Aims to increase value-added content

Chatrudee Theparat

The Board of Investment (BoI) is set to offer the maximum investment privileges to producers of textiles, garments, jewellery and ornaments to back the government's policy of developing Bangkok the fashion hub of Asia.

The incentives are expected to help the industries improve production quality and design by attracting investments from foreign brand-name fashion operators. The project will also help strengthen local downstream industries and boost exports.

The maximum privileges will be available regardless of which investment zones the ventures choose to locate their operations, said Chutaporn Lambasara, the BoI deputy secretary-general.

Mrs Chutaporn said for a project to obtain top privileges, it must include design, training as well as research and development in their investment plans.

The privileges include an eight-year exemption from corporate tax and exemptions on machinery import duties.

Mrs Chutaporn said the BoI's goal was to increase value-added content in local production as well as forge a better supply-chain network in the fashion sector.

To support those labour-intensive industries' development, she said, the BoI would also grant privileges for human resources development projects to train vocational workers and design training projects. Currently, only industries involved in engineering and science qualify for such privileges.

She said the BoI's policy would encourage foreign fashion firms to invest in Thailand, benefiting local industries in terms of technology transfer and product quality development.

``The current trend in the market is for foreign high-end textile and garment companies to set up production facilities in Thailand while low-end ones are establishing operations in China.''

Last year, the BoI received applications from nine garment projects worth a total of 1.05 billion baht and representing 9,568 jobs.

The jewellery and ornaments industry is Thailand's fifth-largest export industry, generating overseas sales of 93 billion baht, up from 81 billion baht last year.

A total of 10 new projects in the jewellery and ornaments industry applied for BoI privileges in 2002, worth a combined 353 million baht and potentially generating 1,487 new jobs.

For the leather industry, Mrs Chutaporn said the privileges granted would depend on which investment zone the projects were located in. She said the sector had made significant improvements in design but required further development in the quality of raw materials and tanning technology.

Last year only three leather ventures worth 99 million baht sought BoI approval, while in the first four months of this year, two projects worth a combined 144 million baht have applied.