Singapore, July 7: While investors and traders in Thailand and south-east Asia are totting up their imminent gains or losses as a fallout of last Wednesday's depreciation of the baht, Indian businessmen in Bangkok are relatively unperturbed.

Executive director of the $800-million Birla group of industries in Thailand SS Mahansaria is unfazed by the 20 per cent fall of the Thai currency since the announcement of the free float, the government's euphemism for devaluation. Mahansaria says that as far as his group is concerned, it will be business as usual. "I am happy the uncertainty has ended. And just look at the effect the decision has had on the stockmarket here. It has surged by over 25 per cent in just three days. This augurs well for the industry as also the economic health of the country," he says.However, he says his group will not gain much from the devaluation, which is expected to make Thai exports more competitive.

"Apart from the raw material base, many industries here, like ours, are import-intensive. So whatever gains we make from enhanced exports will be cancelled out by the higher prices we will pay for import of capital goods and components," he says.

But even if he doesn't expect short-term gains, he is happy with the government's decision, since "it will buoy up the economy in the long run. In fact, we are going ahead with our plans for expansion of our acrylic fibre and epoxy plants."

He is dismissive of analysts who compare the Thai currency crisis to the one that Mexico witnessed a few years ago. "Thailand's case is very difficult. It has foreign exchange reserves to the tune of $35 billion. Its industry has increasingly focused on high-technology, value-added products," he says.He concurs with experts who say the baht has never been overvalued.The Indian trading community in Thailand is equally buoyant about the impending health of the economy. And they have more to gain from the devaluation. Indo-Thai Chamber of Commerce and Industry president OP Bajaj says, "Of the chamber's 450 members, only 34 have an export base. All the others are local traders and manufacturers, who have had to compete vigorously with China and Indonesia in recent years. The latter have been able to flood the market with cheaper goods because of their low labour costs, forcing their Thai counterparts to concentrate on value addition. With the free float of the baht, Thai entrepreneurs can now be more competitive.

"Bajaj, who is one of the promoters of Surya Hotel in New Delhi, and has, over the last 20 years, diversified from textiles into the hotel and real estate sectors, had taken a loan of $5 million, which he prepaid last year and converted to local baht loans."I hedged my loans because my bankers advised me to do so. But others who are burdened with short-term foreign currency loans, will face a problem when they have to pay much higher amounts, thanks to the depreciation of the baht," he says.

The Birla group did not take such steps to ward off the impact of the currency devaluation. But, as Mahansaria says , "Even if we have to pay a higher sum at the end of the term, this will be compensated by the lower interest. While we pay only about seven per cent interest for the foreign currency loans, the local banks charge 12 per cent, which could go up in the coming months." The Birla group, which exports 60 per cent of its total produce, will obviously gain as a result of the free float.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.