KBank looks to Chinese investors in Rayong estate
Kasikornbank foresees the Thai-Chinese Rayong Industrial Zone becoming a strategic location for boosting loans to Chinese investors due to the industrial estate expanding by an additional 2,000 rai this year.
More Chinese investors are expected to set up manufacturing plants to capitalise on the Asean Economic Community (AEC) in 2015.
The increasing investment of Chinese companies in Thailand was part of the “Go Out” strategy of the Chinese government and the Thai-Chinese Rayong Industrial Estate is expected to benefit from the move, said Pipit Aneaknithi, executive vice president of Kasikornbank.
Thailand, as an Asean hub, is an attractive investment location for China, while the upcoming AEC will open up more opportunities for Chinese companies. Thailand, with its agricultural resources, could become the main resource for China.
According to Thailand’s Board of Investment, Chinese investors, with projects having total investment value of Bt30 billion, are applying for BOI incentives. Chinese investors last year brought in Bt20.50 billion. Of the major investments this year, about 10 new Chinese investors have purchased land in the Thai-Chinese Rayong Industrial Zone, which is being developed by Holley Group (China) and Amata Group (Thai-land). The developer is expanding the industrial estate by an additional 2,000 rai (320 hectares) to deal with increased investment by Chinese companies. Therefore, the industrial zone is a strategic location for KBank, Pipit said.
KBank has currently secured Chinese investors who have set up plants in the Thai-Chinese Rayong Industrial Zone. Of the total 39 Chinese companies in the industrial estate, 20 firms are KBank customers with total loans of Bt750 million. The bank expects to facilitate loans of Bt2 billion within three years.
The outstanding loans for Chinese customers, include the lending to Chinese customers in the Thai-Chinese Rayong Industrial Estate, was Bt2.3 billion, he said, and added that outstanding loans this year are expected to reach Bt3 billion.
Most Chinese companies who are setting up businesses in the industrial estate are engaged in automobile parts, industrial agriculture and electronic parts. The surge in investment in industrial agriculture and the power business is due to a lack of raw material for producing power in China.
KBank has 400 Chinese customers in Thailand with market share of 19 per cent, while most of the customers are small and medium-sized enterprises. The Go Out Strategy of China offers an opportunity for KBank to boost market share to 22 per cent within three years, Pipit said.
