Krungthai set to launch Thailand’s first index linked note investing in 4 megatrends and ESG
Krungthai is launching “Krungthai iSTOXX® Global Transformation IXGTRSND Index Linked Note” which focuses investment in industries riding the 4 megatrends of global transformation and adhering to ESG principles.
Continuing to develop products and services that meet future investment needs, Krungthai is launching “Krungthai iSTOXX® Global Transformation IXGTRSND Index Linked Note” which focuses investment in industries riding the 4 megatrends of global transformation and adhering to ESG principles. The 4 megatrends include Connected World, Industry 4.0, Sustainable Growth and Better Healthcare – making the index linked note the first product of its kind in Thailand. It also boasts full principal protection and sustainable returns.
Rawin Boonyanusasna, Senior Executive Vice President, Head of Global Markets Group at Krungthai Bank
Rawin Boonyanusasna, Senior Executive Vice President, Head of Global Markets Group at Krungthai Bank, said that following the successful sale of the luxury-themed index linked note with full principal protection in June 2021, which was well-received beyond expectations by both new and existing customers, Krungthai Bank has speeded up the issuance of “Krungthai iSTOXX® Global Transformation IXGTRSND Index Linked Note”, a 5-year note linked to iSTOXX® thematic index which focuses the investment in companies that benefit from global future and ESG trends, e.g. Verizon, one of the leading 5G providers; Pfizer, a Covid-19 vaccine manufacturer; and Gilead Sciences, the manufacturer of covid-19 prodrug Remdesivir. The new index linked note boasts full principal protection if held until maturity and periodic principal repayment over the 5-year life of the note. The Krungthai iSTOXX® Global Transformation IXGTRSND Index Linked Note will be available for sale between 6 – 9 September, 2021.
As the world has been going through drastic transformation, with the spread of Covid-19 as an accelerator, behavior of consumers around the world has significantly changed. Technologies and online lifestyles have become more common in people’s lives, especially in the areas of shopping, working, education and healthcare. These changes are reflected in the 4 megatrends and the companies operating in businesses along the trends can expect high growth potential. The 4 megatrends are 1) connected world via 5G, cloud computing and video gaming; 2) Industry 4.0 and Internet of Things becoming increasingly important in people’s daily lives such as the use of artificial intelligence (AI) in devices, applications and social media; 3) sustainable growth and the use of renewable energy such as electric vehicles; and 4) better healthcare, which has gained more attention after the spread of Covid-19, and the adoption of technology in vaccine development, medical treatment and preventive healthcare such as biotech and robotic surgery to ensure better health and quality of life. “These megatrends bring us the new investment opportunities benefiting from world class companies evolving in the global waves of change. The iSTOXX® Global Transformation IXGTRSND Index Linked Note does not only offer the investors the upside exposure on the Global Transformation trend, but also the advantages of this note, including a full principal protection by the AA+ rated Krungthai Bank and the periodic principal repayment over the note’s 5-year life,” added Mr Rawin. For more information, contact any Krungthai Bank branch nationwide or call 02-208-4691 and 02-208-4673.
Digital transformation ‘exploding’ in Southeast Asia: Deloitte
The pace of digital transformation in Southeast Asia has exploded, according to Deloitte’s latest report on Covid-19’s impact on the business environment.
“Crisis as Catalyst: Accelerating transformation” reveals that many Asia Pacific businesses believe they are well on their way to becoming more resilient in a post-pandemic environment, said Deloitte. More than two-thirds of business leaders surveyed expressed high confidence in their company’s outlook over the next 12 months, it added.
Data from the report shows:
• Sixty-nine per cent of Asia Pacific companies surveyed said the pandemic significantly accelerated their digital transformation – not just sparking but exploding the pace of adoption.
• Sixty-three per cent of companies expect to form new partnerships and alliances.
• Sixty-seven per cent of respondents believe supply chains need to be redesigned as a direct result of the pandemic.
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Digital transformation ‘exploding’ in Southeast Asia: Deloitte
In the survey of 2,750 private company executives across 33 countries between January 21 and March 9, Deloitte found that a majority of organisations are now building their resilience across seven key elements: strategy, growth, operations, technology, workforce, capital and society.
“This research resonates with many of Deloitte’s private clients in Southeast Asia, where the pandemic has pushed leaders to speed up their transformations to meet the challenges of a dynamic, uncertain environment,” said Richard Loi, Southeast Asia and Singapore Deloitte private leader.
“Digital solutions are becoming increasingly important for companies as CEOs seek to optimise the present while building a platform for future innovation and competitive advantage.”
A majority of respondents believe their company will snap back from the crisis during the next 12 months, said Deloitte. It added that companies appear to have laid the groundwork for workforce changes through flexible workforce arrangements and by redesigning their organisations to be more agile and accomplish more with smaller, independent teams, including:
Emphasis on digital transformation’s benefits
Executives have broad expectations about the gains technology investments will deliver for their private organisations, and they plan to continue to increase the breadth of their technology investments. For example:
• Highly resilient organisations were nearly twice as likely (80% versus 43%) as those with low resilience scores to say that their digital transformation had begun before the crisis or is currently underway.
• The difference in how highly resilient companies view the importance of digital transformation to their growth versus those with low resilience was 18 percentage points.
Companies are also spending on technology in other areas. In the next 12 months, information security is primed to be the most popular technology spending area according to 39% of respondents, followed closely by cloud computing (38%) and data analytics (37%).
A sharper focus on purpose
Purpose and trust have always been intertwined in the culture and foundation of private companies but took on greater importance in 2020. The report unveiled that:
• Nearly 70% of the respondents said purpose increased in importance for their organisation as a direct result of the COVID-19 crisis.
• Highly resilient organisations were at the forefront in this respect, with 84% of the executives from these organisations saying they sharpened their focus on purpose.
C.P. adjusting to post-pandemic world – focuses on collaborations and overseas expansions
Unveils four strategies for post-pandemic world. Adopting ‘Platforms of Opportunity’ business model to collaborate with more Thai businesses to reach into new overseas markets
Charoen Pokphand Group (C.P. Group) Chief Executive Officer Mr. Suphachai Chearavanont, today, announced corporate business strategies to prepare for the post-pandemic world that will focus one of Thailand’s most diversified business enterprises with over 400,000 staff on accelerated overseas expansion and alliances with other Thai businesses.
Mr. Chearavanont said that the COVID-19 pandemic has “transformed the business environment, catastrophically affecting SMEs in Thailand, and at the same time also creating very large international corporations, some of which are now valued at more than the GDP of many of the world’s countries.”
He said that both of these developments “affect Thailand’s global competitive standing as well as the health of its local economy by weakening its backbone of SMEs.”
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According to Mr. Chearavanont, C.P. Group will drive four strategies that include “accelerating its investments; accelerating the pace at which the group goes global; simplifying group structures of companies for added agility and speed; as well as creating commercial platforms to increase collaboration with other businesses and growers, especially in penetrating overseas markets.”
“We must not scale back investments because of the pandemic, but, on the contrary, accelerate current and new projects as a way of creating new jobs and new contracts, especially for the more than 1.2 million SMEs and small-holder farmers with which we collaborate directly and indirectly.
“The spending of the group’s various businesses should have a flow-through effect into many communities and businesses of all sizes, combined with the almost two billion baht the group has donated for assistance since the beginning of the pandemic,” he said.
Overseas investments are also being accelerated and he expects “multiple large initiatives to progress rapidly this year that can increase the footprint of Thai businesses in international markets.”
Mr. Chearavanont said that there would also be simplification of some complex group structures of companies that are organised in 14 business groups.
“We want to enable our companies to make faster decisions on joint initiatives in a world that demands great speed,” he said.
“We must accelerate the pace at which we go global. And we must help other Thai businesses go global with us.” – Suphachai Chearavanont, CEO C.P. Group
Mr. Chearavanont added that the most important initiative in preparing for the post-pandemic world is for C.P. Group companies to “go beyond creating, producing or selling products and services, to also becoming platforms that empower SMEs and other businesses to develop new opportunities for growth in Thailand and globally.”
As a part of a programme that he called the creation of ‘Platforms of Opportunity,’ Mr. Chearavanont said that C.P. Group is developing systems that will help other Thai businesses and growers enter foreign markets by working together with C.P. Group companies.
“When any Group company succeeds in establishing itself in an overseas market, it should also help tens, hundreds, or maybe even thousands, of Thai SMEs, or farmers, or other producers to go into those markets. SMEs are generally unable to afford the risks and difficulties of trying to enter international markets. And often, they cannot succeed against the entrenched commercial networks of those countries. If we consolidate their collective capabilities on any of our commercial platforms, we can give them the power of much larger companies and help them obtain the market access that only the largest Thai corporations can secure in foreign countries. It will unlock enormous, new economic potential that will bring added prosperity to millions, while also reinforcing the C.P. Group’s footprint internationally through a win-win arrangement.”
Mr. Chearavanont said that the ‘Platforms of Opportunity’ business model is one of the best ways to strengthen Thailand’s interests in the new, post-pandemic world because “it empowers and mobilises on the global stage the capabilities of tens of thousands of SMEs and other Thai enterprises.”
“Thai companies must collaborate on a level they’ve never done before to create a collective power that can protect Thailand’s place in the future global economy. Just as the world’s giant companies in the United States or Europe or China or Japan or Korea support and strengthen their home countries and home companies while also adding value to their host countries, so, too, must we do the same, in accordance with our Three-Benefit Principle. The Principle states that the consideration of benefits should be, first and foremost, to our country of investment, second to the community, and lastly to the company, in that order,” he said.
A Chula marketing expert has offered SMEs three tips for boosting their food delivery businesses – know your strengths, know your customers, and use eye-catching food images.
Food delivery is a fast-growing business during Covid-19, when customers are often reluctant to leave their homes or offices. More customers naturally generate a higher number and variety of sellers.
With the online food delivery business becoming increasingly competitive, Asst Prof Kritinee Pongtanalert, Department of Marketing, Faculty of Commerce and Accountancy, Chulalongkorn University, shares some marketing techniques to increase sales for small food business owners who may not be familiar with online platforms.
“If you want to start an online restaurant, the most important thing is to determine what food you wish to sell and to whom. Every restaurant has a menu, but you have to know what you will sell and to which customers. Who will be happy to receive your products and services?”
Create a clear selling point
For all types of restaurants, big or small, promoting their strengths or selling points is essential. Business owners need to analyse the strengths of the food they sell, to better communicate the restaurant’s identity to customers. Selling points can be divided into three categories:
1. Selling taste
Restaurant owners must be able to answer the following questions: What taste was the restaurant famous for before the Covid-19 crisis? Which are the flagship dishes that are famous and memorable for customers?
2. Selling speed
Restaurants famous for their speed always prepare some food ahead, such as grilled pork and fried chicken. When customers order, they are ready to cook the food a little more and then pack it for immediate delivery. This is a strong point for customers who want fast food or are in a hurry. It’s even better yet if you can specify the delivery time in minutes.
3. Selling convenience
Some customers want to eat late at night when most restaurants are closed. Restaurants that can open during this period when choices are limited will stand out to customers. In addition, you may add other conveniences, such as free drinks or offering discounted drinks with food purchases. Offering value meals, or family sets also adds charm and ease of ordering.
Moreover, some stores also increase sales with fun activities to engage customers, such as ice cream shops that invite customers to add their own choice of toppings or shabu-shabu restaurants that offer to sell electric hotpots with the food.
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What food are you selling? Who are your customers?
Shop owners must first decide “what to sell” and “whom to sell to” by clearly defining their target audience. Do not think that you will sell to everyone, because you can’t reach all groups of people. Make this mistake and you may not sell to anyone.
If we take the example of fine dining restaurants, they usually sell food with luxurious service. Making advanced reservations is necessary and customers often come in groups such as families. During the pandemic, a posh restaurant with elegant decor and impressive service is meaningless. These restaurants need to adapt to survive by turning to full online operation. The owners also have to design new menus to meet the needs of the whole family, while lowering prices. A limited number of sets should be offered daily to ensure efficient management of raw ingredients while maintaining the same standards of quality in food taste, reputation and care.
The above example shows that even with the new model, the usual target customers can still be reached. This also presents a new selling opportunity in the online market, where they can get to know new customers as well. A systematic analysis like this will benefit business owners in designing food sets based on customer behaviours and sizes. Those who want to know their customers better can compile data on best-selling items (single sets, couple sets, or party sets). This will provide the restaurateurs with customer insights.
How to make customers choose your restaurant?
Many customers buy food on a mobile application without choosing their restaurant in advance. This group of customers presents a golden opportunity for the restaurant to showcase itself with food images known as “finger-stopping shots”. This technique is powerful because many customers scroll through the screen until they stumble upon eye-catching food photos. Some restaurant owners trust their food quality and taste but underestimate the potential of marketing communication. There is no denying that in an online marketplace filled with hundreds of thousands of dishes, pictures that are worth a thousand powerful words have a powerful influence on purchase decisions.
1. Showcase flagship dishes instead of the restaurant name
If the customers do not specify the restaurant, they are always on the lookout for familiar restaurant names to reduce the risk of being disappointed by new restaurants. Promoting just one dish or a special product as the top-of-mind image is more effective than presenting a full menu of delicious dishes but that customers won’t remember. More importantly, this will help entrepreneurs to plan orders of raw ingredients that closely match actual sales. This is another tip for success in online business management.
2. Catchy name, memorable menu so customers know what you sell
Business owners should create memorable names and menus that appeal to customers, reflecting their speciality. This will attract customers’ attention and make it easy to recall and communicate what your restaurant sells. The name should not be too peculiar, or so far-fetched that customers cannot figure out what you sell and may reject your brand, hurting the reputation of the restaurant.
How to get repeat business
Displaying too many food images on the screen to reflect a wide variety of products may confuse customers with too many choices. Selective display of food items complemented by a solid pricing strategy will help customers make quicker decisions. Initially, you may offer a food combo in a set meal of complementing items, such as rice and soup with a free drink, or offer sets by the number of people, like personal sets, sets for two, family sets, or office sets.
The bundle sale technique is also effective. You can offer other menu items at a special price with an order of a regular meal set. This technique can help increase sales volumes: for example, if a customer buys a single dish, you can offer a drink for a little more. The important thing that will make customers come back again is their first impression– of the food taste, products that fit the descriptions, speedy service and charming touches like a thank-you card from the chef or a gift.
How Covid-19 propelled digital disruption transformed Thailand’s business sector
A vast majority of businesses have been driven by digital disruption globally with most executives admitting its transformative impact to an extent. It is, therefore, crucial to identify digital disruption perspectives and approaches to digital implementation in Thai companies.
“Deloitte Thailand conducted its first Thailand Digital Transformation survey in November 2019 to early January 2020. With the unprecedented Covid-19 global pandemic later in 2020 and its seismic impact, a pulse survey was commissioned covering November 2020 to January 2021 as a follow-up to gain an understanding of the pandemic’s impact on digital transformation in Thai businesses. The annual Thailand Digital Transformation Survey intends to serve as a benchmark of sentiment on the progress of digital transformation in Thailand,” said Dr Narain Chutijirawong, executive director of Deloitte Thailand’s clients and industries division.
The two surveys focus on the following topics to draw a comparative analysis of digital transformation implementation before and during the Covid-19 pandemic:
• Interpreting perceptions towards digital disruption
• Exploring digital transformation implementation
• Pinpointing digital transformation skill demand
• Identifying areas of government support in digital transformation
The respondents of both surveys hold managerial positions. For instance, 19 per cent of respondents in the primary survey are members of the board of directors and 16 per cent are CFOs. Meanwhile, for the pulse survey, 34 per cent were CFOs, 30 per cent CIOs or equivalent and 13 per cent members of the board.
The consumer sector has been the leader in adopting basic technology such as traditional web, mobile applications and cloud before and after the Covid-19 pandemic.
For instance, the traditional web was adopted in 79 per cent of companies, rising to 95 per cent after Covid-19.
This sector also surpassed the technology, media and telecom sectors in adopting advanced technology including blockchain, artificial intelligence and the Internet of Things, with the adoption of AI rising from 4 per cent before Covid-19 to 35 per cent after.
Financial services as well as life sciences and healthcare sectors pushed their digital transformation plan after the arrival of Covid-19. The two sectors, however, face recruitment issues for the key positions of data analysts and scientists.
Up to 56 per cent of companies are now at the “digital adopter” stage after the arrival of Covid-19 compared to 12 per cent earlier, shifting from 59 per cent in the digital evaluator stage to 12 per cent after Covid.
Furthermore, the implementation of advanced technology, except robotics, and basic technologies has increased in the post-Covid-19 era. For instance, a 19 per cent increase in Cloud technology adoption rate was found as well as a 16 per cent increase in the Internet of Things and a 15 per cent increase in mobile applications. This indicates a digital adoption of all technologies across business sectors at a rapid pace during the Covid-19 period.
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Viney Hora, executive director of Deloitte Consulting, said: “The major challenge in implementing digital transformation is not the technology itself, but rather a lack of internal and external expertise in the relevant fields. Thai corporates reveal the three main challenges they face include talent gap, digital culture and organisation silo. All of which have almost nothing to do with technology but revolve around recruiting people with the right skill to get the job done.”
According to the survey, in 2020, analytical thinking and innovation, as well as active learning and learning strategies, ranked first among the country’s skill demand, which aligns with the global market’s expected skill demand in 2025. The outcome also demonstrates that Thailand is moving in the same direction as the international market.
“The higher digital transformation rate coupled with an immense and unforeseeable impact from the Covid-19 pandemic across all businesses is evident. Businesses should therefore be more vigilant about the digital transformation movement and the digital environment in the market especially during this period of turmoil,” added Dr Narain.
Digital Marketing in 2021: How SEO Has Become an Essential Part of Online Strategy for Businesses
68% of online experiences begin with a search engine, do business owners really realize just how essential SEO has become today as an online marketing strategy? Many actually don’t, and therefore tend to take it lightly.
It is generally known that search engine optimization (SEO) is what a business owner does to ensure their digital properties (such as web pages) can be found online when their target audience searches the web with keywords related to their industry, products or services.
But, given that 68% of online experiences begin with a search engine, do business owners really realize just how essential SEO has become today as an online marketing strategy? Many actually don’t, and therefore tend to take it lightly.
No wonder the experts at Inspira Digital Agency here in Thailand see the need to highlight how SEO has become the key to digital marketing success for businesses in 2021 and beyond.
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Digital Marketing in 2021: How SEO Has Become an Essential Part of Online Strategy for Businesses
First, it’s important to understand that organic search today is the major source of website traffic for businesses, whether small, medium, or large. In fact, according to research by Bright Edge, up to 53.3% of all website traffic comes from organic search; and Google, as the organic search market leader, controls a whopping 92.96% of this organic search traffic.
What this tells us is that PPC campaigns, social media and other traffic sources pale in comparison to organic search when it comes to traffic generation, and SEO happens to be the only way business owners can claim their share of organic traffic.
When it comes to building trust and credibility, and being recognized as an industry authority, any business with an online presence simply cannot disregard SEO. As Cookie Veeratat, Account Manager at Inspira Digital Agency, states, “our clients are beginning to understand more and more, the necessity of SEO to strengthen their target consumers’ perception of their brand as an industry authority.”
She further explained that “this could be as a result of them coming to realize that the more their target audience keep seeing their brand name and web pages on the number one search engine results page of a leading search company like Google when they search for pertinent information, the more these consumers will regard their business as relevant, credible, and authoritative.”
For a brand looking to build authority and trust which are vital for success in marketing, ranking its web pages high on Google’s (or any other search platform’s) SERPs can only be achieved with good SEO, which accounts for optimized content and on-page elements, quality backlink profiles, positive user behavior, and machine-learning signals.
As the use of mobile devices to access the web continues to grow, so does the need for small and medium-sized businesses to optimize their web pages for local search. Consumer insights obtained from a study by Think with Google have it that 30% of all mobile searches are related to location, and 76% of people who use their smartphones to search for nearby products and services visit a business within a day.
Digital Marketing in 2021: How SEO Has Become an Essential Part of Online Strategy for BusinessesSo local SEO, which involves the optimization of digital properties for a particular locality such as a town or city, ensures consumers who are in the same vicinity as a locally optimized business can find it quickly and easily.
Commenting on how essential local SEO can be for businesses, Xavier Cloitre, Managing Director of Inspira Digital Agency, notes that “local SEO is a sure way to increase engagement, traffic, and conversions.” Going further, he revealed that “in order to boost engagement on the local level, the first thing our SEO pros do is to optimize a brand’s Google Business Profile, its Knowledge Graph panel, and its social media profiles…”
Ultimately, in order to market better to their target audience and position their brand for constant growth, business owners need a good knowledge of the web environment, the tactics used by their competitors, and their own level of performance at any point in time. The good news is that the process of SEO can equip them with such useful insights as it incorporates in-depth research, tracking, and analytics.
“The bottom line remains that the essentiality of SEO as part of the online strategy of businesses today and in the future cannot be overemphasized – it is absolutely necessary for successful marketing,” Cookie Veeratat concludes.
Digital Marketing in 2021: How SEO Has Become an Essential Part of Online Strategy for Businesses
About Inspira Digital Agency
Inspira Digital Agency is a full-service digital marketing and SEO Company in Thailand focused on helping businesses achieve their online marketing goals. Find out more about how Inspira creates and executes effective digital strategies at inspiradigitalagency.com. You can also reach out via contact@inspiradigitalagecy.com, or call +66 (0)8 1466 7837.
Nu To Van Partner, Tax & Legal – Global Trade Advisory Deloitte Thailand Tom Cachet Manager, Tax & Legal – Global Trade Advisory Deloitte Thailand
After a year completely disrupted by the Covid 19 pandemic, there were some indications by the beginning of 2021 that Thai Customs had picked up their audit activities on importers, most likely to make up for the limited controls on imports that preceded and in search of foregone duty and tax revenue.
Companies, which are audited by Customs, are at risk of having to pay back duties and VAT together with fines, penalties surcharges in case of non-compliance issues.
However, by April of 2021, a third Covid-wave hit Thailand and Customs decided to scale back their enforcement activities in an effort not to place an undue burden on companies already suffering from the pandemic.
To disclose or not to disclose?
Temporary incentives for self-disclosure of non-compliance to Customs
Instead, incentives are being made available to companies to self-disclose non-compliance issues with duty and tax exposures. The One-Stop-Service for Additional Duty Payment (One-Stop-Service Program) already allows importers to disclose self-identified import duty/VAT shortfalls centrally to Customs Headquarter. As long as the importer can prove that there was no intention to evade duties, Customs would waive the customs fines. This program still runs until 30 September 2021.
In addition, a new Ministerial Regulation was released on 28 May 2021 to reduce monthly duty surcharges to 0.25% of any outstanding duty payable for those companies making a self-disclosure to Customs. Duty surcharges are calculated monthly on top of the duty shortfall amount, which is either detected by Customs or self-disclosed by the importer, from the date of import/export until the date of payment (but capped at the total amount of duty shortfall). Normally, duty surcharges range from 0.25% to 1%, depending on when payment is made. However, under the new Ministerial Regulation the percentage is fixed at 0.25% regardless how far back the import/export is dated.
The duty surcharge reduction is a temporary relief measure in response to the lingering Covid situation in Thailand, and applies from 1 June until 30 September 2021.
By promoting both a waiver on customs fines and a reduction of duty surcharges in case of a self-disclosure, Customs is making an attempt to convince companies to independently come forward with any self-assessed non-compliance findings. This will still allow them to secure some duty revenue despite not being able to conduct their usual audit activities. Now may be the time for companies to seriously consider taking them up on their offer. After the relief measures expire on 30 September 2021, and if the situation allows it, Customs is expected to increase their audits once again.
What to look out for?
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Some of the typical non-compliance issues that Customs assessed companies for before restricting their audit activities were related to the use of Free Trade Agreements (FTAs), payments of royalties and declaration of tariff code (HS codes).
Importers who make use of FTAs to obtain import duty privileges must present to Customs a Certificate of Origin (CO) issued in the exporting country. Thai Customs is known to rigorously verify whether COs have been completed in accordance with FTA guidelines and are consistent with other submitted customs documentation such as the import declaration, invoice and bill of lading. If any errors or inconsistencies are detected, the duty privileges are usually denied. One area that has caught Customs’ recent attention was related to FTA imports that involved multiple party sales transactions and “breakbulk” transactions in an intermediary country where a regional distribution center is located.
Currently, these kind of transactions are only allowed under the ASEAN FTA. Using the same kind of transactions under different FTAs are currently not allowed in Thailand and can lead to claw back of duties and taxes together with fines and penalties for historic shipments.
Another area is related to the declared value of imported goods. During audits, Customs normally reviews whether any additional payments (e.g. for royalties or license fees) were made on top of the price of the imported goods. In case Customs views that these payments should be dutiable, Customs will reassess the original declared value and claw back duties with fines and penalties.
Finally, tariff codes (HS codes) have traditionally been a hot target area for Customs challenges given the ambiguity of the classification system and the possibility for Customs to opt for codes which would normally attract higher duty rates. Companies must review whether they have been declaring tariff codes that can be defended in accordance with the customs classification rules and if not, consider whether to make a change and disclose past mistakes.
What’s next?
Given that Customs has temporarily decided to scale back their enforcement activities, companies are encouraged to conduct an internal review of their company’s import/export activities to determine whether they have complied with customs rules and regulations or not and identify potential risks and exposures. If any significant non-compliance is identified, it may be worthwhile to make the self-disclosure to Customs before 30 September 2021 to mitigate the potential financial exposure in the future and close the issue.
On the other hand, companies must keep in mind the possibility that following a self-disclosure Customs could expand investigations into other customs issues. Therefore, companies must have a clear picture of their customs risk areas and exposures before deciding to proceed with the self-disclosure.
With only limited time before the self-disclosure incentive programs close, now may be a good time for companies in Thailand to start reviewing their import and export activities.
U.S. water and power are shockingly vulnerable to cyberhacks
When the Los Angeles Department of Water and Power was hacked in 2018, it took a mere six hours. Early this year, an intruder lurked in hundreds of computers related to water systems across the U.S. In Portland, Oregon, burglars installed malicious computers onto a grid providing power to a chunk of the Northwest.
Two of those cases — L.A. and Portland — were tests. The water threat was real, discovered by cybersecurity firm Dragos.
All three drive home a point long known but, until recently, little appreciated: the digital security of U.S. computer networks controlling the machines that produce and distribute water and power is woefully inadequate, a low priority for operators and regulators, posing a terrifying national threat.
“If we have a new world war tomorrow and have to worry about protecting infrastructure against a cyberattack from Russia or China, then no, I don’t think we’re where we’d like to be,” said Andrea Carcano, co-founder of Nozomi Networks, a control system security company.
Hackers working for profit and espionage have long threatened American information systems. But in the last six months, they’ve targeted companies running operational networks like the Colonial Pipeline fuel system, with greater persistence. These are the systems where water can be contaminated, a gas line can spring a leak or a substation can explode.
The threat has been around for at least a decade — and fears about it for a generation — but cost and indifference posed obstacles to action.
It isn’t entirely clear why ransomware hackers — those who use malicious software to block access to a computer system until a sum of money has been paid — have recently moved from small-scale universities, banks and local governments to energy companies, meatpacking plants and utilities. Experts suspect increased competition and bigger payouts as well as foreign government involvement. The shift is finally drawing serious attention to the problem.
The U.S. government began taking small steps to defend cybersecurity in 1998 when the Clinton administration identified 14 private sectors as critical infrastructure, including chemicals, defense, energy and financial services. This triggered regulation in finance and power. Other industries were slower to protect their computers, including the oil and gas sector, said Rob Lee, the founder of Dragos.
One of the reasons is the operational and financial burden of pausing production and installing new tools.
Much of the infrastructure running technology systems is too old for sophisticated cybersecurity tools. Ripping and replacing hardware is costly as are service outages. Network administrators fear doing the job piecemeal may be worse because it can increase a network’s exposure to hackers, said Nozomi’s Carcano.
Although the Biden administration’s budget includes $20 billion to upgrade the country’s grid, this comes after a history of shoulder shrugging from federal and local authorities. Even where companies in under-regulated sectors like oil and gas have prioritized cybersecurity, they’ve been met with little support.
Take the case of ONE Gas Inc. in Tulsa, Oklahoma.
Niyo Little Thunder Pearson was overseeing cybersecurity there in January 2020 when his team was alerted to malware trying to enter its operational system — the side that controls natural gas traffic across Oklahoma, Kansas and Texas.
For two days, his team was in a dogfight with the hackers who moved laterally across the network. Ultimately, Pearson’s team managed to expel the intruders.
When Richard Robinson at Cynalytica fed the corrupted files into his own identification program, ONE Gas learned it was dealing with malware capable of executing ransomware, exploiting industrial control systems and harvesting user credentials. At its core were digital footprints found in some of the most malicious code of the last decade.
Pearson tried to bring the data to the Federal Bureau of Investigation but it would only accept it on a compact disc, he said. His system couldn’t burn the data onto a CD. When he alerted the Department of Homeland Security and sent it through a secure portal, he never heard back.
Robinson of Cynalytica was convinced a nation-state operator had just attacked a regional natural gas provider. So he gave a presentation to DHS, the Departments of Energy and Defense and the intelligence community on a conference call. He never heard back either.”We got zero, and that was what was really surprising,” he said. “Not a single individual reached back out to find out more about what happened to ONE Gas.”
The agencies didn’t respond to requests for comment.
Such official indifference — even hostility — hasn’t been uncommon.
The 2018 break-in to the L.A. water and power system is another example.
These weren’t criminals but hackers-for-hire paid to break into the system to help it improve security.
After the initial intrusion, the city’s security team asked the hackers to assume the original source of compromise had been fixed (it hadn’t) while hunting for a new one. They found many.
Between the end of 2018 and most of 2019, the hired hackers discovered 33 compromised paths, according to a person familiar with the test who wasn’t authorized to speak publicly. Bloomberg News reviewed a report produced by the hackers for Mayor Eric Garcetti’s office.
It described 10 vulnerabilities found during their own test, along with 23 problems researchers had discovered as early as 2008. (Bloomberg News won’t publish information that hackers could use to attack the utility.) The person familiar with the operation discovered that few, if any, of the 33 security gaps have been fixed since the report’s submission in September 2019.
It gets worse.
Soon after the hackers produced the report, Mayor Garcetti terminated their contract, according to a preliminary legal claim filed by the hackers hired from Ardent Technology Solutions in March 2020. The company alleges the mayor fired the hackers as a “retaliatory measure” for the scathing report.
Ellen Cheng, a utility spokeswoman, acknowledged that Ardent’s contract was terminated but said it had nothing to do with the report’s substance. She said the utility frequently partners with public agencies to improve security, including scanning for potential cyber threats.”We want to assure our customers and stakeholders that cybersecurity is of the utmost importance to LADWP and that appropriate steps have been taken to ensure that our cybersecurity is compliant with all applicable laws and security standards,” Cheng said in a statement.
Garcetti’s office didn’t respond to a request for comment.
The case of the Oregon network — the Bonneville Power Administration — is no more encouraging.
The testing went on for years beginning in 2014 and involved an almost shocking level of intrusion followed by a pair of public reports. One published in 2017 admonished the agency for repeatedly failing to take action.
By 2020, two-thirds of the more than 100 flaws identified by the Department of Energy and the utility’s own security team hadn’t been resolved, according to interviews with more than a dozen former and current Bonneville security personnel and contractors and former members of the Department of Energy cyber team, in addition to documents, some accessed via Freedom of Information Act request.
Doug Johnson, a spokesperson for Bonneville, didn’t respond to requests for comment on whether the vulnerabilities have been resolved, including some detailed in documents reviewed by Bloomberg in 2020.
Dragos estimated in its 2020 cybersecurity report that 90% of its new customers had “extremely limited to no visibility” inside their industrial control systems. That means that once inside, hackers have free rein to collect sensitive data, investigate system configurations and choose the right time to wage an attack.
The industry is finally focused on fighting back.
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“If the bad guys come after us, there has to be an eye-for-an-eye, or better,” observed Tom Fanning, chief executive officer of Southern Co., at a conference this week. “We’ve got to make sure the bad guys understand there will be consequences.”
Published : June 13, 2021
By : Syndication Washington Post, Bloomberg · Kartikay Mehrotra
Covid third wave hurts economic recovery but export growth robust
The growth forecast for the Thai economy has been revised down to 1.9 per cent from 2.0 per cent for 2021 by the Economic Intelligence Unit (EIU) of Siam Commercial Bank.
The revised forecast follows downward revision of tourist arrival projections and the impact from the longer-than-expected domestic Covid outbreak, although the economy is propped by robust export recovery and government’s stimulus measures.
The EIU said the Thai economy was greatly impacted by the domestic pandemic resurgence, which is projected to take approximately four months (April-July) to contain, leading to significant decline in private consumption, especially face-to-face activities.
Bleak tourism prospects
Meanwhile, foreign tourist arrivals are projected at only 0.4 million people, despite reopening plans in the latter half of the year, as many countries remain cautious about easing restrictions for international travel due to concerns about new Covid variants. Subdued tourism will add to deeper economic scars among businesses and workers, particulary in tourism-related sectors, the EIU said. However, the Thai economic growth will not be much slower than the previous forecast, owing to robust export growth in line with the global economic recovery, especially among developed economies with accelerated vaccination pace.
Stimulus support
Another equally important push factor is the government support from the THB240 billion stimulus from the THB1-trillion loan decree, and a projected additional THB100 billion stimulus under the newly launched THB500-billion decree.
Going forward, the Thai economy is expected to gradually recover to reach pre-Covid levels in early 2023 and still face downside risks from the possible longer-than-expected pandemic containment timeline and slow progress in vaccination, which could delay economic recovery and make the economy more fragile, the EIU said. Therefore, improvement in the pace of vaccination to help boost confidence and jump-start short-term economic recovery, followed by economic restructuring towards the new normal, would be crucial for minimising permanent output loss for the Thai economy, the EIU added.
The global economic recovery is expected to be robust this year, but uneven across countries, mainly hinging on the effectiveness of pandemic containment, the vaccination pace, and the size of fiscal stimulus support.
The EIU revised its 2021 global economic growth projection to 5.8 per cent from the previous projection of 5.6 per cent. The global recovery is led by earlier lockdown easing among developed economies after rapid vaccination along with sizable and continuous fiscal support.
With improving consumer confidence, households may bring forward accumulated savings from last year and gradually spend on additional consumption.
Meanwhile, recoveries among emerging markets (EMs) will remain sluggish as delayed vaccinations have forced governments to prolong strict lockdown measures. Also, fiscal support for EMs are smaller in size due to limited fiscal space compared to developed countries, the EIU said.
Higher inflation
A strong recovery in global demand, together with limited global supply from shortages of some commodities and production factors, has caused inflation rates to rise across many countries. Recently, global inflationary pressures came from:
▪︎ pent-up demand and excess savings, causing prices of goods and services to spike after reopening;
▪︎ rise in commodity prices adding to higher production costs;
▪︎ continuous expansion of the global housing market, especially in developed countries such as the US and UK, leading to higher rental costs;
▪︎ higher wages as labour markets in some countries (such as the US) continued to be tight: low-wage workers have not yet fully returned to work as they are still discouraged by both the pandemic and generous fiscal support as unemployment benefits. Inflationary pressures are expected to gradually subside in the second half of 2021, as fiscal support measures are gradually wound up, commodity supply adjustments follow price increases, as well as from slowing wage pressure with more workers returning to the market. As of now, global inflation spikes have already caused government bond yields to rise in many countries.
Nonetheless, the EIU expects major central banks to maintain accommodative monetary policies.
Policy rates are expected to remain on hold, but central banks could start to signal tapering of quantitative easing (QE) in the latter half of this year, potentially leading to volatilities in asset prices and cross-country funds flows.
Exports lead the way
Thai exports have seen robust recovery in line with the improving global economy and trade. In the first four months of 2021, Thai exports, excluding gold, remarkably expanded 12.8 per cent year on year, and the expansion was broad-based across essentially all key products.
For the rest of year, speeding up global growth, particularly among developed countries, coupled with thriving prices of export products following rising commodity prices, should further boost Thailand’s export performance, especially during May-July with low base support, the EIU said.
With these factors, the EIU has revised Thailand’s exports growth projection up to 15 per cent from the previous forecast of 8.6 per cent. Thailand’s improving exports will help boost private investments, particularly in tools and machinery. Nevertheless, private construction investments remain largely subdued following sluggish recovery in the real estate sector.
Regarding tourism, the EIU has lowered the projection for foreign tourist arrivals in 2021 to 0.4 million, from the previously projected 1.5 million. Despite Thailand’s relaxation of lockdown measures to accept more foreign tourists, such as the Phuket sandbox, many countries are still imposing strict travel restrictions in fear of new virus variants. For example, the UK, despite high domestic vaccination rates, continues to maintain tight travel restrictions under Traffic Light system while UK returnees must be quarantined for durations according to the colour scale of their travel destinations. In the UK, countries are classified into red, yellow, and green scale, from strictest to most relaxed quarantine requirement. Thailand is in the yellow zone, requiring a 10-day home quarantine upon return to the UK.
If countries with early herd immunity like UK choose protective measures like the one in the UK, recovery for global travel could be further delayed. As a result, the EIC has adjusted foreign tourist arrival projection downward for this year.
On the domestic front, the economic damage from the third Covid-19 wave could be larger than expected. Even though the government has avoided strict lockdown measures to limit economic impacts, large and continuous spread of the pandemic has made residents more cautious about travel and significantly lowered their levels of economic activities, as suggested by high-frequency indicators such as various mobility data.
In its previous forecast, the EIU had projected that containment of the third wave could take up to three months. However, the situation has recently worsened from rising number of cases and clusters. The EIU now expects that this round of the pandemic could take up to four months to contain and cost around THB310 billion in economic damage to private consumption, including losses from declining domestic tourism.
Rising unemployment
The prolonged pandemic could potentially cause deeper economic scars.
Recent data indicated that unemployment rate rose again in the first quarter of 2021 to 1.96 per cent, from 1.86 per cent in the previous quarter. The number of unemployed people was at 0.76 million people, which already exceeded the number during the first lockdown last year. As rising unemployment in the first quarter has not taken into account the impact of the severe third wave, it is likely that Thailand’s unemployment rate could rise further this year, the EIU said.
At the same time, the average working hours shrank 1.8 per cent as the number of underemployed people (working less than 35 hours per week) rose, including 0.78 million furloughed workers who had not lost jobs but reported zero working hours. This furloughed worker figure more than doubled from 0.36 million in the previous quarter while the number of full-time and overtime workers decreased. In addition, work income, including salary, bonus, and overtime pay, significantly declined 8.8 per cent from the same period of last year across most major non-agricultural business sectors. Consequently, deeper scars in the labour market would negatively impact household incomes and confidence, resulting in slower consumption recovery and more sluggish restoration of household balance sheets from higher debt-to-income ratio, the EIU said.
Higher household debt
Thailand’s household debt-to-GDP ratio is expected to increase in the first quarter, due mainly to GDP contraction, and stay high throughout 2021 in line with ongoing debt forbearance measures.
With slow recovery of household income, debt overhang will be another obstacle for Thailand’s economic growth going forward, the EIU said.
Government fiscal support, with both on-budget and off-budget financing, will play crucial roles in shoring up economic growth in 2021. Regarding on-budget financing, the EIU expects construction investment in 2021 to expand 9.6 per cent from multiple construction projects, including the high-speed train between Bangkok-Nakhon Ratchasima, high-speed train linking three major airports, and dual-rail train etc.
Meanwhile, the off-budget financing would mainly come from the THB1-trillion loan decree with approximately THB530 billion of injection this year, consisting of THB290 billion approved before the third wave and an additional THB240 billion approved after the third wave, which depleted the THB1 trillion budget.
New relief measures include electricity and water fee subsidies, expansion of the Rao Chana and Mor33 Rao Rak Gun handout schemes, welfare card owner benefit payments, third-phase of Kon-la-krueng copayment scheme, and Ying-Chai-Ying-Dai subsidy. In addition, the government recently passed another THB500-billion loan decree with budget plan lasting up until next year. Based on the current state of the Thai economy, the EIU expects the government to inject another THB100 billion from this new budget decree in 2021.
These fiscal measures will be vital to limit the impact of the longer-than-expected third wave on Thailand’s private consumption.
The EIU has revised consumption growth down to 1.9 per cent this year from the previous projection of 2 per cent.
Monetary policy
In monetary policy, the EIU expects the Bank of Thailand (BOT) to hold the policy rate at 0.5 per cent for the rest of 2021 but will emphasise loan restructuring and widespread loan disbursement measures to increase the efficiency of monetary policy transmission. Thailand’s overall financial condition continues to be accomodative, as the BOT holds its policy rate at a record low and although inflation is expected to rise from the previous year due to higher oil prices, it remains at a low level. Headline inflation is forecasted at 1.3 per cent for 2021. However, rising long-term Thai government bond yields in line with rising US treasury yields have led to higher financing costs for businesses and the government. In particular, businesses with higher credit risks are more impacted since the credit spread has widened due to weaker economic conditions.
Going forward, the EIU expects the BOT to hold its policy rate steady at 0.5 per cent for the rest of 2021 alongside purchasing government bonds in the secondary market as necessary to maintain interest rates in the financial markets at a low level and support the economic recovery.
In addition, extensions for measures already in place which will expire soon are also necessary, including the Financial Insitutions Development Fund fee reduction scheme and relaxation of loan quality classification for financial institutions, which would assist financial institutions in maintaining support for their customers through both financing costs and loan restructuring.
Furthermore, the effectiveness of the rehabilitation loan scheme and the asset warehousing scheme must be monitored closely in order to improve the scheme’s conditions to ensure that SMEs have widespread and prompt access to the loans.
The way forward for the baht
The EIU expects the baht to depreciate year on year at the end of 2021 to a range of THB31-32 to the US dollar.
Since the beginning of the year, the baht has depreciated 4.2 per cent against the US dollar which is a greater depreciation than most other regional currencies, mainly as a result of lower economic growth outlook due to the new Covid-19 wave and lower current account balance.
For the rest of 2021, the EIU expects domestic factors to put downward pressure on the baht from the current account, which could see a deficit for the first time in eight years, and the sluggish Thai economic growth which would limit capital flows into the Thai financial markets. However, the baht compared to the US dollar would not depreciate much since the US dollar is also expected to depreciate in the second half of the year, as other major economies see an accelerated recovery going forward, especially in Europe, while economic recovery in the US may decelerate.
The European Central Bank (ECB) is expected to taper its quantitative easing programme before the Fed, which is expected to start tapering in early 2022. Nonetheless, the baht could appreciate again towards the end of the year and at the beginning of next year if progress in vaccination allows Thailand to almost achieve herd immunity, the EIU said.
Downside risks for the Thai economy going forward include:
▪︎ containment timeline for the third wave outbreak, which may be longer than expected, alongside potential new outbreaks as long as vaccination rate remains low;
▪︎ slow progress in vaccination and low vaccine efficacy, which may not be effective enough against new virus strains;
▪︎ Covid-19 resurgence or new outbreaks in many countries, especially in Asia, which could impact Thai exports;
▪︎ deeper than expected impact from scarring effects such as a significant rise in non-performing loans.
Sluggish recovery
The EIU expects Thailand’s economic recovery in the next 2-3 years to remain sluggish, GDP would reach the pre-Covid level only in early 2023. This could result in a large permanent output loss mainly because the Thai economy is heavily reliant on the tourism sector, which is expected to see a slow recovery. Additionally several challenging factors remain, such as deep scarring effects on the Thai economy, pre-existing vulnerabilities from high household debt, and challenges for SMEs to adapt to new technological changes and stronger competition.
The EIU suggested that the public sector, which is the main economic driver amid the crisis, should implement measures to support a faster economic recovery and reduce the size of permanent output loss.
The EIU sees the THB500 billion additional borrowing by the government as suitable theoretically but in practice should be disbursed cost-effectively to build confidence and reduce scarring effects on the economy in the short-term. This could be done through accelerating vaccine procurement and distribution, supporting impacted people and SMEs, and promoting employment, the EIU said. In addition, the government should implement measures to restructure the economy for recovery in the medium and long term, such as upskiling and reskilling labour for the modern economy, especially in digital skills, educating SMEs about digital technologies and applying them practically, and supporting new growth industries which would become Thailand’s key economic drivers in the future.
The rising public debt remains managable despite likely crossing the 60 per cent of GDP threshold next year, as government bond yields remain low, which would limit the interest servicing costs to government revenue ratio, the EIU said. Nonetheless, going forward, the government would need to outline a clear practical plan to expand revenue base and manage expenses more efficiently to maintain fiscal sustainability, the EIU said.
(The writer is chief economist at the Economic Intelligence Unit, Siam Commercia Bank Plc)
Published : June 02, 2021
By : Yunyong Thaicharoen, Special to The Nation Thailand
GWM set to open smart factory in Rayong, boosting Thailand’s EV ambitions
Great Wall Motor (GWM) says its first smart factory in Southeast Asia will open in Rayong next week.
The launch comes seven months after the Chinese automaker took ownership of the plant from General Motors (GM). GWM is targeting production of 80,000 units per year at the Rayong factory – 40 per cent for export.
The Thai plant will make electric vehicles (EVs), becoming an important component of Thailand’s strategy to be a regional EV manufacturing hub. GWM will officially open the plant on June 9.
Rawin Boonyanusasna, Senior Executive Vice President, Head of Global Markets Group at Krungthai Bank
Digital transformation ‘exploding’ in Southeast Asia: Deloitte
“We must accelerate the pace at which we go global. And we must help other Thai businesses go global with us.” – Suphachai Chearavanont, CEO C.P. Group
Digital Marketing in 2021: How SEO Has Become an Essential Part of Online Strategy for Businesses
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Digital Marketing in 2021: How SEO Has Become an Essential Part of Online Strategy for Businesses
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