Thai rice exporters eye investments in Cambodia-INTERVIEW

By Apornrath Phoonphongphiphat

BANGKOK, April 12 (Reuters) - Thai exporters plan to invest in Cambodia's fledgling rice sector, lured by low production costs and tariff-free exports to the European Union, an industry official said on Tuesday.

Cambodia, the world's 15th-largest rice producer caught the attention of Thai exporters because of its growth potential and access to special EU privileges for poor countries, Korbsook Iamsuree, president of the Thai Rice Exporters Association, told Reuters.

"Cambodia is an interesting country to invest in. The rice quality is OK and there is plenty of land to grow more rice at cheaper costs," she said.

Siam Cement May Spend 6 Billion Baht on Second Cambodia Factory

By Anuchit Nguyen

May 6 (Bloomberg) -- Siam Cement Pcl, Thailand's biggest producer, may spend as much as 6 billion baht ($189 million) to build a second factory in neighboring Cambodia to triple its production capacity there.

The planned factory, twice as big as the first plant, will increase the Bangkok-based company's capacity in Cambodia to 2.55 million tons a year, company President Kan Trakulhoon said in a May 2 interview. A feasibility study will be completed this year.

Siam Cement, controlled by the king's asset management arm, is building cement and paper plants in countries including Vietnam and the Philippines to counter slowing domestic sales. The company is also expanding investments in petrochemicals to benefit from oil reserves in the region.

``We have to import cement for our customers in Cambodia, as the first factory, which started operations in January, is already running at full capacity,'' Kan said. ``There's a very strong outlook for cement sales in Cambodia because of infrastructure development and economic growth.''

BHP Billiton Ltd., the world's largest miner, and Chevron Corp. are investing in Cambodia to tap the nation's natural reserves of copper and oil. Developers such as Club Mediterranee SA and Starwood Hotels & Resorts Worldwide Inc. are building hotels and adding rooms as more tourists visit ancient temples such as Angkor Wat.

Cambodia's economy expanded 9.6 percent last year and 10.8 percent in 2006, according to the International Monetary Fund's data on its Web site.

Shares of Siam Cement rose 1.9 percent to 212 baht on May 2 in Bangkok. Markets were shut yesterday for a public holiday.

To contact the reporter on this story: Anuchit Nguyen in Bangkok at anguyen@bloomberg.net.

Thai investors are urged to invest across the border ... especially in Cambodia

A chance well worth taking

Thai investors are urged to cross the border provided they have done their homework and have interesting products to offer

Saturday June 02, 2007
UMESH PANDEY
Bangkok Post

Thailand's central location and strong economic fundamentals should give its investors the competitive advantage they need to expand their operations into more regional economies, senior government officials and bankers say.

"We are centrally located. We are in the area where all the action is taking place, from increased manufacturing to being the link between the emerging global economic giants such as China and India," Deputy Industry Minister Piyabutr Cholvijarn said in a recent seminar organised by the Export Import Bank of Thailand (Exim Bank).

Thailand, he said, was witnessing a declining manufacturing production index mainly due to the increased costs, an indication that Thai companies now needed to move to other regional markets, especially Cambodia, Laos and Vietnam, to take advantage of the gradual opening of these markets.

"These are interesting markets we should try to look into, and I request all of us gathered here to look at opportunities that are beyond the frontiers of the Thai border," he said at the seminar held to help Thai investors familiarise themselves with prospects and regulations in neighbouring countries.

He said the timing could not be better. The US dollar value of Thai export products had been declining for three years, and the gradual decline in export growth from 20.6% in 2004 to 16.94% in 2006 was an indicator of slipping competitiveness in export markets. The global share of Thailand's trade has declined to 1.23% in 2006 from 1.32% in 2004.

"All this is an indication that we are gradually losing our competitive edge. What we need to do is move up the value chain or look for alternative markets for investments," Mr Piyabutr said.

Citing the case of Italy, which has gradually moved its textile industry into a more value-added, innovative and design-oriented industry, he said Thailand should follow suit.

Other panelists agreed that Thai investors needed to take a bold step forward across the region, as only a handful of companies had so far taken the lead and those that did had been successful.

"The Commerce Ministry ... is also looking at ways of promoting Thais to invest in the region and the rest of the world," said Pisanu Rienmahasarn, the ministry's deputy permanent secretary.

He added that although the ministry had been pushing for Thais to invest in the neighbouring countries and other emerging Asian markets, very few investors had so far taken up the challenge. Most investors from small and medium-sized businesses, in particular, were fearful of going abroad.

Mr Pisanu, who handles China for the ministry, says fears that China will destroy Thai SMEs and that investing in China would only burn them were something of the past, and investors who do their homework could succeed.

"Investing in China and losing your shirt is something of the past, as China is becoming a more international market," Mr Pisanu said.

The Board of Investment (BoI) also has been studying industries in Thailand that have gained the know-how and strength to operate outside the country.

"Our job is not only to help foreign investors come into Thailand but also to look at Thai industries to move abroad," said BoI secretary-general Satit Chanjavanakul.

He added that as long as investors did their homework, had good technological processes, and products good enough to sell in the target markets at competitive prices, they should be ready to venture outside Thailand.

Citing the example of the global computer giant Dell, Mr Satit said the company, whose sales were done online, had not been successful in China due to its pricing strategy and the low level of internet penetration there.

"Investors who are willing to take the risk of investing in such markets are rewarded with very high returns as well," Mr Piyabutr said.

Narongchai Akrasanee, the chairman of the Exim Bank, said most Thais were not investing in neighbouring countries because they had not travelled abroad or studied how to do business there.

Although Cambodia was among the hottest destinations for Thai investors, especially in the hospitality sector, there was still a lot of room for expansion. "What we would like to see is for the greater Mekong subregion to be the next epicentre for investments," he said.