Thai Cabinet to Discuss Steel Project in Mid-2011, Minister

Thai Minister of Industry Chaiwut Bannawat said on Monday Thai cabinet starts discussion in 6 months on pending integrated steel project. He said the government tries to move the project forward when the delay of the project could impact on steel consuming sectors including automobile industry.

The government committee on industry development reviews feasibility study by Iron and Steel Institute of Thailand for next 6 months so that the government can start the discussion around July. The project should clear hurdles including consent of local community and tourism industry. The government indicates the project should be in Cambodia or other neighbor countries when the government would fail to get consensus from domestic interests.

Mr. Chaiwut said at interview with reporters from Japan Metal Bulletin and other media the study was to check availability of deep port and environmental impact along with potential consensus of local community. He said the government will select the project promoter from Nippon Steel, JFE Steel, Arcelor Mittal and Baosteel Group and the promoter should decide the project schedule.

The project, which was launched in 2007, was delayed due to economy slump after Lehman shock and rebel campaign. Iron and Steel Institute of Thailand conducted feasibility study in Chanthaburi province and Songkhla province while the project could be opposed even in the government due to impact on tourism industry and could take time to set the candidate site. The cabinet could delay the discussion when the government has to prepare for potential general election in second half of the year.

Mr. Chaiwut said when the project couldn’t be accepted in Thailand, the government eyes potential project in neighbor countries as a last resort. He said the project in neighbor country is OK for the government as long as the project benefits Thailand when ASEAN Economic Community will combine the member countries as one market. The government tries to realize the steel project for optimization of the industry structure.

Thai economy grew at estimated 7.9-9.8% in 2010, according to central bank of Thailand. Thai automobile production increased to 1.6 times at record 1.645 million units in 2010 from 2009 when Japanese automakers increased the production. Federation of Thai Industries expects the production will reach 1.8 million units in 2011 and 2.3 million units in 2015. The steel demand increased to just more than 14 million tonnes in 2010, which was around 40% higher than 2009 level. The government tries to improve the industrial competitiveness through the steel project when the domestic industry has to compete severer with foreign manufacturers.