Thailand, S'pore sign $700 million joint venture deal

Thailand, S'pore sign $700 million joint venture deal

BANGKOK (AFP): Thai and Singaporean firms agreed yesterday to
develop a US$700 million industrial estate which Bangkok hopes
will help turn its eastern coast into Southeast Asia's top
industrial hub.

The venture is also expected to become a springboard for
investment in the neighboring Indochinese countries, Cambodia and
Laos, due to join the Association of Southeast Asian Nations
(ASEAN) in July, officials said.

The signing of the memorandum of understanding at Bangkok's
Government House was witnessed by Thai Prime Minister Chaowalit
Yongchaiyudh and his visiting Singaporean counterpart Goh Chok
Tong.

Thailand's Eastern Sugar Co. Ltd, and Singapore's JTC
International Pte. Ltd. agreed to set up a joint venture firm,
KK-JTCI (Thailand) Co. Ltd. to build the massive industrial park
near Rayong on Thailand's eastern coast.

The new firm, with an initial registered capital of 300
million baht (US$11.5 million), forms part of Bangkok's bid to
turn Thailand's eastern seaboard into the region's largest
industrial hub, officials said.

The Thai partner will take a 60 percent stake in the deal
while the Singaporean side will retain the remaining 40 percent
share, company officials told AFP.

The 1,100 hectare Thai-Singapore 21 (TS 21) industrial estate,
Thailand's biggest, should attract 4.63 billion dollars in
investment in factories, plants and machinery after the last of
its four stages is completed in 2003, officials said at the
ceremony.

Work on the first phase will begin in July and will end in mid
1998, joint venture officials said.

The industrial park will also launch regional investment in
two of Thailand's poorer neighbors, Cambodia and Laos, which
along with Burma are due to join ASEAN as full members in July,
company officials said.

"TS 21 industrial estate is strategically located in the heart
of the eastern seaboard," said the joint venture firm's managing
director, Panida Thepkanjana.

"Strategically it is also a gateway for multi-nationals who
are positioning themselves for the Indochinese market," she said.

The entry of Burma, Cambodia and Laos would expand ASEAN's
market to 500 million people. ASEAN currently groups Brunei,
Indonesia, Malaysia, the Philippines, Singapore, Thailand and
Vietnam.

She said the park was located on the main highway linking
Bangkok with the east coast as well as just 32 kilometers (20
miles) from a deep sea port at Laem Chabang.

The new industrial park would boost Thai plans to turn the
area, which is situated about 180 kilometers (112 miles) west of
the Thai-Cambodian border, into the region's top industrial
centre, she said.

"As part of the government's moves to make the eastern
seaboard region the biggest industrial hub in Southeast Asia,
four billion dollars worth of infrastructure development will be
spent in the next four years in the region. "

Japanese auto giant Mazda already has a production facility in
the area, as did the U.S. car maker Ford Motor Co., she said.

The managing director of JTC International, Dominic Ng, said
TS 21 would be a "customer focussed" venture with a "one stop
service where we assist the investors from the moment they appear
at the doorstep."

At the signing ceremony, the secretary general of Thailand
Board of Investment presented officials with a certificate
granting the venture certain fiscal privileges.

It will be exempted from import duty on machinery as well as
from corporate tax for eight years, followed by a five year
period during which it will pay only 50 percent of the usual
level of corporate tax.

In addition, the firm will be exempted for five years from
duty on raw materials to be used in production of goods of which
at least 30 percent are exported.

The signing came on the first of a three-day visit to Thailand
by the Singaporean premier, Foreign Minister S. Jayakumar, Trade
an Industry Minister Lee Yok-Suan and more than 60 captains of
business and industry.

JTCI is the 100 percent-owned international arm of Singapore's
Jurong Town Corporation, and has already invested about $200
million in various countries in region including the Philippines,
Thailand and China. Singapore is the third largest investor in
Thailand after the United States and Japan.