The investment budget will be sourced from the industrial giant’s initial cashflows and bank loans as well as from the issuance of debentures worth Bt15 billion, with four years’ maturity, on April 1, Roongrote told a press conference.

“We will maintain our net debt to EBITDA at not over 2.5 times this year, even though we are expanding our investments,” he said, adding that the group has net debt to earnings before interest, taxes, depreciation and amortisation of 1.7 times.

Aside from the investment in Vietnam, the company plans to put Bt5 billion into its packaging business in the Philippines and Bt20 billion into the expansion of production capacity in its business in Thailand, as well as Bt5 billion into research and development for innovative products and startup operations that support its business solutions business.

 “We started to expand our investment in startups in 2018 with an investment value of Bt400 million in 10 business that are located in Thailand and overseas,” Roongrote said. “This came as part of our efforts to improve business service to support our customers’ demand. We have a long-term investment to improve our business solutions platform at a time when businesses face increased risks from changes in the global economy.”

The company has also earmarked funds for mergers and acquisitions by focusing on the packaging and cement and construction materials industry both in Thailand and in the Asean region. Roongrote declined to state the size of the investment allocation.

“We cannot say how much the budget for mergers and acquisitions is, as that depends on the business opportunities that arise,” he said.

With its aggressive investment stance this year, the company expects growth in total revenue of up to 5 per cent year compared with last year.

Last year, the company reported total revenue of Bt478.438 billion, up 6 per cent from 2017. But net profit was Bt44.748 billion, down 19 per cent from the prior year.

The company’s board yesterday proposed a 2018 full-year dividend of Bt18 per share for a total of Bt21.6 billion. This represents 48 per cent of profit for the year on a consolidated financial basis – of which Bt8.50 per share, totalling Bt10.2 billion, was paid as an interim dividend on August 22, 2018. The proposal will be submitted to the annual general meeting of shareholders for approval.

The final dividend will be Bt9.50 per share, totalling Bt11.4 billion. The payment will be made to those shareholders on the register on April 3, 2019, with the funds transferred on April 19, Roongrote said.

“Our net profit dropped when our production costs for the chemical industry fluctuated following the rise in oil prices in the fourth quarter of this year,” he said. “The oil price rose to US$80 per barrel, then fell to US$50 per barrel by the end of the fourth quarter of last year. As a result, we had to book a stock loss that had a direct impact on our chemical business, resulting in a profit drop.”

He said that a strong baht, with gains of more than 5 per cent against the US dollar over the past year, hurt the group’s earnings in 2018, as up to 43 per cent of its total revenue came from export markets.

The group’s exports to Asean countries accounted for 25 per cent of its total revenue in 2018, at Bt118.014 billion. Some 18 per cent of total revenue, or Bt86.155 billion, came from countries outside the region.

“We expect our total revenue this year will maintain growth and we will try to improve our net profit,” Roongrote said.

“However, the industry this year continues to face uncertainties, as the trade war between the US and China is not yet resolved, and the oil price continues to fluctuate and the baht remains strong.”

Viroj Vithayaveroj, chairman and managing director of Philips (Thailand), said that the medical equipment market is expected to see sustained growth, pointing to the ageing population and the increased health consciousness of the middle class.

Urbanisation will also spur demand for innovative products, especially in the healthcare industry, Viroj said. The government’s efforts to promote Thailand as a medical hub in the Asean reason, with world-class medical services and an increased number of hospitals, will further underpin the market.

On the regional dimension, Viroj said the Asean Economic Community (AEC) will provide opportunities for hospitals to welcome more patients with purchasing power from neighbouring countries.

 “First of all, Philips’ commitment is to improve 3 billion lives each year by 2025. This will also be implemented in Thailand policy for our business goal as well. So, we will deliver meaningful innovation to make people’s lives better.

“In addition, we would like to increase the perception of Philips as a leading brand of health technology among Thai consumers.”

Viroj said that Thailand is a fast-changing market for technology and innovation. For the medical sector, Thai market is one of top priorities markets in Asia for the introduction of new technology and the implementation of innovations.

“The key challenge is a market benchmark on price set-up which normally uses the cheapest brand to set the budget of purchasing,” Viroj said.

“As a result of this, it affects our competitiveness in the market. Even though our devices have higher prices, we offer better standards, full functionality and additional features which rival products might not have. So, we have to invest to educate market and stakeholders.

“Most of the purchasing in Thailand comes from public sector, but there is a reduced budget for purchases of high-value medical devices. Therefore, we need to redefine our business model for this customer segment from selling products to the hire purchase model instead. This business model will drive us to work closely with our distributor to enhance our business opportunities.”

He said that the company believes that Thailand will be able to become the medical hub of Asean because of the number of hospitals, and the expertise of its specialised healthcare professionals as well as the service mindset and attitude of hospitality in the country.

Philips yesterday unveiled in Thailand its Philips Tempus ALS, which incorporates a first-responder monitoring defibrillator, with high-performing vital sign monitor and real-time telemedicine. It is also features an ultrasound transducer for point-of-injury line placement and vascular examinations. This means increased effectiveness during the transport of patients and throughout the chain of survival.

There are about 1.7 million emergency cases in Thailand each year, with nearly 7 per cent of those involved suffering from cardiac arrest.

“We are focused 100 per cent on Myanmar because it is the most important market for us. I have spent a lot of time studying the Myanmar market, more than any other we are doing business in,” he said at a press conference yesterday.

According to Kreingkrai, the company usually holds nearly 30 events in Myanmar every year. It plans to organise three major trade fairs in the country in the second half of the year – Myanmar FoodBev, Myanmar Retail Sourcing Expo2019 and Myanmar Build & Decor.

He said the company enjoyed a 5 per cent revenue growth to US$2.8 million in Myanmar last year. Globally , it posted a 10 per cent rise in revenue.

“This year, we are targeting $3.4 million in revenue from Myanmar, given the brighter outlook for the event business in the country,” he said.

According to estimation, the total revenue of Myanmar’s event industry is expected to grow 20 per cent this year to $151 million. Last year, the industry saw a 15 per cent growth from 2017, recording $145 million in total revenue.

Yet, the executive warned of digital disruption which could have a negative impact on advertising spending on television and the printed media.

Media and data storage device industries are among the sectors likely to be affected, as some magazines and newspapers may have to close down due to financial constraints whereas disk, CD and DVD are no longer in use with the arrival of Cloud storage.

“Over the past three years, we have witnessed a continuous decline in advertising spending on TVs and magazines in Thailand. This has become a global trend, businesses need to invest in digital marketing,” he said.

“For example, look at department stores. When a new shopping mall comes, old ones need to protect their market, which means they have to spend more on events to attract their customers because the market size remain the same.”

However, Kreingkrai seemed happy with the expansion of event space in Yangon, Myanmar’s commercial hub.

Following the opening of new shopping malls including Junction City and City Mall St.John, the available area for events in Yangon will reach 1,501,480 square feet, nearly 400,000 square feet more than in 2015.

Regional footprint

According to Kreingkrai, exhibitions in Myanmar will mainly focus on food & beverage, industrial engineering, construction, electronics, power and energy, agriculture, automobile and pharmaceuticals this year. The company plans to manage events in Thailand, Cambodia, Vietnam, Japan, and United Arab Emirates, and is also eyeing Taiwan and Korea.

He said the Middle East would be a new market for the company.

“At this point, we mainly focus on Myanmar and our clients in the Middle East because they need more creativity,” he said.

“We are aware that some countries in the Middle East want to create a new sector to attract more tourists as petroleum prices have been dropping. For example, UAE, Qatar and Bahrain have similar strategies to develop their countries.”

Regionally, the event industry will continue to grow, as it helps to meet customers’ needs in this digital era.

In this respect, the company will deliver many creative events, sharing its 29 years of experience in event marketing, brand building, organising trade fairs and lifestyle entertainment for both the public and private sectors, said Kreingkrai.

The executive said the behaviour of Myanmar consumers has changed. They are now more open to a new lifestyle and technologies. New venues for organising events have also opened to support the growth of the event industry such as exhibition halls, hotels and malls.

“Compared to other Asean countries, Myanmar has much room for improvement in the event industry. Our team in Bangkok can offer support when it comes to digital marketing,” he said.

According to the executive, Myanmar’s event industry can be divided into three groups – event marketing, exhibition and entertainment.

Apart from Yangon, Kreingkrai sees Mandalay as another promising city for Index events, though it may take longer to see such events in other major cities such as Nay Pyi Taw, Pathein, and Taunggyi.

“Our strategy is to create different platforms for various industries in the form of modern trade fairs in order to support business growth in Myanmar and aboard. It will help improve investors’ confidence in this country,” he said.

KKP also expects the level of non-performing loans (NPL) ratio to be lower in 2019 after the NPL ratio stood at 4.1 per cent last year.

“We expect the NPL ratio for this year to be no higher than 4 per cent,” Aphinant Klewpatinond, CEO of Kiatnakin Phatra Financial Group yesterday told a press conference.

The falling level of NPL could be attributed to an improvement in the bank’s management of problematic loans, especially in the real estate sector, he said.

“In the past year, real estate (RD) loans grew at a significant rate despite various real estate experts warning of slower growth in the sector,” he claimed.

KKP’s commercial lending grew by 26 per cent in 2018, with the real-estate lending component growing by up to 36.6 per cent, said Preecha Techarungchaikul, the bank’s head of financial markets group and acting head of finance and budgeting group. In private banking, KKP will continue to offer a diverse range of investment products through its many structured notes or national investment funds, such as the Thailand Future Fund.

The bank currently has Bt650 billion worth of assets under advice, and aims to achieve Bt1 trillion. However, the bank’s CEO hinted that this aim may not be attainable by the end of 2019 given the upcoming challenges in the market.

The Bank of Thailand’s new macro-prudential guidelines announced back in October last year could have negative impacts on the number of real-estate loans this year, Aphinant cautioned.

Under the new rules, the maximum loan-to-value (LTV) ratio will be restricted to 80 per cent on new mortgages for homes worth more than Bt10 million. The same LTV restrictions will apply for the purchase of a second home, irrespective of the property value. Banks will also be prohibited from providing advances that exceed the value of a property.

“The macro-prudential may have further impacts beyond the real-estate loans and also dampen the level of other loans,” he said.

When questioned whether KKP’s real-estate loans will shrink this year as a result of the Bank of Thailand (BOT)’s new home-loan rules, Aphinant replied that he expects KKP’s real-estate lending to grow at a slower pace, but believes the loans will not contract.

Another risk factor is the prospect of rising interest rates.

“We believe the BOT will increase the policy rate once this year by 0.25 points, increasing the interest rate from 1.75 to 2 per cent,” said Pipat Luengnaruemitchai, assistant managing director, head of private wealth management research of Phatra Securities Pcl.

“The BOT is expected to value financial stability and the creation of policy space to stimulate the economy in the future over the actual economic situation,” he said. “Hence, despite dimmer economic outlooks such as slower GDP and exports growth, as well as lower inflation, we expect the BOT to still hike rates once in the middle of this year.”

Phatra Securities forecasted the nation’s GDP would grow by 3.7 per cent in 2019, down from last year’s 4.3 per cent, exports would grow by 3.9 per cent, down from last year’s 7.6 per cent, and inflation would remain at a low 0.9 per cent. However, KKP is yet to have any plans to increase interest rates for its clients, said Aphinant.

The bank’s loan spread stood at 5 per cent in 2018 and is expected to fall to a range of 4.5 to 4.7 per cent this year.

Following its operational ramp-up last year, the Bt800-million plant will host its grand opening on February 22.

On the same day, the company will also officially launch its latest truck models in the Thai market. Scania has set up its regional headquarters in Thailand in order to expand its production base and deliver its products to Asia and Oceania.

Stefan Dorski, managing director of Scania Siam Co Ltd, said that 2019 is a watershed year for Scania in Thailand, despite having had a presence here for 33 years dating back to 1986, as a subsidiary of Scania CV AB of Sweden.

“We are a solutions provider for our customers’ business, with products and services to maximise their profitability. For services, we have new additions this year with flexible maintenance plans together with a fleet management system to monitor fleet performance in real time.

“Scania in Thailand has a strong commitment to deliver sustainable solutions to our customers, and will lead the way towards sustainable transport. And last but not least, we will be launching our new generation trucks in the coming weeks.”

Dorski sees the company’s role as providing transport solutions to match customers’ heavy-transport needs among truck, bus, and engine options. Plus they offer extensive product-related services, including vehicle financing, insurance and other services enabling their customers to focus on their core business.

“Our main goal as a company is customer satisfaction, and we deliver this by having the best performance, fuel efficiency and safety features in the market,” he said.

The company is very satisfied with the development of its service business in 2018, which grew 25 per cent last year. Their spare-parts quality has been noted by customers, he said, as well as the high service level in their workshops.

“The new-generation truck, which will be introduced in a few weeks in Thailand, will be a very important milestone for the company,” It is the biggest project the company has ever invested in globally, costing over 2 million euros and 10 years of research and development,” Dorski said.

And this year, the company will continue to roll out “flexible maintenance” in which the maintenance interval is calculated individually for each vehicle based on how the vehicle is operated. This guarantees optimised service intervals, maximised productivity and better uptime for their customers, he said.

The air-pollution problem in Bangkok and nearby provinces has caught Dorski’s attention, leading him to publicly encourage a regulations shift to require less-polluting heavy vehicles.

“We are happy to see an increasing demand for the use of B20 diesel in Thailand, as all our diesel engines can easily be adapted to run on this biofuel,” he said. “In Europe we have built long experience with bio diesel, and Scania’s vehicles can run 100 per cent on bio diesel. This goes hand in hand with our vision of sustainable transport.”

Dorski said that after Scania identified Thailand as one of the key markets in Asia, it moved to invest Bt800 million to expand its industrial and commercial presence in the country. The new assembly facility for trucks and bus chassis, as well as a manufacturing facility for truck cabs, was set up in the Bangkok Free Trade Zone, Samut Prakan province. It has production, logistics and purchasing staff, along with research and development.

In addition to its primary role to serve Thailand’s domestic market, it will also feed other markets in Asean where feasible.

“The main reasons to set up the plant in Thailand [and also the key benefits of Thailand compared to other markets in the region] are the large domestic market in Thailand, the well-established supplier base and access to staff with experience from the automotive industry,” said Dorski.

He said that Thailand will not only enjoy direct benefits from the energy-efficient vehicles to be produced by the plant, but also from the knowledge and experience Scania is bringing related to producing high-quality vehicles and working with local suppliers to increase quality levels to meet Scania’s strict requirements.

Scania will benefit from being closer to its customer base in the country and the region. It is establishing a full cross-functional presence of production, logistics, purchasing and research and development as well as gaining access to the Thai supplier base.

“As a part of Scania’s focus on Thailand as a key market in Asia, we have already established our regional headquarters for the whole of Asia and Oceania region in Thailand. The regional resources support Scania’s distributors in Asia and Oceania in developing business in their respective markets,” said Dorski.

The company’s business plan is set, based on its ambition to see Thailand become the preferred partner for sustainable and profitable transport solutions in the next five years.

To do that, it will provide its customers with tailor-made solutions and the best total operating economy. The company wants to promote alternative fuels and to see emission standards for heavy diesel vehicles upgraded from the current outdated Euro 4 standard to the Euro 6 level.

“We aim to improve road safety and reduce emissions in Thailand by training drivers to drive safely and reduce their fuel consumption, and to strengthen our presence in Thailand through our industrial presence,” he summed up.

The wallet, the product of a collaboration between Bangkok Bank and Kasikornbank and the support of Central Group retailers, targets 5 million users by the end of this year.

Rungruang Sukkirdkijpiboon, chief executive officer of Central JD Fintech Holding, predicts the e-wallet service will lift up everyday living standards for Thais, through its accessible financial innovations that satisfy the varying demands of each consumer.

The e-wallet integrates artificial intelligence and big data analytics – both of which are part of Central JD Money’s technological expertise, Rungruang said. These innovations will enable businesses to develop and present promotional offers that perfectly fit each user’s lifestyle, offering maximum value as well as a bevy of privileges on The 1 Loyalty Platform.

Dolfin Wallet will be established as an e-wallet that offers convenience and security to users – with full support for purchases and transactions at Central Group department stores and accommodations across the country, as well as many other retail partners in the network.

“Dolfin Wallet is the first e-wallet application to support payment and money transfers through all channels – including connection to bank accounts, debit cards and credit cards, cash top-up at all CenPay counters nationwide, and full-scale PromptPay support,” said Rungruang.

“Through a user authentication system connected to Bangkok Bank’s and Kasikornbank’s respective applications, Dolfin Wallet supports payment for products and services at all PromptPay locations nationwide regardless of partner bank.”

He said the firm expects to officially announce access to its new services in the next three months. In the first phase, the featured services will include financial services such as e-money and e-payment, operation and entertainment, which will allow business partners to promote their campaigns and promotions via its application.

The Dolfin Wallet is also the first e-wallet application to introduce the E-KYC (electronic know-your-customer) system for user identity verification, allowing for a much friendlier user experience in the sign-up process. Advanced technologies – including Face Recognition and Optical Character Recognition (OCR) – are integrated into the process, enabling a new user to confirm their identity with a selfie and a photo of their identification card with no need for hard copies of any document beyond the app. The firm is now awaiting regulatory approval for e-money, e-wallet, E-KYC and e-wallet licences from the Bank of Thailand.

He added that the firm has a registered capital of Bt1.6 billion. Central JD Money plans to launch a face-payment service to achieve maximum convenience and security in payment authentication in the near future. The firm also has plans to expand to overseas customers, such as to China in terms of cross-border services as the next step.

“I think that Dolfin Wallet is part of the e-wallet [shift] that [will] drive [a] cashless society in the country. The firm expects to reach 3-5 million customers, focusing on existing bank customers, The 1 Card customers, student and first jobbers by the end of this year and jump to around 10 million customers in the next four years,” said Rungruang.

Charamporn Jotikasthira, member of the board of executive directors of Bangkok Bank, said that as the banking partner, Bangkok Bank would facilitate many types of transactions through Dolfin Wallet – including wallet top-up, user verification and the integration of PromptPay to enhance convenience for the financial lifestyles of Thais. Bangkok Bank has brought its banking experience and expertise in technology to connect PromptPay to Dolfin Wallet, giving the app more extensive usage opportunities as users could simply scan QR codes to make payments at 3 million supported retail locations in Bangkok and nationwide.

“I think that the Dolfin Wallet will be a part of creating trust between traders or businesses and customers so that customers will have more confidence in payment via online transaction, which will drive and support a cashless society in Thailand in the next step, said Wirawat Panthawangkun, senior executive vice president of Kasikornbank.