Italian smes eye investment opportunities in thailand

The businesses in which Italian SMEs are exploring investment opportunities include jewellery, fashion design, packaging and automobiles, according to the Italian Ambassador to Thailand, Ignazio Di Pace.

Di Pace said SMEs were an important economic engine for both countries and Italy wanted a resumption of the dialogue between Thai and Italian SMEs initiated by a former government.

This year marks the 140th anniversary of Thai-Italian social, political and economic relations, with many activities planned throughout June to celebrate the milestone.

Meanwhile, the number of Italian entrepreneurs investing in Thailand continues increase. The Board of Investment reported approving investment privileges for 11 Italian projects altogether worth Bt1.84 billion last year, an increase from the nine projects with total value of Bt481.3 million approved in 2006.

The investments were mainly in services, metal products and machinery, minerals and ceramics, chemicals and paper, light industries and textiles, and electric and electrical products, and employed a total of 200 Thai workers.

Among the investors was Danieli Far East, the biggest steelmaker in Italy, which set up a Bt200-million manufacturing plant in Rayong. The company has focused not only on machinery design for steel manufacturers but also on steel-plant design services.

Di Pace said the value of bilateral trade reached US$3 billion (Bt96 billion) last year and continues to grow.

"Italian investors' interest is in SMEs and they are eyeing Asia, which is their continent of the future. They only have to decide where they should go," the ambassador said, adding that low labour costs, good infrastructure and communications and a helpful legal system have created a good investment environment in Thailand.

He suggested the government focus on establishing industrial clusters, where an industry's supply chain is set up in the same area. The strategy not only reduces production and logistics costs but also strengthens the country's competitiveness.

"The industrial-cluster strategy is one successful Italian policy to strengthen our manufacturers' competitiveness. The successful implementation of the policy here will make Thailand a good place to come," he said.

However, Di Pace cited factors including excessive bureaucracy, the Foreign Business Act (FBA) and high tax rates as big hurdles to doing business in Thailand and suggested the government set up one-stop services to assist foreign investors.

The FBA is a particular obstacle to investment since it restricts foreign majority stakes in joint ventures, he said.

Potential areas for Thai businesses in Italy include restaurants and spas, Di Pace said. However, they should operate under Italian regulations.

"There is still a lot of room for these services, in which Italy has opened the market to foreign investors," he said.

Events to celebrate the 140th anniversary of Thai-Italian ties include the creation of an Italian Pavilion, where authentic Italian dishes will be provided by Italian restaurants in Bangkok, a festival of Italian films, a workshop on real Italian coffee and an exhibition by renowned Italian artist Galileo Chini.