28/03/2012 (Bangkok Post) - PTT Plc, the largest firm listed on the Stock Exchange of Thailand, is considering listing its businesses in other Asean countries, starting with its palm oil operation in Indonesia.

The plan is aimed at capturing the benefits of freer-flowing capital in the region under the Asean Economic Community (AEC) to take effect in 2015.

Tevin Vongvanich, the chief financial officer, cited the huge outlay required for the palm oil business in the coming years as a reason to potentially raise funds in other Asean markets.

The Thai oil and gas giant has secured 200,000 hectares of land in Indonesia for palm oil trees, plus it operates a palm oil factory that country.

It aims to grow 1.2 million rai of trees in five years with a reported investment of 40 billion baht.

"PTT has a strategy to expand our business overseas," said Mr Tevin.

"As the AEC sets to widen the opportunity to mobilise funds in Asean, we're looking at the possibility of listing subsidiaries in other markets for the financial flexibility of each business."

He said Indonesia's stock exchange is one of the more advanced in Asean, comparable with the Thai and Singaporean bourses.

Apart from palm oil, PTT wants to expand its retail oil network further in Asean by developing the Life Station model of petrol station in neighbouring countries.

The group operates more than 1,000 stations in Thailand and fewer than 50 sites in the Philippines, Cambodia and Laos.

The upstream business, through PTT Exploration and Production Plc, produces 30% of its natural gas from Myanmar.

Speaking at yesterday's forum on the AEC hosted by the Thailand Management Association (TMA), Mr Tevin said the Bank of Thailand must strike a balance between protectionism and flexibility for Thai firms to invest in the region when the AEC dawns in 2015.

The central bank is drafting a master plan for cross-border capital flows under the AEC and is expected to complete it in the next few months, said Mr Tevin, who is also the TMA's chairman.

Chaovalit Ekabut, the Siam Cement Group's vice-president for finance and investment and its chief financial officer, said challenges for Thai firms posed by the AEC include how to efficiently use funds and leverage trade benefits when market liberalisation could lead to a price war.

The luring of foreign direct investment (FDI) will also intensify in the region, especially in Indonesia, whose large market has seen positive developments in recent years in terms of political stability.

As of last year, Thailand ranked fifth among FDI destinations in Asean, attracting 16% of total inflows of US$76 billion.

Singapore enjoyed the highest share or 47%, mainly in the financial sector, followed by Indonesia, Malaysia and Vietnam.

Indonesia is SCG's largest investment destination in Asean, with $1 billion of the group's $1.7 billion worth of assets in the region.

Revenue generated from SCG's Asean operations accounts for 7% of the group's total revenue, while 40% of its exports are destined to the region.

"To do business in Asean, partnerships are important, especially with local partners in countries we invest in. This helps minimise risk and ensures a certain degree of success," said Mr Chaovalit.