TCMC is confident that it will grow strongly in coming years through its merger-and-acquisition (M&A) strategy, under which it has taken over three companies during the past three years.
This year’s revenue is expected to double.
TCMC chairman Pimol Srivikorn said yesterday after signing the latest M&A agreement that the company’s Bt1.6-billion investment would make TCMC the major shareholder in DMM, with a 75-per-cent stakes. Two British partners, David Lee and Mark Smith, will hold 12.5 per cent each.
Shareholders approved the transaction at a meeting yesterday.
After the merger, TCMC will start recognising revenue from DMM in the current quarter.
This year, the company expects revenue of Bt3.3 billion, double last year’s figure. Next year, it expects revenue to double again, as DMM’s annual income is more than 70 million pounds (Bt3 billion), Pimol said.
Last year, TCMC acquired a stake in another British furniture company, Alstons, whose annual revenue is 30 million pounds (Bt1.5 billion). Another M&A deal last year was with TCH Suminoe, a manufacturer of fabrics and carpeting for the automotive industry in Thailand and globally.
In 2013, before adopting the M&A policy, TCMC posted revenue of about Bt700 million.
After the merger with DMM, TCMC will support the British company’s marketing in the Asia-Pacific region, especially China, as well as supplying raw materials.
David Lee, chief executive officer and co-founder of DM Midlands, said the two companies would tighten cooperation to ensure sustainable and significantly growth.
He said his company expected to continue to flourish despite the impacts of the United Kingdom leaving the United Kingdom. The merger with TCMC should help DMM increase its exports from the current 3 per cent of total sales.

The 78-year-old takes interim charge of the sprawling $100 billion tea-to-steel group almost four years after Mistry succeeded him to become the Indian giant’s first chief from outside the Tata family.

Monday’s announcement comes as Tata’s steel arm struggles to offload its loss-making British assets while its carmaking business continues to be plagued by weak sales and a dispute with Japan’s NTT Docomo threatens to damage its international reputation.

“Tata Sons today announced that its Board has replaced Mr. Cyrus P. Mistry as Chairman of Tata Sons. The decision was taken at a board meeting held here today,” the company said in a statement.

It added that Ratan Tata had been named interim chairman until a successor could be appointed — a surprise comeback for the media-shy industrialist, who made way for Mistry in December 2012.

The search for a successor to Mistry, 48, was likely to take four months, the statement said.

“The Tata Group is going through a lot of problems and most of it was either inherited, such as Tata Steel or Tata Motors, or due to adverse economic conditions like the IT business,” G. Chokkalingam, managing director at Mumbai-based Equinomics Research & Advisory Pvt, told Bloomberg News.

“It is very difficult to attribute it to leadership. Therefore it is shocking.”

Tata Sons is the holding company of the massive Tata Group, arguably India’s most famous family conglomerate, which spans at least 100 companies in as many countries.

Its businesses include one of India’s largest IT firms, Tata Consultancy Services, the biggest vehicle maker Tata Motors, and a ritzy hotel chain which includes Mumbai’s Taj Mahal palace hotel.

Tata brands also feature daily in the lives of Indians, with products ranging from salt to watches.

Mistry was named as Tata’s heir more than a year before he assumed the role. He is related to the famous Indian family through his sister’s marriage.

Ratan Tata, who took over as chairman of Tata Sons in 1991 and led the company for 21 years, is credited with building it into a global behemoth.

During his time at the helm, the organisation went on a global purchasing spree, acquiring major names ranging from Tetley Tea to Land Rover and the Anglo-Dutch steel firm Corus in 2007 for $13.7 billion.

Struggling steel

However, Mistry’s time in charge has been rocky and the group, founded under British colonial rule in 1868, has hit headwinds of late with lacklustre performances at several companies including Tata Motors, Tata Power and Tata Steel.

Profits at India’s IT outsourcing companies are also being squeezed as the sluggish global economy sees clients rein in their spending.

The group’s revenue slipped 4.6 percent for the financial year ended March to about $103 billion, hurt by global economic uncertainty, a crash in commodity prices and volatility in currencies, according to Bloomberg.

It has been trying to offload its loss-making British steel assets for several months but has so far been able to find a buyer. More than 15,000 jobs at its plant in Port Talbot, Wales, are at stake.

Mistry been unable to resolve a long-running dispute with Docomo which is demanding that Tata coughs up a $1.17 billion arbitration payment awarded to the Japanese mobile phone operator at an international hearing.

In August Tata Motors reported a 57 percent fall in quarterly profits, slowed by weak sales of its luxury British unit Jaguar Land Rover and foreign exchange losses.

“Tata Motors is not on a sustainable footing, obviously Tata Steel has had its struggles and the Docomo issue is unsettled which is earning Tata a bad name globally.”

“Mistry was not giving direction to the individual companies so Ratan Tata has probably just got frustrated and taken back the chairmanship,” a companies analyst, who asked not to be named, told AFP.

Mistry’s sister is married to Tata’s younger half-brother Noel, who was initially expected to be the group successor and is now tipped by some analysts to get the top job.

“All research and development has to take a long time before resulting in commercial products that meet our customers’ demand,” he said. “However, once they are commercialised, they generate high returns for our business.”
The group has concentrated on investing in R&D of innovative products to serve customer demand.
The company’s research focuses on products related to the petrochemical industry.
The R&D budget supports both PTT’s own research and also capitalising on research by others, by developing it into commercial products.
The total budget including R&D for 2016-20 remains at Bt300 billion for the company and its subsidiaries. “We will revise our investment budget every year. It may be changed for 2017-21. That has to wait for approval by the company’s board at the end of this year before releasing a new investment plan.”
PTT Group led by PTT Exploration and Production will host the 10th “International Petroleum Technology Conference” under the theme “Innovation and Efficiency Excellence for Our Energy Future” from November |14-16 at the Bangkok Convention Centre, part of CentaraGrand @Central World Bangkok.
At the event, PTT will showcase its innovative exploration, while up to 80 other oil and petrochemical firms – such as Shell, ExxonMobil, Halliburton, Baker Hughes, Petronas and Weatherford – will also display their innovations and technology.
“We target up to 4,000 visitors at this event. We also will discuss and exchange our knowledge and innovative technology with other petrochemical firms.
“This is a challenge for us and other petrochemical firms to learn about innovation and technology for the future,” Tevin said.

Chase Manhattan Bank (now JPMorgan Chase) had helped us get our start in the broiler business by introducing us to US poultry company Arbor Acres. The American bank later introduced us to another valuable business partner, Continental Grain, a major grain group in the US.
After working closely together across Southeast Asia, CP and Continental decided to set up a joint feed business in the newly opened Chinese market.
I left China in the late 1950s and had not returned since due to the upheaval of the Cultural Revolution. During that period, which lasted from the 1960s to the 1970s, even overseas Chinese merchants could not enter the country.
In late 1979, accompanied by Continental executives, I flew from Hong Kong to Guangzhou, Guangdong Province. It was my first time setting foot on the mainland in more than 20 years.
It was a short visit: We concluded our business discussions in the morning and returned to Hong Kong that evening.
I had lived in Guangzhou for a short time as a middle schooler in the 1950s. In those days, it was the main city in southern China, attracting people even from Hong Kong. The Guangzhou I returned to was all but unrecognisable. Temples and other historical buildings had been destroyed during the Cultural Revolution, and there was no trace of its former prosperity.
The situation was bleak, but while others might have been discouraged from making a foray into the area, I saw it as an opportunity. There was little room to penetrate developed economies like those of the US and Japan. In post-Cultural Revolution China, it was a completely different story. There was nothing there, so you could develop something from the ground up. I immediately made the decision to invest.

A long-awaited reunion
Once back in China, I desperately wanted to visit Swatow (Shantou), where I had spent part of my childhood. The reason was personal: I wanted to see Ms Chen Shifu, who had been my teacher in elementary school. During the Cultural Revolution, China had forbidden its citizens from exchanging letters with the outside world, so I had no idea whether she was even alive.
While in Guangzhou for my second business meeting, I was able to place a phone call to Swatow and confirm that she was in good health. I immediately set out to see my beloved teacher.
Ms Chen came to the Swatow airport to pick me up, and our reunion filled my heart with joy. She had been in her late 20s when she taught me and was now nearly 60 years old. “You haven’t changed,” I told her. “I recognized you instantly.”
She still had the same smiling face of old, even though she had suffered greatly during the Cultural Revolution – teachers had been labeled “reactionary” and censured.
Her husband, himself a middle school teacher, had worked as a local council member under the Kuomintang (Chinese Nationalist Party). That past was viewed as “problematic” by the Communist Party and he had been detained. Even after the Cultural Revolution ended, the family’s life did not return normal, and three of them – Ms. Chen, her husband and their son – ended up living in a tiny room of just 6 or 7 sq metres.
I wanted to give my teacher her own house, but she liked living modestly and would not accept such a gift. So I made arrangements for her to live in the same building, located in the old part of town, where I had lived during my elementary school days. Later, when a modern condo was built in Swatow, I arranged for her to move into one of its rooms.
Every time I visit Swatow, I make it a point to pay a visit to Ms Chen. She turns 93 this year but is still going strong. Her husband and her son have both died, leaving her lonely, so my classmates from elementary school look after her now.

Dhanin Chearavanont is chairman of the Charoen Pokphand Group.
This is the seventeenth of a 30-part series of “My Personal History” by Dhanin Chearavanont.
Reprint with permission from The Nikkei Asian Review.

Anukool Saibejra said he decided to return to his home province of Surin province several years ago after graduating with a social- science degree in international disciplinary studies from Thammasat University. There he began to grow rice on his 10-rai (1.6-hectare) farm in his hometown.
Every year, he spent four months growing rice and six months doing market research. At the same time, he started working and building a network with farmers by providing them with agricultural knowledge, food-processing skills and business-management abilities, while also selling rice to some friends online.
Eventually, he became aware that many of the farmers he was working with were having difficulty selling perishable products. To meet this challenge, he founded Folkrice Co Ltd early this year after securing more than 1,000 farmers nationwide in his network.
The company, of which he is chief executive officer, then created an online application called Folkrice as a venue where farmers can sell their products to customers directly.
“Farmers, especially small organic farmers, can use the application as a marketplace,” he explained. “We aim to help them grow sustainably, having their own shops and reaching customers widely.”
The 1,000 farmers in the Folkrice network have been placed in four main categories that best fit their products with suitable markets.
The “folk and travel” category is suitable for farms with a travel theme, “folk and restaurant” is for food retailing, “folk and green” is for organic shops, and “folk marketplace” is for general online trading.
Each farmer considers what his or her focus is before joining.
Anukool said many members in the Northeastern region produced rice, as well as vegetables from Nakhon Ratchasima’s Wang Nam Kheow district, Suphan Buri and Nakhon Pathom, fish from the Southern region, and eggs from Nakhon Ratchasima and Chanthaburi.
When farmers are approved for membership in Folkrice, they can place photos and stories about their products on the app, and purchasing conditions.
Anukool said his business had secured deals with five luxury hotels in Phuket and Krabi provinces. “I will soon meet with more clients for further deals,” he added.
In his sights are 20 schools and 20 health-conscious restaurants in Bangkok, associations for senior citizens and retired people, exporters, and more high-end hotels. “The international market is a big opportunity after receiving some orders at the ‘Slow Food’ exhibition in Italy in September,” he said.
Anukool said his app could help farmer sell their products at much lower prices than at modern trade outlets such as supermarkets.
The company charges fees of 10 per cent of purchase value. Currently, it is earning about Bt100,000 per month.
“My aim is to have a million farmers in the application network. The revenue target is Bt2 million per month or Bt24 million a year within five years,” he said.

We built our first poultry slaughtering plant in Bang Na, on the outskirts of Bangkok, and it was there, in 1972, that we introduced rapid freezing equipment from Japan.
Soon, we began exporting frozen chicken to Japan via trading house Itoman Corp (now Nippon Steel & Sumikin Bussan). Seeing CP’s success, other Thai companies quickly piled into the chicken-raising business – at one point 30 per cent of Japan’s chicken imports came from Thailand.
Due to an outbreak of avian influenza, Japan banned imports of fresh chicken from Thailand from 2004 to the end of 2013. Fortunately, beginning in the 1990s, CP had teamed up with Japanese food producers and restaurant chains and steadily switched from being a supplier of fresh chicken to a producer and exporter of cooked and processed foods. Even today, Japan accounts for 20 per cent of our total exports.Connections everywhere
In the early 1960s, I made my first trip to Taiwan, stopping there on my way to Japan. There were few taxis at the airport, so my brother’s friend was kind enough to come and pick me up in his Volkswagen. It seems overseas Chinese have personal connections just about everywhere. With the help of friends in Taiwan, we were able to begin operating a feed plant on the island in 1967.
I went to school in Swatow (Shantou) in China, so I could speak the Chaozhou dialect of that area, but I had never got the hang of Mandarin, the country’s standard language. Through conversations with people in Taiwan, I gradually mastered the language, something that would prove an incredible help in the years ahead.
Later we also began raising chickens and processing meat in Taiwan, and we eventually took our local subsidiary public.
Hong Kong has long been another of CP’s important operation bases. In the late 1950s, we established a feed and egg-import company there, and in the 1970s built a local feed plant.
We also established a holding company to supervise the group companies in charge of trade and other operations. Even today, several of those companies, including CP Pokphand Co, which is involved in agribusiness, are listed in Hong Kong.
We expanded into Malaysia and Singapore as well, and my third brother, Sumet, broke into the Indonesian market. As our business spread across Asia, it was only China – where I had spent my elementary and middle school years – that remained closed to us. During the Cultural Revolution, which lasted from the 1960s through the 1970s, China’s more pragmatic leaders, including Liu Shaoqi and Deng Xiaoping, lost all standing and private economic activity was forbidden.
China became isolated from the rest of the world, even clashing with fellow communist state the Soviet Union. Anyone in China who tried to have a relationship with a foreign entity was persecuted for being “reactionary”.
Even overseas Chinese could not have normal personal relations, to say nothing of business ties, with those inside the country.
My father operated a farm in his hometown of Swatow during the 1950s, but he left China just as the Cultural Revolution was unfolding, barely escaping with his life. Because he had lived in China for so long, however, he was not able to return to Thailand, either, as the country had adopted a staunch anti-communist policy. As a result, he resided in such places as Hong Kong and Singapore, keeping a close eye on China’s future all the while. My father always told me: “Be prepared to return to my hometown.”
The more China implemented the policies of the Cultural Revolution, the poorer the country became. My father always believed that once the situation became untenable, change would occur. I was of exactly the same opinion.
Just as my father prophesied, the Cultural Revolution ended in 1976 and in 1977 Deng Xiaoping was restored to power. The resurgent Deng began advocating economic reforms and the opening of China to the outside world.

Dhanin Chearavanont is chairman of the Charoen Pokphand Group.
This is the 16th of a 30-part series of “My Personal History” by Dhanin Chearavanont.
Reprinted with permission from The Nikkei Asian Review.