BUSINESS 
HEADLINES [click on headline to view story]: 

Oil imports drop markedly in August

Thailand to invest Bt 2 billion to improve competitiveness, value-added focus

Thai teams to explore contract-farming plans with Mekong neighbors

TGI leads tour to reveal progress on upgrading mold and die industry

PM asks exporters to make Thailand the world’s leading supplier

Finance Ministry decreases economic growth projection

Profitable solution for Thai Retailers

PM invites Japanese businesses to expand investment into Thailand

Oil imports drop markedly in August

Sharp increases in the domestic price of fuel and energy saving measures led to a marked drop in oil imports this month, Energy Minister Viset Choopiban said today.

Oil prices had been allowed to float upwards in accordance with the market, while state energy conservation measures pushed down demand and imports. In August, 750,000 barrels of oil per day were imported, down 13.1 percent from earlier refinery projections of 860,000 barrels per day.

The energy minister also said gasohol sales had increased seven times from that of January. Demand for the alternative fuel was around 2.3 million liters per month.

Gasoline consumption in August dropped by 1.4 percent from the same month last year, to 18.8 million liters per day. Diesel consumption declined by 3.4 percent from the same month of the previous year to 48.6 million liters per day, and by eight percent from the previous month.

Viset said the rise in the price of oil on the New York market to a new high of US$70.85 per barrel could be attributed to the disruption to drilling and refining in the United States caused by Hurricane Katrina. However, prices were likely to fall once the impact of the storm dissipated, as the rapid increase was not based on underlying factors. Nevertheless, he said while prices would decline, they would continue to stay high and he wanted people to cooperate with the energy-saving drive. Meanwhile, the government is accelerating the promotion of alternative fuel consumption. (TNA)


Thailand to invest Bt 2 billion to improve competitiveness, value-added focus

The Committee to Improve Thailand’s Competitiveness has approved a plan to restructure the Thai economy in the agricultural, industrial and service sectors through a fund of two billion baht.

Government Spokesman Dr. Surapong Suebwonglee said the Committee agreed at a recent meeting that the bulk of Thai exports are produced without a clear concept of the value-adding process. Most Thai exports involve importing raw materials and then reassembling them for re-export, the Committee found.

Following in-depth analysis of strategic sectors, the Committee agreed on a plan to restructure the agricultural, industrial and service sectors. A subcommittee chaired by Deputy Prime Minister and Commerce Minister Somkid Jatusripitak will elaborate details on how to make these sectors more competitive in the global market through a funding of two billion baht.

Dr. Surapong said the investment would be well worthwhile as small-to-medium-sized enterprises stand to benefit from the sustainable growth. (TNA)


Thai teams to explore contract-farming plans with Mekong neighbors

The Agriculture and Co-operatives Ministry is assembling teams of officials to conduct field studies for contract-farming agreements with neighboring countries, starting with Cambodia. Agriculture Minister Khun Ying Sudarat Keyuraphan said the first fact-finding mission on contract farming will consist of both government officials and Thai company representatives.

The first mission will visit the Cambodian provinces of Battambang, Pailin, Siamriep, Banteay Meanchey and Odar Meanchey on 31 August-8 September. Thailand hopes to contract Cambodian farmers to grow soybeans, corn, and palm oil.

The second mission will visit Laos on 7-13 September to explore possibilities of contract farming of soybeans, peanuts, maize, rubber and palm oil in Champasak and Saravane provinces.

The mission to Myanmar will be dispatched after the two governments conclude a memorandum of understanding (MOU) on agricultural cooperation, said Khun Ying Sudarat. The draft MOU is due for cabinet consideration by mid-September.

The missions will compile practical details to develop a plan of action for the government’s policy to promote development for mutual benefits within the Greater Mekong Sub-region. (TNA)


TGI leads tour to reveal progress on upgrading mold and die industry

Suchada Tupchai

The Thai-German Institute (TGI) led a press tour of the Mold & Die Technology Center so that reporters could see the progress on developing this essential aspect of the industrial manufacturing process. Director of the center, Manop Thongsaeng, welcomed the visitors.

Wirot Chalermrattanaporn, acting director of the Industrial Mold Project, describes progress.

It is the policy of the Thai government to develop mold and die expertise within the country to lessen the reliance on foreign technology and allow the nation’s industrial manufacturing sector to become more competitive in the overseas markets.

Molds and dies are used in all manufacturing industries and range from tiny electronic components to automobile and heavy industry parts.

Wirot Chalermrattanaporn, acting director of the Industrial Mold Project, said that mold development has a support budget from the government in the amount of 1.6 billion baht to help the industry achieve international standards.

The TGI says that the greater proportion of production molds are for the vehicle assembly industry, vehicle spare parts, and the electronics and electrical industries. The local mold making industry lacks knowledge and qualified personnel, the employees change their jobs often, and the entrepreneurs continue to use old-model machines and don’t have the new techniques necessary to support production methods. Therefore, new equipment has to be imported, costing the country more than 20 billion baht each year.

The Ministry of Industry and Ministry of Education cooperated to establish the National Mold Institute and Mold Personnel Development Project, which runs from 2004 to 2008. This project also works in conjunction with the Ministry of Science and various private organizations.

There is considerable urgency behind the strategy to drive Thai mold and die making to world marketing standards. Thailand has a policy to develop further into value-added hi-tech manufacturing in order to distance itself from other Asian countries that can offer bulk manufacturing at a lower cost. Presently, attractive new investments and ventures demand ever-higher standards of manufacturing, which at this time, can only be achieved by sourcing the essential mold making technology from overseas.

Vinai Tripaichajonsak, director of the Industrial Service and Development Center, described to visitors how the TGI is working with overseas companies, arranging training in industrial mold development, organizing seminars, and undertaking other projects to ensure that Thai companies can learn how to design and manufacture world-class molding technology.

The press tour also included visits to YMP Co Ltd, Bankai College in Rayong, and PVS Plastic Co Ltd.


PM asks exporters to make Thailand the world’s leading supplier

Prime Minister Thaksin Shinawatra told exporters that they should aim high by making the entire world their market and Thailand as the maker of goods to supply that market. The prime minister addressed his comments to 32 exporters whose products won the Prime Minister’s Award distinction at a ceremony at the Government House, and to a hundred other companies that could achieve similar success in the future.

Prime Minister Thaksin Shinawatra.

The award this year was expanded to cover 13 categories of OTOP - the ‘One Tambon, One Product’ cottage industry promoted by the government.

Thai exporters have been striving for years to raise quality of their products to increase their recognition internationally, Thaksin said. Manufacturers should now look to secure the market in places where they have not yet reached, said the prime minister, adding that they should look at the entire world as a market for their goods.

Deputy Prime Minister and Commerce Minister Somkid Jatusripitak, said that Thai exports expanded by 13 percent during the first seven months of this year. As growth topped 18 percent during July, he is optimistic that Thailand will perform well in the remainder of 2005, offsetting the cost of expensive fuel imports. (TNA)


Finance Ministry decreases economic growth projection

The Fiscal Policy Office (FPO) has revised this year’s economic growth estimate downward to 4.1-4.6 percent, from 4.6-5.1 percent projected earlier, due to the continued rise of fuel prices.

Somchai Sajjapongse, deputy director-general of FPO, said in his capacity as the Finance Ministry’s spokesman that the office needs to decrease the economic growth projection given higher global crude prices and the country’s economic expansion of only 3.3 percent in the first half of this year.

However, it forecasts that the second half of this year’s economy would outgrow the first half based on economic indicators such as the manufacturing production index, farm output index, tourism and employment.

Additionally, the government’s move to set aside budget to stimulate the economy, and its planned investment in mega-infrastructure projects would also help boost the Thai economy in the second half of the year.

Somchai said the current account is expected to be in surplus of around US$1.2-2.2 billion in the second half against a deficit of US$6.2 billion in the first half, resulting in an expected deficit of US$3.9-4.9 billion, or 2.2-2.8 percent, of the gross domestic product (GDP).

The inflation rate is expected to stay at 4.5 percent under the assumption that crude prices in Dubai hovers at US$48.3 per barrel.

In July, he said, the employment rate was at a satisfactory level, led by that in the non-agricultural sector. Employment in the farming sector dropped due to the drought.

Unemployment in July declined to 1.4 percent from 1.9 percent in June, and private consumption and investment in machinery, equipment and property had slowed upon concern over higher product prices and income constraints.

Somchai said the inflation rate had increased to 5.3 percent in July from 3.8 percent in June. The non-food and beverage categories, particularly fuel, edged up 2.2 percent in July. The food and beverage categories dropped slightly by 0.6 percent. Basic inflation grew 1.9 percent, close to that of June’s.

The external position remained at a satisfactory level, as the baht had weakened to an average of 41.8 to the US dollar. The current account balance in June was US$1.54 billion in deficit. (TNA)


Profitable solution for Thai Retailers

The 6th International Supermarket, Store Display and Retailing Supplies Exhibition alongside the International Food & Hospitality Show 2005 (IFHS 2005) will be held September 14 - 17 at the Queen Sirikit National Convention Centre in Bangkok.

Official supporters of the event are the Thai Retailers Association, EAN-the Federation of Thai Industries, the Institute for Small and Medium Enterprises Development (SMES), the Franchise and Thai SME Business Association and the Department of Business Development as part of the Ministry of Commerce.

Attending the exhibition from throughout the industry in the region will be convenience retailers, department stores, discount stores, e-/retailers, forecourt retailers, hyper-markets importers, international brands, specialty outlets, supermarkets, supply chain distributors, wholesalers, marketing professionals, consultants and designers, all gathering to source the latest technology and retail solutions from around the world.

Thailand is the largest food exporter in Asia after China and is the 14th largest exporter of food products in the world, valued at US$12 billion. However, during recent years Thailand has become a major importer of food products and processing machinery. Roughly 60 percent of the industry is comprised of food products and the other 40 percent is beverages. Projected growth in the industry is estimated at between 7 and 10 percent for the next 3 to 5 years.

With an estimated attendance of 20,000 comprising of 45 countries - mainly Thailand, followed by Philippines, Malaysia and Singapore, a successful exhibition is envisaged. Likit Fahplayochon, president of the Thai Retailers Association said, “For the retail sector, Retail Thailand 2004 stands foremost in our annual activities.”

New to the exhibition as part of IFHS will be national pavilions from Israel and New Zealand, alongside previous pavilions from Germany, China, Korea, USA and the UK. Complimenting Thailand’s largest trade event for the retail industry is the 3re World Franchise Forum, Retail Conference and EAN seminar.

For further details on Retail Thailand 2005 please visit www.retailtahiland.com or contact +66 2 617-1475 ext. 108.


PM invites Japanese businesses to expand investment into Thailand

Prime Minister Thaksin Shinawatra has invited Japanese business leaders to expand their investment into Thailand.

Meeting with Japanese business leaders in Tokyo for 30 minutes this past week, the prime minister promised that the Thai government would facilitate their expanded investment projects in Thailand and reduce what are considered ‘barriers’ to the investment, according to Government Spokesman Surapong Suebwonglee.

Japanese business leaders from 10 conglomerates, including Mitsui, Hitachi, Toyota and Mitsubishi, have already had their production bases in the Thai kingdom.

Thaksin later met top executives of Japan Bank for International Cooperation (JBIC) and the Japan External Trade Organization (JETRO), during which the former promised to help promote Asia Bond on the world’s financial market and the latter confirmed to support community-based Thai products under the One Tambon, One Product Scheme (OTOP) as well as the government’s Thai kitchen to the world initiative.

The prime minister also held talks with executives of Japan’s central cooperatives league and urged that Japanese farmers help transfer technologies to their Thai counterparts.

The Thai leader later met his Japanese counterpart Junichiro Koizumi Thursday afternoon during which the two leaders expressed their appreciation to a recent bilateral agreement on economic partnership, which would pave the way for the establishment of the Thai-Japanese Free Trade Area (FTA) Agreement. (TNA)