FDI Trends and Case Studies of Western Firms in Thailand
Explore Foreign Direct Investment (FDI) in Thailand through the OLI paradigm and case studies of Infineon, Sika, Ingredion, and Solvay.
SEMINAR THESIS · CHAIR FOR INTERNATIONAL MANAGEMENT
FDI of Western Companies in Thailand
Stylianos Kelidis
Student No. 18-108-399
Supervised by Prof. Dr. Dirk Morschett
Fribourg, 16th June 2026
Table of Contents
Introduction
FDI Trends in Thailand
Institutional & Regulatory Environment
Conceptual Framework of FDI
Case Studies of Western FDI in Thailand
Infineon Technologies AG
Sika AG
Ingredion Inc.
Solvay SA
Comparative Analysis
Prospects of FDI in Thailand
Conclusion
1. Introduction
<span style="font-weight: 500;">FDI has gained momentum</span> over the last half century — enabling market access, cost reduction, resource security & international footprint
<span style="font-weight: 500;">Thailand:</span> strategic location in Southeast Asia — major FDI destination in automotive, electronics, retail, food & services
<span style="font-weight: 500;">Western firms</span> have been present in the region for decades, contributing to Thailand's growth as a manufacturing powerhouse
Paper examines how western companies engage in FDI in Thailand through four case studies
2. FDI Trends in Thailand
FDI stock to GDP grew from 3% (1980) to over 10% (mid-90s); accumulated to 50% of GDP by 2017
2024: FDI inflows increased 31% → $11 billion (manufacturing, real estate, wholesale & retail)
Key western players: BMW, Continental, Bosch, Nestlé, Roche, Ford, TotalEnergies
Switzerland ranks among top 4 European FDI sources in Thailand (2024)
Greenfield investments dominate in high-value industries; cross-border M&A declining
Thailand: midstream manufacturing hub — automotive, electronics, semiconductors, food processing
Rising regional competition from Vietnam, Indonesia → need for strategic reform
3. Institutional & Regulatory Environment
Domestic Level
International Level
NESDC:
responsible for long-term national development planning & economic strategy (Thailand 4.0)
BOI (Board of Investment):
attracts & promotes FDI via tax incentives; guides investment process
Foreign Business Act (FBA):
restricts majority foreign ownership in several sectors
Foreign Business License (FBL):
required for >49% foreign ownership
ASEAN Economic Community:
trade liberalization, investment facilitation, regional integration
Free Trade Agreements:
16 agreements with 23 entities (as of 2026)
EU–Thailand FTA:
currently under negotiation (2026)
EFTA–Thailand FTA:
finalized in 2025 → competitive advantage for Switzerland
4. Conceptual Framework of FDI
Why Companies Invest Abroad (FDI Motives)
Market Seeking
Access new markets & customer base
Resource Seeking
Secure natural resources & competitive advantage
Efficiency Seeking
Lower costs, higher productivity, economies of scale
Follow-the-Leader
Compete against industry leaders abroad
Strategic Asset
Access technology networks & innovation
OLI Paradigm (Dunning)
Ownership Advantage
Proprietary technology, brand, know-how
Location Advantage
Host country conditions (cost, institutions, market)
Internalization Advantage
Control operations rather than licensing
FDI = equity ownership >10%
Forms: Greenfield · Brownfield/Acquisition · Joint Venture
5. Case Studies of Western FDI in Thailand
Four western companies — four different investment strategies
Infineon Technologies AG
Germany
Semiconductors
Greenfield WOS
Sika AG
Switzerland
Construction Chemicals
Greenfield WOS
Ingredion Inc.
USA
Food Ingredients
Brownfield/Acquisition WOS
Solvay SA
Belgium
Chemicals/PVC
Joint Venture (49%)
5.1 Infineon Technologies AG
Germany · Semiconductors · Greenfield · WOS
Global leader in semiconductor design & manufacturing
Revenue: ~€14.7 bn | 57,000+ employees
Core areas: automotive, green industrial power, connected secure systems
<strong style="font-weight: 600;">Jan 2025:</strong> $1.7 billion backend semiconductor fab in Samut Prakan, near Bangkok
<strong style="font-weight: 600;">Operations:</strong> wafer sawing, assembly & testing
<strong style="font-weight: 600;">Operational:</strong> early 2026
Greenfield — wholly owned subsidiary (WOS)
Efficiency-seeking — economies of scale, cost optimization, ASEAN supply chain expansion
Strong <strong style="font-weight: 600;">O</strong> (semiconductor know-how), <strong style="font-weight: 600;">L</strong> (lower cost + BOI support), <strong style="font-weight: 600;">I</strong> (in-house value chain control)
Chapter 5 · Case Studies
5.2 Sika AG
Switzerland · Construction Chemicals · Greenfield · WOS
Leading Swiss B2B specialty construction chemicals company
CHF 11.2 bn net sales | 33,000+ employees | 102 countries
Gotthard Base Tunnel, Bangkok Metro Orange Line
$12 million — second factory in Saraburi, 100 km north of Bangkok
Present in Thailand since 1988; existing plant operating at capacity
25,000 m² facility producing 100,000 t/yr mortars + 65,000 t/yr concrete admixtures
Greenfield — wholly owned subsidiary (WOS)
Market-seeking — booming construction market, rapid urbanization, government infrastructure spend (CHF 100 bn, 2014–2021)
O (specialty chemicals expertise), L (construction boom + high demand), I (full quality & know-how control)
5.3 Ingredion Inc.
USA · Food Ingredients · Brownfield/Acquisition · WOS
Company Profile
American company transforming agricultural raw materials (corn, tapioca, rice) into specialty food ingredients
Net sales:
$7.2 bn | 11,000+ employees
Products:
Texture, sweetness, nutrition enhancement for food & beverages
The Investment
Aug 2016: acquisition of Sun Flour Industry Co. Ltd in Banglen, Thailand
$18 million — joins 3 other Ingredion sites in Thailand (presence since 1983)
Completed March 2017; employs 870+ people across Thai facilities
FDI Analysis
Brownfield — acquisition of existing Thai business assets (WOS)
Resource-seeking (rice starch, tapioca, agricultural raw materials) + Efficiency-seeking (supply chain scale)
O (R&D, food tech expertise), L (Thailand as agricultural powerhouse, ASEAN gateway), I (full production control)
Banglen site is leased — dependency on third-party property
5.4 Solvay SA
Belgium · Chemicals & PVC · Joint Venture · 49%
Company Profiles
Belgian MNC (founded 1863), chemicals/PVC/caustic soda, €4.3 bn sales, 8,400+ employees
(Charoen Pokphand): major Thai agro-industrial conglomerate, $17 bn revenue, 133,000+ employees
The Investment
Joint Venture → "Vinythai Co." at Map Ta Phut Industrial Estate, Rayong
$300 million | PVC materials for pipes, cables, floor tiles
Solvay: 49%, C.P.: 45%, minority Thai shareholders: 6%
Solvay divests stake to Japanese AGC for ~€435 million (portfolio restructuring away from PVC)
FDI Analysis
Joint Venture — limited to 49% by Thai FBA regulation at the time
Market-seeking (rapidly growing SE Asian plastic/construction demand)
Strategic asset (access to Solvay's PVC technology & know-how) + diversification
O (PVC expertise), L (surging SE Asian demand), I (local partner reduces institutional risk)
FDI is dynamic — interests may change → divestment possible
6. Comparative Analysis
Criteria
Infineon
Sika
Ingredion
Solvay
Origin & Year
Germany 2025
Switzerland 2016
United States 2016
Belgium 1988
Industry
Semiconductors
Construction Chemicals
Food Ingredients
Chemicals / PVC
FDI Type
Greenfield
Greenfield
Brownfield
Joint Venture
Ownership
WOS
WOS
WOS
49%
Main Motive
Efficiency-seeking
Market-seeking
Resource + Efficiency
Market-seeking
Investment Value
$1.7 bn
$12 m
$18 m
$300 m
All cases reflect Thailand's key strategic sectors (tech, construction, food, chemicals)
Greenfield/Brownfield WOS = high control; JV = medium control with local risk reduction
FDI motives vary by industry; rarely driven by a single factor
FDI is dynamic — Solvay's divestment shows long-term interests evolve
7. Prospects of FDI in Thailand
Thailand must transition from cost-based manufacturing toward high-skilled, value-driven & sustainable investments.
🖥
Digital Infrastructure
Data centers, cloud services, AI infrastructure & digital platforms
⚡
EVs & Next-Gen Automotive
Electric vehicles, batteries & components (Thailand's core strength)
🔬
Semiconductors & Electronics
High-tech manufacturing, global investment magnet
🌱
Green & Sustainable Industries
Renewable energy, low-carbon technologies
Thailand's Path Forward
Improve skilled labor, technological knowledge, transport & infrastructure
Strengthen industrial clusters (e.g., Eastern Economic Corridor — EEC)
Investment liberalization, regulatory flexibility, tax incentives
Bold reforms needed to stay competitive vs. Vietnam, Indonesia & other ASEAN rivals
8. Conclusion
Thailand is a strategically important, highly attractive FDI destination — driven by ASEAN membership, industrial base & BOI support
FDI type is shaped by industry, regulatory context & firm strategy:
high control, capital-intensive
efficiency via acquisition of existing assets
shared risk, regulatory compliance
The OLI Paradigm confirms FDI decisions across all four cases — ownership, location & internalization advantages align
FDI is not static — divestment (Solvay/Vinythai) shows strategies evolve with market dynamics
"Long-term success belongs not to those who avoid change, but to those who adapt most effectively."
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