Investment by Thai SMEs increased twelvefold last year, with 147 projects applying for investment incentives. The positive trend is likely to continue in 2011, especially in the processed foods, auto parts and petrochemical industries, with potential investment of more than Bt400 billion, according to the Board of Investment (BOI).

However, the BOI recommends that SMEs closely watch global economic development and the baht.

Dr. Atchaka Sibunruang, Secretary General of the Board of Investment, said that the strong investment momentum among Thai SMEs was a result of the improvement of investment promotion policy launched in early 2010. Last year the BOI added 47 new business categories to its list of target SME businesses, bringing the total number to 57. Following the change, the BOI received applications for 147 SME projects with total investment value of Bt2.592 billion, which represented a growth of 12 times or 1,200 per cent the figure for 2009 when only 11 projects applied for the investment incentives.

The majority of the projects seeking investment incentives from the BOI are related to the food production, food preservation, high-technology food flavoring and additives, metal and metal products and parts production, machinery and equipment production and plastic and plastic coated product manufacturing industries.

?Our improved policy to promote investment by SMEs and the satisfactory results show that we are on the right track. The policy has helped increase access to various investment incentives for SMEs, such as 8-year corporate income tax exemption, which plays a significant role in increasing liquidity and competitive advantages,? said the Secretary General.

In 2010, the industry with the highest number of applications was the service and utility sector, which attracted Bt167 billion in investments. Major projects in this category are 79 electricity- generating projects with a value of more than Bt107.572 billion. The second top category is metal, machinery and transport equipment, with more than Bt67 billion, followed by the agro industry with Bt 66.1 billion investment value.

In January 2011, a total of 120 SMEs projects applied for BOI investment incentives. This represents 35 per cent increase compared to the same period last year, when there were applications for 89 projects. In terms of investment value, this year the overall value was Bt28.4 billion, 55 per cent lower than the same period last year because most projects applying for the incentives in January 2010 were large-scale ones, including seven natural gas-fired electricity generating projects with a total investment value of Bt35 billion.

Looking ahead for 2011, the BOI predicted that total investment value applying for investment promotion would be at least Bt400 billion. High-potential segments are the processed foods, automotive and auto parts, electrical appliances and electronic equipment, electricity and petrochemical industries. The strong trend is driven by clearer investment direction in the Mab Ta Phut area. However, impact from the strong baht and global economic fluctuation may slightly affect the investment climate as some businesses decided to delay their investment.


Source : BOI

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