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Two US companies eye
Thai aerospace industry
Industry Minister Somsak Thepsuthin announced that two
United States aerospace companies are considering the possibility of
investing in projects to transform Thailand into a regional aviation hub.
Speaking after a recent joint meeting with the Air Force
and Finance Ministry on plans to turn Thailand into a regional aviation
center, the minister said that a partnership company would be established to
oversee the transformation, with registered capital of 100 million baht.
Foreign companies with expertise in aircraft maintenance
would be invited to form part of the partnership, Somsak said, adding that
US companies Pratt and Whitney Co. and Lockheed Co. had already expressed an
interest. This would leave government agencies such as the Office of Small
and Medium Enterprise Promotion, the Ministry of Finance, and the Industrial
Estates Authority of Thailand with a holding of no more than 51 percent.
Somsak expressed confidence that concrete progress would
be made on the establishment of the partnership by the end of the year, with
initial investment of 800 million baht. At present the government was
deciding which airport would be used as a maintenance center, he said,
speculating that it would possibly be Nakhon Sawan’s Takhlee Airport.
“The strategies for the development of the aerospace
and aviation industries state that within five years Thailand will be a
regional aviation hub, and that within 10 years it will be a center for the
production of aircraft and components. We will begin by providing services
to the Air Force, as at present the Air Force spends around 1.6 billion baht
a year on maintenance abroad,” Somsak said. (TNA)
Thailand launches Asian Bond Fund
The Thai government has successful launched a
billion-dollar Asian Bond Fund (ABF) under the full support of 11 Asia
economies. The bond fund will focus on investing in regional government
bonds.
“Thailand is very proud to play a significant role in
initiating and pushing for the success of this fund,” Thaksin said.
Thailand, Indonesia, Malaysia, Singapore, the
Philippines, China, Hong Kong, South Korea, Japan, Australia and New Zealand
all contributed the money to create the fund.
The bond fund was initiated to promote regional financial
stability and minimize the risk of repeating the 1997-98 Asian economic
meltdown.
Thailand initially committed 200 million dollars to the
fund, however since other countries contributed more than expected, Thailand
reduced its contribution to 120 million dollars.
The fund is to be managed by the Bank for International
Settlements (BIS). (TNA)
Central bank advocates ending state guarantees for creditors
The Bank of Thailand (BOT) is supporting the
government’s proposal to end state guarantees for Thai financial
institution creditors. The announcement follows a Finance Ministry plan to
end state support and is a measure of the enormous changes in Thailand’s
economic climate since the recession of the late 1990s.
Krerk Wanikkul, assistant to the BOT’s director of Fund
Management, said that the situation of Thai financial institutions had
considerably improved since the economic crisis. “The economy is rapidly
expanding, state reserves have strengthened, and foreign debts had fallen.
As a result, we think it is no longer necessary for the state to act as a
guarantor of financial institution creditors.”
The state has guaranteed financial institution creditors
since 1997, when the cabinet passed a resolution that the state would act as
a guarantor of the creditors of all domestic financial institutions in order
to boost the confidence of depositors and international creditors, following
the closure and bankruptcy of a large number of financial institutions
during the economic crisis. (TNA)
Rising food prices push inflation rate higher
According to figures released from the Ministry of
Commerce, rising food prices pushed May’s inflation rates above market
consensus to 1.9 percent.
The Consumer Price Index (CPI) rose 0.40 percent in May
from the previous month and 1.9 percent year-on-year, against 0.40 percent
rise month-on-month in April and 1.6 percent rise year-on-year in April.
Analysts had expected a 1.6 percent rise.
Core inflation, which excludes energy and food prices,
remained unchanged for the month and stood at 0.10 percent for the year on
year, the ministry said.
Thailand’s central bank targets core inflation this
year from 0 to 3.5 percent.
The ministry said retail prices for meat, vegetables and
rice rose sharply in May mainly because fewer supplies reached the domestic
market.
Government agencies project inflation for the whole of
2003 at 1.5-2.0 percent, against 0.7 percent in 2002. (TNA)
Bangchak’s rehab business
plan approved
Energy Minister Prommin Lertsuridej recently stated that
the government has approved Bangchak Petroleum Plc’s business
rehabilitation plan. The mandate requires the debt-laden firm to provide
loans to refinance its existing debt to reduce its debt-to-equity ratio down
to 2.2 from the existing 4.36 and restructure its management strategy and
business operations.
Prommin said, “Some financial institutions have offered
refinancing packages to substitute the existing 20 billion baht of debt. The
debt cutting process should take about six months. Considering the
58-percent stake that the government has in Bangchak through the Finance
Ministry, if it fails, we would be responsible for a considerable amount of
debt.”
Narong Bunyasanguan, managing director of the company,
said the company has to pay back interest on loans of about 1.2-1.3 billion
baht per year. This year alone, the company will have to pay back 3.6
billion baht worth of debt.
The government will be seeking cheap financing for the
company in order to allow it to expand its business and restructure its
financing. The Finance Ministry currently guarantees eight billion baht of
Bangchak’s debt. (TNA)
Toyodabo Filtration holds foundation stone laying ceremony at Hemaraj’s Eastern Seaboard Industrial Estate
(Rayong)
Nobuyuki Ozeki (3rd from left), president of Toyodabo
Filtration System (Thailand) Co., Ltd. presided over the foundation stone
laying ceremony for a new factory construction project phase 2 at
Hemaraj’s Eastern Seaboard Industrial Estate (Rayong).
With registered capital of 300 million baht the new plant
is a joint venture between Toyoda Boshoku Corporation, Japan and Denso
Corporation, and will be leased to STB Textile, one of Toyodabo’s
subsidiaries in Thailand to produce air cleaners.
The photo also shows Koji Iida (2nd from left), president of STB Textile;
Hiroyuki Nakamura (4th from left; vice-president of Toyodabo Boshoku
Corporation Japan and David Nardone (5th from left), president & CEO of
Hemaraj Land and Development PLC.
Bangkok Bank opens third
Micro Branch in Pattaya
Songklod Kaewvisit
In the ever-competitive business of finance and banking,
Bangkok Bank is striving to excel in customer service and provide quality
products. As a result Pattaya’s third Bangkok Bank Micro Branch was
officially opened for business at the Big C Super Center in South Pattaya on
June 6.
(L to
R) Boontiwa Isornsena na Ayuthaya, Region 6 manager, Tewin Chaiyo, general
manager of Big C Super Center, South Pattaya, and Mayor Pairat
Suthithamrongsawat cut the ribbon declaring the new micro branch open for
business.
Mayor Pairat Suthithamrongsawat presided over the opening
ceremonies and was joined by Jirasak Laosiripaisarn, Central Region 1
manager, Boontiwa Isornsena na Ayuthaya, Region 6 manager and Tewin Chaiyo,
general manager of Big C Super Center, South Pattaya.
Thanusak Vanichwong, Banglamung branch manager for
Bangkok Bank said, “The opening of this new micro branch is part of the
bank’s commitment to customer service and its effort to provide convenient
locations and quality products for bank customers.”
The new branch is the 401st location of the Bangkok Bank
Public Co. Ltd. The firm plans to reach its target of 599 branches around
the country before its 60th anniversary of operation next year.
“We at the bank are always striving to maintain the
latest technology and provide the best services and products for our
customers. The concept of a Micro Branch has won awards from international
institutions such as ‘The Banker’, ‘Euromoney’ and ‘Finance
Asia’. Our first micro branch was opened in 2000 and we now have over 70
such branches around the country, located within commercial buildings,
shopping centers, educational establishments and industrial estates,” said
Thanusak.
Each micro branch is open 7 days a week with staff specifically chosen
and trained to handle all aspects of customer services such as deposits,
withdrawals, money transfers and loan payments in a fast and convenient
manner.
Pirate operators cutting into UBC’s profits
Vasili Sgourdos, deputy chief financial officer of UBC,
the nation’s largest cable TV operator recently said because the company
faces unfair competition from private cable operators in the provinces, it
expects the number of new subscribers could be as little as 20,000 to
30,000, instead of the anticipated 40,000 to 50,000 new subscribers.
Vasili said, “With the current level of piracy going on
in the provincial market, the firm cannot guarantee the company’s
profitability during the second half of 2003. We expect to show profits
during the first and second quarter, but our subscriber base is still low
and our operating costs are rising.”
Regarding the issue of the government allowing
advertising on its cable television operations, Vasili said, “We have not
received any official notice from the government to allow advertising. We
know that Pramote Rathavinij, the deputy director general of the public
relations department, is looking into the matter and that the Deputy Prime
Minister Wissanu Krea-Ngam will also review the request.” (TNA)
Private sector must spur national economic growth
Deputy Prime Minister Somkid Jatusripitak recently issued
a rallying call to the private sector to act as a driver of national growth
and development, saying that in the future the private sector would become
the nation’s economic leader; while the government would fall back to take
a supportive role.
Speaking on the theme of “Thai economic trend in the
latter half of the year: the impact of SARS and the US-Iraq war” at an
event organized by Thammasat University and the Thai-Chinese Foreign Trade
Association, Somkid said that Thailand had gained from the Iraqi war, but
then suffered a setback due to Severe Acute Respiratory Syndrome (SARS) but
that neither event was likely to have a long-term impact on the country’s
economic growth.
“Fortunately Thailand was less impacted by SARS than
other countries; while several local economic indicators rose sharply,
particularly returns from value added tax (VAT), which grew by 12
percent,” Somkid said.
“Road shows in various countries in the region have
shown that other countries are seeing Thailand in an increasingly positive
light. The government’s effort to attract foreign investment has
strengthened Thailand’s reputation abroad,” said Somkid.
The government sees Thailand eventually standing as a
regional economic center alongside China and Japan. Somkid urged Thai
companies to focus on meeting international standards in order to prepare
for increased liberalization of global trade.
Chakramon Phasukavanich, secretary general of the
National Economic and Social Development Board (NESDB), revealed that
indices signaled Thailand’s economy would grow by 5-6 percent this year.
Holding up first quarter export growth of 20 percent as
an example, Chakramon said prices of Thai agricultural products - including
rubber, rice, cassava and prawns - were on the rise. In the production
sector, growth was evidenced by the 6-7 percent rise in demand for
electricity; while figures show the shipping sector is also booming. (TNA)
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