Thai Businesses Have Expanded Operations into Indonesia
Manufacturers are looking to regional neighbors to bypass trade barriers and offset sluggish domestic growth.
Updated on Sept. 29, 2026 in Openings & Closings
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Thai companies in sectors including energy drinks, packaging, and agriculture have expanded into Indonesia to escape limited domestic growth. A delegation of 37 executives visited Jakarta during the week of September 29, 2026, to secure new distribution channels.
Why it matters
With Thailand's domestic growth cooling to 1.9 percent in the second quarter of 2026, businesses are moving assembly to lower-cost economies to maintain margins. This shift allows firms to circumvent import quotas and access larger regional consumer bases.
Thailand reported 1.9 percent economic growth in the second quarter of 2026, with businesses now pivoting to export-heavy production models. The recent Jakarta delegation included 37 executives aiming to establish local manufacturing to replace high-cost domestic assembly.
The players
Bangkok Bank
A major Thai financial institution that provides cross-border commercial banking and business-matching services for regional expansion.
Permata Bank
An Indonesian retail and corporate bank acquired by Bangkok Bank in 2020 to anchor its operations in the country.
The details
Bangkok Bank, which has operated in Indonesia since 1968 and acquired Permata Bank in 2020, is facilitating these connections by providing local distribution infrastructure. By producing goods directly within Indonesia, Thai manufacturers can avoid costly import tariffs and restrictive regional quotas. Companies are increasingly prioritizing these moves to lower labor overhead, often treating neighboring markets as new hubs for regional exports.
Timeline
Bangkok Bank began operations in Indonesia in 1968.
The bank acquired Permata Bank in 2020.
Thailand's economic growth slowed to 1.9 percent in Q2 2026.
A Thai delegation visited Jakarta during the week of September 29, 2026.
Market Landscape
This move reflects the broader regional supply chain relocation trend as companies seek to mitigate rising labor costs in their home markets. It mirrors the strategic pivot by regional firms to establish local manufacturing hubs, bypassing trade friction in high-growth corridors.
Operators in high-cost markets should evaluate if their current assembly locations are inflating landed costs relative to regional peers. Assess whether shifting production into specific target markets could help you bypass quotas and capture new distribution efficiencies.
The takeaway
Expanding into emerging economies is a necessary hedge against stagnant growth in smaller domestic markets. Track your competitors' manufacturing footprint to see if they are leveraging local assembly to undercut your pricing in regional export zones.
Further reading
For more on industry expansion, see our latest coverage on Openings & Closings.
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