[Thai] Steel body proposes complex in Burma or Koh Kong

17/01/2011
Nareerat Wiriyapong
Bangkok Post

The government should consider establishing a steel industrial estate in neighbouring countries at a cost of up to 100 billion baht for infrastructure including a deep-sea port, says the Iron and Steel Institute of Thailand.

The institute would recommend Burma and Cambodia as potential locations for a complex covering 15,000 rai, said president Wikrom Vajragupta.

Koh Kong is considered the most appropriate location in Cambodia for the estate, which will house integrated steel manufacturing including upstream smelting facility, while Dawei is recommended in Burma, as it is the site of a planned industrial and port complex worth tens of billions of dollars.

The institute hopes to propose the plan to the National Industrial Development Committee chaired by Deputy Prime Minister Trairong Suwannakhiri within the first quarter for submission to the cabinet later.

"The development of a steel estate in a neighbouring country will help strengthen Thailand's capacity as the centre of Asean Economic Community (AEC)," said Mr Wikrom.

"The Thai steel industry, meanwhile, will be able to tap an abundant workforce as well as growing steel demand in the neighbouring countries if the steel estate is operated."

The master plan for the industry also envisages another option of developing the steel estate with an eco-town concept in Thailand, with five recommended locations including Songkhla, Pattani and Prachuap Khiri Khan.

The institute has pushed for Thailand to establish a steel smelting plant to lower the cost of existing mid- and downstream steel manufacturers but the plan has faced heavy opposition from environmentalists.

Mr Wikrom said Thailand last year overtook Vietnam to regain its position as the largest steel market in Southeast Asia. Consumption totalled 14 million tonnes, up 40% from 2009.

This year, conservative demand growth is projected at about 6-8% to 15 million tonnes.

The automotive industry, which is expected to produce nearly 2 million cars and pickup trucks, will lead the demand growth in the manufacturing sectors along with electrical appliance and machinery makers.

The construction industry is also forecast to have strong demand for steel, thanks to planned government infrastructure projects and more private-sector work, he said.

"Steel prices are projected to surge sharply and be volatile in the first half of this year, mainly pushed by rising coal prices due to the severe floods in Australia," said Mr Wikrom.