Crisis kills private hospitals

Privately owned hospitals have been in a coma after a year of the economic crisis, which caused patients to go to public hospitals. "At least 32 of about 400 private hospitals nationwide have been under siege after debt restructuring talks with creditor banks have failed, and probably a hundred more are going to fall," said Dr Pongsak Vitthayakarn, managing director of Krungthep Vejthani Co., operator of Bangkok Hospital.

Like many other businesses, hospitals borrowed heavily from foreign creditors for expansion plans during boom days. "Hospitals were investing in new facilities and hi-tech medical equipment to create new selling points," said Dr Pongsak. "They suffered after the baht flotation in late 1997," he said.

The Bangkok Hospital chain has been healthy after its outstanding debts were rolled out from 3 to 10 years and the company is to expand, said Dr Pongsak. "The chain has planned to bail out 20 hospitals nationwide this year and is considering acquisitions into 30 more hospitals next year," he said.

The larger the hospital, the stronger its bargaining power in medicine; branches help save costs; only hospitals in up-scale markets left in good shape, while lower group of patients turned away; Bangkok Hospital chain earned Baht 2.9 billion last year in the Baht 50 billion market.

Japanese coming on investment trips

About 50 Japanese investors are coming this month under an investment tour organized by the office of the Board of Investment. The first group of about 36 investors from Fukuoka prefecture was scheduled to arrive in the first week of February, according to Sompong Vanapa, an assistant chief of BOI.

The visit took place after months of door-to-door invitations by BOI offices in Japan. The next group to come would be from Kumamoto prefecture, said Mr Sompong. "At least one of those visiting the Kingdom this month has decided to invest in food processing industry," he said.

Most of the potential investors invited this time are in small and medium sized businesses in their respective home provinces, businesses now highly promoted by the Japanese government to replace larger scale investment projects seen during boom times, said Mr Sompong.

Japanese investors seen scattering investment projects to other countries to reduce risks; the slowdown clearly seen in 1991 after a military takeover in Thailand; Japanese investors from provinces still coming in under the local-to-local cooperation project; those from Saitama, Nagasaki and Aomori prefectures have been working with Thai counterparts in Ayutthaya, Samut Sakorn and Lampoon provinces.

Ford to unveil left-hand steering pickups for EU market

Auto Alliance (Thailand) is to launch left-hand steering pickup trucks for the European Union market for the first time this week, while planning to unveil Ford CKD commercial cars for 9-10 other markets, both regional and overseas, which include South Africa, the Philippines and Malaysia.

According to AAT’s vice-chairman and director Mr. Davis Sneider, the company has planned to bring out 65,000 units of pickup trucks this year, 45,000 of which will be exported. Another 10,000 units will be for the domestic market, while 10,000 completely knock-down units will be customized for special markets.

Ford is implementing the strategy to produce trucks for the world market under the concept ‘global truck with global quality and global suppliers for global market’, said Mr Sneider. AAT, a joint venture of Ford-Mazda and a group of Thai investors, has also formed two other companies to produce auto parts.

Ford pickup’s market share increased from 1 to 4.4 percent last year; image building campaigns under way; more dealers planned this year from currently 48 nationwide; combined sales of pickups expected to rise to between 155,000-160,000 this year, up from 140,000 units in 1998; assembly line for first passenger car for local market planned in 2000.

Thousands of Chinese tourists flocking into Pattaya

About 40,000 Chinese from mainland China, Hong Kong, Taiwan and Singapore are flying in this month and Pattaya has been the most favorite destination to celebrate the lunar new year. Those tourists are coming on about 200 extra flights to Don Muang Airport and on a few others flying directly to U-Tapao.

According to sources in the Department of Aviation, most of the mainland Chinese are flying in on extra flights of Air China, China Southern, China Eastern and China Southwestern airlines, while Taiwan’s China Airlines, EVA Air and Hong Kong’s Cathay Pacific, and Dragon Air, have all increased their flights to Thailand.

Cathay Pacific alone is flying 18 extra flights, adding to its five regular flights a day to Thailand this month, taking about 5,000 tourists from southeastern China and Hong Kong. Dragon Air flies 3 flights directly to U-Tapao, said sources.

Stable yuan enables more mainland Chinese to travel Asia this year; 2,000 rooms at Ambassador Pattaya Hotel were fully booked; there are about 20 percent overbookings at Pattaya hotels this month; previous road-shows to Shanghai and other southeastern cities yielding fruits; thousands of Singaporean Chinese, spared in the regional crisis, also coming.

1998 a flimsy year for imported whisky

Imported Scotch whiskeys have failed to regain lost ground last year as sales plunged by 40-50 percent despite efforts to revive the once most flourishing market. Only Richmonde (Bangkok), the market leader, is left in a good health, notwithstanding huge declines in profits.

According to industry sources, there were only 1.10 million crates of whisky imported in 1998, about 50 percent down from 2.19 million crates the year before. Of those, only 180,000 crates were of 10-12 years premium whiskies, a 70 percent decrease compared with 600,000 crates in 1997, sources revealed.

About 80,000 crates of 5-8 years standard whiskeys were imported in 1998, down from 190,000 crates in 1997, while imports of the 3-year ‘secondary whiskies’ decreased by 40 percent, to 840,000 crates from 1.4 million crates in 1997, said sources in the Excise Department.

Johnnie Walker Black Label, under Richmonde, maintained absolute control by capturing 98.90 percent of the up-scale market segment, followed by Seagram’s Chivas Regal; Richmonde’s Johnnie Red conquerors of the standard market, controlled 93 percent of market share, up from just over 70 percent in the previous year, followed by Grant’s of Royal Distiller (Thailand); Spey Royal under Richmonde lost 15 percent of market to Blue Eagle of United Pacific Holding.

New cancer drug sees a boom in Thai market

Capecididine, the newer, more effective drug with minimized side-effects, has rapidly become the most popular dose among patients undergoing cancer treatment in Thailand, while state hospitals are prepared to introduce the drug into common use. Taking Capecididine pills can be an alternative to the more harmful radiation treatment, said specialists.

The drug, available in the Kingdom for a couple of months, is easy to use and easy to be assimilated into cancer cells. Assimilation has been among the problems which have caused failure in treating cancer in the past several years as medicines will be driven out by cancer cells, said specialists.

Capecididine is likely to replace Cyclophosmide, widely used in treating breast cancer, and VP-16, used by lung and ovum cancer patients, which are less effective in term of assimilation, said specialists. Patients do not have to mix the doses with their food anymore before taking, they said.

The new drug is also good for treating colon cancer; breast cancer patients suffering from injections now have a real option; Capecididine will affect specific areas only and thus cause minimized side-effects; the drug will be assimilated in antibody enzymes produced by cancer cells.

Heineken to increase output/advertising

The Singaporean-Thai joint venture, Thai Asia Pacific Brewery Co., brewer of Heineken beer, has allocated a Baht 300 million budget for advertising this year, as competition in the market is likely to heat up. The advertising spending, which is up from Baht 250 million in 1998, is the highest since the company started operations nearly 7 years ago.

According to TAPB’s general manager Roland Preames, the company has planned to increase its share from 60 to 70 percent this year in the Baht 45 billion beer market. But Heineken beer of the Netherlands now controls 70 percent of the domestic premium beer market, he said.

Advertising this year will be mainly in image building areas as more brewers will enter the premium beer market, said Mr. Preames. Kloster beer and Singha beer will both introduce new products to compete in the premium beer market this year, he said.

Kloster reportedly to offer three new tastes of beer this year; Singaporean parent company fully supports major sports events, games; the brewery is to invest Baht 1 billion more in new plant, to bring out 1 million hectoliters of Heineken beer a year, up from currently 450,000 hectoliters a year.

Thai insurance market will strengthen in near future, says Ayudhya CMG Chief

Despite the current uncertainties in Thailand’s insurance industry, the long term market potential is strong, says Peter Smedley, group managing director and chief executive officer of Australia’s Colonial Group, Ayudhya CMG’s Australian joint owner.

Mr. Smedley, who is also group managing director and chairman of Colonial’s wholly owned subsidiaries, CMG Asia and Colonial State Bank, was in Thailand on February 6-7 to see first hand the changes taking place in the insurance industry, and to meet executives of the Ayudhya CMG joint venture.

New regulatory measures now being implemented by the Department of Insurance will ensure that the industry develops to international standards, with medium and long term benefits both for the insurance companies and for their customers.

"We don’t need to be afraid of the present situation," Mr. Smedley said. "In fact, the economic difficulties are likely to accelerate the pace of positive reform, leading to a more internationally competitive insurance industry providing even greater value and security for its customers.

"It is up to the industry to cooperate fully with the government, and to listen to the needs of its customers. There is a great future here."

CMG Asia has in recent years conducted a rapid expansion policy in the region, having started with life insurance companies in Hong Kong and the Philippines in 1990, and expanded into Malaysia and Thailand in 1995.

In 1997, CMG doubled its investment in Asia by buying the shares of its Asian partner, Jardine Pacific, and the group’s expansion accelerated further last year with the acquisitions of the Australian operations of Legal and General, the Australian and New Zealand operations of Prudential, and Guardian Royal Exchange’s Hong Kong business.

In Thailand, Ayudhya CMG Life has been the fastest growing life company since the joint venture was founded in April 1995.

Mr. Smedley believes that this is a time of opportunity to further establish the CMG Asia group in Thailand and the region.

"It is important to operate from a position of strength," he says. "At a time when other companies are forced to cut down on their marketing activities, our strategy is to do the opposite.

"We are committed to building a network of successful life insurance businesses throughout Asia, and in the current environment our financial strength gives us the opportunity to stand out from our competitors by continuing to invest in the region."

Business News

Bartercard hits Bt40m target and sees fast take-up from SMEs

Bartercard, the retail barter exchange organization launched in Thailand in May last year, has achieved its Baht 40 million trade target ahead of schedule and is seeing membership grow fast as the concept takes off in the Thai market.

Companies forming the bulk of Bartercard’s membership are small to medium sized enterprises (SMEs), which, during recession, frequently experience difficulties with cash flow. Graham Brain, Thailand’s Managing Director, says he is convinced that the timing was right for Bartercard in Thailand, but hitting the 40 million target this early was not initially anticipated. SMEs are a vital part of the Thai economy and they are receiving much encouragement and support from the government, since it is seen as a financial instrument, which actively helps companies plan cash flow and expansion without having to resort to the financial sector. Bartercard only opened in Thailand for business in May 1998 and since then has established its membership base at over 250 companies. Acting as a third party record keeper, Bartercard uses credit units called Trade Bahts to monitor the value of transactions between members who are issued with plastic cards similar to a credit card. Members can then accumulate and spend their barter credits across a wide range of businesses and industries.

Bartercard’s initial launch in Australia in 1991 was at a time when the home market was passing through a tough economic recession. The immediate grass roots support led to Bartercard emerging as the world’s fastest barter organization, with 45 franchises in seven countries (Australia, Thailand, Hong Kong, Sri Lanka, New Zealand, England and Canada). The company’s international expansion plans are another aspect of interest to Bartercard’s membership base in Thailand, particularly amongst SMEs doing business overseas. Right now, they are in the process of setting up in Malaysia and Belgium. The intention then is to move into the United States, which will be a major step in taking Bartercard into global trading. For more information call 02-254 5152.

DHL and Central launch gift voucher scheme

DHL Worldwide Express is the world’s largest international air express network, linking 80,000 destinations in more than 200 countries.

DHL now has launched a gift voucher program in which all companies using the express courier service to send or receive documents and parcels from an overseas destination will accumulate points, which can then be redeemed for gift vouchers at any branch of Central Department Store.

The program, which will run through 31 May 1999, is part of DHL’s policy of supporting and encouraging Thai based exporters with a number of specially tailored air express products.

Each time a company sends or receives a DHL delivery, the organization will receive reward points to the value of one point for every one Baht for documents, and five points for every one Baht for parcels. Once 32,500 points have been accumulated (excluding VAT), they can be exchanged for a Central gift voucher worth 200 Baht. A maximum of 6,000 Baht in vouchers can be redeemed per company. Further information on the program can be obtained from DHL’s 24-hour service at 02-207 0600.

Microsoft - Windows NT upgrade promotions

Corporate users and academic institutions upgrading their Microsoft Windows NT Server will benefit from Microsoft’s special competitive and version upgrade promotions. Corporate users who purchase Windows NT Server 4.0 Competitive Upgrade or Windows NT 4.0 Client Access License Competitive Upgrade via the Corporate Select or Open License Program, and academic institutions who acquire a Windows NT Server 4.0 license or Windows NT 4.0 Client Access license via the Academic Select or Open License Program, are entitled to a Windows 2000 server or Windows 2000 Server Client Access license at no extra charge, regardless of whether or not the product is available during the term of the customer’s agreement. The offers also apply to Windows NT 4.0 Competitive Upgrade license and academic full license purchased from November 1st 1998 onwards and are available from now until March 15th 1999. For more information call 02-636 0806 to 3 or e-mail: [email protected].

Roll’s-Royce proves new technology as Trent 8104 clears 110,000 LB thrust

Rolls-Royce plc is a global company meeting present and future requirements of civil aerospace, defense and energy market, with facilities in 14 countries. Its core gas turbine technology has created one of the broadest product ranges of aero engines in the world, with 55,000 engines in service with 300 airlines, 2,400 corporate and utility operators and more than 100 armed forces, powering both fixed and rotary wing aircraft. In addition, more than 30 navies use Rolls-Royce propulsion. Energy markets include the oil and gas industry and power generation.

Rolls-Royce is the pioneer of gas turbine technology for aerospace, power generation and marine propulsion, is today involved in the major future programs in these fields, including the Trent aero and industrial engines, the Eurofighter Typhoon and Joint Strike Fighter combat engines and the WR21 marine engine.

Rolls-Royce plc, announced recently that the Trent 8104 engine has exceeded 110,000 lb. thrust during initial test runs. This engine is the latest member of the successful Trent family, the most successful family of large aero engines on offer in the world today and is proving new technologies which will benefit all new members of the Trent series. Innovative features include the new "swept" fan blade, which introduces the fourth generation of advanced design, maintaining the company’s world leadership in wide-chord fan technology. The advanced aerofoil design passes a greater airflow and delivers improvements in fuel efficiency. The "swept" blades are also stronger, increasing resistance to bird strike impact and runway debris. The intermediate and high pressure compressors benefit from state-of-the-art design techniques, such as 3D computational fluid dynamics, which provides improved airflow control. This advanced technological development will also be applicable to other members of the Trent family. Phil Hopton, Rolls-Royce Trent 800 Project Director, said, "These are exciting results in a design and manufacturing program which saw the first engine run achieved on schedule after 15 months. Results have matched predictions and bear out our confidence in the continuing growth of the Trent engine." The value of firm and option orders for Trent engines exceeds $15 billion.

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