Thailand remains upbeat despite slide

Official figures released in May 2009 showed that recovery of the Thai economy will be relatively weak in the coming months owing mainly to the powerful drag in some of the country's largest manufacturing sectors. Yet several economic indicators for May suggested that Thailand's inventory liquidation might have run its course, even though the spending lift was muted, a Citibank report said. The prices of domestic products are expected to rise between 3 and 8 percent next year in line with the expected higher prices of imported raw materials, according to the Internal Trade Department. The price of steel is expected to surge between 4 and 7 percent. Suraporn Simakulthorn, president of Kulthorn Kirby, a manufacturer of compressors for refrigeration and airconditioning systems, stated, 揟he prices of steel and copper early were very high last year, so we decided to stock up on supplies. But when the world economy collapsed in the second half, prices plunged, and now we抮e facing inventory losses. And some financial difficulties because our lenders have not compromised on our debts.? The department's director-general, Yanyong Phuangrach said the department had no plan to allow local steelmakers to mark up their product price next month. This is to allay concerns on a possible steel-price hike in the domestic market with the steel prices in the global market having moved up. The global cost of steel scrap this month is $245 per ton, while billets are $400 per ton. Positive growth Thai Prime Minister Abhisit Vejjajiva expressed his confidence in domestic economy and the need for the kingdom to diversify economy and attract fresh investments for sustainable growth. In the launching ceremony of The Report: Thailand 2009 by Oxford Business Group (OBG) and Thai Board of Investment (BOI), Abhisit said, 揥e do look forward to the Thai economy turning around and hope that there will be positive growth in the last quarter of this year, followed by growth firmly back next year, both for Thailand and the region.? Thailand's largest hot-rolled steel maker, Sahaviriya Steel Industries Plc., is confident about business profit from an expected sales volume increased by 50 percent in response to the market share of 1.5 million tons. It hopes to see better exports to make up for 15 percent of total sales. Particularly, the increased demand from China has contributed up to half of its export income, accounting for Bt17 billion (US$499 million) in revenue from 60,000 tons of steel sale. Other markets include Asia and countries in the Middle East. Steel tariff refunds Thailand will have to shell out about Bt400 million (US$11.7 million) in tax refunds under the Japan-Thai Economic Partnership Agreement (Jtepa), which requires duties on imported Japanese steel to be cut to zero. 揟he government's loss is limited, while indirect benefits are huge,?Deputy Prime Minister Pradit Pataraprasit said. 揑ndeed, this is not a loss, as they should not have been liable to the import tariffs after the agreement took effect,?he added after meeting with the Thai Chamber of Commerce and automakers. The refunds will cover steel imports as far back as November 2007, when the Jtepa took effect. 揟he Bt400 million (US$11.7 million) refunds are based on the auto industry's imports of 300,000 tons of Q11-type steel worth Bt8 billion (US$235 million) per year.?Pradit said. The Bt400 million (US$11.7 million) outlay would be a slight setback to the government's revenue, but lower material costs would improve the auto industry's competitiveness, he explained. The government will also trace how the imported steel was used to ensure there is no diversion to other industries, which is against the Jtepa agreement. Business enterprise Royal Can Industries of Thailand has teamed up with Netherlands-based Impress Group to sell and manufacturadidas Mutator