Romania welcomes Thai investors

Bangkok Post
Umesh Pandey

Thai entrepreneurs looking to go beyond the local boundaries and tap into the high-income European Union market can take advantage of opportunities in new EU members such as Romania that are looking to attract investment.

"Romania is happy to welcome Thai entrepreneurs to participate in the growth of the country and we are willing to offer all kinds of incentives to attract them," Radu Gabriel Mateescu, the Romanian ambassador to Thailand said at a recent seminar in Bangkok.

"The aim here is to try and promote the two-way trade and to strengthen the bilateral ties between the two sides," he said, adding that as a newcomer to the 25-nation EU, the country was well placed to be the springboard.

Mr Mateescu said that since entering the EU, Romania could only offer incentives in line with EU policy but as a country, Romania was a much cheaper manufacturing base than most countries in the region.

Two-way trade between Thailand and Romania last year was just $179.61 million with Thailand having a surplus of $149.63 million. This was a slight improvement over 2005 when trade totalled $147.73 million with Thailand having a surplus of $99.77 million.

"Our aim has been to increase the trade to more than $300 million as soon as possible," Mr Mateescu said, adding that apart from increasing trade Thai businessmen could now establish businesses there with very little hassle.

Romania, which is strong in steel, tools, machinery and trucks, has been exporting these products to Thailand while importing manufactured goods from Thailand.

"Thai entrepreneurs can take this opportunity to expand into Romania and neighbouring countries around there as entering the western European countries now maybe very difficult and these western European union countries may already be saturated," Sompong Amornvivat, the former Thai trade representative, said at the seminar.

The former Eastern European bloc that is now in the EU is developing and offering a host of opportunities, he said, adding that Romania featured a central location that connects with the Black Sea and has road links and river links all way into central Europe.

"There is huge demand for products from Asia, which is currently dominated by Chinese products in [Romania]y, and we can offer them value added over the Chinese products and gain market share," he said.

"Quality is the key to the European markets and we can provide that, and also Thailand is slightly closer than China and therefore we can also act as the go-between for the two countries."

Mr Sompong, along with other panelists, said that Thailand's expertise in the food industry could help entrepreneurs to contribute to the development of the Romanian food industry.

"I believe that trade between the two countries will prosper only if the potential is realised," he said although cautioning that Thai investors should be aware that as a country that has just started to change its laws to meet the EU's stringent requirements, they could be faced with problems.

Among other drawbacks was the lack of a double-taxation treaty between the two countries. Other hurdles include the lack of letters of credit, the small size of export shipments to Romania, weather conditions, the lack of direct flights to the country from Thailand, high value-added taxes of 19% and other areas such as communications.

"We are building a distribution centre in Constanta, the largest seaport in Romania, and priority will be given to Thai investors who have decided to take the plunge in the country and have stuck together," said Preecha Treesuwan, chairman of the Thai-Romania Business Council and the entrepreneur who is building a multi-million dollar distribution centre called Thai Product Wholesale and Retail sale Centre.

The project, once operational, would be the driving force to help ship more Thai products such as Otop and other well known Thai consumer goods into Romania.

SMEs in Thailand can also look to participate in Romania's growth especially those related to tourism, a key strength of Thailand, said Kittipruet Moolsrichai, the vice-chairman of Thai-Romanian Business Council.

He added that opportunities existed in areas such as fashion, food and restaurant business, home products and furnishings, spa products and cosmetics and auto parts and vehicles. Although Thai companies may need to create brand awareness, position their products and segment their markets to be successful.