Business Partners in Thailand

Thailand is on the road to recovery. The kingdom needs foreign investment. This month's column is dedicated to foreigners who visit Thailand searching for business partners. I will try to provide some tips on how to be more successful in arranging partners.

Find the Joint Venture Partner or Agent/Distributor

If you have product or service that want to market in Thailand by Joint Venture (JV) or by appointing an Agent/Distributor, here are some tips that might help you:

Where to find successful business people

Now is the perfect time to look for successful business people. Because this is a tough time for most people, anyone who is not badly affected by the currency fluctuations or economic turmoil must have really done something right in the past.

For example, those who fixed their Foreign Exchange rates before the Thai Baht depreciated are not damaged by the currency crisis. You may chat with the foreign banks who might have this kind of customer. Usually, Foreign Bank Associations in Bangkok have a regular luncheon function once a month. If you get the chance to attend such a function, it will be worthwhile. You may get further information from your bank representative about the luncheon. Your bank representative may also be able to identify the prospects for you. You should ask for good credit performance candidates.

Another example are organizations which did not invest using other people's money (investment made with their own cash). They are in better shape today. They are also have good cash flow in hand which means that they have strong financial fundamentals for the future.

Other good prospects are those doing business related to exports from Thailand. These are among the few sectors that are benefitting from the current currency situation. Agricultural Exporters or Food Exporters are also in good condition.

Businesses that do business up-stream or down-stream to the above sectors are also good prospects. Companies that provide products or services to exporters, the agricultural and food exporters are less impacted than other industries.

You can find out more informal information about these prospects from Trade Associations like the Thai Chamber of Commerce, American Chamber of Commerce, Industrial Federation of Thailand or even the Board of Investment (BOI). Please feel free to contact me if you like to have specific source.

Referral prospects

As I mentioned in December's column, Thais rely heavily on relationships. Referral is a process that Thais are familiar with. If your own product or service is not a big name like GE, Ericsson, or Honda, you may find it difficult to locate a good business partner, since the "good guys" always look for the high exposure brand names. However, you can work around this barrier by using the referral approach. Thais are willing to discuss the business opportunity with foreigners who have a good recommendation from someone they know. In this case, here are some sources that might be able to refer you to good Thai prospects;

• If you come from Sweden, get a recommendation from existing Swedish Executives or Thai Executives who work in Swedish firms like Volvo, Ericsson, or Electrolux.
• Your embassy.
• Your bank representative in Thailand.
• Your suppliers or vendors who have business in Thailand.
• Your direct customers who have bought products/services from you in the past.
• Your legal adviser.
• Your accounting consultant.

After you get a recommendation try to set up an informal meeting first. Let both parties get to know one another a little bit. The formal session should be arranged afterwards.

Kriengsak Niratpattanasai
DBS Thai Danu Bank, Bangkok, Thailand