Thai Integrated Steel Plant Project Requires Governmental Profit Return Actions to Local Community, ISIT Says

Iron and Steel Institute of Thailand (ISIT)’s chairman, Mr. Wikrom Varagpta, met Japan Metal Bulletin’s editor in Tokyo and explained about integrated steel plant project led by Thai government. Mr. Varagpta said the point is effect evaluation on local community since the new plant should import raw materials from Australia or Brazil and require construction of deep sea port. ISIT has almost finished feasibility study in 2 sites, one of which is southeast area near Bangkok and another is south area far from steel market. He revealed ISIT would submit the proposal to Thai government next month or within 2 months at latest.

Mr. Varagpta said Thai government needs to hear opinions from local community and explain the construction process to local community as well as to Japanese steel makers related to the project. He explained the government’s concept is to build eco-towns beside the integrated steel plant and give profit to local community, especially supporting agricultural productivity and quality for life level improvement of local community. This concept requires substantial control and protection of local environment conditions.

He explained ISIT has conducted feasibility study in Chanthaburi Prefecture, southeast area near Eastern Seaboard Industrial Park where many automobile factories are operated, and in Songkran Prefecture, southern area of the country. The project would take substantial time to be approved when local community hasn’t shown clear intentions of yes or no against the project and Thai government doesn’t have strong power to advance the project in the areas. Mr. Varagpta said Formosa, Taiwanese enterprise can construct a steel plant in Vietnam because Vietnamese government showed strong initiative on the project.

Mr. Varagpta suggested Thai government should establish supporting systems to return profit to local community efficiently and new laws to improve relationship between local community and heavy industry. He pointed out the project requires huge budget to develop lands, deep sea ports and water infrastructure while tax and charge for electric power, water or port usage can become profit return to local community.

He referred to integrated steel plant projects in other surrounding countries, Formosa in Vietnam or POSCO in Indonesia. He indicated the possibility to construct steel plants in Cambodia or Myanmar if the project is difficult to be realized in Thailand, both of which is abundant with raw materials, oil and natural gas as well as high potentials to construct heavy industry infrastructures. But, he personally said, the construction would be actually difficult because integrated steel plants can’t remove to other areas after establishment and political issues should also be considered.

Mr. Varagpta overviewed Thai steel consumption is expected to reach 12.32-13.50 million tonnes in 2010 when automobile production is very active. Thai automobile production is forecasted at 1.6 million units in 2010, which is expected to reach 1.8 million units in 2011. He said steel consumption could exceed 14 million tonnes in 2011. Meanwhile, he pointed out the market condition would be effected by election convenes in 2011 though the market itself is strong.