Nakornthai Strip Mill Plc chairman Sawasdi Horrungruang said mergers and acquisitions would help the Thai steel industry to survive.

Local steel manufacturers have always thought that a total capacity of 1.5 million tonnes per year was large enough, he said. But, if compared with world capacity, local manufacturers are still small and unable to upgrade to become upstream steel plants or smelting plants.

 "The real problem with the country's steel industry is that none of us ever makes a decision on which direction we should take the next step," Sawasdi said.

A former Board of Investment secretary-general, Staporn Kavitanont, said the government should put a brake on steel projects in which foreigners were major shareholders.

"The policy was foreigners should be here as partners to help Thais develop the industry, so that Thai steel operators could gain power to some extent," he said. However, he said that when some steel operators successfully sought political support to liberalise the industry, the industry collapsed.

Staporn said that in the age of globalisation, steel operators should not be afraid of tapping funds from financial institutions if they have profitable projects.

They should also expand to increase their competitiveness, he said, and gave the example of the Indian steel magnate Lakshmi Mittal.

"From a paper trade business, Mittal has built his empire to embrace the steel business. Now, he controls so many steel interests," he said. "Therefore steel-plant operators should not be worried about funding sources, but coming up with high-return projects."

Narongchai Akrasanee, chairman of consulting firm Seranee Holding Co Ltd, said that from his association with the Export-Import Bank of Thailand, there is a view that Thai steel manufacturers should be supported to expand their business overseas, especially in neighbouring countries where many dam projects should increase steel demand.

Payoongsak Chartsuthiphol, chief of the Federation of Thai Industries' steel club, said there should be a state unit responsible for technology transfer as well as other developments to promote the steel industry.

Watcharapong Thongrung

The Nation