Link found between FRA official and asset buyer

Assistant secretary-general of the Financial Sector Restructuring Authority Narong Pattamasevi was found linked to a Thai-Singaporean consortium which won the FRA auction of loan assets last year. The case faces further investigations as the FRA has had mounting criticism.

Mr. Narong, the former executive chairman of Nithipat Finance Plc, now an FRA official responsible for sales administration of loan assets left behind by the 56 finance firms ordered closed last year, was found directly related to Singapore’s Kim Eng Holdings, winner over the asset tranche belonging to the closed Nithipat Finance worth over Baht 127 million at the FRA auction on June 15, 1998.

Mr. Narong was also found among other former Nithipat executives in the board of directors of NNKE and Partners Co., a consortium between Kim Eng and AFC Thai Co, in which Mr. Narong and close associates are also directors. Kim Eng formerly owned the majority of Nithipat Finance.

Kim Eng was the sole bidder and winner over Nithipat loan assets last year with a relatively low bidding price; FRA’s performance in selling Nithipat’s assets was widely criticized; Kim Eng reportedly unsuccessful in persuading Nithipat Securities Plc to join NNKE and Partners.

Academics tell government to stop borrowing abroad

Leading academics said it was time for the government to stop borrowing in foreign currencies and turn to using the depreciated baht to stimulate the economy. Some of the academics were also suggesting that the International Monetary Fund ease rules in restructuring the Thai financial institutions and debt restructuring in the private sector.

The depreciated baht theory was strongly supported by Dr Virabongsa Ramangura, a leading economist and former deputy prime-minister and finance minister, Dr Ammar Siamwala of Thailand Development Research Institution, Dr Phasuk Pongpaijit of Chulalongkorn University, and Dr Kosit Panpiemrath, chairman of the Bangkok Bank Plc. They said a weaker Thai currency would help spur exports and help local producers survive the crisis.

Dr Virapbongsa partly criticized IMF for its concentration on helping financial and banking sectors while ignoring the real economic sectors which were left in financial distress for over a year. The weaker baht theory was in return challenged by IMF’s deputy managing director Stanley Fisher and chairman of foreign bankers’ association Mr. David Procter, who said that a strong currency was crucial to economic growth.

Government urged to borrow from domestic market to reduce foreign debt burden; farm sector would also benefit from the weaker baht; IMF officials said they would not be happy to see the Thai baht rock Asia for the second time; Dr Kosit told the government: just say no to more borrowing.

Harrods buying into US Texaco’s Thai explorations

The UK-based Harrods, through Thai subsidiary Harrods Energy (Thailand) Co., has been in advanced talks with US Texaco Exploration for investment in the gas and oil exploration projects in the Gulf of Thailand. "A conclusion on a new share holding structure is expected soon," said Mr. Noppadol Manthajit, chief of the Natural Resources Department.

The new investment fits into Harrods’ expansion plans after the company entered into the gas and oil exploration industry in the Kingdom last year. "Harrods Energy (Thailand) has been exploring for natural gas and oil in onshore areas in Prachuab Kirikhan provinces," Mr. Noppadol said.

Harrods Energy, majority-owned by the Al Fayed family, which also owns Harrods in London, has reportedly been in negotiations with the US UNOCAL in other exploration projects in the Gulf of Thailand. Harrods Energy and the Petroleum Authority of Thailand’s exploration arm had earlier struck a deal in three offshore exploration projects.

Harrods Energy would become the third largest explorer in Thailand after the deal with Texaco; PTTEP to sell 30 percent of its shares in exploration projects in the Thai-Vietnamese joint development area to UNOCAL; the US Santa Fe Energy Resources among newcomers; more foreign explorers to invest in energy exploration and production in Thailand.

Miss Lilly looks for matching mates in the US and Australia

It has turned into a success story in just a couple of months of operation. Miss Lily florist chain now has over 100 branches and franchised outlets nationwide in the home delivery flower business. The company, Miss Lily Co., is looking for business partners in continents under its expansion plans.

According to Miss Lily’s general manager, Mrs. Pringprai Nitthayanon, negotiations have been underway with investors in the US and Australia for a possible cooperation in expanding the Thai flower market to those respective countries. Talks on a similar cooperation are also going on with a local investing group in Vietnam, she said.

"From Vietnam, Miss Lily would be out to cover all the Indochinese markets in the years to come while expanding to other Southeast Asian countries," Mrs. Pringprai said. "The company expects to win 100,000 customers in 3 years in this domestic market."

There are currently 16 Miss Lily outlets delivering bunches of flowers to households and offices in Bangkok by telephone orders; the chain covers Phuket, Chiang Mai, Chiang Rai, Mae Hong Sorn, Udorn Thani, Khon Kaen and other major cities; member cards prepared for members to make orders in credit; more product lines will be introduce to the chain.

Don’t move! Price war has just begun

The operator of Cellular 900 and GSM mobile networks, Advance Info Service Plc., this month started a new campaign offering a variety of hand sets for especially low prices to its old customers. The new marketing gimmick was introduced while AIS’s arch rival Total Access Communication Plc. has been reportedly successful in persuading Cellular 900 and GSM customers to turn to services by WorldPhone 800 and PCN 1800 networks.

To stop the turnover, AIS is persuading its customers on the Cellular 900 network to change to the digital GSM network under a marketing plan called "migration campaign". "The company aims to draw the attention of between 50,000-70,000 customers this year," said AIS’s Vice-president Sanchai Teowprasertkul.

Among the brand-name GSM models offered in specially low prices include Ericsson GF768 (Baht 9,700), Ericsson GH688 (Baht 8,999) and Siemens S10 (Baht 9,999), while others: Nokia 6110, 5110, and Phillips Genies offer a 25-percent discount. Alcatel One-Touch-View and Bosch 980 offer special "small talk" packages.

Letters have been issued to thousands of old customers in this direct selling campaign; AIS will also offer another price campaign to its GSM service in a strategic move to keep old customers; AIS started the price war with TAC earlier this year offering special "small talk" packages to those who turned away from the WorldPhone 800 and PCN 1800 networks.

Wine imports fall 40 percent as dozens of traders vanish

The domestic wine market experienced its worst year in 1998 as imports sharply fell to 260,000 crates, from 680,000 crates the previous year. The government’s tax measures to reduce imports, weakening buying power among consumers, directly affected wine sales, said sources in the Customs Department.

In 1997 there were more than 100 wine importers, but only a handful survived in 1998 - a serious blow to the wine business, while the market is set to face another slumping year this year - said sources. "There are expected to be just a few major wine importers left in 1999," they said.

However, Tassanee Luengpetch-ngarm, manager of Berli Jucker’s winery department, said though the company’s wine imports dropped by 10 percent, sales volume increased by about 20 percent in 1998. Sale’s prospects are expected to continue to grow this year as many other importers have vanished, said Ms Tassanee.

Many others still have to clear their stock, left over from the 1997-1998 ill-performance; medium-price wines still doing well in the market; Berli Jucker to introduce two more brand-name Australian wines this month; some wine importers have turned to the more lively whiskey.

Lemonene ad banned from TV

The Consumer Protection Office has ordered a ban on commercial spots by Lemonene for advertising itself as an insecticide agent which, said scientists, was not true. The aromatic substance D-Lemonene, extracted from citrus peels, was yet to be proved effective in killing insects, they said.

Though the substance is highly acceptable to the fact that it is free of side effects when used in repelling mosquitoes, it was necessary that the advertisement be honest to customers, said the office. Lemonene solvent would kill insects only if it was concentrated enough, 15 percent at least, and when sprayed directly, with sufficient amount, to the body of insects, scientists said.

The CPO said though Lemonene’s "non-poisonous" label was acceptable, its claim as a non-poisonous insecticide was untrue and must be corrected. Lemonene has been on the market for several years and has already become popular among health-conscious households annoyed by mosquitoes and other insects.

CPO introduces tough measures against several untrue and "dishonest" ads; experiments in the US found D-Lemonene effective in paralyzing nerve and breathing systems in insects but not killing; the Medical Science Department is to find out the facts.

Don Muang Airport in major revamp to cope with congestion in 2002

While the construction of Bangkok’s second international airport at Nong Ngu Hao is in its first phrase, the Airport Authority of Thailand is expected to spend about Baht 4 billion to expand and renovate facilities at Don Muang Airport, involving construction of new runways, taxi ways and terminals, to meet increasing demand in both international and domestic services.

According to AAT’s deputy governor Pojana Simasthira, the new enlarged Bangkok International Airport will be enough to cater to 37-38 million arrivals in 2002. The new facilities include one more passenger terminal, taxi way, runway and tarmac for large-body planes. A new car-park for up to 450 vehicles was included in the expansion plan, he said.

About 30-40 percent of the Baht 4 billion budget would be allocated for the construction of the airport’s fifth assembly point, which would be large enough to park Boeing 747-400 large-body planes at the same time, said Mr. Pojana. All the four existing terminals will be expanded, renovated to meet with demands by airliners, he said.

There had been fewer inbound flights in the 4-month period between December 1998 to January 1999 while more passengers were coming in with flying alliances; arrivals also increased at Phuket, Chiang Mai and Samui airports, while Haad Yai suffered a 15.53 percent decrease in term of flights and a 2.10-percent drop in term of passengers - apparently a fallout from the Malaysian crisis.

Thai condoms to go global in new packaging

The condom has been among the few consumer products left unaffected by the economic crisis, and the largest producer, London Royal Consumer Products (Thailand), sees a continuing growth this year while planning to increase production for export to new markets worldwide.

According to London Royal’s marketing manager Pornchai Piriyabanjerd, the company, producer of Kingtex and Durex condoms, has had new orders from distributors in Central Europe and Latin America, and the administration was considering increasing the production. London Royal, like others, have been more conscious recently in packaging areas as to make condoms a new modern look, "as a consumer product in market places, not a medical one," Mr. Pornchai said.

"Packaging must be attractive enough to draw the attention of youngsters and other groups of customers in the world market," he said.

Kingtex and Durex controls 77 percent of the Baht 260 million market which enjoyed a 5 percent growth last year; new packaging will have a ‘global look’; selling through vending machines considered; more education campaigns for youths planned as marketing gimmick.

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Created by Andy Gombaz, assisted by Chinnaporn Sangwanlek.