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

Big C Supercenter sees profits soar in second quarter

Printing and packaging industrial estate to be built in Samut Sakhon Province

Economist expresses concern over rising household debt

Thailand and Laos agree to expand trade and investment

ASEAN’s largest solar powered electricity plant to open in Mae Hong Son

Government plans to use lottery proceeds for social development

PTT’s president says firm to restructure both at home and abroad

Clothing industry calls on government to push FTAs with US and EU

Traditional medicine to be developed for export

Local industries urged to improve production efficiency

Big C Supercenter sees profits soar in second quarter

Big C Supercenter Plc, the nation’s second largest retailer, reported the company’s profit rose 4.7 percent in the second quarter of this year as sales increased after the expansion of new stores.

Big C reported its profit stood at 352.8 million baht up from 336.9 million baht last year. Earnings were boosted by booming sales from its 35 stores around the country, including its newest new three stores.

A spokesman for the firm said the company’s sales were not affected by the outbreak of SARS as some had feared. In fact, sales are expected to continue to increase throughout the remainder of the year as long as the economy stays steady. (TNA)


Printing and packaging industrial estate to be built in Samut Sakhon Province

Industry Minister Somsak Thepsuthin has vowed to press ahead with the establishment of a new industrial estate focused on the printing and packaging industries, aimed at providing an integrated raft of services which the government hopes will boost Thailand’s global competitiveness.

After presiding over the signing ceremony for the establishment of the Sinsakhon Industrial Estate, a collaborative project linking the Industrial Estates Authority of Thailand (IEAT) and CAS Printing Co. Ltd., Somsak said that the estate was being set up as part of the government’s promotion of industrial clusters designed to strengthen particular industrial groupings.

Sinsakhon expressed hope that the new estate would strengthen Thailand’s printing industry, noting that it would provide a complete range of services, from sourcing raw materials to production, services, trade and transportation. “Not only would this help bolster Thailand’s global competitiveness, it would also help conserve the environment and cushion the blow from foreign trade barriers,” he said.

Three target industries will form the core of the Sinsakhon estate: the print industry equipment production sector, producing machinery such as printing presses and developing printing industry personnel; the printing industry itself; and the printing press maintenance sector.

The estate will be located in Samut Sakhon Province, adjacent to Bangkok, on 700 rai of land. Of this 500 rai will be devoted to industry while six rai will be given over to trade, 44 rai to offices, and the remainder to other public facilities. The 1.430 billion baht project will take two years to develop. Sixty percent of the investment will come from shareholders, with the remaining percent derived from domestic loans. IEAT governor Anchalee Chavanich said that she expected the project to get underway in January next year. (TNA)


Economist expresses concern over rising household debt

While speaking at a recent seminar, Chirathep Senivongs Na Ayudhya, an economist at the Bank of Thailand (BOT) said latest figures show a sharp increase in personal loans which is resulting in higher household debt.

“We are back to the 20 to 30 percent growth in personal loans, similar to that seen during the pre-crisis level and this is something that the country needs to keep a close eye on,” Chirathep told the seminar.

Chirathep’s study was backed by central bank governor, Pridiyathorn Devakula, who agreed rising household debt was something that would be monitored. “We are closely watching the situation, but presently we view these debts are still at a manageable level,” Pridiyathorn said. “Thailand’s consumer confidence index recently hit a 58 month high, led by purchases of durable goods which boosted demand for consumer loans,” he added.

Chirathep said that his study shows that household debt rose around 20 percent to 82,485 last year from 68,279 baht in 2001 and about 69,674 baht in 1998, a year into the economic crisis. (TNA)


Thailand and Laos agree to expand trade and investment

Senior Commerce Ministry officials have hailed a recent trip to Laos as a resounding success, after the two countries agreed to boost bilateral trade and investment, with Laos acting as a gateway for Thai goods to the region.

Wichak Wisetnoi, Deputy Director-General of the Department of International Trade led a delegation of businesspeople from the timber industry, furniture industry, agricultural sector, vegetable oil sector, paper pulp industry, construction sector, eucalyptus cultivation sector, and transport sector to business and investment talks in the Lao provinces of Savannakhet and Champasak. The Thai delegation was able to meet deputy governors of both provinces, as well as policy-making officials.

Laos asked for assistance in investment and development in marketing, and had requested that Thailand purchase more Lao products. Wichak noted that the completion of the second Friendship Bridge, scheduled for 2006, would give a boost to the regional economy by forging more communication links between Thailand, Myanmar, Laos and Vietnam.

The Thai delegation also proposed investment in an integrated eucalyptus cultivation program. In addition, Thailand expressed an interest in collaborative development to add value to wood waste and small wood products, as well as assist in marketing.

The two sides also want to boost the soy bean cultivation sector, noting that Thailand currently imported 1.5 million tons of soy beans each year from the United States, Brazil and Argentina. (TNA)


ASEAN’s largest solar powered electricity plant to open in Mae Hong Son

Thailand is set to harness its year-round sunshine to provide electricity for the northern province of Mae Hong Son, with the Electricity Generating Authority of Thailand (EGAT) now pushing forward with a 200 million baht project to establish a solar powered generating plant there.

Speaking after the ceremony to lay the foundation stone at the solar powered station in Tambon Pha Bong, Energy Minister Prommin Lertsuridej said, “The opening of the generating plant underlines the government’s policy to provide electricity to people living in remote locations and ensure the use of clean energy. The Mae Hong Son plant will be the largest solar powered station in the Association of Southeast Asian Nations (ASEAN).

While conceding that the production costs for solar powered electricity were five times higher than those for ordinary electricity, the energy minister stressed that the construction costs for the station were considerably lower than the billions of baht which would otherwise have to be spent on bringing in electricity from nearby provinces.

EGAT governor Sithiporn Rattanaphas added, “The Pha Bong plant will help preserve the environment and meet the growing demands of tourists in the province. In the first phase, the plant will generate 500 kilowatts, but in the future the plant will generate 1,750 kilowatts.” (TNA)


Government plans to use lottery proceeds for social development

According to Deputy Prime Minister Chaturon Chaisang, the profits from sales of two and three-digit lottery prizes are to be ploughed back into social development projects.

Speaking after a meeting among agencies concerned with the proceeds of the new lottery game which was designed to replace the underground lottery, Chaturon said that the government will announce clear approaches as to how the lottery proceeds could best be used for social advancement.

Chaturon expressed hope that students and members of the public suffering from poverty would be able to have their cases for lottery funding considered by the committee responsible. After the facts of each request had been assessed, funding would be allocated around November of 2003 and added that the public and private sectors would check whether or not the poverty of those making the requests was genuine, and the reason behind that poverty, in order to solve problems on a long-term basis. (TNA)


PTT’s president says firm to restructure both at home and abroad

Thailand’s oil and gas conglomerate PTT Plc said it is planning to restructure its operations, locally and overseas, in its attempt to become a market leader in Southeast Asia.

Company president Prasert Bunsumpun, recently announced, “It is entirely possible that PTT could become a regional leader because of its diverse operations which include refinery plants, retail fuel oil and gas trading, and exploration and production of natural gas. The company is also planning to set up an export processing zone either in Chonburi Province Rayong Province to increase efficiency.”

Prasert said, “PTT wants to become a gas company with oil fuel and petrochemical as core areas. Future plans include the export of our energy products, mainly to China, but also to neighboring countries,” added Prasert.

Presently PTT’s investment overseas involves only gas and petroleum exploration. However, the firm sees increasing benefits in making overseas investments on fuel oil and other petroleum products.

Prasert said the investment in exploration and production in the Middle East, Africa, and neighboring countries would be made through its flagship unit, PTT Exploration & Production Plc (PTTEP), while PTT itself will take charge of gas distribution. PTT now owns a 63 percent stake in PTTEP.

Prasert added that PTT plans to sell a 36 percent stake each in Rayong Refinery, and Star Petroleum Refining, as well as a 24 percent stake of Bangchak Petroleum Plc. PTT intends to sell them once market conditions are favorable and terms for share purchases are attractive. (TNA)


Clothing industry calls on government to push FTAs with US and EU

President of the Thai Clothing Industry Association Suchaat Chantaranakharat is urging the government to push ahead with the establishment of free trade areas (FTAs) with the United States and the European Union (EU) to cushion the impact of the liberalization of the global clothing industry under World Trade Organization (WTO) rules in 2005.

Suchaat said the Thai clothing industry backed the government in its negotiations to establish the FTAs with the US, scheduled to be inaugurated in 2004, and with the EU, which had also expressed an interest in the establishment of a free trade deal. He said if these two FTAs become a reality, they would ease the impact of the liberalization of the global clothing industry under WTO regulations.

Noting that Thailand’s clothing exports had grown by 11 percent over the first half of the year, Suchaat predicted that the growth rate for the year as a whole would be no less than 5-6 percent, with total exports worth over 3 billion US dollars. (TNA)


Traditional medicine to be developed for export

A Thai research center plans to develop various Thai herbs in response to the growing demand in both domestic and global markets. Speaking after a seminar on Thai traditional medicine research and development held by the National Research Council of Thailand (NRCT), Chirapandh Arthachinta Secretary General of NRCT said that Thai herbal products, both in the form of supplementary food and in the form cosmetics, have potential in local and global markets.

While noting that more scientific research needed to be conducted to assure medicinal properties of the herbs, Chirapandh said that more information about benefits and cultivation of Thai herbs should be collected to promote the use of Thai traditional remedies.

NRCT has aside about 70 million baht to support in-depth studies, and will set the standard of extracted herbs. “Two main projects on the development of Ya-hom (anti-nausea herbal powder) and 10 other kinds of herbs will be implemented in 2004,” said Associate Prof. Promchit Sorlalam, Faculty of Pharmacy, Mahidol University. “The project will create the integration of knowledge bases and the network of herb researchers,” she added.

An initial survey showed there were more than 300 formulas of Ya-hom produced in the country. Ya-hom has medicinal properties to relieve nausea and stimulate the digestive system. The demand is high among the elderly, and its potential for export is seen as promising. (TNA)


Local industries urged to improve production efficiency

Leading economists say many local industries need to improve production efficiency unless they want to lose competitiveness. Speaking at a seminar on “Strategy to Enhance Competitiveness of Thai Industries, Theera Atchakul, economic advisor of Industrial Finance Corporation of Thailand (IFCT), said some foreign economists warned the Thai economic growth of 5-6% might not be sustainable because the expansion stemmed from economic stimulation through state spending, and not actual production efficiency.

Theera said, “The IFCT and the Industrial Economics Office jointly estimated industrial competitiveness by using the Total Factor Productivity (TFP) approach to gauge production efficiency of each industry in many countries including Japan, Hong Kong, France, Germany, China, the United States and Thailand. They found the production efficiency of Thailand lowest since the country’s economic growth stemmed from an increase in labor and capacity, not production efficiency.”

Theera said many industries ran the risk of losing competitiveness with foreign rivals as their TFP is lower than 100 points. The industries at risk include auto parts, concrete products, processed fruits and vegetables, ceramics, electrical appliances, sugar, steel products, footwear, furniture, and textiles. (TNA)