Steel plants warning

Although Thailand has the region's highest demand for steel products, the government's policy to attract investors for an estimated investment of over Bt100 billion remains unclear, said Dr Chatchai Somsiri, deputy director of the Iron and Steel Institute.

"If we have steel blast furnaces in Thailand, steel makers and related industries will not face a shortage of raw materials and price volatility," he said, adding the country will have to compete with Indonesia and Vietnam which have iron ore.

 Tata, BlueScope Steel and ArcelorMittal are keen to invest in upstream steel production in Indonesia, with ArcelorMittal last week acquiring shares of Krakatau Steel.

ArcelorMittal, the world's largest, is one of the four steel makers which previously submitted a letter of interest to Thailand's Board of Investment to set up steel blast furnaces here.

Iron and Steel Institute director Wikrom Vejaragupta said if the government did not speed up its decision on investment incentives and land plots for steel furnace projects, the country could lose ArcelorMittal's project to Indonesia.

ArcelorMittal plans to invest US$5-10 billion (Bt160-Bt319 billion) in Indonesia.