Thailand - TTM to build a new plant to produce cigarettes.. WHY??

December 15, 2010 - The Thailand Tobacco Monopoly (TTM) has received cabinet approval to use its own funds to construct a 16.2-billion-baht factory at an industrial estate in Ayutthaya province. [1 USD = 30.0610 baht] The board of the state enterprise approved the purchase of land in the industrial estate in August last year. TTM so far has spent 679.11 million baht out of an approved budget of 877 million for design consulting fees. Deputy government spokesman Vachara Kannikar said the cabinet also approved a Finance Ministry proposal to cut TTM's contribution to the national treasury in fiscal 2012. At present TTM contributes 88% of its net income to the treasury.

The Thailand Tobacco Monopoly (TTM) dominates the tobacco market in Thailand. TTM is a state-owned enterprise and is the only domestic tobacco producer in Thailand. In 2008, TTM held 67% of the total cigarette market. Philip Morris International ranked second with a market share of 27 percent, followed by British American Tobacco (3 percent), and Japan Tobacco (0.5 percent.) In Thailand, more than 38 billion cigarettes were sold in 2008. (International Resource Center: Thailand: Overview
Thailand prides itself on their tobacco control program to protect the health of their citizens. At the Tabinfo Asia 2009 expo in Thailand, November 2009 the country's prime minister did not want TTM to promote smoking. (Thai Tobacco Monopoly withdraws products from Tabinfo Asia 2009..)

The ministry reasoned that although TTM is profitable, it has limited access to funds since some financial institutions do not want to lend to tobacco companies, and some institutional investment groups have similar restrictions. Business risk as a result of competition with foreign cigarettes is also a concern of financial institutions.

The Asean Free Trade Area (Afta) required members to cut tariffs on tobacco products to zero in January. TTM still has an 80% share of the local cigarette market.

The government first began talking about moving TTM out of Bangkok in the mid-1990s. TTM has been seeking a location for a new factory since 2007 to replace its existing site in a park-like setting off Rama IV Road, one of the most highly coveted pieces of real estate left in the centre of the capital.

Reference: TTM gets go-ahead for B16bn plant in Ayutthaya, Bangkok Post, 12/12/2010.

Some other Thailand news briefs:
Phuket, Thailand - no smoking in crowded outside areas starting January 1, 2011..;
WTO panel order Thailand to set up uniform taxes on both foreign and locally made cigarettes..;
Thailand - health authorities want to close smoking areas at airport..;
Thailand - EU free-trade agreement (FTA) stuck over alcohol and tobacco..;
Thailand govt - wants to ban the growing of Burley and Oriental tobacco..;
Thailand - more measures put in place to protect non-smokers..;
Thailand - number of no-smoking zones expanded..;
Thailand - PMI likely breached the Foreign Business Act..;
Thai Tobacco Monopoly withdraws products from Tabinfo Asia 2009..;
Thailand - organizer of international tobacco exhibition fined..;
Thailand - hand-rolled cigarettes more popular and other matters..;
WTO - "DS 371" Philippines versus Thailand on cigarette customs valuation..;
Thailand - Tobacco Expo organizers and guests must obey all tobacco control laws..;
Thailand unit of Philip Morris International faces charges that it violated custom tax rules..;
Thailand - hosting major tobacco promotion event in November 2009..;
Thailand Tobacco Monoploly - union concerned about privatization..;
Thailand - monks sickly from tobacco smoking and/or smoke exposure..;
Philippines - Thai cigarette import rules..;
Thailand - cigarette and liquor prices are expected to rise once new measures for calculating excise taxes take effect..;
Congratulations.. Thailand Joins Developed World With Total Ban On Smoking..;
Discouraging Tobacco Use - Horrific Images on the Packaging..

- Thailand is a member of Southeast Asia Tobacco Control Alliance (SEATCA)..