Fri, Aug 08, 2003 page11

• Thai outlook rosy, group told

  SIAM SUCCESS A 15-member business delegation was given the inside track on Thailand's rebound from the 1997 crisis and how to profit from its car industry

  • By Joyce Huang / STAFF REPORTER IN BANGKOK
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  The Thai government's low-interest-rate policy has successfully buoyed the Southeast Asian nation's private spending since the 1997 financial crisis, Thailand-based businessmen told a 15-member business delegation from Taiwan yesterday.

  With that policy, people in Thailand could afford to spend and the nation's auto, property and stock markets were able to recover in the shortest time possible, they said.

  "Auto sales are estimated to reach as many as 600,000 cars this year," said Chiou Min-chang (裘明昌), a Taiwanese senior adviser to the Rojana Industrial Park Public Co in Bangkok.

  With a population of 63 million people, Thailand's GDP per capita is around US$2,006. But the nation is currently a manufacturing base to almost all international auto-makers including Honda Motor Co, BMW, General Motors Corp and Toyota Motor Corp, Chiou said.

  While auto prices in Thailand are relatively higher than those in its neighboring countries, Toyota Motor Thailand's auto production is currently producing at around 70 percent capacity, and likely to reach full capacity later in the year, according to a Bangkok Post report, citing company chairman Pramon Sutivong.

  "Now is also a good time for Taiwanese auto and motorcycle manufacturers to move in and set up shops here in Thailand," Chiou said.

  However, none of Taiwanese auto makers including Yulon Motor Corp (裕隆汽車) have been able to branch into Thailand since their foreign technical partners may still control the franchise rights, Chiou added.

  Sharing a similar view, Vikrom Kromadit, CEO of Amata Corp, which developed one of the biggest industrial parks here, said that auto-part manufacturers make up nearly 50 percent of proprietary in his Amata Industrial Estate in eastern coastal Bangkok.

  After generating revenues of 2 billion baht (US$47.6 million) last year, Kromadit, who also developed two industrial parks in Vietnam, said that the development of industrial parks in Thailand is on a fast-developing track in line with promotional efforts and tax incentives kicked off by the Board of Investment (BOI) to attract foreign investments.

  The BOI in Thailand offers tax exemptions on imported machinery and tax breaks of up to eight years on corporate earnings, depending on which of the nation's three industrial zones businesses are located in.

  The corporate income tax rate in Thailand is 30 percent.

  To showcase its vast investment potential, Thailand is slated to host the fourth Asia-Pacific Economic Forum (APEC) Investment Mart in mid-October.

  As an experienced land developer, Kromadit also said the recovery of local property markets is foreseeable.

  Chiou said he expects to see the local property sector to get out of the five-year-long recession and grow by 30 percent within one year.

  While taking part in a Taiwanese media group interview, Kittiratt Na-Ranong, president of the Stock Exchange of Thailand (SET), expressed confidence in future gains of the local stock market, saying that the local stock benchmark "may climb up to 800 points possibly within one year."

  Na-Ranong said that his prediction is based on the stock market's averaged price/earnings ratio and dividend yield, which are as low as 8.34 times and 2.69 percent respectively.

  With an average daily turnover of US$232 million, Thai stock investors, on average, had a 65 percent gain in the past year, he added.

  According to the SET, foreign investors made up 25 percent of the market's transactions.
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