• 
• 

Published on February 2, 2008

Four world-class steelmakers - ArcelorMittal, Japan's Nippon Steel and JFE Steel and China's Baosteel - have expressed interest in tapping the Board of Investment's tax incentives for their upstream blast furnaces.

According to BoI secretary-general Satit Charnjavanakul, all four have submitted letters of interest to the state agency, which were open for submission through this past Thursday.

ArcelorMittal is the world's largest steelmaker on the Fortune Global 500 list, followed by Nippon Steel, JFE Steel, South Korea's Posco Steel and Baosteel.

The furnaces are expected to require an investment of over Bt100 billion each.

Satit said yesterday that the BoI had not yet drafted the details of investment privileges for interested steelmakers.

The process now involves the four collaborating with the National Economic and Social Development Board (NESDB) and the BoI to find appropriate locations for their steel plants.

Each plant will require an area of 5,000 to 10,000 rai for a minimum production capacity of 2 million tonnes of premium-grade upstream steel per year. While saying that it would take around six to 12 months to search for appropriate locations, Satit noted that the Eastern seaboard could be too crowded for such giant new investment projects. He added that the projects were likely to be located on the Southern Seaboard.

The Surayud government did not get round to fully defining where the Southern seaboard would be. According to former industry minister Kosit Panpiemras, the next government should continue with the Southern seaboard project, or heavy industries - including the upstream steel plants - would not have an area to set up their plants.

During the Surayud government, the NESDB was ordered to study potential areas for the Southern seaboard. The survey covered a number of provinces in the South from Chumphon to Songkhla.

"We decided to keep those areas on the Andaman coast for tourism purposes. However, this can be changed if the new government does not agree," he said.

According to Satit, the new steel plants will be required to use advanced production technology in order to prevent environmental destruction and create harmony with communities. He said Sahaviriya Steel had also expressed interest to the BoI in an upstream steel blast furnace. However, its project was not approved because it did not meet the BoI's conditions.

"Sahaviriya can continue with its project, but it will not receive any incentives from us," he said.

At present, domestic steel demand is estimated at 12.5 million to 13 million tonnes per annum. While 4.5 million tonnes are of premium grade for the automobile, electric and canned-food sectors, the rest is for construction purposes.

 Satit is confident that following the election, more investment will flow into Thailand. The BoI expects total applications for its investment incentives this year will be at least Bt500 million.

Chalida Ekvitthayavechnukul

 The Nation