Vol. II No.23 Saturday 7 June - 13 June 2003
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BUSINESS NEWS
HEADLINES [click on headline to view story]:

Finance Ministry assures strong baht not yet hurting exports

PTT predicts fuel demand will exceed supply

Lack of computer use hampers Thai businesses

Japanese keen on investing in Thai SMEs

Finance Ministry assures strong baht not yet hurting exports

Finance Minister Suchart Jaovisidha is assuring exporters that the strong baht is unlikely to be a hindrance to exports for the near future.

Traders anticipated the Bank of Thailand (BOT) will intervene to avoid the strengthening of the baht and its negative impact on the country’s economic growth.

The US dollar has been reeling from the slowing US economy and the sell-off of dollar contracts by global fund manager George Soros.

Thailand’s economic growth is largely dependent on exports and domestic consumption. Export and industry analysts have been concerned about the strengthening of the Thai baht against the US dollar.

“The weaker dollar is a result from heavy selling. However, it is not weak enough to create any adverse effect at the moment,” said the finance minister.

Suchart conceded that if the dollar becomes too weak it will have some impact on the world economy, particularly the economy of European countries. He added that Soros, who had been offloading his dollar accounts, has predicted that the weak dollar could do serious damage to European economies.

Suchart admitted that a stronger baht could raise the price of Thai goods. “But it will also help lower the price of imported oil” he said.


PTT predicts fuel demand will exceed supply

PTT’s president Viset Choopiban recently stated that demand for natural gas among local power producers is likely to exceed its original projection on the back of a continued economic recovery of economy. PTT is Thailand’s largest oil and gas conglomerate and has projected it may not have enough natural gas to supply local power plants in the next two to three years.

“To meet the rising demand for natural gas among local power producers, PTT will speed up its construction of a third pipeline network linking its sources in the Gulf of Thailand to onshore points in the southern province of Songkhla,” said Viset.

The investment cost for PTT’s third pipeline is based on a growth of about 3 percent a year for the Thai economy over the next 6 years; however growth has been greater than expected.

PTT’s vice-president Prasert Bunsumpun said PTT’s existing dual main gas pipelines can pipe a maximum of 2,700 million cubic feet daily of natural gas. But if growth continues at its present rate local power producers’ demand is likely to reach 50 million cubic feet daily, a demand higher than PTT can supply.

Prasert projected domestic power producers will continue to use natural gas of around 2,750 million cubic feet daily for fueling their power plants until 2005. Then the industry may need about 1,000 liters of bunker oil a year to fuel their power plants to make up for the shortfall. (TNA)


Lack of computer use hampers Thai businesses

Thai businesses are not growing as fast as they should due to an extremely low level of computer and information technology use, with nearly 46 percent of businesses surveyed failing to use computers in their day-to-day operations, according to a recent report published by the University of the Thai Chamber of Commerce (UTCC).

Thanawan Pholwichai, director of the UTCC’ s Center for Economic and Business Forecasting, said that a recent survey of 608 businesses in Bangkok and the surrounding provinces, ranging from small and medium-sized enterprises to large-scale companies, showed that as many as 46.4 percent did not use computers.

Thanawan said that Thailand should focus on product innovation and quality, rather than trying to compete with low prices.

Computer usage in Thailand is extremely low compared to other countries, where the use of computers reduces costs and facilitates communication. Many Thai companies see computers as high initial costs. They also lack skilled personnel and the high budgets needed to train them.

The survey found that in the trade sector 47 percent of companies did not use computers, compared to 31 percent in the service sector and 20 percent in the manufacturing sector. Moreover, most computers were used for data and accounting operations, and few companies had plans to use computers to expand their businesses.


Japanese keen on investing in Thai SMEs

A recent investment road show in Japan revealed many small- and medium-size enterprises in Japan have shown interest in boosting investment and trade with Thai counterparts, according to the Board of Investment’s chief.

Board of Investment (BOI) secretary general Sompong Wanapa said, “Many Japanese investors would like to invest, particularly in Thailand’s automobile and electronics industries. It is possible more than 100 SMEs could decide to follow major investors in shifting their investment to Thailand this year.”

Discussions with potential Japanese investors revealed the epidemic of the Severe Acute Respiratory Syndrome has renewed their interest in investing in Thailand after they had previously focused investment on China.

The BOI chief said meetings with several major electronics operators in United States also proved fruitful, saying they showed interest in shifting their production base, particularly for hard-disk products, to Thailand. To give the investors confidence, BOI said it might need to plan a road show in the US again. (TNA)



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