Vol. VII No. 25 - Tuesday
June 17 - June 23, 2008



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by Saichon Paewsoongnern


BUSINESS & TRAVEL
HEADLINES [click on headline to view story]:

Government to develop integrated logistics system

Govt’s incentives insufficient for E85 cars made in Thailand

FTI urges Thai govt to help reduce cost of living

Govt agrees to raise sugar price

Government to develop integrated logistics system

The Thai government is determined to develop a comprehensive logistics system in preparation for trade liberalisation, according to Finance and Deputy Prime Minister Surapong Suebwonglee.
Delivering a keynote speech on “Thailand’s Logistics Policy and Trade Liberalisation,” he said he was worried about the development of the country’s basic infrastructure. Thailand is currently ranked 48th among 55 countries for the basic infrastructure development as it has not yet been able to create an integrated system of logistics.
Up to 86 per cent of the country’s cargo transfers rely on land transport, with only 2 per cent distributed by the rail system.
At present, Thailand’s transport cost is as high as Bt1.2 trillion, and oil consumption for transport reaches Bt800 billion or 10 per cent of the gross domestic product (GDP).
However, Surapong said the government is attempting to forge ahead with development of a large-scale transport system. In particular, it has developed transport routes linking with Myanmar, Laos and Vietnam.
Dr. Surapong said the government would also count on information and communication technology to develop a rail system that links land, seaborne and airborne transports. (TNA)


Govt’s incentives insufficient for E85 cars made in Thailand

Fourteen car manufacturers in Thailand have delivered their assessment that the Thai government’s measures and incentives are still not attractive enough to induce manufacturers to produce E85 vehicles in the Kingdom, said Deputy Prime Minister and Industry Minister Suwit Khunkitti last week.
Suwit said his ministry would ask the manufacturers what added measures they wanted in a bid to enable the country to become a hub for alternative energies for automobiles. The government is going all out to encourage more motorists to switch to using E85, a blend of 85 per cent ethanol and 15 per cent gasoline.
Last Tuesday, the cabinet gave a green light to exempt import tariffs on E85 car parts as well as lowering excise taxes for E85-powered cars.
According to Suwit, the manufacturers also said they would continue to concentrate on manufacturing eco-cars, but that the government plan to promote manufacturing E85-powered cars would not affect their businesses.
Currently, six eco-car projects have received Board of Investment’s privileges. Combined production is estimated at 800,000 units in the next six to seven years which would make Thailand an important production base for energy-saving cars.
Suwit said his ministry would soon meet again with all 14 producers to lay out a long-term automotive industry pilot plan, designed to make Thailand a significant passenger car production hub, apart from being a one-tonne pickup truck hub. (TNA)


FTI urges Thai govt to help reduce cost of living

The Federation of Thai Industries (FTI) has urged the government to help lower the public’s cost of living, which has been battered by soaring global oil prices and locally increased inflation.
FTI chairman Santi Vilassakdanont said the Thai economy is now confronted by several negative factors including a sharp increase of New York crude to US$139 per barrel, Thai inflation in May which rose to 7.6 per cent and the recent increases in deposit and lending interest rates of commercial banks.
Some businesses are now reluctant to ask for loans from commercial banks, especially those focusing on goods manufactured for the Thai market, as consumers have slowed their spending, Santi said.
“The outlook of the Thai economy towards the end of the second quarter until the third quarter isn’t bright while economic growth this year isn’t expected to reach the projected 6 per cent. Growth is expected to be about 5 per cent only,” he said.
Santi proposed that the government should introduce measures to help lower expenses for the people, such as distribution of food coupons for certain groups, as is done in some other countries, and holding fairs to sell goods inexpensively. (TNA)


Govt agrees to raise sugar price

Those with a sweet tooth who prefer to put plenty of sugar in their coffee might start having to think twice and become sugar-free, after the government agreed to increase sugar price by 5 Baht per kilogram. The government’s decision will likely have a grave effect on consumers and sweetmeat sellers.
A sweetmeat vendor said “Obviously our production cost has risen. We have less profit.”
Although the sugar price hike has caused trouble for sellers, it has great benefit not only for sugarcane growers —who have suffered from low prices for many years — but also the Bank for Agriculture and Agricultural Coopperatives or BAAC.
“As currently the BAAC has subsidised 24 billion baht to help with sugarcane farming, each increased 5 Baht per kilogram of sugar sold will go to BAAC. It is estimated it will take 5 years for BAAC to clear existing debts,” said Akachai Ariyamongkonchai Deputy Secretary General Cane Planters Association For Zone 7.
For sugarcane growers, the price rise is as high as 700 to 807 baht per ton. Still, they cannot break even. One rai can grow a maximum of 12 tons of cane, which means that the most income that can be gained per rai is 9,684 Baht. The growing cost is high, at 10,000 baht per rai, especially when chemical products and other materials cost more due to the oil price hike.
Anchalee Chamnongkol, a sugarcane grower said, “It’s great that the government has increased the sugar price but it can’t cover our growing costs anyway.”
Raising the sugar price alone might not be enough if the government wants to ensure sugarcane growers a better living in the long run. Plans to improve sugarcane output and quality are still vital. (TNA)



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