Other industries support upstream push

       Industry operators support establishing an upstream steel industry in Thailand as it would reduce risks from importing expensive steel products.
       Ninnart Chaithirapinyo,vicechairman of Toyota Motor Thailand, said an upstream steel producer would vastly reduce the production cost of locally made vehicles. Locally produced steel is 10-15% cheaper than imported products because of import tax, logistics cost and shipment insurance, he said.
       Local supply would also allow production flexibility as imported steel purchasing orders must be made three months in advance. Local supply would also eliminate exchange-rate and price fluctuations as speculative investment can affect global steel prices, said Mr Ninnart.
       Local production promotes development of other industries that need quality steel products such as shipbuilding, bus,rail and plane assemblers.
       The government should support steel industry development, especially local community understanding of the industry and environmental protection,he said.
       "Interested investors for projects need to know the government's direction,"said Mr Ninnart.
       Last year, the automotive industry contributed 900 billion baht or 10% of GDP. The industry employs 1.2 million workers and vehicles are the secondlargest export product, in terms of value.Electrical and electronics items are the country's top export.
       Payungsak Chartsutipol, president of the Steel Industry Club at the Federation of Thai Industries (FTI), agrees the country needs upstream steel production.
       "All industries would benefit. We use 13 million tonnes of steel products yearly to support various industries," he said.
       "While steel demand is expected to surge to 15 million in a few years, we should have local production to complete the supply chain, create local jobs and guard against steel speculation and exchange-rate fluctuation."
       According to Vikrom Vajragupta, director of the Iron and Steel Institute of Thailand (ISIT), four upstream steel investors - Japan's Nippon Steel and JFE Steel, India's Arcelor-Mittal and China's Baosteel - have all filed preliminary environmental and community management plans to the Board of Investment (BoI).
       An upstream steel industry development team under Industry Ministry supervision has selected three to four potential sites in the southern and eastern regions. The sites need massive environmental rehabilitation and investors are expected to contribute to this improvement.
       "The project would also have to be acceptable to the local community," said Mr Vikrom.
       The ISIT is now waiting for 38 million baht from the 2010 government budget to be disbursed so it can go ahead with in-depth research on the finalist sites.