By SUCHEERA PINIJPARAKARN
Manop Sangiambut, executive vice president for international banking at SCB, said the bank’s international strategy was to connect the growing banking sectors in the six countries of the GMS, adding that Thai companies were engaged in a high level of trade and investment with partners in the region.
The subregion comprises Thai-land, Laos, Myanmar, Cambodia, Vietnam and China’s Yunnan province.
In contrast, SCB has no branches in Malaysia and Indonesia. The bank believes its branch in Singapore can serve Thai businesses that plan to broaden their activities in those two countries.
“The bank’s planning is based on customers’ requirements … If our customers are focusing on countries in the GMS, we should go [there],” Manop said.
SCB plans to set up its first representative office in Beijing next year, to be upgraded to a branch by 2015.
China has many projects in East Asia, especially in Myanmar, where it supports the Kyaukpyu special economic zone, which is to be set up for heavy industries. China is constructing a natural-gas pipeline and rail link to the zone.
SCB will officially open its representative office in Yangon on November 23, and plans to upgrade it to a joint-venture bank or a branch to fully serve customers once the sector is liberalised. This might take place in 2015, Manop said.
“We will offer cooperation with local banks, more than competition, because the banking sector in Myanmar is underdeveloped,” |he said.
The representative office in Myanmar will reinforce SCB’s network in the GMS, he said.
While Myanmar has become highly interesting since the drafting of new foreign-investment laws, the country will not be an easy place to do business in initially, and Thai businesses should take a wait-and-see attitude when it comes to long-term opportunities, Manop advised.
“The general election in Myan-mar in 2015 is a factor that will determine whether the country will [genuinely be attractive to] foreign investment or not. The current uncertainty over electricity capacity and high land prices, which are not attractive for investment, should be solved,” he said.
To assist Thai businesses looking to invest in Myanmar, SCB examines the proposed projects in terms of such factors as investment budget, break-even point and the payback period. It then categorises the potential investor into one of three categories: The first involves an immediate investment; the second category requires one to two years; and the third phase requires more than three years.
Consumer-products, hotel and construction-materials businesses are among those in the first category, while energy, infrastructure, telecom and agricultural projects are in the second. Electronics, automobile and petrochemicals firms are in the third phase because these industries need support from supply chains, Manop said.