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   BUSINESS NEWS

HEADLINES [click on headline to view story]:
Local stores told to do or die

Car makers bring up targets as quarter sales rise sharply

FDA says no to higher caffeine levels in soft drinks

TMB president rumored to call it quits

Internet ‘Invention Fund’ reviewed as Shin eyes foreign partner for technology

Thai recovery: The crisis has gone - insists FM Tarrin

Tens of thousands face layoffs as electronic banking becomes choice

Krabi Airport has busy first year

Atec computer sales unexpectedly surge in first 5 months

Local stores told to do or die

A number of local department stores have been closed over the past few years after the country’s retail sector was taken over by foreign retail giants. Santi Khunavong, president of the Provincial Department Store Club, said the club used to have a total of 40 members, but only 22 members survived the crisis and fierce competition.

Diana Department store in Haad Yai was the latest to bow to pressure from foreign-owned retail chains. Diana agreed to lease its supermarket space to Tops supermarket chain, which is owned by Royal Ahold of the Netherlands. Netr Chantarassamee, managing director of Diana store said, “if you can’t beat them, join them.”

Netr said it was difficult to compete with foreign-owned chains because they are much stronger financially. But the new retail outlet at Diana would create an opportunity for other “sideline businesses”, like a bowling alley and movie theater.

Kaard Suan Kaew Chiang Mai, Klang Plaza in Korat, and Oasis in Khon Kaen are now considering the Diana example.

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Car makers bring up targets as quarter sales rise sharply

The local car market was upbeat on sales in the first quarter, causing some car makers to increase their sales targets. Combined sales in the industry are predicted to be higher, up to 280,000 units this year.

Honda Motor (Thailand) said it had sold 11,680 cars, an 86% increase, in the period from January to May. HCT has now adjusted this year’s sale target to 31,000 units, from 28,000 units.

Dr Vatchara Pannachet, vice-president of MMC Sittiphol Co, which produces and sells Mitsubishi Cars in the local market, said the overall industry output between January and April this year was 120,416 units, a 51% increase, while the export value had topped Baht19.5 billion in the same period.

Low interest rates have helped spur leasing and purchasing, and about 70% of cars leased in the past few months have been bought under installment programs.

A total of 19,705 units were exported from January to April; the number represented a 43.81% increase compared to exports in the same period in 1999.

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FDA says no to higher caffeine levels in soft drinks

The Food and Drug Administration has rejected demands by producers of ‘energizing drinks’ for an increase in the quantities of caffeine. But the FDA resolved - in a way viewed by many industrial experts as a time buying game - that all the soft drinks in the market be re-examined to figure out a suitable level of the stimulating substance.

According to Dr Narong Chayakul, FDA secretary-general, a committee was set up to handle the study. Soft drinks to be scrutinized for caffeine content include energizing drinks, ready-to-drink coffee and tea, Coke and Pepsi, the sales of which have grown rapidly over the past few years. The study would focus on how much caffeine average Thais could consume without harming them.

Osotspa, producer of Lipovitan D, rationalized that if the level of caffeine was increased from 50 milligrams to 80 milligrams a bottle, then exports would increase dramatically.

Thailand and Japan are major producers of energizing drinks for the world market, which had combined sales worth Baht262.4 billion in 1999.

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TMB president rumored to call it quits

Rumors have it that the president of the Thai Military Bank, Dr Thanong Pittaya, will soon leave his office after successfully leading the bank through the capital increase process. Rumors spread when Dr Thanong was on leave to spend holidays with his family, and none of his deputies stepped out to calm down the rumors.

Dr Thanong was reportedly paving way for Akradej Peechaphol, a vice-president, while rumors put it that the finance ministry, which is the majority-owner of the bank, is sounding out Somchai Sakulsurarat, former president of First Bangkok City Bank, and Tawatchai Yongkittikul, president of Thai Bankers Association, for the TMB top post.

Dr Thanong does not have to leave until he completes his three-year term in the next 7 months. But sources said the president is waiting for new board members representing new shareholders to move in before he moves out.

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Internet ‘Invention Fund’ reviewed as Shin eyes foreign partner for technology

Shin Corporation has stopped injecting new capital into AD Venture Co, the group’s venture capital arm, while the company eyes prospective foreign partners to share know-how on the Internet.

Shin Corporation is looking for foreign partners because there are still problems that average Thais are not able to solve because they have not yet “matured” in particular areas.

Boonkli Plungsiri, Shin’s chairman and CEO, said it was not only money that makes scientists; there were several other ways to make them. “Thais are not diligent, nor do they work harder after they win funding,” he said. “Shin will not set up ‘incubators’ here to nurture young scientists because of high costs, and the fund will be reviewed,” Boonkli said. Candidates would face a tough examination to win more grants.

There have been more than 10 Webmasters and/or Websites that won financial support from AD Venture Co. when the project was launched late last year.

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Thai recovery: The crisis has gone - insists FM Tarrin

The Kingdom has survived the worst economic crisis in modern times, but a lot has yet to be done to bring about a sustainable economy after this ‘first phase’ of the economic recovery, said Finance Minister Tarrin Nimmanahaeminda. Politically, he said his Democrat Party would be a must choice in the next general election in order to continue the economic policy.

The Thai economy has reached a very important turning point that needs continuity in policy, the economic chief said. It is important to continue implementing measures to stabilize the economy by strengthening banking and financial institutions, which would need drastic change in their managing systems. The Bank of Thailand, for instance, faces such a change, the minister said.

Thai society must be strong and secure, and the government must undergo redistribution of wealth to different social sections, he said, adding that the country’s non-performing loan problem has been corrected.

Dissolution of the parliament this month would delay the 2001 fiscal budget for 6 months.

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Tens of thousands face layoffs as electronic banking becomes choice

Between 10,000-30,000 employees in the country’s banking industry fear they will be laid off starting this year as financial institutions turn more to electronic banking. Many of the employees said layoffs en-masse seems inevitable as foreign bankers introduce banking inventions into the Kingdom. Electronic banking has been the new trend since the market began to use the Internet. For example, GE Capital is currently providing lending services through the group’s home page.

The president of Siam Commercial Bank, Khunying Chada Wattanasiridham said that services at branch offices cost Baht15-30 per service, but would only cost Baht7-15 per category by electronic banking. There are normally 15 employees working at each branch, but that number was recently brought down to 5-7 employees after electronic systems were introduced, said another SCB executive.

Modern machines will further bring down the number of employees at each banking branch to 4-5. Bankers are saying it was time to adapt to modern times, in order to be competitive.

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Krabi Airport has busy first year

The Krabi Tourism Association has asked Thai Airways International to increase flights to the province to two times a day, adding to the 11 regular flights a week at present. More than 1 million passengers have arrived/left the Krabi airport since it was inaugurated nearly one year ago.

The Tourism Authority of Thailand was also urged to promote trips to this southern city among Asian tourists. Currently, most tourists to Krabi, which is famous for its beautiful natural scenery, are Europeans.

According to Subin Chayaburakul, president of the Krabi Tourism Business Association, Singapore Airlines will start its three chartered flights a week service from June 15, while PB Air started its four-flight-a-week schedule Sunday, June 11 from Bangkok to Singapore via Krabi. Bangkok Airways currently flies daily flights from Bangkok to Krabi via Samui, Subin said.

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Atec computer sales unexpectedly surge in first 5 months

Atec Computer Co, leader of local brand PC makers, said sales had surged to a level beyond expectations, spurred by an increase in overseas orders. General Manager Nithipat Limvanicharat said about 3,000 Atec PCs were sold to European and Middle Eastern countries each month in the first 5 months this year.

Sales were expected to rise to 5,000-6,000 units a month later this year as the market has been greatly expanded, Nithipat said. Domestic sales also increased 30%-40% in the same period, to about 2,000 units a month, he said. The company’s initial sales target was only 1,000-1,500 units a month, Nithipat said.

The company, which is close to suppliers in Taiwan, has the edge in competing with PC makers in this region. Atec performance was much better than that of its second brand PC, Dash, which was to attract PC users in lower price markets.

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Updated by Chinnaporn Sangwanlek, assisted by Boonsiri Suansuk.