Oregon companies build relationships on third annual trade mission to Bangkok.
BANGKOK— On day one of an Oregon trade mission to Bangkok, Kobsak Pootrakul, Minister Attached to the Office of the Prime Minister, ran a pickup line past executives of eight green technology companies. “China will stay with you for two years; India is a one night stand,” he riffed during a lunch meeting. “Come to Thailand; We’ll love you forever.”
On its third annual trade mission to Bangkok, Business Oregon, the state’s economic development agency, bet on that long-term relationship. Oregon’s cluster of green technology companies matches Thailand’s renewable energy ambitions, says the trip’s organizer, Business Oregon global trade specialist and Bangkok native Sunun Setboonsarng. The only U.S. state in town for the Association of Southeast Asian Nations (ASEAN) Sustainable Energy Week conference, Oregon was hoping for an edge on regional investment opportunities. As Nick Stanley, a Portland investment banker and honorary Thai Consul, put it, “if we don’t, California companies will.”
Over six days, the Oregon delegation braved the chaos of Bangkok traffic — a scrum of taxis, motorbikes toting everything from steel beams to propane tanks, and vendors weaving on foot between vehicles — to blaze through a series of business meetings, a trade show and informational sessions with Thai officials, the US Commercial Service and the American Chamber of Commerce.
Clark Aganon (left) of Powin Energy at the AmCham meeting, with Mark Wolf (right), and Judy Benn (center).
The specter of a trade war loomed. President Trump’s meetings with North Korean leader Kim Jong Un and Thai Prime Minister Prayuth Chan-ocha bode well for Southeast Asian commerce, but the same cannot be said of the president’s eagerness to slap tariffs on friends and enemies alike. China’s massive investment in renewables is another force rendering Thailand a promising, but uncertain destination for American business.
“I should have been here a long time ago,” says Dave Girard, a talkative salesman for the Peterson Pacific, a company that has closed deals on its massive wood chippers in Japan and South Korea. Girard’s comment followed an initial series of meetings with the Prime Minister’s aide and the Thai Chamber of Commerce, whose members include executives of the nation’s largest sugar and oil producers.
Others appeared discouraged. Thailand offers cheaper labor than China, and advanced manufacturing capabilities. The second largest economy in the ten-member ASEAN is eager to develop new technology and a stake in the global marketplace. Still, Hans van der Meer, an affable Dutchman who founded electric charging company EV Global, mused that the Thai Chamber was “out of tune” with the electric vehicle market. Prosper Portland clean technology liaison Pam Neal said the Thais seemed more fixated on China than Oregon.
Ever since King Rama II wrote to President James Monroe to establish a trade relationship 200 years ago, Thailand has continued to open up to American business. The nation of 69 million is Oregon’s 14th largest trading partner, with 2016 exports totaling $320 million. The United States recently removed Thailand from the arcane “Special 301” watch list of nations with inadequate intellectual property protections. Thailand climbed to 26th on the World Bank’s ranking of nations for “ease of doing business.”
In one meeting with the Board of Investment, essentially the Business Oregon of Thailand, dangled eye-popping incentives for foreign companies. Qualifying companies can land a 15-year tax holiday. A new SMART visa slashes paperwork for tech workers and other valuable employees. Clark Aganon, director of market development for Tualatin-based energy storage company Powin Energy, raved about the programs. Nyah Zarate, co-founder of electric motor research and development firm Continuous Solutions, agreed. “It’s amazing,” she said.
Bangkok's iconic sky train. Thailand's economic development plan emphasizes transportation, infrastructure and renewable energy.
Expats from the American Chamber of Commerce displayed less enthusiasm. Lake Oswego native and real estate developer Mark Wolf described his latest Bangkok-based venture, ProperDi, as “Zillow for Thailand.” Comparing the country to the United States 40 years ago, Wolf and other expats told the Oregon delegation the tech sector lacks momentum. Thais distrust American businesses unless they bridge the gap with a local partner. Regulations fill the books, AmCham Executive Director Judy Benn explained, but they are “arbitrarily enforced.” She added that, “the government doesn’t necessarily believe in a free and open market.” A case in point: The 57 state-owned enterprises include a coffee chain confusingly named Amazon, which competes with Starbucks. Political instability is another potential problem. In the past 80 years the country has weathered 12 successful and seven attempted coups.
“It’s a great market but not without its challenges,” said Greg Wong, a counselor who briefed the companies on behalf of the U.S. Commercial Service, a federal agency that helps American companies enter new global markets. “You can see from the World Bank rankings Thailand doesn’t do well on transparency, corruption and some of their customs processes.”
The true test arrived on day three, the first of ASEAN Sustainable Energy Week, a trade show that packed 1,200 brands from 45 countries inside the sprawling 750,000 square-foot Bangkok International Trade & Exhibition Center. Over breakfast on the 35th floor of the Continent Hotel, overlooking a cityscape that could fit ten Portland downtowns, Girard expressed concern about Oregon’s brand recognition, or lack thereof. Wondering aloud if the Thais would value companies so small, he joked, “I hope they don’t think we’re Intel.”
The trade show certainly exuded a big tent look and feel. Buddhist monks in sandals and flowing orange robes, satchels in hand, stood juxtaposed against cutting-edge solar installations. Exhibitors displayed bright yellow and green electric motorbikes.
During the opening ceremony, Minister of Energy Siri Jirapongphan proclaimed renewables a pillar of the country’s Thailand 4.0 economic development plan and the Eastern Economic Corridor infrastructure project. Trailed by a gaggle of Southeast Asian media, he marched across the floor for photo-ops with an electric tuk tuk engine (tuk tuks are Bangkok’s iconic three-wheeled taxis) and a map of new energy development.
Monks visit the ASEAN sustainability week trade show.
In the middle of the red carpeted, fluorescent-lit space, a shining white booth proclaimed “Oregon: USA leader in sustainable technology.” Under posters of Multnomah Falls and Smith Rock, the eight company delegates welcomed a trickle of business partners, consultants and curious Thai alumni from Oregon universities.
Not all the business meetings, some of which took place in the booth and Center hallways, bore fruit. Thais take years to cement business relationships with farangs (foreigners) before embarking on a deal, the opposite of the American “do work today, want deal tomorrow” attitude, as Thai businessman Kitti Kumpera, a longtime friend of Setboonsarng, put it. During a meeting with Wilsonville-headquartered battery storage company Energy Storage Systems, a Thai engineering consultant regarded the company’s all-iron flow battery as promising but untested. He reminded the delegate, Shelley Peng, “we have quite a long way of doing things here, compared to the Western way.”
Director-General of Thailand’s Energy Policy and Planning Office Twarath Sutabutr told Oregon Business he sees opportunities for ESS and other Oregon energy storage companies, but urged a measured pace. The Thai government is mulling incentive programs for that sector, he said. He advised interested companies to find a local partner and incrementally test their applications.
Shelley Peng (left) meets with a Thai engineer.
The plodding pace engendered frustration, even among market veterans. Several of the companies—SSI Shredding Systems, Stevens Water Monitoring Systems and West Salem Machinery—already do business in Thailand. “You’ll come close on order after order and never close,” said SSI’s Asia Sales Manager Richard Ellis, who oversees the company’s 80 plus Thai installations. “You’ve got to be Thai.” Or do as SSI does: work through local Thai partners.
For others, opportunities came sooner than expected. Later that day, Mike Gerard, CEO of Mobility Cubed, a Portland electric bus startup, vanished into a whirlwind of meetings with a Thai legislator and members of the Thai Chamber of Commerce. He emerged with a potential manufacturing deal in an area he considers “safe for business.” If the deal goes through in July, Gerard may be able to manufacture and sell his semi-autonomous electric buses to Thailand and other Southeast Asian nations, including Australia, the Philippines, Malaysia and Sri Lanka.
“China will stay with you for two years; India is a one night stand,” Pootrakul said. “Come to Thailand; We’ll love you forever.”
West Salem Machinery’s Chris Thompson maintained his steady sales growth in the Thai market, generating his usual 15 or so leads. Thompson spent a year and a half teaching English in Bangkok, where he grew accustomed to Thai working culture. He prefers Thailand over China for business. “Thailand is easy,” he said. For one, there’s no need to drink all night with business contacts.
Waste recycling companies gained more leads than the energy storage and electric vehicle representatives, according to Setboonsarng. Those emerging technologies have high capital costs that make them a tough sell for the Thais. Setboonsarng says, “it takes a while for them to understand that it works.”
Nyah Zarate (left) greets conference attendees at the Oregon booth.
Van der Meer showed resolve navigating Thailand’s twisting road toward electric vehicles. Initially discouraged by the lack of political interest in expensive EV infrastructure, he left with strengthened relationships. He foresees a deal to install a battery that bridges the power capacity of Thailand’s electric grid with new DC fast chargers for electric buses. Hewing to the Thai style, he remained patient in bolting it down.
For this year, van der Meer was content chatting with members of the Electric Vehicle Association of Thailand (EVAT) about their most exciting development, electrification of tuk tuk. “Tuk Tuk is easiest way to electrify vehicles,” Thai Photovoltaic Industries Association President and EVAT member Narratchai Leeraphante told him on Saturday outside the exhibition hall, “Very good for the poor.”
An electric tuk tuk prototype on display at the conference.
Every year Business Oregon embarks on a dozen or so trade missions, to Australia, Hong Kong, Germany and other nations. The ventures target growing sectors in the region—outdoor gear for Germany, renewables for Thailand. An annual $750,000 U.S. Small Business Administration State Trade and Export Promotion grant and matching Business Oregon funds pay part of the bill for qualifying Oregon companies. After funding from the Business Oregon program, the Thailand trip cost each of the delegates roughly $2,300 for airfare and a conference ticket.
Was it worth it? The delegates generally regarded the mission as productive. An elated Gerard called it the best trade show in his business career. Girard generated two new leads and valuable market research — he learned Peterson needs smaller machines for the Thai market.
Yet questions remain. The exhibition floor seemed sleepier than last year, Setboornsarng said, in no small part because the infamous “solar coaster” just hit a downhill—China limited a solar subsidy at the beginning of June, alarming large solar suppliers. A deck of political wild cards features Thailand’s unpopular new playboy monarch and Trump’s predawn Twitter diplomacy. Wong declined to comment on the effect of Trump’s protectionism on Thailand, saying only, “We’re delighted that President Trump welcomed the Prime Minister.” An editorial in ASEAN Today, however, warned that a trade war could “spell disaster” for the association’s export-driven economies.
The China threat was impossible to ignore. Board of Investment officer Patipol Kornkamonpruk implored Oregon companies, “come here; do not go to China.” Yet China is coming to Thailand, in force. Expensive American green technologies are a hard sell alongside China’s dirt-cheap electric cars and waste to energy machinery.
But if U.S. investment in renewables is declining and trade relations are unraveling, regional efforts are moving forward. The trip showcased the quality of Oregon technology, Setboonsarg hopes, and presented the state’s sustainability companies as a unified front. “It helps show we’re there to solve the problem. It gives us more credibility.” (Big Oregon players, including Nike and OHSU, conduct business in the Thai capital, but this particular mission focused on smaller companies.)
Perhaps the best indicator of success is that many of the participating companies plan to return next year to build upon their meetings with Thai businesses. The country’s professed love for U.S companies may or may not run true. But like any good partnership, long term trade relationships take time and effort to sustain. They are never a done deal.
Business in Bangkok: our coverage of the third annual Business Oregon trade mission to Thailand
To subscribe to Oregon Business, click here.