PwC EM20 Index shows that the BRIC Countries continue to offer opportunities for investment

Bangkok, 21 July 2008 – The PricewaterhouseCoopers (PwC) EM20 Index shows that the BRIC countries (Brazil, Russia, India and China) continue to offer interesting opportunities for investment. However, the results of PwC’s innovative country risk and reward model also indicate a range of other locations that can offer attractive alternatives, especially in south east Europe.

For manufacturing companies seeking to invest in emerging markets, low production costs are, of course, essential but other facts then come into play, including a country’s risk premium, its distance from key export markets and the local taxes. Amongst the Asian countries in the PwC EM20 Index, India tops the Manufacturing Index, followed by Vietnam, Thailand, Malaysia and China.

Thailand rated 11 ^th most attractive emerging market for investment in manufacturing this year, has declined from the sixth last year. Thailand also 15 ^th ranks in the top 20 for the services industries, which stable at the same place.

Prasan Chuaphanich, Executive Chairman of PricewaterhouseCoopers Mekong which comprises of offices in Thailand, Vietnam, Cambodia and Laos said “It is encouraging that Thailand ranks in the top 20 for not just one, but both the manufacturing and services indices. This is a reflection of the attractiveness is mainly due to a reasonable cost structure, a stable economic environment, a skilled workforce, a manageable regulatory system and attractive investment incentives - changes to the Foreign Business Act. These are the reasons for companies to consider a market investment strategy in Thailand. However, political stability has emerged as a factor which has a major impact for Thailand”

Although countries like Vietnam and Cambodia are still relatively small economies, their relatively low-cost bases can sometimes offer higher margins to manufacturers. Despite China being an attractive investment location, it may be surprising to many that it is not one of the top ten most attractive destinations for manufacturing investment as measured by the Manufacturing Index. Its 14 ^th place may even seem counterintuitive, given the high prominence of China as a recipient of manufacturing-based foreign direct investment (FDI). It is worth noting, however, that as the incomes of Chinese workers rise, they will become more attractive consumers for service providers such as retailers and hoteliers in the coming years”


Ian Coleman, UK head of emerging markets, PricewaterhouseCoopers LLP, commented:

“The main reason why China trails countries such as India and Vietnam is that the EM20 risk-reward index is a ratio measure which does not take into account the absolute size of a country’s market. If a company was looking to develop a very large-scale manufacturing facility, the labour capacity and physical infrastructure required would arguably rule out some of the countries at the top of the Manufacturing Index and would increase China’s relative attractiveness.”