PTT Global Chemical Plc (PTTGC), Thailand's biggest petrochemical producer, has announced the creation of a joint venture with consumer goods giant Saha Pathana Inter-Holding Plc (SPI).
The new company will develop an industrial park in Tak's Mae Sot district to tap the growing economy in neighbouring Myanmar.
The two SET-listed companies signed a memorandum of understanding (MoU) in Bangkok yesterday.
According to the MoU, the two companies will work together to develop an industrial park in the first phase of the special economic zone (SEZ) in Tak province.
The holding company under the consumer goods conglomerate Saha Group will set aside 1,000 rai near its existing industrial park in Mae Sot for development as an additional industrial park project, SPI chairman Boonyasit Chokwatana said.
PTTGC also has agreements with its 40 existing polymer buyers, which plan to expand their production through factories in Tak's SEZ.
Some 24 traditional polymer buyers of PTTGC have expressed interest in investing in the new industrial park with SPI.
According to the agreement, PTTGC will lend logistics support such as silos and plastic and polymer depots to its clients.
The first phase of the industrial park project is envisioned to span 300 rai of land, which will be developed for plastics producers.
The industrial park is tipped to receive the utmost support from the Board of Investment, with an eight-year tax holiday and zero import tariffs on producing machinery.
The first tranche of budget for the project will be disbursed by early next year, Mr Boonyasit said.
Most plastics producers that are already major clients of PTTGC are small and medium-sized enterprises (SMEs).
"This project will help them to expand their business from SME status to larger business, as the growing Myanmar market is expected to support their business," Mr Boonyasit said.
SPI developed an industrial park in the same area more than 10 years ago to tap rising consumer product demand in the neighbouring country. The company's industrial park covers 130 rai in Tak.
PTTGC wants to expand polymer production in the industrial zone via 40 potential polymer buyers, president and chief executive Supattanapong Punmeechaow said.
Demand for plastic in Myanmar is growing by 20% a year. The market is valued at 11 billion baht now, with 3 billion worth coming from Thailand and half of that made in Tak.
"Global trade is slowing, but cross-border trade continues to grow substantially," Mr Supattanapong said.
"So we decided to collaborate with SPI for further expansion."
According to Commerce Ministry data, cross-border trade in the first nine months of this year grew by 2.1% year-on-year to 738 billion baht, of which 47.7 billion came from Mae Sot.
PTTGC shares closed yesterday on the SET at 57.75 baht, up one baht, in trade worth 369 million baht.
SPI shares closed at 24.60 baht, down 20 satang, in light trade worth 32,000 baht.