Thailand's major petroleum and construction firms are focusing their strategic investments on Burma to cash in on the country's increasing opportunities, especially infrastructure projects.
PTT Exploration and Production (PTTEP), a national petroleum exploration and production company, said it saw Burma as a focus for its investments over the next five years.
President and chief executive officer Anon Sirisaengtaksin said the company would allocate about Bt60 billion of its capital investment to its petroleum exploration and production projects in Burma. The money accounts for 10 per cent of PTTEP's total investment, worth about Bt600 billion, set aside for the next five years.
He said PTTEP was currently investing in five operating projects and two joint ventures in petroleum exploration and production. He added that he expected Burma would deliver a large contribution to PTTEP's revenues in the next five to 10 years.
Anon spoke at a forum on "The New Burma and Investment Opportunities in Thailand and India" organised yesterday by Maybank Kim Eng Securities (Thailand).
As a top-10 publicly listed company on the Stock Exchange of Thailand, PTTEP operates more than 40 projects in 13 countries around the world.
Anon said Thailand was its main focus, and Burma second.
"PTTEP has been operating in Burma for 20 years with a long-term and sustainable development strategy. Burma is now the company's strategic country for our future investments," said Anon.
He said Burma was becoming a hot spot for foreign investors after being largely closed for almost 50 years.
"Burma has quite a lot of potential because it is located between two giant economies, which are China and India. The country is a gateway to Indochina," Anon said.
He said Burma contained many diverse and unexplored resources such as hydroelectric power, oil, gas and coal.
"Burma has many of similarities to Thailand, such as its size and culture. Only its GDP and energy consumption are lower," said Anon.
Anon said PTTEP was looking for strategic investments in Burma in partnership with major oil and technological companies.
He said major concerns raised by foreign investors are the country's new rules and regulations regarding foreign investments as well as the lifting of trade and business sanctions by the United States and the European Union after a general election to be held by midyear. Other concerns are the government adjusting its exchange rate from a multiple to a single rate, and the development of local skilled labour.
He said PTTEP's key success to doing business in Burma was the company's relationship with the Burmese government and stakeholders. It has also adopted a "win-win strategy" of negotiations with stakeholders and extensively invested in socio-economic programmes, he said.
Meanwhile, Dr Somchet Thinaphong, managing director of Dawei development for Italian-Thai Development (ITD), said the company had been granted the right to develop and operate the Dawei Deep Sea Port and Industrial Estate Project under a framework agreement signed between the Burma Port Authority and ITD in November 2010 for a 75-year land-lease period.
The project was created under the joint effort and cooperation between the Burma and Thailand to develop a deep-seaport and industrial-estate mega-project that would be a gateway to Indochina on the Indian Ocean.
Requiring an initial investment of about US$8.5 billion (Bt260 billion) and occupying about 250 square kilometres, the Dawei Deep Sea Port and Industrial Estate Project will be divided into different zones, comprising port and heavy industry, oil and gas industry, an upstream petrochemical complex, medium industry, light industry, and authority and township centres.
Somchet said the development of the Dawei project would be separated into two phases, which would take four and six years respectively.
Thitisesh Seshthabutra, assistant director-general of the Department of Trade Negotiations, said Burma posted $31.6 billion in gross domestic product last year. The country exports natural gas, wood products, beans, fish and rice. About 38.3 per cent of the exports go to Thailand, and another 20.8 per cent to India.
In 2011, Thailand was Burma's largest trading partner while Burma was Thailand's 22nd-largest.
Within Asean, Burma is the sixth-largest trading partner of Thailand after Singapore, Malaysia, Indonesia, the Philippines and Vietnam. The bilateral trade volume reached $6.1 billion last year in favour of Burma. Thailand also exported $2.8 billion of goods to Burma last year.
Thitisesh added that Thailand was also the second-largest investor in Burma after China. Thailand's investment in Burma reached $9.5 billion last year.
He said that as the newest Asean member, Burma was preparing to join the Asean Economic Community fully by 2015. Burma wants to cash in on AEC benefits, which encourage a free flow of goods, services, investments and skilled labour.
"Burma is a country rich in resources and a source of raw materials. However, major concerns between Burma and Thailand are border problems that have not been solved, as well as Burma's security problems and other cross-border issues. Burma's multiple exchange rate also creates various economic distortions," Thitisesh said.
