MYANMAR: Khon Kaen Sugar to decide on expansion soon
Published: 07/11/2012, 10:19:31 AM
Khon Kaen Sugar Industry (KSL) is looking into expanding into Myanmar, as part of its plan to cash in on the Asean Economic Community, where sugar will continue to be on the "highly sensitive" product list and therefore subject to some tariffs, according to Thailand's The Nation newspaper.
KSL president and chief executive officer Chamroon Chinthammit said that although the AEC will eliminate many tariffs when it becomes effective in 2015, sugar will continue to be subject to tariffs of 5-10% in Malaysia, Indonesia and the Philippines, down from 25-38% currently.
"We started to expand our business in Asean five years ago by setting up plants and acquiring land to grow sugar cane in Laos and Cambodia. We are also interested in expanding in Myanmar when there is a clear picture on its laws for foreign investors," he said.
If the revised foreign investment law clears the way, the company is ready to expand into that country, he said.
"If we decide to expand [into Myanmar], we will spend at least US$100 million to build a new plant there. It may take three to five years after the [amended] foreign business law in Myanmar takes effect," Chamroon said.
He added that up to 80% of KSL's export income came from Asia countries, including Asean members, China, Japan and South Korea. The company exports 60% of its total production and markets the rest in Thailand.
"We export little to Europe, so the euro crisis has not affected our business," Chamroon said.
Currently, KSL Group focuses on four businesses. The first is sugar, for which it has six firms in Thailand, Laos and Cambodia. The three Thai companies are Tamaka Sugar Industry Co, Ne Krung Thai Sugar Factory Co and New Kwang Soon Lee Sugar Co. Cambodia has Koh Kong Plantation Co and Koh Kong Sugar Industry Co, while the sixth company is in Laos, Savannakhet Sugar Corporation.
The other three businesses are sugar support, energy and chemicals, and property.
The sugar-support businesses are Thai Sugar Terminal, KSL Export Trading Co and KSL Agro Co. The energy and chemical businesses are Khon Kaen Alcohol Co, Khon Kaen Sugar Power Plant Co and KSL Chemical Co. Its property business is KSL Real Estate Co.