Saha Group, one of Thailand's largest manufacturing and trading conglomerates, will invest Bt2 billion in expanding its manufacturing and distribution facilities both in Thailand and regional markets between this year and 2015 when the Asean Economic Community (AEC) kicks off, group chairman Boonsithi Chokwatana said.

The group yesterday signed a joint venture agreement with MK Group of Myanmar, to set up a logistics company "Tiger Distribution & Logistics (Myanmar) Co Ltd".

Boonsithi said it was a good time now to expand its business into the Asean market and cash in on the AEC.

He said the Saha Group expected to increase its business contribution from different markets in AEC from currently less than 10 per cent to between 40-50 per cent in the next 5-10 years.

The Saha Group has a strong base in Thailand where it has operated its business for about 50 years, Boonsithi said.

"We will speed up our investments in fast-moving consumer goods, such as instant noodles and detergents, in potential AEC countries especially Myanmar, Cambodia, Laos, and Vietnam," he said.

Boonsithi said the group plans to open instant-noodle factories in Cambodia and Myanmar. It also plans to set up new instant-noodle factories in Bangladesh and Hungary in the near future.

"From the business sector's point of view, we are quite ready to penetrate the AEC market. We may not able to compete with stronger countries like Singapore, but in some countries such as Malaysia we are better. We are also able to compete neck and neck with Indonesia," said Boonsithi.

He said the group was negotiating with a potential partner to set up the detergent factory in Yangon. The joint venture, with an investment of about Bt500 million and Bt600 million, would also Lion Corp of Japan and a Myanmar local investor as partners.

Saha Group itself would own a 30-per-cent stake in the joint venture, which would start operations by next year and serve only the Myanmar market.

Boonsithi said the group, however, had suspended its plan to develop an industrial park in Myanmar. According to its internal study, the investment in such an industrial estate in Myanmar was not appropriate at this time due to the high land cost and the limited lease period for lands.

"We are also looking at some developing countries such as Bangladesh to expand our manufacturing base, especially for fast-moving consumer products such as detergents. Bangladesh has a free-trade agreement with India so that we can target the India market as well. The investment in Bangladesh will have joint venture partners from Japan and a local partner," said Boonsithi.

He said the group was also studying the Vietnam market for its trading business.

He said that in Cambodia, the group had already set up a trading company to distribute products to its Japanese partner Aeon Corp, which opened its first shopping mall in Phnom Penh this month.

By Kwanchai Rungfapaisarn The Nation

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