Vol. XIII No. 19
Friday May 13 - May 19, 2005

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Fun City By The Sea

Updated every Friday
by Saichon Paewsoongnern

 

BUSINESS 
HEADLINES [click on headline to view story]: 

Fears for elephants as encroachment continues

Rising oil prices benefit Thai petrochemical industries

Q1 automobile production continues upward trend

Industrial index dips to 2-year low

New hospital standards to be introduced next year

Government urged to allow fuel prices to reflect actual costs

Thai fruit exports target China

FTA prompts boost in logistics cooperation with China

Thailand proposes expanding joint rubber venture

Fears for elephants as encroachment continues

National park officials in Thailand’s southern province of Surat Thani voiced fears that wild elephants might be shot by irate local farmers if they continued to encroach on agricultural land.

Nattaphol Rattanaphan, head of the Tai Rom Yen National Park, expressed his concerns during a meeting of national park officials, noting that a herd of six elephants had recently encroached on land in tambon Klon Sa in a desperate search for food and water.

The elephants, whose normal food and water sources have been made scarce by the recent drought, have already caused over 3 million baht worth of damage.

Mr. Nattaphol admitted that it was proving difficult to push the elephants back onto national park land, as they had become familiar with humans.

He said that he was now liaising with conservationists to find a method to get the elephants out of local fields, while appealing to farmers not to shoot the beasts, or use firecrackers as a means of scaring them away. (TNA)


Rising oil prices benefit Thai petrochemical industries

Rising oil prices will benefit Thailand’s leading petrochemical producer Thai Petrochemical Industry Plc (TPI), according a senior official. Last year, the company made a net profit of around 12 billion baht. The firm is now set to become ASEAN’s leading integrated petrochemical producer, the firm’s key planner, Pakorn Malakul Na Ayudhya said.

“TPI has lost business opportunities in the past three years due to internal problems. As a result the company lack’s working capital and the ability to improve machinery and increase production,” he said.

The company has increased its investment budget to three billion baht from a billion to improve efficiency and boost production. “We believe the oil price rise will have a positive effect on the company’s performance because it is an integrated producer of petrochemicals,” Pakorn said.

Representatives of the finance ministry and a business consortium are scheduled to discuss the TPI’s share price and contracts. The tentative contract should be completed by the middle of next month. The negotiation process should be concluded and final contract signed on June 20. The payment of US$650 for the purchase of the shares is scheduled to be made on November 4. (TNA)


Q1 automobile production continues upward trend

Thailand’s automobile manufacturing sector continued to go from strength to strength in the first quarter of this year, with a 14.5 percent rise in production, according to the latest statistics released today by the Federation of Thai Industries (FTI).

The first three months of 2005 saw Thailand produce a total of 250,393 vehicles, 31,687 more than in the first quarter of 2004.

A 14.24 slump in the production of saloon vehicles, mainly caused by a 19 percent decline in domestic sales and a 8.29 percent drop in export sales, was offset by the growing market for one-ton pick-up trucks, which recorded a 31.89 percent rise in production.

In total Thailand manufactured 179,415 pick-up trucks in the first quarter of the year, accounting for 71.65 percent of all vehicle production. Production of public passenger vehicles (PPV) showed a particularly impressive rise, of 351.09 percent.

The first quarter of this year also saw 86,962 vehicles produced for export, accounting for 34.73 percent of total automobile production, with an 18.14 rise in export sales. This earned Thailand over Bt40.3 billion, up 24.44 percent from the same period the previous year.

Automobile components also proved lucrative export earners, with exports of engines up 25.95 percent to earn Bt1.49 billion, while exports of other vehicle components rose 81.89 percent to earn Bt15.47 billion.

The combined value of automobiles, engines, components and spare parts for the first trimester stood at Bt58.1 billion, up 36.15 percent from the first quarter of 2004.

Mr. Suraphong Phaisitphattanaphong, FTI spokesman for the automobile sector, said that the trends for domestic and foreign sales remained promising.

“We remain confident that total domestic automobile sales this year will hit our target of 690,000 units,”he said, noting that the automobile market had continued to expand above initial estimates despite fears of a slump in the nation’s gross domestic product (GDP) growth. “We are also confident that we will export 400,000 units, with Thailand manufacturing a total of 1.09 million vehicles this year,” he said. (TNA)


Industrial index dips to 2-year low

The Thai Industries Sentiment Index (TISI) slumped to its lowest point in two years last month amid continuing fears over the impact of rising oil prices on production costs, according to figures released by the Federation of Thai Industries (FTI).

The new statistics, announced by FTI Vice President Santi Vilassakdanont, show that the March TISI figures fell below 100 points for the second consecutive month, dropping to 96.8 from 96.9 in February.

Mr. Santi attributed the poor figures largely to the government’s recent decision to raise the price of diesel by Bt3 per liter, noting that the incessant rise of global fuel prices was having an immediate impact on production costs, while also serving to dampen consumer purchasing power.

The FTI deputy-president said that industrialists were unanimous in their wish to see the government draw up clear measures to cope with the fuel price crisis, while also continuing the search for alternative forms of energy.

At the same time, the government was told to search for measures to minimize the impact of high fuel prices on the industrial sector and to ensure that public utility prices remained as low as possible.

“The trade deficit for three consecutive months is largely a result of oil imports,” Santi said. “The government should search for means to reduce imports, particularly by encouraging freight vehicles to use NGV fuel,” he added.

He also promised that the FTI would campaign for factories to slash their energy consumption by 10 percent, while castigating the government for introducing tax breaks for energy efficiency, which he said did not provide a sufficient incentive for industrialists to install ‘green’ technology.

Nonetheless, he remained optimistic in the face of the World Bank’s decision to downgrade Thailand’s economic forecast, pointing to increased production as an indicator that the industrial sector was continuing to expand, both for export and for domestic consumption.

He also noted that the TISI has only fallen marginally since February, and expressed confidence that it would pick up in April.

The March figures are notable for minor increases in confidence relating to foreign purchase orders, foreign and domestic sales, investment, hiring and production usage. Other indices which rose included domestic and foreign competitiveness. (TNA)


New hospital standards to be introduced next year

The Institute of Hospital Quality Improvement and Accreditation (HA) is drawing up new hospital standards to push the nation’s hospitals into the forefront of medical care in the region.

The announcement by HA Director Dr. Anuwat Suphachutikul comes at a time when the government is trying to promote Thailand as regional medical hub, and to encourage health tourism from around the globe.

Dr. Anuwat noted that Thai hospitals were increasingly recognizing the importance of accreditation, and that many had already received certification including ISO, HA and HPH. However, he said that the need for flexibility and diversity in accreditation standards, to take account of the different requirements of each hospital, had prompted the HA to revamp its hospital standards system.

The new quality standards will draw on both Thai and foreign accreditation schemes, including regulations from Canada, the US, Australia and France.

While the new scheme will be largely based on existing standards, the HA hopes that it will also be stricter and more systematic.

The new regulations are how being piloted in a select number of hospitals, and will be put into widespread use from the beginning of next year.


Government urged to allow fuel prices to reflect actual costs

The government should allow local fuel prices to move by market mechanism to reflect actual costs if it wants to solve the trade deficit problem, according to an academic on energy affairs.

Thienchai Chongpeepien said the country had experienced the trade deficit because it imported more fuel to accommodate the economic growth. But since global oil prices had significantly increased, the fuel import value had edged up accordingly.

Because of this, he said, the government should accelerate considering how to reduce fuel consumption concretely.

He viewed allowing local oil prices to reflect actual costs would make people aware of the need to conserve the fuel consumption. The move should be made together with concrete measures to encourage people to save energy.

He said prices of fuel, particularly diesel, would normally edge up at the end of the year on greater global demand since it enters into the winter.

Should the government continue to cap the diesel price indefinitely, it would bear more burdens on the oil subsidy. So far, the State Oil Fund has spent 83.74 billion on subsidizing local fuel prices. (TNA)


Thai fruit exports target China

Thailand plans to promote fruit exports to China, according to senior government officials. The government plans to hold Thai fruit festivals in some of China’s biggest cities and to broadcast promotional advertisements on Chinese television.

Thailand will promote Thai fruit in seven large Chinese cities, including Beijing, Shanghai, and Guangzhou, with a total population of more than a 100 million.

The promotional campaign will target the high-end market and aims to increase Thai fruit exports to China in the long-run, the Agriculture and Cooperatives Minister Sudarat Keyuraphan said during her current visit to China.

The Thai fruit festivals will be organized in supermarkets. Thailand plans to showcase Thai fruit to China’s health-conscious consumers. Prime Minister Thaksin Shinawatra will open the Thai fruit festival in China on July 1.

The government is also cooperating with China’s television channel CCTV to produce a documentary on Thai fruit to be broadcast in China, Sudarat said.

A Memorandum of Understanding (MOU) covering the export of some fruit, including durian, mangosteen, longan, lychees and mangoes, will be signed initially. However, there are obstacles to Thai fruit exports to China, including transportation and distribution.

The MOU would allow Thai fruit to enter China through all border checkpoints. Currently, it can only be transported through one border checkpoint. Thailand has also sought Chinese government cooperation to import Thai fruit by having Chinese officials stationed at all border crossings to help deal with any problems on site. (TNA)


FTA prompts boost in logistics cooperation with China

Thailand is poised to open at least four new consulates in China, and is accelerating the development of logistics operations with China in anticipation of the birth of the Chinese-Association of Southeast Asian Nations (ASEAN) Free Trade Area in 2010, Deputy Foreign Minister Preecha Laohapongchana revealed.

Preecha, who recently held talks with Chinese Commerce Vice-Minister An Min, said that Thailand hopes to expand cooperation in the fields of trade and investment, particularly by developing joint transport routes between southern China and northern Thailand by land and along the Mekong River, and by boosting shipping links with Chinese ports.

The government hopes that with the opening up of new and more convenient transport links, Thailand will serve as a gateway to ASEAN when the Chinese-ASEAN FTA deal comes into force in 2010. Better logistics links would also help to boost exports of Thai fruit and vegetables under the existing Thai-Chinese FTA agreement.

The deputy foreign minister said that he had also held talks with his Chinese counterpart, and agreed that Thailand would open at least four new consulates in Chinese cities.

Mr. Preecha also revealed that he had held talks with a Chinese scientific research institute on a collaborative project to use biogas produced from agricultural waste as an alternative source of fuel. (TNA)


Thailand proposes expanding joint rubber venture

Thailand’s Prime Minister Thaksin Shinawatra plans to discuss expanding the rubber joint rubber venture with Indonesia and Malaysia, according to a senior agriculture official.

During a two day meeting the Thai prime minister proposed including Singapore, India and Vietnam in the rubber joint venture, the director general of the Agricultural Department, Chakan Seangraksawong said.

‘’The prime minister aims to convince Singapore, India and Vietnam to join in the company. This would increase the venture’s share of the world market share to more than 70 percent,’’ he said.

Malaysia has already provided some funds for the joint-venture company and the firm has begun recruiting CEOs. ‘’So far, we have 30 candidates, but only two have passed the initial stage,” Chakan said.

The two potential CEOs were identified as Pongsak Kerdwongbandit of the Wongbandit Company and Seang Udomcharumanee of the Thai Rubber Company.

‘’If we cannot a suitable person by the end of this month, I will be assigned as the acting CEO until a successor is selected,” Chakan said. (TNA)



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