Type of BOI for Producers of industrial chemical products
Producers of industrial chemical products
Thailand’s large chemical industry is among the country’s most vibrant sectors, playing a significant role in other sectors such as food processing, plastics, textiles, automotive, pharmaceuticals, and several others. As a result of Thailand’s skilled workforce and world-class infrastructure, several multinational corporations have poured billions of Dollars’ worth of investment into the country. Thailand’s chemical industry can be categorized in two ways: producers of basic chemicals used as raw materials and producers of finished goods sold to consumers. This particular section pertains to the production of chemicals used for industrial purposes, namely fertilizer production, plastics, and fractional distillation. Given the importance of this industry, the Thai government has provided incentives to foreign investors seeking to participate in large-scale projects in this sector through privileges given by the Board of Investment.
- The production of consumer chemical products, construction chemicals, and substances that contribute to global warming and other negative externalities will not be eligible for promotion.
- Projects with process that involve mixing, dilution, or phase transition will not be promoted by the Board.
Production of eco-friendly chemicals and polymers
With concerns about global warming and environmental degradation, the importance of eco-friendly materials has become paramount in all industries around the world. This is certainly the case in Thailand where corporations, including those in the chemicals industry, are becoming increasingly conscious of their carbon footprint. The Thai government, through the Board of Investment, has therefore encouraged investment into large-scale projects involving the production of eco-friendly chemicals and polymers in order to bolster Thailand’s position as a sustainable producer of chemical materials.
- Producers of eco-friendly chemicals and polymers are given A2 privileges. The production of these chemicals must be sustainable without negative impacts on the environment. They must also be certified and proven to be made with renewable or biodegradable sources. Moreover, products must be assessed using internationally-accepted standards such as the Life Cycle Assessment before being fully operational.
- Projects that only produce eco-friendly polymers are eligible for A3 privileges. They must involve plastic forming or coating processes using eco-friendly plastics or polymers.
Refinement of oil, petrochemicals, and polymers
Oil refining is a large, technology-driven industry that requires a large amount of capital in order to take advantage of economies of scale. While barriers of entry are high, the Thai government nonetheless welcomes investments into projects in this field and provides incentives for qualified projects through the Board of Investment. Refineries can be split into two broad categories: simple refineries, which distills or separates various oil products from crude oil, and complex refineries, which incorporate cracking units to their processes and use more complex machinery. The Board also highlights the production of polymers as a promoted activity.
- Projects where oil refineries are established will be granted B1 privileges.
- The Board will grant A3 privileges to those involved with manufacturing petrochemicals.
- Specialty polymers or specialty chemicals will be given A2 privileges by the Board.
Production of plastic products for industrial goods
Thailand is currently in the process of securing its role as a hub for the production of plastics, with many players in the industry placing emphasis on the use and production of eco-friendly products and materials. The plastics industry is among Thailand’s largest business sectors, with plastics being used in a number of products including furniture and packaging. This particular activity involves the production of plastic products used for industrial purposes. This can include clamps, conveyor belt slats, protective housing for robots, and plastic sheets for heat or moisture resistance. In an effort to bolster this industry, the Board of Investment provides privileges to investors seeking to participate in large-scale projects in this sector.
- Projects involved in this sector must have a plastic forming process
- The Board may also require producers in this field to comply with international standards regarding sustainability and environmentally-friendly production processes.
Production of plastic packages with special properties
Thailand is currently in the process of securing its role as a hub for the production of plastics, with many players in the industry placing emphasis on the use and production of eco-friendly products and materials. The plastics industry is among Thailand’s largest business sectors, with plastics being used in a number of products including furniture and packaging. The Board categorizes this sector into three: producers of multi-layered plastic packaging, aseptic plastic packaging, and antistatic plastics packaging. In an effort to bolster this industry, the Board of Investment provides privileges to investors seeking to participate in large-scale projects in this sector.
- Producers of multi-layered plastic packaging must integrate at least 3 layers of plastic, particularly those that involve a co-extrusion process.
- Manufacturers of aseptic plastic packaging must have an ISO 14611 level 7, Federal Standard 209 E Class 10000, or any other equivalent certification within 2 years after the project starts operations.
- Projects involved with the production of antistatic plastics packaging must be certified with an ISO 14611 level 7, Federal Standard 209 E Class 10000, or any other equivalent certification within 2 years after the project starts operations.
Production of plastics from recycled plastic
Thailand is currently in the process of securing its role as a hub for the production of plastics, with many players in the industry placing emphasis on the use and production of eco-friendly products and materials. The plastics industry is among Thailand’s largest business sectors, with plastics being used in a number of products including furniture and packaging. In order to encourage a shift towards more sustainable and environmentally-friendly practices, the Board of Investment has provided privileges for large-scale investment into projects involving the production of plastics from plastic materials that have been recycled.
- Plastic forming processes must only involve recycled plastics that have been sourced locally.
Manufacturing pharmaceutical ingredients
This refers to the production of products or materials used for making finished goods sold to consumers or medical facilities. This can include manufacturing active ingredients, supporting ingredients, or creating special techniques used to change the molecular structures of existing compounds which would require significant investments into advanced technology and innovation. The Thai government, through the Board of Investment, provides incentives to investors seeking to invest in large-scale projects involving the production of pharmaceutical ingredients.
- Project must be involved in the production of active, raw materials, or active pharmaceutical ingredients.
Production of medicines
Thailand has a robust medical tourism industry that is not only reliant on medical facilities, but also on medicines used to treat a number of ailments. This can include generic over-the-counter drugs or specialized prescription drugs for more severe illnesses that can either be sold to consumers or medical facilities. As an auxiliary sector to Thailand’s robust medical industry, the production of medicines is a key industry that the government wishes to promote not only to expand domestic capacity, but also to promote the country as a source of medical products. The Board of Investment therefore provides investors in large-scale projects with a number of privileges
- Producers of targeted or specialized medicines, which will be provided A2 privileges, must target specific ailments listed by the Ministry of Public Health when applying for promotion by the Board. They must also be GMP-certified in accordance with PIC/S guidelines within 2 years following the start of the project’s operations.
- Producers of conventional medicines must be GMP-certified in accordance with PIC/S guidelines within 2 years following the start of the project’s operations. Projects engaging in this activity are eligible for A3 privileges.
Production of fundamental fertilizer chemicals
Chemical fertilizers, either manufactured or synthesized through chemical processes, come in various forms and types, but are nonetheless split into three types: straight fertilizers, which usually only contain one element such as potassium; mixed fertilizers which contain a mix of two or three elements; and compound fertilizers containing two of the three major compounds found in fertilizers which have been chemically fused into one compound. As a significant contributor to Thailand’s agricultural sector, the Thai government has endorsed the production fertilizer chemicals to incentivize investors into participating in large-scale
- The Board will require projects to present processes involved in the production of fertilizer chemicals during the application phase.
Production of pulp or paper
The production of pulp, paper, and print have played significant roles in Thailand’s economic growth, providing not only crucial materials for other industries but also a substitute for the importation of such materials. On top of industries such as the production of hygienic products and paper for stationary use, pulp and paper are also used as raw materials for packaging products and labels. The Thai government has therefore provided projects engaged in these activities with a number of benefits through the Board of Investment. These activities are primarily relevant to the production of paper for hygienic paper or paper, specialty pulp, or specialty paper.
- The production of hygienic pulp or hygienic paper are given A2 privileges by the Board. Producers are required to obtain either an ISO 14611 level 5 certification, a Federal Standard 209 E Class 100, or any equivalent international standard within two years of full operation.
- The production of specialty pulp or paper will be eligible for A3 privileges. Producers must acquire relevant standards such as a GMP or Food Grade within two years of full operation.
Production of paper articles
The production of pulp, paper, and print have played significant roles in Thailand’s economic growth, providing not only crucial materials for other industries but also a substitute for the importation of such materials. This activity pertains to the production of finished goods or supplementary products made from pulp or paper such as paper containers, high performance paper products, or hygiene products. The Thai government has therefore provided projects engaged in these activities with a number of benefits through the Board of Investment. All activities which constitute the production of paper articles are eligible for A4 privileges.
- Projects engaged with the production of goods derived from hygienic paper or pulp must have a hygienic production process and acquire relevant certifications such as the GMP or a Food Grade within two years following the start of operations.
- Those producing paper containers coated with bio-plastics must undergo a product coating process using biodegradable plastic.
- The production of high-performance paper products, such as those used for packages or labels, must undergo an engineering design process which includes building special load-bearing capacity or shock-proof capacity.
Production of printed matter
Thailand’s print sector is a major industry that serves as an auxiliary to many other markets, namely print media, packaging, and labelling. Exporting $1.76 billion in 2017, Thailand’s print sector is undoubtedly a significant contributor to the Thai economy and has attracted a number of multinational entities to the Kingdom. However, while the industry plays a significant role in the Thai economy, Thailand nonetheless imports at approximately $1.4 billion worth of print material, presenting a significant opportunity for those in the print industry to capitalize on the country’s demand for printed matter. In order to stimulate this, the Thai government has incentivized those involved in the production of printed matter through privileges given by the Board of Investment.
- The production of digital printed matter will be eligible for A3 privileges.
- The production of regular printed matter will be eligible for B1 privileges.
- Manufacturers must ensure that their printing a design process involves the use of digital media software.
Production of body care products
Beauty and personal care are among the fastest growing consumer goods in Thailand, growing at a significantly higher rate than the country’s GDP of 6.6% between 2015 and 2018. This is supplemented by both rising disposable incomes and inbound tourism, particularly from China and other countries in the region. As a result of this, several large multinational corporations, specifically those involved with FMCGs, have established operations in Thailand, not only due to local demand, but also a skilled workforce and world-class infrastructure which has made Thailand a production hub where many goods are exported to other markets. The Thai government has therefore provided incentives to projects involved in these activities, particularly for those producing soaps, shampoos, tooth paste, and other cosmetics. These activities are eligible for A2 privileges.
- Factories must be established in a Special Economic Zone of any of the ‘model cities’ promoted by the Thai government which include Nong Chik, Pattani Province; Betong, Yala Province; and Sungai Kolok, Narathiwat Province
- Applications must be made before 30th December 2020.