Chinese firms set up coconut water factories in Thailand, cutting Thai producers out of exports and dominating the supply chain to China.
Chinese Firms Shift from Buyers to Producers
A coconut water processing plant operator in Ratchaburi has alleged that Chinese investors are no longer purchasing products from Thai manufacturers but are instead establishing their own coconut water production operations for export.
The Thai factory owner, who requested anonymity, said that in the past, Chinese businesses used to buy bottled coconut water from Thai plants for export. However, they have now begun investing in their own processing plants and coconut plantations in Thailand.
Thailand Loses Market Share in Coconut Water Exports
According to the source, Thai exporters and manufacturers once had strong access to the Chinese market. However, as demand grew in China, some Chinese investors shifted strategies—initially purchasing from Thai factories before setting up independent operations within Thailand.
“Lately, they no longer buy bottled coconut water from us. They’ve established their own factories—many of which are in Ratchaburi,” the source said.
Chinese Investment Backed by High Capital
The factory owner noted that Chinese investors are highly capitalised and able to undercut Thai producers by offering lower prices.
“They even rent coconut gardens and use their own trucks to transport coconuts to their factories,” he said, adding that this vertical integration allows them to dominate the supply chain.
Most of the coconut water produced by these Chinese-operated factories is exported directly to China, with the remainder shipped to other countries.
“It’s become a complete circle,” the source added, referring to how Chinese investors now control production, processing, and export.
Allegations of Tax Avoidance and High Mobility
The source also alleged that some Chinese-owned factories may be engaging in tax avoidance.
“These investors are very mobile. They can set up temporary offices using container boxes quickly and relocate with ease,” he said.
Thailand’s Coconut Product Exports in 2024
According to the Trade Policy and Strategy Office, Thailand exported 257,428 tonnes of coconut products in 2024, valued at 217.4 million US dollars. The top five export destinations were:
China: 82.7%
United States: 7.1%
Hong Kong: 2.1%
Singapore: 1.6%
Netherlands: 1.5%
Source: The Nation
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<p>Time: 2024 By: Ministry of Industry and Trade</p>
