Warehouse Business Growth Boosted by New Strategies to Avert Disasters (Business Brief No. 3286 Full Ed.)

There is a growing trend towards warehouse business due to many supporting factors, such as private consumption demand that may rise 3.5-4.5 percent in 2012, over 1.3-percent growth in 2011, plus AEC integration that will increase demand for products and freight logistics to neighboring countries. Industry in general will likely expand production bases, thus furthering demand for warehousing. In addition, efforts to prevent damage from flooding by moving warehouses to safer locations in the eastern and northeastern regions will lead to an increase of 5-10 percent in land prices there amid surging demand.

Moreover, setting up warehouses in strategically superior locations should help reduce logistic costs, thanks to more convenient freight transport to and from Laem Chabeng Port, that will be expanded and linked via dual-track railways which would effectively minimize transport costs and increase international trade for supporting our logistic network development, as well as preparing for AEC integration in 2015. Also, it should also be noted that logistics must be liberalized by 2013.

The bright future ahead for warehouse business may also be supported by urbanization, rising demand for warehousing space, a recovery in manufacturing production, soaring demand for products and services in the capital and key provincial areas across the country (thus accelerating the need for distribution centers in such communities to facilitate freight transport as well as serving international trade with other neighboring countries.) Also, infrastructure construction by the government and rising border trade will partially help support the growth. KResearch estimates that warehouse business should generate a market value of around THB9.6 billion in 2012, growing 12.5 percent YoY, over the market value of THB8.3 billion in 2011.