What was behind the creation of SEP and how has the company evolved since you established the industrial park in 1992?
To start at the beginning, with my industrial business background I recognized early on that Thailand had the potential to be the center of the region's growth, particularly in the industrial, logistics, and agricultural sectors. Looking broader, I saw that with our geographic location, there was potential to build industrial park because of location near deep sea ports in Thailand. We also have the opportunity to be come a key hub across all of Asia. I have long worked in the industrial sector and have experience as the Chairman of the Thai Chamber of Commerce, Samutprakarn Province, so with this background I established SEP to answer this growing potential. SEP is not the largest industrial park on the eastern seaboard, but from the very beginning we focused on providing an all-in-one service to our clients, from facilitating their manufacturing operations, aftersales services, logistical support, as well as dealing with environmental issues, such as providing waste management and water supply solutions. Actually, on the last point, we have further developed our environmental management services by catering to our industrial park and beyond. However, with soaring demand in this area, and encouragement from the government to provide waste water management in particular, we will be expanding this field at SEP and by next year hope to double our capacity to be able to serve more industries in Rayong and beyond. One final development to note, concerning our core business line, is that we are expanding SEP to our second phase; our new project is called Siam Green City. We are currently expanding our industrial park to a new location, not far from our original base, which sits on 2000 rai of land and will be able to accommodate new investors making use of the growing opportunities on Thailand's eastern seaboard.
What are some of the key incentives that investors can expect if they establish their operations in SEP?
There are many benefits but the most important is that our tenants are 100% exempt from corporate tax for a period of eight years, followed by 50% exemption for the next five years. This is the most important attraction for the foreign investor but there are many others such as import tax breaks for machinery used for production of export products, and others that come with operating from a Zone 3 Board of Investment (BOI) location, as we are at SEP. However, beside these tax benefits, I would say our main pull factor lies in the full range of services that we offer. Not only do we provide the land and help our clients settle with all necessary logistical support, we provide consultation services, which is often crucial for companies investing in Thailand for the first time. Sometimes in many industrial parks there are labor relations problems but in our industrial park there have been no labor protests or demonstrations because we have several mechanisms, like monthly HR club meetings; there are talks and there are very good relationships so there are no hiccups in the operations of our tenants. We have some very reputable producers here at SEP, including Nippon Steel, Mitsubishi, and more. With a total of 37 factories in our first park, and over 40,000 workers here, it is important to make sure everything is constantly running smoothly for all parties. Often in Thailand such industrial areas encounter labor concerns, or even protests, so we ensure we regularly sit with all parties and conduct HR consultations.
With the government prioritizing the development of Thailand's eastern seaboard as the country's key industrial hub, how will such developments impact the future growth of the company?
We see that the government is trying to improve and develop the eastern seaboard, and most importantly the infrastructure and logistics in the area, such as the new airport at U-Tapao and the deep sea port projects. We recognize that the government is serious about developing this region so we are establishing a new company, Siam Eastern Logistic Terminal, which is going to focus on developing our sea transportation with other countries, and regions as well. We are launching a new, breakthrough service called K-City; a sea port and high-speed ferry that will accommodate tourists, locals, and businesses in the region. We are connecting three ports on the eastern, western and northern side of the Gulf of Thailand, a project which has never been done before and which will revolutionize travel and logistics in the region. Most importantly it will cut transportation time and costs by between a half to two-thirds, which is crucial for investment in the region. Aside from this, we are growing and expanding in line with the government's plans, so I would say the ongoing eastern seaboard development project will be very useful for the future growth of this country, and we are well positioned and excited to play an active role in this.
What are your expectations for the year ahead?
Once again, I would say that the eastern seaboard signals very strong vision from the government, and indeed is one of the brightest opportunities that this country has at this point. The economy in Thailand has been slow for a long while and the government is trying to solve the problem through infrastructure development, so by next year I am confident we will see a full recovery. Above all, we expect that over the next 12 months the industrial sector will pick-up and exports will be improving, which is very important for our line of business. I think that the market recovery is coming and right now is the perfect time for investors to come in. Currently the land prices are low on the eastern seaboard as the development is in an early stage, so I would say it is a good chance for investors to enter the market and buy land or build facilities in order to do business next year before the economy picks up and prices begin to grow again. In line with this, and the ongoing expansion of several of our projects, I would say this is a very exciting time for Thailand, and for SEP.