Asean focus needed for Thailand Plaza scheme

Asean focus needed for Thailand Plaza scheme

The Thailand Plaza programme to help local small businesses gain exposure abroad needs a fresh focus with more showrooms in Asean countries, according to the Office of Small and Medium Enterprises Promotion (Osmep).

The programme that originated during the Thaksin Shinawatra government focused on developed Western countries but the results were poor. The first plaza in the United States folded as the cost of maintaining the office was too high.

Thailand Plazas, with a budget of 100 billion baht, are seen as having potential to become a key marketing channel for Thai small and medium enterprises (SMEs) to gain access to Asean countries.

Yuthasak Supasorn, the Osmep director-general, said partners of Thai SMEs could also order products via Thailand Plaza outlets in each country.

The agency will also ask the new government to adjust the investment criteria for the Osmep fund, which totals 1.3 billion baht, to support SMEs that want to form joint ventures with large companies to help them gain access to better credit terms and reduce costs.

Currently, only 30% of SMEs can obtain loans from commercial banks but they are charged higher interest rates than large companies.

Normally, Osmep uses its fund to invest directly in SMEs. However, the fund should also expand to cover SMEs that want to invest with large companies on condition that the small companies do not merge with the larger ones.

The office has a goal under its third SME plan from 2012-16 to incubate at least 250,000 SMEs and create 300 networks among them.

Mr Yuthasak said laws should also be amended to allow SMEs to obtain loans on the strength of copyrights, brands or inventories of goods as collateral, or personal guarantees.

Mr Yuthasak said strengthening of SMEs would help upgrade the competitiveness of the Thai economy. The country has 2.9 million SMEs that employ 10.5 million people or 77.8% of the total workforce and contribute 3.75 trillion baht to the country's GDP.

Dusit Nonthanokorn, chairman of the Thai Chamber of Commerce, said the chamber and Osmep would hold a seminar on the Asean Economic Community and how Thai SMEs can prepare to operate in a bigger regional market.