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BoI adopts single-zone system: Privileges target six hardest-hit industries
[November 17, 2008]

BoI adopts single-zone system: Privileges target six hardest-hit industries


(Bangkok Post (Thailand) Via Acquire Media NewsEdge) Nov. 14--Thailand will become a single investment zone, with the exception of Bangkok, with maximum privileges offered for six industries by the Board of Investment (BoI).

The incentives will be offered for investment projects submitted from now until the end of 2009, in a bid to revive the industrial sector.

However, only six industries considered hardest hit by the global recession are eligible for the universal zoning privileges: energy efficiency, high-tech innovation, environmentally friendly products, government infrastructure megaprojects, tourism and real estate, and high-tech agriculture.



"Next year, we expect the crisis to seriously affect the electronics and automotive industries," Atchaka Brimble, the BoI secretary-general, told the British Chamber of Commerce Thailand (BBCT) yesterday.

"Although the financial sector remains intact, demand from abroad could disappear. Attracting foreign investment will be quite difficult and we need a lot of assistance from every corner of Thailand to do our jobs."


The BoI has used a three-zone system for more than two decades, with Zone 3 -- the country's 60 less developed provinces -- attracting the highest incentives. The aim was to spread development throughout the country.

The BoI has also announced plans to set up six more offices overseas starting in Taipei this month. Beijing, Sydney, Guangzhou, Seoul and Stockholm are slated for next year.

Industrial operators welcomed the programme's flexibility to draw investors at a tough time, said Payungsak Chartsutipol, vice-chairman of the Federation of Thai Industries.

"Without concerns about investment privileges, manufacturers can easily locate near raw materials, suppliers, or a large labour pool, and it will be convenient for logistics," he said.

Mrs Atchaka also said the BoI was ready to help the Sahaviriya Group advance its iron smelting project, admitting that Thailand trailed China and Vietnam in attracting such investment.

Sahaviriya this week threatened to relocate its 500-billion-baht steel project to either China or Vietnam unless more support from the Thai government was offered. The smelting plant has been delayed for years due to protests related to its possible environmental impact.

"Sahaviriya is the case that we are looking into. The company has done a lot by itself without government support. For example, it invested in its own port and a power plant," she said.

She said upstream steel facilities such as the smelting plant were vital for Thailand's economic development and to cut reliance on imports. "Without this kind of project, Thailand hangs on the mercy of manufacturers overseas with the bargaining power."

BCCT chairman Rodney Bain believes that while consumer confidence has declined due to political instability, Thailand is still in better economic shape than other Asian countries.

After the 1997 crisis, the banking sector became much more disciplined and conservative. The ratio of bad loans is very low here, he said.

While direct investments from Japan, the US and Asian countries to Thailand declined this year, those of British firms continue to rise. UK applications totalled 4.32 billion baht from January to September (up from 1.54 billion in the same period in 2007) and the UK ranked first among European investors.

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Copyright (c) 2008, Bangkok Post, Thailand
Distributed by McClatchy-Tribune Information Services.
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