IFU (The Industrialization Fund for Developing Countries) has currently a number of new potential Danish-Thai joint ventures in the pipeline of which at least some are expected in the coming years to become a reality.
One project, which is currently maturing, is a Danish manufacturer of small wood pellets interested in producing these pellets in Thailand based on compressed saw dust. These pellets should then be exported to Europe where the product already exists and is used for heating in both industry and private homes.
Other potential new companies to join the ranks of other Thai-Danish enterprises in Thailand in the years to come include a company interested in producing electricity saving equipment, a manufacturer of batteries, a manufacturer of proteins and more.
“We are here and we have the money,” says Poul Weber who would like more companies to be aware of the benefits of having IFU as a professional and “safe” investment partner.
According to Poul Weber, companies interested in an IFU co-investment – or co-financing – are typically Danish companies with an idea, which they believe is feasible to realize in Thailand. But local Thai companies with a project they believe would benefit from being established together with a Danish joint venture partner may also be of interest.
“If we believe in their idea, we might help identifying a suitable partner company in Denmark,” he says
“It is important to keep in mind that we can only enter a project if there is a Danish company involved – but this Danish company does not necessarily have to be located by the Thai company in advance.”
If IFU after a professional evaluation of the project should decide to enter as a shareholder in the new company, they never invest more than the Danish company itself and IFU has set 25 percent as its maximum level of involvement.
Even with a small equity share, having IFU as co-investor may, however, be of high value for the new joint venture when seeking additional financing from banks or financial institutions as well as help open many doors in the market place when the company starts its operation.
Another important added value is also IFU’s contribution as a professional member of the Board of Directors of the new company. In Thailand, this duty has for many years been performed by Poul Weber who has actively contributed to the development of the company based on his vast business experience and local network.
IFU’s first investment in Thailand was in a furniture factory in the early 70’s. Since then, some of the most prominent Danish companies in Thailand have at one point or other in their creation taken advantage of the facility. DZ Card, Pongpara Codan Rubber, Carlsberg, Egmont/ Nation Multimedia Group are but a few examples.
In all these companies, existing or new shareholders have since purchased the shares initially held by IFU, which is typically what IFU requests once the new company has been established and is well under way.
“When a project is consolidated, usually after 6 -8 years, IFU will sell its shares in the project company to release funds for new investments. When this time comes, the existing partners in the project are normally given first right of refusal,” Poul Weber explains.
Royal Scandinavia Thailand is currently IFU’s largest investment in Thailand. The company was established in 1998 and today the company has 216 employees. A new factory building of 4,250 sq.m. is currently under construction, scheduled for opening in November this year. Then the number of employees will be expanded to 450 skilled silvers and gold ware workers.
Another company in Thailand in which IFU currently has equity is Pena Dansk Tekstil Tryk. This Herning-based company has developed a special technique for printing on garments and has already affiliates in also India and Pakistan.
The most recent IFU investment in Thailand is Caretex. The company established last year a factory in Laem Chabang to produce liners for containers. These liners are like big flexible tubes of the size of the inside of a container. If bulk goods are filled in the liner instead of directly in the container, it both helps protect the goods and facilitates the cleaning of the container afterwards.
