Eastern Seaboard Report October - November 2017 – Prepared by Mark Bowling, Chairman BCCT Eastern Seaboard •
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All passenger cars and SUVs are set to come with mild hybrid tech from 2020, pending some issues in Thai automotive excise taxation. Mazda is planning to pour more investment into its Thai engine and transmission facility before the end of the decade, pending some issues in automotive excise taxation. As the Japanese carmaker has a strategy to hybridise all of its passenger cars and SUVs in next-generation forms from 2020, it wants to upgrade its site in Rayong to deal with more capacity and new powertrain technologies. As production of the next-gen BT-50 will move to Isuzu’s facility under a new agreement, Mazda’s vehicle assembly plant in Rayong will be freed up and can handle more passenger car models with renewed powertrain technologies. Toyota Motor Thailand (TMT) has exported its pickup Hilux Revo to Japan for the first time since the Aichi-based Toyota Motor Corporation (TMC) phased out its pickup truck manufacturing in Japan and moved to Thailand in 2002. The Japanese carmaker said the Hilux Revo double-cab 4x4 has been shipped since August to the Japanese market with a retail price of about ¥3 million (879,494 baht). The company plans to export about 300 pickups a month. TMC managing officer Hiroki Nakajima said Toyota's plants in Samut Prakan (Samrong) and Chachoengsao (Banpho) are the pickup truck production bases, serving 122 countries worldwide. Prime Minister Prayut Chan-o-cha has order relevant agencies, particularly the Eastern Economic Corridor (EEC) Office, to rev up the review process for the EEC civilian law and get it ready for enactment by year-end as earlier planned, says EEC Office secretarygeneral Kanit Sangsubhan. "The prime minister is very concerned about the law and doesn't want to see any further delays, since it would erode the confidence of foreign investors," Mr Kanit said. "He wants everything to go on as planned." The EEC is a massive new investment area spanning the three eastern provinces of Chon Buri, Rayong and Chachoengsao and aimed at accommodating next-generation industries. The government also plans to add the defence industry to the previous 10 targeted industries, bringing the total number of targeted industries in EEC areas to 11. The Board of Investment recently approved a two-year extension of investment privileges in the special promotion zones of the Eastern Economic Corridor (EEC). Existing privileges, including a corporate income tax exemption for eight years and a 50% reduction in corporate income tax for an additional five years after the tax holiday, are scheduled to expire at the end of this year. According to Board of Investment (BoI) secretary-general Duangjai Asawachintachit, the board meeting chaired by Prime Minister Prayut Chan-o-cha also approved an extension of the corporate income tax exemption from the existing eight years to 10 years and a 50% cut on corporate income tax for an additional five years after the tax holiday. The new perks will be offered to investors in three special zones at the EEC, while applicants for the new privileges are also required to cooperate with educational British Chamber of Commerce Thailand, 7th Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 085 2828 120 Email: mwbowling1970@gmail.com www.bccthai.com
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institutes, research centres or other other excellence hubs on human resource development and training of employees. According to Ms Duangjai, the board yesterday also approved measures to support small and medium-sized enterprises to upgrade their capability, allowing those who win BoI privileges and list on the Market for Alternative Investment (MAI) to enjoy a double corporate income tax exemption. The board approved privileges for new investment categories, namely trading centres and integrated manufacturing centres, in a bid to promote more investment in 10 border special economic zones (SEZs). Investment projects located in SEZs in 10 border provinces will be allowed to enjoy eight years of corporate tax waivers and a 50% reduction in corporate income tax for an additional five years after the tax holiday. Investment in the three EEC provinces (Chon Buri, Rayong, Chachoengsao) in the first nine months of 2017 totalled 104 billion baht, with investment in the 10 targeted industries making up 67.8 billion baht. Thailand is planning its first recycling plant for photovoltaic (PV) panels to deal with the massive amount of waste from solar power systems. Construction of the facility is expected to start by mid-2018 with a development cost of 60 million baht, says a government source. The source said the plant would be operated by a joint venture between a local solar power system provider and a Chinese firm. The source declined to give further details about the plant, saying the two sides have not yet finalised the deal. But the joint venture has already been granted a factory development licence by the Industrial Works Department (IWD). The joint venture plans to apply for investment privileges from the Board of Investment and is now seeking capital, the source said. The recycling plant is set to be built in Chachoengsao province, in the government's flagship Eastern Economic Corridor investment area. PTT Plc, the country's oil and gas conglomerate, has set aside 10 billion baht to invest in the first phase of its innovation centre in the Eastern Economic Corridor (EEC), known as EECi, in Rayong's Wang Chan district, says Pailin Chuchottaworn, chairman of Vidyasimimedhi Institute of Science and Technology. Mr Pailin, a former PTT chief executive, said the centre is expected to be a knowledge base to increase its investment in bio-based petrochemical products and for foreign investors interested in investment in these areas. "Most of the 10 billion baht is for the development of infrastructure on 800 rai in the first phase," he said. "There is a total of 3,140 rai we have prepared for this EECi project." The EECi project is a "smart city" the government has designated for investment, in an area spanning more than 30,000 rai in the three eastern provinces of Rayong, Chon Buri and Chachoengsao. PTT wants to invest more in developing next-generation biobased plastics and bio-medical equipment as well as train new scientists and other skilled workers to match rising demand in the EEC areas. The government's flagship Eastern Economic Corridor (EEC) will stimulate private investment and rev up corporate loan demand next year, says a senior official at Bangkok Bank (BBL). Corporate loan demand is improving in line with the economic recovery, driven by the government's infrastructure investment plan, while the EEC is expected to be the key driver in supporting economic growth, private investment and corporate loan demand from next year, said Chansak Fuangfu, senior executive vice-president and executive director. British Chamber of Commerce Thailand, 7th Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 085 2828 120 Email: mwbowling1970@gmail.com www.bccthai.com
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The EEC will draw local and overseas investors and fuel Thailand's long-term expansion, Mr Chansak said. Other infrastructure work, such as double-track rail and smaller transport projects upcountry, will also continue next year. With the positive prospects, BBL is ready to lend financial support and sees greater opportunities in construction, transport and logistics, Mr Chansak said. British maker Triumph Motorcycles is confident about its position as leader in the premium big-bike segment in Thailand, which has experienced strong growth in the last few years. Triumph Motorcycles Thailand said its registration at the Land Transport Department tallied 2,086 units from January to August, an increase of 22.6% year-on-year. "We believe we can sell 3,000 big bikes by the end of 2017, a 23% increase," said general manager Jakkrapong Santirat. Triumph introduced three new models in Thailand this year, including two motorcycles launched yesterday: the Bonneville Bobber Black and Bonneville Speedmaster. Triumph came to Amata Nakorn Ind. Estate, Chonburi in 2002, after opening its first motorcycle components factory in the country to manufacture frames, fuel tanks, header systems, swinging arms, engine covers and chrome-plated parts. The company employs 1,100 workers in Thailand, and its local factories make up half of its total production capacity of 80,000 units a year. Pattaya-based developer Apus Development Group Co will continue with its policy to collect a 30% down payment for a new condominium project it plans to launch in Pattaya, a strategy it employs to reduce risk. Managing director Chalermphon Khoncham said collecting a high down payment of the unit price could help screen out some short-term speculators who refused or might be unable to get a unit transfer when the project is completed. On Nov 25-26, Apus will launch Andromeda, a 1.28-billion-baht condominium project located on a 1.5-rai site in the Khao Pratumnak area of Pattaya. It will comprise 216 units sized between 27-74 square metres and priced from 2.8 million baht. A 30% down payment is required from Thai buyers and 50% from foreigners. The company expects to have 200 million baht in presales during the two-day launch and 50% units sold by the end of the year, said Mr Chalermphon, whose family runs Baan Amphur Trading Co, one of Siam Cement Group's large construction materials dealers in the eastern region. The government plans to raise the number of pilot smart cities from the current three to seven next year, using 300 million baht from the fiscal 2017 budget. The ultimate goal is to have 100 such cities within two decades to improve the quality of urban life, Deputy Prime Minister Prajin Jungtong said in a speech to Secutech Thailand 2017, which ends today at Bitec. The smart cities scheme, part of the Thailand 4.0 initiative, includes Phuket, Chiang Mai and Khon Kaen at present. It will expand to the Eastern Economic Corridor in Chon Buri, Rayong and Chachoengsao, plus Bangkok. To stimulate adoption of smart cities, the government has established the National Smart City Committee, comprising key cabinet ministers and chaired by the deputy prime minister. The Office of Transport and Traffic Policy, Energy Policy and Planning Office and the Digital Economy Promotion Agency (Depa) will also contribute. British Chamber of Commerce Thailand, 7th Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 085 2828 120 Email: mwbowling1970@gmail.com www.bccthai.com
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Dutch paint maker AkzoNobel has agreed to acquire VPowdertech to strengthen its powder coatings business in Southeast Asia. A company statement recently said AkzoNobel has agreed to acquire the business of VPowdertech, the leading Thai manufacturer of powder coatings, supplying a range of products for domestic appliances, furniture and general industrial applications. The latter employs more than 250 employees. AkzoNobel runs four manufacturing sites locally, one in Bangkok for decorative paints and packaging coatings and three for performance coatings in Nakhon Pathom, Rayong, and a new site in Chon Buri. The firm will close operations in Nakhom Pathom and Rayong, shifting capacity to its Chonburi facility.
British Chamber of Commerce Thailand, 7th Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 085 2828 120 Email: mwbowling1970@gmail.com www.bccthai.com