The seminar - "Investment Opportunities in GMS Countries: Potential in Agricultural Processing and Biofuel Industries" - was co-hosted by Exim Bank and the JBIC.

Narongchai said high oil prices were forcing Thailand to seek alternative fuels from neighbouring countries, especially Burma and Laos. In extending financial assistance, Exim Bank and the JBIC will focus on plantations whose crops could be used in biofuel production, such as physic nuts, tapioca and sugar cane.

"Plantations require vast tracts of land, but there are none in Thailand. Investing in neighbouring countries is necessary and would also strengthen trade relations between Thailand and its neighbours," he said.

A plantation requires at least 1,000 rai of land that can be used for up to 50 years.

Rangsan Sarochawikasit, executive director of the Energy Ministry's Bureau of Energy Research, said Thailand expected to become an ethanol hub.

He said ethanol demand in Thailand was estimated at 3 million litres a day. The Energy Ministry has approved the establishment of 40 ethanol plants to raise production capacity to 8 million litres a day by 2011, surging from production capacity of 460,000 litres a day at present. The government has also exempted ethanol manufacturers from paying excise duty.

Rangsan said ethanol by-products such as yeast could boost the Kingdom's income. Yeast can be sold for Bt100,000 a kilogram to the cosmetics industry.

Shinji Kaburagi, director general of the JBIC's Advisory and Consulting Office, said Laos offered potential business opportunities for Thai and Japanese companies in the agricultural and food industries, thanks to its fertile soil and cheap labour costs.

However, he said investors needed to have sufficient funds of their own, because Laos had an underdeveloped system in terms of medium- and long-term loans. A lack of production materials and equipment might also affect confidence.

Chalida Ekvitthayavechnukul, The Nation