Vol. XI No. 4
Friday 24 January - 30 January 2003

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Updated every Friday
by Parisa Santithi

 

BUSINESS NEWS
HEADLINES [click on headline to view story]: 

Talented guest speaker wows German Language Business Club members

Unemployment could reach 1 million in 2003

Rice exports could face tough year

Privatization plans still on track for state-owned enterprises

TC Auto Care opens in Pattaya

Energy Policy office says oil price hikes won’t hit electricity charges

No need to intervene in baht movement, says BOT

Analysts upbeat for year 2003

Talented guest speaker wows German Language Business Club members

The monthly meeting of the German Language Business Club held early in January at the Benjarong Restaurant of the Royal Wing in the Royal Cliff Beach Resort was buzzing with interest as Belgian Stefaan de Vos, site manager for Bayer Polymers in Maptaput, was the guest speaker for the monthly luncheon.

Stefaan de Vos and his wife Dorothea (standing center) surrounded by members of the German Language Business Club pose for a photo before the business lunch at the Benjarong Restaurant of the Royal Wing in the Royal Cliff Beach Resort.

Guest speaker De Vos is a talented linguist and speaks fluent German, Latin, Thai, English and French. He explained that soon after his arrival in Thailand he studied at the Institute of Business Administration at Chulalongkorn University in Bangkok. Stefaan de Vos is married with three children and his wife, Dorothea de Vos, is a well-known concert pianist.

The topic of De Vos’ address was his company, Bayer Polymers, which is a fusion of the former business fields of synthetics, rubber and varnish raw products, dyestuff and special departments of Bayer Falser Plc. With approximately 23,000 workers with revenue of approximately 11 million euros, the company is considered one of the biggest Polymer establishments in the world. Almost 10,000 products of his company are being produced in Asia, part of it in Maptaput with 672 workers.

The Thai German Chamber’s number two man, Stefan Buerkle, spoke after De Vos, telling about all the important events and highlights the German Chamber went through last year. He also promised that there will be a regular Chamber consulting day held in Pattaya in the near future.

The next lunch meeting of the German Chamber of Commerce will be held on February 15 and another very interesting guest speaker is already planned.


Unemployment could reach 1 million in 2003

The number of jobless is likely to reach one million this year, which could impede the country’s economic growth, according to Thai Farmers Research Center (TFRC). Thailand’s leading think tank said the 5 sectors in which there are a large number of unemployed include agriculture, the manufacturing industry, construction, wholesale and retail, hotels and restaurants.

The high unemployment could become a risk factor that undermines the country’s economic expansion unless the government can come up with new measures to cope with it. To sustain economic growth, TFRC suggested the government should apply the following measures to stimulate the economy.

First, it should come up with a new economic stimulus package to create new jobs in the medium and long term.

Second, it should prepare for the return of a large number of Thai workers overseas as a result of the economic slowdown in many countries and a possible war between the United States and Iraq.

Third, it should step up efforts to comprehensively solve the illegal alien labor problem ranging from illegal immigration, kickbacks, and protection by influential persons. Local and expatriate business owners must be urged to employ local people to reduce the number of jobless.

Fourth, TFRC says the government should initiate new mega-projects to create new jobs for the unemployed.

Fifth, it should accelerate seeking new export destinations to increase employment in that sector and related ones.

Finally, regular training should be given to those workers who have been retrenched so that they can learn how to set up their own business. (TNA)


Rice exports could face tough year

As the world’s top rice exporter Thailand could face another tough year in 2003. With its large surplus of stocks, key competitors are threatening to keep prices steady despite high demand from countries hit by destructive El Nino weather patterns.

Vichai Sriprasert, president of the Thai Rice Exporters’ Association, said China and India have signaled they may undercut Thai exports to key Southeast Asian markets. He explained that their vast surplus stocks and price subsidies for ricer growers in the United States could prevent prices from rising. “Those are factors that could cap world prices in 2003,” said Vichai.

“China, one of Asia’s major rice exporters, with a population of 1.3 billion, is thought to have a huge surplus stock of 70 million tons. China has the potential to export massive supplies of rice,” Vichai said.

However since the Chinese government does not have a track record of giving top priority to rice export, this gloomy scenario remains to be seen.

Vichai said India will continue to be a key exporter in 2003, but export volumes could be less than last year because of a reduced crop and lower state subsidies.

India emerged as a major international supplier and took over from Vietnam as the world’s number two rice exporter in 2002, exporting around six million tons compared with less than two million tons shipped in 2001. (TNA)


Privatization plans still on track for state-owned enterprises

According to a recent statement Thailand’s Finance Ministry has not received any instructions to delay or postpone the privatization plans of state-owned enterprises or any liberalization tasks currently in progress.

The State Enterprise Policy Office’s deputy director general Areepong Phuchaum said that his office has not had any contact with the committee which reviewed the 11 economic laws implemented in 1997 as preconditions to receiving IMF assistance during the Asian financial crisis. There has also been no final word from government policy makers.

The special committee for the revision of the 11 economic laws submitted a recommendation to Prime Minister Thaksin Shinawatra suggesting the government halt the privatization plans of state-run firms until a clear picture on the amendments has been acquired.

The privatization scheme is in progress and the state-run firms that are going to be listed in the capital market include TOT Corp and the Airport Authority of Thailand, which are waiting for proper the timing to enter the stock market.

The state-run firms that have not been transformed to limited companies are now undergoing ‘an incorporating process’, covering the organization restructuring, administrative reformation and mapping up of long-term business expansion plans.

Finishing the crucial processes will lead to a capital-raising plan in the country’s capital market. At that time it is expected that the government will have a clear picture on how much capital is needed for each firm.

State-owned enterprises with plans to list in the Stock Exchange of Thailand (SET) are ready to move forward with the listing plans and are just waiting for the most suitable timing.

Areepong said that the state-run firms’ privatization has nothing to do with the government’s International Monetary Fund (IMF) debt repayment plan. “In the letter of intention Thailand made to the IMF there was no clause on this issue and there have been no statements on the time frame of state-run firms’ privatization,” he said.

Areepong said state-owned firms which plan to list their shares on the SET in 2003 include Krung Thai Bank, Siam City Bank, Thai Airways International (THAI), TOT Corp, Communication Authority of Thailand (CAT), the Airports Authority of Thailand Company, Port Authority of Thailand and the National Housing Bank.


TC Auto Care opens in Pattaya

Mayor Pairat Suthithamrongsawat cuts the ribbon to officially open the new TC Auto Care Center in Pattaya, as Theera Ritkreangkai (wearing tie), president and managing director, looks on.


Energy Policy office says oil price hikes won’t hit electricity charges

Fears of a hike in electricity charges as a result of increased world oil prices are unfounded according to the Energy Policy Office (EPO). EPO director Metta Bantherngsuk stated that although world oil prices have edged up, only 2 percent of Thailand’s electricity needs were generated from oil and 0.24 percent was generated from diesel.

The fuel transfer charge levied on fuel used to generate power has also not increased from the current 21.95 satang a liter. Metta said the FT charge was reviewed every four months and the next review of the FT charge would only take place at the end of January.

Most of the fuel used to generate Thailand’s electricity is natural gas (73 percent), lignite (15.58 percent), hydro power (5.98 percent), and 2.26 percent of the total amount of electricity consumed is purchased from neighboring countries.

>From December 2002 to the beginning of to January 2003 fuel prices rose; on January 7, 2003 for benzene 95 standing at 16.79 baht a liter, benzene 91 at 15.79 baht a liter and diesel at 14.59 baht a liter. World oil prices have risen due to fears of war in the Middle East as well as a strike which has paralyzed the Venezuelan oil industry. (TNA)


No need to intervene in baht movement, says BOT

Bank of Thailand’s governor, M.R. Pridiyathorn Devakula is again stressing that the central bank sees no need to intervene in the baht movement for now, saying the local currency remains stable.

He said the baht had still appreciated in a reasonable and acceptable level partly because the dollar had significantly weakened on the back of economic uncertainties in the United States.

The BOT governor said the baht has become stronger in accordance with other regional currencies; however the central back will continue to closely monitor and supervise the baht movement.

Given affected factors and conditions, the BOT views it unnecessary for the moment to intervene or take any particular action to lessen the stronger baht. What the bank wants to do now was to supervise the baht to curb severe fluctuation and ensure it moves in line with the market mechanism. (TNA)


Analysts upbeat for year 2003

Economic analysts are predicting that Thailand’s economy will continue to grow providing the government tackles some issues that have been dragging out. The National Economic and Social Development Board (NESDB) projects a conservative growth forecast for this year of 4.0 to 4.5 percent.

The cautious prediction takes into consideration one of the downside risks the economy faces this year. Although Thailand’s export has been a big contributing factor the economy will probably not be boosted by outside capital.

There is a possibility that Thailand’s trade balance could, in the near future, turn negative. Imports have risen from US$12.9 billion (558 billion baht) in the second quarter of last year to $18.2 billion in the third quarter and then in October 2002, to $15 billion, and have definitely contributed to growth. The downside may be that this growth may come at the expense of the trade balance if import demand continues.

The possible trade deficit is not necessarily a negative outlook since industrial productivity has been rising steadily, increasing 4 percent in the first quarter, 7.8 percent in the second and 10.6 percent in the third.

If the import of capital and rise in industrial productivity work in tandem the imported capital can be used effectively. This scenario allows the economy to achieve promising levels and can signal sustained growth for the country.

There is more good news on the horizon. Thailand will, after careful deliberation, pay back its IMF debt earlier than scheduled. There is also the completion of the Thai Asset Management Corp’s task of restructuring 338.05 billion baht of non-performing loans, (NPLs) left over from what was a total of 717.65 billion baht.

Thailand also has sustained its political stability and friendly investment climate. In all the analysts are optimistic that 2003 could be a year of continued and sustained economic growth. (TNA)



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