BANGKOK, Nov 20 (Bernama) -- The Islamic Bank of Thailand (IBT) plans to lend 1.2 billion baht in 2009 to promote halal food and product manufacturings while exploring sukuk or Islamic bonds through "petro money" from Middle East investors.

Its chairman Professor Dr Somchai Virunhaphol said the fund for halal manufacturers would then be doubled in two years as there are vast potential to be tapped.

"Our current financing for halal products are only about 200 million baht. With Thailand aiming to becoming the 'Kitchen of the World', we want to increase our presence and lend to all types of halal products, including medicine and cosmetics," he said on the sidelines of the Bangkok Global Halal Conference here today.

At present, the world halal food market is estimated at over US$265 billion, with Thailand's export around US$1.7 billion.

"Thailand market share is very small. So we want to assist our producers and exporters to convert their products to be halal-compliant. We will also support them with training programmes," Somchai said.

At the moment, there are 1,900 Thai companies with halal certification for their products and manufacturing processes.

On sukuk, Somchai said the prospect for such financing in Thailand was good and several Middle East countries with large fund at their disposals have contacted IBT to invest in the kingdom.

"At the moment, sukuk is almost non-existent in Thailand. The Middle East countries are keen as they have a lot of money from oil production and want to offer sukuk to finance mega-projects like mass transportations and other infrastructure projects," he said.

According to Somchai, sukuk can be offered in Thailand next year once laws and tax procedures are amended by the Government.

IBT was set up in 2003 to offer financial services in compliance with Islamic law and serve the country's six million Muslim population. The Thai Finance Ministry is the largest shareholder with 48.54 percent share in the bank.

Asked if the bank sees competition from Malaysia's CIMB Bank once its purchase of BankThai is completed in January, Somchai said he welcomed such competition.

"I am not sure about their plan in Thailand but I heard they will have Islamic window. This is good as in Islam, there should not be any monopoly and we will have a benchmark to gauge our own performance," he said.

In fact, Somchai said, IBT had held talks with Bank Negara Malaysia to extend cooperation and get know-how in term of Islamic banking and financing.

He said this was needed in IBT's expansion plan as it hoped to open another 10 branches in 2009 from the existing 26, and increase its staff to 500 from the current 400. -- BERNAMA