Thailand: BBL keen to finance EEC projects and fuel growth

• Nov 22, 2017

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.

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.

The National Legislative Assembly is expected to approve the EEC law governing investment activity by year-end or early next year, paving the way for investment to begin in the first half of 2018. The draft bill is now under review by the lawmaking committee.

With the positive prospects, BBL is ready to lend financial support and sees greater opportunities in construction, transport and logistics, Mr Chansak said.

Amid the economic recovery, it would also be a boon to other industries, he said, adding that BBL projects positive corporate loan growth next year.

BBL, in collaboration with Krungthai Bank, Siam Commercial Bank and the Export-Import Bank of Thailand, last month financed the construction of Bangkok’s Pink Line and Yellow Line monorail projects, worth 63.4 billion baht.

BBL also signed a 2-billion-baht loan agreement to finance SET-listed Vanachai Group Plc (VNG) as it builds a new panelboard factory. Upon completion, the company’s annual production capacity will double from the current 450,000 cubic metres a year.

VNG managing director Wanthana Jaroennawarat said the improved technology used in the new factory will raise capacity and sales, particularly for exports. Domestic particleboard sales represent 50-60% of total sales.

VNG expects exports to become the majority soon because of stronger demand in Asean, especially in Cambodia, Laos, Myanmar and Vietnam.

When capacity doubles next year, the company expects a 20% increase in revenue.

For the third quarter VNG posted revenue of 3.28 billion baht, up 16% year-on-year.

BBL shares closed yesterday on the Stock Exchange of Thailand at 196 baht, up 50 satang in trade worth 458 million baht.

VNG shares closed at 11.40 baht, down ten satang, in trade worth 22 million baht.

Source: https://www.bangkokpost.com/business/finance/1364731/bbl-keen-to-finance-eec-projects-and-fuel-growth