BoI to stop supporting low-tech businesses

Bangkok Post (20 November 2007)

‘Labour-intensive, low-quality and low-technology sectors will no longer receive investment privileges from the Board of Investment (BoI), effective next year. Satit Chanjavanakul, the BoI secretary-general, said the state was focusing on promoting investment in high-technology and high-grade products.

''We aim to phase out [promotion of] manufacturers that have fewer advantages in global competitiveness,'' he said.He said the agency promoted labour-intensive manufacturers for decades, but that it would no longer be a fruitful business since the new emerging economies such as China, India and Vietnam have lower labour costs.

He said Thai manufacturers had entered the era of high technology through research and development and more complex product design.

Existing textile, garment and footwear manufacturers also have the opportunity to gain investment privileges through a machinery and equipment replacement programme.

The BoI forecasts 550 billion baht in new applications for investment privileges for 2008, up 10% from 500 billion baht estimated in 2007.

Automobiles and parts, electronics, chemicals, steel, services and alternative fuels would be major growth areas.

The BoI reported 498 billion baht in net application from January to October this year, up 20% from 414.5 billion baht a year earlier.

It expects slightly more than 500 billion baht for all of 2007.