The 2022 meetings of the Apec Business Advisory Council (Abac), which highlights the bio-, circular and green (BCG) economic model, are prompting Thailand to gear up for advanced technologies and environmentally friendly businesses.
The Thai government introduced BCG as a new path for national economic development a few years before it was listed on the agenda for the four Abac meetings, held as part of the 2022 Asia-Pacific Economic Cooperation (Apec) summit, hosted by Thailand later this year.
Since early last year, BCG has been high on the Thai national agenda directing the policies of many state agencies, including the Industry and Energy ministries.
Three concepts grouped under one umbrella, a bio-economy, circular economy and green economy have different emphases, but share the same objective to encourage businesses to devise ways to add value to their products and services through manufacturing that has no, or minimal, impact on the environment.
The government is determined to use BCG to fuel the domestic economy, together with a push for advanced technologies, including biotechnology and pharmaceutical technology, which are increasingly important following the outbreak of African swine fever in Thai pig farms.
INVESTMENT BOOST
Authorities are planning more tax incentive packages to stimulate investments in BCG projects, following growth in BCG economic development last year.
Both foreign and Thai investors are encouraged to invest in BCG projects as they align with a global trend in promoting environmentally friendly industries to reduce greenhouse gas emissions.
"The government wants to see manufacturers expand their investments in Thailand, especially in the agricultural industry, which is being promoted to help farmers earn more money through value-added product development," said Industry Minister Suriya Jungrungreangkit.
BCG investment projects are expected to generate up to 130 billion baht in economic value for Thailand in the future, according to the ministry's estimate.
In addition to attractive investment privilege packages, the ministry intends to develop the BCG economy through conducting more R&D projects, giving financial support to business operators, enhancing the skills of workers and setting up new e-commerce platforms to facilitate sales.
According to the ministry, among the prominent BCG projects are some involving the bio-economy, with investment value worth more than 10 billion baht. They include a polylactic acid (PLA) technology project in Rayong, Thailand's first biochemical complex in Nakhon Sawan, and the Palm Biocomplex project in Chon Buri.
PLA is a compostable biopolymer that can be used in a variety of applications including coffee capsules and food packaging. This biopolymer is made from renewable sources such as corn starch or sugar cane.
Product development based on PLA technology can benefit the agricultural sector because it uses farm products as raw materials.
The ministry expects bio-economy projects will help Thailand achieve its goal to become the "Bio Hub of Asean" by 2027.
SIGNIFICANT GROWTH
The Thai Board of Investment (BoI) reported investment value in BCG project proposals last year soared by 123% year-on-year to 152 billion baht. The board expects the amount to keep growing.
Duangjai Asawachintachit, secretary-general of the BoI, said she is confident project numbers and their value will continue to increase because BCG is a global trend and is listed on the national agenda.
The Thai government has joined the international community in adopting more environmentally friendly measures with an aim to reduce carbon dioxide emissions, she said.
Since 2015, more than 2,800 projects have been granted investment incentive packages by the BoI.
The most popular BCG segment was renewable energy development and waste-to-energy power plant projects, according to a BoI report released last year. Second on the list was food additives and ingredients using high technology, followed by green polymers and chemical products, recycled agricultural raw materials and natural rubber.
The BoI expects BCG investments will account for 25% of GDP in five years.
AVOIDING BARRIERS
BCG manufacturing can be used as a preventive measure against new international rules dealing with products that do not meet environmental standards, said Kriengkrai Thiennukul, chairman of the Federation of Thai Industries.
Climate change, which results mainly from global warming, has prompted many countries to join global campaigns to reduce carbon dioxide. The EU plans to implement a Carbon Border Adjustment Mechanism, or CBAM, imposing charges on manufacturers that fail to adopt technology that benefits the world's climate.
Steel, aluminium, electricity generation, fertiliser and cement are five industries targeted by CBAM. Supply chains related to these businesses will be affected in the near future, said Mr Kriengkrai.
He urged Thai manufacturers to follow a carbon neutrality campaign or else their exports could be affected by new international trade rules.
Carbon neutrality refers to efforts to balance carbon dioxide emissions and absorption to reduce global warming.
POWER OF TECHNOLOGY
BCG, biotechnology and pharmaceutical technology share the same aim to support farmers, workers and entrepreneurs in the agricultural sector.
Sugar cane farmers and sugar manufacturers can use the bio-economy concept to promote the use of renewable resources as raw materials to produce energy, food and other value-added products.
This industry can use molasses to make ethanol and sell dry pulp residue from sugar cane as fuel to power plants, according to the Thai Sugar Millers Corporation, which urged the industry to look for new sources of revenue other than sugar manufacturing.
The government is pushing ahead with the Nakornsawan Bio Complex project, spanning 2,000 rai in Takhli district of Nakhon Sawan province, as it moves towards its goal of becoming the Asean Bio Hub.
The first phase of development calls for designing a sugar cane crushing unit with a daily capacity of 24,000 tonnes; an ethanol production plant with a daily capacity of 600,000 litres per day; a biomass power plant with a capacity of 85 megawatts; and steam output of 475 tonnes per hour.
In the livestock segment, a public-private study was initiated to develop a new pig vaccine.
The National Science and Technology Development Agency is working with Bioscience Animal Health Plc (BIS), an animal drug and vaccine provider, on the project. They aim to reduce imports of expensive animal vaccines.
"Thailand imports animal vaccines worth more than 7 billion baht a year and the value continues to grow because we are a base for agriculture and livestock production," said Thanawat Kongcharoensombat, veterinarian and chief executive of BIS.
The company believes the new pig vaccine will help farm owners reduce the cost of animal treatments.
"Animal vaccines and feed account for 70% of production costs, so if farm owners use vaccines that are made domestically, it will be good for them financially," said Mr Thanawat.
The animal vaccine market in Thailand has potential to grow because now only a small number of meat production companies, mostly large ones, can produce vaccines themselves, he said.
Mr Thanawat is confident Thailand can eventually become a hub of animal vaccines in Asean thanks to help from the government, R&D facilities and technology that can support the development of vaccines for many animals.
"The vaccines can be used for a wide variety of animals from livestock and pets to aquatic animals, so vaccine development promises good business prospects," he said.
The domestic livestock market, made up of both foreign and local food companies, has a value of around 33 billion baht a year.
The export market is a focus of BIS.
"We distribute 446 products, including drugs, vaccines and animal products, to customers in Thailand, Cambodia, Laos, Myanmar and Vietnam," said Mr Thanawat.
