Thailand has welcomed interest by Japanese investors in partnerships with Thai companies to invest in Burma’s $58-billion Dawei development project.
The proposal emerged during meetings this week in Bangkok involving representatives of Nippon Keidanren, which represents leading Japanese companies such as Sumitomo, Mitsubishi, Hitachi, Toray Industries, Mizuho Financial Group, and All Nippon Airways.
Japanese companies were interested in basic infrastructure projects such as a deep-sea port, roads, power plants as well as a steel and petrochemical complex in Dawei, said Hiromasa Yonekura, the Keidanren chairman and also chairman of Sumitomo Chemical Co.
“Japan and Thailand have been partners for many years and this could expand the partnership. The two countries are both donors and have similar stance on Burma which is currently opening up for democracy,” he said.
SET-listed Italian-Thai Development (ITD), Thailand’s largest contractor, has signed a 10-year contract to develop Dawei, with the first phase valued at $8 billion. The entire project, which comprises a steel mill, petrochemical complex and oil refinery, is estimated at $58 billion.
Japanese companies have already indicated that investments could be supported through the Japan Bank for International Cooperation (JBIC) and other government financial institutions.
“[But] the Dawei project is huge and we want to raise financing for the project. That’s why we support the establishment of a bond market in Asean to stimulate the flows of money into this region,” said Mr Yonekura.
Japanese firms see the Dawei port as a way to extend their reach to markets in south and central Asia as well as the Middle East, said Jingjai Hanchanlash, co-chairman of the Joint Public-Private Standing Committee’s Greater Mekong Subregion Business Forum.
“Petrochemical and other industries to be set up in Dawei have also drawn interest from Japanese investors as alternative locations in addition to Map Ta Phut in Thailand, which has been plagued by environmental issues,” said Dr Jingjai, also an executive of Thailand’s Board of Trade.