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   BUSINESS NEWS

HEADLINES [click on headline to view story]:
The Rachabhad Institute held a seminar for construction contractors

SONY sets 400 million baht marketing budget to reach year 2000 sales target

Economic problems force students out of schools, severely affecting “back-to-school” products

Trade Department discusses agreements with foreign partners

Quality Assurance Failings in Thailand

The Rachabhad Institute held a seminar for construction contractors

Dr. Sangob Laksana, Secretary of the Rachabhad Institute, chaired the seminar at the Town in Town Hotel on 24 April.

Dr. Sangob Laksana, Secretary of the Rachabhad Institute, addresses construction contractors.

The Rachabhad Institute, involved in keeping abreast of new developments in construction techniques, and following a 1999 assessment, decided to disseminate new methodology to the field, whereby construction standards could be improved.

The training was presented to 150 selected contractors and professionals in related fields covering construction control techniques and methods of assessing contracted work.

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SONY sets 400 million baht marketing budget to reach year 2000 sales target

Sources from Sony Thai released figures from Sony’s operations in 1999, showing that Sony earned 9,200 million baht revenue from electrical product sales. The figure exceeded Sony’s 1999 sales target, which was set at 9,000 million baht.

This year Sony has set their new sales target at 10,000 million baht and has prepared a 400 million baht budget for marketing and promotional activities. The expected increase in sales comes from new products, which will be continually introduced throughout the year.

New products to be introduced this year include high-end audio players such as the new model of Super Audio CD, DVD player, as well as portable players such as the minidisk player, CD Walkman, VCD Walkman, and mini hi-fi components. Product designs focus on modern, nice, and luxurious looks.

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Economic problems force students out of schools, severely affecting “back-to-school” products

The MD of Normjit Manufacturing - a manufacturer and distributor of student uniforms and products - said the “back-to-school” market before the new school session in May this year suffered a big slow down due to an economic situation that has decreased consumer purchasing power.

Before the economic crisis, the market for student products had a value of 2,000-3,000 million baht each year. Right now the value has sunk to 800-900 million baht per year and the highest growth rate that can be expected is no more than 10%. Statistics collected by Bangkok Metropolitan showed that 37% of students were economically forced to leave school or unable to continue higher educational due to economic problems.

The MD of Somjainuk - another well-known manufacturer and distributor of student products - said that student products have seasonal demand. During high season, the manufacturers need to stock a high volume of products to serve the high demand. Nowadays the manufacturers are having problems with cash flow because most financial institutions do not approve loans.

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Trade Department discusses agreements with foreign partners

The Vice-President from the Foreign Trade Department, Janthara Buranaryt, chaired a conference discussing trade duties at the Dusit Resort in Pattaya on 21 April.

Thai traders with foreign trade partners met with the Foreign Trade Department to discuss trade practices.

The discussion revolved around foreign trade partners protesting trade practices. Also discussed were revisions on import/export duties. The Ministry of Commerce spent 20 million baht last year retaining lawyers and consultants to research trade requirements. Contested matters will be brought before the World Trade Organization if procedures are found not to be in compliance with agreements already set in place.

Particular attention to taking protective measures concerning increased imports, with a view to safeguarding the Kingdom’s interests, were tabled. Import/export businesses in Thailand can obtain further details by calling 02-547-4738-40.

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Quality Assurance Failings in Thailand

Quality - The English dictionary interpretation is: “degree of excellence; high standard”. Assurance reads: “a promise, guarantee a feeling of certainty”. We see every day the signs going up, we read the brochure in the Bangkok Post of companies who have achieved the respective ISO standard. With the recent spate of tragedies in Map Ta Phut and Sriracha it is more important than ever that quality standards are to be lifted higher in construction.

Smaller companies are afraid of it because they do not understand it and the low costs involved achieving any ISO standard. One answer that comes up regularly when talking to them is, “Well, we get the work done and the clients are happy with the results, so why do we need ISO?” The answer is in the above interpretations - ISO 9000 certification proves it.

It is essential in Europe and the Middle East that subcontractors have at least ISO 9002 and it is being said that some oil companies in Thailand are now going to implement the same principles with subcontractors. This will soon spread to other companies and then the smaller ones without ISO will be left out from bidding for work. So, inevitably, the ones who have it will undoubtedly get the work.

Now is the time for these companies to invest in achieving at least ISO 9002, which eventually has a streamlining affect on paperwork, effectively reducing overhead; it also cuts down on the inspections required as sample checks can be made, again a cost effective measure. Currently, if any client is aware that the sub contractor is on an ISO 9000 programme he will also favour this to companies who are not when reviewing bids.

There has been an advert run for one month in this paper yet not one enquiry from any contractors large or small received, offering an opportunity for them to go for ISO 9000 series (contact by E-mail [email protected]). The questions now arise: 1/ Is Thailand’s construction industry ready for this? 2/ Is it only for the larger, more successful service companies and conglomerates that can afford to pay for this? 3/ Do the smaller companies have any ideas as to what is involved?

The answer to #1 is yes, Thailand’s industry is ready, but are the contractors not fully aware the tax laws would assume some relief would be given for this restructuring? 2/ No, small companies of only 20 permanent staff can benefit from this, and the cost can be spread over an average of twelve months so it can be more cost effective. 3/ Most do not. Some have systems in place which meet the standards and need little attention but a free face-to-face assessment and explanation should be given at the introduction stage.

Lets get more positive with Quality Assurance and make the plants in Thailand a safer place to work in by getting more contractors to work to the ISO 9000 series.

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Updated by Chinnaporn Sangwanlek, assisted by Boonsiri Suansuk.