Thailand has a high potential to become a gateway for French businessmen exploring business opportunities in the countries of the Greater Mekong Subregion (GMS), not only to establish manufacturing bases, but also to locate sources of offshore supplies.

Thai-French Business Council co-president Jingjai Hanchanlash said French businessmen were likely to focus on the potential for business in agro-industrial goods, textiles, essential oils, logistics and decorative items.

Jingjai, who is also chairman of the GMS Business Forum, said France also considered Thailand to be a potential gateway for GMS goods to access the European Union market.

He said Thai and French businessmen exchanged ideas on trade and investment opportunities and problems associated with increasing trade at a meeting in Paris last month. At present, French businessmen are generally not very interested in Asia, particularly in Asean, because they are concentrating on former French-colony countries in southern Africa.

"France is not familiar with Asian markets, nor the tough competition from the US and Japan, which have concentrated on this region for a long time," he said.

However, France has much experience in several industries, including textiles, fashion design and logistics, and Thailand, Laos, Cambodia and Burma have major supplies of raw materials to support its manufacturing.

Moreover, low labour costs in GMS countries will reinforce the reasons for France to set up manufacturing bases in the region and add to its competitiveness.

"Thailand could become France's assembly and export base in the region," said Jingjai.

For instance, Laos and Cambodia are rich sources of farm goods, such as soybeans, and low labour costs would encourage the establishment of textile industries. In addition, Burma has a high potential in regard to the essential-oils industry, thanks to its variety of herbs and a suitable environment for growing roses.

He said the soon-to-be completed

East-West Economic Corridor Road, linking Mae Sot, on Thailand's border with Burma, to Da Nang, Vietnam, would facilitate transportation in the region. The link will also create business opportunities for French logistics experts.

Jingjai said relevant agencies in France had agreed to make business trips to the GMS countries next year. However, a group representing French small and medium-sized enterprises will visit Chiang Mai next month to explore business opportunities in decorative items and essential oils.

French investment in Thailand includes retail operations (Carrefour), telecommunications (Alcatel), life insurance (Axa), construction and imported car brands Peugeot and Citroen.

Thailand currently has a trade deficit with France. In the first eight months of the year, Thai exports to France were valued at US$929.5 million (Bt34.92 billion), while imports from France were valued at $1.12 billion. Despite the figures, Thailand's exports to France during the period increased 10.38 per cent, and imports fell 5.57 per cent. The top five export products were garments, computers and parts, rubber, vehicles and parts and gems. Imported goods included aircraft, machinery, chemicals, medical equipment, medicine and electrical machines.

Thailand's Export Promotion Department has drawn up plans to double the value of exports to France within the next five years. It sees an opportunity to expand exports of rubber, processed foods and mid-market to high-end garments.

Jingjai said that as a major exporter of defence equipment, French businessmen were also interested in Thailand's defence industry, from air defences to weaponry.

However, at the Paris meeting they raised concerns about trade-facilitation and food-safety issues, yet to be solved by the Thai government.

Jingjai said they also expressed interest in participating in the bidding for Thailand's mega-projects, particularly for new elevated-train projects. He added that French businessmen also saw a potential in helping develop Bangkok's old Don Muang Airport.

Achara Pongvutitham

The Nation