Win Viriyaprapaikit has a smile on his face. Since he signed an agreement in late August to buy a steelworks in northern England from Corus, the price has fallen by over $22 million in baht terms.
Thailand’s baht is up by 11.4 percent against the dollar this year but in spite of a reliance on exports for 65 percent of gross domestic product, the economy is booming.
“This is working very favorably for this acquisition,” says Mr Win, the president of Sahaviriya Steel Industries. “And it makes future investments a lot more attractive.”
SSI’s $500 million deal to buy Teesside Cast Products, which is still being finalized, is symbolic of a country which not only seems to have recovered from the global crisis but is also weathering the first squalls of the currency wars.
During the past decade, the labor-intensive, low-margin export industries that have taken the biggest knock from Asia’s surging currencies have largely migrated from Thailand.
Thai exports of high-margin products such as cars and electronics, many of which have a large import content, now outweigh significantly the low-margin products on the current account.
Usara Wilaipich, the chief economist for Standard Chartered Bank in Thailand, says: “Net, for the whole country, Thailand benefits from the baht appreciation.”Page 1 of 4 | Next Page