FRIDAY, March 29, 2024
nationthailand

Cluster plan approved

Cluster plan approved

The Cabinet has approved in principle the setting up of six "Super Clusters" in nine provinces across the country to increase Thailand's production, industrial and export competitiveness.

The six clusters are Automobile and Parts, Electronics, Appliances and Telecommunications, Petrochemicals and Other Environmental Friendly Chemical Products, Digital, Garment and Clothing, and Processed Food.

The initiative will be spearheaded by Somkid Jatusripitak, deputy prime minister in charge of the economy. The Industry Ministry will set up the clusters with support from the Board of Investment (BOI), which will provide tax and non-tax incentives for targeted industries within the clusters.

"In the past, the BOI has given investment privileges to foreign businesses but these businesses are scattered to where they can get the most benefit," Somkid said after the Cabinet meeting yesterday.

"The concept of increasing production and industrial competitiveness is based not just on foreigners coming here to produce and sell their products. It involves the whole value chain, including the presence of raw materials, which eventually led to the cluster idea."

Cluster plan approved

Thailand’s export volume has been in the negative zone for the past two years and Prime Minister General Prayut Chan-o-cha has already set up seven Special Economic Zones in border areas to promote cross-border trade and tackle the situation.

The setting up of these clusters is also meant to encourage the transfer of know-how from abroad, Somkid explained.

"The first area of focus is the Eastern Seaboard in Map Ta Phut, which has exiting infrastructures. These Super Clusters will be provided with incentives that will definitely rival those of other countries," he said.

"Value chains include the production of raw materials and processed products, research institutes and educational institutes that will work together in the cluster and the BOI will provide the tax and non-tax incentives to encourage investors to invest there," he added.

Somkid cited the Parma region of Italy as an example of a cluster where the main product, Parma ham, has a complete value chain, from the local livestock all the way to packaging and the exporting of the product.

He also cited examples of industries within clusters, such as the automobile industry, which involves the production of parts for hybrid, electric and plug-in hybrid electric vehicles and industries.

Other examples include the production of chemical products such as special petrochemical products, bio-chemical and bio-plastic and products made from bio-plastic.

The BOI revealed that interested companies have to file their application before the end of next year and they have to begin investing before the end 2017 as part of the conditions if they want to avail of the privileges.

Another condition is that companies must work with educational institutions and centres of excellence in the clusters.

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