Thailand’s Ease of Doing Business (EODB) score, an absolute measure of the country’s progress toward global best practice, reached 78.45 this year, up from 77.39 last year.

Thailand remains among the top 30 of the 190 economies in the EODB ranking, according to the World Bank Group’s Doing Business 2019: Training for Reform report.

The units, trading under the name TFFIF, hit a closing price of Bt10.30 per unit.

The first-day performance gives the TFF a total value of Bt 2.328 billion.

The funding vehicle for infrastructure development is expected to yield dividends of 4.75 per cent in the first year of public trading in its units, Chuvinda Hanratanakool, the fund manager and chief executive of Krungthai Asset Management Pcl, said yesterday at the opening event for the TFF’s first trading day on the Stock Exchange of Thailand.

Up to 45 per cent of the net toll revenues from the Chalong Rat and Burapha Withi expressways in the next 30 years will be used to fund the project, enabling that dividend target for unit holders in the fund’s debut year.

“Investors in the TFF will be paid dividends twice a year if warranted by retained earnings.

“Furthermore, individual investors will enjoy an eight-year exemption on taxes on dividends,” Chuvinda said.

Prapas Kong-ied, director-general of the State Enterprise Policy Office, said: “The TFF will allow the government to raise funds for its infrastructure projects without having to put pressure on its annual budget.

“Instead of waiting for 30 years, the government can raise the same sum of capital immediately and start investing in its projects today to develop the economic structure of the country.”

Suchart Cholsakpipa, governor of the Expressway Authority of Thailand, conceded that the delays to the IPO launch could have made some investors hesitant.

However, with the units offered amounting to a capital value of Bt 44.7 billion, the official pointed to the TFF’s distinction in being |the biggest IPO in the region this year.

Stable investment

Prapas said the TFF presented a stable and safe choice for investors, allowing them to diversify their risks by investing in the infrastructural development of the country.”

Chuvinda said projections for the revenue growth for both expressways are set at 4 to 5 per cent for the next year.

All investors in the TFF are based in Thailand, split evenly between the retail and institutional sides, she said.

The two expressways have a total length of 83.2 kilometres. The Chalong Rat Expressway links Bangkok’s central business district with the northern residential district.

The revenue prospects for the expressway are very promising, Chuvinda said.

“This is because we have seen a growing volume of traffic as the residential area in the northern region of Bangkok continues to grow,” she said.

The Burapha Withi Express-way, which links Bangna in the south of Bangkok to Chon |Buri province on the Gulf of Thailand, has high potential for growth as it links Bangkok to the Eastern Economic Corridor (EEC), an special economic area which is targeted to be the technological manufacturing hub for Thailand and the Asean region, she said.

The Cabinet resolved that at a study be conducted to determine the feasibility of raising additional funds through the TFF to finance the toll-based operation of Motorways No. 7 (Bangkok – Ban Chang) and No. 9 (Bangkok Outer Ring Road).

“The current obstacle to including these two routes into the TFF has to do with legislation.

“I am currently working to amend these items of legislation so that they can be included in the TFF by next year,” Prapas said.

Drupa 2020 is projected to accommodate 1,850 exhibitors from around the world in Dusseldorf.

To be held from June 16-26, 2020, the event “will provide decisive stimuli to the global print technology industry”, said Sabine Geldermann, director of Drupa and global head for print technologies at Messe Dusseldorf, which organises the event.

“2020 seems to be far away but it is only 20 months to go. So, we are in full swing for preparation,” she said at a public event on Tuesday.

“We are experiencing strong demand for exhibition space. Shortly after the official registration deadline, 80 per cent of the planned 160,000 square metre space is already booked.”

According to Geldermann, more than 1,300 exhibitors from 45 countries have so far confirmed they will showcase their innovative products and services at the event.

“I believe there will be more exhibitors who are eager to take part in our global portfolio, which is the key to future markets. I want Myanmar printing businesses to take advantage of our professionalism by joining us in 2020,” she said.

On top of printing and converting processes, the focus will be on package printing, industrial and functional printing as well as additive manufacturing. Geldermann considers the growth potential of inkjet as a key driver for innovation.

“It has become very clear that the fascination with print products increases with the constant development of technical possibilities. Print conquers new dimensions with haptic elements, innovative materials and embellishments opening a bright new world of customer experiences,” she said.

Geldermann said that future and cross-sectional technologies and global mega-trends have a major influence on the printing industry, and applications for organic and printed electronics, nanotechnology and all further developments resulting from Industry 4.0 will intervene in a large number of processes.

“As the meaning of Drupa goes, the event will bring together cutting-edge technologies and solutions that reach target groups in a wide range of markets,” said Geldermann.

Messe Dusseldorf is investing in digitalisation and optimisation of its exhibition centre. The company plans to invest 650 million euros to undertake the full-fledged modernisation of the centre by 2030. New facilities are expected to be functional by the third quarter of 2019.

“We expect to receive]a total of 44,000 people coming from Asia. Not only is the exhibitor side very dynamic, so too are the conference and education programmes that we will provide in cooperation with our partners,” she said.

As part of its strategic expansion in Southeast Asia, the company has appointed locally owned Su Shwe Nadi Trading and Consultancy Co as its representative in Myanmar. Geldermann urged Myanmar businesses to directly contact their local partner for any inquiries about the event.

Thet Su Hlaing, managing director of Su Shwe Nadi Co, is encouraging local businesses to join the event as a team from Myanmar.

“Myanmar people usually prefer individual efforts rather than teamwork. Some businesspeople are willing to attend the event, but I would recommend them going there as team so that we can represent our own country. Let’s strive for collective success,” she said.

She said a Myanmar presence at the event would help printing and packaging businesses achieve invaluable experience, an innovative mindset and motivation for the implementation of their plans.

“It is time for Myanmar businesses to learn about the latest printing technologies so they can catch up with the development |of the neighbouring countries,” |she said.

So now might be a good time for the two departments to review the current situation, now that companies are more familiar with the changes. After all, the Customs Act was the first major rewrite for a hundred years and took several years of drafting and discussion to finalise. And the Excise Act fundamentally changed the way that tax was collected.

The new Excise Act moved from using a percentage of the ex-factory price (or CIF price for imports) to using a lower percentage of the Suggested Retail Price (SRP). The overall objective of the change was to be tax neutral, so the same revenue would be collected. However, the initial indications are that collections are slightly below the budget (by around 3 per cent). It is always difficult to accurately assess the immediate impact of a big change, as excise tax payers will set new retail prices depending on potential excise tax. In future, every retail price increase will mean a corresponding increase in excise tax. That means brand owners may try to absorb cost increases until they have no choice but to increase prices.

One of the other major changes to the Excise Act was a move to more checks on audit rather than at the time of tax payment. There has not been a lot of visible audit activity yet, but the Excise Department is asking questions on cost structures and that often indicates an upcoming audit. Controlling taxes after the payment point is usually more cost effective for a government and the taxpayer, so this is a welcome change in principle. However, we need to see the approach to audits before knowing the actual impact. There is always the possibility of lots of questions with the burden of proof on the taxpayer. An audit should require the auditor to have reasonable doubt on the correctness of the declaration and the taxpayer should have a suitable opportunity to defend their position.

Watch this space on how audits will unfold, particularly as the new rules allow Excise Officers a reward of up to 20 per cent of any fines, capped at 5 million baht per case. The recent changes to the Customs Act also limited rewards to this same level, but the Excise rewards are newer and so the incentive to audit is strong.

The changes to the Customs Act were more about modernising the old rules, and were well over ten years in the planning and drafting stage. Key changes included the capping of rewards for Officers and informants, and significant reductions on penalties in court. This means more cases will be able to proceed past the Customs led Board of Appeals (BOA) to a hearing in court, which is a very welcome development.

One unwelcome side effect of the update was the large number of assessments made just before the new rules applied, in an attempt to grandfather the uncapped reward regime under the old laws. Several of those assessments have now been withdrawn but others are proceeding to the BOA and may well end up in court where the new lower penalties will apply if the importer (or exporter) is found guilty.

Thai Customs is looking at further reforms, and is continuing the very encouraging process of engaging with key stakeholders including the business community.

There has been a very successful outreach program to various Chambers of Commerce and Thai companies. Any company having dealings with Thai Customs that gets the chance to comment should do so as it really does help to shape the end result – as recent consultations have shown – as long as there is a ready supply of patience.

The next challenge for both the Customs Department and the Excise Department is how to balance their role as tax collectors with the need to facilitate legitimate trade and reduce compliance burdens. The Excise Department is likely to see an increase in the numbers of products covered, given it is an efficient tax to collect. The big question is how the Excise Department will take the cost breakdowns they have into an audit environment. In theory, the retail selling price is as uninfluenced as prices can be, but it’s another case of watch this space.

The Customs Department has a bigger challenge on how to streamline trade. Investors are looking for locations that provide certainty, security and cost effectiveness, and the customs process is a critical factor.

As Free Trade Agreements reduce duty collection, Customs needs to carry on supporting businesses whilst making sure that everybody plays by the rules. That means more initial trust and audits focussed on risks. When the new Export Controls rules are applied, that risk profile will need to be updated, and companies will need to be prepared. After all, the penalties are likely to be very significant and the scope for regular businesses to be caught up in the requirements will be very high.

Contributed by PAUL SUMNER, Partner and WIPHAWEE RUNGWANITCHA, Senior Manager of Customs & International Trade, PwC Thailand

However, due to current concerns about the pace of the baht’s appreciation, Standard Chartered Bank expects no further rate hikes in December, the bank’s economist, Tim Leelahaphan, said.

Yesterday, the baht weakened to Bt33.30 to the US dollar, its lowest in eight weeks.

“We expect the policy rate to end 2019 at 2.25 per cent with a 25bps hike each in the first and second half of 2019,” Tim said at a press conference yesterday.

The BOT has been slow to normalise its monetary policy when compared to neighbouring countries because of current worries about the baht’s rate of appreciation. In the first quarter of 2018, the baht rose by 4.5 per cent, a clear outperformer in Asia’s emerging markets, he said.

In the third quarter, Asia’s markets were negatively affected by the escalation of the US-China trade war. However, Thailand’s economy was seen as a safe haven in Asia for foreign investors and the baht even appreciated by 2.4 per cent, he explained.

However, in the fourth quarter, there is a slowdown in the baht’s appreciation, and the BOT is expected to hike interest rates in November, according to Tim.

Another motive for the BOT to normalise monetary policy at a faster rate than expected is the signal from the US Federal Reserve that it would increase the interest rate from 2.25 per cent to 2.50 per cent in December, and to 3 per cent by the end of 2019. The Federal Funds rate currently exceeds the BOT rate by 75bps.

If the Federal Reserve increases their interest rates even further, this will create a wide rate differential between the Federal Funds rate and the BOT rate. This gap between the two rates would encourage investors to shift their current investments in Thailand to the US. This may lead to capital outflows from the Kingdom, which makes it likely that the BOT will hike interest rates in November, Tim explained.

Despite these worries, Standard Chartered bank expects Thailand’s economy to grow by 4.5 per cent in 2019 on the back of political progress and long-term economic policies. The road to the election will lead to a wider distribution of capital to rural areas in the country, according to Tim.

Furthermore, the current economic policies are highly likely to be continued in the next government’s policies. This includes boosting Thailand’s exports to Cambodia, Laos, Myanmar and Vietnam, which has seen a 20-per-cent growth thus far in 2018, he said.

The government’s infrastructure investment plans in Bangkok and the Eastern Economic Corridor as well as its Thailand 4.0 policy are expected to boost the economy, leading to a strong economic year in 2019.

Meanwhile, the key risk factor for Thailand’s economy in 2019 is the tourism industry. Total hotel reservations are expected to be low from the fourth quarter of 2018 all the way to the first quarter of 2019, according to Tim.

“With no clear policy to win back Chinese tourists, which have declined since the fatal boat accident in Phuket in July, the tourism industry remains at risk in 2019,” said Tim.

These questions certainly challenge leaders to pull their organisations through the storm. But do you think existing marketing principles, approaches and strategies suffice the effort? Are there any new methodologies that remain unexplored?

I have worked extensively with many CEOs and top executives from numerous organisations and found many who are resilient to rapid changes whereas many others who are still reluctant as to where and how to begin the journey. Delving into the issue, we found the main reason for this problem being a trap of past achievements or dated approaches which inhibit a timely change.

Three risks of business crisis

A fast-moving world: The truth is even when we have 24 hours just like before but the world changes every second. Unlike the past, these changes are unpredictable and leave us with little to no time to brace for impact. Rather than being complacent, organisation leaders and their people should be vigilant for the quick and the unexpected, ready for impromptu correction and reskilling to thrive resiliently in the fast-changing business world.

Resting on your past achievements leads to a downfall: Be aware that new challenges and opportunities always come up in the disruptive business landscape.

Sticking to the old ways and past achievements is neither a way to survive nor a formula for sustainable success. Leaders must be able to rediscover how to deal with new challenges. Even recurring challenges that you’ve tackled before doesn’t necessarily call for the same approach every time. Good leaders shall demonstrate new and smarter ways to face recurring challenges more effectively.

Cosmetic change isn’t enough: Stop deceiving yourself that you’re abreast of others in the disruptive world if your change is only superficial. The needed change is actually not the minor adjustments but a multidimensional, radical transformation: to rework the entire organisation including structure, process, people and mindset. Even if you are already able to adapt quickly, bear in mind that this doesn’t guarantee that you would consistently stay ahead or others may not be able to surpass you.

As the world is getting increasingly complex and interrelated, to keep the leading pace or even to simply exist in today’s business world, the prerequisites have extended beyond knowing merely your competitors, the market shares, the world’s megatrends and consumer behaviours. Instead, to take the lead, you must explore new methods and that is finding your business empathic opportunities.

This is to say that, as the world becomes increasingly more complex and interdependent, it’s extremely critical that we train our ability to shift our perspective as a means to obtain greater understanding about a system to seek new prospects.

In details, empathy is about understanding and about seeing the perspective of others. It isn’t at all about being soft or weak and has nothing to do with sympathy. Take a look at the most successful examples of empathy.

First, Satya Nadella, CEO of Microsoft has used empathy to revive the falling company. He didn’t only bring the company out of impending doom, but also significantly increased market value. And he did all that by transforming the mindset of Microsoft and its people from ego to empathy.

Second, Michael Ventura, CEO of award winning agency Sub Rosa, used the same concept of empathy to solve complex problems of his clients. They worked with General Electric (GE) on solving the problem of women’s fear of going to their mammography appointment. With empathy, they created a space for these women to share their experiences and through this, were able to solve the problem.

Both Nadella and Ventura proved that empathy isn’t a passing fad – it is a lifestyle that you as a business leader must live and inspire your people to live. Empathy can be practised in many different ways and it can be used to solve problems.

In this highly disruptive world where changes become the new normal and problems become complicated, to solve them in the most effective way, taking into account the different angles of the problem is necessary. With empathy, you might even come up with a hybrid of different solutions that can solve even the most complex problems in your organisation.

But this can only happen if you’re willing to open your mind.

When there’s so much proven power that empathy holds, shouldn’t you grab that opportunity and bring your organisation to a whole new level of success?

Contributed by Arinya Talerngsri, Chief Capability Officer and Managing Director at SEAC (formerly APMGroup), Southeast Asia’s leading Executive, Leadership and Innovation Capability Development Center.

She can be reached by email at arinya_t@seasiacenter.com or https://www.linkedin.com/in/arinya-talerngsri-53b81aa

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