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Eastern Seaboard Report Eastern Seaboard Report October 2014 – Prepared by Mark Bowling, Chairman ESB Thailand's bearish automotive market has deterred two Japanese car makers, Mitsubishi Motors Corporation and Nissan Motor, from commencing production of their new eco- car. "Our parent company has not yet approved the exact time frame for production, as the domestic market has experienced weaker growth than was enjoyed in 2012," said Masahiko Ueki, president and chief executive of Mitsubishi Motors (Thailand). "Next year's prospects are unpredictable, as the economy and consumption will take time to recover," he said. Mitsubishi was one of the five companies that applied for Board of Investment (BoI) promotion for the second phase of the eco-car scheme. All eco-car production will be done at Mitsubishi's third plant in Laem Chabang Industrial Estate in Chon Buri province. The government confirmed changes to its high-speed development plan, adding a Bangkok-Rayong route and splitting the Nong Khai-Map Ta Phut route into two — Nong Khai-Nakhon Ratchasima and Nakhon Ratchasima-Bangkok-Map Ta Phut. The Nong Khai- Map Ta Phut route would cover 737 kilometres and cost 393 billion baht, while the Chiang Khong-Phachi route would be 655 km and cost 349 billion. Two high-speed rail routes costing a combined 741 billion baht would link Thailand with southern China. Bang Na-Trat office demand up - With office rents in Bangkok's central business district rising by 15% last year and nearly 6% more so far this year, more companies are considering Bang Na-Trat Road an alternative due to its competitive rents and convenient access to both the CBD and the Eastern Seaboard. However, the office market in this area suffers from a severe shortage of quality office supply. Suphin Mechuchep, managing director of Jones Lang LaSalle (JLL), said Bang Na-Trat was known predominantly as a major manufacturing and logistics hub in eastern Bangkok. But in recent decades, the area has emerged as a major commercial location, with a number of retail and office developments lining the main road. The Thai division of South Korea's Posco has broken ground on a continuous galvanising line plant. Posco Coated Steel (Thailand) is setting up the factory to make high-end steel products to satisfy growing demand for automotive steel sheets in Thailand. Construction started in October on the Rayong facility, which will have annual capacity of 450,000 tonnes. The plant is expected to be finished in June 2016 at a cost of US$300 million. The site is in the Amata City Industrial Estate, the epicentre of Thailand's automotive industry and close to Laem Chabang port and many steel buyers. Taco Bell, the giant Tex-Mex food chain, is testing a new menu platform that's hotter than hot, and it pays homage to a small town in Thailand. About 70 restaurants in the Kansas City market have begun testing Sriracha, the wildly-popular hot sauce - in everything from tacos to nachos. If the test is a hit, the chain is expected to more widely roll-out the Sriracha platform, which is made with the paste of chili peppers and has its origins in Thailand, where it was first made in the Eastern Seaboard town of the same name 80 years ago. British Chamber of Commerce Thailand, 7th Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 038 427 771 Fax: 038 427 772 Email: [email protected] www.bccthai.com PTT Plc, the national oil and gas conglomerate, plans to invest more than 100 billion baht on a new gas pipeline from Rayong's Map Ta Phut to Bangkok. The project will be its fifth pipeline to serve the constantly increasing demand for gas in the future, says chief executive and president Pailin Chuchottaworn. "Our four gas pipelines are operating at nearly full capacity, so we have to prepare for the new one since construction will take years," he said. Details of the new pipeline have yet to be finalised as the company is waiting for the results of the feasibility study. The project would also need to meet the requirements of the state's power development plan (PDP). However, he said that it would probably be routed to link with pipelines carrying gas from Myanmar in order to secure gas supply in the future. Leading industrial conglomerates have agreed to make Map Ta Phut Industrial Estate acceptable among the surrounding communities by turning it into an eco-industrial town by 2018, say members of the Community Partnership Association (CPA). CPA was founded by PTT Group, SCG, BLCP Power, Dow Thailand and Glow Group to develop eco- friendly industrial works and provide mutual cooperation. Regulations are under development with the Federation of Thai Industries and the Industrial Works Department to govern raw materials use, energy use, logistics management and green supply chains. "In the last five years, PTT Group has laid a green roadmap that consists of manufacturing processes and finished products," said Pailin Chuchottaworn, president and chief executive of PTT. Property developer Chewathai Ltd plans to launch three residential projects worth a combined 3 billion baht and 10-20 ready-built factories in 2015 in a show of confidence in the new government. New projects next year will include a high-rise condo near a mass transit line, a low-rise condo and a single-house project. It will also develop 10-20 ready- built factories in Rayong with an investment of 30-40 million baht each. In the first half, it bought a 20-rai site at Amata City in Rayong, where it has a 40-rai plot. It already has 10 ready-built factories after an investment of 300 million baht with full occupancy and rental revenue of 3 million baht per factory per month. The Industry Ministry is on course to set up six new industrial estates in a bid to accommodate industrial waste management businesses, says Industry Minister Chakramon Phasukvanich. "We're going to choose one plot for each area to build up specific-purpose industrial estates for managing waste from manufacturing," said Mr Chakramon. Mr Chakramon said the plan was to have one industrial estate project each in Rayong, Chon Buri, Chachoengsao, Ratchaburi, Nakhon Pathom and Samut Sakhon provinces. The plots need to be large enough and located far from local communities. SET-listed developer Property Perfect Plc (PF) is planning a joint venture with a large industrial estate developer for a residential township project on 100 rai along the Eastern Seaboard by year-end. "We need to diversify into more provinces," Chief Executive Mr Chainid said. "Bangkok property prices keep rising, driven by soaring land costs. Some Bangkokians will eventually be unable to afford a housing unit." The project will comprise residential areas including single houses, townhouses and condominiums across all price ranges. British Chamber of Commerce Thailand, 7th Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 038 427 771 Fax: 038 427 772 Email: [email protected] www.bccthai.com Toyota Motor Thailand has urged the Thai government to stimulate domestic auto sales, following a 38% contraction in the first eight months of this year. Export sales also failed to offset the sharp decline during the period, rising by a mere 3% year-on-year. Total production will likely be 1.985 units, short of the 2.1-million-unit target, but the ministry is confident output would reach 2 million units given typically heavy sales promotion campaigns in the fourth quarter. The Toyota executive also asked the government to consider amending the law revising up the maximum weight of trucks to 2.2 tonnes from 1.6 tonnes. With the amendment, Thailand can expand its export markets. Despite an unfavourable market outlook, German luxury car maker BMW Group Thailand is committed to expanding its outlets and service centres for its three brands — BMW, Mini and BMW Motorrad. President Matthias Pfalz said the group planned to increase its BMW outlets to 23 this year from 17 in 2013, bump its Mini centres from six to 11, and increase BMW Motorrad outlets, the group’s big bike unit, from four to eight. He did not reveal the cost for the expansion. "The group remains confident in luxury car prospects despite Thailand’s bearish car industry," he said. "Luxury car sales are projected to grow by single digits this year from 18,000 units last year," he said. For the first eight months this year, BMW Group Thailand reported its car sales fell by 2.2% year-on-year to 5,051 units. BMW sales dropped 7% for the period to 4,512 units, but Mini sales surged 80% to 539 cars. BMW Motorrad sales rose 30% to 348 units, driven largely by locally assembled motorcycles. The Board of Investment (BoI) has approved investment applications worth nearly 90 billion baht, mainly for companies making environmentally friendly cars or involved in renewable energy. Secretary-general Udom Wongviwatchai said the BoI approved investment applications worth 89.7 billion baht at Friday's meeting chaired by Prime Minister Prayut Chan-o-cha. The investment is mainly for 18 large projects, with six worth a combined 52.7 billion baht slated for the second phase of the eco-car scheme. Ford Thailand will spend 18.2 billion baht to make environmentally friendly cars, with annual production capacity of 180,000 vehicles and 2,000 engines. Its US peer General Motors will invest 13.1 billion baht to make 158,000 vehicles annually. Thailand-based developer Kingdom Property debuted last weekend its latest beachfront retail project in Central Pattaya called ‘The Bay’, with a total value of THB5 billion (USD154 million).
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