3 recurring themes learned about doing business in Thailand

3 recurring themes learned about doing business in Thailand

After speaking with three days’ worth of electronics manufacturers, here are some facts that keep getting repeated

BY JEFFREY BAUSCH

On my third day of touring Thailand’s electronics manufacturers, my group traveled to the Thai Microelectronics Center, Maxim Electronics, and Donaldson.

While it was interesting to hear about the best practices that each company uses to conduct its business here, I found myself more taken by three particular points I heard today — made by all of the companies visited — that were also stated on the other two days of the tour, and will likely be reinforced tomorrow on our last day here:

Talent, incentives, and location keep companies in Thailand.

These three facts are not only what draws companies to Thailand, they’re what help retain business here. The Thai general school system is reportedly very good at turning out a high level of trainable graduates, but it’s fast becoming the norm here to pursue a higher education upon general education graduation. As a result, Thailand is seeing more and more Engineer, Scientist , and Technician undergraduates who then either go to work for one of the local technology companies, or otherwise opt to study abroad. Regardless, though, as the younger generation continues to pursue higher education, the country’s talent pool continues to expand, which makes it easier for local companies to recruit and cultivate potential employees at a younger and younger age.

Additionally, the Thai government provides several tax benefits to companies that set up shop here. A few have admitted that it was this aid — like the tax-free zone along the country’s eastern seaboard which allows companies set-up here to import / export goods tax-free — that originally drew them to the country, but that, perhaps a bit more importantly, it’s the biggest reason why they choose to stay here.

Lastly, most companies that are set up in Thailand in one way or another support each other, whether it’s through developing manufacturing solutions or creating custom-made components; a lot of the work can be done right here — from concept and design to testing and manufacturing — all under the same flag. This is a huge convenience for companies, and something that really helps them save time and money.

Women make better fabricators

This was a particularly interesting thing to learn. My group noticed that, following a number of tours, the manufacturing floors were all highly populated with female employees. After probably the third or fourth time seeing this, we finally asked why and it ends up that in this particular area of the companies’ manufacturing process, women are preferred to men — with some operations employing 90% to 95% women in this roll.

The reason why is actually pretty simple: The work necessary for physically manufacturing electronics and technology requires smaller fingers, a higher level of dexterity, and tremendous patience. No offense to the men out there, myself included, but these are skills that the group typically lack.

There’s not much recruiting going on here either: Thai women actively seek these positions, while men tend to hold the title of engineer or technician, though the country’s female-friendly work culture is seeing the disparity in these numbers balance out a bit more.

HDD manufacturers are the main reason why Thailand is in a position to become a leader in technology manufacturing

As has been referenced numerous times by several companies, Seagate broke the ice here many years ago, and today it’s high-volume companies like Western Digital that keep the country at the forefront of electronics manufacturer’s minds.

Here’s a good for instance on why this is: Donaldson creates filters for Western Digital equipment. The company actually set up shop here for WD’s convenience (as well as a number of other businesses who use Donaldson filters, too), allowing the business to save — as an example — time and money with manufacturing and shipping their filters.

There are several other companies like Donaldson that made the decision to set up their business here, and while there were several other reasons given, such as tax incentives, local talent, and savings on cost, the one thing that all of the companies kept pointing out was that there was already an infrastructure set up because the country is home to world-renowned HDD manufactures. This, in turn, has made it remarkably simple for these manufacturers to come in and set up their own facility following the model of companies like WD. ■