bangkok business brief - volume 2, issue 12 - mid-november/december 2013

Inside

General Interest 2Government/Economy 3Finance/Investment 4Production 5Real Estate 6Retail/Services 8Tourism 10IT/Comms 11The Calendar 14

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BANGKOKBUSINESS BRIEF

Mid-November/December 2013Vol. No. 2, Issue No. 12

Amusing Thailand?campaigns have been is debat-able, but there is no question that tourism in Thailand is booming, with the number of international tourists increasing significantly each of the past three years. And 2013 has already seen a 20% in-crease in the first six months of the year.

But as Thailand enters its annual high season from November to February, many tourists, industry insiders, and even government of-ficials are raising questions about safety standards, scams and crime, and an assortment of oth-er issues that threaten to tarnish Thailand’s reputation as a premier tourist destination.

Tourism in Thailand has grown steadily since the 1960s when it became an international hub for airlines, a period that coincided with an influx of military per-sonnel into the region. In 1967, there were 336,000 international visitors to Thailand (along with 54,000 soldiers on R&R from the Vietnam War). Fast-forward to 2012, when over 22 million tour-ists enjoyed Thailand’s beaches, cities, and cultural heritage. These numbers have made everyone involved in tourism in Thailand optimistic that even great heights can be achieved, with the govern-ment setting a target for 2014 of just over 28 million tourists. And so far this year, the numbers have

supported this optimism. In June 2013, Time magazine noted that, according to the 2013 Global Des-tination Cities Index, Bangkok is the most visited city in the world.

Regional tourists top the list of visitors to Thailand with China, Malaysia, Japan, Russia, and South Korea comprising the top five, and with European, Austra-lian, and American tourists also high on the list. But a recent spate of high-profile incidents involving tourists has shone an unflattering light on the Kingdom and a sector that accounts for approximately 7% of its annual GDP.

Story continues on 2

By Lotney FrateLLi

Amazing Thailand, The Land of Smiles, and Miracle Thailand: All of these slogans have been used to market the Kingdom to inter-national tourists in recent years. How successful these marketing

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goo.gl/bH6PF...added that the company had set aside a significant investment budget of Bt200 million to Bt300 million for overseas expansion.Full story: http://goo.gl/bH6PF

General Interest

http://goo.gl/ozbNM Thailand ranks near the bottom in an English proficiency survey, showing the persistence of one of the key competitive weaknesses of the Thai economy. Out of 60 countries and territories where Eng-lish is not their mother tongue, Thailand manages only 55th place – outdoing only Panama, Kazakhstan, Algeria, Saudi Ara-bia and Iraq, according to the EF English Proficiency Index. The survey on adults was conducted by the global leader in in-ternational education, EF Education First, which is based in Zurich, Switzerland.

Poor English skills indicate the small base of competent adult English speak-ers necessary for a globalised workforce. “Comparison of countries with their neighbours, trading partners and rivals provides a fascinating study in diver-gent national priorities and educational policies worldwide,” Christopher Mc-Cormick, head of EF’s Academic Affairs and Research Network, said. “We found that by engaging in a national dialogue about English, stakeholders can help align

If you look at Thailand’s competitiveness, the key constraint is the quality of gov-ernment. The latest Global Competitive-ness Index rates corruption as the most problematic factor for doing business in Thailand. Some of the detailed data in the GCI are depressing. For example, among 148 countries, Thailand ranks 101 in di-version of public funds, 127 in public trust in politicians, and 107 in wastefulness of public spending. Corruption is difficult to measure, of course. What can be done to reduce corruption? Here there is good news. Even in very corrupt settings, cor-ruption can be reduced, leading to great-er investment and public satisfaction. The success stories exhibit some common principles, regardless of cultural setting. The successes range from classic cases such as Singapore and Hong Kong to more recent ones such as the Republic...Full story: http://goo.gl/tNYQxU

Bangkok made global headlines again recently when a BBC report put the city on a list of “10 monster traffic jams” along with Jakarta, Manila, Mumbai and six others. The report featured one man who spent about an hour travelling from Pathum Thani to central Bangkok via a commuter van on weekdays. Many people would say that’s fast. It seems like a fair observation that an average per-son spends about two hours a day going to and from work or school or on other trips. In other words, Bangkok commut-ers waste around 10% of their waking hours in traffic.

A local academic has estimated that traffic jams incur economic losses _ as people normally would spend time on other activities than being stuck in cars _ of 10 billion baht a year, not to mention increased fuel expenses. That’s 0.1% of

Thailand ranks near bottom in English proficiency: survey

Tackling corruption in Thailand

Six global firms team up to offer ‘emerging talent’ programme

Charging you to get stuck in traffic

Heidrick & Struggles International, a professional-services firm, has partnered with five other international companies to launch an Emerging Talent Alliance Programme in Thailand. The programme is aimed at providing local high-potential employees with more exposure to dy-namic work experience. Conceptualised by General Motors, the innovative talent-exchange programme is being facilitated by Heidrick & Struggles, and supported by the senior business leaders of like-minded companies, namely BlueScope Steel, Dusit International, Maersk Line and McDonald’s. The five companies have jointly launched the one-year pro-gramme to offer their core expertise to emerging talent, with the objective of providing promising staff with a develop-ment opportunity through cross-...Full story: http://goo.gl/SyIBbH

Thailand’s annual GDP. We believe the figure, based on a loss assumption of 100 to 120 baht per person per hour, might be significantly underestimated. The...Full story: http://goo.gl/cLTrVa

goals, improve incentives and focus on teaching English for communication. The economic impact of such a coordinated programme is clear.”...Full story: http://goo.gl/2kYk3c

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2 BANGKOK BUSINESS BRIEF December 2011

Greece, India, China and Thailand are home to the weakest national pension systems in the world, crippled by a mix of acute sover-eign debt, young retirement ages, high ratios of pensioners to work-ers and poor pension take-up, a study showed.

The Allianz Global Investors Pen-sion Sustainability Index, which tracks the relative sustainabil-ity of national pension systems in 44 countries around the world, showed the number of Greek re-tirees to people of working age re-

Land subsidence caused by ground water losses tops the list of prob-lems that must be solved in Bang-kok to mitigate the impact of the climate change on flooding, says a study by multinational agencies.The conclusion is contained in a report entitled “Climate Risks and Adaptation in Asian Coastal Megacities”, jointly conducted by the Asian Development Bank, the Japan International Cooperation Agency and the World Bank in 2010.

The report recommended a...Full story at http://goo.gl/20yMD

‘There is a tide in the affairs of men, which, taken at the flood, leads on to fortune”, wrote Wil-

KUALA LUMPUR : The Asian cri-sis in the late 1990s was a wake-up call for the region that has turned out to be a blessing in disguise nearly 15 years later, as the region’s financial sector is now strong and able to sustain a certain degree of shocks from the fallout in the Western Hemisphere, according to a panellist at a recent Asean conference.

“There will be more crises in the future, and the Asian crisis in

The shift of economic growth mo-mentum to the East has opened up numerous opportunities that Asian countries should not miss out, suggests an economist.The robust economic growth of China and emerging economies will open a new opportunity for Asian economies to increase their wealth from trade in goods and services at a time when the United States and Europe are...Full story at http://goo.gl/S65D6


Thailand near top of list of world’s weakest pension systems: study

Panel: Asia better off, not immune, from global crises

Preventing Bangkok from sinking biggest challenge

Grow with the flow of cycles

Asia stands to gain from West slowdown

General Interest

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...added that the company had set aside a significant investment budget of Bt200 million to Bt300 million for overseas expansion.Full story at http://goo.gl/bH6PFliam Shakespeare in JuliusCaesar. Nature and life are cyclical _ the seasons of the year, life and death, the phases of the moon, the tides. Caught up in daily details, we eas-ily forget that the business world has cycles, too. We are all familiar with the economic business cycle of expansion, contraction and re-covery. However, other cyclical phenomena affect...Full story at http://goo.gl/fJolr

1997-98 was a blessing, as the impact of 2008 would have been far worse for the region,” Azman Mokhtar, the managing director of Khazanah Nasional of Malaysia, told the CIMB Asean Conference.His comments were...Full story at http://goo.gl/dfu2u

mains above the European average.In India, China and Thailand, roughly 12 percent of the popula-tion contribute to a pension, while the weaknesses of Thailand’s pen-sion system are...Full story at http://goo.gl/rtpH3Government / Economy

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Meetings to look at barter arrange-ment for Chinese role in high-speed train project: A number of agreements to strengthen Sino-Thai economic ties will be signed when Chinese Premier Li Keq-iang arrives in Bangkok. One memoran-dum of understanding will be signed by the Board of Investment and China De-velopment Bank Corporation to promote direct investment by both countries. The other concerns the partial payment for a Chinese rail system with Thai farm prod-ucts. A joint working will be set up to dis-cuss this matter further.

Only a few Thai companies have made their presence felt in China, such as Cha-roen Pokphand Group, Bangkok Bank and Kasikornbank. However, some Chinese companies have established operations in Thailand. From 2007 to 2012, Chinese investors with 188 projects worth Bt177.7 billion applied for the BOI’s tax...Full story: http://goo.gl/BW628M

Industry Minister Prasert Boonchaisuk recently reiterated the government’s de-termination to continue promoting the Thailand Creative Economy initiative. In an attempt to rally support for Thai-land’s transition to an innovation-driven country, he used rousing words such as “creative” and “sustainable” to describe his latest strategy. A three-stage, 20-year plan is now being drawn up, but it is not without its challenges.

The three stages: The first stage involves establishing a leading production base within Asean. The particular industries to be targeted have yet to be specified, but they are likely to be those related to agricultural products, energy, automo-tives and electronics. In the second stage, Thailand will develop its own intellectual property and apply these innovations to improve production capabilities. In this way, it is hoped that Thailand can be-come a regional trade centre from where production can be effectively managed and serviced. Additionally, Thai brands will be promoted on an Asean level. The third stage involves the international...Full story: http://goo.gl/b0fovx

Thailand and India are scheduled to sign their long-awaited comprehensive free-trade agreement at the World Trade Organisation meeting after reaching an agreement on service-sector liberalisa-tion. The agreement would see an in-crease in bilateral investment in the coun-tries’ service businesses.

Deputy Commerce Minister Yanyong Phuangrach said the Thai Cabinet re-cently approved the comprehensive pact covering trade in goods, services and investment, which he said should ben-efit Thai businesses greatly as India had agreed to open its services market to Thai investors. The agreement is expected to be signed by the two countries’ leaders at the WTO summit in Indonesia in De-cember. The pact will be Thailand’s seven bilateral FTA, alongside those with Japan, Australia, New Zealand, Peru, China and Chile.

Yanyong said Thailand should benefit greatly from India’s service-sector lib-eralisation, with many Thai enterprises having potential to expand their business in India to take advantage of the opportu-nities offered by the country’s huge...Full story: http://goo.gl/op6E1h

Former deputy prime minister and fi-nance minister MR Pridiyathorn Devakula expects Thai exports to stage a recovery in the first quarter of 2014 on the back of the global economic recovery. Speaking at the ethical issue forum held by the Thai Chamber of Commerce, Pridiyathorn said that the global economy could im-prove if the United States sailed through its budget crisis, as the US economy was consistently improving with lower unem-ployment. The European economy had turned around to expand 1 per cent in the past two months with a lower unemploy-ment rate. Japan grew 4 per cent in the previous quarter. China expanded 8.5 per cent in the third quarter, higher than the previous two quarters, after the state’s capital injection. In light of such external factors, Thai exports would likely improve in the fourth quarter of this year and the first quarter of next year, Pridiyathorn said.

However, to promote the Thai economy, the government may need to rush dis-bursement of the budget for fiscal year 2013, he said. There may be no big invest-ment in the manufacturing sector and in-vestment may not expand as fast as in...Full story: http://goo.gl/wPRRbI

Economic deals expected to boost ties with China

Thailand paving way towards innovation-driven economy

Thai-India FTA signing soon

Pridiyathorn sees export recovery in Q1 next year

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The three main challenges for small and medium-sized enterprises in the globali-sation era are how to build and maintain credit, how to access funding sources and how to manage operations, a semi-nar heard. Speaking at KTB’s seminar, president Vorapak Tanyawong said SMEs should know what they want to achieve in doing business – and the finance re-quired to support their objectives.

Credit-building is, therefore, the priority for this size of business. When building up their credit position, business operators must secure their credit as it is important to show banks that they have ability to repay debt when it comes to borrowing more. SMEs are a major focus for com-mercial banks, including KTB, as they are key drivers of both the corporate sector and the domestic economy, he added.

Germans ‘keen to invest’ in ThailandKingdom must

cement role as north Asean hub

Building, maintaining credit a major challenge for SMEs

Kasikornbank foresees competition for foreign direct investment getting more intense under the Asean Economic Com-munity, which means Thai enterprises should implement strategic moves now to maintain the country’s position as the centre of the region’s northern part. Songpol Chevapanyaroj, executive vice president of KBank, said that every mem-ber of ASEAN would compete to attract massive investments from overseas in-cluding Japan, China, Europe and the United States. Each ASEAN country has different advantages and levels of readi-ness.

Thailand’s wage costs are lower only than Singapore’s, but the cost of office rental in Thailand is competitive when compared with Singapore, Myanmar and Vietnam,

Weidt Nuchjalearn, first senior executive vice president at KTB, said that the bank would focus more on small enterprises and supply chains with credit lines of up to Bt20 million, as these customers...Full story: http://goo.gl/dJs5TP

he said. FDI from outside ASEAN has been various industries, showing this region’s potential for accommodating entire production chains and becoming one of the world’s manufacturing hubs. Cambodia, Laos, Myanmar, Vietnam and Indonesia are crucial production bases and raw-material sources for foreign en-terprises. Indonesia is the main rival of Thailand in attracting FDI even though that country is facing depreciation of its currency and soaring...Full story: http://goo.gl/s2wuBW

Myanmar has shown positive develop-ments, partly thanks to the Foreign In-vestment Law issued last November. However, the more significant change that has sped up business transactions is the predictable turnaround time of in-vestment applications. In the year since KPMG reopened its office in Myanmar, the situation has improved. It was difficult in the past to plan when the Myanmar In-vestment Commission would respond to applications, but now businessmen can find that out within 90 days. Now that the approval process is clear and transpar-

German enterprises in Thailand said they are keen to invest and expand their busi-nesses in this country, especially to take part in the Bt2-trillion infrastructure de-velopment project. However, they also maintained that corruption is unaccept-able and should be seriously tackled un-der the law. Karl-Heinze Heckhausen, president of the German-Thai Chamber of Commerce, said as foreign investors in Thailand, German investors wanted to keep out of Thailand’s politics. He said investors are still confident of doing busi-ness and investing here. “I’ve no worries about the investment environment in Thailand, despite the recent protests,” said Heckhausen

Asked about the corruption problem in Thailand, the GTCC president said that German investors do not accept it. They...Full story: http://goo.gl/Pf04Qq

Streamlined process key in Myanmar

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General Interest

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mains above the European average.In India, China and Thailand, roughly 12 percent of the popula-tion contribute to a pension, while the weaknesses of Thailand’s pen-sion system are...Full story at http://goo.gl/rtpH3Production

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BMW, the German luxury-car maker, will begin motorcycle assembly for BMW Motorrad at its Rayong plant in the first quarter of 2014. The BMW F800R is des-ignated as the first model to be made at BMW’s plant in Amata City Industrial Estate, with production of over 100 units a year, said Peter Guenther Wolf, man-aging director of BMW Manufacturing Thailand. Local content will make up 40% of the new assembly line.

“Manufacturing here will help cut retail prices for BMW Motorrad, and that will make it more competitive in the Thai market,” said Mr Wolf. “BMW needs to generate big-bike sales with an engine size of 650cc and above, while local manufacturing will help reduce customs tariffs now levied at as high as 60% for the segment.”

An imported BMW F800R goes for about 750,000 baht. The exact retail price for the Thai-made bike and the plant’s in-vestment costs are... Full story: http://goo.gl/h5tgno

Ducati Motor (Thailand), an Italian big-bike maker, invested 580 million baht to triple its Thai output to serve increasing demand across the globe. The assembly plant in Amata City Industrial Estate in Rayong is its sole production base outside its home in Bologna, Italy.

Managing director Francesco Milicia said the parent company, Ducati Motor Hold-ing SpA, spent 220 million baht to set up the Thai unit in November 2010 and has been churning out 5,000 motorcycles a year since 2011. The 7,000-square-metre plant will be extended by 25,000 sq m so that it can produce 15,000 motorcycles. Mr Milicia said models assembled here have engines sized from 800-1,000cc.

“The Thai unit is aimed at serving de-mand for these models in the local mar-ket and for exports,” he said. About 60% of motorcycles are exported, with the fo-cus on Asian emerging markets where...Full story: http://goo.gl/nRG8Zy

Ducati revs up for big expansion

BMW revs up for Amata City plant

Top destination

Thai Solar Energy Co (TSE), the solar-farm operator controlled by Channel 3’s Maleenont family, is expanding into the increasingly popular solar rooftop busi-ness.

TSE aims to install solar rooftops at 15 branches of the Mall Group and Home Product Center Plc, the operator of HomePro hardware stores, at a total cost of 975 million baht.

With rented rooftop space from the two retailers, each site will generate one megawatt of power and revenue of 10 million baht, said chief operating officer Cathleen Maleenont.

TSE will sell the electricity to state utilities for 6.16 baht per kilowatt-hour under the feed-in tariff system, compared with 3.75 baht for power from the existing grid.

Mrs Cathleen said TSE applied for a so-lar rooftop licence for 39 MW under a scheme launched last month by the En-ergy Regulatory Commission. But the company was granted a licence for just 15 MW and is still awaiting an operating...Full story: http://goo.gl/OWxZpx

TSE takes to the rooftops

erations, its president Hiroaki Nakanishi said recently. The Japanese company has also increased its business activities in many Asian countries that need to expand their infrastructure base. “Thailand is the top investment destination of Hitachi in the Asean region. The country is very im-portant not only as a manufacturing base but also as a high potential market and as a hub in expanding Hitachi’s business in surrounding countries like Myanmar and Laos. There is no doubt Hitachi will con-tinue to invest in Thailand,” he said.

Hitachi’s core businesses in Thailand are home appliances, electric components and materials for the automobile indus-try. It also focuses on railways, power transmission, urban development (el-evators, building IT management sys-tems) and medical products. It supplies infrastructure systems to information and telecommunications systems, con-struction equipment, highly functional materials and components to automobile systems and financial services. The group consisted of 131 companies with 28,156 employees in Asean as of September. About 35 of those companies and 12,225 employees were in Thailand. There are many projects Hitachi is working on or exploring now in Thailand, including some major transportation...Full story: http://goo.gl/5jbtch

The Asian market is growing rapidly and the region is important for Hitachi’s op-


Developers find a new way to raise capital

Newcomer blesses On Nut with townhouse project

Northeast housing market overheating

Failed EIAs kick condos to the kerb

Chinese spearhead Chiang Mai boomDue to increasing demand from East Asian and Singaporean buyers for Chi-ang Mai property, a Singaporean inves-tor plans to launch two residential proj-ects worth a combined 1.1 billion baht in the next few months. Kloe Long, chief operating officer of property consultant Kingsfield Asia Consultants Group, said Chinese are the biggest property buyers among East Asian nationalities. “We see an increase of Chinese investors buying up lots of properties in bulk for a second holiday home or investment in Chiang Mai,” she said.

The northern province was ranked 24th in a list of the most liveable global des-tinations by travel website TripAdvisor, while Bangkok stood at 13th among Thai destinations. Ms Long said Chinese inves-tors are also investing in hotels in Chiang Mai due to the increase in Chinese tour-

A number of leading developers plan to is-sue property funds worth more than Bt30 billion combined, in order to raise capital to support their business expansion over the remainder of this year and during 2014. When added to the property funds already issued this year, nearly Bt100 bil-lion worth of such funds will have been is-sued in total. Raising funds via the capital market has the advantage of reducing de-velopers’ financial costs when compared with borrowing from commercial banks or the issuance of debentures, according to a survey by The Nation and informa-tion from the Securities and Exchange Commission.

This is why some developers have ex-panded their investment in rental-income businesses such as hotels, office buildings and retail, which are the sources for issu-ing property funds – to be upgraded to real-estate investment trusts next year – with a view to raising capital in the future.

Blessed Assets Group, a contractor-turned-developer, has launched a town-house project worth 500 million baht near On Nut skytrain station, adding to the large condo supply in the area. Man-aging director Somjit Norraluck said the first nine months of the year saw about 4,500 units of newly launched condo supply near skytrain stations between Sukhumvit Sois 3 and 103.

Of this number, 2,000 units were launched on Soi On Nut at one project

A growing number of condo projects al-ready launched for sale have failed to win environmental impact assessment ap-proval, forcing developers to return book-ing money and revise project designs. The problem, which causes projects to be delayed or even scrapped entirely, was common a few years ago and has re-cently re-emerged in the booming condo sector.

The condo developer Grand Unity De-velopment Co, a subsidiary of the SET-listed Univentures Plc, for instance, sent a letter to customers this week saying its two condo projects had failed their EIAs. Neramit Srangiam, the developer’s man-aging director, said in the letter that the company will return all booking money and interest to customers as stated in the contract. The projects are U Delight @ Phaholyothin Station, an eight-storey building with 400 units, and Condo U @ Phaholyothin Station, two eight-storey buildings with 409 units. Both are on Phahon Yothin Soi 23, launched in...Full story: http://goo.gl/8H0cmw

Despite an opportunity for healthy growth from upcoming Asean economic integration, the property market in ma-jor northeastern provinces should be more cautious, as property prices have risen too high too quickly in recent years, warns the Real Estate Information Cen-ter. Director-general Samma Kitsin said economic, trade and property develop-ment has been rapid, boosting economic growth in the Northeast.

But at the same time, this has come with a rapid rise in land costs, with huge in-vestment and speculation in land in many provinces, particularly in business zones in Muang districts. “Soaring land prices may become an obstacle to housing development, as locals will soon be un-able to afford high-priced housing units,” warned Mr Samma.

That in turn could lead to a slowdown in the housing market such as happened along the Eastern Seaboard 20 years ago. Other obstacles are the ongoing labour shortage and rising costs for both construction and development. Just like in Greater Bangkok, developers in the Northeast face a labour shortage...Full story: http://goo.gl/rAU4N8

For example, CP Land is issuing the Bt...Full story: http://goo.gl/FBq5GY

ists after the Lost in Thailand film was a...Full story: http://goo.gl/90cBzc

alone. Some 200 townhouses from two projects have also been launched near On Nut station this year. Condos in the On Nut area are priced at 100,000 baht a square metre on average, and units go-ing for 6-10 million baht have recorded a good sales rate.

To fill the void in townhouse supply, Blessed Assets launched Bless Town Sukhumvit 50 in July, with 56 3.5-storey townhouses priced between 8 and 12 mil-lion baht a unit. The project is on six rai of Sukhumvit Soi 50, 800 metres from...Full story: http://goo.gl/FceTOX



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Korean fried chicken is coming to Thai-land courtesy of Fico Group. Subsidiary Evolution Capital Group has formed a joint venture with South Korea’s Kyochon F&B Co to operate the popular chicken restaurant chain here.

Kyochon Thailand Co has a budget of 60 million baht to open 15 outlets next year. It will also expand the chain with a fran-chise format. Evolution Capital chief ex-ecutive Sanjay Singh said fast food busi-ness in Thailand is huge with annual sales of more than 25 billion baht, of which 40% is from fried chicken. He said there is plenty of room for new players and he is confident the Asian taste will differentiate Kyochon from the fried chicken produced by international brands.

Two Kyochon outlets already operate in Bangkok at Korean Town on Sukhumvit

Chicken Seoul food comes to Thailand

Rolling out super-luxury chauffeurs

Thai Lion Air readies for take-off

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Soi 12 and at Fashion Island shopping centre. They have been operated by...Full story: http://goo.gl/bCTIuR Owning a Rolls-Royce is considered an

achievement for buyers anywhere in the world, but the complete experience also includes being chauffeured around by drivers who understand excellent driving etiquette and sound handling practices for this super-luxury marque.

After paying close to a whopping Bt40 million for a Rolls-Royce Phantom Ex-tended Wheelbase, one might wonder whether the chauffeur has what it takes. That’s why the esteemed British carmak-er has introduced a pilot series of chauf-feur workshops in the Asia-Pacific region.

In Thailand the British marque is rep-resented by Rolls-Royce Motor Cars Bangkok. According to Rolls-Royce, the “White Glove Programme” is the first of its kind in this region, and comes as a complimentary package for the ultra-rich who purchase a new Rolls-Royce car.

While many owners in the United States or the UK drive their Rolls, customers in Asia prefer to be chauffeur-driven...Full story: http://goo.gl/PoJv29

After securing an operating licence on Tuesday, Thai Lion Air, a strong new player in the competitive low-cost carrier market, has declared all systems go for a commercial blast-off on Dec 4. TLA, part of Indonesia’s giant Lion Air Group, was granted an air operator certificate from the Civil Aviation Department, clearing the last hurdle of the official approval pro-cess and essentially allowing TLA to use aircraft for commercial purposes.

A TLA insider confirmed all preparations are in place to support inaugural flights on Dec 4 from Bangkok to Chiang Mai, Kua-la Lumpur and Jakarta _ three separate non-stop routes. Two brand-new B737-900ER jets have been on standby at Bang-kok’s Don Mueang airport, TLA’s home base, since last month, with some 380 employees, mostly Thai nationals, ready to go live. Current personnel include 22 cockpit staff, 60 cabin crew (all women)... Full story: http://goo.gl/ip3nVd

Vivo Bene AG, a Swiss nursing and per-sonal care company, is investing 250 million baht to develop a nursing home project for Alzheimer’s patients in Doi Sa-ket, Chiang Mai. The 22-rai resort is now under construction and scheduled to be completed by the end of January next year. The first patient will come to stay in early February, said president Bernhard Rutz.

Vivo Bene Thailand was established to operate this project. The company got a special permit from the Board of Invest-ment to acquire land and get work and residence permits for foreigners working to take care of foreign patients, mainly from Switzerland. The investment comes from Mr Rutz himself and a venture capi-tal fund.

The Vivo Bene resort has six Lanna-style buildings with 12 rooms each, a club-house, a nursing building, four villas for guests, and a staff house. It can care for up to 90 Alzheimer’s patients. Some land areas are reserved to build six more...Full story: http://goo.gl/MhdKvU



Retail/Services

http://goo.gl/QyrTE

10 BANGKOK BUSINESS BRIEF Mid-November/December 2013

















General Interest

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Sponsored by...

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mains above the European average.In India, China and Thailand, roughly 12 percent of the popula-tion contribute to a pension, while the weaknesses of Thailand’s pen-sion system are...Full story at http://goo.gl/rtpH3Tourism

http://goo.gl/fxE4d

Singapore, Malaysia tough rivals to Thailand’s quest to be medical hub

Travel firms gear up for Chinese visitors

Theme park incentives urged

AEC strikes fear in Thai tour agents

Thailand should prove itself more if it wants to become a regional hub for med-ical tourism in the long term, competing with arch-rivals Singapore and Malaysia. One major barrier to this quest is poli-tics. If political demonstrations become chaotic to the point of closing airports, this will undermine patients’ confidence, and they might decide to go elsewhere, said Pongsakorn Chindawatana, a profes-sional doctor and also senior director of communication at Bangkok Dusit Medi-cal Services. So far, there have been no cancellations of trips to the company’s hospitals. The political scenario at present is still considered acceptable. However, the company will have to keep monitor-ing the situation closely over the next few months, he said.

He said Thailand was second to no other country in the region for the quality of its medical services. The country’s medical advancement is also internationally rec-ognised for its high standards. It is essen-tial for the government and private sec-tors to make a joint effort to promote this service on the global stage. It is already true Thailand is a hub, but only geograph-ically. So far, there is no clear evidence...Full story: http://goo.gl/L8gaOT

Local tour agents are worried that foreign operators will dominate the travel busi-ness when the AEC begins in late 2015. Jiraruss Montimanutt, managing director of Henry Around the World Co, said tour operators from Singapore will flood into Thailand because they have strong finan-cial backup.

Opening a tour agency in Thailand re-quires a bank guarantee of 200,000 baht, while Singapore demands an out-lay 12 times higher. Setting up a tour agency takes about 370,000 baht in Laos, 800,000 baht in Brunei and 1.1 million baht in Malaysia. “This obviously shows that opening a tour company in Thailand is very easy,” Mr Jiraruss told a seminar on Thai tourism. He said that when more foreign tour agents enter the Thai mar-ket, local agents will finally lose...Full story: http://goo.gl/WI0Pgg

Thai travel-related businesses are prepar-ing for an expected rise in the number of travellers from China next year – and they hope to earn more tourism revenue. Some enterprises plan to employ more Mandarin-speaking staff, while expand-ing their facilities to serve more visitors.

Akaraphol Chaimongkoltrakul, MD of Samphran Elephant Ground and Zoo, said that because of the Chinese govern-ment’s policy to get rid of “zero-dollar tours”, Thai enterprises could expect Chinese visitors with more purchasing power to come to the Kingdom next year. Samphran is one of the businesses that will hire more Mandarin speakers. He foresees that with more “quality tourists” arriving from that country, his business should earn more income from Chinese visitors as the price of a Chinese tour to Thailand would increase from an average of Bt19,000 to more than Bt30,000.

Dhwat Sommanobhat, head of mar-keting and public relations of Riverside Masterplan, operator of Asiatique, said it would launch a new Muay Thai show to draw more foreign visitors, particularly from Western countries and China. The...Full story: http://goo.gl/46EyY0

The government is being asked to work out new tax incentives to promote invest-ment in amusement and theme parks, as existing measures are proving inadequate to lure investors.

“Thailand has set a lofty plan to boost tourism income to 2 trillion baht by 2015,” said Suwat Sidthilaw, the tourism and sports permanent secretary.

“The government needs to improve in many areas including support for tour-ism-related facilities, easing visa exten-sions for long-stay visitors and better safety measures.”

The Board of Investment now offers tax privileges to amusement park start-ups that invest more than 500 million baht.

The privileges include import tariff waiv-ers for machinery and a corporate tax ex-emption for five years in zone one (Great-er Bangkok), seven years in zone two (12 other large provinces) and eight years in zone three (remote low-income areas).

The private sector has long pressed the government to modify conditions for...Full story: http://goo.gl/j65ESW

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mains above the European average.In India, China and Thailand, roughly 12 percent of the popula-tion contribute to a pension, while the weaknesses of Thailand’s pen-sion system are...Full story at http://goo.gl/rtpH3IT / Comms

http://goo.gl/VwYn9

Is LinkedIn killing the recruitment industry?

Baidu set to launch Thai search engine

Urban youth in Northeast becoming more digital-savvy, survey finds

Social business: Humanising business again

Baidu Inc, China’s largest internet search engine company, will introduce a Thai-language interactive search engine next year in a drive to capitalise on the grow-ing online advertising market. Global marketing director Richard Lee said it chose Thailand and Indonesia as test beds for expanding abroad.

Baidu believes Thailand’s internet busi-ness has high potential for growth, fu-elled particularly by the availability of high-speed broadband service, he said. “We are committed to continue investing in Thailand with no concerns about the current political uncertainty,” Mr Lee said.

Baidu set up its Thai subsidiary late last year, spending millions of US dollars to re-cruit staff and build a research and devel-opment facility serving local products. Mr Lee said it has spent almost three years developing a Thai-language search...Full story: http://goo.gl/MKRyP6

Many clients and candidates ask me how LinkedIn has affected our executive search business in the past few years. From LinkedIn’s demographics and sta-tistics for last year, I notice that Thailand has 300,000 registered members of the online service. As of last December, we had a labour force of 40 million people, of whom 6 million come with a higher education, holding a diploma or a bach-elor’s or master’s degree. In other words, Thailand’s 300,000 registered LinkedIn members represent only 5 per cent of the higher-trained people here. Now, com-bine that with the research from the US Bureau of Labour Statistics showing that at any given time only 16 per cent of us are actively looking for a new job.

So how many are 16 per cent of the 5 per cent who by definition are active ap-plicants and candidates? If we take the liberty of assuming that all 300,000...Full story: http://goo.gl/EbOZD6

Marketing-solution agency McCann Worldgroup’s research unit has found that young rural residents of the North-eastern region are digital toddlers while those in urban areas have become more digital-savvy, with high consumption of digital content via social networks both from personal computers and budget smartphones.

This trend is mainly driven by telecom giants’ aggressive roll-out of third-gen-eration wireless broadband and public Wi-Fi hotspots across the Kingdom, the research report also suggested. The research unit aimed to take on the big questions of how burgeoning urban-isation and surging digitalisation have transformed rural culture and tradition in the Northeast, also known as Isaan. Varidda Varaakom, chief innovation offi-cer at McCann Worldgroup and head of the research unit, said the findings could be used to help marketers communi-cate with youth in the Northeast, which would become a large customer base in the near future. She said most young people in Khon Kaen province consumed digital content via their laptops as they...Full story: http://goo.gl/dkvY3Q

In the past five years, Thailand has un-dergone significant growth in terms of digital penetration and social media us-age. From 2012 to 2013, according to the research firm Socialbakers, growth in the total number of users was 54% for Twit-ter, 125% for YouTube and 163% for In-stagram. In addition, Bangkok has been declared the No. 1 Facebook user city in the world, with almost 10 million ac-counts.

These facts underline the unavoidable challenges that all businesses must face, such as the rise in the Voice of Custom-er, the demand for transparency in the workplace arising from the presence of Generation Y, or the socialisation of busi-ness processes whereby external hold-ers are involved. To sustain competitive advantage in the digital era, companies need to embrace the use of social tech-nologies and integrate a “social business model” into their core business.

Some companies that have pioneered in the social business domain quickly start to realise the benefits, with an emphasis on three distinct advantages:

- Social business can help foster collabo-ration among different stakeholders. This can reduce your company’s communica-tion costs and time, as well as create...Full story: http://goo.gl/SZY40n

12 BANGKOK BUSINESS BRIEF Mid-November/December 2013

Amusing Thailand?Story continued from Page 1.

In October, a ferry packed with tourists sank near Pattaya, leaving six dead and nineteen injured. The Thai News Agency reported that there were more than 200 people on board the 12-meter-long ves-sel, which was only licensed to carry 150 passengers. In August, nine people were killed and five injured when a public minivan traveling to Bangkok plowed into the back of an 18-wheel truck. Recent media re-ports quote Transport Minister Chadchart Sittipan as being “appalled” by minivan safety standards, with many of the vans lacking safety belts, fire extinguishers, and glass-breaking hammers. Websites aimed at tourists also warn about minivan drivers who drive at breakneck speeds, take dangerous chances on the road, and who have to drink energy drinks to stay awake.

TTR Weekly, a publication that covers travel news in the Greater Me-kong region, recently reported that PATA Thailand Chapter Chairman Bert van Walbeck said that safety is the biggest concern of tourists when planning holidays in Thailand. In addition to the political violence and flooding in recent years, crimes involving foreigners and tourists made headlines around the world. The stabbing of an American by a Bangkok taxi driver in July over a disputed 51-baht fare was a notable incident, as were the unresolved deaths of two Canadian sisters on Phi Phi Island in 2012.

Bag snatch incidents, jet-ski scams, gang violence, and stabbings and rapings of tourists have all started to contribute to an image of Thai-land as a rather dangerous place to visit. And Thailand’s penchant for gun ownership doesn’t help. The country has the highest gun owner-ship rate in Asia, with 15.6 guns per 100 people.

On top of these statistics and reports, the government has controver-sially announced that it is considering a new tax on international tour-ists. The 500-baht levy would be used to offset the unpaid medical bills of tourists that the Tourism Authority of Thailand (TAT) claims are costing the government 200 million baht a year. However, TAT also admits that the new tax also aims to attract more “quality” tourists who stay longer. Industry analysts are concerned that tourist numbers will drop as visitors look to cheaper countries in the region, like Viet-nam, Laos, Cambodia, and even Myanmar.

And if Thailand wants to attract a “higher class” of tourists, there will have to be an increase in the service levels on offer here, starting with communication. According to the 2013 EF English Proficiency Index, Thailand ranked 55th out of sixty countries where English is not the primary language, putting it at the bottom of the list’s ASEAN nations.

Despite all of this negative press, tourists continue to flock to Thailand, and the government has been working to expand the tourism sector by various measures. The opening of Don Muang airport to low-cost carriers has eased congestion at Suvarnabhumi Airport, while the ex-pansion of Phuket International Airport, from its current capacity of 6.5 million passengers a year to 12.5 million by 2015, will only help increase overall tourist numbers.

But if these increases in tourist numbers are to continue, Thailand will have to also address the safety of its international visitors by imple-menting and enforcing regulations that meet international standards. Failing to do so will lead to more tragedy and an ever-increasing repu-tation of Thailand as a beautiful but dangerous travel destination.

Read today’s business news briefs about Bangkok, Thailand & Asean

every weekday at www.BBBrief.com

Bangkok Business Briefwww.BBBrief.com

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The Calendar For event details, enter the short code below the event into your browser:

goo.gl/6ngBgMango Metro Networking Partyhttp://goo.gl/6ngBg

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AMCHAM: Security/OSAC – Security Briefinghttp://goo.gl/mSXvdh

AMCHAM: Legal Cmte: 2014 Planning Meetinghttp://goo.gl/YrtpK3AMCHAM: Professional Women Cmtehttp://goo.gl/m6ugZY

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Bangkok Trader / Mango Metro Networkinghttp://goo.gl/EnNbR

AMCHAM: YPC Networking Nighthttp://goo.gl/uNkZKL

AMCHAM: Board & Committee Rounduphttp://goo.gl/ti8QPt

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BCCT: Board Meetinghttp://goo.gl/adaSzk

AMCHAM: Jazzy Festive Luncheonhttp://goo.gl/VffaeK

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AMCHAM: University of Delaware Briefinghttp://goo.gl/rvEOZs

Mid-November/December 2013 BANGKOK BUSINESS BRIEF 15www.BBBrief.com

Send us your event details for the Mid-January/February issue by January 7th to [email protected]

Wednesday Thursday Friday Saturday

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AMCHAM: SME Cmte – Planning Meetinghttp://goo.gl/zGoaSm

AustCham: Voluntary English Teachinghttp://goo.gl/47HHVu

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AMCHAM: Myanmar Chapter – Executive Committeehttp://goo.gl/qRpgis

AMCHAM: Myanmar Chapter – HR Committee Meetinghttp://goo.gl/YmFRq3

AMCHAM: Adopt-A-School Dedication For Jason Epiphany Morrow & Judy Bennhttp://goo.gl/CyfWhH

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AMCHAM: YPC Networking Nighthttp://goo.gl/7Ryqmg

AMCHAM: Adopt- A-School Dedication http://goo.gl/ttjYs7

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BCCT: Christmas Luncheonhttp://goo.gl/x3rnLK

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bangkok business brief - volume 2, issue 12 - mid-november/december 2013

Documents

miracle thailand

thailand optimistic

amusing thailand

glozbnm thailand ranks

regional tourists

american tourists

story brief

international tourists