Delta unfazed by latest tax regulations
Despite short-term challenges posed by new tax regulations, Delta Electronics (Thailand) is pressing ahead with annual capital investment of roughly US$300 million (10.4 billion baht) to expand capacity and enhance innovations for its Thai operations.
The largest electronics firm on the Stock Exchange of Thailand also ruled out the possibly of relocating production or investments out of Thailand to alleviate the financial burden caused by the global minimum tax of 15% on multinational firms with annual global revenue of more than €750 million ($790 million).
Delta is driving growth over the next few years through annual capital investment of roughly $300 million, focusing on expanding production capacity, enhancing innovation and sustainable development, chief executive Victor Cheng told the Bangkok Post.
"Despite such uncertainties posed by new tax regulations, we remain confident that our diversified business model, strong market position and ongoing investment in innovation will enable us to navigate these challenges effectively," he said.
Under the rules being shepherded by the Organisation for Economic Co-operation and Development (OECD), Thailand since Jan 1 has imposed a "Top-Up" tax as the country seeks admission to the OECD in a few years.
"At the national level, Thailand is updating its laws, policies and practices as part of its bid for OECD membership in the coming years. Delta Thailand fully supports this national agenda, aligning with efforts to advance the country's sustainability goals," said Mr Cheng.
While the new tax policy may present some short-term challenges, Delta assesses its impact as moderate thanks to the potential disbursement of the National Competitiveness Enhancement Fund regulated by the Board of Investment, he said.
"If we meet the yet-to-be-disclosed criteria, this fund could significantly alleviate the tax burden. We are monitoring the situation and evaluating its implications for our operations," said Mr Cheng.
Meanwhile, Thailand's long-term advantages, including a skilled workforce, strong logistics infrastructure and its status as a leading manufacturing hub, far outweigh the challenges posed by these changes, he said.
"Relocating production or investment out of Thailand is not part of our strategic direction. On the contrary, we see significant opportunities for growth and expansion within the country," said Mr Cheng.
"The recent tax policy is unlikely to derail our medium- and long-term strategic plans, with ongoing investments positioning us to meet the sustained demand from global customers."
Under the current investment plan, two new facilities at the Wellgrow plant in Chachoengsao are being built to support high-growth segments for power systems and thermal management solutions for data centres and artificial intelligence infrastructure by the third quarter of this year.
Similar developments are taking place at its Bangpoo plant and are slated to be completed in the third quarter of 2026.
The recently inaugurated DET8 plant at Bangpoo, dedicated to electric vehicle production, is scaling up with additional lines to meet demand, Mr Cheng said.
As a cornerstone of Delta Group's global strategy, Thailand will continue to play a pivotal role not only in manufacturing, but also in R&D, services and solutions.
Smart manufacturing integration and expanded R&D capabilities in Thailand and India are key priorities, with plans to grow Delta Thailand's R&D workforce to 500 engineers in three years, he said.