Apple Computer to appoint one more local distributor

Apple Computer is to authorize the Vallue Systems Co, a local computer company, as the second distributor for Apple’s products in Thailand after Sahaviriya OA. The move, certain to upset SVOA which has been solely distributing Apple and Macintosh products for many years, is in line with Apple’s plan to increase sales outlets in Thailand.

According to industry sources, the two sides have reached a conclusion after talks in Singapore and an official announcement is expected in February. Apple has earlier appointed 3 regional distributors to operate sales in Southeast Asia - Diversitec, FluelMark and Electronics Resource - all in Singapore.

SVOA has been hard hit by financial problems and is not able to manage a large enough stock to supply to Apple’s dealers. Vallue Systems has the strength in home user market while SVOA, without a strong direct selling force, is limited only to its outlets - SVOA centers, and IT City superstores - said sources.

Negotiations with Apple made by Vallue Systems’ joint venture ECS Holding in Singapore; dealers have been in difficulty in making orders for Apple’s computer and peripherals; the three regional distributors have yet to set up offices in Thailand; the new distributor prepares to spearhead IMac sales in Thailand.

Though difficult, Piper plane still flies

Though it is more than difficult to find a customer for aircraft in the economic crisis, Minor Corporation Plc. still hopes for a brighter day. The company, authorized distributor of Piper light planes by the US New Piper Aircraft Inc., will not leave the business even though only 1 airplane was sold in 1997.

According to Minor Corp’s deputy chairman Karnchana Warton, the company has found it hard to find new customers after the baht flotation in August 1997, which sent the price of Piper planes soaring. A light plane would cost only Baht 3 million prior to the floatation - a price lower than that of a luxury car, said Mrs Karnchana.

Minor Corp has offered 7 models of Piper aircraft, from a 4-seater for training to larger ones for commercial use, to business people and business corporations. The company has sold fewer than 10 units of the aircraft since 1995, said Mrs Karnchana.

Under the agreement with New Piper Aircraft Inc, 1-2 units of the aircraft must be sold each year; there are 2 other distributors of different aircraft in Thailand; Minor Corp eyes Singapore and Indochinese markets; government urged for a clear duty structure on light plane parts; new air field for light aircraft in Samut Prakarn gets a full support.

Construction of nuclear center halted after US inspector withdrew

General Atomic was ordered to stop construction work at the nuclear research center site after a ministry committee found that the company had picked up an unqualified inspector to replace US Raytheon Engineers and Construction, a change which violates the construction agreement.

The order was made by an official inspecting committee in charge of the construction. GA hired ATT Consultant to do the work after Raytheon withdrew earlier last year. The Secretary General of the Office of Atomic Energy for Peace was summoned by Science and Technology Deputy Minister Pornthep Techapaiboon for clarification.

The minister said on Monday he wondered why AEP accepted the change which was against details in the agreement. Thought the US contractor GA was fully experienced in constructing such nuclear facilities, the Thai engineering consultant was not, said the minister.

The center under protest by local residents; a public hearing to be held in Nakorn Nayok city hall next week; security measures for the new facility will be reviewed; AEP was informed by the US Raytheon in February last year, no action was taken so far.

Retailers find Chonburi “heaven”

Major stores which started to head for Chonburi a couple of years ago have found this eastern province a shopping heaven. There have been more than 20 department stores, superstores, discount stores and supermarkets in this province, which is gateway to the east and home of expatriates working for investment projects.

A Thai-German joint venture which started the U&J Mart convenience store chain in the third quarter of 1998, now has 8 branches in the cities of Chonburi, Pattaya and Ban Bung district. Major retailers, like owners of Tops, Big C, Lotus, Save Land, True Value, Makro, Podium, Robinson and Foodland all have their places in the province.

Chonburi, with 1.1 million people, has been leading in the construction industry, the second largest after Bangkok. This might be proven by the fact that US True Value, a leading material supplier, opened its first branch there, said a provincial source. Chonburi’s Sri Racha is where the country’s second deep seaport is while the Laem Chabang neighborhood has been home of 28 industrial estates.

Unlike Bangkok, Chonburi is where about 90 percent of service apartments are occupied; Japanese investors and families are frequent visitors to downtown Chonburi; General Motor Co and BMW choose Chonburi as home for assembly lines; Central Department Store and Carrfour Hypermarket, who postponed Chonburi branches last year, are yet to join the neighborhood.

VAT return for tourists set for July 1

The Department of Revenue said it hoped to be able to start returning value-added tax to foreign tourists starting July 1 this year as preparatory work is almost completed. The VAT returning scheme would be applied only to tourists who spent at least Baht 5,000 for Thai-made products.

From that date, tourists can ask for VAT returns at revenue offices at 4 international airports: Bangkok’s Don Muang, Haad Yai, Phuket and Chiang Mai, said the department’s chief Suchart Chaovisith. A computer system is being developed to link the department with the 4 airports, department stores and other major retail outlets, he said.

Tourists will be able to take back paid VAT immediately in cases where the sum does not exceed Baht 5,000 (for Baht 50,000 spending). Otherwise, said Mr Suchart, the department will send the money to tourists back home later in checks.

The rule will be applied only to tourists who leave the country within 3 months; those of Thai nationality or holding Thai passports are unqualified; Baht 4-5 million will be spent each day in VAT return.

Au Bon Pain, Dunkin Donuts units to combine

Divisions of baking chains Au Bon Pain and Dunkin Donuts will be combined in a restructuring plan by the Thai operator in order to cut operating costs and increase bargaining power with suppliers. The two chains will, however, retain their own marketing and operation departments.

According to Varin Naruela, managing director of the Royal ABP group that operates the two franchises, purchasing, accounting, financial and project development divisions will be combined under the restructuring plan. The company has been successful in running the bakery and fast-food restaurants, said Mr Varin.

Royal ABP, under a 20-year license agreement with the US Au Bon Pain Inc, was scheduled to open at least 5 branches of the bakery / cafe in the first 5 years. The company has, however, opened 5 branches in just a 2-year time, said Mr Varin. Royal ABP will open up 4-5 more branches of the bakery shop and 30 more of Dunkin Donuts this year, he said.

The donut chain already has 180 branches nationwide; US parent Au Bon Pain asked to scrap Baht 200,000 franchise fee on new branches after an early success; a standard bakery shop would need Baht 6 million in investment; Dunkin Donuts to have a new face this year.

Amazing Thailand Years yield sweet bonuses

The economic recession has brought disappointment to all except for those working in hotel and other tourism related industries. Hotels’ management have continued to give away bonuses and other remuneration to their workers this year.

According to a survey, most of Bangkok’s major hotels are giving a minimum year end bonus equal to one-month salary while the highly successful ones offer a higher rate ranging from 1.5 to 1.7 months. Besides year end bonuses, hotel workers have already enjoyed an additional income of between Baht 10,000-20,000 a month from service charges collected.

A source in the Oriental said every normal worker has enjoyed a division of Baht 20,000 from service charges in November and December last year. However, the portion could lessen in January if occupancy rates decline, said the source.

A 5-7 percent adjustment of salary made this year while salary hike frozen at the Bangkok Regent; workers at the Sukhothai have additional Baht 5,000 as ‘ang pao’ on Chinese New Year; most of major hotels found 1998 a year of happiness, with higher profits; Siam Express, a major inbound tour agency rewarding employees with a 1.7-month bonus.

Local investors prepared for March auctions

Pranakorn Automobile group is ready to join the next auctions by the Financial Sector Restructuring Authority scheduled for March. The group, a winner in bidding for loan assets worth Baht 7 billion in the December 15 auction, has spent some time studying new opportunities in purchasing assets left behind after the closure of 56 finance companies in 1997 and 1998.

According to PNA’s chairman Banterng Juengsanguanpornsuk, the group is specially interested in car leasing, properties and some other asset ports for further development. The group had not turned to the auctions until recently after the auto sales business was hard hit in the economic slump. Asset management has become one of the group’s core businesses, said Mr Banterng.

Meanwhile, Shinawatra Asset, the property development arm of Shinawatra group, said the company is gathering information about loan assets, focusing on non-performing loans left by the closed finance houses. Negotiations on NPLs with commercial banks have been under way, said SA’s executive director Surathien Chaktaranon.

PNA chairman said the company has released nearly Baht 4 billion in loans to customers in new hire-purchase deals on the auctioned assets; a new bidding capital would be more than Baht 10 billion; SA is determined in property development projects despite the recession; Shinawatra’s headquarters on Vibhavadee Rangsit to open late this year; selling office space in difficulty.

PNA plans FIAT assembly line here in 2000

Pranakorn Automobile has planned to make the Italian FIAT car here in 2000 for domestic market and exports to Southeast Asian countries. Meanwhile, a PNA subsidiary with Baht 60 million in registered capital has been authorized by FIAT of Italy to solely distribute FIAT and Alfa Romeo models in Thailand.

PNA group, replacing Ital-Siam group in the business with Italy’s FIAT, will introduce the all new 2.0 liter Alfa Romeo 156 model to the Thai market in March and a few other FIAT models are to follow. PNA will have to spend the whole year in brand building as FIAT and Alfa Romeo have been in and out of the Thai market for decades with little success.

The company has prepared Baht 400-500 million to fund the make of FIAT car at Bang Chan General Assembly in Pathum Thani; the Italian side may jump in three years later when the Asian Fee Trade Area scheme is implemented, said PNA’s executive director Tawatchai Juengsanguanpornsuk.

PNA to bring out 10,000 units a year; FIAT’s budget models are first to come out, to compete with Japanese cars in price; Italy’s FIAT is said to pin high hopes on the comeback; both FIAT and Alfa Romeo to share PNA’s Opel showrooms nationwide; another Baht 10 million allocated to fund showroom renovation works.

Copyright 1998 Pattaya Mail Publishing Co.Ltd.
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Created by Andy Gombaz, assisted by Chinnaporn Sangwanlek.