Thailand aims to become the world's kitchen

May 27, 2016, 10:45 AM EDT
Thai seafood.
(Source: Chris Feser/flickr)

On Friday Thailand launched Food Innopolis, an innovation center aimed at making the country "the kitchen of the world." The new initiative will “develop foods of the future and bio–based industries to keep competitiveness and enhance the entire value chain from soil to waste," said Deputy P.M. Somkid Jatusripitak. "Thailand will also be looking at functional foods to meet specific requirements for the elderly, athletes or patients, with supporting innovations for packaging, information technology and logistics as well as research and development into food ingredients and additives," he added.

Thailand’s food industry is a major driver of the economy, worth $26 billion in 2015. It accounted for 12.3% of total exports and 6.7% of the country’s GDP. Currently, about 45% of Thai food exports are unprocessed raw materials. However, that percentage should start declining, as Food Innopolis could accelerate the country’s adoption of more value-added innovation.

The initiative’s prominent stakeholders -- including 13 food companies, 12 universities, and 9 government agencies -- will collaborate via numerous public-private partnerships. Once the hub is up and running, the government expects food exports to reach and perhaps even exceed this year's 10% growth target.

Food Innopolis is the first of 10 high-priority “clusters” in strategic areas for which the government wants to increase investment. They have numerous perks, including full corporate income tax exemption for eight years followed by a 50% reduction for five years, along with tariff waivers for imported machinery. In November the Thai Cabinet approved a $280 million fund to support the clusters, but plenty of firms are investing their own resources as well.

For example, Thai daily The Nation wrote:

Vantanee Seang-U-Tai, managing director of Lucky Union Foods, said the company would invest about Bt20 million [$560,000] for quality and product development this year, as well as building a new laboratory to create new products under the innovation-promotion plan. With strong demand for Thai food and trust in quality, while the problem of illegal, unreported and unregulated (IUU) fishery practices has been declining, Lucky Union Foods expects 20-per-cent revenue growth to Bt1.6 billion [$44.83 million] this year.

Likewise, processed seafood products exporter Smile Heart Foods forecasts a 20% growth in its exports this year. The participating firm intends to automate some of its production line and adopt new technology to save on labor costs. It will also invest in R&D to produce healthier food as consumer concerns over obesity and other health concerns keep rising.

On an ending note, the timing of Food Innopolis’ debut is ideal, as Thailand hosts THAIFEX-World of Food Asia 2016 over the weekend. (The major international exhibition is expected to generate $252 million in sales this year, $28 million more than last year.) Thai food is only going to get more popular.