USANEE MONGKOLPORN
THE NATION June 17, 2016 1:00 am
CAT Telecom and Indian telecom giant Tata Communications will sign a memorandum of understanding for a submarine cable partnership today.
This is part of the government’s plan to seek more strategic partners in the telecom industry during Prime Minister Prayut Chan-o-cha’s three-day visit to India that ends tomorrow.
Tata Communications is a telecom company of the Tata Group, an Indian multinational conglomerate holding company. It and its affiliates operate one of the world’s largest global transmission networks, Tata Global Network, circling the globe and connecting key business locations with both undersea and terrestrial cables.
It has TGN Western, TGN Indiancom, TGN Pacific, TGN Intra Asia, TGN Gulf and TGN Atlantic routes.
CAT Telecom is the state agency that runs Thailand’s international telecommunications infrastructure, including its international gateways, satellite, and submarine cable network connections.
According to the MoU, CAT plans to expand its international coverage and capacity to support its business and promote the development of the digital economy in Thailand.
Tata wants a cost effective, scalable solution for connectivity within Thailand and countries neighbouring Thailand to support its global business and customers.
Tata and CAT agreed to progress to good-faith discussions in exploring the opportunity to collaborate on a submarine cable business and other telecommunication services projected to be mutually beneficial for both parties.
An Information and Communication Technology Ministry source said that this was part of the government’s plan to push CAT to provide extensive international capacity from Thailand to key global destinations.
Recently, the government announced it was allocating Bt20 billion for bridging the digital divide and promoting the country’s international cable capacity, of which Bt5 billion will be allocated to support CAT in a submarine cable project.
KWANCHAI RUNGFAPAISARN
THE NATION June 16, 2016 1:00 am
Yuwadee
CENTRAL DEPARTMENT Store Group, a retail unit of Central Group, yesterday announced an investment of Bt10 billion between now and 2020 in the renovation of major department stores it has acquired in Europe.
Yuwadee Chirathivat, chief executive of Central Department Store Group, said the investment was in line with the group’s strategy to strengthen its flagship department stores in Europe. It hopes to nearly double the annual sales revenue from its Europe stores from 1.3 billion euros (Bt51 billion) expected this year to 2 billion euros by 2020, marking significant growth of 20 per cent per year.
Central acquired its first European department-store company, La Rinascente in Milan, in 2011. Since then, the group has invested about Bt40 billion in acquiring and facelifting its department stores in Europe.
The additional investment of Bt10 billion will be allocated for the renovation of its flagship stores in major cities in Europe.
Yuwadee said the group currently operated European department stores under three umbrella brands, La Rinascente in Italy, KaDeWe (Kaufhaus des Westens) in Germany, and Illum in Denmark.
La Rinascente operates 11 department stores in Italy, including its flagship store in Milan. Another flagship La Rinascente store will be opened next year in Rome at the cost of more than 200 million euros.
The group also operates the KaDeWe department store in Berlin. The group’s other department stores under the KaDeWe umbrella are Oberpollinger in Munich and Alsterhaus in Hamburg.
Central Department Store Group also operates Illum department store in Copenhagen.
“We want to be the best department stores in the world. We have positioned our department stores in Europe as ‘city stores’ so that individual visitors to each city will recognise [them] when they visit,” Yuwadee said.
She said Europe was a well-known tourist destination and popular luxury market. The market for luxury travel has grown by 50 per cent since 2010. The number of tourist arrivals to Europe is expected to increase significantly from 590 million in 2014 to about 750 million by 2030, driven by strong cultural attractions and shopping destinations.
“We increased the contribution from our department stores in Europe to the Department Store Group’s total sales revenue from 25 per cent in 2014 to 30 per cent last year, and up to 40 per cent is projected for this year,” Yuwadee said.
Revenue target Bt120 bn
She said Central Department Store Group expected its total sales revenue to reach Bt120 billion this year, and increase to Bt180 billion in 2020. The Department Store Group will maintain its business contribution to Central Group at about 40 per cent, excluding its Vietnam business.
Yuwadee said that in Thailand, her group operated 21 Central Department Stores and 42 Robinson Department Stores.
“We will open one or two new Central Department Stores and three to five new Robinson Department Stores every year,” she said.
“However, we will slow down the physical expansion of our department-store business in Europe [for now] as Central Group has recently allocated a lot of money to develop the retail business in Vietnam. However, we will not stop looking for new opportunities in Europe.”
Yuwadee said La Rinascente recently won the “Best Department Store in the World” award at the “Global Department Store Summit” in Zurich, Switzerland. The summit was hosted by the Intercontinental Group of Department Stores, the largest department-store association with more than 40 member companies worldwide.
A SURVEY by professional-services firm Grant Thornton of business leaders in 36 economies found that 33 per cent of respondents planned to make an acquisition at some point over the next three years.
The total value of merger and acquisition (M&A) activity was a very buoyant US$3.8 trillion in 2015. But transaction confidence on both the buy and sell sides has taken a knock because of global economic instability. Still, the regional picture is varied because of differing macroeconomic conditions.
The data in this report are drawn from interviews conducted between September and November last year with more than 2,500 chief executive officers, managing directors, chairmen and other senior decision-makers in mid-market companies across all sectors.
Asean countries are showing an appetite for acquisitions, with many affluent investors looking for lucrative overseas deals. The main driver for this is to enter new geographical markets. While businesses in emerging markets are more likely to engage in cross-border M&A activity to leverage new technology or for increased brand recognition, southern European businesses are more likely to engage in acquisitions as a defensive measure against hostile takeovers.
Julaporn Namchaisiri, managing director of corporate finance at Grant Thornton in Thailand, said: “Cross-border activity increases as the economic recovery gains more traction in developed economies.
“In Thailand, M&A is still a development short cut for both listed and non-listed businesses [that] have purchasing power. It helps them grow rapidly and strengthen their organisation.
“But in this pessimistic economy, we see M&A trends as a way to reduce business risk by diversifying into other businesses that may not be directly related with the initial core business and are more stable, thus rendering growth in the future.”
Despite cheap sources of funding and increasing propensity to acquire in some regions, vendor confidence slipped 5 per cent globally in 2015, signalling fewer tangible selling opportunities. This sets the stage for increasing valuations as the disparity between supply and demand widens. The recognition that better valuations are ahead may be contributing to the 5-per-cent decline in businesses expecting a change in ownership in the near future. As a result, the difference between future acquisition demand and supply is 24 per cent, further signalling favourable market conditions for sellers. “Acquiring new talent or skills is a main driver for businesses across all regions, but it also reflects the fast pace of technological progress and a lack of such skills internally,” Julaporn said.
“For acquirers seeking to buy in depressed economies, there are a range of opportunities. But turnaround for many of these economies is slow and they will continue to face challenges in the near term. Rather than seek quick returns, acquirers need to take a mid-term view, looking at how an acquisition supports their business strategy.
“Businesses should consider acquisition as a route to accessing new markets, recruiting new talent and skills into their firm and building scale to grow – as long as those opportunities support their middle and long-term strategic goals rather than a short-term objective of speedy financial return.”
WATCHIRANONT THONGTEP
THE NATION June 16, 2016 1:00 am
AFTER a delay of almost three years, the broadcasting regulator has finally selected Obtainment Co to launch its public relations campaign to raise national awareness of digital terrestrial TV. The contract is expected to be sealed this month.
Takorn Tantasith, secretary-general of the National Broadcasting and Telecommunications Commission (NBTC), said yesterday that Obtainment offered the best bid at Bt53.56 million, which was below its base price of Bt63.5 million.
Obtainment reportedly won over BrandConnections and another PR agency.
Under the six-month assignment, Obtainment must produce television commercials, music videos and brochures.
It will be responsible for media planning and a marketing strategy for building public awareness of digital TV broadcasting as well as the next distribution of vouchers for the purchase of digital receivers.
It must also conduct a series of on-ground activities in the provinces.
According to the Business Development Department of the Commerce Ministry, Obtainment has initial registered capital of Bt3 million.
Last year, the company reported revenue of Bt273.96 million.
The national PR campaign is among the key promotions that digital-TV stations have been pushing for since the debut of digital terrestrial television in Thailand. They blamed the delay for the public’s understanding of digital TV remaining limited.
The NBTC is planning to issue 5.1 million more coupons to help people purchase digital TV receivers.
In previous rounds, 14.1 million vouchers were delivered nationwide but only 8.7 million were redeemed.
KING POWER Group plans to diversify into travel and sport businesses with high hopes of cashing in on growth in these markets in China, after it bought a 39-per-cent stake in Asia Aviation (AAV), operator of budget airline Thai AirAsia.
Vichai Srivaddhanaprabha, founder and chief executive of the duty free shops, said King Power and Thai AirAsia would begin to synergise many business and marketing platforms to strengthen future growth following the Bt7.9 billion deal.
Thai AirAsia would continue to expand its network while King Power will push more duty-free goods onboard, as well as via the Internet.
King Power aims to become “one-stop service” centre for shopping, travelling, and entertaining with sport events thanks to Leicester, its premiership winning football club in Britain.
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The group will soon to launch a new online shopping, duty-free promotion, and join a marketing campaign with the new partners. Even people who not travel will be able to buy duty free items, it has said.
Thai AirAsia (TAA) is the airline that carries the most passengers between Thailand and China, so it is not difficult to see how an alliance with TAA will promote King Power’s retail business in the Chinese market.
TAA and King Power will team up to develop their brands, products and services together, with the aim of providing customers with international quality shopping and travel experiences at affordable prices.
Vichai said yesterday he had been interested in the airline business for a long time and used to have a 5-per-cent share in Nok Air, but decided to sell it because it was “too small”.
With 27 years of expertise in retail and duty-free shops, the King Power boss believes he can expand and diversify into new opportunities such as travel and sport.
The deal between King Power and AAV is expected to help strengthen both companies and help them grow, particularly in China, where he sees high potential right the moment.
“China is an opportunity for us. It is emerging for both air travel and also for duty free products,” he explained.
King Power currently operates a huge duty-free shop at Suvarnabhumi international airport, although its concession will expire in five years.
The billionaire whose net worth is estimated by Forbes magazine at about US$3.1 billion (Bt109 billion) also bought Leicester City Football Club in 2010. Leicester became the toast of Thailand when it won the UK Premier League recently.
In the airline deal, Vichai and four of his family bought control of AAV, operator of Thai Air Asia, the country’s largest budget airline, from the carrier’s chief executive Tassapon Bijleveld and two of his family.
AAV reported to the Stock Exchange of Thailand yesterday that its board of directors had approved the sale of 1.8915 billion shares of the firm at Bt4.2 each to Vichai and his family members.
AAV’s share price closed at Bt6 yesterday, up 10 satang or 1.69 per cent.
After the transaction was completed yesterday through big lot purchases, Tassapon reduced his shareholding in AAV from 13 per cent to 5 per cent, while his two family mem?bers’ shares dropped from a combined 31 per cent stake to zero.
Vichai now has a 14-per-cent share and his four family members take up the balance of 25.82 per cent.
Tony Fernandes, AirAsia Group CEO said yesterday:”This investment proves that Thai AirAsia’s value proposition remains undiminished. The vote of confidence that comes from one of the most successful family businesses is fantastic. The potential tie-ups between AirAsia and King Power, Thailand’s sole duty-free operator, are massive and we look forward to working together, not only in Thailand but across the group and Asean.”
Fernandes said there was no change to management at the Thai unit as Tassapon Bijleveld would continue as CEO as long he is still a substantial shareholder.
Earlier this year, King Power revealed plans to open duty free shops in China, Japan, Vietnam and Myanmar, from existing shops in Bangkok, Phuket, Samut Prakan, and at Suvarnabhumi and Don Mueang International Airport.
The group expected to earn Bt85 billion revenue this year, up from Bt65 from last year.
Vichai will have to proceed with a mandatory tender offer to acquire all the remaining securities of AAV from its other shareholders in accordance with stock market regulations. AAV’s board also approved the appointment of three new directors effective immediately, namely Sombat Dechapanichkul, Aiyawatt Srivaddhanaprabha and Apichet Srivaddhanaprabha. They replace Pattra Boosarawongse, Tanapat Ngamplang and Prechaya Rasametanin.
PTT Research & Technology Institute will use a range of Intergraph Smart Plant design and modelling solutions on a key process-engineering research and development project this year.
The move follows the successful implementation of the solutions across PTT RTI’s petroleum and petrochemical process technology research department last year.
Researchers are now using a next-generation three-dimensional design solution, Intergraph Smart 3D; a piping and instrument diagram manager, SmartPlant P&ID; and an instrument design solution, SmartPlant Instrumentation, to create preliminary design models and basic design deliverables.
Researchers will use the solutions on a key R&D project to expedite the transition from a laboratory-scale to pilot-scale unit, where the innovations developed will be “scaled up” to enable testing on a larger, more complex pilot-scale unit.
“We have been satisfied with the performance of Intergraph’s SmartPlant design and modelling solutions and are looking forward to using them on this upcoming project,” said Thana Sornchamni, head of the process design and simulation research group in PTT RTI’s petroleum and petrochemical process technology research department.
“Furthermore, the training and on-the-ground support provided by Intergraph and its partner in Thailand, Neon Infotech, helped our researchers to become thoroughly familiar with the tools very quickly.”
Gerhard Sallinger, president of Intergraph Process, Power and Marine, said PTT RTI was one of Southeast Asia’s foremost R&D institutes, so Intergraph was pleased to be playing a part in this key project to drive process industry innovation.
US-based Intergraph says its SmartPlant Enterprise offers a powerful portfolio of best-in-class design and data-management solutions, enabling companies in the process, power and marine industries to capture integrated engineering knowledge at the enterprise level.
SmartPlant Enterprise’s integrated suite of solutions enables proven productivity gains, improving engineering efficiency by up to 30 per cent, Intergraph claims.
The ARC Advisory Group, a US-based industry analyst firm, ranked Intergraph as the No 1 overall worldwide provider of engineering solutions for plant design – process, power and marine.
USANEE MONGKOLPORN,
WATCHIRANONT THONGTEP
THE NATION June 15, 2016 1:00 am
pic
IN THE second year of digital terrestrial TV, Channel 33HD run by BEC-Multimedia was the biggest revenue maker.
The National Broadcasting and Telecommunications Commission (NBTC) has received Bt226.31 million in annual licence fees from 22 digital-TV licensees.
The total figure was from a full year of operations, while last year’s total revenue from all digital TV licensees — just Bt72.1 million – was from June to December.
According to an NBTC source, a digital TV broadcaster has to pay about 2 per cent of gross revenue as its annual licence fee.
In this round, Channel 33HD generated Bt1.8 billion in revenue, the highest among the 22 existing terrestrial-based digital TV stations. So it became the top contributor in annual-licence-fee payment – Bt35.97 million – to the broadcasting regulator under the digital-terrestrial-TV licence regime.
Channel 33HD simulcasts |analog programmes from Channel 3, which is run by its sister |company Bangkok Entertainment Company under a concession from MCOT.
Combining revenues generated by BEC-Multimedia’s three digital TV networks – Channel 33HD, 3SD and 3 Family – the company made Bt2.21 billion.
Channel 3SD made Bt275 million while 3Family made Bt140 million.
Thai Broadcast, the operator of Workpoint TV, showed total revenue of Bt1.7 billion last year and it has paid Bt33.96 million for the annual licence fee.
Bangkok Broadcasting and Television, the operator of Channel 7HD, reported last year’s revenue incurred in the digital terrestrial TV system at Bt1.67 billion and paid Bt33.37 million for the annual licence fee.
After the top 3, RS Channel 8 paid Bt16.34 million for the annual licence fees, calculated on its total revenue of Bt820 million.
GMM Grammy’s One 31 paid Bt15.54 million for the annual licence fee, based on its total revenue of Bt780 million.
GMM Grammy’s GMM 25 paid an annual licence fee of Bt8.01 million.
For other leading TV broadcasters, Mono Broadcast, the operator of Mono 29, paid Bt12.53 million, True4U Station paid Bt11.68 million, Triple V Broadcast, the operator of Thairath TV, paid Bt9.53 million, and NBC Next Vision, the operator of Nation TV, paid Bt8.06 million.
WATCHIRANONT THONGTEP
THE NATION June 15, 2016 1:00 am
SOME DIGITAL terrestrial TV stations oppose the drafting of the second master plan for radio and television as they believe that the broadcasting regulator still has not delivered on its promises under the current one.
“The National Broadcasting and Telecommunications Commission should extend the execution of the current master plan until the term of the five members of NBTC’s broadcasting committee comes to an end next year,” Adisak Limparungpatanakij, president of Nation Broadcasting Corporation, the operator of Nation TV digital news Channel 22, said yesterday.
“That would ensure that they can use the remaining time to solve all issues in the broadcasting industry,” he said.
Other stations – New TV and TNN 24 – also agree that the broadcasting regulator must fix all problems that surfaced after the launch of digital terrestrial TV. They include a concrete time frame for the analog switch-off, coverage and quality of digital TV signals and a subsidy scheme for media-content development.
Adisak also said there should not be a new radio and TV master plan until the Digital Economy and Society Ministry and two new ministerial agencies – the National Economy Committee and the Digital Economy Promotion Agency – are established to take responsibility for the development of the “digital economy”.
“Under the ongoing changes, the NBTC is expected to be transformed and restructured to suit the whole new structure under the ‘digital economy’ policy,” he said.
This idea was raised among participants from digital-TV stations at a workshop organised by the NBTC to brainstorm on the key components in the draft master plan for national radio and TV broadcasting services, which is expected to replace the current plan when it expires next April.
However, Vichai RoopKhumdee, a member of the working committee on the master plan, said the key intention was not to implement this master plan immediately but the NBTC wanted to prepare essential points before the new members of the NBTC assume office and take up this matter for consideration.
The working panel is led by Peerapong Manakit, a member of the NBTC’s broadcasting committee who oversees a subcommittee on content and TV programming.
The quality of digital-TV transmission was another key issue raised by several representatives from leading TV stations.
A representative from Bangkok Broadcasting and Television, the operator of Channel 7, complained that the quality of digital TV signals both in standard and high definition were unsatisfactory compared with the quality of pictures from satellite TV.
This concern should be added to the second master plan, he said.
Some representatives also called for financial support for content development and TV rating measurement to be written into the next plan.
PICHAYA CHANGSORN
THE NATION June 14, 2016 1:00 am
THAI Jintan, a regional and global distributor of Jintan products from Japan, is adding food supplements and cosmetics to its line-up to nearly double sales this year.
Managing director Narit Vittayavarakorn said that the company expects to achieve sales of Bt200 million this year after recently introducing Jintan Nudeliquid toothpaste, appointing a distributor for the domestic market, expanding exports and launching more products.
Having focused on the confectionery and oral care business, Thai Jintan is now looking to expand to other product segments that its parent firm in Japan is involved in – healthcare, skincare and personal care.
Pending approval from the Food and Drug Administration, Thai Jintan plans to enter the dietary supplement market with its Jintan Bifina probiotic products and to introduce its Baby D vitamins for children shortly.
Narit has high confidence in the Bifina product line-ups since they have been the bestsellers in Japan for 17 years, and Thai Jintan, which has won the right to market the products in Asia, has already successfully introduced them in Vietnam.
“The supplement market is worth Bt49 billion in Thailand, of which probiotics alone total around Bt10 billion.
“We hope to find a conclusion with the FDA in two to three months,” he said.
Thai Jintan plans to enter the cosmetics market late this year with a full range of Jintan Bifina skincare products, starting with direct sales.
It will also court speciality store chains like Watson and Boots.
They are expected to be successful, considering that they are “all-Japan” products with effective and proprietary ingredients and are price competitive, he said.
Thai Jintan makes most of its sales from Jintan Nude confectioneries that Narit had initiated and developed with Morishita Jintan when he took charge of the family business in 2009, while the original Jintan silver pills are still mostly available only in drugstores.
The firm, which is the authorised global distributor of Jintan Nude, is expanding its overseas sales and is being approached by Alibaba to distribute the products in China.
Domestic sales have also been rising since it has appointed in April Sino-Pacific Trading (Thailand), a leading distributor of confectionery and other fast-moving consumer goods, to handle its confectionery line.
Claiming 5 per cent of the Bt10 billion confectionery market, Thai Jintan also plans to expand early next year into the hard-candy segment led by Halls.
“As we’ve set a target to achieve sales of Bt500 million in three years, we will introduce a hard candy early next year to penetrate the lower-end segment,” he said.
It also plans to enter the personal care market in two years.
Thai Jintan expects to finish talks on forming a joint venture with Morishita Jintan in August to build a factory in Pathum Thani for exporting Jintan products to worldwide markets.
It plans to raise funds from the Thai stock market to finance the manufacturing investment in five years.
The company targets to expand its exports to 70 per cent of total sales in three to five years, up from less than half at present.
During a knowledge-sharing session held by CP All and the Panyapiwat Institute of Management last week, Narit said Jintan Nude toothpaste had won a lot of recognition from consumers, though it remained a challenge to convince them to switch from traditional toothpaste to using liquid toothpaste.
It has hired popular TV host Vuthithorn “Woody” Milintachinda as the presenter for the product.
PETCHANET PRATRUANGKRAI
THE NATION June 14, 2016 1:00 am
DUTCH investors have shown interest in the Thai government’s infrastructure projects, foreseeing the Kingdom’s competency to be a central attraction of the Asean region, especially the Greater Mekong Subregion, according to Commerce Minister Apiradi Tantraporn.
After meeting yesterday with the Netherlands’ newly appointed ambassador to Thailand, Karel Johannes Hartogh, Apiradi said Dutch enterprises had told the ambassador they were interested in investing in Thailand and participating in its infrastructure projects.
“Dutch enterprises have foreseen Thailand as a centre of Asean and a link to countries in the Greater Mekong [Subregion] and Asean. Besides investing in infrastructure-development projects, they are also interested in the manufacturing sectors and service businesses, using Thailand as a springboard to Asean markets,” she said.
Thailand and the Netherlands have also agreed to collaborate in technology and innovation and in the agricultural sector, particularly water management, in which that country has high expertise.
However, the Netherlands has expressed concern over the Thai government’s measure to collect higher tariffs on beverages that have high sugar content, as this may affect dairy products imported from the Netherlands.
The Netherlands is Thailand’s 22nd-largest trading partner globally and No 3 among European Union nations.
Last year, Thailand’s exports to the Netherlands were valued at $4.27 billion (Bt150 billion).
The Netherlands is the EU’s second-largest investor in Thailand.
