Diversification of supply chains to create opportunities but will require companies to be flexible on factors including land selection
The next decade will accelerate shifting supply chains whereby manufacturing and production locations will diversify to multiple locations across Thailand, Southeast Asia and India. According to JLL, (NYSE: JLL) markets like Thailand stand to be net beneficiaries of companies diversifying manufacturing capabilities to complement existing bases in China, however, companies will need to be flexible when considering locations and funding options to take advantage of volatility in supply chains.
Over the past few years, companies have begun exploring the relocation of manufacturing outside of China. In Asia Pacific, this near/re/friend shoring trend has resulted in the China+1 strategy where companies add additional manufacturing bases outside of China to hedge against supply chain disruptions by reducing reliance on a single country.
"Thailand has emerged as a prime investment destination in the supply chain reformation from China, garnering substantial investment across key industrial clusters, particularly in the electrical and electronics as well as electric vehicle sectors. This comes on the heels of a robust 2023, during which Thailand achieved its highest industrial land sales in the past 17 years,” says Michael Glancy, Country Head of Jones Lang LaSalle (Thailand) Limited (JLL).
Glancy also highlights the importance of government policies and competitive incentives in attracting foreign direct investment to targeted S-Curve industries. Thailand's proactive measures, alongside with its favourable business climate and skilled workforce have played a key role in sustaining the current momentum throughout 2024.
Over the past few years, companies have begun exploring the relocation of manufacturing outside of China. In Asia Pacific, this near/re/friend shoring trend has resulted in the China+1 strategy where companies add additional manufacturing bases outside of China to hedge against supply chain disruptions by reducing reliance on a single country.
"Thailand has emerged as a prime investment destination in the supply chain reformation from China, garnering substantial investment across key industrial clusters, particularly in the electrical and electronics as well as electric vehicle sectors. This comes on the heels of a robust 2023, during which Thailand achieved its highest industrial land sales in the past 17 years,” says Michael Glancy, Country Head of Jones Lang LaSalle (Thailand) Limited (JLL).
Glancy also highlights the importance of government policies and competitive incentives in attracting foreign direct investment to targeted S-Curve industries. Thailand's proactive measures, alongside with its favourable business climate and skilled workforce have played a key role in sustaining the current momentum throughout 2024.