Four major airports to be privatized

A company will be set up, expectedly in March next year, to administer four major airports in the provinces under a new privatization program. However, the privatization study, being conducted by Merrill Lynch-Pattara, is yet to be concluded, Thawat Unakul, deputy governor for operations of the Airport Authority of Thailand said.

The new company will administer and take control over operations at Chiang Mai, Chiang Rai, Phuket and Haad Yai airports, Thawat said. The new company would need partners with rich backgrounds in handling international airports, he said. AAT has been in talks with several foreign companies, mainly from Germany, Singapore, and the UK, about investment plans, Thawat said.

The government’s policy is to sell about 75% of the four airports to raise funds to support the construction of the second Bangkok international airport at Nong Ngu Hao.

The administering company will oversee four other subsidiaries, which will administer each of the four airports.

Phuket Airport made Baht 500 million in net profit last year, while Chiang Mai Airport netted only Baht 60 million.

Dusit Thani & partners plan ‘virtual sales office’

Rooms on Net

In the near future, booking hotel rooms will be as easy as making a few clicks of the mouse when the ‘virtual sale office’ system by the Dusit Thani Group and its partners is put into service, probably sometime in 2000. A company was set up with Baht 10 million in registered capital to run the system, which will offer room booking services via the Internet to all hotel chains, and to the tourism industry in general.

The virtual sales office will provide easy access to all industries concerned who wish to make or change reservations, said Sirichai Charnchaikulvej, managing director of Direct Commerce Technology Co, in which Dusit Thani Plc owns 49%. The Pinnacle Hotel management group, which currently operates 8 hotels in Thailand, will be the first to join the service, Sirichai said.

The service will be free of charge in the first year, as the company said it plans to survive through advertising from its strategic partners, but US$1 will be collected for every room sale in the future. The service will help save a good deal in commissions, as hotels currently pay up to US$10 per room sale to other services.

Two IT exhibition fairs to spur late-year sales

About 100 companies, including computer makers, are expected to join an IT fair by Man Group between October 28-30 in a late-year sales drive. Several hardware and software producers are all set for big sales, said the organizer. Meanwhile, another IT fair by Reed Tradex Co. is scheduled for late November. The last IT fair in 1999 anticipates up to 130,000 visitors, and transactions worth Baht 500 million.

A Man Group manager said the fair at Bangkok International Trade and Exhibition Center (BITEC), the fourth to be organized by the company in 1999, will have more participating traders than the three previous exhibitions. All of the participating companies will offer special low prices to visitors, said Ong-arj Itmorn, Man Group director.

Reed Tradex said up to 180 companies are expected to join the ‘PC Expo ’99 Winter’ at the Queen Sirikit National Convention Center between November 25-28.

Sales topped Baht 400 million in the second PC Expo ’99 in the middle of the year. E-commerce will be among highlights in seminars during the two IT fairs.

Airline plan fare hikes to offset fuel price increases

Airlines affected by rising oil prices currently await Thai Airways International’s lead in lifting fares to meet with rising costs. A source at Bangkok Airways Co., the Kingdom’s second largest privately-owned airline, said the company will now reevaluate its costs to incorporate the 20% rise in oil prices that has occurred over the past few weeks. If necessary, airfares on major routes will be lifted, the source said.

Chatchai Boonya-Anant, advisory chairman of BP Air Co. at Boon Rawd Brewery, said he fears the price of plane-fuel will rise further as the Western hemisphere approaches winter, during which time the demand for oil is usually high. Capt. Yothin Bhamornmontri, vice-chairman of Angel Airlines, the second national airline, said more expensive airfares will not directly affect the country’s poor.

Notes: The price of Jet A-1 fuel, or special kerosene for planes, will rise in accordance with the price of crude oil in the international market. THAI’s board of directors is scheduled to meet on October 28 to determine fares. THAI said it loses Baht 1 billion every year in domestic flying, a loss which is feared will complicate its annual profit target of Baht 15 billion.

Sales of Lutus Suite go up after Office 2000 launch by rival

Lotus Development International Corporation has planned marketing campaigns to increase sales of its Lotus Smart Suite Millennium office and management software later this year after the introduction of Microsoft Office 2000 in Thailand last month. A Lotus manager said there is absolutely no difference between the Smart Suite Millennium and Office 2000 in terms of quality and ability.

“Thanks to Office 2000 for its help in promoting the KM (the knowledge management ability) solution of which Lotus is the market leader,” said Pavasuth Sriviroj, marketing manager of Lotus Development. Sales of the Smart Suite Millennium greatly increased after the introduction of Office 2000 last month, and especially after Microsoft lifted the price per pack of the office software, Ms Pavasuth said.

Lotus is to organize workshops for customers to learn about the Smart Suite between October 18-22, while another workshop on advanced uses of the software is scheduled in November.

Lotus said the KM solution in Office 2000 is only one-fifth of those installed in the Smart Suite pack. Sales of Office 2000 have fallen after the price per pack was further lifted to Baht 27,000, from Baht 24,000.

EC rice millers express grave concern over rice exports from Thailand

The chief of the Union of EC Rice Millers Association has tersely warned Thai exporters that Thai rice will not be acceptable to the EU market if found that it is produced with any genetic modification. Sombun Phathaichan, manager of the Rice Exporters Association said he received the warning in a recent letter from Douglas Herbison, secretary-general of UARCE.

The Union has warned that although demands by rice importers in Europe are still high, Thai imports will face strong resistance from UARCE unless the products are free of genetically modified organic, Sombun said.

The association replied to the UARCE chief that it was not possible to produce anything harmful, as two-thirds of rice produced in Thailand is for domestic consumption. Only one-third of the product is exported, Sombun said.

A total of 15,100 tons of Thai rice were exported to Belgium, another 4,936.35 tons went to Italy and 35,000-tons were sent to France in the first 9 months of this year.

It is feared that the GMO issue will be used by local producers in Europe as a pretext to bar Thai products from competing in the market.

Fewer potato snacks on shelves as supplies crumble

Frito-Lay (Thailand), producer of Lays Potato Chips, along with other producers of potato snacks, said the industry’s supply of potatoes has run out as climatic changes this year have badly affected the yield. Frito-Lay (Thailand), a subsidiary of US PepsiCo, said potato production in the company’s plantations in Chiang Mai and Lamphun have adversely affected their production of the snacks.

A lack of potatoes will certainly adversely affect sales in the market, which have enjoyed a steady growth of 10% to 15% each year. Potato snacks have shared about 20% of the overall snack market, worth Baht 10 billion a year, said a Frito-Lay source. Yodkun Co., which also produces potato snacks under the brand names Kob Kob and Snacker, said its plant has been running at only 70% of its capacity over the past 3-4 months because of the falling potato supply.

A recent survey found that there were fewer packs of potato chips on shelves in discount and other retail outlets.

Frito-Lay will increase its output of products made from corn paste, while considering potato imports. The company also plans to grow US-bred potatoes here, after experiments found that the plants grow well in the tropical climate and produce a higher yield.

Krung Thai Bank to close 35 branches

The government-owned Krung Thai Bank is set to close down 35 branches in a new consolidating process that started October 18. The closure of the ‘elapsing branches’ will help solve non-performing loans of the bank, said banking sources. The closure will reduce the number of KTB branches to 621, from 656, including those of the former Bangkok First City Bank.

Among those involved, KTB Kluay Nam Thai branch will be changed to be KTB Rama 4, while the Rama 4 branch will be closed, said a KTB source.

There will not be any layoffs, although employees of the closed branches will be allowed to join the bank’s early retirement program, said the source. Hundreds of employees will be transferred to other job functions.

KTB recently set up 16 more service centers to help restructure debts for small-scale borrowers who owe the bank less than Baht 50 million.

The bank had Baht 68 billion in ‘low quality’ loans at the end of August, and hopes to reduce NPLs by Baht 100 billion by the end of the year.

E-Z Net insists service be launched in November

Despite doubts by the industry, and some technical hurdles to be solved, E-Z Net, which has committed to collect the lowest usage time charge rate of Baht 5 per day, insists that the service start in November. E-Z Net has won a good number of clients, mainly students, company chairman Singh Naruela said.

The company said it had already obtained a license from the Communications Authority of Thailand and about 30,000 telephone numbers had been leased from the Telephone Organization of Thailand. However, acknowledged sources in CAT and TOT have denied the company’s claims.

Singh said the dial-in numbers begin with 340-0000, but a TelecomAsia source said it was not possible to obtain so many telephone numbers at the same time. Another TA source, however, admitted that E-Z Net had applied for 300 numbers.

Singh said the operation license was obtained in person, not in the name of the company, and there will not be any problem with that. Singh said the service is experimental and parties interested could try free of charge.

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Updated by Boosiri Suansuk