5 minute read
Thailand’s chemical and petrochemical industry: Building a high-value future
Thailand Board of Investment (BOI)
GLOBAL TRENDS AND INDUSTRY OUTLOOK
The global chemical sector is entering a phase of volatility, overcapacity, and rapid technological change. Commodity production alone is no longer enough to secure competitiveness. Leading producers are shifting toward specialty chemicals, biobased products, and advanced materials to not only meet evolving demand, but also sustainability pressures and tighter regulations.
Over the past year, the global petrochemicals industry has been transitioning, with regional differences increasingly determining success. Valued at US$620 billion in 2023, it is forecast to grow at a CAGR of 7.3 per cent through 2030.(1) According to the International Energy Agency (IEA), petrochemicals and their derivatives already account for around 14 per cent of global oil consumption and 8 per cent of gas consumption. By 2030, this share is projected to rise to over 33 per cent of oil and 15per cent of gas, and by 2050 to more than 50 per cent and 19 per cent, respectively.(2)
Thailand mirrors this global transformation. The Map Ta Phut cluster is home to one of the world’s top 20 largest petrochemical industries, and Thai producers are pivoting toward innovation-driven segments. Bioplastics, specialty polymers, and pharmaceutical chemicals are central to investment strategies, alongside petrochemicals and downstream applications such as packaging, textiles, automotive, and electronics.
This transition is not only a defensive response but also an embrace of new opportunities. Rising demand in ASEAN markets, China, and beyond, has positioned Thailand as a reliable supplier, while abundant feedstock – from sugarcane and cassava to wood pulp – supports a thriving bio-economy.
FOUNDATION FOR FUTURE GROWTH
Over the past five decades, Thailand has transformed itself from a resource-dependent economy into a regional hub for chemicals, supported by a sophisticated petrochemical cluster, advanced infrastructure, and a growing base of international investors.
Investment momentum remains strong. In the first half of 2025 alone, Thailand attracted 172 new FDI projects related to the chemical and petrochemical industry, valued at US$ 844 million(3), a 12 per cent increase year-on-year. Today, as global dynamics evolve, Thailand is charting a course toward higher-value, more innovative, and sustainable chemical production.
THAILAND’S COMPETITIVE STRENGTHS
At the core of Thailand’s competitiveness is its well-integrated value chain. Domestic refineries supply naphtha to upstream producers, which generate basic chemicals for downstream manufacturers. Thailand’s ethylene production capacity – ranked 9th globally in 2021 – ensures efficiency, reduces import dependency, and strengthens the country’s role as a hub in global supply chains.
The Map Ta Phut Industrial Estate exemplifies these advantages. Hosting nearly 60 major petrochemical companies with an annual capacity of 37 million tonnes, this cluster delivers the highest economic output per employee among Thai industries. Its co-located refineries, steel plants, power stations, and chemical port, along with a third-phase port expansion adding terminals and bulk-liquid storage, all serve to boost logistics efficiency.
Thailand’s skilled workforce is another key asset. Over 125,000 employees work in chemicals, supported by 18,000 in upstream oil and gas. High productivity reflects technical expertise and operational efficiency, and complementing this is the nation’s strong logistics and connectivity network. Located at ASEAN’s crossroads, with 14 free-trade agreements and RCEP participation, Thailand offers privileged market access.
In addition, Thailand is advancing policies under the Bio-Circular-Green (BCG) economy model, encouraging sustainable practices and bio-based innovation, and aligning industrial growth with global climate goals.
SECTORAL OPPORTUNITIES
Petrochemicals remain the backbone of the industry, supplying olefins, aromatics, and polymers to domestic and regional markets. Despite cycles of overcapacity, returns remain healthy, with exports to China, ASEAN, and beyond.
Specialty chemicals and bioplastics are among the fastest-growing frontiers, and international leaders such as BASF, Covestro, Bayer, and Evonik have invested in Thailand, producing polyurethanes, engineering plastics, specialty films, and hydrogen peroxide. The fusion of local agricultural resources with cutting-edge technology supports sectors such as packaging, electronics, automotive, and medical devices.
Pharmaceutical chemicals present another high-potential area. While domestic production is currently concentrated on generic drugs, Thailand imports between US$3-4 billion annually in more advanced medicines. Under the National Economic and Social Development Plan (2023–2027), the government aims to foster advanced pharmaceutical production, making Thailand a regional hub and opening doors for German and European Investors.
THE BOI ADVANTAGE
The transformation of Thailand’s chemical industry is actively supported by the Board of Investment (BOI), which provides a comprehensive framework of tax and non-tax incentives designed to attract and sustain high-quality investment. In 2024 alone, it approved 224 foreign projects in chemicals and petrochemicals (US$1.8 billion) and 32 pharmaceutical projects (US$200 million).
Key incentives include:
• Corporate income tax exemptions of three to eight years for qualified projects.
• Import duty exemptions on machinery, raw materials, and essential inputs.
• Non-tax incentives, such as the right to own land, one stop service for visas and work permits, and free sourcing services.
These measures reduce risk, encourage R&D, and sustain Thailand’s position as one of Asia’s most attractive destinations for highquality investment.
CALL FOR STRATEGIC PARTNERSHIPS
Thailand’s chemical and petrochemical industry stands at an inflection point. The sector has proven resilient amid global headwinds, but future success depends on innovation, sustainability, and value-added production. For German companies and other global players, this is not merely an opportunity to access a dynamic domestic market, it’s a chance to integrate into a regional hub at the heart of Asia, to collaborate in building sustainable chemical solutions, and to benefit from a government committed to fostering high-quality growth.
As global value chains realign and demand for advanced materials accelerates, Thailand invites investors to join its next chapter –transforming challenges into opportunities and driving shared success in one of the world’s most vital industries.
Contact details:
Thailand Board of Investment (BOI)
Tel: +66 2 553 8111
---------Footnotes--------
https://www.krungsri.com/en/research/industry/industry-outlook/petrochemicals/petrochemicals/io/io-petrochemicals-2024-2026 2
https://www.grandviewresearch.com/sector-report/petrochhemicals-industry-data-book
THB 27,423 million, BOT exchange rate of 1 USD = 32.495 THB as of 1 September 2025.
