Mitr Phol has planned to construct a 4,000-rai bio-industrial estate in Ban Phai Sub-district in Khon Kaen. Isara revealed BOI is considering tax exemption for bio-businesses involving intermediate and advanced technology, with the latter eligible for a tax exemption period of over 10 years. In addition, “Kaset Thai” has teamed up with GGC to establish a bio-hub in Nakhonsawan. With the engineering drawing finalized, the 8-billion investment will be made in the first phase.
The government has approved a 133 billion baht investment in bioeconomy, one of the ten target industries in the S-curve for which the government provides support in order to encourage research and development in agricultural products for added value. This project will be piloted in three major zones, namely the Eastern Economic Corridor (EEC), two provinces in lower Northern Thailand (Nakhonsawan and Kamphaen Phet), and another province in the Northeast (Khon Kaen). The Ministry of Industry will submit the industrial development plan (2018-2027) to the Cabinet for approval shortly.
Mr. Isara Vongkusolkit, Chairman of Mitr Phol Co., Ltd., revealed that the company has allocated an area of about 4,000 rai in Ban Phai Sub-district, Khon Kaen for the construction of a bio-industrial estate, but the zoning policy means that factory construction will be impossible in certain parts of this industrial estate. Currently, the Industry Ministry is considering amending this policy, which it said may have overlooked the agricultural sector; if agricultural product processing factories are not allowed within agricultural zones, entrepreneurs and farmers would have to carry the burden of transportation costs. The government is in the process of reviewing the matter and considering how to classify bioindustry as an agricultural, food, or green industry as opposed to heavy industry. In addition, the Thailand Board of Investment (BOI) is also having a look into benefits, which may include different income tax exemption periods for intermediate and advanced technology. For example, an advanced technology business involving pharmaceuticals, vitamins, or antibiotics may be granted a tax exemption period of over 10 years and a wider range of benefits.
Research on a special baking yeast
Mr. Isara added that it will take some time for the construction of the 4,000-rai industrial estate to commence. Within this industrial estate, Mitr Phol will be joined by a number of other companies. For the first phase of its industrial development plan, the company will conduct research into low-calorie sugar and animal feeds. It will also look into a special baking yeast produced from molasses. As opposed to those currently available in the domestic market, which need to be imported, this new strain can be produced domestically. Any research and development of these innovative products will require a tremendous amount of know-how, and therefore, it will be best if the company teams up with partners who are already in this market.
Mr. Isara said that the company aims to invest 500 million baht per year on R&D but has so far not met the target. This is because Mitr Phol exercises caution and thoroughly reviews the results that the investment will produce. In addition, the company must also vet researchers to take on projects to make certain that the budget goes to experts, both domestic and international.
Ban Phai Factory Stymied By Zoning Policy
According to the Ministry of Industry, the Department of Industrial Works (DIW) has proposed solutions to the zoning problem in Nakhonsawan, Kamphaen Phet, and Khon Kaen: amending the type of factories in the Ministerial notification from “chemical” to “biochemical” and granting entrepreneurs permission to establish biochemical plants in green zones as appropriate without the need to change the city plans. The two solutions are being reviewed by the Industry Minister, while BOI is considering the benefits to be granted to bioindustrial businesses.
As for the bioeconomy investment extension project in middle Northernern Thailand, the investment is expected to be worth 29.705 billion baht in total. It will consist of projects such as the bioeconomy industrial estate of Mitr Phol and Bangkok Industrial Gas Co., Ltd. (BIG), the liquid enzyme, yeast probiotics, and beta-glucan manufacturing project of Asia Star Trade Co., Ltd. (AST) and Asia Star Animal Health Co., Ltd. (ASAH), and the joint venture between Mitr Phol, DSM Nutritional Products (Thailand) Co., Ltd. (DSM), Charoen Pokphand Food PLC (CPF), Betagro PLC, and UENO Fine Chemicals Industry (Thailand) Co., Ltd. (UENO), which will manufacture dried yeast and phytase for the food industry as well as lactic acid and sugar alcohol for food and cosmetics industries.
Mitr Phol Group was among the 36 companies seeking permission to establish sugar mills from the Office of the Cane and Sugar Board (OSCB) in late 2015. Although it has been granted permits, the construction has been thwarted by a zoning issue. The five sugar mills for which Mitr Phol Group obtained permits are Kalasin Sugar Company (Selaphum District, Roi Et), Mitr Kalasin Sugar Company (Muang District, Amnat Charoen), Mitr Phol Sugar Company (Ban Phai District, Khon Kaen), Mitr Phol Sugar Company (Kaset Sombun District, Chaiyaphum), and Sugar Excellence Company (Muang District, Phetchabun).