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   BUSINESS NEWS

HEADLINES [click on headline to view story]:
Old hand leaves Casino Group for CRC

R&D sends ‘Kill Love’ software to fight Love Bug

Smaller ice cream producers close as competition heats up in Bt4-billion market

BTS plans tariff reduction after sharp fall in revenue

Tougher control over foreign cigarettes urged by anti-smoking group

IT City to open first branch in Bangkok outer area

MAS to stop flying to Haad Yai

Norwegian group eyes property projects

Alcohol production to be liberalized

Sales expected to reach Baht500 million in E Expo Summer 2000

Old hand leaves Casino Group for CRC

A top manager and a pioneer of BigC super center has returned to Central Retail Co, an event that industry sources said might signify that a reshuffle within one of the largest discount store chains in Thailand has been under way. Thai managers at BigC might be replaced by Frenchmen, similar to what happened in other retail groups taken over by foreign investors, the sources said.

Preecha Ekkhunakul, vice-executive chairman of BigC Supercenter Plc, left the group on May 15, the day the Casino Group (the Groupe Casino Guichard-Perrachon SA) of France celebrated the first anniversary of the takeover. “The one-year honeymoon period has ended and like in other places, it’s time to change,” one source said.

Preecha’s new work is at CRC’s exclusive office on the 14th floor of Chidlom Tower. BigC’s French director said Preecha’s assignment at the discount store chain had been accomplished and his exit was not a reshuffle but a callback by CRC.

One more CRC old hand, Likhit Fahpayoch is also to retire this September.

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R&D sends ‘Kill Love’ software to fight Love Bug

R&D Co, a leading research and development company in Thailand, said it had joined the world community’s effort to fight against the Love Bug, a deadly computer virus which raged in millions of PCs worldwide over the past two weeks. ‘Kill Love’ software effectively and timely killed and fenced off the latest virus, said a manager.

Chanya Songrattanakajorn, R&D deputy marketing and sales manager, said ‘Kill Love’ software was easy to use and over 10,000 net surfers had downloaded it from the company’s Website in the first week. The software has made Thai researchers and programmers internationally known, said Ms Chanya.

An engineer working for Total Access Communication Plc said his ‘Rational Killer’, was the first anti Love Bug tool announced in Thailand. Version 2.2 of the software is available. More than 10,000 people who had logged on had downloaded the software from at least 4 Websites.

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Smaller ice cream producers close as competition heats up in Bt4-billion market

One more ice cream maker - River Foods Co., producer of River ice cream - quietly closed its marketing units in Bangkok and in all other provinces except Kampaengpetch where the company is based. The closedown was due to heavy foreign debts and poor performance over the past two years when competition in the market started to heat up.

Sources said the River Group was having difficulties when new loans were not available, while foreign groups with unlimited support came into the local market and took over many local ice cream producers in the past few years.

KFK Foods (Thailand), producer of Scop and Kofuku ice creams, which is based in Ladkrabang Industrial Estate, earlier closed down all operations.

All the company’s marketing plans were changed after competition among foreign producers heated up in order to grab more market share in this local market, where combined sales reached Bt4 billion a year. Nestle is currently seen as a fresh challenger trying to oust Wall Ice Cream, the market leader.

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BTS plans tariff reduction after sharp fall in revenue

The country’s first sky train system ran into hard times when the number of commuters unexpectedly fell to only 180,000 per day. Bangkok Transit Train System Co. is losing Baht8 million a day in operating the transport system, said stock analysts who asked for anonymity. BTSC earlier put the number of passengers at 200,000 per day.

Starting next month, BTSC will reduce the fare 30%-50% to woo commuters after accumulated losses rose to Baht1 billion, said the analysts. Moreover, the operator would provide a fleet of more than one hundred passenger buses to shuttle commuters to and from BTS train terminals in neighborhoods, free of charge, in order to increase riders, they said.

BTSC revenue fell 60% behind target, a performance which would make it difficult to get listed on the stock market. The number of commuters was initially calculated to be between 500,000-600,000 per day, and the company was to earn Baht18 million a day.

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Tougher control over foreign cigarettes urged by anti-smoking group

The Foundation for Anti-Smoking Campaigns said producers and distributors of foreign brand cigarettes have intensified their sales promotions by using loopholes in the Thai tobacco control law concerning advertising. The promotions, which post stickers and placards to show cigarette logos, have been seen at thousands of sales outlets around the country.

Such practices, according to Dr. Vasant Silpasuwan, a philosophy doctor and researcher for anti-smoking groups, were not covered by the 1982 tobacco control law, which only bans advertising tobacco products in the media. About seventy percent of respondents said the practices should be banned in order to curb tobacco product consumption, Dr. Vasant said.

Campaigners sited as a good example the government of the Australian State of Tasmania, which allows only 5 packs of cigarettes to be displayed at sales outlets.

Researchers said producers and distributors of cigarettes intend to expand disguised ads to cover all 62,000 sales outlets nationwide.

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IT City to open first branch in Bangkok outer area

IT City Co, one of the largest IT traders in Thailand, is scheduled to open up its third branch next month - the first of its kind in an outer area of Bangkok. IT City at Zeer Shopping Center Rangsit, which is just inside the territory of Pathunthani Province, is among three others to be opened in locations outside Bangkok, said Ekkachai Sirijirapat, executive director of IT City Co.

The company’s combined sales were projected to increase 33.5% to Bt850 million this year, Ekkachai said. The company would open up more IT City stores in 2001 under the plan to have 8 branches that year, Ekkachai said. There would also be an IT City in large cities with populations of 1 million or more, he said.

The new IT City branch would offer inexpensive computer and PC lessons and training courses. The IT trader would continue to focus on selling only brand name computers and accessories.

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MAS to stop flying to Haad Yai

Malaysian Airlines System plans to stop all flights between Kuala Lumpur and Haad Yai in southern Thailand by this October because of accumulated losses. The airline once flew two daily flights from Malaysia’s capital city to Thailand’s tourist city in cooperation with Thai Airways International before it scaled down the operation to three flights a week.

Singapore’s Silk Air stopped all flights from and to Haad Yai at the end of April after months of losses. Boonchuay Jangsiriwattanathamrong, president of the Songkhla Chamber of Commerce said if MAS were to stop flying to Haad Yai the situation would get worse and tourism would be severely affected.

Malaysian tourists visiting Thailand’s southern city by air are mostly business people with strong buying power. Dragon Air was the first to face this similar problem - all flights from Hong Kong were cancelled after just one week. The MAS halt would mar another airline scheduled to start flying between Haad Yai and Indonesia’s Medan next month.

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Norwegian group eyes property projects

A Norwegian group, which has already settled in Thailand, was exploring the possibility of buying into premium condo projects in Bangkok’s inner areas in a plan to diversify its business into realty. The company - Jan Leyala (Asia), a subsidiary of Jan Leyala AFA of Norway, currently runs a furniture plant in Rayong Province, property sources said.

Negotiations have been underway with owners of five star apartments and condominiums in Bangkok. Similar talks were held with financial institutions which own those projects, said the sources. The condos and service apartments could be developed further for sale and rent, they said.

The only worrisome factor in the property market is ownership, as Thai laws allow only 40% foreign ownership in the property but without rights over the land. Legal issues have hindered overseas purchases, which are needed by this slumping industry.

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Alcohol production to be liveralized

The Ministry of Finance has agreed to liberalize the production of alcohol, which over the past few decades has been monopolized by a state company. The liberalization scheme floated years ago without any progress. But the ministries and agencies concerned now agree with the scenario that there will be a huge business opportunity in using alcohol in the oil industry in the very near future.

According to Alongkorn Palabutr, personal secretary of Prime Minister Chuan Leekpai, Science Minister Dr Athit Urairat would soon bring the liberalization issue to the cabinet for endorsement. Alcohol will replace some essential chemical agents currently used to increase oil octane, Alongkorn said.

Export of alcohol has a very bright future as millions of tons would be needed in next 2-3 years when the State of California bans the use of toxic substances in oils for engines. Refining alcohol would use tapioca as a raw material and the new industry is expected to lift the price of this agricultural product. About 35 companies and plants are waiting in line for promotion privileges.

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Sales expected to reach Baht500 million in E Expo Summer 2000

More than 180 companies, computer makers and distributors are scheduled to join the E Expo Summer 2000 computer fair to be held in Bangkok later this month. Reed TradeEx, the organizer, expected combined sales to reach Baht520 million during the four-day fair, which would cover all computer technology, electronic education, the Internet and E-commerce.

Kallaya Sawaenghaboon, a Reed TradeEx manager said up to 110,000 visitors are expected to visit booths at the fair, a number that represents a 25% increase from all previous PC expos organized by the company. The symbol of the fair is letter the ‘E’, which represents emphasis on e-commerce and electronics besides the usual PC and Internet sales, Ms Kallaya said.

Among the highlights of the fair will be the new low-price PCs to be introduced. Belta Computer Co. is to launch the first PC powered by a 1,000 MHz Intel Pentium III processor, costing Baht99,000. A new PC powered by a 677 MHz Pentium III processor would cost only Baht39,900. Other producers, including brand names, also plan hot sales promotional campaigns.

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Updated by Chinnaporn Sangwanlek, assisted by Boonsiri Suansuk.