China to invest US$1bn in Thai food processing

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THAILAND – China Science and Merchants Investment Management Company plans to set up a US$1 billion food processing investment fund for Thailand, says company president Shan Xiangshuang.

The Chinese venture management firm hopes to set the investment fund up in early 2010, Shan told The Bangkok Post, explaining that the US$1 billion he intends to raise will be invested in processing agricultural products, alternative fuels, transport, rubber and environmentally friendly technologies.

The newspaper quoted Shan: "With fast economic expansion in China, Chinese investors want to expand through overseas investments. We are looking at Thailand because of our strong economic ties and because we see Thailand as a strategic location in terms of trade and logistics."

He explained that instead of importing Thai raw materials into China to add value, promoting local production with Chinese capital would provide better returns by reducing logistical costs.

In addition, Thailand’s trade pacts such as the Asean Free Trade Area (Afta) and its bilateral agreements offer extensive potential for businesses to grow

While he specified no expected return on investment as each investor has a different expected return on long-term ventures, Shan noted, “We hope that the projects we finance will give better returns than the industry’s average rate.”

China Science and Merchant is an investment fund set up nine years ago, running 30 offices across China and managing investment funds worth US$2.93 billion (RMB20 billion). It has invested in 60 projects, of which 21 are listed on Chinese stock markets, focusing on farm products, alternative energy, high-tech machinery and mining.