Thailand: Private investments to spur economy

PRIVATE ENTERPRISES have expedited investments in the Eastern Economic Corridor (EEC), regarded as one of the main economic drivers for the country.

Late this year, the Thai economy picked up continuously from growth in exports and tourism. Another driver of economic growth is private investment. 

Large-sized listed companies have continuously invested, particularly in the EEC and abroad.

PTT Plc plans to spend Bt341 billion over the next five years, starting from 2018 to 2022. Of the total, Bt218 billion will be invested in joint ventures and companies PTT holds stakes in; Bt56.9 billion in its gas pipeline business; and Bt21 billion in its petrochemical operations. The company will set aside Bt245 billion to invest in new businesses.

Tevin Vongvanich, president and chief executive officer at PTT, said that most of the five-year investment plan would be for upstream petroleum and oil groups for flexibility and efficiency in long-term operations.

Next year will see the highest investment of Bt246.61 billion, followed by Bt45.88 billion in 2019. PTT has also set aside Bt245.20 billion to invest in its new S-Curve businesses in the next five to 10 years in response to technological changes, shift in consumer behaviour, clean energy trends and the country’s strategic development.

According to its report, Siam Cement Group Plc (SCG) continues to seek opportunities for acquisitions related to its core business in the country and overseas. It is studying petrochemical investment in the country to cash in on the EEC and expects to finalise its decision by the middle of next year. 

SCG has an investment budget of Bt50 billion to Bt60 billion for 2018. Of the budget, about Bt25 billion to Bt30 billion will be allocated to its petrochemical project in Vietnam and the rest for improvement of local production efficiency.

SCG invested about Bt33 million in a digital start-up with a 13-per-cent stake in Giztix Pte Ltd of Singapore. This was the first direct investment by SCG’s subsidiary, Adventures Capital International Co Ltd, which aimed to invest in overseas start-ups related to innovation.

The Thai cement firm targets growth of 3-5 per cent in sales, which was revised down recently due to the cement industry’s downward trend and high competition.

Ch Karnchang Plc (CK) expects to win 20-25 per cent of all state construction projects to be auctioned next year, while forecasting its income at Bt35 billion in 2018. Its gross margin is estimated at 8-10 per cent in the year.

The company will bid for all government projects: the Bt130-billion Mass Rapid Transit (MRT) Purple Line (Tao Poon-Ratburana), the Bt85-billion MRT Orange Line (Thai Cultural Centre-Taling Chan), as well as a new hydropower project in other countries like Laos.

CK is focusing on local construction projects to generate growth in the next five years, while preparing for high growth from state projects. Its foreign focus will be energy projects in the Asean Economic Community, particularly Laos and Myanmar.

Chavinda Hanratanakool, chief executive officer at Krungthai Asset Management Plc, said that Thailand’s private investment was not expected to be high next year, as economic growth would likely be concentrated on specific sectors and not across the board.

Thai listed companies would target overseas investment rather than diversify, she said, indicating that Thai investment would pick up only when the EEC materialises.

“The private sector will return to invest if there is certainty about the EEC, as it will be a key engine to drive the Thai economy,” she said.

She expected next year to see the consistent economic recovery, which would be led by public investment and supported by exports and tourism. 

Source: http://www.nationmultimedia.com/detail/Economy/30334984