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by Boonsiri Suansuk

HEADLINES [click on headline to view story]: 

BOT seeks ways to strengthen commercial banks

Unithai forms shipping joint venture with South Africa Shipping Co Ltd.

Giant automakers to set up production base in Thailand

German businessmen keen on investing in Thailand

Thailand to have full-fledged Islamic Bank

Director General Dr Vallop Thaineua opens new R&D office

North Korea’s assembly leader pays official visit to Thailand

Grandma’s curry spices up SMEs

Government to shell out B200 million to Maptaput residents

BOT seeks ways to strengthen commercial banks

The Bank of Thailand’s governor, M.R. Pridiyathorn Devakula recently disclosed the central bank is in the process of examining the performance of all local commercial banks to assess their actual status and see how to strengthen their performance. The move was made to identify weak points of each commercial bank and improve them.

Initially, the BOT will look into the status of four state-owned banks, including Krung Thai Bank, Siam City Bank, Bangkok Metropolitan Bank, and Bank Thai, and then examine privately owned banks. It is expected the assessment of the status of all commercial banks will be complete by mid-year.

Pridiyathorn conceded that the central bank remains unable to estimate the loan amount all banks can extend solely on the assumption that the country’s economy would grow 2-3% this year. Still, it was believed the banks would be able to lend more while the excess liquidity in the banking system would remain unabated.

The banks were likely to further cut interest rates following the BOT’s move to reduce repurchase rates.

Regarding mounting concerns about wider spread between lending and deposit rates as major banks opted to cut deposit rates only, the BOT chief said Thailand adopted a liberal stance. Under the system, all players including commercial banks had the right to decide what they should or should not do. (TNA)

Unithai forms shipping joint venture with South Africa Shipping Co Ltd.

The Thailand publicly listed shipping company Unithai Line Public Company Ltd. has announced the formation of a joint venture with South African Shipping Company, Gearbulk (SA) Pty Limited to provide a scheduled monthly break-bulk liner service between South Africa and selected East Asian ports, including Bangkok.

The service, to be marketed as UniGear, will deploy two dedicated multipurpose vessels in the trade to provide a minimum of one sailing per month in each direction. With immediate effect the dedicated vessels deployed in the service are the mv. Candia and mv. Carla. The service commenced operations on the 1st of February.

The management of the eastbound marketing of the service as well as all operations in South Africa will be the responsibility of Gearbulk South Africa through its Durban office while responsibility for the management of the westbound marketing of the service and all operations in South East Asia will be in the hands of Unithai Line.

Unithai Line chief executive officer Gerrit de Nys said that, “The formation of this joint venture company by two large, financially sound and professional shipping companies will provide clients with long-term shipping opportunities in both directions. Given that high levels of service and dependability are assured, we look forward to the volume of shipping improving significantly.”

Giant automakers to set up production base in Thailand

Italian giant automaker Fiat has decided to invest 800 million to set up its manufacturing base in Thailand and make Alfa Romeo cars for export in the ASEAN, according to industry minister Suriya Juengrungroengkit.

Speaking after meeting with John Mack, president and chief executive officer of Fiat Auto (Thailand) Co., he said the company will use Thailand as its base to produce the Royal Alfa series for export to Malaysia, Indonesia, and Singapore next year. “This decision shows that foreign automakers have confidence in the country and its potential.”

He said Fiat will use a plant owned by the General Motors Group at the eastern province of Rayong as its base to produce the vehicles. The plant currently utilizes only 30% of its total production capacity. The Italian automaker has set a goal of eventually producing 10,000 cars per year, but will begin with 1,000 cars per year during the initial stages.

This is the first time Fiat will produce Alfa Romeo cars outside Italy. Its target customers are in a niche market as the company produces luxury cars.

In addition, Suriya said, Fujio Cho, president of Toyota Motor Corporation in Japan, will pay a courtesy call on Prime Minister Thaksin Shinawatra during his visit to Thailand this month. He will take this opportunity to inspect the Toyota manufacturing plants in the country in order to explore the possibility of producing pick-ups to export around the world. (TNA)

German businessmen keen on investing in Thailand

German investors are showing a growing interest in investment in Thailand, particularly in auto and retail sectors and want the country to be a gateway for trade and investment in this region, according to a Thai trade representative. Not only large companies, but small and medium sized entrepreneurs are also looking to invest in the country.

Khanthee Supamongkol said he took a trip to Germany late last month and met German businessmen to inform them of Thailand’s stance on trade and investment from foreign countries. He said a large number of German businessmen had previously eyed only Singapore, Malaysia and Hong Kong as attractive investment spots in the region.

However, upon receipt of information on Thailand, the Germans contacted the Thai embassy and were informed that they would receive incentives for their companies to invest in the country, especially in the auto and retail sectors.

Khanthee said he also spoke with executives of Metro Co, a giant retailer in Germany. The firm was keen on opening a wholesale superstore in Thailand. (TNA)

Thailand to have full-fledged Islamic Bank

Thailand is likely to have a full-fledged Islamic Bank in May, as Krung Thai Bank Plc. (KTB) prepares to launch the Islamic banking system separately in both management and operational aspects from its normal commercial banking businesses. The project is expected to be completed by May.

Theerasak Suwanayos, advisor of the KTB Board, in his capacity as designated president of the Islamic Bank, said that much progress had been made for the establishment of the Islamic Bank.

“A KTB panel in charge of studying and working out the project has conducted a survey in various areas concerning Islamic banking and principles, including seeking opinions and gathering information from local Islamic people and institutions to ensure that the operation of the new Islamic Bank will fully comply with Islamic principles, and is trustworthy and reliable for Islamic people,” Theerasak said.

He said that the main concern of Islamic people is the mixing up of their deposits prohibited by the Islamic principles from gaining interests or returns with those usable for gaining interest. He stressed that this will not happen in the new Islamic Bank. KTB will separate both the management and banking transactions of the Islamic Bank from its normal banking system.

This worrying point has made existing Islamic Banks operated on a trial basis by the Government Savings Bank (GSB) and Bank for Agriculture and Agricultural Cooperatives (BAAC) unsuccessful.

KTB will launch the Islamic Bank as its full branch offices, with 6-12 staff each in three provinces in the South, including Yala, Pattani, and Narathiwat, where the majority of local people are Muslims. In remote areas, special counters will be opened at KTB’s branch offices covering five southern provinces, including Songkhla, Satul, Yala, Pattani, and Narathiwat.

Theerasak said, “KTB plans to sign contracts on exchange of consulting services with National Islamic Bank of Malaysia and MayBank in mid March, and plans to open the Islamic Bank in May. People who are not Muslims, but are willing to follow Islamic principles are also welcome to use the new Islamic Bank’s services.”

In the initial stage, the new Islamic Bank will offer four key services, including current account service, deposit maintenance service, deposits for general investment service, and deposits for special investment service. The former two of which will have no interest returns to clients who, instead, have to pay fees for asking the bank to secure their deposits.

Clients can apply for the deposits for general or special investment services and will be able to receive returns to their investment, but they will also be responsible for any loss of the investment. Most of the investment will be in the form of joint ventures with local entrepreneurs or enterprises. Theerasak said that the Islamic Bank was, therefore, considered beneficial to the rehabilitation of local small and medium-sized enterprises. (TNA)

Director General Dr Vallop Thaineua opens new R&D office

Thailand’s Department of Communicable Disease Control (CDC) recently opened its new administration office in Bangkok. The office opening ceremony affectively started the research and development clinical collaboration with GlaxoSmithKline Biologicals. The collaboration will focus mainly on the clinical development of pediatric vaccines including combinations and vaccines against HIV. A key feature will include regular academic exchanges between Thai medical experts and GlaxoSmithKline vaccinology as well as training and development programs. The agreement between the two parties is significant as it paves the way for further strategic collaboration in Thailand.

This collaboration will not only aim to supply Thailand with a clinically effective combination vaccine but also raise the health benefits and cost savings for Thai patients. As Director General Vallop said, “We are very pleased to be working with GSK Biologicals in Thailand. Working with industry leaders not only helps us to build an expertise in conducting clinical trials and biomedical science, it is an investment in the healthcare sector of Thailand.”

Dr. Hans Bock, vice president and director Clinical R&D and Medical Affairs for Asia Pacific, Middle East and Africa for GSK Biologicals highlighted the mutual benefits of this arrangement. “We are very pleased to be working with Thailand on our vaccines clinical development. We have a strong track record of collaboration in Thailand including large field efficiency and effectiveness trials. We view this agreement as another step in our long-term investment to Thailand’s knowledge economy, specifically in the medical science sector. Building up Thailand’s expertise in R&D and clinical development provides Thailand a significant competitive advantage, not only n the field of vaccinology but in conducting clinical research more broadly.”

The CDC and GlaxoSmithKline Biologicals will establish a working group to further develop a detailed plan that determines the scope f the collaboration and mutual benefits to both parties. Steven Drew, managing director of GSK (Thailand) added, “This event further strengthens out relationship with the CDC. This collaboration fulfills the Minister’s objective to ensure preventative care as a priority for the Thai people.”

North Korea’s assembly leader pays official visit to Thailand

Prime Minister Thaksin Shinawatra gave a warm welcome to Kim Yong-nam, chairman of the Standing Committee of the Supreme People’s Assembly of the Democratic People’s Republic of Korea, who arrived for an official 4-day visit to Thailand as a guest of the Thai government. The North Korea’s assembly leader observed a guard of honor at the Government House before joining a welcome dinner hosted by the Thai premier.

Delivering a speech at the dinner, Thaksin said the official visit by Kim would help strengthen the bilateral relations of the two countries, which had established the diplomatic ties since 1985 during which trade and cooperation had enormously increased.

The two countries have recently agreed to expand their bilateral trade, particularly in rice and consumer products. Satisfactory progress has been made in efforts by the two nations to settle debts incurred through the account trading.

The premier said he believed peace and stability in the Korean Peninsula would benefit the region as a whole.

Thailand fully supports talks on the national reconciliation in the peninsula and welcomes the participation and cooperation by the Democratic People’s Republic of Korea in various activities, particularly cultural and trade.

Thailand officials intend to encourage North Korea to become a member of the Asian Development Bank. Financial assistance from the bank would greatly benefit North Korean national development.

As well as strengthening trading ties, the formal discussion between officials of the two governments will include the signing of agreements involving investment promotion and protection, news exchange. (TNA)

Grandma’s curry spices up SMEs

It’s spicy, it’s saucy, and it could soon be in a shop near you, helping prop up the nation’s small and medium enterprises. As Thailand grapples for ways to sell its local produce to a wider market, one shop in Phuket, specializing in southern Thai cuisine, is branching out to sell products from local SMEs to both Thai and foreign tourists.

Siam Southern Foodline Co. Ltd, manufacturer of the “Mae Ju” brand of over 50 products ranging from chili paste to fish curry, started off with one Phuket grandmother, Ju, who insisted that her grandchildren took parcels of her fish kidney curry with them when they went off to study abroad.

Soon all their fellow students were asking for the curry and Ju decided to make one small pot of the curry each day for sale. As word got around, the business expanded. Eventually a factory was set up which employs 30 people to produce and market a wide range of southern Thai cuisine, including fish kidney curry following the original recipe.

Narachai Phonsilp, the company president, said that Siam Southern Foodline would be the first southern company to enter into the Department of Industrial Promotion’s scheme to set up DIP shops, or shops selling goods based on traditional Thai knowledge.

With its Phuket location, the company is in a prime position to sell to both domestic and foreign tourists, and the DIP shop idea will get round the problem of having to sell products to department stores and paying a high commission fee.

The company’s DIP shops will sell not only Mae Ju products, but also food, beverages, cosmetics, herbs and herbal medicine from small and medium enterprises in the southern Thai region. (TNA)

Government to shell out B200 million to Maptaput residents

People living in the vicinity of the Maptaput Industrial Estate were left with a major victory on their hands last week when the government announced that it would pay out B200 million to compensate them for the suffering caused to them by the estate’s pollution.

Veera Mavichak, head of the Ministry of Industry’s Industrial Factory Department said that the department, in conjunction with the Industrial Estates Authority, had drawn up a blueprint for improving the quality of life for people living in the vicinity of the estate.

A budget of B200 million had been requested for the various projects under the blueprint, which will operate as a pilot scheme, he said, adding that the scheme will focus on public utility and health issues.

Residents in the vicinity of the Rayong Industrial Estate, one of the nation’s largest and most important industrial development complexes, have long complained of the pollution and stench emanating from the estate’s production plants.

Veera said that projects in the scheme included plans to deal with the high levels of iron in the tap water supply, road maintenance work, and training to local residents to enable them to engage in sustainable employment by using the byproducts of the local factories. Responsibility for the scheme will be in the hands of the Industrial Estates Authority, together with the local population, he added. (TNA)

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