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   BUSINESS NEWS

HEADLINES [click on headline to view story]:
Scania to establish own truck assembly facility in Thailand

Westminster appoints highly qualified IFA

MCOT to ban commercials on UBC

Thai Ultimate stops marketing Rover cars

Advertising budgets close to Baht400 millions car sales rise

Fuji expects digital camera sales to triple this year

US Web-based company opens Chiang Mai office

Authorities seeking ways to help Sky Train

Room rates cut by 50% during low season

Scania to establish own truck assembly facility in Thailand

Scania has decided to establish its own local truck and bus assembly facility in Thailand. Acting through Scania Trade development AB, local subsidiary Scania Thailand Co., Ltd. has acquired an 18,000 sq. meter site in Rayong. The construction time will be an estimated 8-10 months.

Anders Spare, Managing Director of Scania Development, and David Nardone, President of Hemaraj Land and Development Plc. (center) sign the contract, witnessed by Sawasdi Horrungruang, Chairman of the Board of Directors of Hemaraj.

Scania Trade Development AB is owned by Scania AB.

“The Thai market plunged from a peak of about 30,000 commercial vehicles per year in the first six months of 1997 to 2,500 in 1999 as a result of the Asian economic crisis. However, the economy has now turned the corner and we predict a market of approximately 12,000 vehicles per year over the next five-year period,” commented Anders Spare, MD of Scania Development.

In the segment where Scania meets competition-heavy vehicles with engines exceeding 330 horsepower, Scania today holds a strong position with a market share of 25 to 30 percent.

The new assembly plant will supply vehicles mainly to the Thai market. However, depending on how the economies of the ASEAN region develop, Thai-built trucks and buses may also be exported to other markets in the region.

The new Scania plant will be built at the Eastern Seaboard Industrial Estate (Rayong) which is developed by Hemaraj Land Development Plc. Many of the world’s leading automakers are currently investing in Rayong, which has been dubbed the ‘Detroit of the East’. Scania’s neighbors will include GM and Ford.

The site was purchased from the Eastern Seaboard Industrial Estate (Rayong) Co., Ltd.

Scania is one of the world’s leading manufacturers of trucks and buses for heavy transport applications and of industrial and marine engines. With 25,800 employees and production facilities in Europe and Latin America, Scania is one of the most profitable companies in its sector. In 1999, turnover totaled SEK47,100 million and the result after net interest income/expense was SEK4,500 million. Scania products are marketed in about 100 countries worldwide and some 95 percent of Scania’s vehicles are sold outside Sweden.

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Westminster appoints highly qualified IFA

Leslie Wright, Managing Director of Westminster Portfolio Services (Thailand) Ltd., and regular contributor to the Pattaya Mail, is pictured here presenting Lee Oxley with his graduation certificate upon successfully completing his three-month Induction Training Course with Westminster.

“It was the toughest and most comprehensive course I’ve ever taken,” said Lee. Before joining Westminster, Lee worked for seven years with the Prudential - Britain’s largest insurance company - during which time he passed all four parts of the Chartered Insurance Institute’s Financial Planning Certificate Course, making him a fully qualified Independent Financial Advisor under the stringent UK regulations.

“Before I joined Westminster, I thought I knew a lot about financial planning,” said Lee. “After going through Westminster’s Induction Course I realise the offshore financial industry is far more complex and wide-ranging,” he added.

“I’m delighted to have such a highly-qualified Financial Consultant on board,” said Leslie. “Lee has demonstrated a dedicated client-orientated approach to financial planning,” he added. “This was a pre-requisite to joining this firm, since our recommendations to clients are always prepared on a ‘best advice’ basis.”

“I see this as a real long-term career opportunity,” said Lee. “Leslie’s standards of professionalism are recognised throughout the international financial services industry, and Westminster’s reputation in the local community is second-to-none. It is refreshing to work with a top-class firm that puts the needs of its clients before its own self-interest.”

Leslie anticipates that Lee will soon take over management of Westminster’s Client Services Department, relieving Leslie of this important but time-consuming role, and allowing him to concentrate on portfolio management.

“Our Discretionary Portfolio Management Service has proven even more successful than I had anticipated,” Leslie disclosed. “This takes up a considerable portion of my time, and I am determined not to let our service standards slip,” he added.

Lee is very enthusiastic about his new responsibilities: “I look forward to helping our clients achieve their financial objectives, and at the same time making a real contribution to the firm,” he said.

Leslie commented, “I have every confidence in Lee’s abilities, professionalism and ethical standards. And being somewhat younger than I,” he added with a wry grin, “I can be assured that the firm will go from strength to strength for many years to come.”

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MCOT to ban commercials on UBC

The Mass Communications of Thailand plans to put an end to advertisements on UBC 8 and UBC 10 channels after a public uproar. Customers say it is unfair to make them pay for international ads.

Sorachak Kasemsuwan, MCOT director, was to take action after the National Broadcasting Committee, of the Public Relations Department, sent a letter to MCOT warning that ads on pay TV channels were prohibited.

UBC, currently the only nationwide pay TV network in Thailand, has been running commercials without censorship on its international channels since last month, saying the commercials allowed programs to run smoothly. UBC used to say that the commercials’ run would be a trial, to test the water to see if the live ads were welcomed by audiences. UBC channel 8, or the “Nation Channel”, is operated by Nation Multimedia Group.

The broadcasting board, however, said the network should bring down its membership fee if it was to keep the advertisements. They also said that ministers in charge were to blame for playing down the issue.

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Thai Ultimate stops marketing Rover cars

Thai Ultimate Car Co, a long-time importer and distributor of Land Rover and Rover cars, has stopped marketing the cars for a while due to changes in ownership. Difficulties started when the British Rover group sold the 4-wheel-drive Land Rover to Ford Motor Co, and Rover and MG passenger cars to BMW AG. Thai Ultimate had sold hundreds of Land Rover and Rover cars over the past several years and was living on after sales services. Thai Ultimate has very few Rover cars left in stock.

Thai Ultimate, which is owned by Thai Rung Union Plc, said imported Land Rover SUVs could not compete in this market anymore because of high taxes. “In order to continue to market cars of the Rover family, the only choice is to make them here,” said Sompong Pha-ernchoke, managing director of Thai Rung Union, who once negotiated with BMW AG to assemble Rover Free Lander SUVs in Thailand.

Ford Operations (Thailand) might use its own assembly plant in Rayong to produce Land Rover models. BMW (Thailand) might also use its Rayong plant to bring out Free Lander models.

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Advertising budgets close to Baht400 million as car sales rise

Major car makers have spent almost Baht400 million in advertising this year, and sales have risen dramatically. A total of 98,971 cars were sold between January and May this year, a 50.8% increase from the same period last year. In May alone, sales rose to 23,457 units, according to a marketing survey by Mead Data Resource Co.

Toyota Motors (Thailand) has been the champion in the market, spending a total of Baht83.962 million in advertising between January and May this year, or 22.9% of the overall Baht365.931 million spent by the industry on advertising.

DaimlerChrysler (Thailand) is second in advertising spending, putting Baht39.299 million into advertising Mercedes cars. Ford Sales and Service (Thailand) spent a total of Baht39.109 million during the same period advertising its Ranger pickup and Laser sedan.

This is the first year that Ford has become a strong competitor in this market, with sales dramatically increasing. Ford cars won the highest bookings during a motor show last April.

Honda Cars (Thailand), which spent Baht33.455 million on advertising, became the 4th biggest spender.

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Fuji expects digital camera sales to triple this year

Fuji Photo Film (Thailand) said sales of its digital cameras are expected to increase threefold to about 3,000 units this year, while sales by all manufacturers in the market are expected to double to about 30,000 units. Fuji recently introduced two models of its Finepix family which yield high-resolution pictures of 1.3 million pixels.

Combined sales of digital cameras in the Thai market was 15,000 units last year, compared to only 9,000 units in 1998, 4,500 units in 1997 and 2,000 units in 1996, said Manas Kanokpaipipat, marketing director. Sales in the Thai market still have a very good chance to grow, as sales of the product in Asia grew very rapidly over the past few years, he said.

The Japanese alone purchase 2.2 million digital cameras, or 38% of the total market. Sales in the US constitute 37%, or 2.1 million units, while Europe constitutes 21% of total sales, or 1.2 million units.

The price of digital cameras in Thailand is expected to fall about 50% if/when the zero-tax agreement on this category is implemented.

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US Web-based company opens Chiang Mai office

Noveca Corporation, a leading retailer of handicrafts on the Internet, recently opened an office in Chiang Mai, planning to make the city a new base of supply. Noveca (Thailand) was set up last month with registered capital of Baht1 million, to run Web-based retailing, targeting customers in the US. The Chiang Mai branch is among 9 others set up worldwide.

The Thai office should help reduce costs immensely, as middle men will be cut out, said Pornpan Wanna, manager of Noveca (Thailand). The company is partly-owned by local investors, Ms Pornpan said. There are 12 major producers of handicrafts in Chiang Mai, which bring out up to 80 categories of products each day, she said.

The products will be delivered directly from Chiang Mai to mail order customers worldwide.

Sales by the company’s Bali office reached US$30,000 a month, while orders made to Chiang Mai were worth only US$2,000 a month.

The company plans to open their next office in India.

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Authorities seeking ways to help Sky Train

The Office of the Commission for Management of Road Traffic, and other related agencies, are considering ways and means to help transport passengers to Bangkok’s sky train. Measures include constructing parking lots for motorists under a park-and-ride scheme, and construction of terminals for passenger trucks in particular areas in order to bring commuters to the nearest sky train terminals.

A meeting between state agencies concerned took place late last week shortly after Kiree Karnchanapas, chairman of Bangkok Transit System Co, and representatives of Germany’s KfW bank, met with Bichai Rattakul, deputy prime minister on June 15. KfW, an investment bank, has lent US$650 million to BTSC for the construction of the first elevated electric train in Thailand. The German bank was anxious after BTSC earnings missed their target.

The plan also includes construction of interchange terminals on city corners to bring commuters back and forth, free of charge. The project will involve hundreds of millions of baht and hundreds of trucks and shuttle buses.

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Room rates cut by 50% during low season

The Thai Hotel Association recently launched its ‘Hotel Hotline’ service, which offers a 50% discount on room rates at more than 100 hotels nationwide. The move was made to help attract tourists while the local tourism industry was entering its traditional low season.

Several member hotels even offer a much higher discount for those who called the hotline for bookings, said Pantipa Thongchindavong, president of marketing for THA.

The three-month campaign between June and August was also designed to promote domestic tourism and to promote the ‘1552’ telephone service, said Ms Pantipa. Only one credit card is needed for booking, she said. Prior to this, hotels required rooms be booked in advance with a Baht500 deposit to guarantee the booking. Now credit card numbers work on everything, she said. Rooms can now be booked from anywhere via telephone.

There are THA member hotels in 26 provinces. Major hotels in this service include Dusit Resort Pattaya, Regent Cha-am, Sofitel Hua Hin, Phuket Arcadia and Chiang Mai Orchid.

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Updated by Chinnaporn Sangwanlek, assisted by Boonsiri Suansuk.