Industry fears strong baht
could dent exports
The Federation of Thai Industries (FTI) has called on the
Bank of Thailand (BOT) to maintain the exchange rate at an ‘appropriate’
level, amid fears that the appreciation of the Thai baht could have a
devastating effect on the nation’s export sector.
The FTI’s vice-president, Santi Vilassakdanont, who
recently announced the figures for December’s industrial confidence index,
said that the majority of industrialists were beginning to feel jittery over
the strengthening of the Thai currency. Speaking of an ideal of 40.6 baht to
the US dollar, compared to the current rate of 38.4, Santi called on the BOT
to ensure that the Thai currency would suffer no further volatility.
Santi said that industrialists also wanted to see the
government continue to cap diesel prices at no more than 15.09 baht per
liter. Any higher, and production costs would become prohibitively high, he
said. Industrialists are also concerned over the comeback of avian flu, but
are confident in the government’s ability to control the situation.
The industrial confidence index fell slightly to 106.1
points in December, down from 106.6 points the previous month. The decline
was particularly noticeable in the electronics and electrical goods sector,
and the machinery and metalwork sector, largely due to higher raw material
prices and intense competition from China.
Santi admitted that the Thai economy could face a
battering from several fronts over the coming year, and that these negative
factors could dent the nation’s economic growth rate. Warning that the
government’s projected 17-18 percent export growth rate would be had to
achieve, he said that expansion of 15 percent would be as much as the
government could hope for. Nonetheless, he voiced optimism that the
industrial sector would expand by around 9 percent, thanks to a range of
positive factors carrying over from 2004. (TNA)
Investment in projects seeking BOI privileges soars in January
The investment in projects applying for investment
promotions in the first month of this year amounts to almost 80 billion
baht, a five time increase from the same month of last year, according to
the Board of Investment.
BOI’s Secretary-General Sathit Sirirangkamanond
disclosed the number of projects seeking the promotional privileges totaled
106 with the investment amount of 77.8 billion baht, creating 23,700 new
jobs. Industries in which large investment amounts were made include
vehicles, metals, chemicals and basic facilities and services. Foreign
investors who sought investment promotions at the highest level are from
Japan, followed by the United States and Europe.
“Foreign investors seem confident of investing in
Thailand continuously. The general election won’t have any effect on their
investment decision. We believe the investment amount in projects seeking
BOI’s privileges this year will be around 600 billion baht close to that
of last year,” Sathit said.
Sathit added he would propose at the next board meeting a
possibility of considering and granting special investment promotions to
businesses affected by last month’s massive tidal waves.
Under the proposal, the businesses, most of which are
hotels and resorts, are entitled to the maximum promotional privileges such
as a waiver on the duty of machinery imports and income tax exemption for
Under the existing BOI rule, operators of hotels and
resorts, particularly in Phuket, are not entitled to promotional privileges
because previously they could stand on their own feet. (TNA)
Banks urged to develop
and strengthen financial system
Finance Minister Somkid Jatusripitak has called on
commercial banks to jointly help develop and strengthen the country’s
financial system in preparation for free trade competition in the future.
The call was made after the minister, accompanied by a
team of his advisors, visited Kasikorn Bank’s headquarters and discussed
the issue with the bank’s top executives.
Somkid said the executives informed him of what the bank
had done to resuscitate from the past financial crisis, which is similar to
what the government would do to develop state-owned banks. Among them are
the introduction of new innovations, change in the working style to enhance
efficiency, and development of human resources and information technology
Somkid said the ministry had attempted to encourage state
banks to focus their performance style on development. For instance, the
Bank for Agriculture and Agricultural Cooperatives (BAAC) has been assigned
to develop farming activities, the Small and Medium Enterprise Development
Bank of Thailand (SME Bank) to develop small- and medium-sized enterprises,
the Government Housing Bank (GHB) to cooperate with property business
operators to develop the sector, and the Export and Import Bank of Thailand
(EXIM Bank) to join hands with the Commerce Ministry to promote the
country’s exports. At the same time, the Finance Ministry will attempt to
overhaul the tax system to facilitate the development.
Somkid said the ministry would seek Kasikorn Bank and the
Thai Bankers’ Association’s cooperation in supporting the education
development and strengthening the financial system in preparation for the
trade liberalization in the future. On the ministry’s plan to set up an
independent organization to regulate financial institutions, he said the
matter was just in the study process and would take time. It is one of
alternative approaches the ministry is discussing with all state agencies
concerned for the development of the financial sector in the country, he
Muslim countries lining up to buy halal food from Thailand
Muslims from over 60 nations across the world are fully
prepared to purchase food produced by Thailand’s burgeoning halal food
sector, Agriculture and Cooperatives Minister Wan Muhamad Noor Matha
Wan Noor, who traveled to Rajabhat Yala University last
month to witness the signing of a public-private agreement on the promotion
of halal food, said that a meeting of Muslim chambers of commerce on January
25 had expressed confidence in the high standards of halal food from
Thailand. Not only were they ready to purchase halal food from Thailand,
they were also willing to invest in the kingdom’s halal food sector, he
The January 27 agreement linking Rajabhat Yala
University, the provincial authority, the Suk-Kaew Kaew Daeng Foundation and
the Office of Small and Medium Enterprise Promotion (SMEs) will lead to
concerted efforts to promote the farming of goats using halal methods.
It is hoped that the move will give a boost to local
employment, raise the profile of the province’s halal food industry and
help promote traditional farming methods across the province. Wan Noor, who
also noted the high global demand for halal goat meat, said that the
Ministry of Agriculture and Cooperatives would fully support the project by
providing technical support. (TNA)
Energy Ministry initiates strategy to boost power generation
In a move to make a last contribution to the country’s
energy affair before the end of his term, Energy Minister Prommin
Lertsuridej has delegated state-owned agencies concerned to jointly work out
a strategy to enhance efficiency in power generation.
Speaking after a meeting with the ministry’s senior
officials, he said the executive board of the Energy Conservation Promotion
Fund had assigned the Energy Policy and Planning Office (EPPF) to engage an
advisor to outline the framework of the country’s power production
So, to ensure the power production is developed in the
same direction, the meeting shared a common view that the Electricity
Generating Authority of Thailand, the Metropolitan Electricity Authority and
the Provincial Electricity Authority should team up with EPPF and PTT Plc to
study for the strategy to boost efficiency in electricity generation.
Prommin said, “The conclusion on the matter will be
made before the year-end so information obtained can be used to set
conditions for the opening of a bid for independent power plants. An initial
plan to be implemented under the strategy is to establish the combined heat
and power system involving the process of heating, cooling and cogeneration
of power, and the modular system that supports electricity generation in the
power consumption area to reduce transmission costs.”
People will be encouraged to consume alternative power
generated from biomass. The process of alternative power generation based on
demand in respective areas will also be promoted. (TNA)
Andaman spa businesses struggling to recover
A huge number of spa businesses in Thailand’s six
southern Andaman provinces affected by last December’s devastating
tsunamis are still struggling to recover their operations, according to the
Ministry of Public Health.
While spas on the resort island of Phuket got off
relatively lightly, with only around 20 percent affected, elsewhere the
damage is much higher.
In Krabi Province, over 66 percent of spas have reported
damage to their businesses, and in Phang-nga the figure is as high as 73
The Department for Health Service Support, which oversees
Thailand’s burgeoning spa industry, said that it will offer assistance to
spas which had gained government quality certification, as well as those
whose applications for certification were in the pipeline.
The department will also work to restore the confidence
of foreign tourists by arranging a series of seminars in hotels in the
affected region. The government has been keen to promote the nation’s spa
industry, seeing it as a lucrative money-spinner. (TNA)
Trang attempts to keep alien snouts out of roast pork trade
Authorities in the southern province of Trang have moved
to protect their region’s best-known local specialty – a traditional
recipe for roast pork. Trang roast pork is fermented with aromatic herbs and
then grilled until the skin is crispy and the meat tender. It is
traditionally eaten with coffee for breakfast, or can be served as a banquet
Now Provincial Governor Nares Jitsujaritwong has ordered
that Trang roast pork be registered for intellectual property protection to
ensure its special quality and taste is maintained.
A senior provincial commerce official, Surapol
Suwannakul, said Trang’s most famous dish was being registered as a
geographically-limited, distinctive local product.
Surapol said Trang’s roast pork association is now
considering an agreed recipe and the common trademark. The province will
later allow the roast pork traders in the province to register, he said.
“After the registration period is closed, any roast pork traders who
operate without the designated trademark or produce the roast pork outside
the province will be fined at least 100,000 baht,” Surapol said.
The registration of the roast pork is expected to be
completed soon, and the province plans to register other products of the
province in a similar way, including cake and fabric. (TNA)
December bank stats show
economic growth slowing
The pace of economic growth in Thailand began to slow in
December with private investment leading the decline, according to new
figures from the Bank of Thailand (BOT).
Suchada Kirakul, Senior Director of the BOT’s Domestic
Economic Department, said private investment in December dropped by 7.3
percent when compared with the same period last year, while that of the
previous month surged by 11.7 percent. The investment fall was attributable
to a 23.7 percent slump in higher-priced machinery and capital goods
Private consumption in December also edged down by 1.2
percent when compared with 12 months earlier, while that of the previous
month increased by 3.4 percent.
The decline has been blamed on higher gasoline prices and
many people’s decision to call off celebrations and travel during the New
Year festival after the December 26 tsunami tragedy in the South.
Consumption in the tsunami-hit provinces, particularly
Krabi, Phang-nga and Phuket, dropped because many people lost their jobs and
revenue from tourism fell.
However, Suchada said the decline in consumption in the
provinces had trimmed the gross domestic product growth by a relatively
small amount, less than three percent, and had not affected the country’s
overall economic performance.
The consumer confidence index dropped to 92 in December
from 94 in November. But the tourism and service sector continued to expand,
partly because the tsunami disaster hit late in the month. Suchada said
December exports totaled US$8.38 billion in value, up 16.7 percent on the
same month of 2003.
Imports totaled US$7.57 million, up seven percent on the
previous December, while that of the previous month rose by 33.7 percent.
The slowdown stemmed from a decline in imports of capital goods and consumer
With the fall in imports, the country enjoyed a surplus
of US$813 million, and US$556 million in the trade and services balance. It
brought the surplus in the current account and the balance of payments in
December to US$1.37 billion and US$1.34 billion respectively, the highest in
Swedish medical company invests 300 million baht in Phuket
The battered island of Phuket received good news when a
Swedish medical equipment company recently revealed plans to invest 300
million baht in a Phuket-based production plant.
The Thai Microelectronic Center (TMEC), a Board of
Investment (BOI) sponsored initiative spearheaded by the Swedish company
Radi Systems, will manufacture microchip sensors for use with pressure wire
used to measure blood pressure, circulation and temperature.
The investment move, announced by TMEC deputy president
Surin Bamrunphon, represents a major coup for an island still recovering
from the December 26 tsunami.
TMEC established its first production plant eight years
ago, and last year became the first company in Thailand to produce CMOS
The Swedish company Radi first considered a Phuket site
two years ago, and began work on the production plant in Thalang district
last year. Completed in September, the production plant also acts as a
training center and the company’s Asia Pacific headquarters.
Surin, officially launching the company’s production
process, said that all production would be for export. He explained the
Swedish company’s decision to locate the production plant in Phuket by
noting its popularity as a tourist destination, saying that it would be easy
to attract foreign observers to the site. (TNA)
Global Giants Forge Local Alliance
Employment Initiatives to help Hilton Hotel Staff in Tourism downturn
In the aftermath of the Boxing Day tsunami disaster that
impacted on parts of Phuket, an unusual alliance has emerged between 2 of
the World’s largest real estate and hotel operators, the Hilton Hotel and
O’Brien and Peter Hourigan, help hotel staff through a slow and difficult
Announcing the partnership, Stephen O’Brien, Managing
Director of Knight Frank Phuket along with Peter Hourigan, General Manager
of the Hilton Phuket Arcadia Resort and Spa have come up with a solution to
help hotel staff through a slow and difficult period. “We’ve been
talking to each other about how we can utilize the Hiltons skilled workforce
with the amount of properties that we manage” said Stephen O’Brien.
Since December 26, we have received a surge in villa management instructions
from owners living abroad and hence we needed more staff and contractors to
assist us. For instance, we required more pool cleaners, maids, gardners and
cleaners and we needed them urgently, so we turned to the Hilton”
Peter Hourigan added that with the downturn in tourism
numbers, he needed an alternative initiative to keep all his 850 staff
employed. “Our staff have remained loyal in good times and bad and now we
need to show them our commitment to keeping them” adding “I see a swift
recovery in the tourism sector and we should be back to near post December
26th levels again shortly. “We don’t want to lay off any of our staff
and then experience an upsurge in bookings only to have no qualified
personnel in service.”
According to O’Brien, much of the villas and estates
managed by Knight Frank, such as the pool cleaning, gardening and maid
service is normally outsourced. “We try and spread the work around to
various contractors who are skilled and professional in their line of work
and we view the Hilton staff especially skilled, trained and have a
wonderful service mind” It looks impressive when a lawn to one of our
managed villas is being mowed by a guy in a Hilton uniform, and the quality
of workman ship is outstanding”. We even use the Hilton drivers to
transport guests staying at our managed villas to and from the airport, into
Phuket town, Central Department Store or to golf”
Hourigan adds that the cost of providing these services
is no more than what villa owners pay at present “when we set this up with
Steve, we wanted to make sure that our staff had plenty of active work to do
and not price ourselves out, as it turned out, we are seeing good demand for
our services and everyone is happy, from the villa owners, to Knight Frank
and our staff”.
Neither O’Brien or Hourigan know how long the
arrangement will go on for noting that when the hotel sector recovers, that
the staff’s first and foremost obligation will be back at the Hilton
Phuket Arcadia Resort and Spa, however there is talk that the relationship
may continue. “We can provide villa owners with outside catering, laundry
and hotel guest privileges said Hourigan, plus we will launch our Hilton
Premium Club Card in early February that will enable guests staying at
outside villas the opportunity to enjoy our hotel facilities”.
According to Knight Frank Phuket there has been good growth in the
property sector with solid and committed sales being recorded in January and
demand for rentals and sales being at “levels higher than we expected”.
We had a record breaking January month in sales, February looks even
better” said Stephen O’Brien adding that as most of the International
Governments have lifted their travel bands, tourists are now returning.
Phuket prawn farmers
face 10 billion baht losses
Deputy Agriculture and Cooperatives Minister Newin
Chidchob has pledged full assistance for all fisheries businesses affected
by last month’s tsunamis, while admitting that Phuket’s prawn farming
sector could faces losses of over 10 billion baht
Speaking at the government’s workshop on the
rehabilitation of the six Andaman provinces hit by the tsunamis on December
26, including Phuket, Phang-nga, Krabi, Trang, Ranong and Satun, Newin said
that his ministry was doing all it could to ease the plight of fishermen and
To date the owners of 5,228 small boats, of which 4,989
are fishing boats and 299 are tourist boats, have registered for
compensation with the ministry, along with the owners of 539 large tourist
boats and 598 large fishing vessels.
However, Newin admitted that the compensation scheme
could run into difficulties, as only 2,452 small boats and 1,167 large boats
had previously been registered with the ministry. He also noted that 5,977
fish farmers raising their stock in fish baskets had requested compensation,
but that only 2,257 of these were registered.
Particularly affected are prawn farmers, with 277 prawn
farmers reporting damage. As these represent 40 percent of the nation’s
prawn farming industry, the prices of prawns has shot up as a result.
The infiltration of wastewater into prawn farms has meant
that farmers will have to halt their operations for the next 4-5 months,
leading to losses of over 15 billion baht, and 10 billion baht in Phuket
The migration of sea creatures following the tsunamis has
also meant that catches in the area have been extremely poor over recent
TRIS launches credit rating service for short-term debt instruments
Thai Rating and Information Service (TRIS) Co.,
Thailand’s renowned credit rating company, is launching a new service,
offering credit rating for short-term debt instruments, for the first time.
“Kenneth Pinkes, a former top executive of US-based
Moody’s Investors Service - a globally recognized credit rating firm - is
helping TRIS to conduct the new service as an advisor,” TRIS’s
president, Varabhatr Tothanakasem, said.
“TRIS is gathering information, and expects to
publicize its credit rating system for the country’s short-term debt
instruments within the next couple of months,” Varabhatr disclosed. The
new service will be based on international standards, and its analytical
criteria would come from factors and characteristics of the Thai capital
TRIS’s new reliable rating service is expected to grow
parallel to the more sophisticated debt instruments’ market in Thailand
and with the rising demand for the service among local investors, according
to the company’s president. (TNA)
Commerce Ministry backs Thai franchises abroad
The Ministry of Commerce has announced a major drive to
promote Thai franchises and indigenous brand names in the international
marketplace, with the aim of gaining greater global recognition for Thai
The campaign was launched on January 27 by Orajit
Singkalavanich, director-general of the Department of Business Development,
who opened a ministry-sponsored trade development fair at the Department of
Noting that Thai franchises were gaining growing
acceptance around the world, Orajit said that over the past couple of years
a huge number of franchise operators, mostly in the restaurant sector,
received training from the Department of Business Development. Last year
these franchises recorded total revenue of around 25 billion baht, and this
year the government expects this figure to grow by at least 10 percent.
But Orajit insisted that the department not rest on its
laurels, and would continue to offer training to franchise operators. Both
quality certificates and certification for the completion of training will
help Thai franchises gain wider acceptance, she said.
The department is also joining hands with the Department
of Export Promotion to work on the launch of more Thai franchises abroad.
Successful franchises include the Black Canyon coffee shop chain and the
Jomthong restaurant chain.
One of the pressing questions facing Thai franchises will
be how to keep a Thai name, rather than adopt a foreign one, but,
nonetheless, gain recognition in foreign markets.
The four-day trade development fair showcased 166 booths
featuring a range of products, including leather goods, silk, fabrics,
clothing, cosmetics, gemstones and jewelry, handicrafts, food, One Tambon
One Product (OTOP) goods and products made by Thai franchises. (TNA)
Forest Department studies alternatives to natural wood
The Royal Forest Department is forging ahead with studies
to find alternatives to natural wood in order to help conserve the natural
environment, according to a department official. The government’s closure
of many of the nation’s forests to logging back in 1989 has led to growing
demand for alternative materials to replace natural timber.
Woratham Unjittichai said that the department was now
studying a range of alternatives, including materials made from twigs,
agricultural waste products and scraps of wood from furniture production
plants. The use of such products would give a huge revenue boost to
industries which currently consign them to the scrapheap.
The Royal Forest Department is now offering free training
in the use of such materials to interested individuals and communities, and
in the future plans a showroom to publicize its products and promote the
creation of jobs using alternatives to natural wood. (TNA)