Thailand doubles down on biggest port as free trade hub

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BANGKOK — A local unit of Hong Kong’s CK Hutchison Holdings has been taking some big steps to put the Thai province of Chonburi in position to reap the benefits of at least three free trade zones.

This year, Hutchison Ports Thailand opened Terminal D, a state-of-the-art facility, at Laem Chabang Port, north of the resort city of Pattaya.

Laem Chabang, already Thailand’s biggest port, is also in line for an 88 billion baht ($2.78 billion) infusion from the Thai government, which is keen to make the berthing spot a core piece of a grand economic project known as the Eastern Economic Corridor.

The port lays southeast of Bangkok, along the Gulf of Thailand, an area that the Thai government envisions as a crossroads for trade throughout the Mekong Delta region.

The government realizes that bringing about its vision requires further infrastructure upgrades, including more work at Laem Chabang.

The development of Laem Chabang Port began in 1986. Terminal D, which opened at the end of January, is its fourth terminal and one of the world’s most advanced container terminals, a representative of Hutchison Ports Thailand said.

All of the terminal’s cranes — the quay cranes, which load and unload ships, as well as the yard cranes, which move containers after they have been unloaded — are told what to do and where to go from inside an air-conditioned operations room.

“This remote control facility makes the operation faster, safer and more efficient,” said Stephen Ashworth, managing director of Hutchison Ports Thailand.

A worker controls a crane at Terminal D of Laem Chabang Port in Chonburi Province from the comfort of an air-conditioned operations room.

“The work that previously required six persons,” a male employee in the room said, “can now be done by one.”

Many of Thailand’s ports are shallow. But Terminal D, with a depth of 16 meters, makes Laem Chabang a deep-water port and allows for larger vessels to be received. Montri Rerkjamnien, director of Laem Chabang Port, said the port can now accept large container vessels that have so far relied on Singapore and Hong Kong, among the world’s biggest ports, as pickup and drop-off spots in Asia.

Thailand hopes the Eastern Economic Corridor does more than increase imports and exports. It is also counting on the EEC to attract multinational auto and electronics companies as well as other big manufacturers.

Other EEC projects include an upgrade to U-Tapao Airport, south of Pattaya in Rayong Province, and a high-speed rail linking U-Tapao and two Bangkok airports, Don Mueang and Suvarnabhumi.

The country fears that without these big infrastructure projects it will fall behind its neighbors in the race to attract big manufacturers.

Laem Chabang still has a long way to go. Besides the Thai government’s infusion, Hutchison Ports Thailand has announced that it will invest $600 million to further develop Terminal D.

When the project is completed, the berth’s length will be 1,700 meters, up from 400 meters at present, and the terminal will be able to handle 3.5 million twenty-foot equivalent units, or TEUs, of cargo.

This will help the port as a whole increase its cargo handling capacity by 37%, to 13 million TEUs.

The Thai government expects the added capacity to be soaked up by increased demand from an expanded ASEAN Economic Community, a free trade zone that was fully implemented last year. Furthermore, Thailand is looking to join other free trade groupings — the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership.

According to estimates by German consultancy Roland Berger, Thailand’s container handling volume will rise 35% to 9.2 million TEUs in 2020 and by more than twofold to 14.9 million TEUs in 2030, compared with 2015 levels.