Prasert Sinsukprasert, deputy director-general of the Energy Policy and Planning Office (EPPO), told a seminar held by the Economic Reporters Association yesterday that the recent decision by the National Energy Policy Council (NEPO) to organise open bidding for the Erawan and Bongkot gas fields to find new operators after the current concessions expire in 2022-2023, put the country’s energy-supply security at risk.

“The worst case is that there is not enough gas for running power plants. [The country would] have to conserve power. [We] may have to ask shopping malls to reduce their electricity consumption, or use more severe measures,” he said.

“Right now, we are still not faced with such a problem, but there is a risk if the existing producers don’t get [the concessions],” the official told the seminar.

The Erawan and Bongkot concessions, currently operated by Chevron Thailand Exploration and Production and PTT Exploration and Production (PTTEP), respectively, together produce natural gas that accounts for 44 per cent of all gas procurement for the country.

Prasert said that if newcomers won the auctions, which are expected to take place next year, existing producers may cut their investments prior to the end of their concessions – and consequently their gas production could be reduced by 1,500 million cubic feet per day.

In this worst-case assumption, the gas shortfall would mean a loss of 6,300 megawatts of electricity production capacity during 2020 and 2021.

Total capacity

Thailand’s total installed power capacity is currently about 40,645MW.

Prasert said the government was considering various ways to fix the possible shortfall in gas supply, including construction of a floating terminal to import more liquefied natural gas (LNG), using other fuels to run the country’s power plants, and increasing renewable power production.

Additional coal-fired power projects, if plans for them got off the ground, would also be very helpful, he added.

“I insist that I would use every means possible to prevent a power blackout. I worry about it … I will try my best. This [what I say about a potential blackout] is not a threat,” he said.

Thitisak Boonpramote, head of the Mining and Petroleum Engineering Department at Chulalongkorn University, told the seminar that the market mechanism would not necessarily work in the auction system, in that bidders would have what he called an “asymmetry” of information.

“I don’t believe others would know better than Chevron and PTTEP, which have been with the fields for 30 years,” he said.

The academic suggested that the government amend petroleum regulations for producers to provide more returns to the state than required under the current “Thailand III” regime, and that it reformulate the gas-purchase contracts in a way that was fair but with prices no higher than current ones – and no higher than the price of LNG imports.

Auttapol Rerkpiboon, senior executive vice president of PTT, told the seminar that PTT’s LNG-receiving facilities would have insufficient capacity to service the shortfall of domestic gas production based on the worst-case scenario projected by the EPPO at 1,500 million cubic feet per day in 2021, which was equivalent to 9 million tonnes of LNG.

Prapatpong Chanchit, legal officer of the Office of the Consumer Protection Board’s (OCPB) direct selling and direct marketing division, yesterday said the executives would be called in for a meeting next week to clarify how the company would assist its Thai subscribers.

Apart from coming up with remedial measures, the OCPB will also investigate whether the company has been involved with fraudulent activities following reports that it faced a series of financial problems before shutting down the business.

Ensogo’s Thai unit was registered with the OCPB as an e-direct marketing business in 2014, and the company has provided about 6,000 product and services, including discount coupons for more than 1,000 items.

Last year, the company reportedly had more than 3.5 million subscribers. On its website, Ensogo said that across Asean and Hong Kong, it had 7.4 million subscribers.

On Tuesday, however, it announced the shutdown of all its businesses in Asean. The Commerce Ministry’s Business Registration Department yesterday removed its “DBD” verification for the website upon the company’s notification of the termination of on-line services. However, the department’s director-general, Pongpan Jiarawiriyapan, said that Ensogo did not make a move to dissolve the company. By law, as the on-line business was the only business objective of the company and it was terminated, Ensogo must notify the department of the company dissolution within 30 days.

All Ensogo subscribers’ rights must be protected, said Prapatpong, who urged all merchants to show responsibility by accepting all existing coupons issued by the company.

Nuchjaree Suphateachanart, a regular Ensogo subscriber – particularly for hotel and dining-related deals – was saddened by the news, saying that Ensogo offered good choice to consumers.

“Yet, the company and its merchants should take responsibility. The vouchers should be valid until their expiry dates, or customers must be fully refunded,” she said.

Yesterday, another affected subscriber set up a Facebook page called “SosadEnsogo” at https://mobile.facebook.com/SosadEnsogo?_rdr, to help all subscribers seek refunds.

He said that based on complaints from more than 2,000 people, the combined damage to Thai subscribers was well beyond Bt1 million.

Surangkana Wayuparb, director of the Electronic Transactions Development Agency, said yesterday that some merchants that were Ensogo partners were not accepting coupons, claiming that they could not access the transaction system.

She said that this was clearly a lame claim, and that all customers should get full refunds. Several hotels and restaurants are among the businesses not accepting Ensogo coupons, but some still welcome the coupons as a relief measure, including The Pizza Company, SF Cineplex, Paul Thailand restaurant, Sizzler restaurants, and Fitness First Thailand.

The Pizza Company said it would accept the coupons until July 10.

Poor strategic move

Experts in the e-commerce industry attributed the shutdown to Ensogo’s decision to turn itself from a flash-deals business into a market-place platform. Michael Cluzel, co-founder and chief executive officer of Eatigo, said traditional flash-deals business tended to lose money as merchants seek profits, against the high cost and complexity in keeping the deal factory going.

However, he said that while Ensogo’s decision to move to the market-place model seemed technically sound, it was a “very red ocean” environment in which to do business.

“The general trend that we start to see, not just in Southeast Asia, is that businesses that are built only on top-line growth, but not on positive profitability, are bound to run into trouble,” he added.

At Eatigo, growth and profitability go together, the CEO said, and this seemed to please investors who seek start-ups with a clear and sustainable path to profitability.

Pawoot Pongvitayapanu, president of the Thai eCommerce Association, said Ensogo’s decision to embrace the market-place platform stemmed from low profits from the prior business model.

However, the new model landed it in the red ocean dominated by giant players like Lazada, which has full support from Alibaba, he said.

“Alibaba’s acquisition of Lazada is the main reason why [Ensogo] investors decided to pull back. In the past, investors might have focused solely on business growth, but now they look at both the revenue-generating plan and profits,” he explained.

The company plans to increase significantly the contribution its overseas business over the next three to five years, said Nobuyasu Watada, managing director of local subsidiary Zensho (Thailand).

Within two years, the company expects to double its business in Thailand, both in sales and the number of restaurants, from 2011, when it established itself here with its flagship Sukiya brand.

The company currently operates 12 Sukiya restaurants in Thailand, of which 11 are in Bangkok and one in Sri Racha district, Chon Buri. The 11th Sukiya restaurant in Bangkok was officially opened yesterday at the Promenade Mall on Ramindra Road.

Zensho has a 49-per-cent stake in the Thai subsidiary, while 51 per cent is held by its Thai partners. However, the parent company controls everything in the Thai subsidiary.

After starting its restaurant business in 1982, Zensho Group now operates 4,800 Japanese restaurants in Japan under 19 different brands. The group also operates 180 restaurants in seven other markets around the world: Brazil, Mexico, mainland China, Taiwan, Thailand, Malaysia and Indonesia.

Sukiya, a chain of gyudon beef bowl restaurants, and Hamazushi, a conveyor-belt sushi restaurant chain, are the group’s flagship brands for expanding into overseas markets.

Zensho Group posted net sales revenue of 511.8 billion yen (Bt172.6 billion) in the fiscal year ended March 31, 2015.

“While the restaurant market in Japan is full [for opening new branches] with an annual growth rate of between 5 and 10 per cent, we have seen higher business potential overseas with a faster growth rate of approximately 30 per cent per year,” Watada said.

He said the group this year would open its newest Sukiya restaurant in Ho Chi Minh City, Vietnam.

“We try to go anywhere around the world [where there is] business potential for the opening of Japanese restaurants and with [a big] population. Such potential markets include those in Asean.”

Watada said the overseas expansion would be conducted directly by Zensho Group, which has no franchise system.

He said that with its strong network, the group would be able to source products, including raw food materials, from all over the world.

“Thailand is the most advanced country in Asean in terms of Japanese restaurants, with estimated market value at about Bt22 billion and average growth of between 10 and 15 per cent per annum.

“Nevertheless, sushi restaurants are new [now] coming into the country with strong growth potential, even it is still smaller than Malaysia at the moment. There are many sushi restaurant chains planning to come into Thailand,” Watada said.

He added that there was a high chance of the group’s Hamazushi sushi restaurant brand to be launched in Thailand in the near future. Zensho Group currently operate 400 Hamazushi restaurants in Japan alone.

Supinya Klangnarong, a member of the broadcasting committee of the National Broadcasting and Telecommunications Commission, said yesterday that based on the NBTC’s database, about 40,000 customers had paid for a monthly package to watch both free-to-air and pay-TV programmes via Thaicom’s Ku-band satellite-TV footprint.

She commented on this matter after a meeting with the Office of the Consumer Protection Board (OCPB) yesterday at its head office. The discussion was a part of a bid to seek remedial measures for people soon to be affected by the CTH move.

Speaking on behalf of the NBTC’s consumer rights protection subcommittee, Supinya said she believed that the end of this service could have a severe impact on CTH’s subscribers and more complaints are expected to be surface once the service comes to an end.

OCPB secretary-general Umpon Wongsiri said that as of yesterday, his office had received about 34 complaints from CTH and GMM Z customers alleging breach of contract.

“Only 20 out of those cases have been solved after negotiations between the company and its customers,” he said.

However, there had not been any cases so far arising from CTH’s recent announcement of the end of its Ku-band service.

Apart from ending that service, CTH has also stopped providing its Z Pay TV programmes via the GMM Z platform and C-band service via PSI Holding, the country’s leading satellite-TV provider.

Supinya said she wanted to hear more details from CTH and her team had invited representatives from the company to meet with the subcommittee next week.

“At this point, we do not know yet whether CTH wishes to stop only some of its services or close its operations entirely. So we need them to clarify this matter,” she said.

At next week’s meeting, the NBTC hopes to see further details from CTH about its remedial measures for its customers after the change.

Additionally, CTH has told its customers to check their rights to remedial measures via its website or call centre.

Recently, CTH chief executive officer Amarit Sukhavanij told Now 26 digital TV station, an affiliate of The Nation, that his company had no plan to cease operations. The end of some services was a part of a downsizing strategy after suffering huge financial losses.

He admitted that prepaid customers would be effected after ending service via the Ku-band satellite system. However, those affected would be transferred to another system on a Vinasat satellite.

According to the Commerce Ministry’s Business Development Department, CTH reported a loss of Bt4.55 billion in 2014 and a Bt3.27-billion loss in 2013.

“This is the beginning of a renaissance in marketing research as well as the media industry following the emerging middle class, the next generation, ageing citizens and the advance of communication technology, Jerome Hervio told The Nation.

Hervio added that this would be a turning point because of the online/social media era. When it came to the marketing research, he said, research companies and consumer brands needed to change their mindsets as consumers’ purchasing patterns had changed.

Following this trend, he said face-to-face research was moving online and to the mobile-phone platform to tap the new generation – Gen Y and Millennials – who made up about 60 per cent of the total workforce.

However, Hervio said that implementing effective data collection from new media was an incredible challenge due to limitations. For example, long questionnaires do not appear to be suitable for online respondents. Therefore, a company should design each question simply but the question must lead to the right answer – truth and real insight.

“The three key concerns are data accuracy, proper interpretation and privacy. Despite having changes in the research approach, the researchers must keep well balanced between research and commercial objectives,” the research expert said.

He said that online research was playing a key role in the market. From what he had witnessed, the online research conducted by brands and marketing research firms was on average less than 5 per cent of total budgets but within the next two years, this proportion could reach 60 per cent.

To gain better insights and better tap new trends in marketing research in this new era, the TMRS will hold its “What Is Coming Next?” forum on Thursday at Pullman Bangkok Grande Sukhumvit.

The event will focus on the changes that are affecting international and Thai markets and societies in order to identify how marketers, advertisers and researchers can adapt to these changes and take advantage of them.

The TMRS expects the event to attract some 300 participants from the marketing, market research and advertising media industries.

The store expansion will cost about Bt400 million, of which 60-70 per cent will be allocated to mass-market fashion brands, and the rest to luxury products, said Opras Lavichant, chief executive of Pacifica Group, which has been in the business for almost 14 years.

“We earlier this year reshuffled our operations within the group with the buy-out of all minority shares in our subsidiary Pacifica Element Co Ltd, which is in charge of the import and distribution of premium fashion products. The move will allow me and my family 100-per cent control over all subsidiaries and will be able to consolidate their operations, back-office work, and marketing to go in the same direction,” he said.

He added that the reshuffle would also help the company cope with the fluctuating economic situation and the growth of the lifestyle fashion sector, which is very competitive, while offering customers more alternatives.

In addition to Pacifica Element, the group’s subsidiaries include Pacifica Max, Pacifica Lifestyle, and G.O Retail.

“We will focus on store expansion and our imported mass fashion brands because of their tremendous opportunity for growth in the domestic market, both in Bangkok and many first and secondary provinces throughout the country,” he said.

The group is also looking for opportunities to expand outside Thailand, he said.

Opras said that under the three-year business plan, the group wanted to increase its sales by 25-30 per cent every year. Pacifica Group expects its overall revenue to increase from Bt1 billion last year to Bt1.4 billion this year.

“We expect to double the business for our mass-market fashion brands both in sales and the number of physical stores within the next three years. However, the sales of our luxury and premium products will increase by between 15 and 20 per cent every year.”

He said that to increase its penetration of the mass-market segment, the company was planning to expand its American Eagle Outfitters branches from five stores currently to between 15 and 20 over the next three years.

The latest American Eagle Outfitters shop just opened at Fashion Island shopping centre in Bangkok, and a new shop at Terminal 21 will be opened at the end of this year. The plan is also to open new American Eagle Outfitters stores at major tourist destinations such as Phuket andChiang Mai.

In addition, the group will increase the number of stores selling NYX cosmetics, one of its fastest-growing brands, from 16 currently to 28 by the end of next year.

CONGRATULATIONS ON YOUR AWARDS FROM FINANCEASIA MAGAZINE. HOW SPECIAL THEY ARE?

This year, it’s very special that we received in total five awards, which are almost all of the categories. Besides Best CEO and IR [investor relations], we receives the [awards for] Best Managed Company, Most Committed to Corporate Governance, and Best Corporate Social Responsibility.

If you look back at the last 12-18 months, our industry has [faced] many issues, especially regarding sustainability, labour, human trafficking and illegal fishing practices. We have been addressed in many news [reports], because when NGOs [non-governmen tal organisations] attack Thailand, they also attack Thai Union.

These awards were rated by investors, so that is why we are quite pleased [that] all these awards demon strated confidence and trust that investors see [in] us. If you look at the news, we should not have been rewarded. We were in the wrong industry for the last 18 months.

HOW CLOSE ARE YOU ARE TO BECOMING A TRULY GLOBAL COMPANY?

We need to work more in relation to the organisational structure, the operating model. We will have a clear picture for the next two to three years. And the size of company, I’m still not happy with that right now to be called “global”. If we hit the 2020 target [of US$8 billion in revenue], I’m sure we can become a global company.

If you look at our Bangkok office, the management team now is quite diverse. We have a good number of expatriates. We have been able to attract very high-qualified executives from international firms.

HOW DO YOU MAKE SURE THAT THAI UNION WILL ALWAYS STAY AHEAD OF THE CURVE?

Our job is to look ahead, and we hope we can look three to five years ahead. And the organisation must be willing to take some risks and try new ideas. Our people must always stay curious … try to look for something new. Don’t just sit back and stay in the comfort zone.

CAN YOU GIVE SOME EXAMPLES OF YOUR RISK-TAKING EXERCISES?

[Our investment in] innovation is a financial risk because you invest in something that takes some time to [produce returns], and there is no guarantee. Recruiting expats is also a risk because if you look at the cost, it’s high. If you look at investment, it also carries some risk. But we decided to move on. You can see we did so very quickly, once we decided. The strength of Thai Union is speed.

WHAT DO YOU CONSIDER YOUR BIGGEST ACHIEVEMENTS AND FAILURES OVER THE |PAST YEARS AS CEO?

What I’m proud of the most is the quality of the people we have. We have also demonstrated our leadership in sustainability. And last, I’m very happy about the establishment of our innovation centre.

We failed to manage our pet-foods business early on, but it has now turned around. We failed to manage the fishing fleets because it’s not our [area of] expertise. Quite a few failures, but fortunately, not significant failures. With the growth ambitions that we have, we must admit that we will make some mistakes but we have to make sure they are not big mistakes.

IN YOUR OPINION, WHAT MAKES THE BEST LEADERS?

Leaders must be ambitious, disciplined. A good leader must have a good ability to listen, be willing to learn: Dare to challenge yourself. I like to stretch the boundaries.

Alipay (Hong Kong) Holding, part of Alibaba Group Holding’s Ant Financial Services Group, is also seeking an option to increase its stake in Ascend to 30 per cent at a later date.

No further details on the dollar value of the deal, the approval process or a timeframe were given.

Ascend’s subsidiaries include True Money, an online payment service provider, and Ascend Nano, a licensed financial services provider.

Ant Financial, whose Alipay payment platform dominates the online payments industry in China, is looking to expand its presence overseas even as competition from Tencent’s rival Wechat payment system heats up.

The company also continues to expand its reach domestically, buying 20 per cent of financial data provider Shanghai Suntime Information Technology for around US$35 million (Bt1.2 billion), Reuters reported last week.

Ant Financial Services Group, valued at close to $60 billion, offers services like online payment, wealth management products and insurance.

Its core Alipay online payment business was founded in 2004.

The Alibaba affiliate closed a $4.5 billion funding round in April.