Vol. V No. 19 - Saturday May 6, - May 12, 2006
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BUSINESS 
HEADLINES [click on headline to view story]:

Lanna products for exhibition in Chengdu, China

Higher gasoline cost and stronger baht affect exports

Cabinet approves short-term economic stimulus package

Lanna products for exhibition in Chengdu, China

Nopniwat Krailerg
A Lanna group and entrepreneurs from four provinces in the lower part of the Northern region have planned a marketing strategy in advance of participating in a roadshow in Chengdu, China.
Chuchok Thongtaluang, Head of Chiang Mai Public Relation office said that the Office of Commerce, Chiang Mai had arranged the conference before “The 7th Western China International Economy and Trade Fair” which will be held on May 25-28, 2006 in Chengdu, China.
The exhibition will show banana conversion products, handbags, handmade cotton shoulder bags, soap flowers, paper products, sofa models, and fresh fruit and vegetables. This product exhibition focuses on investment, trading, communications; trade areas, cooperation, marketing development, and offers a great chance for doing business with China. There will be a total of 3,000 product exhibition booths from 73 countries, and it is expected that there will be more than 800,000 visitors and 9,000 investors.
As well as the product exhibitions, there will also be a conference between both Chambers of Commerce, Chengdu and Thai; and an MOU will be signed between Chengdu’s Chamber of Commerce and the Lanna group; including a marketing study, and cross-cultural tourism.
Chengdu is the capital of Sichuan Sheng, the center of government, trading, and important Chinese culture, with a population of approximately nine million.


Higher gasoline cost and stronger baht affect exports

Saksit Meesubkwang
Sukin Wongsa, president of NOHMEX disclosed that the export value of products made by his members in 2005 was about 3 billion baht. This year it is predicted that export would be about 2-3 billion baht, with 700-800 million baht already made during the first trimester. The reasons the exports remain relatively flat are attributed to the stronger baht currency and increasing fuel oil costs, so the export value instead of rising as predicted, has remained relatively similar to last year.
Producers have faced higher capital costs this year so they have been forced to increase the price of their products, resulting in overseas clients seeking cheaper goods from Vietnam and China. Vietnam is developing products to catch up with Thailand, but Thailand is concentrating on ensuring that their products are superior to the Vietnamese ones in both design and quality. In long term Thailand must improve product design, or customers might purchase products from neighboring countries instead of Thailand. Consequently, NOHMEX is considering opening new markets in Russia, Scandinavia and South Africa.
At the moment, there are 210 companies who are members of NOHMEX, 90 percent of whom are in the Northern region and the rest scattered throughout Thailand. Hand carved products such as furniture, toys and decoration supplies form around 40 percent of NOHMEX exports, with 20 percent coming from clothes, including ready-made dresses and suits; while 10 percent are paper products, ceramics and jewelry with the remainder toys made from plastic and resin.
Sirikan Tawarat, manager of the Bank of Import and Export of Thailand, Chiang Mai branch said that the head office had set a target for the Chiang Mai branch to authorize credit of 150 million baht for export business owners this year. It is the target that was put in place when the bank was established in its first year in Chiang Mai, offering cheap loans to export business owners, especially those producing modified-agricultural products and handicrafts. The branch in Chiang Mai has every confidence that entrepreneurs will take advantage of this cheap capital.
The bank has taken huge steps to promote its organization to be better known by exporters of the Northern region and has joined in activities with various organizations such as BOI by opening a booth to advise the local business owners on how to obtain credit and how to run an export business.


Cabinet approves short-term economic stimulus package

Concerned over possible impacts from oil price hikes on the Thai economy, the cabinet approved short-term measures aimed at stimulating the country’s economy in the remaining eight month of this year as proposed by the National Economic and Social Development Board (NESDB).
Government Spokesman Surapong Suebwonglee said that NESDB reported the overall picture of the Thai economy in the first quarter of this year to the cabinet at its weekly meeting last Tuesday.
The national think tank viewed that the economy in the first quarter of this year continued to expand more satisfactorily than in the same quarter of last year due to higher exports.
However, the Thai economy is still in a path of slowdown due to risks from surging oil prices and an upward trend of inflation and interest rates.
Should the global oil price stay at around US$70 per barrel in the remaining eight months of this year, the average price for the whole year would be US$66 per barrel, up US$17 from US$49.20 per barrel last year, the NESDB noted.
The inflation rate surged to 5.7 percent in the first quarter and the short-term repurchase rate stood at 4.75 percent.
Dr. Surapong said private consumption grew roughly 3.5-4 percent in the first quarter, compared with 4.4 percent the same quarter last year.
Private investment in the first two months of this year increased 5.1 percent, compared with 8.4 percent the same period the year before.
Dr. Surapong said NESDB had proposed short-term measures to stimulate the Thai economy within the remaining eight months of this year as follows:
On energy conservation measures, NESDB saw a need to encourage local consumption of natural gas for vehicle (NGV), increase the number of NGV service stations to 180 within this year and motivate consumers to use NGV by offering an attractive service cost for equipment installation and low-interest loan sources.
As well, it is necessary to accelerate production of alternative gasohol to the amount of eight million liters per day within this year.
State agencies have been instructed to help save energy by 10-15 percent this year.
NESDB suggested an acceleration of the export promotion campaigns to increase state revenues.
The measures are aimed to make export growth, particularly for farm products, electronics and vehicles, reach 17 percent as targeted.
Other measures are to promote tourism concretely, accelerate opening of the Suvarnabhumi Airport in July and speed up disbursements of budgets. (TNA)



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