Eastern seaboard report may 2015

Eastern Seaboard Report May 2015 – Prepared by Mark Bowling, Chairman ESB 

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The long-delayed automotive testing centre looks set to get off the ground, with the cabinet expected to approve financial support within the next three months. Vichai Jirathiyut, president of the Thailand Automotive Institute (TAI), said the government was fully committed to investing 5 billion baht in it and accelerating the approval process. The Natural Resources and Environment Ministry has already agreed to an Industry Ministry request to use 900 rai of its land in Chachoengsao's Sanam Chai Khet district to develop it. He said the testing centre, scheduled to be completed five years from now, would be jointly operated by the Thai Industrial Standards Institute and the TAI. Thailand's online food delivery market has seen steep growth with the proliferation of mobile devices. The amount of online food orders grew by 140% in 2014, with 12% of the population ordering food online against 5% in 2012, according to Foodpanda, a Berlin-based online food delivery service. "The figure is expected to reach 20% of the population by 2016, helped by greater wireless broadband network coverage and more affordable smart devices," said Alexander Felde, co-founder and managing director of Foodpanda Thailand. The overall food delivery market in Thailand is tipped for compound annual growth of 12.5% during 2015-18 with the market reaching 26 billion baht. Foodpanda provides online food ordering service in Bangkok, Pattaya and Chiang Mai. Future plans call for expansion to Phuket, Khon Kaen, Udon Thani and Nakhon Ratchasima.

SET-listed Hemaraj Land and Development Plc (HEMRAJ) plans to maintain its land sales target despite the lacklustre economy. The industrial estate developer aims to sell 1,400 rai of land at its industrial estates this year, up from 665 rai in 2014. Hemaraj sold 190 rai in the first quarter or 14% of its full-year target. The company hopes to sell 700 rai in the entire first half. estates this year, up from 665 rai in 2014. Hemaraj sold 190 rai in the first quarter or 14% of its full-year target. The company hopes to sell 700 rai in the entire first half. Hemaraj reported first-quarter revenue of 1.54 billion baht, down 45% from the same period of 2014. Revenue from industrial estates fell to 874 million baht from 2.07 billion baht a year earlier. The company concluded the sale of non-core businesses, such as the UM Tower and 253 rai of land on Koh Lan near Pattaya, in April via public bidding. The proceeds from the sales, which had an asking price of 3.02 billion baht, will be booked in the second quarter.

Chonburi: Farm equipment maker Siam Kubota Corporation (SKC) has earmarked 600 million baht to set up a research and development (R&D) unit in Thailand. The move is aimed at expanding production of the company's farm machinery for sale in Asean markets.

The government and car makers are flexing their muscles to usher Thailand's auto industry into a new th

British Chamber of Commerce Thailand, 7 Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 038 427 771 Fax: 038 427 772 Email: mark.bowling@colliers.com www.bccthai.com

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chapter with electric vehicles. Vichai Jirathiyut, president of the Thai Automotive Institute, said electric vehicles, or EVs, will be the new passion of the nation's automotive industry. Authorities and all stakeholders are due to meet 20th June to discuss the EV development plan, he added. "The government itself is also very keen on this new automotive trend," he said yesterday at a seminar on the next decade of Thailand's automotive industry held by UBM Asia (Thailand) and the Board of of Investment (BoI). In a related development, according to Mr Vichai, the government is also fully committed to investing 5 billion baht in the long-delayed automotive testing centre. In a related development, according to Mr Vichai, the government is also fully committed to investing 5 billion baht in the long-delayed automotive testing centre. The next step is to hire a foreign company to design the world-class testing centre.

The Marine Department plans to relax its maritime regulations to pave the way for the entry of superyachts into the country. The department's plan is part of a bid to boost trade and tourism, department director-general Chula Sukmanop said. Eleven marinas are located in Phuket, Krabi, Trat, Chon Buri and Prachuap Khiri Khan provinces. However, Thailand has the potential to increase its number of marinas to 33 − 11 in the Andaman Sea and 22 in the Gulf of Thailand, according to the department's feasibility study.

During a meeting held on the 29th May, Koh Larn ferry operators were criticized for allegedly overcharging passengers and violating fare rules for children. After a string of complaints about overcharging by boat operations at Bali Hai pier, Deputy Mayor Ronakit Ekasingh called a meeting to address the issue. But only 12 boat operators showed up. He said a city inspector, on April 13, found evidence that those complaining were justified after he was charged 100 baht for a 30-baht ticket to the island. Be warned that more notably over the Visakha Bucha holiday weekend there were two separate incidents involving these ‘death traps’ and all passengers had to be evacuated from boats within the space of 48 hours.

Detours will be created along a vital stretch of Sukhumvit Road to allow contractors to lay drainage pipes needed for the Central Road bypass tunnel, making already bad traffic worse. Deputy Mayor Ronakit Ekasingh announced the detours during a May 26 meeting called to address complaints by residents near the construction zone about cars and commercial trucks using their private road as a detour. Ronakit said from 15-30 June, contractors will lay 1.2 meter drainage pipes along the west side of Sukhumvit Road (Central Road to North Pattaya). Traffic heading towards North Pattaya will be detoured from in front of Pattaya School No. 5 to the East side of Sukhumvit Road (Siam Country Club side) and back to the west side in front of the Index Mall.

Finally on a Shocking note - Blasted in the media and online for dangerous, low-hanging jumbles of wires hanging from its utility poles, the Provincial Electricity Authority blamed shoddy work by technicians from cable-television and Internet suppliers for the problem. PEA technical officer Panya Boonsamer May 12 said every company other than the PEA is responsible for adding to the cable problem so evident throughout Pattaya, especially along Sukhumvit Road. Well he would, wouldn’t he…?  th

British Chamber of Commerce Thailand, 7 Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 038 427 771 Fax: 038 427 772 Email: mark.bowling@colliers.com www.bccthai.com

The Following news items kindly provided by SATCC 

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Chinese photovoltaics (PV) manufacturer Trina Solar has established a subsidiary in Thailand to construct a $160m cell and module production facility. Trina Solar Science & Technology (Thailand) will build the facility in Rayong. It will produce 500MW of modules and 700MW of cells. The new facility, which is expected to start production in late 2015 or early 2016, will expand Trina Solar’s existing manufacturing capacity to meet increasing demand in emerging markets. The company’s investment in Thailand will help create new jobs, support local economic development, and further develop the solar industry. Trina Solar COO and president of module business unit Zhiguo Zhu said: “Thailand is an ideal location for us to build a new manufacturing base due to its proximity to key emerging markets in the Asia Pacific region as well as its favorable investment environment in terms of land acquisition and labor costs. “Besides, Thailand is also a particularly attractive PV market given its sunny environment, long-term PV subsidies, and favorable government policies towards the solar sector.” In 2007, Thailand adopted a feed-in tariff system for renewable energy sources to diversify its energy portfolio.

The Transport Ministry and the Royal Thai Navy will sign a cooperative agreement next month to expand the capacity of U-tapao airport, Transport Minister Prajin Juntong said recently. The date for the signing has not been set but the minister said it would take place in late May. The agreement will provide a clearance from the navy to allow the ministry to develop the navycontrolled airport in Rayong province. The expansion will be undertaken in three phases starting with the construction of a new terminal to handle up to 3 million passengers a year from its 800,000 capacity at present. The project is expected to be completed next year. The first step also includes the expansion of the main road linking Chachoengsao province to the airport from two to four lanes. Facilities at the airport will then be improved, starting in 2018, to accommodate 5 million air travellers by 2020. The last stage will be the construction of a new runway and the development of the commercial area around the site. The minister said the plans will not start until the details are settled by two panels that are yet to be set up. Despite the move to turn U-tapao into a fully commercial airport, ACM Prajin said the navy insisted on full control of the airport, including air traffic management. But the navy could seek assistance from Thai Airways International or Airports of Thailand to handle ground services in the event of increasing flights and passengers, he added. U-tapao is the main navy air base and is also used to serve passengers mainly to Pattaya. The ministry expects the airport to ease air traffic loads at Suvarnabhumi, while using it to bolster tourism and industry in the eastern provinces.

Premier Inn, the UK’s largest and fastest-growing hotel operator, continues the expansion of its Thailand portfolio with the announcement of its first hotel in Phuket. One of the region’s most popular leisure and MICE destination, Phuket is a key focus market for Premier Inn in Asia. The Premier Inn Phuket signifies the entry of the brand in Phuket with plans to open five hotels in partnership with Rayaburi Group Co., Ltd., totalling around 1,250 rooms by 2020. The property comes after the group’s first hotel in Thailand, the 224-room Premier Inn Bangkok Soi 11 which will open by mid-2016. Premier Inn expects to further expand in key Thai city and resort locations including Chiang Mai, Hua Hin, Koh Samui and Pattaya.

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British Chamber of Commerce Thailand, 7 Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 038 427 771 Fax: 038 427 772 Email: mark.bowling@colliers.com www.bccthai.com

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The 32-km route connecting Pattaya in Chon Buri and Map Ta Put in Rayong, authorities plan to use money from tolls on the existing motorway to fund its construction, which is about 14 billion baht, ACM Prajin said.

The government secured a soft loan from China in November 2014 to fund construction of the standard-gauge line from Nong Khai on the border with Laos south via Kaeng Khoi where it will split to serve Bangkok and Map Ta Phut in Rayong. The Thai and Chinese governments subsequently signed an agreement to jointly build and operate two lines linking the northeastern province of Nong Khai with Bangkok and Rayong on the east coast in March.

Gintech to open 350MW Thailand cell factory. The Taiwanese crystalline silicon cell manufacturer Gintech Energy is to build a 350MW cell production facility in Thailand. The site has yet to be confirmed but it is strongly suspected to be in Rayong province. The PV cell supplier has established a Thailand-based subsidiary under the name Gintech (Thailand) and is to invest around US$45 million in the facility’s first phase to cover the costs of land acquisition, construct and equipment.

Taiwanese cell manufacturers have been under pressure to relocate production capacity overseas to avoid the latest anti-dumping measures imposed by the US on Chinese solar imports, which include equipment manufactured using cells made in Taiwan. The impact of the US duties has been a key factor in falling sales reported by Taiwanese cell manufacturers in recent months.Gintech expects the factory to be operation before the end of the year and start commercial production in Q1 2016. Dr Wen-Yen Pan, chairman and CEO at Gintech Energy, said the factory’s establishment would help diversify the company’s production capacity and leverage its resources more effectively.

U-Tapao airport, which is between Ban Chang in Rayong and Sattahip in Chonburi is getting fresh attention from carriers seeking to develop new destinations. Malaysian low-cost carrier AirAsia is due to inaugurate four weekly scheduled flights from Kuala Lumpur to the eastern Thai airport on July 16. Sister carrier Thai AirAsia (TAA) plans to make U-tapao its new hub by linking it with China and other Thai cities, possibly starting in September or October. Preceding the foray by AirAsia and TAA was Thai commuter carrier Kan Air's April 10 launch of five routes out of U-tapao. Those flights connect with Chiang Mai, Ubon Ratchathani, Udon Thani, Khon Kaen and Bangkok's Don Mueang airport. The airport is sparsely used, with only Bangkok Airways operating limited regular turboprop flights to Koh Samui and Phuket. The influx of Chinese tourists to Pattaya, one of their top Thai destinations, is the main spur of TAA's planned connection with a number of Chinese cities At the same time, there is demand from people living in the eastern coastal region including those working at huge industrial estates to fly out of the area's airport rather than catching flights from gateway Suvarnabhumi airport close to Bangkok in Samut Prakan province. TAA is working on several fronts to develop U-tapao as a new hub. AirAsia's July 16 launch of Kuala Lumpur service to U-tapao is consistent with the same strategic view taken by TAA — that U-tapao airport can become an important route in AirAsia's overall network.

The Cabinet has approved an investment of Bt1.864 billion by the Port of Authority to expand the Laem Chabang seaport. This will include the expansion of the port's basic infrastructure and investment on major lifting and logistical equipment.

Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT) and the Japan International Cooperation Agency will work with their Thai counterparts to develop and upgrade the railway system and connectivity within the Southern Economic Corridor linking Thailand, Cambodia and

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Vietnam. The MLIT has also expressed its intention to develop the Bangkok-Rayong railway jointly with Thailand, an offer that is under the study of this country's Transport Ministry.

Huawei Marine Networks Co, a global provider of undersea cable networks, has signed a system design and construction agreement with a consortium comprising Thailand's Symphony Communication, Telekom Malaysia, and Cambodia's Telcotech Ltd to build the Malaysia-CambodiaThailand (MCT) submarine cable system. Spanning about 1,300 kilometres, the MCT cable system will provide connectivity between Cherating in Malaysia and Rayong in Thailand, with a branching unit connecting from the main trunk into Sihanoukville in Cambodia.

THAILAND is considering letting the United States use Phuket Airport or U-Tapao in Rayong as a base for planes assigned to monitor the movement of migrants stranded on surrounding seas.

Thammasat University has been helping a seaside community in the eastern coastal province of Rayong to establish itself as a sustainable tourism destination. "Our goal is to ensure Pak Nam Prasae can attract visitors without having to give up its tradition and culture," Assoc Professor Jearanai Lekuthai, director of the university's Institute of Intellectual Property and Business Incubator, said. The project also emphasises social responsibility and the conservation of natural resources. "We have done that by engaging locals and promoting sustainable measures as well as integrated management in the community," she said.

Thailand's annual steel consumption is projected to grow steeply from 17.3 million tonnes last year to over 20 million tonnes in the next three years, driven mainly by the government's infrastructure projects. Tata Steel (Thailand) expects its sales to increase by 12 per cent to 1.25 million tonnes for fiscal year 2016 and to 1.7 million tonnes within the next three years when its three steel plants (one of which is in Rayong) in Thailand will reach their full capacities.

Robinson Department Stores get exclusive rights to world brnads. The first Payless ShoeSource stores will be open at Robinson Rayong and Jungceylon in Phuket.

Indorama Ventures (IVL) has successfully concluded the acquisition of Bangkok Polyester, the acquisition which raises its PET capacity share in Thailand from 43 per cent to 58 per cent.Bangkok Polyester is a significant exporter of PET to Japan, which is currently the world's largest importer of PET, and enjoys zero import duties from Thailand. The acquisition is in line with IVL’s strategy of vertical integration as it is located close to the company's PTA facilities in Rayong and therefore improves the overall cost synergies and supply chain of the company.

DEMAND to buy homes in Chon Buri province has recovered as investors from China and Japan have returned to the markets in both the Eastern Seaboard and Pattaya, according to Quality Houses president and chief executive officer Chadchart Sittipunt.

LEADING property firm Quality Houses is negotiating with a Japanese property firm to develop serviced apartment for ageing citizens to serve demand in the market, which is expected to rise in the future. "Japanese property firms are interested in expanding investments in Thailand, especially in Chon Buri province and other provincial areas, hence they need a partner to do business," Quality Houses president and CEO Chadchart Sittipunt said.

Dutch multinational AkzoNobel plans to invest more than 30 million euros in a manufacturing facility in Thailand to support regional growth of its performance-coatings business. The project, which is supported by the Board of Investment, involves constructing a 120,000-square-metre site at the Hemaraj Eastern Seaboard Industrial Estate in Chon Buri.

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British Chamber of Commerce Thailand, 7 Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 038 427 771 Fax: 038 427 772 Email: mark.bowling@colliers.com www.bccthai.com

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Mazda has designated Thailand as its spare-parts distribution hub for Asean and global exports, and has officially opened a new parts distribution centre in Samut Prakan in order to improve the quality of its after-sales service. Set up by Mazda Logistics & Yusen - a joint venture between Mazda Sales Thailand and Yusen Logistics with registered capital of Bt40 million - the new facility stocks up to 53,000 Mazda parts worth more than Bt360 million – many of which come from its plant in Rayong CENTRAL RESTAURANTS GROUP will focus on expanding its franchised casual dining Japanese rice bowl restaurant Yoshinoya in Thailand over the next three years, before exploring opportunities in other Asean markets, particularly Laos. The company expects to increase significantly the number of Yoshinoya restaurants in the Kingdom from 18 currently to 30 within the next three years – especially in Chonburi and Rayong provinces.

The upgrade of Beach Road's drainage system is expected to begin in June, but the planned simultaneous refilling of Pattaya Beach has been postponed again. Deputy Mayor Verawat Khakhay said following a meeting with contractors and Marine Department officials May 11 that Pattaya's inability to find sand that matches that currently on Pattaya Beach has necessitated yet another delay in the project to rebuild the beach after decades of erosion.

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British Chamber of Commerce Thailand, 7 Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 038 427 771 Fax: 038 427 772 Email: mark.bowling@colliers.com www.bccthai.com