Thailand is the gateway to the South-East Asian economic area: gigantic growth potential, an affordable manufacturing location, a smoothly functioning infrastructure, an extensive network of component suppliers, a liberal economic system, these are facts that indicate a profitable market to enter. Thailand, however, is simultaneously a challenge and an opportunity. At least, this is how Reiner Fries, Managing Director of the machine tool manufacturer Schwäbische Werkzeugmaschinenfabrik GmbH from Schramberg-Waldmössingen, sees it: “For our company, it will be of major importance in the future to grow concurrently as Thailand itself develops, and thus maintain our own position against our competitors.”
Reason enough for the entrepreneur to take part in the VDW’s Technology Symposium in Thailand. 14 front-ranking German machine tool manufacturers showcased their corporate capabilities and their product and service portfolios in Bangkok on 12 November 2014. 150 high-profile representatives of Thailand’s industrial sector, from the automotive industry and its component suppliers, the aviation and electrical engineering industries, the metalworking sector and mechanical engineering sector, plus tool and mould manufacturers, accepted the invitation extended by the VDW (German Machine Tool Builders’ Association).
The machine tool market in Thailand, particularly, is a fiercely contested one. Leading-edge technology from Germany faces stiff competition from affordable Asian machines, which dominate the market.
It’s precisely here that German entrepreneurs like Fries see an opportunity. With requirements for quality and productivity expected to tighten in the automotive industry and among its component suppliers, as well as in the electrical engineering sector, German vendors will be particularly well placed to establish themselves as a permanent presence on Thailand’s market. Schwäbische Werkzeugmaschinenfabrik has already responded to this opportunity, and is represented in Thailand with a service partner experienced in the products concerned.
Thailand is one of the biggest markets for machine tools
“In 2013, with around 2.5 million vehicles produced, Thailand was the world’s ninth-biggest manufacturing location for automobiles,” explained Klaus-Peter Kuhnmünch, who at the VDW is responsible for the German technology symposia. This is why customers from the automotive industry and its component suppliers were particularly targeted for this event. In parallel to the country’s economic upturn, the local machine tool market has also developed most impressively. In the past few years, Thailand’s imports of machine tools have grown by a breath-taking 88 per cent to reach 2.4 billion euros. This means the country is the world’s fourth-largest importer of machine tools. From the German machine tool industry’s viewpoint, Thailand has likewise in the past few years gained significantly in perceived importance, and continues to justify optimism for the future.
Wullop Liwiwathanapornchai, a representative of Thailand’s Ministry of Industry, views this development as highly auspicious. “The symposium comes at precisely the right time, since Thailand’s industrialisation is steadily advancing. In order to drive this process successfully forward, particularly in the automotive industry, our companies need high-tech machines from Germany.”
A thrust to challenge Japan’s domination of the market
For years now, the market in Thailand has been significantly dominated by Japanese machine tool manufacturers. For them, Thailand occupies a special status, since the Japanese automotive industry is strongly positioned there. In 2013, Japan accounted for 57 per cent of Thailand’s entire machine tool imports, followed by vendors from Asia and the USA. German manufacturers ranked 6th, with a market share of 3 per cent. This dominance of Japan is something the Germans will have to challenge, and fly the flag more vigorously in Thailand than hitherto.
How the market position is to be sustainably improved is outlined by Andrew Parkin, Managing Director of Heller Asia: “Despite Japan’s strong position on the market, we are confident that with our own highly qualified workforces and our good service support capabilities we can gain more ground here in Thailand. Our goal is to further reinforce and steadily expand our market share as a can-do vendor of holistic solutions for metal-cutting applications.”
German machine tool industry with powerful allies
The symposium was organised on the spot in conjunction with the German-Thai Chamber of Industry and Commerce, and supported by prestigious local institutions from the industrial sector and the research community. It was being held in Thailand for what is already the second time, after 2010, and thus underlines the country’s importance as one of the major industrialised nations in South-East Asia. The German side was represented by the following companies: Alzmetall, Emag, FFG-Werke, Gleason-Pfauter, Heckert, Heller, Index, Mikron, Profiroll, Samag, Siemens, Schwäbische Werkzeugmaschinen, Trumpf and United Grinding.
Dr. Willi Nef, Deputy Sales Manager at Mikron GmbH in Rottweil, was participating in the symposium for the first time, and this is his verdict: “The event offers an ideal platform for familiarising yourself with the situational complexities of the local market, but also for exchanging news and views with your German counterparts, who are facing similar challenges. The matchmaking organised beforehand with the local customers was very helpful for clearing up open questions and making some initial business contacts.”
Jörg Buck, Executive Director of the German-Thai Chamber of Industry and Commerce, concurs: “The very good attendance at the VDW’s symposium shows that the topic of ‘Innovations in Production Technology’ in Thailand is in tune with contemporary concerns. The kingdom will in future, too, be prioritising a high-tech strategy, encouraging further automation of the traditionally strong domestic component supplier sector.” The enthusiastic response from Thailand’s trade associations and entrepreneurs has shown that there is keen interest in German technology. The symposium laid a good foundation for expanding what are in any case good sales opportunities for the German machine tool industry in Thailand, said Buck.
Finally, Kuhnmünch from the VDW pointed out that German manufacturers are approaching the Thai market with a long-termist strategy. “We are confident that German manufacturers, thanks to their long years of experience in the international automotive industry and among component suppliers, can be dependable partners in upgrading and expanding Thailand’s industrial production capabilities,” he stressed. The VDW is emphatically supportive of this thrust, and is available as a contact point for prospective customers from Thailand.
Further information from Klaus-Peter Kuhnmünch, VDW, Tel. +49 69 756081-37, [email protected].
Background:
Since 2003, the VDW has been organising German technology symposia in important growth markets. They are designed to support the German machine tool industry in penetrating these markets, showcasing the sector’s competence and performative capabilities to users in the country concerned. So far, symposia have been held in Brazil, China, India, Mexico, Poland, Romania, Russia, Thailand, Turkey and South Korea. In line with sustainability thinking, the symposia are repeated at defined intervals.
Pictures:
Klaus-Peter Kuhnmünch, Manager General Affairs in VDW (German Machine Tool Builders´ Association), Frankfurt am Main
(Source: VDW)
Official Opening Ceremony of the Technology Symposium of the VDW in Thailand: 150 high-profile industry representatives received insight into the product portfolio of German Machine Tool Manufacturers.
(Source: AHK Thailand)
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