Airfares likely to be higher as ticket
agents suffer from new rates
Over 500 companies and agencies that sell tickets for
airlines in Thailand have been adversely affected by lower commission rates and higher
insurance premiums to be collected by a new insurance company this month. Unless the
problem is addressed, agencies would soon adjust airfares to meet with rising costs.
Other airlines are going to follow United Airlines in bringing down the
commission rate from 9% to 7%. The new rate has been widely condemned by agencies, said
industry sources. In addition to that, new insurance premiums of Baht 27.90, starting
August 1, will further complicate things for agencies. The new premium is nearly double
that of the Baht 15 previously collected by Samaggi Insurance Plc, they said.
The smaller commission, offered by airlines for every ticket sale, has made between 60%
to 70% of local ticket agents suffer as they earn 20% less from the business. Nine members
of the Star Alliance umbrella, which includes Thai Airways International, are to pursue
the new commission rate. The International Air Transport Association is to meet soon to
address the problems.
Local Benz and Chrysler units merge as
old parthers discarded
Mercedes-Benz (Thailand) has undergone a major change in
its operation in which the companys name is to be changed to Daimler-Chrysler
(Thailand). The new company, a merger between MBT and local Chrysler operation, Chrysler
Sales and Services Co, will take care of producing and marketing both Mercedes and
Chrysler cars in Thailand, said MBT sources.
DCT is to follow its German and US parents in managing production and
marketing of the cars under Daimler-Benz and Chrysler. CSS moved to the MBT office in
Rajanakorn Tower on Sathorn Road earlier in June, as MBT said it would need about two
months to complete the merger. Benzs long-time partners, which include the Thonburi
Group, are likely to be excluded from DCT operations in the future, said the sources.
Benz cars will probably be assembled by other companies; Thonburi Group is not even
among 20 Benz dealers selected last month. Thonburi Group owes to Germanys
Daimler-Chrysler a huge debt. The Thai group, which distributed Benz cars in Thailand for
decades, will probably be an independent distributor.
Nationalizing Bang Chak Petroleum - a
A group of top generals of the Royal Thai Armed Forces
said Bang Chak Petroleum Plc should be nationalized and given back to the military to
control if the refinery is to be sold to foreigners. Top generals discussing the Bang Chak
issue in the past several weeks have agreed to pursue the course through the ministry of
defense, which is ministered by PM Chuan Leekpai.
According to the generals who declined to be named, it is necessary
that Bang Chak continue to be the only Thai-owned refinery for national economic security
reasons. The refinery, which was owned by the defense ministry until 1985, was
nationalized under the administration of Gen Prem Tinsulanonda, when it was named after
the location, Bang Chak.
Generals argue that Bang Chak was originally formed to take part in
solving economic problems and rural developing, and the task has been well undertaken by
its outgoing president Sopon Supapong.
Bang Chak used to be owned by a Singaporean-Thai company, Summit Oil, when it came to
the brink of collapse, and was later nationalized.
German groups to compete for 30%
of new airport shares
Five German banking and investment groups said they are
ready to acquire 30% of shares in the New Bangkok International Airport when the portion
of shares comes up for auction under a privatization plan of the state company. Top
executives of the groups expressed interest in meeting with Transport and Communication
Minister Suthep Thuagsuban on Monday.
The groups - KfW bank, Siemens, B-Grimm Holding Co., Ltd., am Main
(FAG), Hochtief, and Asia Brown and Boveri (AG) - said the Nong Ngu Hao International
Airport, with its excellent geographical position, will be the largest air transport hub
in Southeast Asia in years to come. The airport construction should be accelerated for the
operations scheduled in 2004, urged the German groups.
German investors have contributed DM7 billion in loans to development
projects in Thailand during the past 25 years.
KfW bank chairman, Dr Gert Vogt said the bank is ready to be a partner
Siemens AG has experience in providing services in piloting and signaling, while B
Grimm has the expertise in operating major airports.
Publishers bullish as book sales
up in first 5 months
Major publishers said the year-on-year combined sales of
books have slightly increased in the past 5 months. Many publishers have planned more
outlets in months to come, hoping that the market will continue to grow. However, there
have been 50% fewer books published this year, compared with what it was during boom
times, said industry sources.
Matichon Plc, owner and publisher of Matichon and Khoasod dailies, and
Prachachart Thurakij, had taken an exceptional lead with 70% growth in the same period.
Matichon assistant manager Prayong Krongmuang said the company has brought out more books
in the past several months. Samakkee Sarn Plc said it will open up 5 more Dokya stores in
Bangkok after sales increased by about 20% each month.
SE-Education Plc predicts a more bearish mood as sales grew only 5% to
10% during the five-month period. SE-Ed said only 14 titles of books were being sold each
month, down from between 25 to 30 titles. Ammarin Printing Plc said earnings from printing
services has constituted 70% of the companys income.
Compaq launches fresh sale drives
to be No 1 in home use segment
Compaq Computer (Thailand) will this month introduce two
new models in the Presario family to the market, offering an interest rate of 1% in an
18-month installment plan option. The installment package, under an agreement with First
Choice leasing group, will help make the computer easier to buy, said Anothai Vattayakorn,
consumer business manager, Compaq Computer (Thailand).
Compaq will, however, maintain its image as the premium PC in the
market, while planning to win back home users who recently turned to lower priced local
The 1% rate is far lower than a normal rate of between 1.5% and 2.1%
First Choice offers to customers in electrical and electronic appliance market, he said.
CCT in June followed IBM (Thailand) in offering on-site free service
for 3 years to every new purchase to the end of the month, while IBM extended its campaign
for another month.
Compaq is to open more outlets in the communities, to make for better access to the
Provider to launch free Internet
E-Z Net Co, one of about 16 Internet service providers
in Bangkok, said it will next month launch a new service to educational institutions free
of charge to provide schools and universities nationwide better access to the World Wide
Web. A PC maker in Hong Kong is, meanwhile, making 200,000 units of specially low priced
PCs for school users in Thailand, said E-Z Net general manager Suwan Deesantiah.
Those institutions will, however, cover the installation costs, and the
expense on lease lines, while the unlimited connection will be free of charge, Suwan said.
The use of E-Z Net must not be strictly for educational purposes with no commercial use
involves, he said. Prices of the companys PCs with multimedia kits will range from
Baht 12,650 to Baht 20,900.
Notes: Provincial network will be greatly expanded to woo more
upcountry users. The connecting speed will be increased from 45 megabytes at present to
145 megabytes in the next 2 years; a student package for use outside school with a
3-hour-a-day access is only Baht 1,800 a year.
Acer Computer to launch new
products with prices lowered
Acer Computer in the third week of July will launch a
new family line of PCs, adding to its Aspire series, aiming to be No 1 and controlling
about 30% of the market this year. Prices of new models in the Power S family, with 300
MHz to 550 MHz Intel Celeron, Pentium II and Pentium II processing units, will range from
Baht 16,000 to Baht 38,900.
In addition to that, Acer will open the first 3 Bomb Shops inside two
of Bangkoks IT City superstore branches, and in IT Mall, to sell Acer PCs,
accessories and peripherals, said Alan Jiang, Acer computer business manager. Ten branches
of the Bomb Shop IT chain will be opened by the end of the year, he said.
A top-of-the-line unit with 500 MHz Pentium III Processor will cost
only baht 42,900, compared with more than Baht 50,000 for a PC of the same range by
Acer was considered unsuccessful when it launched the low-price Basic PC series to the
market last year. Prices of Power S family are still 10% to 15% higher than most
US group Omnicom plans new media
operation in Thailand
US media giant Omnicom will set up a new operation in
Thailand, with plans to expand more into the Asia-Pacific market. Negotiations have been
underway with at least three local media groups to set up a join venture, a media
specialist, to serve industries here. The new entry will certainly heat up competition in
the business, said sources.
According to industry sources, Omnicom, which already holds shares in
some local advertising firms, will expand into the media segment of the industry. Omnicom,
with expertise in business research, has set up offices in Hong Kong, China, Singapore and
Taiwan in the past 4 to 5 years, to tap from Asias booming advertising industry.
Notes: Pricing has been the key factor to success, besides technology and know how.
Local media sales business is worth Baht 25 billion last year. The entry gets mixed
reactions as local media specialist firms said local expertise will overrun foreign
experience in the Thai market.
Star Cruise returns to Laem
Talks to form a joint venture between Star Cruise ocean
liner and Sriracha Harbor Plc have failed and the Singaporean-based company returned to
use Laem Chabang deep seaport instead of constructing a new pier. Sriracha Harbor said
discussions with investors from Europe have been under way to expand the facility.
According to Vice Admiral Thanong Sirirangsri, managing director of
Sriracha Harbor, the talks ended on Tuesday when Star Cruise said its parent company did
not agree to the investment plan, which is too costly. Constructing a new facility at
Sriracha Harbor would cost up to Baht 300 million.
Moreover, the fact that the harbor has been used mainly for exporting
cement and construction materials has discouraged tourism activities, he said.
Laem Chabang management said Star Cruise will join the bid to
administer Pier 1, and to develop the facility for tourism purposes.
The port will earn Baht 4.4 million a year from servicing Star Cruise.
Foreign chambers urge government
to improve environment for investments
Twenty-two foreign chambers of commerce, 25 local
business associations and 20 government agencies met to discuss key areas involving
foreign investments in Thailand. The discussions have been aimed to improve
competitiveness of Thailand as one of the business hubs in Southeast Asia, now dominated
by Singapore and Malaysia.
According to sources, both tariff and non-tariff issues were addressed
during the meeting chaired by PMs Office Minister Savit Bhodhivihok, who overseas
the office of the Board of Investment. Among non-tariff problems is visas for foreign
investors which is still less persuasive compared with those in its neighboring countries.
Multiple-entry visas are much needed to keep foreign investments, they said.
Foreign chambers also raised concerns on the Buy Thailand
campaign as to its implications on non-Thai made goods. The campaign should be changed to
Buy Made in Thailand instead, to help reduce adverse impacts.
The Customs system was singled out as it complicates import and export activities; the
government should increase support for those in supply industries.
Copyright 1998 Pattaya Mail Publishing Co.Ltd.
370/7-8 Pattaya Second Road, Pattaya City, Chonburi 20260, Thailand
Tel.66-38 411 240-1, 413 240-1, Fax:66-38 427 596; e-mail: email@example.com
Updated by Chinnaporn Sangwanlek.