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The Thailand Trade Representative Office (TTR) plans to support the expansion of small and medium-sized enterprises in overseas markets such as Bahrain, India and other Asian countries.

An Indian rickshaw puller waits for customers next to a construction site on a foggy morning in New Delhi on Thursday. India’s explosive growth has opened up numerous opportunities for Thai construction companies. AFP

TTR president Kiat Sittheeamorn said that apart from the focus on Bahrain and India, potential existed in other markets in the Middle East, particularly in residential construction.

The TTR has held negotiations with five property development and building associations, whose members are seeking government support to expand abroad. The talks have identified six markets – four in the Middle East along with India and Libya, where there are many construction projects.

TTR also forecast that bidding for overseas projects could help Thai companies generate as much as 60-100 billion baht in revenues.

“[The developers] identified these countries as having high demand with a high number of residential projects required, which is expected to bring a high degree of benefit to Thai developers,” he said.

Contracts for financial support are pending with three government banks – Krung Thai Bank, the SME Bank and the Export-Import Bank in the next two months – for small and medium developers that have the skills and ability to compete with foreign peers abroad.

“The main problem for developers who bid for projects overseas is financial,” he said. “At present, there are no Thai commercial banks in the Middle East, so those developers have to fork out high financial fees for funding from overseas banks.”

Mr Kiat said the government would try to remedy this problem by encouraging Thai commercial banks to open overseas branches or join with local banks to launch operations. In addition, the government expects to encourage Thai private companies to join with local companies as strategic partners to generate a greater chance of winning business.

Moreover, Mr Kiat said government-to-government (G-to-G) negotiations would help to create more trust and confidence among overseas clients, including more convenience and access to government offices.

Thai developers are expected to have more opportunities to win bids in these countries because of strong competitiveness and high capability, especially in some sectors such as high-rise construction and single housing development.

“We will mainly focus on small and medium developers in specific sectors such as housing and high-rise buildings because some giant contractors such as Italian-Thai Development Plc (ITD) might not need any help because they are ready to move by themselves,” he said.

Companies such as ITD, which a few years ago bought out a local construction company in India, are faring well in the market.

ITD-ITD CEM Joint Venture, comprising of ITD and ITD Cementation India, recently signed a contract for the Bangalore Metro Rail Project Phase 1 in India worth around 1 billion baht.

Mr Kiat said more detail should be available this year on the projects for which Thai companies would bid.

He said Bahrain was a promising market for Thai businesses seeking to join bids for housing development. Projects planned in the country are estimated to be worth around 50 billion baht, thus giving Thai companies an opportunity of a lifetime if they can compete.

In India, Thai companies are seen as having potential to pursue work worth 70-80 billion baht, including the construction of an airport in Kolkata.

In addition, the Thai government is proposing that Vietnam allocate land banks to Thai developers to build residential projects given the country’s growing affluence and high demand for residential property.

Thailand’s second largest residential developer, Pruksa Real Estate Plc (PS), signed an agreement late last year with Hoang Huy Services Investment Joint Stock Company, with registered capital of US$10 million to jointly develop townhouses and four-storey condominiums in Vietnam. The project value is more than 1 billion baht and targets mid-income home earners.

Mr Kiat added the Thai government had also held talks with Bahrain’s government to open a Thailand Distribution Centre for Thai agriculture products for the Gulf countries. Negotiations were progressing well.

Source: http://www.bangkokpost.com/business/economics/31522/ttr-opens-overseas-construction-to-smes

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