Thailand 4.0 to drive innovation in food manufacturing

 

While Thailand has long capitalised on the popularity of its cuisine, the production, selling and exporting of food products is being given renewed focus under the national Thailand 4.0 initiative. With food processing listed as one of the First S-Curve industries that the authorities are seeking to add value to in the short to medium term, multipronged efforts are been made to align the agriculture, manufacturing, retail and hospitality sectors. Combined with a renewed focus on research and development (R&D), Thailand is seeking to significantly advance its food industries.

“We must develop value-added products, especially in ‘future foods’, whether they are medical, novel, functional or organic,” Yongvut Saovapruk, president of the National Food Institute (NFI), told OBG.

The Ministry of Industry has tasked the NFI with developing these so-called future foods, which are envisioned to be high value-added food products. This should also help to improve the quality of life for farmers producing the raw materials they are made from. It is a bold initiative designed to upgrade and modernise an already strong pillar of the Thai economy.

There are four main categories of future foods: functional foods that promote health or well-being; medical foods, which are used for the treatment specific conditions such as diabetes; organic foods, which have become one of the fastest-growing categories in the local market; and novelty foods, which are classified as highly innovative products that have not been produced or marketed before. The project’s goals are broad and comprehensive. For example, it aims to improve food-safety management so that the quality and nutritional value of the products can be guaranteed. It also seeks to raise labour capabilities and management skills.

Innovation

Food-related industries employ 40% of Thailand’s workers, making value addition in food industries a vital component of Thailand 4.0. For one, the plan seeks to make agricultural procedures more efficient, using sensor technology and drones to view and analyse crops, as streamlining tasks will become increasingly important given the ageing population. Other key technologies that are likely to be developed further include bioprocessing, material sciences, biodegradable packaging and logistics for food transportation. It could also be used to open new avenues for producers. “Technology has transformed distribution channels which were once monopolised by middlemen, but have now been replaced by e-commerce,” Tipvon Parinyasiri, director of bureau of food of the Food and Drug Administration of Thailand, told local media.

As part of efforts to encourage research and development, the authorities are offering a range of incentives. The Board of Investment (BOI), for example, offers incentives for innovative projects that utilise biofuel manufacturing, specialise in medical food, rubber sciences and the extraction of bio-active ingredients, among others. In 2016, the year that Thailand 4.0 was launched, the BOI approved more than 320 agricultural developments worth over $4.8bn.

Room for Growth

There are a some key areas that could accelerate the development of Thailand’s food industries if they were improved. For instance, the country does not currently have sufficient testing infrastructure to verify claims that its foods are pure and clean. While the products are generally assumed to be so, laboratories that meet global standards are becoming a necessity for companies wishing to market their products internationally. More coordination within the sector would also be beneficial, as waste from one area could potentially be utilised in another. Improved communications channels and increased knowledge-sharing would quicken the pace of industry-wide development. Furthermore, the authorities could do more to ensure producers provide accurate information on their food labels. In addition to allowing consumers to make informed decisions, better labelling would hold Thailand’s food producers more accountable, in turn potentially raising the quality of produce.

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The Report: Thailand 2018

Industry & Retail chapter from The Report: Thailand 2018

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