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Published on December 8, 2007

Board of Investment (BoI) approval of tax breaks for up to seven eco-car projects is seen as sparking demand for premium-grade steel.

Deputy Prime Minister and Industry Minister Kosit Panpiemras earlier said output from the new steel plants would supply the automobile, electronics and packaging industries.

Both Nippon Steel and JFE Steel need to submit letters of intent by January 31, said the BoI.

Kosit said steelmakers would come under an approval process similar to the one for auto-makers showing interest in establishing eco-car assembly plants.

But steelmakers must also submit action plans for handling environmental impacts to show their corporate social responsibility, he said.

They need to collaborate with the National Economic and Social Development Board (NESDB) to hold public hearings and complete their plans before submitting their applications for BoI incentives, he said.

"This will be another new dimension for the BoI to promote industrial investment by setting a condition to promote good governance among manufacturers. It will help sustain industry without ruining communities and the environment," he said.

Since the Eastern Seaboard Industrial Estate is full, the NESDB has been assigned to study and draw up a blueprint for developing the country's southern seaboard with the private sector.

The southern seaboard would accommodate steel, petrochemical and power plants in the future.

The NESDB is expected to take one year to complete the scheme, Kosit said.

 The BoI has set four conditions for upstream steel furnaces. First, a project must produce at least two million tonnes of premium-grade upstream steel per year.

Generally, a steel firm needs at least $3 billion to open a high-quality steel blast furnace, he said.

Second, the steelmaker must conduct research and development with related industries and research and academic institutes here.

Third, a control and management system is required that meets high environmental standards.

Last, applicants must practice good governance and present plans for demonstrating responsibility to the community and society.

Thailand imports 4.5 million tonnes of upstream steel per year, of which premium-grade steel makes up 2.5 million tonnes.

Chalida Ekvitthayavechnukul

 The Nation