Investment in Thailand: How to Prepare a Project


Investment in Thailand: How to to Prepare a Project


It is not every year that a company plans foreign investments, and the best “blueprints” cannot be adopted for a new project without risk. Planning the organization of a project carefully is decisive not only for the smooth running of the project. A lack of preparation inevitably leads to expensive, subsequent adjustments and delays in your production in Thailand and thus the return on investment.

The Sanet Group in Bangkok has been supporting foreign investments in Thailand for around 20 years, not seldom from the initial workshop and strategy finding to the start of production.

Thereby, it has proven itself time and again that the management pays full attention to the following planning principles:

  • Proactive communication of the project with all stakeholders
  • The proper composition of the project team
  • Agreed project and reporting rules.
  • Selecting and involving of external support

Our management consultants in Thailand explains these key criteria.

Find out here which services the Sanet Group offers for your investment and business in Thailand or for Western companies already based in Thailand:

Proactive communication of the project with stakeholders

Every space becomes filled with information. If you do not provide information yourself, the room will be filled with rumors.

When a business moves abroad, this usually does not trigger storms of enthusiasm among everyone involved.

Employees are worried about losing their jobs. Suppliers are concerned about whether they will lose some or even all business with a customer. Banks have concerns about co-financing the investment abroad, either directly or indirectly, without having access to buildings or machinery abroad as collateral. Finally, customers worry that quality or delivery times will suffer if production is relocated abroad.

For all these foreseeable concerns, it is important to develop an honest and transparent communication concept. Do not announce “blooming landscapes for all”. It is about developing an empathy for your partners’ concerns and being proactively open to them. Describe in concrete terms whether and how you will consider and address any such risks for stakeholders.

And remember: attempting to inform stakeholders only with or after the official announcement of your intentions will backfire on you. Stakeholders will repeatedly place their concerns in your path as roadblocks. And information that you do not provide will be filled with rumors by others. However, dealing with rumors is always more difficult than well-prepared communication.

No department heads in the project team!

The golden rule when forming the project team is to appoint a second-tier employee from each department or resort who is as motivated as possible to the project team.

Seemingly the obvious thing to do is to appoint the heads of all departments involved to the project team. Yet this is a mistake.

Department heads love it when the new subsidiary’s department is set up exactly like the one they formed in the parent company. All systems should be transferred 1:1. In this way, the department heads figure, they will retain extensive control, no one will dispute their leadership and a smooth operation will be guaranteed.

But far from it. They rarely admit what is guaranteed in this way: Not just the good, but beloved mistakes in the domestic organization are carried over 1:1 to the new plant! Familiar labor law, cultural and technical conditions are transferred to a faraway country and do not fit there. In the worst case, hot showers and fully insulated walls are designed and built for the factory building near the equator.

Of almost greater importance is the project team’s self-perception. It is not its mission to ensure that all the characteristics of the parent company will be reflected in the new production facility.

The project team should rather see itself in the role of “service provider” for the new subsidiary and do everything it can to ensure that it can produce independently, in line with local requirements and therefore successfully.

Highly motivated team members from the “second row” of each department see the project as their own and often as a great opportunity to prove themselves. In the best-case scenario, one or the other team member enjoys this project so much that they gladly join the management team of the new plant afterwards. This would be the ideal scene for gaining both loyalty to the parent company and a loyal management team abroad.

Foreign investments in Asia are a top priority for the Executive!

As a rule, the CEO or “Boss” is not part of the operational project team. There is not enough time for this because other duties also call.

Consequently, the manager must set clear guidelines for the team. This will be done in a kick-off meeting, which the Boss himself will lead. He will set the following cornerstones:

  • He appoints the project manager. This person is granted time off for the project, reports directly to the boss or board of directors and recognizably enjoys the full trust of the management.
  • He now sets the rules for reporting. The members of the project team report solely to the team or the project manager. The latter in turn then reports to the boss or a board member.Under no circumstances the members of the project team must report to their line managers! Otherwise, one can be sure that the mentioned “special interests” of divisional managers will be brought back into the project team through the back door.Moreover, the management will then be flooded with “preventive warnings” from all the “naysayers”.
  • The boss then debates and sets the budget for the project team (not to be confused with the budget for the investment). The rules for business trips, operating expenses and external costs must be defined.
  • Finally, the management sets the reporting periods, milestones and exit points. The project manager should, however, always find open doors with the top management if he needs to obtain a decision or an opinion on important project steps.

The milestones and exit points determine at what time or at what project status a decision is to be made on the continuation, adaptation or exit from the project. Examples for the need of an exit or adjustments include e.g. determining the legal feasibility, deciding on the location, accepting, or rejecting investment promotions or the results of the construction tender.

Waiving external support on site is not a sign of self-confidence, but of an extremely high appetite for risk

The selection of external support is a matter for the manager or CEO. Consultants, such as the Sanet Asian Advisors, with their local team are the temporary “right hand” to the management. Therefore, the chemistry must be right and there must be trust.  To hire a consultant and then to mistrust his advice is a concept for failure and a waste of money.

Avoid local experts who presume to know more about your business and your products than you do as the business manager. That is neither their role nor meaningful advice. Nor will any local consultant interfere in the objectives or motives of your investment.

However, a consultant should understand all these matters very well in order to provide sound advice.

Ultimately, the external consultant should guide the project team to implement these objectives of the project efficiently and correctly in the specific investment country in legal, cultural and practical terms. In any case, he must be domiciled in the investment country, understand the business and negotiation culture and possess an excellent network, e.g., to the BOI in Thailand granting great investment promotions.

Sound project management must meet the following criteria:

  • A clearly entrepreneurial, not merely formal approach, which is particularly important for legal advice.
  • Long years of experience in active project management
  • Willingness to contribute to the implementation of the planning “hands-on” and not just with “good advice”.
  • A strong local supporting team that is also capable of dealing with authorities, business partners and service providers.
  • A clearly structured “menu” of tasks and responsibilities to be carried out in return for a fixed fee. Billing according to hourly rates should be the exception.

The Sanet Group in Bangkok supports investment in Thailand by project management, legal advice, BOI-Thailand’s investment promotions and by his recruitment agency in Thailand, CREATING CAREERS.