural-resource advantages, including in the EV battery value chain,” he said.
For Thailand, decades of supporting global auto and electronics supply chains are a key differentiator.
“Thailand’s distinct proposition is the depth of its industrial systems and established operating environment,” Mr Metzger said. “Its automotive, components and electronics industries bring strong supplier networks, production expertise and an experienced manufacturing workforce.”
Yet Thailand must also evolve if it is to capture the next wave of investment.
“To maintain its competitive position, Thailand can continue to strengthen its engineering capabilities, technology adoption and workforce skills, while addressing considerations such as grid flexibility, renewable-energy integration and exposure to fuel price volatility,” Mr Metzger said.
“The opportunity is to capture higher-value activities within Asean’s increasingly interconnected supply chains.”
Amidst an uncertain geopolitical environment, chief financial officers are focusing on resiliency and risk mitigation.
“In a more fragmented and volatile world, the priority for treasurers is to protect margins and ensure the business can continue trading, investing and meeting its obligations across a range of currency, interest-rate and geopolitical scenarios,” Mr Metzger said.
“Companies are also diversifying funding across banking partners, markets, currencies and tenors, maintaining committed facilities and improving visibility and control over cash. Regional liquidity structures, trade finance and supplier-finance programmes can help reduce trapped liquidity, strengthen critical suppliers and prevent a single disruption from constraining the wider business.”
For Standard Chartered, its presence in over 50 markets across Asia, Africa and the Middle East gives the bank a unique view on the needs of companies trading across borders.
Initiatives such as the EU’s Carbon Border Adjustment Mechanism, for instance, has placed greater compliance and cost pressures on exporters in sectors such as steel, cement and electricity.
Mr Metzger said Standard Chartered had focused heavily on providing transition finance solutions to assist clients’ moves towards decarbonisation.
“Transition finance can support credible, investable decarbonisation plans through measures such as renewable-power procurement, energy-efficiency upgrades, electrification and process improvements,” he said.
Crucially, these credit lines are governed by rigorous performance benchmarks rather than broad environmental, social and governance labels.
“Financing can be linked to time-bound targets, measurable capital expenditure and appropriate governance, helping businesses preserve international market access while reducing the carbon intensity of their operations,” said Mr Metzger.