Bangkok--8 Apr--EXIM Thailand
EXIM Thailand showcases its role as financial advisor in a successful joint venture deal between the Thai Eastern Group (TEG) and Sumitomo Rubber Industries (SRI), a leading automobile tire company in Japan. This business alliance reflects EXIM Thailand’s commitment to promote job creation, high technology development while adding value to Thai rubber exports destined for tire manufacturers in Japan.
Dr. Apichai Boontherawara, President of Export-Import Bank of Thailand (EXIM Thailand), revealed that recently the Bank, serving as financial advisor, successfully facilitated a Nippon-Thai business matching whereby a joint venture worth 1.1 billion baht was formed between Japan’s Sumitomo Rubber Industries and the Thai Eastern Group to manufacture automobile tires under such brands as Dunlop, Falken and Goodyear as well as other rubber-related products to cater for the Japanese automobile industry.
According to Dr. Apichai, SRI was interested in establishing a joint venture with a Thai company to invest in natural rubber plantations and set up a factory to produce block rubber and other rubber products in Thailand. Realizing the mutual benefits Thailand and Japan could gain under this prospective joint venture, EXIM Thailand has introduced TEG to SRI. An EXIM Thailand’s customer, TEG is a leading Thai company in the rubber plantation and high-grade block rubber production business. Under this collaboration, Thailand will gain benefits from employment generation and advanced manufacturing technology transfer from Japan. Relying on Thailand’s competitive advantage as the world’s first-ranking exporter of natural rubber with strong potential in rubber processing and production, Japan will be able to increase efficiency in raw material quality control and development of innovative rubber products, particularly high performance automobile tires.
This important Thai-Japanese partnership was materialized through the advisory support of EXIM Thailand and Daiwa Securities Capital Markets for TEG and SRI, respectively. The cooperation results in two joint venture companies: 1) Sumirubber Thai Eastern Plantation Company Limited, with TEG as major shareholder, to undertake rubber plantation business. Latex tapping is expected to commence within the next 4-6 years; 2) Sumirubber Thai Eastern Corporation Company Limited, with SRI as major shareholder, to operate a BOI-promoted high quality block rubber production factory which is scheduled to start operations in 2011. Moreover, another innovative rubber material manufacturing project is under consideration. The total investment value of these projects is estimated at approximately 1.1 billion baht.
“Apart from the development of Thailand’s quality block rubber production, this Nippon-Thai joint-venture will help create a number of jobs and enhance the Thai rubber export value by over 4 billion baht each year,” said Dr. Apichai.
Financial Advisory Service is a new facility provided by EXIM Thailand’s Investment Banking Department. The facility encompasses various areas of financial advisory services with regard to fund-raising for business expansion, financial restructuring, merger and acquisition consultation, business and financial partner identification and matching as well as other financial counseling facilities aimed at achieving the customers’ business objectives and creating the best value for the customers.
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