Thai firms expand investment before AEC birth
By Quoc Hung - The Saigon Times Daily
HCMC – Large numbers of Thai firms have expanded investment in Vietnam to await the formation of the ASEAN Economic Community (AEC).
One ASEAN Development Company of Thailand last week signed an agreement with the authority of Quang Tri Province on developing the Southeastern Economic Zone (SEZ). The signing ceremony took place on a Thai visit by the provincial delegation, said Ho Dai Nam, director of the Quang Tri Department of Industry and Trade.
Previously, the Thai investor came to the province several times to study the EZ project, said Nam. He informed the firm wanted to develop a large-scale EZ to get connected to ASEAN countries as well as China and Japan.
Under the agreement, One ASEAN Development, an experienced company in industrial development and infrastructure construction, will build facilities such as an oil refinery plant, petrochemical complex, multi-sector industrial park, export-processing zone and commercial and entertainment area.
The project demands tens of billions of U.S. dollars and as such One ASEAN Development will join with other investors to carry out the project.
It is expected that the firm will conduct a field survey on Friday and complete preparatory work in six months. With the development of the SEZ, Quang Tri in the future will become an attractive destination for investors from Thailand and other countries.
Apart from infrastructure construction, Thai companies tend to expand their investment in Vietnam to further penetrate the regional market, to wait for opportunities once AEC is established.
As one of the pioneers, the multi-sector group SCG said it will continue to move ahead with its vision and ASEAN business expansion plan to gear up for the establishment of AEC. To do so, SCG has recently taken over several companies in the region, including Vietnam.
After acquiring a 99% stake in the Dong Nai-based Buu Long Investment and Industry Joint Stock Company in March, SCG announced it has taken over big stakes in two local plastic firms.
Particularly, Thai Plastic and Chemicals Co. Ltd., a subsidiary of SCG, has acquired 9.82 million shares, or a 22.67% stake, in Tien Phong Plastics Joint Stock Company and 5.85 million shares, a 16.73% stake, in Binh Minh Plastics Joint Stock Company.
Last year, the Thai group took over Alcamax Packaging Co., a Vietnamese producer and distributor of corrugated paper. Despite it already having many operational projects in Vietnam, SCG is still seeking more investment opportunities, including a petrochemical complex in Ba Ria-Vung Tau worth US$4.5 billion.
Also aiming at the opportunities offered by AEC, Berli Jucker Public Company (BJC) opened a factory producing glass containers and beverages in Ba Ria-Vung Tau in February. BIC said Thai enterprises with factories in Vietnam can enjoy advantages of labor and costs. Products made in Vietnam will be easily transported back to Thailand or to other markets.
Meanwhile, Charoen Pokphand Group (CP), the leading foodstuff and animal feed producer in Thailand, plans to pour hefty capital into Vietnam to raise the number of factories in Vietnam from five to ten by 2014. Jittisart J. Sakulchai, general director of CP branch in Vietnam, expected this expansion will create conditions for the company to approach material sources and customers in a more efficient way.
Several Thai banks also join the investment flow into Vietnam. Last year, Tharabodee Serng Adichaiwit, senior vice president of Bangkok Bank, led a delegation consisting of 37 companies to Vietnam to study investment opportunities.
Compared to Laos, Cambodia and other regional countries, Vietnam attracts more attention of Thai enterprises thanks to the large market and the abundant labor force with high skills and low costs, said Adichaiwit.
AEC is expected to spring to life in 2015 in a bid to create a unified market for ASEAN countries, promoting the free flow of goods, services, investment and skilled labor in the region.