Banks to off load another 30,000 employees

There is no bright future for thousands of employees in the Thai banking industry as state and privately-owned banks plan more layoffs to reduce costs. Industry experts said it was likely that the sector would further cut the workforce by one-third, or 30,000 employees, between now and 2000.

Thai Farmers Bank has implemented an early retirement program since January by offering employees who are 40 years of age and over a compensation package worth 40 months of salary. The program has already attracted 300 applications from the bank’s 15,000 employees and about 200 of those are approved.

Siam Commercial Bank, starting this Monday, will offer compensation packages worth 6-30 months of salaries to over 12,000 employees, with no limit in number.

The government-owned Krung Thai Bank said there could be as many as 2,000 employees to apply for early retirement packages after the bank’s restructuring work is completed, probably in April.

Bangkok Bank Plc said it has no more redundancy plans after 2,500 employees joined an early retirement program last year; Thai Military Bank Plc, Bank of Ayudhaya Plc said no more layoffs; the government-owned Thai Bank said it might cut of 1,000 of the current workforce of 4,500 persons; debt collecting departments in banks help thousands of clerks save their jobs.

Angel Airline opens Singapore-Bangkok-China route

Leases 1 more plane from MAS

After 6 months of operation, the second national flag carrier Angel Airline said it will later this month start flying a new route linking Singapore, Bangkok and the southern Chinese city of Chentu. The route will be plied using a new Boeing 737 leased from the Malaysian Airways System. The second plane would double the airline’s seat-per-week to 4,000.

According to the vice-chairman Capt. Yothin Pamornmontree, the new 142-seat Boeing 737-400 would fly 3 flights a week from Singapore to Chentu via Bangkok, while another Boeing 737-500, also leased from MAS, would fly the Bangkok-Chiang Rai-Kunming route four days a week. Dornier 328, leased form BP Air, would fly other domestic routes, he said.

The new route would bring hundreds of Singaporeans and other passengers from other countries, especially Australia, to China via Bangkok. From Chentu, a city in the southern province of China, Angel Airline passengers could connect to other destinations in China by South China West Airline, said Capt. Yothin.

Angel Air to improve services at Chiang Rai airport and to upgrade the facility to international standard; the airline to stop operating the Bangkok-Chiang Mai-Udorn Thani route; now it is to fly from Chiang Mai to Udorn Thani; Angel Airline also flies 7 flights a week from Bangkok to Singapore via Phuket, there are 7 direct flights a week Bangkok to Singapore.

VAT cut reports cause standstills in wholesaling

Distributors and wholesalers have found that fewer orders have been made while businesses await the government’s new measures to spur the economic growth, in which a VAT cut is included, reported to be announced April 1. The new value-added tax rate has been the focus of interests, said trading sources.

The standstill brewed when Prime Minister Chuan Leekpai hinted a couple of weeks ago that government agencies have been studying more measures to bring about the economic growth after a financial package announced last August 14 had failed to work well outside the country’s banking sector.

Industries and leading economists have since urged a 5-percent VAT cut, from the 10 percent present rate, to stimulate spending in the market. Finance Ministry officials, however, doubted the possibility as a 5-percent cut would cost the government the fiscal budget. A 2-3 percent cut, to 7-8 percent, is more likely, said conservative fiscal officials.

Traders fear they would suffer from the new VAT rate and have to reduce the size of stocks; orders for merchandise sharply fell in provinces where stocks were already reduced to reduce cost and risk; a 2-percent VAT cut can send traders with huge stocks crumbling in the crisis.

Cargo services find sharp rise in Y2K consignments

The Y2K threat has helped push exports of electronics devices sharply upwards, as world markets await cheaper but highly effective Thai-made software and hardware. Major European airliners are considering increasing flights to connect to Bangkok more frequently.

Air France’s regional cargo manager Mr. Pipat Fu said consignments of electronic devices from Thailand have recently quadrupled, up to 20 percent of all cargo. "The millennium bug is the cause of the rise in cargo loads," he said. "The UK has been a major destination of the Thai-made products," Mr. Pipat said.

But the German airline Lufthansa seems to have uploaded many more of the devices. Lufthansa’s Southeast Asian cargo manager Mr. Choosak Chuenprayos said semiconductors and other electronics devices for computers have constituted 50 percent of the cargo. The airline’s cargo bays have been full since earlier this year.

Lufthansa considering more Frankfurt-Bangkok direct flights; EVA Air had the same experience - electronic cargo to the US has increased since the fourth quarter last year; other transport agencies, representatives have all predicted the rise to last through late in the year.

Pattaya’s submarine service on the rocks

No torpedoes in sight, but it is protests which cloud the future of the first ever submarine service in Pattaya. The Royal Thai Navy has kept an eye on the service, suspecting possible espionage activities, while unhappiness builds among local administrations and residents who said the service is harmful to Pattaya’s underwater world.

According to military sources, the submarine service, by the US-Thai joint venture Sports Sub Co., at Pattaya’s Koh Larn Island waters, could undermine national security, especially when foreigners are involved. The Sattahip Naval Base, twenty kilometers by road from Pattaya, is responsible for security matters in Pattaya and Koh Larn areas.

Mr. Suchart Khobjai, chairman of Koh Larn municipality council, said he did not agree with the service as far as the security question is concerned. There is no authority which guarantees that the service is safe enough for tourists, in general, and an authorized inspection is urged, said Mr. Suchart.

The company said a sub costs Baht 3 million and safe for all; the vehicle has been registered with the Harbor Department and more will be imported; local tourism office said the company was licensed but with glass-house style underwater vehicles, not subs; local residents said the sub has destroyed parts of the sea’s coral reefs.

TAT on ‘trade show’ to US, Canada

The Tourism Authority of Thailand, to complete its road shows to southern Chinese cities this week, is to start a new tourism trade show to the US and Canada next month. The move comes after finding that North American tourists to Thailand significantly increased last year.

The road shows on the Amazing Thailand Years exhibition, which focuses on selling the River of Kings scheme, and the trade show, which would organize meetings with local travel agencies, would take place in New York City, San Francisco, Los Angeles, Boston and Canada’s Toronto and Vancouver, said TAT sources.

Besides general tourism packages, ‘health tour’ and eco-tour packages would be highly promoted during the campaigns, said the sources. A group of TAT officials and tour operators traveled to China’s Kunming, Chentu and Chongqing between March 14-20, promoting the same packages, they said.

A total of 604,472 Chinese tourists visited Thailand in 1998, a 33.58 percent increase from the previous year, while 415,831 Americans arrived, a 17.87 percent increase; the number of Canadian tourists rose to 94,381 in 1998, 22.74 percent more than that in 1997; operators from provinces and those in Bangkok will meet in a plan to help promote upcountry tourism.

Japanese investors see Thai recovery in 2001

The Thai economic crisis has already reached bottom and should start to pick up sometime in the middle of 1999 - probably in June or July - said chairman of Japanese External Trade Relation Organization in Bangkok Mr. Hajimi Kuwata. "However," Mr. Kuwata said, "it is still difficult to say exactly when the crisis will be over."

But Mr. Kuwata said most Japanese investors agreed late last year that Thailand could be back to normal in 2001, the year the country’s gross domestic production is expected to reach 1996 levels, the year the economic boom had matured. Loans under the Miyazawa Plan would greatly help spur growth, said Mr. Kuwata.

Though Japanese direct investment in Thailand increased by 50 percent last year, there had been no new investment projects. Most of the investments in 1998 were coming in loans or subsidies by Japan’s parent companies to help bail out the Thai units, said Mr. Kuwata.

Mother companies in Japan have also had difficulties financially; all the supporting industries see a very bright future in the next 2-3 years; auto parts industry will be the fastest growing since major European car makers have all entered the Thai market; the government must help stimulate domestic needs while pushing for more exports.

Lotus Supercenter quietly swallows SaveCo wholesale branches

Lotus Supercenter of Charoen Phokepand and the British Tesco Group has quietly bought SaveCo wholesale stores in a new wave of takeovers on medium and small retailers in the economic crisis. Lotus Supercenter is to open its Fortune Town and Sri Nakarin branches next month.

Welco Group of Poonvoralak family, which owns SaveCo stores, closed its two branches in Bang Khae and in Nonthaburi’s Pakkred 2 months ago after running into financial problems, said industry sources. The Bang Khae branch started operations in the middle of 1993 in the economic boom. Welco Group then opened SaveCo Pakkred in 1995.

A medium-sized retailer JC St Louis Co has closed down all the JC Department Store branches at the end of 1998 after months of financial troubles. The JC branches have been changed to J-Plus Supermarkets under St Louis Market Place Co. and Joyful Shopping Center by PJL Trading Co.

Adison Department Store Phrakhanong has been changed to be Mercure Supermarket while Adison Sriyarn becomes Ford Enterprise store, a smaller shopping center with the supermarket to be run by Bel-Thai Supermarket Co, the Thai-Belgian joint venture which owns Food Lion supermarket chain; Food Lion will open another branch inside Adison Bang Kapi.

Fujitsu computer operation spin off to join PC, notebook markets

Fujitsu has set up a new subsidiary to fully take care of its personal computer and computer notebook businesses, as the parent company allocates Baht 20 million to support the brand-awareness campaigns through the year. Fujitsu’s low-prices PCs would spur competition in the market, industry sources said.

The new company, which would also have its own factory, is 100 percent owned by Japan’s Fujitsu. Another subsidiary, Fujitsu System Business (Thailand), which was formerly responsible for Fujitsu’s computer business, has been changed into a trading company, said Mr. M Tomimuro, managing director of Fujitsu PC Asia’s Bangkok office.

Fujitsu notebook computers will be 5-10 percent lower in price compared to those of other brand-names in the market. Though the domestic market is yet to pick up, Fujitsu would spend 1999 to start off the PC business, said Napop Nutsati, marketing manager of Fujitsu System Business.

Land Mark Technology Co chosen to be Fujitsu’s distributor; Fujitsu is a leading producer of computer hard drives and monitors with TTF technology; re-sellers will be appointed to represent the product in Bangkok’s IT malls; the company to announce after-sale service packages next month.

Note: Price competition in the notebook market is likely to intensify this year as major players, Toshiba and Compaq, have opted for the high-performance AMD processors with lower prices.

Copyright 1998 Pattaya Mail Publishing Co.Ltd.
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Created by Andy Gombaz, assisted by Chinnaporn Sangwanlek.