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Khon Kaen local product sales hit the roof
Local products from the ‘One Village, One Product’
scheme of the northeastern province of Khon Khaen have been tremendously
successful since its inception. The Khon Kaen One Village, One Product
project developed its products by using local wisdom and applied an
intensive marketing campaign such as organizing product showcases in
exhibitions and festivals nationwide.
Khon Kaen’s commodities are becoming well known and
accepted by domestic and international consumers especially silk, naturally
dyed cotton cloth, and instant herbal tea.
Local product sales amounted to 271 million baht in
October 2002. It is expected that the number will surpass 300 million at the
end of this year. The APEC summit scheduled to be held in Khon Kaen in
mid-2003 will help promote Khon Khan’s local products at the international
level.
Chanchai Kosirinon, Chonnabot District Chief in Khon Kaen
said silk had topped the highest sales among all goods from the One Village
One Product program. (TNA)
Thailand needs to maintain export base in Asia, says BOT chief
Bank of Thailand’s Governor M.R. Pridiyathorn Devakula
sees the need for the country to diligently maintain its export base in Asia
given the uncertainty over the external situation.
Delivering a key-note speech at a recent meeting of the
Thai-American and Thai-Canadian Chambers of Commerce, the BOT governor said
he believes the economy will continue to grow as a result of more income
earned by farmers from higher prices of farm products in the world market.
He added that the budget deficit run by the government will also contribute
to the continued growth of local consumption and investment.
M.R Pridiyathorn stated, “Although the budget deficit
set for this year is less than that of last year, the government is using
the funds to stimulate the economy at the grass-root level. Such actions
will manage to maintain the economic growth. Prices of farm products in the
world market are higher and the demand for vehicle tyres from the auto
industry increases. This contributes to the Thai economic growth. Also, it
is projected inflation rates will stay around 1.1.2%, which should boost
investment for consumption.”
It was conceded that the country’s export will probably
grow at a slower pace this year in the wake of the global economic slowdown.
However, this year’s export is being marketed to expand in other
destinations in Asia, excluding Japan. The demand for goods purchase has
increased in export destinations in Asia, especially those to China which
saw a rise of 10 % last year. (TNA)
Bright prospects for Thailand’s new online library business
The first-ever online library service of Thailand is
receiving a good response from bookworms as the membership soared in its
first three months of operation.
The library online service is located at www.thailib.com
Jentipong Phumchan, the library‘s web master said
everyone could borrow books via the Internet after registering online to the
web-site as a member.
“My fondness for reading inspired me to have my own
library and decided to run the library business later,” he said.
Books of the online library are generally categorized the
same as ordinary libraries. Clients can select their favorite items and
submit their order on the computer. The requested books will be immediately
delivered to the customers by postal service.
“More than 100 members have already registered with the
web-site and the number of customers is likely to increase steadily. I
don’t expect to earn a huge profit from my business but my intention is to
create the reading community online,” Jantipong said. (TNA)
US firms to increase investment in Thailand
Board of Investment (BOI) secretary-general Sompong
Vanapha said he was encouraged by the success of the 9-day road show held in
the USA. Several American investors have indicated they intend to increase
their investments in Thailand. The interested American firms include AMD,
the world’s largest semi-conductor, and Western Digital, the world’s
third-largest hard discs drive producer. Both have manufacturing plants in
Thailand.
“The BOI was approached by about a hundred American
investors regarding its current investment promotion policy on investment
channels and industries that could ensure attractive investment yields,”
said Sompong.
He added that there was also a strong interest in the
electronics and tourism sectors.
The BOI delegation met with high-level executives of four
global electronics giants and visited their manufacturing plants. American
firms operating in research engineer, electricity production, and
telecommunications enquired about BOI policy on tax incentives for setting
up offices in Thailand.
The BOI delegates also met with high-level management of
the Multilateral Investment Guarantee Agency (MIGA), a unit of the World
Bank, to seek more efficient measures of cooperation when courting foreign
investors. (TNA)
Thailand’s five percent growth means jobless rate lower
A recent report put out by the Federation of Thai
Industries indicated renewed confidence in the local economy, new record-low
unemployment, higher tax collection and improved industrial output.
The Thai industries sentiment index rose to 106.2 from
105.5 in November of 2002 based on responses from 420 factories. A reading
of 50 or above on the index means that business executives are more
optimistic than negative.
One serious concern for manufacturers is the possibility
of higher oil prices which would edge up if war breaks out between the US
and Iraq. The federation vice chairman Santi Vilassakdanont said that higher
oil prices could push up fuel costs and dilute confidence.
Thailand’s unemployment rate dropped to a record low of
1.4 percent in December 2002 according to figures released from the National
Statistics Office. Increased demand in housing, consumer spending and low
interest rates have contributed to rising employment. A year ago, the
jobless rate was 1.77 percent.
The actual number of jobless registered fell to 490,000
in December 2002 from 610,000 a year before. The number of workers employed
in factories rose by 560,000 to 5.24 million, in construction by 250,000 to
1.47 million and in agriculture by 20,000 to 16.6 million. (TNA)
Anti-Thai riots adversely affect trade and investment, says TFRC
The anti-Thai riots which recently rampaged in Cambodia
will have an adverse impact on trade, investment and tourism cooperation
between the two neighboring countries, according to Thai Farmers Research
Center (TFRC).
Thailand’s leading think tank said the incident has
damaged the atmosphere of bilateral trade, which has an annual value of
40,000 billion baht. Thai traders are uncertain about the turmoil in the
country and want to wait and see until the situation returns to normal.
Key Thai exports to Cambodia include packaged oil valued
at US$61 million while imports from the country are ore and metallic residue
valued at $2.2 million.
TFRC said political instability had periodically
undermined foreign investment in Cambodia in the past several years. Most
investor dared not make huge investment in the country.
In its report, TFRC said, “As the Thai economy begins
to recover Thai businessmen want to invest overseas to expand their
business. It is predicted they will shy away from investing in Cambodia and
turn to investment spots where there is more safety and security.”
TFRC added Thailand was likely to lose the Cambodian
tourist market, which is the third largest in Indochina after Vietnam and
Laos, as a result of the tension in bilateral relations. The number of
Cambodian arrivals has increased in the past five years, earning Thailand
tourism revenue of more than one billion baht. (TNA)
EU eases Thai shrimp inspection
but sticks to 100% inspections
on Thai chickens
Thailand’s prawn farmers are celebrating after news
recently emerged that the European Union will no longer insist on stringent
inspection procedures for Thai prawns. But the Ministry of Agriculture
warned that Thailand could still retaliate unless the EU eased similar
restrictions on Thai chickens.
Deputy Agriculture Minister Newin Chidchob said that the
EU had announced that it would cease its stringent inspections of Thai
prawns, on the condition that the Thai Department of Fisheries carried out
its own strict inspections prior to the prawns being exported and reported
to the EU each month.
While the EU’s latest move marks a victory for prawn
farmers, who for the past year have been working closely with state agencies
to ensure that their products meet EU regulations, for many it has come too
late. It is estimated that Thailand lost 15 percent of its export earnings
on prawns to the EU; equivalent to 20 billion baht, as a result of the
EU’s stringent inspection process last year.
But Newin had bad news for Thai chicken farmers - the EU
will continue to insist on 100 percent inspections.
The deputy minister said he would send officials from the
Department of Livestock Development to reiterate to the EU that Thai chicken
meat did not contain nitrofuren, but warned that the EU would have to face
the consequences if it continued to play ‘political games’ with
Thailand’s chicken exports.
Thailand is estimated to have lost 10 billion baht last
year as a result of EU regulations concerning its exports of chicken meat.
Accusing the EU of protectionism, Newin warned that
Thailand would call on the World Food Standards Office to put pressure on
the EU, and would alert the World Trade Organization to the issue. Thailand
may also consider refusing to increase its quota of powdered milk imports
from the EU, and not reduce taxes on EU powdered milk until the EU backed
down.
Thailand hopes to send agricultural officials to ports in
Europe, the US and Japan to coordinate in the inspection process of
livestock imports from Thailand.
The Ministry of Agriculture and Cooperatives has
requested state funding to provide Thailand’s chicken farmers with
hand-held inspection equipment in order to make the inspection process
easier. (TNA)
Local banks may buy back debt early
Local banks are getting set to buy back US$3.1 billion in
hybrid debt issued after the 1997-98 Asian economic meltdown in order to
strengthen the banks in the long term. The hybrid paper, a mixture of bonds
and preferred shares with a total face value of 132 billion baht (US$3.10
billion), was sold with 7 years’ duration but with a clause that allowed
the banks to exercise call options from 2004.
The banks included are Bangkok Bank, Thai Farmers Bank,
Bank of Ayuthaya, Thai Military Bank and DBS Thai Danu Bank, all of which
sold the debt in 1999 to raise money for bad loan provisions after thousands
of borrowers defaulted.
Because the interest on the debt averages a very
expensive 11.5 percent per year, the banks now want to exercise their right
redeem the debt early.
Analysts expect the banks to raise money for the
refinancing over the 12 months and buy back the debt in early 2004.
“Between January and June 2004, five banks are likely to refinance their
costly hybrid capital that would enhance margins and earnings by 44
basis-points and 57 percent respectively, “Phillip Finch at UBS Warburg
said in a research note.
Thai Military Bank recently stated said it planned a
rights issue in the first half of the year for hybrid debt refinancing,
while Bank of Ayuthaya said it would issue bonds to avoid share dilution.
Other banks have yet to announce their plans.
Bangkok Bank has said it wants to redeem its hybrid debt
but had not yet decided how to raise the funds. Analysts said Bangkok Bank
could improve its earnings per share by three baht fully diluted if it chose
to redeem the debt.
Bangkok Bank is forecast to make a net profit of 9
billion baht in 2003 and 11.74 billion baht in 2004, according to Multex
Global Estimates. The bank made 6.27 billion baht profit in 2002. (TNA)
Final decision on deposit insurance rests with Finance Ministry
Bank of Thailand (BOT) Governor M.R. Pridiyathorn
Devakula has restated that the final decision on the establishment of the
Deposit Insurance Institute rests with the Finance Ministry.
He said the BOT worked out the structure and approach to
setting up the institute and submitted it to the ministry for consideration
last year.
The ministry has already conducted a pubic hearing on the
matter and is waiting for suitable timing to issue an act on establishing
the institute. The ministry wants to be certain country’s economic growth
is sustainable.
The BOT governor said, “We have already done what we
were assigned to do in terms of the framework of the institute. Now it is
the duty of the Ministry of Finance to consider and propose it to the
cabinet and the parliament for the enactment.”
The BOT chief conceded the institute should be
established only when the economy has picked up. Although the economy has
already begun to improve many other factors must be taken into
consideration, he added. (TNA)
Finance Ministry hints of lifting foreign stock ceiling
Finance Minister Somkid Jatusripitak recently gave a
clear indication that he personally supports the lifting of the ceiling
currently barring foreigners from holding more than a certain proportion of
stocks in Thai firms, acknowledging that the current regulations pose a
barrier for potential shareholders.
Somkid said that large scale companies across the world
required diversity among their shareholders, and that he personally felt
that Thailand’s current ceiling should be lifted.
He warned, however, that lifting the ceiling was
something that would have to be done with caution, as lifting controls could
run into legal difficulties, and recognized that the government could run up
against accusations of selling the country to foreigners.
The finance minister however brushed off anticipated
criticism of the move, saying that in today’s world of globalization,
money circulated throughout the world, settling in places where investment
proved the most attractive. (TNA)
Foreign investors skeptical about Thai growth figures
The president of the International Chamber of Commerce
recently warned that foreigners are concerned that Thailand’s economic
growth seems to be driven by domestic consumption and government debt and
spending rather than by exports and revenue.
Kierti said the government has to attach more importance
to the perceptions of foreign investors. Foreign investors were worried that
Thailand’s economic growth was based on consumption and credit rather than
on true growth indicators such as exports.
“Several groups of foreign investors constantly come to
check out the basics of the Thai economy. Some of them are satisfied with
the high economic growth rate, but several other groups have expressed
doubts that Thailand’s economic expansion is being driven by government
spending, consumption and debt”, he said.
The chamber of commerce president also urged the
government to do everything in its power to prepare for the eventuality of a
US-Iraq war in order to minimize impact on Thai businesses. (TNA)
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