Joint ventures and international companies have displayed confidence in Thailand, declaring their investment plans for 2007.

US-based Dow Chemical, a leading chemical and plastics manufacturer, for example, has applied for Board of Investment (BoI) incentives based on US$900 million (Bt32 billion) worth of projects.

Company chairman and CEO Andrew Liveris said $408 million would be spent on construction of a propylene oxide and propylene glycol plant.

Another $350 million will be invested over the next four years in a joint venture with the Siam Cement Group to construct a polyolefins plant that will utilise a by-product from their naphtha cracker plant in Rayong.

He said the company would disclose how the remaining $142 million would be spent in the first quarter of this year.

Meanwhile, Akara Mining, a gold-mining company, plans to increase its investment budget to Bt4 billion to better exploit gold deposits in Phichit and Phetchabun, its president Gavin Thomas said.

Akara Mining is a wholly-owned subsidiary of Australia-based Kingsgate Consolidated.

India-based Tata Steel Group, which recently purchased Thailand's Millenium Steel and renamed it Tata Steel (Thailand), said recently it will spend Bt3.6 billion on building a mini-blast furnace at the Bo Win Industrial Estate in Chon Buri.

Tata Steel president Santi Charnkolrawee said construction would begin in the first quarter and be completed by the third quarter of 2008.

The facility will be able to produce 500,000 tonnes of "hot metal", or pure liquid iron, per year.

Tata Steel (Thailand) also plans to expand its business locally and throughout Southeast Asia, Santi said.

Another example of confidence is Thai Fatty Alcohol, which is a 50:50 joint venture between PTT Chemical and Cognis Thailand. The company is to invest Bt820 million to build a fatty-alcohol plant on the Eastern Industrial Estate in Rayong province, according to Manope Kerdlappol, director and acting managing director.

The plant will start operations at the end of this year, he said.

Siam Cement Group (SCG), the country's largest and most advanced industrial conglomerate, has been divided into five strategic business units: petrochemicals, paper and packaging, cement, building products, and distribution.

To follow its parent company's policy as being a leading company among Asean members, SCG Paper will invest Bt18 billion this year to boost its domestic and international production capacity, according to the business unit's president Chaovalit Ekabut.

Of that sum, the company will spend Bt5.2 billion to build a new Kraft paper plant in Vietnam and around Bt10.3 billion to expand production capacity at its paper plants in Thailand.

The remaining Bt2.5 billion will be spent on installing a boiler that uses coal instead of oil as fuel at a plant in the Philippines and other energy-saving projects in Thailand to help offset the increase in energy costs.

Meanwhile, Pramote Techasupatkul president of SCG's cement business unit, said the company would expand capacity at two ready-mixed cement plants in Indonesia and another two in Vietnam with a total investment of Bt300 million this year.

He said the countries had high demand for cement due to the growth of their populations and economies.

The company will also invest another Bt200 million in research to develop new products this year, he added.

Another major investment this year is IGS' plan to build Thailand's first industrial estate for gems and jewellery, named Gemopolis. IGS plans to invest nearly Bt10 billion to build a "one-stop" service city on 600 rai of land.

Suttipong Damrongsakul, IGS assistant managing director, said the construction work would start this year and take 10 years to complete.

The project will consist of trade centres, shopping malls, hotels and service centres at the complex, which will be just four kilometres from Suvarnabhumi Airport.

To maintain confidence, the Industry Ministry is attempting to convert Thailand from labour-intensive industries to a technology and innovation-based country.

Industry Minister Kosit Panpiemras has announced a plan to develop the industrial sector by promoting Thailand as a technology- and innovation-based country.

Deputy Industry Minister Piyabutr Cholvijarn said his ministry has proposed a budget of Bt400 million to train up 300 researchers to support priority industries such as auto parts, machinery, electronics and textiles.

Another Bt114 million will be spent on drawing up a master plan for local industries to increase their productivity in order to compete with overseas rivals.

"If we develop technology ourselves, Thailand will be a knowledge base for science. That will improve our edge against other countries that are now developing to compete with us," Piyabutr said.

Then, the Kingdom will transform into a technology and innovation source rather than a buyer of technology from developed countries, he said.

Meanwhile, BoI secretary-general Satit Chanjavanakul said the board would propose new privileges for industries that invest in research and development to support the Industry Ministry plan.

Besides granting general incentives to investors, it will also specify which industries or technologies the government favours by providing special incentives to firms developing them, he said.

He said sectors with potential to become technology and innovation-based industries included auto-makers, electronics, machinery, moulding, printing and agro-business industries.

The BoI would not forecast the level of direct investment for this year but focus instead on quality of investment in terms of projects that develop the country's productivity and offer technology transfers and innovations, Satit said.

For last year, the BoI targeted to investment of Bt500 billion.

It recorded total investment for the first eleven months of Bt471.5 billion, down Bt213.5 billion from the same period a year earlier.

In addition to political turmoil and sky-high oil prices last year, he said investment was down from 2005 because there were fewer mega-investment projects.

He added that total foreign investment from January to November was Bt280.25 billion compared to Bt481.42 billion in the same period a year earlier.

Around 35 per cent of foreign investment came from Japan. However, some companies from countries such as the US, India, Australia and Belgium had tripled investments compared to 2005.

A quarter of foreign investment last year went into electrical and electronic products. This was followed by the service sector, metal products and machinery.

Investment in the country's core industries - electronics, auto-parts and auto production, petrochemicals, agriculture, services and alternative energy - was forecast to continually expand this year, Satit said.

Chalida     Ekvitthayavechnukul

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