The company has won a Customs Department licence for its 2,640-square-metre duty-free warehouse at Bang Pakong in Chachoengsao province.

The warehouse is 63 kilometres from Bangkok Port, 51km from the centre of the capital and 40km from Laem Chabang Port.

It is also located 20km from Suvarnabhumi Airport.

"Thailand has a geographical advantage over other countries and can compete with Singapore in terms of cost savings," said deputy managing director Picheat Chansate.

"We don't believe we shall have to try hard to attract customers, because the warehouse facility has privileges similar to Singapore while being more convenient for transport," Picheat said.

Many Thailand-based manufacturers use Singapore for warehousing because of its tax privileges.

The company's warehouse will allow customers to "park" merchandise in Thailand before shipping to other countries. Picheat said this meant big savings for customers.

Raw materials, machinery, spare parts, chemicals and finished goods can now be stored in Thailand with both export and import tax and duty privileges, he said.

Duty-free warehouse customers will benefit from time and cash-flow savings and reduced inventories, he added. Pre-export quality control will be simpler, too.

Picheat said the company had spent Bt10 million on technology and security at the warehouse.

It is too early for a revenue prediction for the facility, he said, but promised that duty-free warehousing would become the firm's core business soon.

Shippers' revenues have fallen since customs procedures started going paperless.

Exporters and importers no longer require consultants to help them move goods as a result of this development.

While Picheat believes merchandisers will continue to employ consultants for tariff information, he says fee income will fall from past levels.

The 37-year-old company has affiliates in neighbouring Laos and Cambodia.

Its customers range from companies as diverse as Charoen Pokphand Group, Unilever, Ikea Trading and Ajinomoto Betagro Frozen Foods to BASF (Thai), Cosmo Group, Berli Prospack and Millennium Steel.

Last year Thai Somdej generated revenues of about Bt100 million.

Watcharapong Thongrung

The Nation