The agriculture and food industry in Thailand has been implementing new developments on a regular basis in order to fulfil the increasingly sophisticated demands of a worldwide market that is getting flooded with nearly unlimited possibilities.
In this highly competitive environment, staying ahead of the game necessitates access to a diverse range of raw materials. It starts from extensive agricultural plantations to a well-developed supply chain. The Thai agri-food business is developing foods that fit with mainstream intelligence technology. It also addresses environmental concerns. It is due to improvements in digitalization and deep technology such as 3D printing, AI, and big data.
Indeed, with the recent development of aspiring startups, the increasing shift in consumer demand for new foods such as alternative proteins, medicinal food, functional food, and 3D food printing has generated an unprecedented revolution in the Food Industry in Thailand. These businesses tunes in to global trends and technology. They are helping to establish top-of-mind awareness of Thailand’s food brands among customers.
The Thai food development business likewise places a stronger emphasis on safety standards and openness at each stage of manufacturing. The Thai government promotes the creation of a blockchain system that allows users to trace and track each procedure.
Growth Contributors of Food Industry in Thailand
There is global popularity of Thai tourism and culture, as well as the high quality of Thai cuisine and farm goods. Moreover, “made-in-Thailand” products, have gained a reputation for distinctiveness and quality in the global market. Thailand has effectively expanded its food industry to become the world’s 11th largest food exporter in 2019, second only to China in Asia. It is all due to a competent workforce and an agricultural sector. Both are built from a culture strongly anchored in agriculture wisdom and well-established supply systems.
Thai food entrepreneurs have demonstrated their strengths in the worldwide market. With exports performing well in 2020, despite a drop in worldwide demand due to the pandemic. Thai frozen and processed fruits and vegetables, beans, and soup powders were popular. It is because consumers seek quality food goods with a long shelf life during periods of restricted outdoor activities. This is the reason for placing them among products that stood up in the worldwide market.
Thailand’s thriving food industry employs more than four-fifths of indigenous raw resources. It accounts for one-fourth of the country’s industrial gross domestic product. Thailand’s strong position in the global food supply chain is due to its people’s strength and the country’s endowment of vast agricultural plantations. Other factors are the diversity of agricultural products, a well-established agri-food industry, and a geographic location at the heart of the ASEAN region.
Future Development in Food Industry in Thailand
The Thai government is now undertaking a medium-term plan to expand the Thai food sector. It has the goal of increasing the economic value of local food and agricultural products for local economic development. It also aims in establishing Thailand as one of the top 10 food exporters in the world. Thailand’s efforts will also contribute to addressing food insecurity in some countries. This has been highlighted by the COVID-19 epidemic.
The Thai government has designated “Future Food” as a crucial economic driving engine. It cites a combination of a passionate new generation of food producers, digitalization, and food technology. They are the factors to lift Thailand’s position in this exciting new industry to a worldwide level.
Building new entrepreneurs, scaling inventions, utilising online marketing channels is the government’s focus. Enhancing the ease of doing business are all part of the government’s food development agenda.
Government agencies are assisting Thai farmers by promoting the implementation of Agri-tech, such as automation and robots. It is also promoting AI (Artificial Intelligence), IoT (Internet of Things), and plant factories, to boost production and reduce operating costs.
Thailand’s policy of streamlining its digital databases and the operations of all of its agencies, as ordered by a 2019 law. This will further strengthen Thailand’s position as one of the most attractive sites for food investment.
Thai Government Mentorship for Food Industry
Thailand’s government wants to be a major player in the worldwide “Future Food” market. It is a new type of food that is both functional and unique. It often involves R&D and technology-enabled manufacturing processes and services. Because the food industry is driven by ideas, with the right mentors and investment, can be turned into a viable business model. Thailand has seen the emergence of a slew of new home-grown entrepreneurs launching food innovations. It incorporates the latest food tech and agri-tech in startups that cater to a wide range of consumer demands.
Batch-II acceleration is now underway at “SPACE-F”, Thailand’s first global food tech company incubator and accelerator. SPACE-F is run by the National Innovation Agency, Mahidol University, and Thai multinational food conglomerates. It aims to provide a platform for promising entrepreneurs to receive mentorship and guidance from corporations, venture capital firms, corporate venture capital firms, and government agencies. It is in order to help them scale up their food tech startups to global success.
Since the program’s inception in 2019, four food-tech firms have received funding to help them grow up their businesses, out of a total of 34 participants. Sesame milk, duckweed protein, cricket protein, a biodegradable fruit coating solution, and a sensor system for food quality control were among the local innovations on display at SPACE-F.
Local international food businesses have teamed up with startup funds. It is to invest in food-tech firms around the world, demonstrating their interest in the sector.
Board of Investment Promotions for the Food Industry
The Thailand Board of Investment has implemented tax incentives across the agri-food supply chain. BOI has a particular focus on technology in the form of R&D, productivity improvements, agri-tech, high-tech quality testing, plant factories, and sustainability certification.
The benefits are majorly on the basis of reduction of Corporate Income Tax. It includes the following:
- Manufacturing of medicinal food and food supplements is exempt from CIT for an eight-year period.
- Exemption from the CIT for 8 years if innovative technology is used in the grading, packaging, and storage of plants, vegetables, fruits, or flowers, such as a fruit ripeness sensor, radio frequency pest control, or nuclear magnetic resonance.
- CIT Exemption for the production of biomolecules and bioactive substances employing microorganisms, plant cells, or animal cells over an eight-year period.
- Exemption from the CIT for the seed sector and biotechnology-assisted plant, animal, and microbe breeding for an eight-year period.
- Manufacturing of oil or fat from plants or animals is eligible for a 5-year CIT exemption (except soybean).
- Manufacturing of food, beverage, and seasoning ingredients, except alcoholic beverages, caffeinated drinks, bakery items, and candies, is eligible for a 5-year CIT exemption.
- Smart farming solutions, such as the use of sensors, drones, or greenhouses, are eligible for a 5-year CIT exemption.
- Investment in plant manufacturing is eligible for a 5-year CIT exemption.
- For the manufacture of animal feeds that meet food safety requirements such as ISO 22000, a 5-year CIT exemption is available.
Your Take!
The Royal Thai Government and Board of Investment have the vision to boost the “Future Food” Industry in Thailand. This situation can be of great importance for foreign investors like you who are willing to invest in Thailand.
To take advantage of the tax-exemption and reduction schemes and receive the proper value for your investment, you need a trusted counsel. Mail us at [email protected] for guidance and assistance to invest in the food industry of Thailand.
