KBank sees European crisis as opportunity for large

Kasikornbank suggests large Thai companies should seek to benefit from the euro-zone crisis by acting quickly to acquire technology at a lower cost from European countries if they want to become regional players in the Asean Economic Community (AEC).

KBank executive vice president Vasin Vanichvoranun yesterday said corporations should not wait for the crisis to affect the region and should instead take advantage of Europe’s woes by seeking to acquire technologies more cheaply than was previously possible, so that they can incorporate them into their production processes ahead of the AEC. Large companies must decide whether they want to remain local players or become regional ones, but they have every chance of successfully becoming the latter as the Thai environment is more competitive than that in other countries in the region, he said. He said the Kingdom’s competitiveness in the financial area, its lower policy interest rate and geographical advantage were all important strengths. Moreover, China’s investment expansion in its western area and the relocation of Japanese manufacturing bases to Asean are key factors accelerating the need for Thai corporates to prepare for greater foreign direct investment (FDI). However, Thai companies are less active than their regional peers in overseas investment despite the country’s strong financial fundamentals, he added. <object style=\"width: 640px; height: 390px\"><param name=\"movie\" value=\"http://www.youtube.com/v/RNBzluODBkI?version=3\" /><param name=\"allowFullScreen\" value=\"true\" /><param name=\"allowScriptAccess\" value=\"always\" /><embed allowfullscreen=\"true\" allowscriptaccess=\"always\" height=\"360\" src=\"http://www.youtube.com/v/RNBzluODBkI?version=3\" type=\"application/x-shockwave-flash\" width=\"640\"></embed></object> According to KBank, Thailand ranks fifth among Asean countries after Singapore, Indonesia, Malaysia and Vietnam as an investment target, with an FDI inflow volume of Bt6 billion. If companies can acquire technology at a lower cost from European countries due to the euro zone’s financial and economic woes, they will have a greater competitive advantage in the regional market. China is a potential overseas market besides Asean for large Thai large firms, Vasin said. KBank has developed financial services with selected partners, as well as AEC business advisory knowledge to serve Thai firms that plan to invest outside the country. Vasin added that euro-zone countries had limited exposure outside their own region and were not the main buyers in the world market. Therefore, the crisis will have a relatively low impact on larger Thai companies, which have lower export exposure to the zone. Large Thai businesses’ exports to the European Union account for about 10 per cent of the Kingdom’s total exports of Bt690 billion. However, those whose export turnover to the EU accounts for more than 20 per cent of their overall income represent only 3 per cent of large Thai firms selling to the area, he said. "We have loans of only Bt5.5 billion to high-concentration customers, which is not much compared with our outstanding corporate lending of Bt350 billion," the executive said. He said the European crisis would nonetheless affect Thai exports within three to six months, with gem and jewellery exporters likely among the most exposed as the sector’s exports to the region are high. KBank, however, is confident that large companies can adjust their business accordingly, and that the crisis might not therefore damage the sector too much. "As a lender, we might be more cautious about giving loans to customers that have [high] trade volumes in the euro zone, but the situation is no more serious than the US sub-prime crisis in 2008," he said.

KBank sees European crisis as opportunity for large

Kasikornbank suggests large Thai companies should seek to benefit from the euro-zone crisis by acting quickly to acquire technology at a lower cost from European countries if they want to become regional players in the Asean Economic Community (AEC).

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