Jul 5, 2012

Thailand - Kingdom looks to trade hub status

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Thailand can reap benefits from the im-|plementation of the Asean Economic Community in 2015 by becoming a regional trading hub for gift and premium products, leaders |of the sector said yesterday.

Gift and premium product entrepreneurs in Thailand, Malaysia and Singapore will officially set up the Asean Gifts Federation by the end of this year, in a strategic move aimed at cashing in on the fast-approaching AEC.

Sirichai Lertsirimit, president of the Thai Gifts Premiums & Decorative Association, said the AEC would bring both benefits and negative effects for local businesses in the sector.

"Thailand can be a hub for gift and premium product manufacturers outside Asean wishing to take their products into the region. The country itself has a strong manufacturing base in both gifts and premium goods and a quality workforce," he said.

At the same time, however, Thai entrepreneurs need to have good information about the markets that they themselves want to expand into, as each country has its own regulations, products and raw materials, he added.

The overall domestic market for gift and premium products is worth about Bt11 billion, Sirichai said. The market grew by around 10 per cent last year and is expected to increase by between 15 and 20 per cent this year.

While these figures are impressive, the size of |the Thai market is expected to expand signifi-|cantly to more than Bt15 billion annually in 2015, when the AEC is fully effective, said the association chief.

The combined value of the domestic gift and premium product markets in Thailand, Singapore and Malaysia is more than Bt40 billion, said Jirabool Vittayasing, honorary president of the association.

"We expect the overall gift and premium product market across all Asean members will be worth more than Bt100 billion when the AEC comes fully into effect in 2015," he said.

"We signed a memorandum of understanding with gift and premium associations in Malaysia and Singapore in 2010 to set up the Asean Gifts Federation, which will be launched by the end of this year," said Jirabool, who will be the first president of the federation. Laos and Myanmar last week also applied to join the federation.

"We aim to raise the quality level and standard of gifts and premium items within Asean, and of their trading in the region," he said.

The Thai Gifts Premiums & Decorative Association yesterday launched the TGP label to guarantee |excellence in the design and quality of locally made products.

Jirabool said the label would be promoted for |selected products within Asean when the AEC is implemented.

Alan Ong Yeow Fooi, president of the Malaysian Gifts & Premium Entrepreneur Association, said the AEC would be good for the industry overall. Each market currently has different products and currencies, while import duties vary from country to country.

"When the AEC is up and running, Asean business-people will work more closely together, and import duties will be reduced significantly. Each country will be able to expand into other markets. The impact of the AEC will depend on each country and on individual firms, based on their business strategies. Those who are not ready will lose out," he said.

The Malaysian association has about 250 members, but not all are ready to export and expand into bigger markets in the wake of the AEC, he said, adding that between 70 and 80 per cent of gifts and premium products in Malaysia are imported, mostly from mainland China, but also from Hong Kong and Taiwan.

Frankie Chia, president of the Gifts Association (Singapore), said Asean as a whole would experience a major positive impact from the AEC, as the region would gain more recognition and benefit from the combined efforts of AEC members, with more comprehensive products becoming widely available.

"The AEC is a new business economy, in which some people may suffer while others may gain. In Singapore, we are looking at more value-added local products. With a strong manufacturing base, Thailand and Indonesia still stick to basic gift and premium items," he said.

He added that the AEC would open up opportunities for start-up companies, while at the corporate level, there would be more choice of suppliers and a wider range of products.

The Gifts Association (Singapore), which was set up nearly 12 years ago, has about 100 members.

KWANCHAI RUNGFAPAISARN


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