Amazing Thailand Years in tourism to last into 2000

Tourism Authority of Thailand will continue to promote tourism sales with the slogan ‘Amazing Thailand’ in 2000, even though the official Amazing Thailand Years 1998-1999 are to end this year. Tourism Minister Pithak Intaravittayanan said the Amazing Thailand Years would inevitably last into 2000 as foreign tour agencies will still sell holiday packages to the Kingdom under the slogan.

TAT has created 7 new zones to be promoted in 2000, besides Phuket and Samui, which were already known in overseas markets, said Minister Pitak. The advertising firm Leo Burnett will bring out a new series of TV commercials and printing ads to promote sales of new sites, he said. Instead of the southern resort island of Phuket, Krabi, Stul, Trang and Pattalung would get promoted as new tourist destinations, said the minister.

Several northeastern provinces along the Mekong River will also be promoted under TAT’s ‘Pre-historical Trek and Mekong Treasures’ theme.

Chonburi, Rayong, Chantaburi and Trad will be in TAT’s ‘Jewel Coast’ package.

Baht 2 billion is set for infrastructure development projects.

Thai, Singaporean groups team up to sell Linux in Asia

Power Highland Co. and Kaiwal Software Co. said they had teamed up with a major software trader in Singapore and set up KW-Linux Co. to sell the free-to-use operating system Linux in Thailand and the rest of Asia. The majority of the new company would be owned by the Thai groups, with Baht 2 million in registered capital. The new company will have another Baht 10 million in hand to cover operating costs.

According to Power Highland’s managing director Eric Lim, the company, which is the sole distributor of AMD processors for computers in Thailand, hopes to sell up to 20,000 sets of Linux this year in the domestic market. A set of the operating system, the latest developed version which could be used as an alternative to Microsoft’s expensive Windows, would cost only Baht 950 for a corporate customer, and Baht 180 for a private home user, Lim said.

The Singaporean partner, which is yet to be identified, will use its region-wide sales outlets to distribute Linux. Kaiwal Software would lead in developing the OS; prices would be adjusted after new features are added.

The number of Linux users has increased from 1,000 last year to 4,000 in the first quarter this year.

Kloster’s sister product to join Leo and Chang beers in lower market

Kloster (Thailand), distributor of Kloster beer, said it had planned to re-launch Brew Max beer aiming to tap into the low-scale market, which is already controlled by Boon Rawd Brewery’s Leo and Beer Thai (1998)’s Chang beers. Brew Max beer, by Kloster’s Thai Amarit Brewery Co., has been available for some time in leading super markets.

According to Kloster (Thailand)’s assistant managing director and sales manager Thanarak Wannasrisawas, Brew Max, which was earlier brewed for export to neighboring countries, would be re-positioned on the lucrative low-scale market despite high competition. The company would clearly distinguish the two products, Kloster beer and Brew Max beer, from each other in the domestic market, Thanarak said. Provincial markets, still with room to grow, have been targeted.

The marketing plan for Brew Max beer has been delayed since 1995. Chang beer once again turned to price tactics to protect its market share after Boon Rawd brought down the price of Leo beer.

Conflict hard to settle as rebel labs stand up against Kodak

Though hundreds have already joined Kodak’s new development plan, many others have asked the company to bring down Kodak signs from their shops. The move is seen as a protest against Kodak’s new policy that forces local color labs to sign a new agreement with the company, under the Quality Monitoring Service plan. The rebelling color labs said they were forced to pay Baht 15,000 as a franchise fee to join the new system.

Kodak (Thailand), however, said the sum of Baht 15,000 was not a franchise fee, but for services which would return to labs in discounts on products and other service packages. Kodak used to collect Baht 18,000 in service fees from member labs in previous years, said ML Anavat Srithavat, marketing manager of consumer imaging, Kodak (Thailand) Co. The quality control policy was in line with the policy of the US parent company, he said.

About 553 color labs have already signed new business agreements with Kodak, 20 of those were formerly in Kodak’s rival camp.

Kodak has asked labs who do not want to join the new QCS project to bring down logos, signs and symbols.

Clubs of rebel color labs said Kodak must bring down the signs on its own expense.

Siam Media’s boss calls it quits

Siam Media Group’s president, Bannavit Boonyarat has resigned from all his positions in the Siam Media Group, along with other jobs affiliated to Siam Commercial Bank, as the group undergoes down-sizing during which subsidiaries were either sold or closed. The group, a joint venture between SCB and the Crown Property Bureau, was once among the most ambitious companies in telecom and IT industry.

Siam Media now has only 5 subsidiaries left functional and in good shape, from 13 last year, said Prasob Sanongchart, executive chairman of Infonet (Thailand), which is among Siam Media’s new spin-offs. The downsizing plan is in line with the policy of new SCB president Mrs. Chada Thammasiri, to cut off non-core and unprofitable businesses, Prasob said.

The group consolidated last year by closing 7 of its 20 subsidiaries and operations. Most of the subsidiaries closed or sold were in IT, multimedia and entertainment businesses. Siam Media has become the holding company for its 5 existing subsidiaries.

BBL closes door to foreign takeover

Though some local banks have already fallen into foreigner’s hands, it is unlikely that Bangkok Bank Plc will be among the next fallen victims of the crisis. Bangkok Bank, along with other major banks, might have to sell parts of their holdings to foreign investors - but there is no chance Thailand’s largest bank will be sold off, said BBL’s owner and ex-chairman Chatree Sophonpanich.

Chatree said BBL, which his family founded decades ago, still has a sharp competitive edge as it has expanded in the past several years to cover the provinces. Foreign banks coming into Thailand in the next 5 years would still find it difficult to compete with existing local banks in retail banking business, Chatree said. Chatree handed over BBL management to his juniors a couple of years ago. However, it is important that Thai-owned banks adjust themselves to new competition environments in banking industry, he said.

Chatree said no to advice from foreign consultants that BBL off-load between 5,000 to 8,000 of its workforce. Laying off 2,000-3,000 employees was still ‘too hard to do’, Chatree said. BBL’s ex-boss foresees a new takeoff in 2001.

As of the end of April, six major banks controlled 81.5% of deposits in the system, while sharing 81.25% in lending.

Chinese-Thai paper pulp production project makes progress

The huge investment project between Thailand and China to produce paper pulp in Thailand has progressed impressively. The gains came when the official working committee studying its feasibility suggested last week that a Chinese-Thai joint venture be formed to implement the Baht 40 billion investment in setting up paper pulp production plants and eucalyptus tree plantation in Thailand.

The committee also endorsed requests by the Chinese side that 200,000 rai plots of land be allocated to facilitate the plantation plan. The new joint venture was, however, advised to go contract farming with local residents to insure enough supplies of eucalyptus trees. 3.5 million tons are needed as raw material to produce 700,000 tons of paper pulp each year.

The Chinese government would own the majority of the company, which may be the largest ever single investment project by the Beijing government outside China. Investment in the project, when fully implemented, would cost about US$1 billion. The eucalyptus plantation would need up to 700,000 rai of land in all.

Australian consulting firm to be new advisor to Eastern Wire

Australian consulting company Ferrier Hodgson has been chosen by Eastern Wire Plc to be their financial advisor in restructuring their Baht 1.8-billion debt. IFCT Advisory Co. will be appointed to prepare thea plan for the Stock Exchange of Thailand.

Negotiations on the restructuring process have been under way with 25 domestic creditors, which include Nakorn Thon-Schroeder Bank, Siam City Bank and Standard Chartered Bank, the company’s new managing director Vimol Chanjirawutthikul said.

Eastern Wire, now 80% owned by Egka Holding Co., a joint venture between Thai and foreign groups, will focus on producing tire-trim wires, while slowing down production of other products which compete with low price imported products. The company’s tire-trim wire controlled 45% of the domestic market with leading auto tire producers as prime customers, Vimol said.

Jalaprathan Cement Co. formerly owned 62% of Eastern Wire and still manages the company. Eastern Wire brings out 9,000 tons a year of tire-trim wire, an amount which is still short of meeting with the domestic demand of about 12,000 tons a year. The company also produces welding rods, galvanized wire and other steel wires for construction.

Sales via Thai e-commerce site increase tenfold

There have been 41 companies/exporters selling products via the official Web site ‘www.thai.ecommerce.net.exporter’ during the first 5 months of the year. Transactions in May alone were worth more than US$10,000. Though sales volume was still very small, it has made a great leap compared with the US$1000 worth of sales in January. In other words, exports from Thailand via the World Wide Web have increased tenfold since early this year.

The Web site, created by the Department of Export Promotion to promote sales of Thai products, now has 3,777 names of exporters in its ‘business to business’ directory. There were no sales activities in this category during the period of time, said Krisda Piempongsarn, leader of the department’s working group in e-commerce project. All the transactions were with the companies/exporters in the site’s ‘business to customers’ directory, he said.

Herbal health care products have led in sales on the Web; Baht 9.7 million in fiscal budget funds allocated to support expansion of the country’s e-commerce channel this year, with more names to be added; more shops will be added to the business to consumers list.

Price down to 25 Baht a bottle in fierce beer competition

Brewers of Leo beer and Chang beer recently brought down prices of their respective beers to as low as Baht 100 for 4 bottles in a promotion package, as the market enters the traditional low season for the alcoholic drink industry, during the Buddhist Lent months. Boon Rawd Brewery said though it was not the company’s policy to compete with low prices, it would not obstruct price campaigns by Leo’s sales agents in the provinces in their efforts to compete with arch rival Chang.

Marketing sources said the brewer of Chang, Thai Beer (1991), has renewed the price war by selling beer at Baht 25 a bottle (630 cl), or Baht 100 for four bottles - five in some areas. Thai Beer (1991) was successful with the price tactic when it first introduced Chang to the market, while Boon Rawd was still selling its Singha beer at Baht 47 to Baht 48 for one bottle. The company, however, said the price campaign was initiated by its sales agents in the provinces.

Thai Beer (1991) said it produced 52 million liters of Chang beer in April, a 55% share of the domestic beer market, worth Baht 42 billion in combined sales.

The beer market is expected to grow by 5% this year, while the whisky market would further decline.

Suramaharas Plc, which owns Thai Beer (1991), wants to increase exports of Saengsom and other whiskies to Baht 1 billion, from Baht 600 to Baht 700 million last year.

Star Cruise to set base in Thailand

The world-class Star Cruise has signed an agreement with Laem Chabang deep seaport to set up another regional ‘home base’ in Thailand, besides the one in Singapore. Starting this September, the ocean liner would visit its Thai home base twice a month, bringing in up to 4,000 passengers from Singapore. From Laem Chabang, the passengers would travel to provinces on the eastern coast.

Laem Chabang Commercial Port director Peerapol Traiwattana said from that Star Cruise would further take her passengers to Thailand’s neighbors, Cambodia and Vietnam. Peerapol said that under the agreement, Star Cruise is granted the exclusive right to use Pier A 5 in Laem Chabang, formerly belonging to Ban Pu Mining Co. Star Cruise would be on its own in appointing services to the port, Peerapol said.

It is believed the deal will greatly benefit local tourism, as Star Cruise’s passengers are high-flyers.

There will not be a single port officer or employee involved in the use of the facility by the ocean liner.

The commercial port hopes to have similar deals with other ocean liners in the future.

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