DBS Thai Danu to spend Baht253 million in compensation

The DBS Thai Danu Bank will have to pay Baht253 million in compensation for about 500 employees who applied for the bank’s early retirement packages. The redundancy program, which closed on September 30, won a total of 588 applicants, which exceeds the target. However, not all of the applications will get approved, an executive said.

The bank, which has, since the middle of this year, been majority-owned by the Development Bank of Singapore, has offered a compensation package equaling 30 months of salaries to retirees with over 20 years of working time. The opportunity is extended to those who cannot adjust themselves to the new working environment, said Kongpop Wattanasin, director for employee affairs.

The bank wants to reduce its workforce of 2,850 people to be lean but competitive. DBSTD will, however, offer 20 new jobs to specialists in retail banking, and in solving bad loan problems.

The bank has already introduced new technology into services, which many feared would cost hundreds of jobs.

Singaporean investors rein supreme in Thailand’s financial sector

This month’s takeover of Radanasin Bank by the United Overseas Bank has changed the belief that US and European investors will someday take control over Thailand’s financial sector. Several other Singaporean groups have already made their presence felt in local financial institutions and businesses. Singaporean groups, led by the Government of Singapore Investment Corp, now have a prominent role in the Thai economy.

With the island state only slightly affected by the Asian crisis, Singaporean groups, which enjoyed full backing from the government, now have important roles in Thailand’s banks, major property development, and telecommunication firms. It is Singaporeans that stand a good chance of taking full control over Thailand’s financial sector, not Europeans, or Americans, analysts said.

Development Bank of Singapore owns 51.78% in DBS Thai Danu Bank, while UOB owns 75% of Radanasin. GIC, which owns 6.58% in Thai Farmers Bank, will expand to other banks. GIC already has a sweet stake in Land & House Plc, Thailand’s largest property developer.

Isuzu launches new Dragon Eye pickup

Tri Petch Isuzu Sales Co. launched a slightly changed Dragon Eye one-ton truck on October 22 in a plan to retain their championship as the best-selling pickup in this highly lucrative market. A unit of ‘Super Dragon Eye’ with a new front bumper, new alloy wheels, and headlamp with xenon bulbs, will be from Baht5,000 to Baht15,000 more expensive.

The xenon bulbs, which Isuzu said are as important as airbags, and the ABS break system, a safety feature, will be installed on the 2.5 SLX and the 2.8 SLX top-of-the-line models. Isuzu standard Spark EX models will be installed with halogen bulbs on their headlamps, a Tri Petch Isuzu source said. The sales promotion campaign for the new pickup was held over the weekend.

Tri Petch told its showrooms to end campaigns with GE Capital Auto Lease for fear that Isuzu leasing unit might get dented.

A top-of-the-line 2.8-liter SLX unit is priced at Baht511,000, compared to Baht358,000 a unit for a 2.5-liter Spark EX.

Tesco-Lotus to send house-brand products abroad

Tesco-Lotus Supercenter last week introduced its house-brand products for the first time to test the market. Some of their new products will be sent to the Tesco retailing chain in the United Kingdom.

An executive source in Ekchai Distribution Co., which operates the chain, said 30 categories of products under the SuperSave brand were introduced in the first launch.

The new products, ranging from rice, edible oil, fish sauce, and canned sardines in tomato sauce, to razor blades and tissue paper, have recently been released after months of planning. Most of the products are in categories where brand loyalty is not so high, said the source. Some of the products which will be sent to Tesco discount stores in other countries will be certified by Tesco Group, he said.

The company also plans to introduce more products in new categories in the next 2-3 months after a marketing evaluation is conducted on the first 30 categories.

The 17th branch of Tesco-Lotus will be opened this October 29 in Phuket, and there will be at least 5 more Tesco-Lotus stores in Bangkok and vicinity next year.

Developer banks on new cinema theater project

Eastern Star Real Estate Plc is to spend Baht40 million in adding two 240-seat cinema theaters to the top floor of its shopping center, and in developing other floors to house a department store. The new cinema theaters in Chonburi will match those in Bangkok in terms of quality of audio-visual shows, managing director William Cheng, said.

The improvement plan is in line with company policy to increase sales after the big slump in the property market over the past two years. The new department store has won full support from ICC International of Saha Group, which is one of the country’s leading suppliers, Cheng said. Eastern Star has earned Baht30 million over the past 8 months from selling plots of land and living units in three development projects, Cheng said.

Eastern Star partly owns a living estate for rent with Sunrise Investment of Singapore, an International School with MBF Group of Malaysia, and Prom Mit Eastern Healthcare Center with the Prom Mit hospital group.

A fast-food restaurant corner will also be added to add color to the new department store.

Thai Nu Skin puts off hand phone deal in favor of US parent

Nu Skin Personal Care (Thailand), which is currently one of the largest direct selling agencies in Thailand, said it had put off a deal to sell hand phones for the Millennium Telecom Co. after consulting with its US parent, Nu Skin Enterprise, which plans to bring its own IT chain to Thailand and the rest of Asia in the near future.

According to Suchada Theeravacharakul, senior manager of Thai Nu Skin, the US company had come up with an investment plan in Thailand to expand into the telecommunications field. Nu Skin Enterprise is set to open its first Big Planet shop in Japan soon, Suchada said. Millennium Telecom, however, stands a good chance of being a trading partner of Big Planet, she said.

Thai Nu Skin will, however, continue to look for more partners. Big Planet will also look for local trading partners.

US embassy questions Lucent Technologies case

The US Embassy in Bangkok has questioned the transparency of the bidding for fiber optical link projects in Southern Thailand from which a US company, Lucent Technologies, was disqualified. The minister councilor of the embassy, Maria T Huhtala, in a recent letter to Thailand’s minister of transport and communications, asked for clarifications on standards and norms of selection by the Communications Authority of Thailand.

According to a ministry source, communication minister Suthep Thuagsuban has ordered Srisuk Mahintarathep, chief of the highway department, who currently chairs the CAT board, to reply to the embassy as to why the US technology group was disqualified after it proposed the lowest price for the synchronous digital hierarchy optical fiber transmission projects worth over Baht100 million.

The CAT board selected Lucent Technologies for negotiations, but later disqualified the US group accusing it of not having optical fiber production in Thailand. The US Embassy argued that Lucent Technology had formed a consortium with Thai Transmission Industry, a local cable producer, in bidding.

SCC to issue bonds worth Bt12bn

Siam Cement Plc (SCC) informed the SET that bonds worth Bt12bn, the last batch of its planned Bt50bn bond issue, will be available for subscription between Oct 20 and 29. The new batch is to accommodate the continuing public demand for the company’s debentures after the first two batches were oversubscribed.

The new debt issuance came earlier than previously expected. During the launch of the second batch, SCC executives indicated that the company does not plan to issue the third batch before the end of this year. Earlier, SCC announced that it will not proceed with its Bt25bn plan to raise capital after the book-building process conducted during its international roadshow on Sept 4 showed unfavorable share prices in the midst of poor market conditions in general.

Even so, an SCC spokeswoman said the speed-up on the last batch has no connection with the recent decision to delay a capital increase. She said that the objections are different. The company issued the debentures to refinance short-term debts, while proceeds from equity offering would improve its balance sheet and help business expansion.

Local producers cry fraud over TOR of cable project

The Federation of Thai Industries sent a letter to Prime Minister Chuan Leekpai seeking fair regulation in bids for optical fiber projects of the Telephone Organization of Thailand, saying that the term of reference (TOR) favors foreign producers. Moreover, local producers said that high import duties have made locally-made cables less competitive.

Sompong Nakornsri, honorary chairman of FTI electronic and electrical industry group, said the TOR, which was prepared by TOT officials and a German consultant, Detecon, will disqualify all local producers from contesting for the multi-billion-baht project. The TOR has meanwhile paved way for foreign producers, which include US-based Lucent Technologies, and BICC of Australia, he said.

Only producers with sales record of over US$20 million will be eligible in bidding for TOT’s transmission network expansion project, which is to construct a synchronous digital hierarchy communication backbone. TFI insists that there is no need to import the cable as local production of over 700,000 kilometers a year is sufficient for domestic use.

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Updated by Boosiri Suansuk