The Brief, Dec/2011

Magazine of the British Chamber of Commerce Thailand December 2011

www.bccthai.com

Business battles back The Brief

December 2011

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CONTENTS December 2011

BCCT

Board of Directors Chairman GRAHAM MACDONALD MBMG Group T: 02 665 2534/9 graham@mbmg-international.com Vice Chairman SIMON LANDY Colliers International Thailand T: 02 684 1500 slandy@loxinfo.co.th Treasurer JOHN SIM KPMG in Thailand T: 02 677 2081 jsim@kpmg.co.th Directors STEPHEN FROST Bangkok International Associates T: 02 231 6201/6455 bia@cscoms.com, sfrost@bia.co.th

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RICHARD GREAVES Grand Hyatt Erawan Bangkok T: 02 254 1234 richard.greaves@hyatt.com COLIN HASTINGS The Big Chilli Co., Ltd. T: 02 233 1774-6 colin1066@hotmail.com Matthew Lobner HSBC T: 02 614 4000 matthew.k.lobner@hsbc.com SIMON MATTHEWS Manpower Thailand T: 02 634 7273 matthews@manpower.th.com

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CHRIS THATCHER Individual T: 085 064 8884 christhatcher1@gmail.com Dean Thompson Boots Retail (Thailand) Ltd T: 02 694 5999 dean.thompson@bootsrt.com NIGEL OAKINS Blue Mango Publishing Co., Ltd T: 02 237 9800 nigel@oakins.com JAMES PITCHON CB Richard Ellis (Thailand) Co., Ltd T: 02 654 1111 james.pitchon@cbre.co.th

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This Edition

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The business of recovery: Christopher Bruton assesses the impact of the flood crisis

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Thailand’s latest disaster highlights the importance of Business Continuity Plans

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Insurance cover at risk as Thailand counts cost of flood disaster Front cover: Thailand’s flood disaster is a major test for business and government.

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Loss adjusters to play role in recovery process

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BCCT members help flood victims

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Full steam ahead for Pattaya property market

46

Hotel investment stays on upward curve

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London prepares for Olympics year

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Ready to make a contribution? BCCT seeks new board members

The Brief

December 2011

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CONTENTS December 2011

British Chamber of Commerce Thailand 7th Floor, 208 Wireless Road Bangkok 10330, Thailand Tel: 02-651 5350/3 Fax: 02-651 5354 Website: www.bccthai.com Email: greg@bccthai.com Greg Watkins, Executive Director

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The Brief is published by: British Chamber of Commerce Thailand For advertising and editorial enquiries, please contact Greg Watkins Executive Director - BCCT Production: Scand-Media Corp., Ltd Bangkok

Every Edition

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BCCT Chairman bids farewell: Graham Macdonald confirms plans to step down

26 The views expressed by individual authors are not necessarily those of the British Chamber of Commerce Thailand or of the publisher.

Reproduction in whole or in part without written permission from the British Chamber of Commerce Thailand is strictly prohibited.

BOI approves new emergency measures

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Helping the needy: Foundation gives much-needed support to the disabled in northern Thailand

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By the numbers

61

News from BCCT members

66

Chamber events – including snapshots from Ploenchit Fair 2011

The Brief

December 2011

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Experis™ / Manpower ® / Right Management® © 2011 ManpowerGroup. All rights reserved.

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The Brief

December 2011

BCCT Chairman bids farewell

S

ince my last missive, Thailand and its people have been beset by the tragic flooding which has caused death and destruction on a massive scale. Before anything else, on behalf of BCCT, I would like to send condolences to those who have been affected by what has happened and emphasise that our thoughts are with you.

Graham MacDonald

Official Sponsors

The floods have brought despair to many and it is up to those who can help to do so.

BCCT has been in touch with Thai Chambers of Commerce and the Board of Trade of Thailand to offer what we can. We will also be advising members of how they can participate in comforting and encouraging those who have suffered and how to help them get started again. At the same time we are fully aware that BCCT members have also undergone losses and we will be giving whatever support we are able to.

We should not forget that this is the time of year when we think of those who are less fortunate than ourselves and we give whenever and whatever we can. As W.C. Jones said, “The joy of brightening other lives, bearing each others’ burdens, easing other’s loads and supplanting empty hearts and lives with generous gifts becomes for us the magic of Christmas.” This is the time to act and follow those wise words.

The Chamber has decided to donate net proceeds from the raffle and auction from this year’s Christmas lunch to provide relief to those affected by the floods.

The Chamber goes from strength to strength but no-one has a monopoly on good ideas and new faces would be most welcome. I would urge people to consider standing for the board next year. When the invitations to join the board are sent out, they will stipulate what is expected of a director. If you can commit to these criteria, which are not onerous, then it would be good to see lots of competition for board places in 2012.

Official Supporters

This will be my last message as Chairman as I have decided to stand down from the Board. After fifteen years as Chairman of the Eastern Seaboard and fourteen years on the board it is time for new blood to take over. I will also be handing over the Chairs of the Eastern Seaboard and the Charity Group to a younger generation. However, I will still be around if anyone needs a helping hand so you have not got rid of me completely.

It has been an honour and a privilege to serve you. I have enjoyed it immensely.

There are a host of people to thank, in particular, my vice chairmen and the treasurer John Sim. I would also like to say it has been an honour to work with the embassy. Its staff have been wonderful in helping the Chamber and we complement each other superbly. However, and most importantly, without the support of Greg Watkins and the staff at the BCCT office, it would have been impossible to do anything. My hearty thanks to all of them.

Annual Airline Sponsors

By the time of the AGM next month, I am extremely hopeful that we will have announced a surplus for 2011. Again this is down to the good management and hard work of the staff and board in general. However, as I stated in the last issue, it would help greatly if you could pay any outstanding invoices as quickly as possible.

Also, please remember if you do introduce a new member then you get 25% off your fees for next year.

As intimated above, despite all the travails and tragedy of the last couple of months, this is the Festive Season where we should be hearty and make merry. So please let me take this opportunity to wish you all a Merry Christmas and a Happy & Prosperous New Year.

I will sign off for the last time by asking you to remember the words of Charles Dickens, who wrote, “I will honour Christmas in my heart, and try to keep it all the year”. In 2012, I think we will all need to help each other as much as we can and we should do so with a smile on our face.

The Brief

December 2011

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Executive Director’s Message

A

GREG WATKINS

Other Major Sponsors

s I prepare my last message before the festive period my thoughts turn to the many people in Thailand affected directly or indirectly by the flooding. Media coverage focuses on specific areas. It is only when you take-off from Suvarnabhumi Airport over eastern Bangkok or study satellite images that you begin to appreciate the scale of this disaster. It has had an impact on all BCCT member companies. The BCCT office has remained open and fully functional despite four staff being forced to leave their homes.

Whatever the reasons for the widespread flooding and the management and communication challenges faced by the authorities, the adaptability, forbearance and community spirit of Thai people has been extraordinary.

2012 presents many challenges. BCCT will be focusing on supporting members in the recovery process. The Annual General Meeting and board of director elections are fast approaching. This is a great opportunity for members to contribute actively to BCCT’s work. Therefore I would like to invite any member interested in joining the board to stand for election. The current board demographic – male, expatriate and average age 53 years – needs to be more representative of the wider membership. Several current board directors have indicated that they are not standing for re-election which leaves the field open for new and enthusiastic candidates. Continuity for the new board is provided through the BCCT office and the external support of some past board directors. If you would like to know what is involved in the work of a board director please contact me.

BCCT will end 2011 in a good financial position and with a workable budget for 2012. Following two years of losses, cost-cutting measures have resulted in major reductions to the principal expenses of salaries and benefits. On the income side membership remains stable and new sources of income resulting from bringing in-house both BCCT publications (the Annual Handbook & Directory and The Brief magazine) and sponsored emails will see BCCT achieve a good end-year operational surplus. At this stage I would like to thank BCCT Treasurer John Sim and his team at KPMG for completely restructuring BCCT’s accounting systems (and finding a new Accountant). These systems provide the foundations which underpin the work of the BCCT office. A challenging but achievable work-plan is being prepared that will hopefully see the new board working together to actively support members.

I would like to offer my personal thanks to those board directors and members who supported and encouraged me in 2011, in particular through the difficult first five months of the year. The BCCT staff have worked extraordinarily hard this year most notably RJ and Tai on events and Kaew on the accounts. Without their support it would have been a very different year. With Jyoti and Air joining us and a new support resource to be recruited, the BCCT office is well-placed to meet the challenges and opportunities that 2012 will no doubt present. Finally I should offer special thanks to outgoing Chairman Graham Macdonald for his positive and pragmatic leadership in a board year that had some internal issues occupying much time but that was ultimately successful. Graham leaves the board after fourteen years service but I know he will be providing continuity and support to the new board.

For my part I look forward with much enthusiasm to working with the new board in 2012. We (the board and office team) should never lose sight of BCCT’s main operational objective which is to help members develop their businesses. Before closing I should like to wish all members a Merry Christmas and a happy, and more prosperous, new year.

The Brief

December 2011

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Cover Story

Flooding crisis and new goverment policies

By Christopher Bruton

T

he British Chamber of Commerce Thailand Evening Panel Discussion on 22nd November addressed, in a single broad-brush stroke, the issues of “the impact on business of the flooding crisis and new government policies”.

Since the “new government policies” are not all that new, and there is some doubt about the chances of policies becoming realities, the main focus of discussion was firmly placed on the issues arising from the now receding flood waters, and the resulting but not yet receding crisis.

Khun Pornsil Patchrintanakul, Vice Chairman of the Thai Chamber of Commerce and of the Board of Trade, led the discussion. He emphasised that the flood crisis in 2011 may be considered as the heaviest and severest crisis affecting Thai society in many areas over a long period 10

The Brief

December 2011

of time. Five industrial estates in Ayudhya province have been gravely affected, involving 572 factories, with over 223,000 workers and capital investment of THB 213 billion.

In Pathumthani province, two industrial estates with 321 factories, 130,000 workers and investment of over THB 150 billion have been equally affected. However the floods have also affected, directly or indirectly, much larger numbers of factories and workers nationwide, especially in the automotive industry, which has been brought to a near standstill, because of stoppages in the automotive parts supply chain. Loss of production could amount to 380,000 vehicles, valued at THB 180 billion, during fourth quarter 2011 alone.

The Thai Chamber of Commerce has estimated that more than one

million families have been directly affected, with costs of more than THB 340 billion. The loss to GDP could amount to as much as 3.4 percent. Thai exports for the fourth quarter of 2011, although still representing a marginal increase over 2010, will experience a sharp cutback on the first three quarters of this year.

According to the Office of Social Insurance, fourth quarter unemployment could reach 360,000 people, potentially costing THB 5.5 billion in unemployment pay.

For the tourism industry, it is forecast that losses could amount to THB 20 billion, arising from loss of earnings from up to 800,000 tourists now likely to stay away from Thailand as a result of the flooding and adverse media coverage internationally.

Dr. Sethaput Suthiwart-Narueput, formerly Chief Economist at Siam Commercial Bank and currently managing partner at Advisor Co., Ltd, emphasised Thailand’s dependency on exports, especially electronics and autoparts, severely affected by the flooding in the central region of Thailand where not only the incomes of large and small businesses but also of their workers along with small traders and farmers have been deeply affected.

However the brighter outlook is that economies tend to recover more rapidly from natural disasters, such as tsunami, earthquakes or the present floods, than from macro-economic and financial crises, which cause the economy much deeper and protracted damage with slower, even more painful recovery.

Thailand has been suffering from a whole series of challenges: the Map Ta Pud environmental crisis, the Suvarnabhumi Airport shutdown, the Ratchaprasong riots, widespread arson attacks, and now the flooding.

Some people will ask: what next?

Many Japanese investors appear frustrated at the ineffective management of the problems that have arisen. Investor confidence has been severely hit. Whereas in Malaysia, Indonesia and Vietnam, investor confidence and activity have shown signs of recovery Thailand’s situation remains flat without much sign of recovery, even before the recent disasters.

Dr. Thitinan Pongsudhirak, Director of the Institute of Security and International Studies at Chulalongkorn University, observed that flooding and drought are intermittent: maybe in 2012 we will be crying out for irrigation water, rather than being neckdeep in flood water.

How much more can Thailand take after the depredations of nature, plus the activities of politicians and street mobs? There are deep divisions in Thai society and, rather than using natural disasters as rallying points for reconciliation, political divisions can accentuate the severity of crisis.

The whole situation has been poorly managed. The Bangkok Metropolitan Administration has frequently

been at odds with national government, and political leaders have often been expressing conflicting opinions.

have found ourselves with an ineffective government – led by an inexperienced prime minister.

As far as water management is concerned, this is not a recent issue.

There has bee n poor planning and administration for many years. It would be much better to hand such specialised activities over to real professionals, such as consultants from the Netherlands, rather than trying to manage by committee and letting the politicians get involved.

However, if there were another election, the electors would probably vote the same way as before. The main talent in the ruling party remains banned from politics until May 2012, when their five-year suspension from political activity expires. Whether or not some form of amnesty is introduced and approved, Dr. Thaksin Shinawatra continues to be successful in winning elections and remains popular with the masses.

However the good news is that Thai people are very adaptable, and the floods, like all the other crises in the past, will fade from people’s minds over time. Fortunately, with Thailand’s low ratio of public debt to equity, there is plenty of room for debt financing as long as the prudent fiscal policies of the past are maintained.

More significant will be the handling of political and social divisions. Thailand’s divided society lacks consensus but eventually will get past even this barrier to progress.

The new government, headed nominally at least by prime minister Yingluck Shinawatra, is quite remarkable – even by Thai standards. After a resoundingly successful election we

The main challenge is that Thailand has no internal peace and has lost international prestige. Whereas once Thailand enjoyed high prestige and international recognition, today interest has moved to Thailand’s neighbours, in particular Myanmar.

So where are we heading on the government policy front?

Turning to issues of government policy, Khun Pornsil Patchrintanakul discussed briefly the 16 key policies formulated by the incoming government (see box below). The main question is, however, not what the policies are, but how they will be implemented, if at all.

The policy menu card: 1. Create reconciliation and restore democracy; 2. Set up drug prevention and rehabilitation as a national agenda; 3. Promote prevention of corruption by advance to international transparency; 4. Promote integrated water management administration and to expedite the expansion of irrigation areas; 5. Bring back peace and security for life and property to the South; 6. Promote mutual regional economic growth and to settle conflicts along borders; 7. Alleviate burdens of people and entrepreneurs arising from inflation and fuel prices; 8. Elevate quality of life and increase domestic purchasing power within this policy come the increase of minimum wages of Baht 300 per day, and Baht 15,000 per month for university graduates; 9. Decrease tax for juridical persons to

23% by 2012 and 20% by 2013 to increase competitiveness and ensure accession to the ASEAN Economic Community; 10.

Encourage small loans, including Baht one million per village funding, together with funding for women’s enterprise, higher education, and promotion of the sufficiency economy; 11. Promote farm incomes including rice mortgaging; 12. Increase income from tourism by a renewed “Amazing Thailand” promotion; 13. Promote handicrafts and community products; 14. Develop health insurance and increase the efficiency of the Baht 30 health scheme; 15. Provide tablet computers for schools together with programming and freeof-charge wi-fi internet systems; 16. Promote political reform by means of a new constitution.

The Brief

December 2011

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Cover Story For Dr. Sethaput, there are both short-term and long-term issues. In the short-term, the government simply needs to do something rather than nothing. There has been too much stagnation and the main imperative is to get back some momentum.

For the longer term, the relevance of policies depend on what kinds of business one is involved in. Much of the policy platform is populist and geared to benefit small and medium enterprises. From a fiscal viewpoint, spending seldom gets out of control but there is a risk that populist spending can crowd out solid investment. There has, in the past, been much talk about mega-projects but not much really happened. Then there was the ‘Thai Khem Keang’ initiative, but not much happened over that either. We are really not short of policies but we are short of actual policy implementation.

Are the storm clouds of world recession gathering?

I asked the panel whether, with all this talk of flood relief and populistoriented policy, we were forgetting the fast-approaching economic tsunamis heading our way from Europe and North America. Generally, panel members expressed doubts about the Economic Outlook produced in November by the National Economic and Social Development Board (NESDB).

This report indicates a first half 2011 GDP growth of 3.0 percent and third quarter growth of 3.5 percent. But, with the downturn in fourth quarter 2011, full year GDP will remain positive at 1.5 percent. But for 2012, the NESDB forecasts GDP growth of 4.5 percent to 5.5 percent. Even with the impact of rehabilitation spending, this seems ambitious (see table).

The impact of the Eurozone crisis will inevitably be severe. The European Central Bank will have to underwrite support for the weaker economies but high risks remain of mediumterm collapse and, ultimately, retreat back away from the Euro to national currencies. The lessons have not yet been learned that one simply cannot

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The Brief

December 2011

(% YOY)

2010

2011

Projection

H1

Q3

2011

2012

GDP (at 1988 price)

7.8

3.0

3.5

1.5

4.5-5.5

Total Investment

9.4

6.6

3.3

4.7

10.3

Private

13.8

10.5

9.1

8.8

11.0

Public

-2.2

-5.9

-10.9

-7.9

8.0

5.1

2.8

2.1

2.3

4.0

4.8

3.0

2.4

2.5

4.4

(at 1988 price)

Total Consumption (at 1988 price) Private Public

6.4

1.4

1.1

1.2

2.0

28.5

23.1

27.3

17.2

19.0

17.3

13.7

16.6

10.7

12.0

36.7

27.7

33.4

27.2

25.0

26.5

19.1

24.4

16.7

17.0

4.4

4.2

3.5

2.2

1.2

Inflation

3.3

3.6

4.1

3.8

3.5-4.0

Unemployment rate

1.0

0.7

0.7

0.7

0.7

Export of Goods (US$) Volume Import of Goods (US$) Volume Current Account to GDP (%)

Source: National Economic and Social Development Board, November 2011

have an incomplete economic union without overall fiscal controls.

In fact Thailand, with its relatively much more favourable public debt to GDP ratio of only 41 percent, compared with the weaker European countries with public debt to GDP ratios of over 100 percent, is in a better position. But there needs to be more reliance on domestic consumption rather than depending on exports.

Only then can we reduce the impact of recession in Western countries.

impossible to arrive at even a broad estimate of the bottom line cost of the ‘great flood’.

The optimistic reassurances that Thailand remains the darling of existing investors, and the preferred choice of possible newcomers, needs reassessment. Unless government can display greater commitment to formulating comprehensive water management, irrigation and disaster control policies and carry them out immediately and effectively, the credibility gap will become ever harder to close.

Is the worst yet to come?

Quite apart from the risks of underestimating the possible impact of Eurozone and US economic downturns, we may also find that the final accounting for flood damage is much higher than presently estimated. The NESDB estimates flood costs at under THB 250 billion and 2.3 percent of GDP whereas the Federation of Thai Industries damage forecast reach THB 1.12 trillion and 10.5 percent of GDP. At that level, 2011 GDP performance will turn heavily negative.

The fact of the matter is that, with many factories still under water and no thorough assessment of damage or placement cost yet feasible, it is

Thailand can do the necessary, but only with strong, action-oriented leadership.

Christopher Bruton is Executive Director of Data Consult Ltd, 54 Soi Santipharp, NaresRoad, Bangkok 10500.

Tel: 02 233 5606 Fax: 02 236 8143 Email: info@dataconsult.co.th www.dataconsult.co.th

Crisis highlights need for sound BCPs

By Sarinthorn Sachavirawong

T

hailand is still dealing with the flood crisis that affected more than two-thirds of the country since July 2011. Farmland, business communities and industrial estates have been inundated. A fully estimated loss to the economy is yet to be determined but the World Bank’s forecast is US$45 billion. Factories shut down, transport routes cut off with supply disrupted.

Millions have been displaced from their homes and an equally large number have had their livelihoods disrupted. The effect is far reaching and has impacted global supply and prices of hard disks, electronics and automobile parts, amongst other items.

This may be Thailand’s worst flood in half a century, but it is certainly not an isolated incident causing business disruptions. Since 2006 Thailand has faced: a military coup, street protests and demonstrations leading to closure of Bangkok’s Suvarnabhumi airport, occupation of the central business district and two major floods in the last 18 months.

Given such fragile economic climate, and exposure to external risks within and from outside the country, planning for business continuity becomes critical for organisations.

Companies within the finance and banking sectors tended to have the more comprehensive Business Continuity Plans (BCPs). Central banks require financial institutions to have such plans. Other big companies followed suit and are continually refining their BCPs. However, it seems many smaller firms are still lagging behind.

Research by a European insurer found

that 46 percent of small and mediumsized businesses in Britain do not have a business continuity plan of any sort1.

When asked why, some responded that they found the task too daunting, or the risks too universal and others preferred for the wait and see, deal with the problem when it occurs.

However, crises that we have encountered in Thailand these past years should make us realise that organisations from all sectors – large and small – need to have plans to operate during a disaster and a recovery plan. Take the case of education institutions for instance. During the flooding crisis 2011, schools have had to extend their holidays to over a month.

Without a BCP, students miss out on classes and valuable lessons, curriculum is cut short and students will struggle to cope with the work load.

There are of course the positive stories where schools have opened up their classrooms to accommodate students who have evacuated into their area from the affected provinces. The Traidhos EduCare programme and BIS Phuket open door policy are some such examples (see pages 33 and 63).

A BCP need not be complicated or expensive but should be tailored to fit an individual business. It can range from complying with industry standard such as the British Standard on Business Continuity Management (BCM), BS25999, or those imposed by your industry peak body such as the central bank for financial institutions, to setting up your own form of guidance and recommendations. Ask the question: does your business need a BCP and can it afford not to have one? A typical plan will include:

• Identifying your critical business operations: – what is it that your company absolutely must do; can certain things be put on hold without incurring major costs and penalties; • Identifying risks and assessing the impact they would have on your business: – check your contractual obligations; – financial impact of business disruptions; – try to determine how much your customers may or may not tolerate disruptions to services; • A list of essential business resource requirements: – what resource would you need to ensure those critical business functions can still run. These may range from having access to certain information, files, records, database; identifying which staff members should have access to what equipment and resource and who should be on the business continuity team; • Develop a strategy to respond to, manage, and recover from an incident: – think of a way that the plan can be invoked easily without too much bureaucracy; – who should make the decision, at what point. Remember such incidents are time-critical; • Have a checklist and a communication plan ready.

There are a number of tools available to help you develop a check list for your BCP. One such tool can be found on the PriceWaterhouseCoopers Thailand website. The Bank of Thailand’s policy statement on BCP and Business Con-

1 ‘Out-of-Business As Usual? - The challenges of Business Continuity Management in the UK’s small and medium-sized enterprises’ by Henley Management College for AXA Insurance

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The Brief

December 2011

tinuity Management provide another good overview of what is involved.

Risk advisor Marsh PB Thailand has a disaster recovery portal available.

The site offers information on how to prepare for a flood, how to make insurance claims and other business resiliency materials.

TNT Express Worldwide (Thailand) has shared a summary of its BCP with readers of The Brief. (See page 17). A good resource site to get you started is the Continuity Central website www. continuitycentral.com.

Once you have a BCP it needs to be tested, reviewed and updated to make sure it remains relevant and useful.

Staff should be trained and briefed on what is expected. As with any other business plans, remember that people support what they help create. Make sure staff are involved from early on in the development phase.

Having a BCP does not guarantee immunity from problems, so why have a BCP? British Prime Minister and author Benjamin Disraeli (1804-1881) once stated ‘I am prepared for the worst but hope for the best’ and, in the words of General Dwight D. Eisenhower, ‘When planning for war I have always found plans to be useless but planning to be invaluable’.

While having a BCP is not entirely a ‘get out of jail card’, it does help differentiate your business from those of competitors.

The confidence of your clients, investors and stakeholders can be bolstered when your company has a plan on how to deal with challenges during a crisis, and have a recovery plan in place. Having a BCP could add to your reputation management strategy.

When you conduct impact and risk analysis during the planning stage, it may also help you identify ways to streamline your work processes – possibly leading to cost reductions. One of the cost reductions could come in the form of lower insurance premiums.

You may find that your insurance companies and brokers are willing to consider lower premiums once they see

HSBC banks on continuity The Bank of Thailand advised all financial institutions about the requirement to continue banking operations as usual – in particular the payment and settlement operations.

HSBC Thailand, as per group standards, maintains an active Business Continuity Plan (BCP). Maintaining systems at a desirable capacity, resource planning and management were the key contributory factors in providing such service standards at challenging times.

As the crisis worsened, more of our staff were affected so we adjusted our resources accordingly. Safety of our staff and their families was also a key priority for us. Clear and consistent communications were provided to customers and staff. There were frequent crisis committee meetings held and strategic decisions were made based on the information available. Using technology, such as IVR, SMS, Blackberries

you have a BCP to help mitigate risks.

Duncan Buchanan, CEO at Marsh PB Thailand, said, “This catastrophe in Thailand – along with others in the region over the past 12-18 months in Japan, Queensland and Christchurch – serves as a good reminder to check your insurance and to determine the level of coverage needed. These situations also show the need to supplement insurance with robust risk management practices such as business continuity and crisis management. These assist in times of crisis by helping businesses to recover faster and minimise disruption.”

and Lotus notes, we maintained contact with our staff and connected with respective regional functions and with each other.

For those affected staff we provided accommodation near to our office in addition to those categorised as critical in maintaining service standards. Some employees had home working arrangements. We were ready with adequate food, water, medicine and other essentials to support continued services for further eventualities.

Having a BCP helped HSBC in Thailand to continue its service standards at an optimum level, thereby serving our customers to continue their normal banking requirements.

More details from: Asdaporn Vanabriksha, Chief Operating Officer, HSBC Thailand.

Email: asdapornvanabriksha@hsbc.co.th OR Dimantha Seneviratne, Chief Risk Officer, HSBC Thailand.

Email: dimanthaseneviratne@hsbc.com

cabinet to contract a study on developing a BCP for Thailand in 2009.

The NESDB contracted PriceWaterhouseCoopers Thailand to conduct the study in 2010. Reported findings are to be finalised by the Project Steering Committee and is expected to be ready for submission to the cabinet for approval later this year. This will indeed be an apt time to explore the recommendations from the report and to determine what can be put in place to respond to disasters.

Whilst insurance cover does provide some financial protection it does not cover loss of business opportunities, dissatisfied customers and damage to reputation.

A Business Continuity Plan is certainly not the ultimate, nor comprehensive solution to risk management.

Recent events in Thailand and around the world have illustrated that BCPs are needed not just at the business operational level, but also at the country level. A BCP is key to ensuring businesses and the economy remains resilient. The Office of the National Economic and Social Development Board (NESDB) was given approval by the

Sarinthorn is the BCCT’s new Deputy Director. On one of her previous assignments she worked with local management of an international financial institution to review the BCP for a small unit within the organisation. She is NOT an expert ( far from!) in business continuity planning, disaster recovery or risk management.

Email: Sarinthorn@bccthai.com

The Brief

December 2011

15

Summary of BCP from TNT Express Worldwide T he Business Continuity Plan (BCP) describes the responsibilities and actions to be performed by the management and staff in Thailand for both divisions in the event of a civil commotion to maintain the critical activities of the company.

There are many indices covered by the BCP, such as the definition of civil commotion levels, planning methodology, roles and responsibilities, key contact details (internal and external) and additional information.

Planning This plan covers country civil commotion levels 1, 2, 3, and 4. It provides details of the possible consequences of each crisis level and recommends certain actions to mitigate the impact on our business. The demonstration scenarios are forecast based on historical knowledge. These cannot be considered as being factually certain in terms of reoccurrence, and will be updated whenever new information is available.

Approval, control and distribution The Managing Director is responsible for approving commencement of associated BCP activities, and for ensuring that the plan remains effective at all times. This Business Continuity Plan is a controlled document and must be reviewed at least annually, and whenever there is a significant change in the organisation’s business activities or when testing identifies areas for improvement.

The country BCP coordinator (Security Manager) is responsible

for maintaining the plan to ensure it is up to date, and will ensure its effective distribution. He will maintain the master copy both in electronic and paper format.

The coordinator is also responsible for ensuring the plan is distributed to all members of the country senior management team, the managers of all locations and those who have specific roles in its activation and control.

Plan Activation Before activating BCP for each level, the BCP coordinator (Security Manager) must consult with the Managing Director. Activation of the plan for each level will be made by the Managing Director only.

Communication

Security manager keeps monitoring the situation with daily updates to TH management and ASPAC. TH management sets up a group to gather all information and provides regular internal and external updates.

TH management will immediately inform all staff by sending out emails to all users/stakeholders and raise awareness of the situation with appropriate action throughout the country organisation. The Managing Director will control all internal and external communications depending on each of the civil commotion levels 1, 2, 3, and 4.

For more information contact Alan Miu, Managing Director, TNT Express Worldwide (Thailand) Ltd. Tel: 02 257 6555

Samples of Civil Commotion LEVELS

POSSIBLE SCENARIOS

Level 1 (Low )

• A small group of demonstration in specific area / premises • A small demonstration with road block in specific area • Rain, Flood in rural area, • Earth quake less than 3 on Richter scale

• Internal Security Act declared • An Increase of main road block in the city, highway.

• Demonstration expand wider • Possibility of some staff directly affected with the demonstration and could Level 2 not be reached to work / home (Medium) • Possibility of more than 5% network impact • Flood in some small road • Earthquake less than 5 on Richter scale • Report of minor injuries

Level 3 (High)

• State of Emergency declared.

• Flood on main road obstruct our network but can used other contingency road • Earth quake less than 7 on Richter scale • An increase of road block and impact our network services more than 10% • Some public transportations shut down in main area • Depot closed

• State of Emergency declared / Martial Law declared • Flood in Bangkok and on all main road of our network Level 4 • All others road closed (Extreme) • Earthquake higher than 7 on Richter scale • All public transportations (Skytrain, Underground train and Public Buses) shut down • Increased of more major injured and fatalities

The Brief

December 2011

17

Time to act as business looks for swift recovery

By Christopher Osborne and Monrawee Ampolpittayanant

T

imes of crisis require swift and decisive action and, in the case of Thai companies, this obligation falls to senior management and the board of directors. Some factories have been submerged by recent floods and are unable to continue operations. Other factories, though not flooded, are prevented from operating as they cannot obtain supply chain materials sourced from factories now under water. However, in each case, the result is the same. Through no fault of the company the factory cannot continue operations and there is no work for factory employees.

We see five major areas for floodaffected companies to consider.

1. Employees – suspending payment of wages is not risk-free There has been frequent reporting in the media recently to the effect that companies affected by force majeure are not required to pay wages to employees. However, this position has not been tested in the courts. In fact, court precedent suggests that not paying wages during a cessation of business operations could expose the employer to claims for severance pay.

Suspension of wages could expose directors to liability for termination of employment Directors could expose themselves to personal liability (civil and criminal) if they unilaterally suspend wage payments to employees and directors’ and officers’ insurance policies may not necessarily cover this liability or the costs of defending claims against 1

the directors.

The concept of force majeure is defined in Thailand’s Civil and Commercial Code (“CCC”) and is also referred to in the Labour Protection Act (“LPA”). But even if a company can establish that force majeure has resulted in the suspension of its business operations there is no clear legislative provision which entitles a company to unilaterally suspend payment of wages without being required to pay severance pay.

The LPA requires employers to pay severance pay on termination of employment unless termination arises out of narrowly specified grounds of malfeasance by the employee – the amount of severance pay varies from 30 days’ salary for employees with more than 120 days’ service to 300 days’ salary for employees with more than 10 years’ service.

Termination of employment under the LPA includes instances in which the employee has not worked and has not been paid due to the inability of the employer to continue business.

Section 75 of the LPA enables a company to pay its employees 75 percent of wages if the company has had to suspend operations for reasons other than force majeure and in this case there would be no termination as wages were being paid as required by law.

If the employer is unable to continue business operations and chooses not to pay employees any salary at all, the Labour Courts are likely to regard this as termination even if an

external event beyond the employer’s control is the reason for the employer not being able to continue business.

One example was considered in 2002 by the Supreme Court. Water and electricity had been cut off to an employer’s building by the owner of the building and the employees were not able to access the place of work as a result. The Supreme Court held that termination of employment was triggered under the LPA as a result of the employees neither working nor being paid and the employer being unable to continue its business1.

The provisions of the CCC relating to force majeure do not entitle an employer to avoid the obligation to pay severance pay and Supreme Court cases have previously held that an employer would be required to pay severance pay on termination of employment even in the event of force majeure2.

Companies finding themselves unable to continue their business operations due to flooding should carefully consider whether failure to pay salary to employees would trigger termination and severance pay under the LPA, as severance payments can be substantial for companies with a mature workforce and it is common for companies not to have made accounting reserves to fund severance payments to employees.

Director and officer liability for breaches of the LPA As recent amendments to the LPA include authorised directors

Supreme Court Decision 3086/2545. See also Supreme Court Decision 2560/2529 in which the employer asked an employee to work at a related company after the employer’s factory burnt down and the employer was unable to ascertain when the factory would be rebuilt – the court held that the circumstances constituted termination of employment and that the employer was required to pay severance pay.

2 Supreme Court Decision 2190-2193/2545.

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December 2011

within the definition of “Employer”, directors can find themselves exposed to civil and criminal liability if the company suspends payments to employees. In addition to back payment of salary, directors could also be exposed to criminal penalties in the form of six months’ imprisonment and penalties of THB 100,000.

Managing directors of companies can also be held criminally liable under the corporate liability provisions of the LPA. Directors and officers should review their director & officer insurance policies to determine whether criminal acts are covered before taking steps to suspend wage payments to employees.

Any proposal to suspend wages should be discussed with employees and any agreement should be carefully documented rather than being unilaterally implemented to address concerns of duress and undue influence and show that this was done in good faith.

2. Inability to meet contractual obligations Many companies have found themselves in the position of not being able to fulfil contracts for manufactured goods as a result of disruption to their factories.

Thai law relieves a company from performance obligations if performance becomes impossible as a result of subsequent circumstances for which the company is not responsible, but not all contracts are subject to Thai law, so it is important for companies to review the terms of their contracts to determine which law applies to the contract – if foreign law applies, it will be necessary to obtain foreign legal advice.

Some contracts impose specific notice requirements both in terms of content and timing and failure to strictly observe these requirements can result in companies being subject to liabilities which would not have been imposed if the notice provisions had been properly observed.

3. Insurance Disruption to manufacturing premises typically results in several types of damage to buildings, machinery, equipment, inventory and raw materials. A loss of profits as a result of interruption to business activities and legal claims from third parties for failure to deliver manufactured goods are other possible outcomes.

Companies should assess the damage and review all of their insurance policies to determine which types of damage are covered by particular policies and, in particular, to determine whether the policies cover damage caused by flooding.

Insurance policies are not all worded equally and what is regarded as a flood under one policy may not necessarily be regarded as flood by another insurance policy so a careful review of defined terms will be necessary.

Your insurers should be promptly updated on developments and where the situation changes, these changes should also be promptly reported.

This includes evacuation orders, changes to flood control management plans which affect your property or operations and police, military or government orders and directions.

If in doubt consult your broker or lawyer.

practice and do not impose onerous obligations on the company.

5. Capital requirements The Thai government has proposed a number of financial initiatives designed to assist affected companies but the timeline and quantum of these initiatives have yet to be finalised. If insurance coverage is inadequate, companies may need to obtain additional capital in the form of equity or debt in order to recommence operation. As the capital raising process typically takes several months, companies should commence this process now.

This article is produced by Watson, Farley & Williams. All references to ‘Watson, Farley & Williams’ and ‘the firm’ in this article mean Watson, Farley & Williams LLP and/or its affiliated undertakings. The transactions and matters referred to in this article represent the experience of our lawyers. It provides a summary of the legal issues, but is not intended to give specific legal advice. The situations described may not apply to your circumstances.

Part of this article was published in the Bangkok Post on 17 November 2011. This article constitutes attorney advertising. © Watson, Farley & Williams 2011

4. Additional contracts for repairs, reconstruction and work-arounds Regardless of insurance coverage, affected companies will now be faced with a large volume of contracts with which they are not familiar, such as service contracts to clean up flood damaged areas; construction contracts to repair or build buildings; purchase contracts to acquire replacement machinery and temporary contracts to replace services and goods previously provided by flood affected companies.

Companies without recent experience in negotiating such contracts may need to engage external advisers to ensure that the terms on which they agree on are consistent with industry

Christopher Osborne and Monrawee Ampolpittayanant may be contacted at: Watson, Farley & Williams (Thailand) Ltd., Unit 902, GPF Witthayu Tower B, 93/1 Wireless Road, Pathumwan, Lumpini, Bangkok 10330. Tel: 02 665 7800 Fax: 02 665 7888 Email: cosborne@wfw.com OR mampolpittayanant@wfw.com www.wfw.com

The Brief

December 2011

19

Insurance cover at risk as nation counts cost

By Matthew Grose

T

he current catastrophe facing Thailand brings (again) to the fore the importance to the economic functioning of the country of the sometimes overlooked general insurance sector. It also exposes some of the insurance industry’s current limitations and presents some important challenges, and opportunities.

Thailand has traditionally presented an attractive risk scenario for the general insurance industry, being relatively free of the natural catastrophes that regularly befall countries such as Vietnam and the Philippines (typhoons) or Indonesia (earthquakes). This will now change: the insurance losses, estimated at anything between US$6 and 10 billion or more (not confirmed at the time of writing – assessments of property damage and interruption to business are ongoing), will eclipse those paid out for all other recent catastrophes such as the Australia floods of December 2010 (US$ 2 billion).

The repercussions for the insurance industry are global – a rethink of current natural catastrophe models to take account of their higher frequency and higher premium rates and restrictions on related insurance cover can be expected. For Thailand the fallout has potentially damaging implications for the country’s ability to continue to attract, or retain, foreign investment.

Whatever the final number, the real economic impact will, as always, be much higher, with perhaps 2 to 3 percentage points likely to be shaved off the kingdom’s GDP growth.

The good news in the short term is that most major insurers should be financially strong enough to pay up. Most claims will actually be borne by the reinsurance companies to whom the insurers have ceded their insurance in order to mitigate their exposure in such a scenario as this one. Japanese insurers face the highest losses, with large numbers of Japanese clients in the seven worst hit industrial estates filing substantial claims What does this all mean for companies doing business in Thailand?

There are rough waters ahead: reinsurers will drastically shrink flood capacity, meaning that local insurance companies may be unable to offer flood cover or, if providing it, they will apply a low limit and/or deductible. It will also be very expensive with flood cover (where given) charged at a separate rate under ‘all risk’ (IAR) policies, unlike in the past. And it is likely that all policy holders will be impacted in some way by these new conditions, irrespective of whether they have suffered flood damage this year or not.

Human costs

Whether the final figure is US$6 billion, 10, or higher, most of which will be for business interruption (including disruption to overseas manufacturers in the supply chain such as that to the computer industry) rather than property damage, the insurance industry is facing huge losses from which it will take years to recover.

The total annual non life gross premium for the whole country is estimated at just US$4.7 billion.

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December 2011

Of the approximately 3 million houses to have been damaged, most do not have insurance cover. Residential property insurance penetration rates in Thailand are estimated to be at around just 1% in terms of numbers of houses insured and, despite low premium rates, most take up has been from more affluent home owners. For home insurance policies purchased from banks at the time of

taking out a mortgage, flood is rarely covered. As a result, the government have had to step in with financial assistance for affected households.

Yet while financial pay outs will help overcome the financial distress, they cannot compensate for the less tangible losses: the damaged or destroyed homes and personal property, or the disruption to peoples’ livelihoods.

And of course no amount of financial compensation is ever enough where lives have been lost.

For companies too, if they have adequate insurance cover, they can expect to be compensated by insurers for property damage and business interruption (if purchased). But such things as lost goodwill and credibility, or the customers who switched to another supplier due to the interrupted supply chain are more difficult to account for.

So, for practical advice to companies doing business in Thailand, as mentioned, flood cover will be restricted.

Having loss prevention measures in place, such as waterproofing of critical areas, building dykes or concrete walls at critical points around the premises (as advised by a qualified engineer/ assessor) and a practical Disaster Recovery/Business Continuity Plan in readiness, may make the difference as to whether you can secure flood cover or not, and on what terms.

But it is the responses of government and industry leaders that will determine the future and in turn significantly impact Thailand’s ability to remain competitive by how they respond to the following challenges: • With large claims pay outs there may be short term pressure on cash flow. The regulator (the Of-

fice of the Insurance Commission) will need to relax its strict solvency requirements during this period; • However, after the waters recede it will become apparent over the subsequent months which insurance companies have been swimming naked (metaphorically) for the past 7 years (the 2004 tsunami being the last natural catastrophe wake up call), i.e., do not have adequate reinsurance protection in place. (There is also the knock on effect of cross exposure within the market that will complicate things further). The resulting financial challenges may accelerate the consolidation of the over 60 current players in the industry, which should be allowed to happen; • Major foreign insurance companies should be enticed into the Thai market for the insurance capacity they will bring and which will be so needed going into 2012; • There will also need to be significant investment in a comprehensive national physical flood prevention program that will both reassure foreign investors that their physical assets are protected

and help the industry to secure insurance protection for them; • The inevitable increased post flood insurance awareness among both businesses and the general population should be leveraged so that the higher premiums build a higher capital base as a whole from which flood (and other) claims can be paid going forward; • A public – private partnered pooled insurance fund will have to be considered, similar to that offered in other countries for risks which cannot be fully covered by insurance companies, such as the National Flood Assistance Program in the US, the ‘Earthquake Reinsurance Scheme’ by which the Japanese government makes cover available for earthquake damage, and similar schemes in Indonesia and the Philippines.

This would be a more cost effective means of controlling risks and paying out on the losses than post loss government handouts.

And by extending flood insurance to all households the kind of recently seen conflict and other social problems in and between

communities would be less likely or mitigated.

If the current catastrophe serves to further galvanise the progress that has already been seen on some of these measures and initiate action on the others, the insurance industry and the economy may yet emerge from this stronger and more resilient.

Matthew Grose is Head, Business Excellence and Human Resources MSIG Insurance (Thailand) Co. Ltd. MSIG Building, 1908 New Petchburi Road Huay Kwang, Bangkapi, Bangkok 10310.

Tel: 02 788 8701 Fax: 02 319 1405 Mobile: 085 908 2923 Email: matthew_g@th.msig-asia.com www.msig-thai.com

The Brief

December 2011

21

Ready for action as losses are assessed

By Gareth Sampson

N

ormally loss adjusters are like ‘Action Man’ figures – not only in looks, build and fitness but also in our ability to gain access to difficult situations and locations and our ‘try to save the day’ approach for our clients.

That might be a tad far-fetched and tongue-in-check but the truth is that whenever a catastrophic (CAT) situation occurs loss adjusters are very adept at getting into places quickly, sorting out logistical arrangements, getting the specialist manpower from our other operations (if required) and feeding back necessary information to clients.

We will also be instructing strategic partners in disaster recovery, quantity surveying, civil and structural engineering and forensic accountants or value of risk assistance specialists, setting in place remedial action to try and mitigate losses and, importantly, starting site inspections as soon as the situation allows.

What has been so completely different about the Thailand floods from other CAT situations is basically the length of time it has taken before we can effectively start to put into action what we do. This has been a frustrating scenario from all sides as our clients want action to mitigate losses (as do their clients) but our hands have been tied in many ways waiting for the flood waters to recede to enable site inspections.

Obviously there are many things that we can do whilst waiting for this to occur and we have been extremely proactive in meeting with our clients, taking instructions, getting the necessary resources and logistics in place to hit the ground running when access to sites is available. We have also been instruct-

ing some of our strategic partners to start spraying affected machinery and plant at some industrial estates where the waters have started to subside and, importantly, keeping the market updated on what is happening.

The bulk of the work we undertake will be at the flooded industrial estates primarily in Ayutthaya province. A significant number of companies that operate in these affected industrial estates are multi-national corporations and have subsidiary operations in Thailand which supply components to other parts of their operations in other countries.

Supply chains have been significantly disrupted for a long period of time so not only will there be flood damage claims but there could be large contingent business interruption (BI) claims as a result.

Even if the factories and manufacturing plants could continue to operate they could not get their products out as roads were blocked and the port, while operational, could not get containers in or out. To assist with these potential BI claims we are sending in specialists from other parts of our global operations.

Our understanding of individual company insurance policies is at the forefront of any claim. We have to understand what is and what is not covered under each policy. Experience demonstrates that we will probably encounter some interesting interpretations of the business interruption add-ons and rather wide interpretations of customers and suppliers extensions when dealing with claims in the supply chain.

Gareth Sampson is Managing Director of Cunningham Lindsey (Thailand) Ltd. 100/61 Sathorn Nakorn Tower, 29th Floor, North Sathorn Road, Silom, Bangrak, Bangkok 10500.

Tel: 02 236 9785 Fax: 02 236 9788 Mob: 081 754 7748 Email: garethbk@cl-int.com www.cunninghamlindsey.com

The Brief

December 2011

23

Five key steps to making an insurance claim

By Mark Ferguson and Dumnern Subpaisarn

U

Step 2: notify the loss

nexpected events such as the flooding in Thailand can have a catastrophic and long term impact on affected businesses. In our recently published Crisis Checklist we set out a list of important Dos and Don’ts to follow in order to protect your business should you suffer loss as a result of the floods. The first and most critical item on that list was notification of the loss to your insurers.

Once the relevant policy has been identified, the loss should be notified as a matter of urgency. Check the notification provisions in the policy: Who do you have to notify? Must notification be made in writing or on a prescribed form? Do you have to submit a Proof of Loss? Most importantly, check your obligations on timing must you notify immediately upon suffering loss or within a reasonable period of time?

An initial assessment by the Office of the Insurance Commission suggests that damage claims for Thailand’s flood crisis will exceed THB 600 billion. Insurance will be the primary means of recovery for almost all of those losses.

The insurance industry in Thailand has never been tested on this scale before. It is impossible to say with any certainty exactly how insurers will react to these claims or even whether insurers are sufficiently capitalised to meet their liabilities. However, we can be certain that insurance is crucial to your business at times of crisis and that a carefully constructed insurance claim can mean the difference between your business failing or surviving the crisis.

Failure to properly notify, or to notify within the required time frame, can delay significantly recovery under the policy and, in some cases, can invalidate your claim altogether.

Mark Ferguson

As the policyholder, your company has a duty not to do anything which might increase the loss and to take appropriate steps to minimise the loss. You should seek your insurer’s consent before undertaking such steps. However, insurers should recognise that seeking consent is not always practical in the event that urgent relief work is required to prevent further loss. Reasonable costs incurred in such relief work should be covered under your policy.

This article summarises five key steps involved in making a successful insurance claim and identifies some common pit falls to look out for.

Step 4: Know your limits

Step 1: Identify the relevant policy Dumnern Subpaisarn

If the floods come (or ideally before they arrive), it is important to collate and review all of the company’s insurance policies in order to establish, on a preliminary level, the extent of cover available to meet the loss. Once you have identified the relevant policy (which in the case of flooding is

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December 2011

Step 3: Minimise the loss

likely to be Property All Risks Insurance), check the policy period to ensure that it has not lapsed. You must also confirm that the premium has been paid and do make sure that the entity which suffered the loss is covered under the policy.

Check the level of cover available under the policy: Is the policy limit applied per claim and/or in the aggregate? Have any claims been made during the policy term and, if so, have they eroded the limits available? Does the policy apply a retention figure and, if so, is the retention applied per claim? Losses from flooding arise typically from two sources: actual damage to property (such as buildings and ma-

chinery) and the loss of profits resulting from interruption to the business.

A practical example:

Not all Property Damage policies cover business interruption losses.

Where business interruption is covered it is likely that the policy limits for business interruption and property damage will be aggregated.

• Your Property All Risks Policy has a limit of THB 10 million per claim and THB 20 million in the aggregate. (In other words, you are covered for Baht 10 million per claim up to a maximum of level of cover of Baht 20 million) • The policy applies a retention figure of THB 500,000 per claim • The policy covers both property damage and business interruption • The floods cause THB 10 million of damage to your buildings and machinery and cause you to suffer a loss of profit of Baht 20 million

Step 5: Is the loss covered?

Once you have identified the relevant policy and established that it is valid and active, it is important to consider carefully the policy terms. In particular, pay close attention to the Insuring Clause and the Exclusions listed in the policy: Is there any ambiguity in the Insuring Clause which may call into question whether your loss is covered?

In what situations are losses/events excluded from cover? How wide is the scope of the force majeure clause? Following the tsunami in Japan, many policyholders discovered too late that loss resulting from a tsunami was excluded under their policy (either ex-

Although your actual loss is THB 30 million the most you can recover is THB 19.5 million (THB 20 million less the THB 500,000 retention) irrespective of how the loss is comprised. pressly or because other intervening factors contributed to the loss).

Only by understanding the extent and cause of your loss and by considering carefully the claims provisions in your policy can you construct a successful claim. It is a common (and often costly) mistake to believe that taking out an insurance policy is enough to ensure that a prudent business is protected in a crisis. In reality, the

presentation of a well-constructed claim when a crisis strikes is just as crucial to your business.

For more details please contact Mark Ferguson or Dumnern Subpaisarn at Allen & Overy (Thailand) Co., Ltd. Tel: 02 263 7600 Fax 02 263 7699 Email: Mark.Ferguson@ AllenOvery. com OR Dumnern. Subpaisarn@ allenovery.com www.allenovery.com

The Brief

December 2011

25

BOI approves additional emergency measures A

t its first meeting under the new government, the Board of BOI (Thailand Board of Investment) approved additional emergency measures to help companies affected by the flood crisis. The Board also appointed a national image enhancement sub-committee.

This BOI Board meeting, on 7 November, was chaired by Deputy Prime Minister and Commerce Minister Kittirat Na Ranong. Dr. Wannarat Channukul, Industry Minister, confirmed that the Board had approved additional emergency measures to help companies and entrepreneurs affected by the flood disaster. The new measures include permission for raw materials imported under section 36 (duty-free importation for export manufacturing) that are completely damaged to be recognised as part of waste allowance and therefore relieved of tax burdens; permission for companies to outsource temporarily all of their manufacturing processes

Deputy PM Kittirat na Ranong.

to other manufacturers in order to maintain continuity in delivering their products to customers, and a six-month extension of import tax exemption on machinery brought in to replace that damaged by flooding.

The BOI had introduced previously a number of measures to help investors.

These include: • Permission for BOI-promoted companies to move machinery or raw materials out of factories in emergency cases

Visas & work permits · Permission for urgently bringing in experts to work in Thailand for not more than 30 days without non-immigrant B visa · Applications and accompanying documents can be submitted via email · Facilitation in obtaining nonimmigrant B visa in the case of experts staying in Thailand for more than 30 days · Expedited process in approving the entry and short-term stay of foreign experts · Expedited and relaxed process for issuing documents replacing

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December 2011

lost or damaged ones · A company letter can be accepted as a replacement for the evidence from the police station · Permission for foreigners to report to Immigration every 90 days via telephone (02 209 1100), fax(02 209 1193), sms (088 487 9797) and email visa.onestop@ gmail.com (no need to submit passports)

The BOI has assigned the following contact points for BOI-promoted companies affected by floods that require assistance.

• In cases where raw materials had been imported prior to the flooding for use in production for export and had been damaged by the floods, the materials can be written off as waste allowance and as such excluded from tax burden.

As for the raw materials that are still in a usable condition, the companies can use them in other on-going projects still entitled to benefits under section 36 • The BOI permits companies to outsource temporarily some parts of the production process in order to maintain business continuity • The BOI has also introduced additional measures to facilitate companies in bringing in foreign nationals to effectively help recover businesses in Thailand Minister Wannarat added that the Board has additionally approved the appointment of a sub-committee in charge of enhancing the country’s image and restoring investors’ confidence.

Agricultural and light industries, Khun Warisara Phungtonglor Tel: 02 553 8274

Metal parts and machinery industries, Khun Anin Meksuksai Tel: 02 553 8366

Electronics and electrical appliances, Khun Tanavadee Khuvasanont Tel: 02 553 8167

Chemicals, paper, plastic, infrastructure and services, Khun Wuttichai Pisatphen Tel: 02 553 8294

Visas and work permits Khun Krongkanok Managijonggol Tel: 02 209 1166, 081 303 1337, email: krongkanoke@boi.go.th

Crisis dampens UK interest T he flood disaster in Thailand has had a dramatic effect on hopes for attracting British investors. That’s the view of Steve Buckley (pictured), Chairman of the BCCT UK Group.

surprising that the BOI is struggling to generate any interest from UK companies showing any positive interest in the market – something unlikely to change before the BOI Fair takes place in February.

“I had hoped that Thailand would enjoy a period of relative stability with interest in Thailand increasing in the UK. Unfortunately, the ongoing flooding has not only changed matters but the after effects are likely to be around for many months to come,” says Steve.

Steve is hoping that 2012 – a year that marks the Anglo-Thai Society’s 50th anniversary – will be a much better year for Thailand. “I am planning to stage the next meeting of the BCCT UK Group in February and follow this with a general market update event. Hopefully, the latter will clearly demonstrate that the flooding is no longer an issue – with measures in place to stop this from happening again – and that the outlook for the business and tourism sectors are far more positive.”

“It has had a negative impact on both the business and tourism fronts. Media reports in the UK show hundreds of factories under water with companies such as Honda having to cut their UK

production rates. Nikkon has also put its losses at £200 million so it’s not

Thailand postpones minimum wage increases

By Stephen Frost

E

arlier this year, the Cabinet announced that it proposed to implement its election promises to increase the national daily wage to 300 Baht a day and the minimum salary for new graduates to 15,000 Baht per month, and to set off these increased obligations by reducing basic rate corporate income tax from 30 percent to 23 percent (See our previous article on this subject).

On November 22, the Cabinet announced that the increase in the minimum wage increase to 300 baht per day would be postponed from 1 January 2012 to 1 April 2012, in order to help flood-affected employers.

Increases to 300 Baht daily will now apply with effect from April 2012 in only seven provinces: Bangkok Metropolis, Nakhon Pathom, Nontha-

buri, Samut Prakan, Samut Sakhon, Phuket and Pathum Thani.

The daily rate in the remaining 70 provinces of Thailand will be increased by 39.5 percent from the current rate in April 2012, and will rise to 300 baht in January 2013. The seven provinces launching earlier will maintain their minimum wage at 300 baht. In 2014 and 2015, the minimum wage will therefore be increased to an equal rate nationwide.

Thus the historical policy of having different minimum wages in each province of Thailand will come to an end, in favour of having the same minimum wage nationwide.

No announcement was made with regard to the government’s intention to reduce corporate income tax in

2012 from 30 percent to 23 percent.

We will have to wait for further announcements as to how this related tax reduction proposal will be implemented.

Bangkok International Associates is a general corporate and commercial law firm. For further information, please contact Stephen Frost by email at sfrost@bia.co.th or Tel. 02 231 6201/6455.

The Brief

December 2011

27

UK expertise can aid flood prevention schemes

By Bradley Jones

Relief workers prepare to distribute essential supplies

T

he last few months have, without doubt, been a traumatic time for Thailand. The personal tragedies, of homes and livelihoods devastated, are almost beyond comprehension.

Although the flood waters have now receded, this is a disaster that has not yet ended and it is difficult at this stage to fully comprehend the likely long term social, economic and political impact of what has happened. Some estimates indicate that the floods will shave some one to two

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December 2011

percent from this year’s GDP growth.

Approximately 11,000 mediumto-large companies and 240,000 smaller businesses have been affected and, on top of the predicted loss of economic activity, the damage to commercial property, machinery and other assets could be another THB 400-500 billion – or four to five percent of the size of the economy.

with rehabilitation ranging from soft loans to businesses and farmers, cash handouts to affected households and the possible relaxation of terms for imported raw materials and machinery. Many of these schemes were, of necessity, thought through in haste and there will no doubt be further announcements as the situation evolves.

The Government has responded to the crisis with a series of policy announcements including THB 325 billion worth of schemes to help

One constant throughout the crisis has been that business has been very much leading the agenda on the post-flood reconstruction

priorities for the months and years ahead. The business community has shown leadership in many ways – through the support they have given their own staff who have been affected by the floods, and through their contribution to charitable and community initiatives in flood affected neighbourhoods.

British companies have played an impressive role in this respect and, as I have mentioned in a previous article, it is this commitment to CSR in Thailand which sets British companies apart from their competitors.

Thailand will no doubt go through a period of introspection as it explores how to reshape itself to reassure foreign investors that it remains an attractive and stable business destination. Continued insurance and re-insurance coverage will be

Ambassador Asif Ahmad (left) is briefed by FROC officials

Grandiose talk of building new cities and new rivers will need to give way to long term, coherent, professional master planning of projects that span decades and that are underpinned by both vision and pragmatism.

Such projects are taking place in many emerging markets around the world from the low-carbon Al Masdar City in Abu Dhabi to the West Kowloon Cultural District in Hong Kong, (British architects Foster and Partners is the lead designer for both projects) to the regeneration of East London, which I described in the last edition of The Brief.

FRoC director Pracha Promnok (left) with the UK Ambassador to Thailand.

an integral part of any strategy for maintaining investor confidence in Thailand.

Furthermore a multi-stakeholder approach will be needed with the Ministry of Finance, Ministry of Commerce and the BOI setting the policy framework, while other arms of Government look at the long term physical infrastructure projects that will need to be undertaken to ensure the industrial estates that power Thailand’s economy will be protected from such disasters in the future.

New mega-projects such as these will be needed in Thailand too if it is to retain its leading position as an investment destination postflood and post ASEAN economic integration.

UK companies are world leaders in harnessing private sector investment, through PPP, to attract sufficient capital to bring such projects to fruition in emerging markets such as Thailand.

UK consultancy firms also have huge expertise in the management of such complex projects. There is no shortage of curiosity amongst British companies about the opportunities in Thailand but the challenge will be to reassure them

about the level of risk, ensure that the policy framework is right and establish a long term economic roadmap for the country so that while governments may come and go the ambition and the vision to build a national infrastructure befitting a dynamic 21st century emerging economy will remain a long term constant.

One of our priorities at the British Embassy over the next few months will be to help connect relevant UK companies to the decision makers and stakeholders in Thailand who will be plotting out Thailand’s postflood reconstruction. We will also continue to work closely with the BCCT to ensure that the voice of the British business community here is heard as the Government starts to develop new initiatives to revitalise the economy and stimulate new foreign investment.

Bradley Jones is Director – UK Trade & Investment in Thailand, based at the British Embassy, 14 Wireless Road, Bangkok 10330. Tel: 02 305 8256 Fax: 02 255 8619 Email: bradley.jones@fco.gov.uk www.ukinthailand.fco.gov.uk

The Brief

December 2011

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FlOOD RElIEF EFFORTS

Express relief from TNT team

T

NT Express Worldwide (Thailand) has spearheaded initiatives to mitigate the impact of heavy flooding across Thailand. In partnership with TNT Asia Pacific, the company has delivered waterproof protective clothing, waders and essential supplies for soldiers working on the front line of Thailand’s flood relief effort.

TNT used its integrated air network to bring the best quality waterproof clothing from its manufacturing base in Taiwan within 36 hours. These suits greatly reduce the risk of skin disease, snake bites and electric shocks which, in turn,

save lives and prevent injuries.

Donations for the 500 suits were sourced using Facebook. TNT covered the delivery fees and associated costs – estimated to be some THB 150,000.

TNT also established a rescue team that provided round-the-clock assistance to employees and their families that needed to be evacuated from flood hit areas.

(From left to right): Thanarat Leetrakul, Managing Director of Digital Associates; Alan Miu, Managing Director of TnT Express Worldwide (Thailand), Prayuth Chan-ocha, Commander-in-Chief of Royal Thai Army and Dapong Ratanasuwan, Deputy Commander-in-Chief of Royal Thai Army

Bags of help from Bangkok Patana

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taff and pupils at Bangkok Patana School have created relief packs for distribution to flood victims via the Thai Red Cross and other state and charitable organisations.

The school allocated an initial sum of THB 150,000 to purchase essential food and medical items. Members of the Patana community also made cash donations which the school used either for immediate relief or to

Marriott Thailand provided 20 boats and 40 life vests for the temples of Samko Temple, Ban Paen Temple, Kradongthong Temple and Wat Bang Nom Kho Phan Uthit in Ayutthaya province which have been severely affected by the floods.

help fund the planned post-flood rehabilitation projects.

Included in these packs were canvas bags produced by the school’s Thai Department and decorated by primary and secondary school students during their Thai lessons.

Primary and Secondary Community Action Team Coordinators Peter Hockley and Lorna Tighe welcome any further support in the form of cash donations or supplies.

Management and staff of the BOONMA Group teamed up with PTT Exploration and Production to prepare some 6,000 sets of survival kits, worth over THB 2 million, and then arranged delivery to flood victims.

The Brief

December 2011

31

FlOOD RElIEF EFFORTS

Team spirit endures at Diageo

D

iageo Moët Hennessy Thailand (DMTH) has extended a key element of its CSR programme to help ease the burden of Thailand’s latest disaster.

A company team led by Ainsley Jong, Brand Assurance Director – Asia Pacific and Thanakorn Kuptajit – Director of Regulatory and Government Affairs took the DMTH ‘Disaster Relief and Enriching Communities’ programme to Ayuthaya province where they handed out some 20,000 bottles of water, 11 boats and other necessities to local officials including Chatri Yuprasert, Vice Chief Executive of Ayuthaya Provincial Administration Organisation.

This donation of water was part of DMHT’s ’Water of Life’ initiative, established to provide clean water to communities and those in need. The DMHT team also travelled by boat to inaccessible communities affected by the flood.

Staff at Diageo Moët Hennessy also formed a group to provide support to

their colleagues under the ‘Friends Help Friends’ project. Assistance provided included food, medicines, rubber boots/suits and transport.

DMHT has also announced plans to provide substantial support to communities once the flood water has subsided and the recovery process begins.

GSK makes long-term pledge to aid flood victims

G

units throughout 2012 to address common diseases that occur as a result of flooding on this massive scale – ensuring that those most affected continue to enjoy access to quality medications.

SK Thailand extended its ‘Medicine Bank’ programme to provide health and wellness support to flood victims.

The GSK Medicine Bank has made contributions to the Disaster Relief Centre of the Royal Thai Army to reinforce the company’s Access to Medicines initiative.

GSK Thailand also collaborated with the Thai Red Cross Society and the Royal Thai Army to take the company’s doctors, pharmacists and volunteers on a relief mission that began in Kalasin province. The relief mission then shifted to the flooded areas of Ayutthaya province where they provided health counselling and much-needed necessities such as personal care items and basic medicines. The GSK team was joined in Ayutthaya by British Ambassador Asif Ahmad and Vice Consul Caroline Vaudrey.

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To commemorate the auspicious occasion of His Majesty King Bhumibol’s seventh cycle (84th birthday) the GSK Medicine Bank is providing three types of innovative vaccines for 900 people via the Thai Red Cross Society.

British Ambassador Asif Ahmad joins the GSK Viriya Chongphaisal in Ayutthaya.

Although the flood waters in central provinces have been subsiding the threat to health from contaminated water has remained and GSK is continuing its outreach programme to flood victims in collaboration with the Thai Red Cross. The company plans to operate mobile medical

The company previously gave medicines and vaccines to over 10,000 underprivileged people in June to August this year and also joined with the Foundation for the Deaf under the Royal Patronage of Her Majesty the Queen to organise vaccinations to prevent influenza for over 2,000 hearing-impaired students.

Schools act swiftly with care and tuition programmes

T

he Traidhos Three-Generation Community and PTIS International School have established a Flood Relief and EduCare Programme, recognising the need to provide education assistance to families as a viable alternative to the necessary school closures.

The programme was quickly created, presented and approved by the ISAT President. The President’s Council worked with many facets of the Traidhos Community to develop a programme to continue learning in a safe environment for all Grades 3-12 children affected by the floods.

rangements was also made available for up to 80 students and their families.

The first priority is to get the students who are temporarily or permanently affected as a result of the disaster back in the classroom. Staff from all areas of the Traidhos Community offer coordination support, classroom teaching, extended studies, after-school Exploria activities, supervision, nursing care, security and empathy.

The ‘no-cost’ relief programme has been offering selective classroom study and care to children of families directly affected by the disaster. Temporary schooling and on-campus living ar-

The Traidhos EduCare programme is being developed as part of the curriculum that can cater for any form of natural disaster and may be implemented at short notice.

Students host fund-raising fair

S

tudents at St. Andrews International School at Green Valley have raised THB 100,000 to help Thailand’s flood victims. Pupils at the secondary school organised a fair full of fund-raising events and attractions. Throwing wet sponges at teachers was one of many popular activities on a day that did so much for those families affected by the disaster.

“All the students were very proud with what they had managed to put on with just a week’s notice to prepare a stall, decide who would do what, get prizes and to help out on the day. It was a fantastic event

to take part in, especially knowing that our money was going to a good cause. The support was outstanding

with lots of great co-operation from the students, parents and staff,” says year 11 student Jasmine Taylor.

Christmas tree project backs Red Cross

F

or the fifth consecutive year the Four Seasons Hotel in Bangkok is organising its Christmas Tree charity project – featuring trees designed by local artists and designers displayed in the Hotel’s Parichart Court.

To help those affected by the country’s flood crisis the proceeds from this year’s project, organised in association with Livingetc. magazine, will go to support the work of the Thai Red Cross Society.

Each tree has a donation box and guests are invited to make a donation to the tree of their choice.

All funds donated will be combined with the generous donations made by participating corporate sponsors.

The Brief

December 2011

33

FlOOD RElIEF EFFORTS

Five pronged approach from KIS

S

tudents at KIS have mobilised a five pronged approach to the flood crisis in Thailand. From the very young students in Grade 1 in the Primary School to the oldest students in the Secondary School the student body has sought to take effective action.

Grade 1 children collected items useful for flood victims such as canned food, clothing, bottled water and medicine which will be taken to a flood relief centre and re-packaged and labelled for forwarding to communities in need.

Grade 9 students organised a miniconcert with popcorn and soft drink sales to raise funds for schools in Sukhothai. Funds will be distributed to help in the post-flood repairs and restocking of school materials. Over THB 30,000 was raised and will be distributed by the KIS students to two schools in Sukhothai.

New International School of Thailand (NIST) has donated 20 boats and 650 relief packs to aid flood victims. NIST Headmaster Simon Leslie and Miss Supranee Taecharungroj, Director of Marketing and Development, as the School’s representatives, made the donation at the Flood Relief Operations Centre in Bangkok.

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December 2011

Students at the Secondary School arranged a charity football match that raised over THB 140,000. They also made life vests from t-shirts and recycled water bottles for donation to communities affected by the floods.

The Student Council’s call for donations in the form of canned foods, clothing, bottled water and medicine received a positive response and all donations are being distributed to those most in need.

Management team members at the Phachara Suites Sukhumvit hotel visited the Thai Red Cross Society to donate cash and goods collected by the employees and guests for flood victims. Pictured are Lt. Gen. Dr. Amnat Barlee, Director of the Thai Red Cross Society ( fourth from right), Phachara Suites General Manager Nathalie Post ( fourth from left) and colleagues from Phachara Suites Sukhumvit.

St. Andrews International School Developing independent, confident, lifelong learners

British International Education With over 40 nationalities St. Andrews’ philosophy encompasses the whole child and each campus is small and exclusive by design. www.standrews-schools.com

Sathorn Central Bangkok Location Primary Specialist 2 to 11 years

T: +66 (0) 2632 1995 E: admissions@standrews-schools.com

Sukhumvit 107 Foot of Bearing BTS Primary & Secondary School 2 to 18 years

T: +66 (0) 2393 3883 E: admissions@standrews-schools.com

Green Valley Outskirts of Pattaya Primary & Secondary School 2 to 18 years

T: +66 (0) 3803 0701 E: admissions@standrews-schools.com

PROPERTY FOCUS

Flood worries to prompt shift in new condo sites C

ondominium developers in Bangkok will now be eyeing locations likely to be safe from any further major flooding. So says Miss Risinee Sarikaputra, Associate Director of Research and Consultancy Department at Knight Frank Thailand.

She forecasts that inner city areas such as Lumpini will benefit whilst concern remains over the Sukhumvit area which lies close to the San Sab Canal. Miss Sarikaputra also predicts that land prices in areas where this year’s flood did not reach will increase in value. Underground parking in the plans of new residential developments in flood-risk areas will also likely be scrapped, she says.

The overall take-up rate of Bangkok condominiums decreased from 48.3 percent in the second half of 2010 to 45.8 percent in the first six months of 2011. More than 57,000 medium to low end condominium units were added during the second half of last year to the middle of this year, while no premium supply was added.

“There is additional supply being added to the luxury market in the second half of 2011 and in 2012. The medium to low end market will slow down after a dramatic number of launches from the second half of last year. This is likely to create pricing pressures and competition of condominium located in the periphery of Bangkok,” she adds.

Beyond the popular but expensive Central Business District of Bangkok there is growing demand for homes along the Bang Na-Trat road with the BTS extension to Bearing station now open and several new shopping cen-

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tres coming on stream over the next 2-3 years. The skytrain extension from On Nut to Bearing Station has challenged property developers to launch new residential projects in the area.

The flooding situation will have an impact across the board on all property sectors but will vary in degree and extent, according to CBRE Thailand.

More than 10,000 new units have been added in Pattaya this year the majority of which are located at Jomtien Beach where prices are significantly lower that in north Pattaya.

In the short-term, business is likely to slow down as people will be busy solving their own problems. Overall, the flooding will result in changes in demand patterns in the residential sector in terms of preferred locations and product, the company states.

“Our research has shown that the additional condominium supply in Pattaya is mushrooming in Jomtien with at least 4,000 units set for launch over the next 12 months whereas the additional supply in North Pattaya will be less than 1,000 units,” adds Miss Sarikaputra.

The CBD, which includes Lumpini, Silom, Sathorn and early Sukhumvit, will be the preferred area. Other areas will be assessed after the flooding is over. Demand for high-rise condominiums is likely to rise as people

may want to buy them to use as a second home in the city centre.

Purchasers considering buying residential properties will pay more attention to the product, design features and flood protection measures of individual developments. Housing developers will also need to ensure flood prevention measures and features are incorporated when launching new developments.

business is experiencing a slow down or closure in some areas which are directly affected by the flooding. In the long-term, retailers may re-think their distribution strategy and consider a wider geographical dispersion of their distribution centres in order to minimise the impact from any future crisis.

However, CBRE believes the retail sector will experience a quick recovery.

The second home markets in Pattaya, Chonburi, Hua-Hin, Cha-am and nearby provinces will benefit from this crisis. Bangkok residents with disposable income will be inclined to purchase holiday homes out of Bangkok as many residents evacuated to Pattaya and Hua-Hin.

The most impacted is undoubtedly the industrial sector. At present, it is difficult to predict how long the recovery process will take but in the short-term the impact is severe with widespread disruption in the manufacturing and distribution chain. The recovery process will be strongly underpinned by the government’s effectiveness in implementing supporting measures, as well as the individual industrial estate operators’ measures to bring factories back into operation.

Whilst existing operations will reopen it is critical for the government to rebuild confidence and take effective measures to prevent similar disasters from occurring again. If not, Thailand is at risk of losing its credibility.

Overall, the government’s recovery programme will be essential to all sectors of the property market and will have a direct impact on the overall economic outlook and Thailand’s direction for the coming year.

The office and retail sectors will experience minimal short-term impact.

The office sector is experiencing a short-term slow down as businesses are delaying decisions while the retail

Demand increases for temporary warehousing I n the wake of the flooding that struck a number of major industrial estates despite strong protection many companies with operations in industrial areas that are affected by floods or at risk of floods are looking for warehouses in safe locations to store goods and production supply.

That’s the expert view of Subyagorn Sansugtaweesub, Head of Industrial Agency at Jones Lang LaSalle.

“An increasing number of companies operating in Bangkok and its vicinity are looking for warehouse space where they can temporarily store goods, production supply, and equipment on a short-term lease basis.

“These companies are mainly semiconductors and consumer goods manufacturers and logistics service providers whose facilities are located in areas

that are flooded or at risk of floods including Ayutthaya, Pathumthani and Nonthaburi,” he said.

Most companies are looking for warehouse space in locations that are currently identified as low-risk zones, especially in or close to Bangkok. However, the supply of rental warehouse in the area is limited and thus demand for temporary warehouse is now shifting to provinces in the east and the south of Bangkok which have not yet been affected by floods and where warehouse supply remains available.

“Companies are looking for the flexibility that would allow them to immediately relocate back to their facilities once the flooding recedes or move to a new location if the warehouse they are temporarily renting becomes flooded,” Mr. Subyagorn added.

Jones Lang LaSalle has helped some of these companies secure their leases. For example, they secured a lease on 12,000 sqm of warehouse space on behalf of a logistics company whose facilities were under water in Ayutthaya. The firm has also continued to receive an increasing number of inquiries for warehouse space.

“Although most owners offer their warehouse for long-term lease many of them do not mind accepting shortterm contracts due to higher rentals. Typical rental rates for warehouse space vary greatly between THB 80 and THB 170 per sqm per month depending on quality and location. But on short-term leases, coupled with the strong demand, rentals of temporary warehouse are 30 to 40 percent higher,” said Mr. Subyagorn.

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December 2011

37

PROPERTY FOCUS

Property chief hails Pattaya’s regained popularity

By Cees Cuijpers

M

ore than once I almost had to justify my reasons to work and live in Pattaya to those that have a certain judgmental prejudice about what they think is ‘Sin City’.

I was invited to a gathering of real estate agencies on the roof-top pool area at Raimon Land’s Northpoint condominium project. Standing on the 44th floor of this modern oceanfront high-riser I was fascinated by the skyline of Pattaya below. For a second I remembered some of the great metropolitans I ever visited in my life and realised I was simply admiring Pattaya city on the Gold Coast of Thailand. My home.

What has happened with Pattaya? Has it lost its youth and suddenly matured?

This could well be the case. On my first trip to Thailand nearly 20 years ago I remember Pattaya as a village more than anything else with large chunks of bare land everywhere. It was a ‘rough diamond’ in the making.

I would never have thought that Pattaya would become my haven for many years to come. The face of Pattaya was (and still is) dominated by a large number of tourists that enjoy many of the pleasures that Thailand in general and Pattaya in particular has to offer.

As a tourist destination, I remember that certain months of the year were much quieter than others. September, for example, was always one of those typical off-season periods where shopping malls stayed empty and pedestrian traffic was at a bare minimum.

Organising property road shows during these months was a clear ‘no no’.

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December 2011

No point looking for customers if they are not around. But things are changing. Chatting with a friend recently at a hotel coffee shop on Naklua Road we noticed in a time span of not more than 45 minutes at least 30 guests in and out that I would describe as ‘typical hi-so Bangkok Thais’. We were both surprised as this would not have happened five years ago if we had sat all day in that coffee shop. The majority of these Thai people were under 25 years of age, mainly female and all dressed for a relaxed weekend, many seemed to be taking photos for posting on their facebook pages to promote their fun time in Pattaya.

We concluded, as long-time residents in the city, that Pattaya is back on the map. Not so much for foreign tourists (as Pattaya has always been popular anyway), but for Thais. This explains why the city now has a constant buzz throughout the year – including September. Pattaya is rediscovered!

Pattaya’s changes over just a very limited number of years have created a warm safety net for those that seek comfort in their own trusted and familiar environment. Pattaya isn’t Pattaya anymore. We have witnessed the dawn of a new era and I would like to invite all readers to celebrate the rebirth of Pattaya city with me.

It’s just the way I want it to be.

Cees Cuijpers is Managing Director of Town and Country Property, 63/10-11 Pattaya-Tai, Moo 10, Nongprue, Banglamung, Cholburi.

Tel: 086 666 7238 Fax: 03 837-4137 www.towncountryproperty.com

PROPERTY FOCUS

Cautious approach to real estate investment

By Eilidh Callum and Nick Axford

C

ommercial real estate sales in Asia Pacific totalled US$9.0 billion in the second quarter of 2011, a decline of 39% q-o-q, as investors in Asia turned more cautious following the March 11 earthquake and tsunami in Japan and the worsening economic picture in the United States and Eurozone. That’s according to the latest Asia Pacific Capital Markets MarketView report for Q2 2011 from CB Richard Ellis (CBRE).

located sites also sought after. This year thus far we have seen City Virtue Limited purchase the three rai site (1.2 acres) on Sathorn Road from the French Government while developers L.P.N and Supali have both purchased land for residential development.

“A new entrant to the market, Boon Rawd Brewery Co., Ltd. (the company behind the Singha brand) purchased the former Japanese Embassy site (nine rai or 3.6 acres) on New Petchburi Road for THB two billion, which they intend to develop into a mixed use development.”

Whilst transaction volume in Asia fell by 52 percent q-o-q but the Pacific markets picked up strongly (228% qo-q), albeit coming off a low base following a slow start to the year.

Eilidh Callum

The CBRE report adds that ‘the state of uncertainty in the global economy has encouraged investors to drift towards conservative plays with the period witnessing a renewed focus on core quality buildings in established markets’.

Australia registered the greatest transaction volume across the region in the second quarter, accounting for 24 percent of total investment in Asia Pacific.

Income producing properties are in demand in Thailand, as seen with the recent sale of the Sofitel Silom Hotel to an owned associate of The Pioneer Global Group. The same 49.5 percent owned associate that holds the Pullman Pattaya Aisawan Resort purchased the 469 room hotel for THB 2.01 billion (THB 4.3 million per key).

Eilidh Callum, Senior Economist at CBRE Thailand, said, “Current market interest stems beyond income producing assets with strategically

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December 2011

REITs and other listed property companies maintained buying momen-

tum during the second quarter and were responsible for 27 percent of all commercial real estate transactions.

REITs completed the majority of their purchases within their own borders but the period also saw a number of noteworthy cross-border acquisitions.

The growth in activity of regional REITs has been particularly impressive over the past six months with total investment spend reaching US$6.6 billion in the first half of 2011, a record high. Five new REITs were listed during the period.

“Despite the recent fall in activity a significant volume of investment capital continues to look to access Asian markets and there is a shortage of sellers of better quality assets,” said Greg Penn, CBRE Executive Director of Institutional Investment Properties for Asia. “The limitations imposed on lending, particularly in Hong Kong and China, has made it difficult and more costly to borrow. Prospective purchasers are attempting to share this cost burden with sellers beginning to adjust their expectations on pricing in the form of discounting.”

tion. However, the region is not immune from the issues affecting Europe and North America and we are keeping a close eye on how events unfolding elsewhere in the world are impacting Asia.”

Nick Axford

“The current lull witnessed in Asia is primarily the result of short-term weaker market sentiment and increased caution among investors,” commented Dr. Nick Axford, Head of Asia Pacific Research for CBRE. “Asian real estate is relatively well placed to weather the current global volatility and remains an attractive medium term investment proposi-

CBRE’s investment transaction data presented in this report is based on real estate transactions valued US$20 million and above. It included real estate transactions reported in 25 major markets in 12 countries across Asia Pacific. It included office, industrial, retail and mixed use properties. Development site transaction is excluded. Transactions prices are tracked in local currencies and converted to US dollars using exchange rates as recorded on the last day of the respective quarters of the year.

More details from Eilidh Callum and Nick Axford at CB Richard Ellis (Thailand), 46th floor, CRC Tower, All Seasons Place, 87/2 Wireless Road, Pathumwan, Bangkok 10330.

Tel: 02 654 1111 Fax: 02 685 3300 www.cbre.co.th

PROPERTY FOCUS

Full steam ahead for Pattaya property market

By Antony Picon

T

he first half of 2011 marked another eventful period for the condominium market in Pattaya as the city develops into a truly international city. That’s the view of Colliers International Thailand.

The number of launches in H1 2011 exceeded the number for the whole of 2010 with nearly 5,200 units coming onto the market. The key reason for this was the launch of two large scale projects, both offering over 1,400 units – The Grand Jomtien on Jomtien beach (by AD Houses) and the Condotown North Pattaya-Sukhumvit – project from LPN Development.

Antony Picon, Associate Director of Research at Colliers, believes this could be a ‘game changer’ for the residential market in Pattaya. “LPN has been a major player in the Bangkok condominium market for some time with its small unit sizes targeting first-time buyers and now they are entering Pattaya”, he said.

With units of 22.5 metres, the main focus is upon Thais living in Bangkok looking for an affordable second home. LPN is set to launch two more projects in the city and Tony Picon feels that this represents a huge vote of confidence in the future. “It is likely that other listed developers will follow Raimon Land, Major Development and now LPN Development who are already part of the Pattaya developer mix”, he added.

Patima Jeerapaet, Managing Director of Colliers, also pointed to other real estate developments that are helping to cement Pattaya’s increasing significance. “Central Festival remains a very strong draw card, even for Bang-

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December 2011

town Pattaya on behalf of the Tulip Group. “Sales have been brisk for both projects and one key reason is the hotel aspect”, added Mark Bowling.

Probably the most significant tie up is also a project by the Tulip Group in partnership with the Park Plaza group, a global hotel chain to develop the Park Plaza Waterfront located near Bali Hai pier, offering views overlooking the bay. kokians, and more refurbishment of older retail centres should be something for the future”, he said.

Another important project is the King Power Duty Free complex which will add to the attractiveness of the city as a tourism destination. According to Patima Jeerapaet, strong tourism source markets such as China, Russia, India and Vietnam will be the target. “This centre can only help to grow these markets, leading to more tourists, more jobs and therefore more residential property interest in the future,” he claimed.

Mark Bowling, Senior Sales Manager for the Pattaya office, is stressing the growing trend of a hotel component in condominium developments in the city. “In the first half of 2011 three agreements were reached between developers and hotel brands.

The first was Amari that will manage the previously-named The Legend on Cosy Beach by The Nova Group with the lower floors being operated as serviced apartments and the upper floors as residences,” he said.

Centara is to manage the Centara Avenue Residence and Suites in down-

“Buyers like the best of both worlds, which means residential facilities are separate from that of the hotel/ serviced apartment component but they can also take advantage of what the hotel offers such as room service and housekeeping for added convenience”, he said.

“Hotel management will ensure proper upkeep of the property and therefore capital values will remain buoyant but with the added benefit of better rental yields, a very seductive proposition for any savvy buyer.”

Readers may access reports from Colliers at: http://bit.ly/ColliersResearch Contact: Antony Picon, Associate Director - Research Tel: 02 656 7000 Mob: 085 260 0294 Fax: 02 656 7111 Email: antony.picon@colliers.com www.colliers.co.th

HM KING CONSTANTINE AND REGENT’S SCHOOL-BANGKOK

(L TO R) KHUN THIPHAVAN TECHAVIJIT, HM QUEEN ANNE MARIE OF GREECE; HM KING CONSTANTINE OF GREECE, EXECUTIVE PRESIDENT OF THE ROUND SQUARE ORGANIZATION; DR. VIRACHAI TECHAVIJIT, CHAIRMAN OF THE REGENT’S SCHOOLS THAILAND

HM QUEEN ELIZABETH II OFFICIALLY OPENING THE ROUND SQUARE CONFERENCE

HM QUEEN ELIZABETH II WITH HM KING CONSTANTINE JOIN 1000 STUDENT-STAFF DELEGATES, INCLUDING 12 FROM THE REGENT’S SCHOOLS, AT THE ROUND SQUARE INTERNATIONAL CONFERENCE 2011 AT WELLINGTON COLLEGE, UK HM Queen Elizabeth II presided over the opening ceremony of the 2011 Round Square International Conference together with HM King Constantine and HM Queen Anne Marie of Greece. The Royal guests were greeted by Dr. Virachai Techavijit and Khun Thiphavan Techavijit of the Regent’s Schools Thailand. A truly auspicious occasion.

The Round Square International Conference 2011, hosted by Wellington College, UK, took as its theme “Reaching Beyond Our Limits”.

The conference was attended by 80 member schools from 21 countries worldwide. These countries included UK, USA, Canada, Switzerland, France, Denmark, Germany, Australia, Japan, Thailand, India, Oman, Jordan, Bangladesh, UAE, South Africa, Kenya, Peru, Bermuda, Armenia and Singapore. Last year The Regent’s Schools Thailand had the great honour of hosting the Round Square International Conference 2010 at the Pattaya Campus.

The Round Square Organization, led by HM King Constantine, aims at enhancing young peoples’ ethics, life skills and community service in order to promote a better world.

WWW.REGENTS.AC.TH HOME OF WELL ROUNDED LEADERS FOR THE FUTURE CONTACT US ON ENQUIRY@REGENTS.AC.TH OR PHONE 02-690-3777 OR 038-418-777 EXT.222

PROPERTY FOCUS

Guidelines on buying land and property in Thailand F or readers interested in purchasing property in Thailand, as a retirement or holiday home or for investment purposes, Wichien Harnpraween – Managing Director of Bangkok-based legal firm Wissen & Company – outlines the entitlement of non-Thai nationals.

Can foreigner be an owner of land, house, condominium unit in Thailand?

For land, under the Land Code of Thailand, an Alien may not own land in Thailand. The term ‘Alien’ means an individual being a non-Thai national or a juristic entity, such as a company, partnership, foundation or association, where the majority of shares are held by non-Thai persons.

Nevertheless, under the Land Code, an Alien may own land if he/she/it is permitted by special law.

Currently, when an alien company (more than 49% shares held by nonThai national or more non-Thai national than Thai national in the company) has obtained the investment promotion from the Office of the Board of Investment to operate the business in Thailand, such company will be permitted to own land but only to use the land for its promoted business.

Nevertheless, BOI Office also permits a BOI promoted company to buy land for offices and residential purposes for executives or skilled personnel of the company but the total land area may not exceed five rai (1 rai = 1,600 square metres) for offices and 10 rai for executive or skilled personnel residences.

In addition, alien or foreign national company may also own land by virtue of other laws, i.e. the Act on Industrial Estate Authority of Thailand, where

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such company operates its business within the estate or location of the Industrial Estate as approved and supervised by the Industrial Estate Authority of Thailand, and also by virtue of the Petroleum Act where such company receiving concession for oil and/or gas operation may be owner of the land throughout the time of the concession period.

For a company that has more than 49 percent of its shares held by foreign national(s), or has more foreign national shareholders than Thai nationals, it is deemed to be ‘Alien’ under the Land Code as stated above and as such may not own land unless it is granted permission under these special laws. A foreigner may own shares in a company up to 49 per-cent of the total equity, in which case such a company is not regarded as ‘Alien’ and may own land.

There has been no law prohibiting the minority shareholders to have management control of the company.

Therefore, the company under control of the minority shareholder is still considered as Thai national company provided always that the 51 percent shares are held by Thai nationals and that there is a greater numbers of Thai shareholders than foreign national shareholders. Such control of power may be achieved by contractual arrangement under a shareholders agreement and the Articles of Associations (or by-laws) of the company being registered with the authority.

One of the more common ways is to create a class of shares by fixing certain voting rights to the particular class of shares. It is also possible to indicate in the Articles of Association of the company that any change of director need certain number of votes.

For instant, 60 percent or more of

the votes of shareholders is required to change any director. Therefore, the 51% shareholders cannot eliminate a director without approval of the minority shareholders.

It is important to note that using a Thai national as a nominee to hold shares for foreigners in the company that will own land (except for the company that is entitled to own land under special law as mentioned above) is illegal. In principle, the Thais must be investing with their own funds in the company that owns the land.

As for a house or other construction on land the Land Code only prohibits foreigner to own land but does not prohibit ownership of the property itself. Any foreign national, either individual or company, may be the owner of a house or construction built on land that belongs to anyone. In reality, a foreigner may build his/her own house on the land that he/she leases it from others.

The purchase of condominium units is covered under the 1979 Condominium Act. Under this Act foreigners are permitted to own units up to maximum of 49 percent of the total sale units of any condominium building.

It is important to bear in mind that, for the purposes of this Act, ‘condominium building’ means any building that has received the necessary licence or permit. Owners of units in a condominium building are referred to as a ‘co-owner’ as they are co-owners of the common spaces within the building and the compound, such as a swimming pool, car park, garden, sauna and fitness room. These areas are known as ‘common property’.

Under the Condominium Act, a foreigner that wishes to buy condo-

minium unit must present evidence showing that he/she has brought in the funds from outside Thailand to make the purchase. Exceptions apply to foreigners with permanent residency status.

Note that, under the law, ownership transfer of land/house/condominium unit will be legally effective and complete when it is registered with the relevant land office upon payment of transfer fees, taxes and stamp duty.

Can foreigner be a long term lessee or so-called leasehold for property in Thailand?

As discussed above, in general, foreigner either individual or company is not allowed to be owner of land in Thailand. However, foreigner is allowed to occupy land by way of long term lease. Currently, under Thai law, foreigner can lease the land for residential purpose maximum for the term of 30 years. The Thai Civil and Commercial Code provides that “lease term of immovable property (land/ house) cannot be longer than 30 years, if it is longer than 30 years, the period shall be reduced to be 30 years. However, when such period of lease ends, it can be renewed but must not be longer than 30 years from the renewal date”. Moreover, the same Civil and Commercial Code also provides that “the lease term can be made for the life time of either the lessee or lessor”.

Therefore, in principle, if the lease is made for the term of life time of either lessor or lessee and he/she lives longer than 30 years, then the lease term could be longer than 30 years. In reality, it is not common for any lessee and lessor to agree for the lease term of life time of either lessee or lessor, and as such they prefer to make the lease term of 30 years initially.

Since the law allows the extension of the lease term for another 30 years, it is very common to state in the lease agreement for many real estate development projects that the owner (lessor) covenants to the customer (lessee) that the customer (lessee) has option to extend the lease term for another 30 years. This provision in the lease agreement is enforceable as such has been upheld by the Supreme Court of

Thailand in many cases, e.g. case No. 876/2537, and No. 1602/2548.

Some real estate developments have made their lease agreement with customer (lessee) with an additional option for the lessee that the lessee can extend the lease term by another 30 years after the first 60 years period.

This provision has not yet been upheld by the Supreme Court as to its enforceability but it is simply an interpretation among lawyers that the covenant of the landlord to allow such extension of lease term should have the same legal effect and enforcement as the option to renew the initial lease term of the first 30 years.

It is important to note that under Thai law, i.e. the Civil and Commercial Code, any lease agreement of immovable property (land, house, building or condo) for the lease period of longer than three years must be registered with the land office in order to cause such agreement valid and enforceable according to its terms. Nevertheless, if any lease agreement with a term of longer than three years fails to register with the land office, such lease agreement will still be valid for the period of three years. Therefore, even the lease agreement for longer period than three years without registration, the lessee can enjoy utilising the leased property for three years only.

The government charges for the registration fee of lease agreement at 1 percent of the total rental amount in the lease agreement for the whole lease period, plus 0.1% of stamp duty, to be charged at one time at the time of registration.

It is also essential to verify the correctness of the registration particulars of the lease agreement. The original land title deed of the leased land will record the name of the lessee and the land office will issue an official one page lease agreement stating important particulars of the lease agreement, i.e. name of lessee, address, lease term, rental amount, and other conditions (if any).

A lease of land is an alternative for non-Thai national to occupy and utilise the land for long term, and such

acquiring of lease of land for long term mostly has intention either to re-sell (or officially “assignment of lease”) or to have it inherited to their heirs.

Under Thai law, lease agreement of any kind of property will cease to be effective upon the death of the lessee.

This has been upheld by many Supreme Court judgments in Thailand.

Therefore, a lease of a piece of land for 30 years could be shorter if the lessee passes away prior to the completion of such 30 years.

The Supreme Court Judgment used to render its judgment in the black case index No. 2760/2534 in the year 1991 holding that the lease right is a personal right, and the lease right is exclusive right being given by the lessor to specific lessee who the lessor selected, and that, therefore, lease agreement is terminated on the reason of the death of the lessee.

By virtue of such Supreme Court Judgment, all lease agreements regardless if it is registered with the Land Office, is terminated when the lessee who is a natural person is dead.

However, there is another Supreme Court Judgment in the black case index No. 1729/2540 in the year 1997 holding that although lease right is a personal right, the lessor and the lessee can indicate in the agreement that the lease right can be inherited.

Therefore, the lessee can indicate as its property to be inherited to the heirs of the lessee. Important to note that the lease right is inherited only when the lessor and the lessee have agreed in the lease agreement that the lease right of the lessee is inherited. Thus, without such a clear statement, the lease right cannot be inherited and ceases when the lessee passes away.

Wichien Harnpraween, Wissen & Co Limited, Level 8, Suite 3801, BB Building, 54 Sukhumvit 21 (Asoke), Klongtoey Nua, Wattana, Bangkok 10110.

Tel: 02 259 2627 Fax: 02 259 2630 Mobile: 081 647 8100 Email: wissen@csloxinfo.com www.wissenandco.com

The Brief

December 2011

45

PROPERTY FOCUS

Hotel investment stays on upward curve

By Mike Batchelor and Karan Khanijou

O

n the back of a significant turnaround in hotel trading environment across Asia Pacific, Thailand is experiencing a similar strong interest in its hotel investment market.

After a strong 2010, with some THB 5.5 billion of hotel transactions, the momentum continued into the first half of 2011 with two major properties totalling THB 3.46 billion transacted.

According to data compiled by Jones Lang LaSalle Hotels, 2011 appears to be on track to surpass levels of the past four years – though a long way from the peak in 2006 where close to THB 16 billion of hotel transactions was recorded. Bangkok and Phuket has attracted strong interest this year with approximately THB two billion and THB 1.5 billion in transactions respectively. This contrasts to 2010 when Bangkok recorded no major transactions while Phuket dominated with THB four billion and Samui with THB 1.5 billion.

The company notes that, of the above transactions, seller profile has been limited to institutional investors and corporates (with the exception of a receiver sale in the case of Baan Taling Ngam Koh Samui). Investor interest has been generated from a wide range including private corporations, public companies, investment funds and high net worth individuals.

While domestic investors continue to dominate the hotel investment landscape, regional private equity firms made major acquisitions during the first half of 2011.

Thailand continues to face the twin challenges of limitations on foreign

46

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December 2011

ownership and political instability though the latter to a lesser extent with the smooth transition of government earlier this year. Two notable transactions represented by Jones Lang LaSalle Hotels this year, that of Sofitel Silom Bangkok and the Laguna Beach Resort, were both sold to foreign investment funds. However, both funds had a Thai platform that allowed the investment to be made.

Transaction volumes would benefit if foreign capital had more channels to acquire Thai assets. Signs of greater political stability in Thailand have also sparked offshore interest. A stable political environment should bolster investor confidence in the Thai hospitality market, especially if coupled with continued growth in tourism numbers.

While Thailand’s tourism industry has recovered from the political instability in 2010, its landscape is certainly changing. China overtook Japan to become Thailand’s top source market for the first time in 2010 accounting for just over seven percent of all arrivals. This year the disaster in Japan slowed the country’s outbound travel whilst China arrivals continue to grow rapidly. Russian travellers, another key growth market, are typically attracted to Bangkok as well as the resort markets of Phuket and Pattaya.

Regional Asian markets continue to dominate visitor arrivals, with traditional European source markets no longer present in the top five.

The improved market environment is reflected in hotel trading performance across all star catego-

ries. RevPAR (revenue per available room) in Bangkok’s three, four and five star markets were three of the top ten most improved markets in the region in 2011. The five star market saw the strongest year on year RevPAR growth with 29.4 percent (22.9% for three star; 21.3% for four star).

Prior to the flooding the Thai hotel market had been in the midst of an emerging turnaround with a surge in visitor arrivals backed by a return of relative political stability. A return to favourable conditions will boost investor interest in Thai hospitality assets. While Bangkok still faces the spectre of an oversupply in rooms with over 12,000 due to open by 2014 – its key strengths in tourism and potential as a meetings, incentives, convention and exhibition (MICE) hub will underpin hotel performance in the medium term.

Jones Lang LaSalle Hotels still sees opportunities in certain niches such as the three star hotel market which continues to perform strongly and where future supply only makes up just 21 percent of total Bangkok supply.

More details from Mike Batchelor or Karan Khanijou, Jones Lang LaSalle, 19/F Sathorn City Tower, 175 South Sathorn Road, Bangkok 10120. Tel: +66 2624 6563 Fax: +66 2679 6519 www.joneslanglasallehotels.com

OBITUARY

M.R. Sarisdiguna Kitiyakara

M

.R. Sarisdiguna Kitiyakara, an honorary member of the British Chamber of Commerce Thailand, passed away September 21, 2011 at the age of 71. The royal sponsored cremation presided by HRH Princess Mahachakri Sirindhorn was held on Sunday, 27th November 2011 at 18:00pm at Thepsirin Temple.

1989 he was appointed as Chairman, the top position of the Shell Company of Thailand Ltd., until he retired from Shell 31 August 1994.

After his retirement M. R. Sarisdiguna Kitiyakara continued to be active in business and social work. He was President of New Imperial Hotel Public Company Ltd and was Chairman of T.C.C. International Company Ltd. He served as an independent director of Kasikornbank Public Co. Ltd, and of Goodyear Thailand Public Co. Ltd.

M.R. Sarisdiguna Kitiyakara graduated with a Masters Degree in Engineering from the University of Cambridge. He attended Senior Executive programme at IMI, Switzerland and Advanced Management programme at Wharton University.

He was married to M.R. Duenden Kitiyakara and had two sons.

M.R. Sarisdiguna Kitiyakara began his career with Shell Company of

Thailand Ltd in 1961, and in 1983 became the first Thai to be appointed as Managing Director of the company. In

He was honorary advisor of the Old England Students Association under Royal Patronage. He was an active member of the BCCT and served on the board of directors from 1988 to 1994. He will be greatly missed by his friends and colleagues.

Sandy McKinnon

I

t is with deep regret that we inform you that Alexander (Sandy) McKinnon, founder of McKinnon & Clarke (now M&C Energy Group Ltd) passed away on 12 October 2011. The burial took place in his family town of Penicuik in Midlothian, Scotland.

In Thailand a memorial service was held on Thursday 17 November 2011 at the Christ Church, Convent Road, Bangkok.

Sandy was an enthusiastic supporter of BCCT. He was keen to see McKinnon & Clarke and M&C Energy actively involved in BCCT

48

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December 2011

events and was working with BCCT on raising sustainability issues with members at the time of his illness.

Sandy also actively supported the St Andrews Society, the development of the Scottish Business Group and GlobalScot.

Sandy was loved by all that knew him.

His friends from around the globe attended the funeral in Scotland and the memorial service in Thailand.

Our deepest sympathies go to his family and loved ones at this sad and difficult time. Sandy is missed by all his friends and those who were fortunate to have crossed paths with him.

Jørn Unneberg

P

Jørn joined Jotun some five months ago, and quickly became a true and valued member of the Penguin family.

Jotun has been a long supporter and an active member of the BCCT. During his short time with Jotun Jørn extended the same support enthusiastically and spent time working closely with our team at the Chamber most recently as lead sponsor of the Annual Bangkok Masters Football Dinner.

assing of Jørn Unneberg, Managing Director of Jotun Thailand.

It is with great sorrow that we inform that Jørn Unneberg, Managing Director of Jotun Thailand, passed away suddenly on 28 October 2011.

Jørn was attending a regional Paints meeting in Hua Hin at the time, and in spite of urgent assistance from both colleagues and doctors his life could unfortunately not be saved. Colleagues gathered shortly afterwards in remembrance of Jørn, and Jotun Thailand has held an all-hands

meeting led by Peder Bohlin to inform of his passing.

Jørn will be remembered for his generosity, leadership, and sense of humor. He will be dearly missed by all. Our heartfelt condolences go to Jørn’s wife, three daughters, his friends, family and colleagues at this difficult and sad time.

Michael Gerson

B

CCT members will be saddened to learn of the death of Michael Gerson at the age of 70.

Michael became Managing Director of Gerson & Sons in 1970. The business was formed in 1923 by Michael’s Ukrainian father Henry who had settled in Bangkok some three years previously.

Michael was an active member of the BCCT and the international business community. He was a long-serving President of the Jewish Association of Thailand.

He died at the Bangkok Nursing Home on 27 October and is buried close to his father and mother in the new Protestant Cemetery on Charoen Krung road in Bangkok.

He is survived by his wife Ruth and children Monique, Mark, Colin and Shane.

The Brief

December 2011

49

helping the needy

Foundation gives vital support in northern provinces

T

he Foundation to Encourage the Potential of Disabled Persons (The Foundation) is one of the primary sources of support care for the handicapped poor in northern Thailand.

Based in the shadow of Doi Saket, on the outskirts of Chiang Mai, this non-profit NGO provides desperately needed services in the six northern provinces of Lampang, Mae Hong Son, Lamphun, Phayao, Chiang Rai and Chiang Mai. The Foundation primarily offers physical therapy and wheelchairs as well as other mobility aids including beds, gurneys, walkers, walking canes and standing frames. Just as importantly, it gives a mental and emotional uplift to people dealing with challenges greater than our own.

Founded in 1993 by Don Willcox, The Foundation originally provided classes in Computer Science, Website Design, English and Music. As time progressed so too did the opportunities to help those in need.

In 1998 The Foundation became legally registered. Two years later, with a clearer eye for the needs of the people, The Foundation opened the Freedom Wheelchair Workshop.

The Workshop makes and assembles wheelchairs and mobility devices to be distributed free of charge to those in need.

Since then it has provided in excess of 3,000 wheelchairs and mobility aids to the poor. The next big jump was Baan Piranan in 2008. This house provides residential care for children suffering from severe cerebral palsy.

The value of these services cannot be compared to those offered in a western country, where you might find handicapped parking, wheelchair 50

The Brief

December 2011

accessible store entrances, and a general understanding for the needs of those facing severe challenges.

With an eye ever on the future, The Foundation has expanded and upgraded its services. More wheelchairs are being donated every year; over 400 this year alone.

More people are being helped in the Chiang Mai area through a local homevisit health, hygiene, and therapy programme which is now helping more than 40 people living in the surrounding rural communities. The next step in the coming year is to open an emergency shelter and clinic for those with disabilities and their families. This will provide them with a place to come together for treatment, training and networking.

This year Lee O’Brien joined the team as Intern Coordinator. When asked where he sees The Foundation in five years, he replied, “A healthy charity, sustaining the work we already do with the clinic and developing

further projects to address the cultural perception of being disabled in Thailand whilst changing lives and particularly attitudes.�

Twenty years ago Don Willcox came to Chiang Mai, found that it reminded him of Appalachia, and embarked on a labour of love. His wife Piranan has impaired vision and, because of her challenges in life, The Foundation has set up to ease the suffering of thousands through the hard work of volunteers and staff, the kind and generous donations of both time and money from individuals and organisations and the determination of good people to see its mission continue and grow.

If you would like to help the Foundation through a pledge of time or money please contact Lee or Don on 082 809 2870 Email: sponsorship@ assistdisabled.org

Britain in South East Asia (BiSEA)

Cambodia British Business Association of Cambodia c/o Top Recruitment Cambodia 592, Building F, Phnom Penh Centre Corner Sothearos & Sihanouk Boulevards, Phnom Penh, Cambodia Tel: 855-23-997-492 Fax: 855-23-997-493 Email: secretary@bbacambodia.com Website: www.bbacambodia.com Chairman: Keith Carroll Committee Secretary: Kevin Britten

Indonesia British Chamber of Commerce in Indonesia Wisma Metropolitan 1, 15th Floor, Jl. Jend, Sudirman Kav 29-31 Jakarta, Indonesia 12920 Tel: 62-21-522-9453 Fax: 62-21-527-9135 Email: bisnis@britcham.or.id Website: www.britcham.or.id Chairman: Haslam Preeston Executive Director: Chris Wren

Malaysia British Malaysian Chamber of Commerce

52

The Brief

December 2011

E04C1, 4th Floor East Block Wisma Selangor Dredging 142-B Jalan Ampang 50450 Kuala Lumpur, Malaysia Tel: 603-2163-1784 /1786 Fax: 603-2163-1781 Email: britcham@bmcc.org.my Website: www.bmcc.org.my Chairman: Jon Addis Director, Business Development: Molly Jagpal

Philippines British Chamber of Commerce of the Philippines c/o The British Embassy Manila 120 Upper McKinley Road McKinley Hill, Taguig City 1634 Metro Manila, Philippines Tel: 632-858-2255/858-2372/858-2373 Fax: 632-858-2390 Email: secretariat@bccphil.com Website: www.bccphil.com Chairman: Keith Perrin Executive Director: Alison Doig Henderson

Singapore British Chamber of Commerce in Singapore 138 Cecil Street, #11-01 Cecil Court Singapore 069538 Tel: 65-6222-3552 Fax: 65-6222-3556 Email: info@britcham.org.sg Website: www.britcham.org.sg

President: Mr. Steve Puckett Executive Director: Brigitte Holtschneider

Thailand British Chamber of Commerce Thailand (BCCT) 7th Floor, 208 Wireless Road Lumpini, Pathumwan Bangkok 10330 Tel: 66-2651-5350-3 Fax: 66-2651-5354 Email: greg@bccthai.com Website: www.bccthai.com Chairman: Graham Macdonald Executive Director: Greg Watkins

Vietnam British Business Group Vietnam Ho Chi Minh City G/F 25 Le Duan Blvd, District 1 Ho Chi Minh City, Vietnam Tel: 84-8-3829-8430 Fax: 84-8-3822-5172 Email: execdirector@bbgv.org Website: www.bbgv.org Hanoi 67 Le Van Huu, Hai Ba Trung Hanoi, Vietnam Tel: 84 4 6674 0945 Chairman: Patrick Regis Executive Director: Jakki Lydall

Boris confirms explosive start to Olympics year in London

M

ayor of London Boris Johnson has confirmed plans for a spectacular display of fireworks at the London Eye on New Year’s Eve to signal the start of a momentous year for Britain’s capital city.

“As we begin one of the most extraordinary and exciting years in our great city’s history, the sky will light up with a dazzling display of pyrotechnic magic. 2012 will open not with a timid whimper but a colourful bang, a noisy clarion call to herald one amazing year,” said Mayor Johnson.

“Londoners know how to celebrate and our fireworks display will be the first in a year long celebration of all things London. From the magic of the Games to the Diamond Jubilee, the London 2012 Festival and our own outdoor arts festival there will be world-class events in every corner of the capital to create a summer like no other.

“It (2012) will be a year to be confident and ambitious and London will welcome the world with energy and optimism,” he added.

London-based brand experience agency Jack Morton Worldwide will again create and produce the dazzling show, working with British pyrotechnic company Kimbolton Fireworks.

The New Year will also see the Mayor launch a new online gateway where Londoners and visitors to the capital will be able to get information about the vast programme of free events and activity being planned across all 33 boroughs.

Ruth Mackenzie, Director – Cultural Olympiad & London 2012 Festival, said, “The eyes of the world will

Above: London is preparing to welcome the New Year in spectacular style. Right: Mayor of London Boris Johnson flies the flag ahead of the London Olympics.

be on us in 2012 and through the London 2012 Festival we have a once in a lifetime opportunity to showcase the world leading arts and culture in this city and this country.”

New year travel tips The London.gov.uk website has issued the following advice for visitors and residents wishing to see in the New Year.

The fireworks display is enormously popular, attracting large crowds who have a long wait in the designated viewing areas along the Thames. There is limited space and these fill up early, by 9pm or 10pm, and access to each zone will be closed as soon as it is full. Due to the crowds and waiting time people with young children may wish to consider celebrating the New Year nearer to home.

Public transport will be the best way to get around the capital on New Year’s Eve.

Tube, DLR, tram and selected national Rail services in Greater London will run all night. night and 24 hour bus routes will run as normal but there will be a reduction in bus services leaving central London from around 5pm to around 3am on New Year’s morning because of road closures.

There will be free travel on all journeys on the Tube, DLR, buses and trams from 11:45pm until 4:30am. Please plan your return journey in advance and be patient if your return journey involves queuing before boarding your train, bus or tram.

More information can be found at www. london.gov.uk/newyearseve

The Brief

December 2011

53

Inspiring programmes from British Council

By Simon Farley

I

t has clearly been a challenging environment for everyone here in Bangkok in the last few weeks. We are pleased to report that the British Council has been able to maintain core operations throughout with our main teaching centre and programmes team office at Siam Square remaining open and operating at full capacity.

However, our teaching centres at Pinklao and Ladprao were affected by the floods. Our core programmes activities, in Education, English and the Arts, continue development of a series of innovative new projects. Here is a brief outline, with associated opportunities for corporate partnership.

Education Inspiring Science is the opportunity to support and work with British Council in curriculum development, to support the teaching and learning of Science in Thai schools and reach students and teachers across Thailand.

British Council in partnership with Sheffield Hallam University in the UK and the Science Institute, Office of Basic Education Commission, Ministry of Education of Thailand, is working on a science curriculum development project for schools in Thailand.

The Inspiring Science Project develops quality and innovative on-line contemporary materials for science teachers. The ideas were developed in the UK with great success, with over 45,000 teachers registering to the website and more than one million activity downloads. The materials, translated into Thai, will be available for Science teachers in primary and secondary schools throughout the country.

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December 2011

The project presents an excellent corporate partnership opportunity, enabling a brand presence and association with a high quality education initiative and reach across the nation, directly reaching students both in primary and secondary schools.

English learning resources into the Thai market.

English language Services

The British Council will work with English language professionals in Thailand and colleagues in the UK to map a selection of our digital content to Thai school curricula. Following this selection, we will translate navigation instructions into Thai and Intel will develop an easy-to-use, Thai-friendly interface. The resulting software package will be embedded onto Intel laptop and tablet devices.

Parents who purchase these devices and their children will be able to access world class resources at the touch of a screen.

We have created a partnership with Intel to put British Council digital

A partnership with the Royal Projects and the Ministry of Education

If you are interested to partner with us in this project and for further information, please contact Uraiwan Samolee, Head of Business Development, Education.

Tel: 02-657-5638 or Email: uraiwan.samolee@ britishcouncil. or.th

is designed to increase access to English for teachers and learners in three conflict-affected provinces.

Together with technology partners we will develop online training programmes for teachers to improve both their own English level as well as their teaching skills. We will deliver context-specific teaching resources for primary and secondary school teachers in print and digital formats and the skills to use them. We will work with existing ICT infrastructure partners to increase access to British Council digital English learning resources for both school-based learners and young adults to improve access to education and employment opportunity.

British Council is working with the Distance Learning Television Foundation’ network to pilot a localised version of ‘Word on the Street’. This will be broadcast directly to over 30,000 schools in Thailand and to many others in South East Asia that

have received satellite equipment from the DLTV Foundation.

For further details on these innovative new projects and the opportunities to partner with them, please contact Brian Stott, Head of Professional ELT Development.

Tel: 02 657 5644 or Email: brian.stott@britishcouncil.or.th Arts An innovative major new British Council exhibition is currently being curated for both Thailand and Vietnam. ‘Everything Forever Now’ will showcase the latest trends in sustainable design by contemporary British designers, engineers and architects.

The exhibition will examine how British creative talent is leading the debate on designing for a sustainable future whilst also promoting growth, reflecting the current agenda where new designs put in more than they take out.

This ambitious exhibition will feature new British developments in resources, materials, method and community design initiatives, while also showcasing best practice examples from both Thailand and Vietnam.

We are working in partnership with the pre-eminent design and exhibition authority, the Thailand Creative Design Centre (TCDC), where the exhibition will be staged in February and March 2012 before travelling on to Vietnam. A series of live events, including a sustainable design seminar and challenge will feature within the exhibition schedule. Finally, the Creative Economy partnership is in the early stages of development with Chiang Mai Creative City.

Simon Farley is Head of Development, Creative Industries at the British Council in Bangkok.

Tel: 02 657 5601 Email: simon.farley@ britishcouncil.or.th

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December 2011

55

Dataconsult

rent account balances were in negative territory and foreign currency reserves fell to first quarter 2011 levels.

Chamber Events

By the Numbers

Chris Bruton Director, Dataconsult Ltd.

E

ven statistics are affected by floods and this is also the case with our regular reporting items in the attached tabulations. However, many of the numbers are now available indicating some downward trends, even before floodwaters made their full impact in October and November.

Consumer prices and inflation experienced little change but generally consumption and confidence indicators were clearly downward. Foreign trade, for the time being, remained strong and tourism had not yet experienced any strong downward trends. However the SET Index hit its lowest point for a year, losing all the gains made over the past six months. Board of Investment activity remained strong. Thai Baht currency weakened against the US Dollar and Yen but strengthened against the Pound Sterling and the Euro. Cur-

on with the job of reconstruction and disaster prevention rather than the rehabilitation of Dr. Thaksin Shinawatra.

Looking at overall GDP growth prospects, first indications for full year 2011 and forecasts for 2012 are inevitably discouraging. Flood impact has cut 2011 GDP forecasts (Bank of Thailand) from a previous 4.1 percent down to 2.6 percent. However, the stimulus of reconstruction suggests that, for 2012, GDP growth could be much stronger.

If the October 2011 IMF outlook is to be believed, Thailand already lagged behind most other ASEAN countries in growth for 2011 and will hardly be a winner in 2012. With impending negative impact from the recessions in the USA and the Eurozone and the USA overall growth prospects may require downward revision.

The Bank of Thailand is now forecasting 4.1 percent for 2012, with a range of 4.0 percent to 4.5 percent among analysts. Much depends on the determination and commitment of government to get

However, unless the Thailand government gets things badly wrong (as well they might), ability to reach target growth looks promising, thanks to reconstruction spending.

GDP growth (%)

Countries

2010

2011(f )

2012(f )

China

10.3

9.5

9.0

India

10.1

7.8

7.5

Brunei

2.6

2.8

2.2

Cambodia

6.0

6.7

6.5

Indonesia

6.1

6.4

6.3

Lao PDR

7.9

8.3

8.4

Malaysia

7.2

5.2

5.1

Myanmar

5.5

5.5

5.5

Philippines

7.6

4.7

4.9

Singapore

14.5

5.3

4.3

Thailand

7.8

3.5

4.8

Vietnam

6.8

5.8

6.3

Source: International Monetary Fund October 2011

Thailand Statistical Update (November 2011) 2011

Item

Sep

Aug

2010

Jul

Jun

May

Apr

Mar

Feb

Jan

Dec

Nov

Oct -4.9

Production Indicators Agricultural Production Index (y-on-y %)

n.a

3.5

-7.1

-8.1

-5.8

39.0

32.3

4.4

7.5

-1.2

0.4

Manufacturing Production Index (y-on-y %)

-0.5

6.8

-0.7

3.8

-3.7

-8.1

-6.7

-3.0

4.1

-3.4

5.7

6.0

Industrial capacity Utilisation (%)

65.4

65.0

63.1

64.1

58.8

54.4

66.1

59.5

62.3

62.4

63.6

63.9

Key domestic product sales Electricity (KWH bn.)

n.a

13.76

13.70

13.47

13.77

12.58

13.12

11.86

11.91

12.18

12.28

12.96

Benzene/gasohol (mn. litres)

n.a

620.18

384.28

362.12

374.46

392.05

389.25

406.52

426.98

441.39

384.08

430.23

Beer (mn. litres)

n.a

129.64

132.96

144.83

130.09

149.79

177.98

139.98

126.04

200.39

166.46

134.64

Soda / soft drinks (mn. litres)

n.a

45.29

41.77

48.32

44.92

47.21

57.13

49.79

50.70

57.96

49.82

43.59

Passenger cars (000 units)

n.a

33.02

25.55

26.91

15.74

22.90

35.54

30.95

29.00

32.24

31.54

31.16

Motorcycles (000 units)

n.a

184.20

190.63

197.01

180.72

148.64

187.14

154.50

158.22

152.43

160.32

155.91 37.10

Commercial vehicles (000 units)

38.28

41.49

39.21

32.31

24.71

25.85

41.89

37.66

33.29

40.29

40.55

Cement (mn. metric tonnes)

2.28

2.37

2.29

2.38

2.51

2.21

2.65

2.43

2.33

2.25

2.12

1.92

Passenger cars (y-on-y %)

29.6

26.4

12.2

-0.5

-15.2

17.8

80.3

49.6

49.6

28.2

39.7

42.7

Motorcycles (y-on-y %)

n.a

15.9

11.6

20.3

23.8

11.0

13.1

15.7

5.3

10.0

10.8

15.3

Commercial vehicles (y-on-y %)

25.7

15.7

10.1

-0.3

-6.2

17.7

28.5

37.6

29.7

29.9

37.3

29.6

Cement (y-on-y %)

12.2

15.3

8.6

4.0

-5.8

-1.0

2.2

1.3

0.9

2.7

-2.5

-7.8

Producer / Consumer Price Indicators Producer Price Index

139.1

138.4

137.1

138.7

138.3

139.3

137.4

137.3

134.0

166.9

168.8

167.7

Change (m-on-m %)

0.5

0.9

-1.2

0.3

-0.7

1.4

0.1

2.5

1.4

-1.1

0.7

0.8

Change (y-on-y %)

5.6

6.0

5.2

4.5

6.2

6.6

5.9

7.4

6.0

6.7

5.9

6.3

120.8

120.9

120.8

120.1

120.2

119.7

119.0

117.9

117.7

143.4

142.3

141.3

-0.1

0.1

0.6

-0.1

0.4

0.6

0.9

0.2

2.0

0.8

0.7

-0.5

Construction Materials Price Index Change (m-on-m %)

56

The Brief

December 2011

2011

Item

2010

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

Jan

Dec

Nov

5.8

6.3

7.3

6.7

4.8

4.5

6.6

6.0

6.0

3.5

2.4

0.4

112.9

113.2

112.7

112.5

112.4

112.0

110.5

110.0

109.5

108.9

108.8

108.5

Change (m-on-m %)

-0.3

0.4

0.2

0.1

0.3

1.4

0.5

0.4

0.5

0.2

0.2

0.0

Change (y-on-y %)

4.0

4.3

4.1

4.1

4.2

4.0

3.1

2.9

3.0

3.0

2.8

2.8

106.8

106.6

106.4

106.3

106.1

105.6

104.8

104.5

104.4

104.2

103.9

103.8

Change (m-on-m %)

0.1

0.3

0.1

0.2

0.5

0.7

0.3

0.1

0.2

0.4

0.0

0.1

Change (y-on-y %)

2.9

2.9

2.6

2.5

2.5

2.1

1.6

1.5

1.3

1.4

1.1

1.1

Industrial Confidence Index

90.7

102.5

105.2

107.4

108.3

106.6

102.3

108.2

112.7

109.7

99.7

98.7

Business Sentiment Index

48.5

52.2

51.2

53.1

50.9

47.3

54.1

52.3

52.8

51.6

52.5

50.0

Change (y-on-y %) Consumer Price Index (headline) (2007 = 100)

Core Inflation (2007 = 100)

Oct

Consumption & Confidence Indicators

Private Consumption Index

140.7

143.0

138.0

141.3

141.3

140.0

141.7

137.9

138.4

137.2

137.3

132.7

Private Investment Index

205.9

206.6

202.5

201.7

206.9

206.3

208.3

198.6

195.5

187.8

188.9

188.4

Consumer Confidence Index

30.4

30.0

30.6

22.4

18.4

17.7

16.0

18.9

20.4

24.6

24.9

25.9

Benzene 91 (Baht per litre)

36.29

40.92

43.02

42.41

43.09

43.41

42.12

40.36

39.06

37.45

36.04

35.33

Diesel (Baht/litre)

27.99

29.51

29.99

29.99

29.99

29.99

29.96

29.99

29.99

29.89

29.26

28.56

Manufactured products (Baht bn.)

548.91

558.26

573.74

544.86

501.55

461.37

554.18

497.11

431.99

446.16

459.90

464.27

Agricultural products (Baht bn.)

71.40

65.64

63.13

58.74

64.51

52.25

75.95

62.42

57.37

57.08

50.51

44.36

Total exports (Baht bn.)

637.16

640.55

652.09

633.71

580.05

527.62

646.28

573.01

501.08

516.62

524.80

522.38

Total exports (y-on-y %)

19.1

31.1

38.3

16.8

17.6

25.0

30.6

31.0

22.3

18.8

28.5

15.7

Fuel Prices

Foreign Trade of Thailand: exports

Foreign Trade of Thailand: imports Consumer goods (Baht bn.)

Raw materials (Baht bn.)

53.17

54.54

46.55

48.82

46.99

45.63

50.81

40.89

44.89

42.56

46.06

42.33

229.43

234.91

220.41

241.32

230.19

224.67

231.91

198.32

205.37

194.25

197.97

194.86

Capital goods (Baht bn.)

131.82

175.69

141.76

155.32

125.84

136.79

168.20

129.63

135.16

115.05

121.84

117.00

Other Imports (Baht bn.)

223.97

219.80

165.71

157.44

176.05

151.43

148.44

156.82

148.17

132.13

153.38

108.23

Total Imports (Baht bn.)

638.40

684.93

574.43

602.90

579.07

558.53

599.37

525.66

533.58

484.00

519.25

462.42

Total Imports (y-on-y %)

41.9

44.0

13.5

26.1

33.8

27.9

28.4

22.2

33.3

11.4

35.3

14.8

Tourism Indicators Suvarnabhumi Arrivals (000 persons)

1,029

1,109

1,124

964

889

1,004

1,101

1,142

1,183

1,143

1,003

864

Change (y-on-y %)

31.25

32.87

32.86

64.42

91.64

48.61

15.77

6.75

6.20

3.32

4.55

0.15 1,314

Nationwide Arrivals (000 persons)

1,490

1,721

1,516

1,485

1,369

1,498

1,759

1,805

1,792

1,802

1,473

Change (y-on-y %)

22.68

35.43

18.80

53.90

65.61

35.17

22.23

11.80

11.62

6.95

8.17

8.61

Hotel Occupancy Rate (%)

54.81

57.74

57.76

50.00

49.86

56.10

62.49

68.93

62.69

58.44

55.36

49.03

Loans (Baht bn.)

n.a

9,692.4

9,602.4

9,466.3

9,540.6

9,636.7

9,244.9

9,405.8

9,073.6

8,591.4

8,767.6

8,672.7

Deposits (Baht bn.)

n.a

7,723.8

7,633.4

7,568.0

7,670.9

7,598.7

7,625.9

7,598.0

7,446.9

7,468.7

7,312.6

7,201.9 984.46

Commercial Banking Indicators

Stock Exchange and Foreign Investment indicators SET Index (1975 = 100)

916.21

1,070.05

1,133.53

1,041.48

1,073.83

1,093.56

1,047.48

987.91

964.10

1,032.76

1,005.12

Market Capitalisation (Baht bn.)

7,502

8,757

9,271

8,513

8,742

8,860

8,488

8,004

7,811

8,335

8,163

7,989

Foreign Purchase (Baht bn.)

113.15

165.33

168.36

114.96

125.82

144.49

157.33

141.65

166.21

138.34

135.01

129.05

Foreign Sale (Baht bn.)

113.57

129.65

207.37

130.49

141.86

142.53

114.98

137.73

133.20

194.84

107.40

141.28

Foreign Direct Investment (net, Baht bn.)

n.a

17.89

22.42

34.85

25.24

16.19

18.53

26.82

-17.64

17.84

21.17

16.17

Foreign Portfolio Investment (net, Baht bn.)

n.a

-39.45

136.70

-38.20

-73.91

97.79

28.18

23.27

35.76

45.79

-2.93

44.70 53.7

Board of Investment indicators 105.8

38.0

52.9

42.4

37.9

51.2

46.0

39.8

26.8

71.4

42.1

Approvals (Baht bn.)

Applications (Baht bn.)

4.9

4.2

11.7

68.9

38.6

35.8

30.7

57.0

22.3

35.3

60.2

19.8

Certificates (Baht bn.)

15.9

54.2

40.5

47.2

39.8

47.8

28.1

17.7

46.8

25.7

32.3

56.8 29.97

International monetary indicators US$ / Baht (mid-rate)

30.42

29.88

30.08

30.51

30.24

30.05

30.37

30.72

30.58

30.12

29.89

ÂŁ / Baht (mid-rate)

48.04

48.91

48.54

49.52

49.42

49.19

49.09

49.54

48.23

46.97

47.74

47.50

Euro / Baht (mid-rate)

41.90

42.86

42.99

43.91

43.30

43.43

42.51

41.97

40.83

39.76

40.89

41.60 36.58

Japan (100) Yen / Baht (mid-rate)

39.61

38.74

37.90

37.90

37.26

36.18

37.16

37.23

37.01

36.13

36.27

Exports (f.o.b. US$ bn.)

21.26

20.94

21.10

20.82

19.28

17.24

21.07

18.41

16.52

17.22

17.58

17.04

Imports (f.o.b. US$ bn.)

18.84

20.23

16.55

17.02

17.10

15.93

17.33

15.32

15.39

14.29

15.36

13.28

Trade balance (US$ mn.)

2,419.05

704.76

4,552.36

3,798.89

2,186.39

1,310.50

3,746.56

3,086.03

1,130.19

2,930.33

2,227.31

3,767.39

404.16

-696.74

3,438.31

2,401.93

-655.74

-350.48

1,692.03

3,160.59

1,056.83

1,718.25

955.35

2,652.27

-1,674.20

-556.30

541.20

-971.60

-2,599.60

3,570.40

1,364.60

4,270.90

1,688.90

2,262.80

820.30

5,821.70

180.11

188.32

187.64

184.89

185.47

189.88

181.58

179.45

173.99

172.13

167.97

171.06

Current account balance ( US$ mn.)

Balance of payments ( US$ mn.)

Foreign currency reserves ( US$ bn.)

Statistical sources: these statistics have been derived from the following official sources: Bank of Thailand, Ministry of Commerce, Ministry of Finance (Department of Customs, Fiscal Policy Office), Ministry of Industry, Board of Investment, Immigration Department, Stock Exchange of Thailand.

The above statistics represent the principal economic indicators for Thailand, but the original sources provide much more extensive and detailed coverage of different aspects of the economy. Statistics as presented are, in most cases, provisional figures, which will be adjusted at a later date when final returns are available from the respective sources. While best efforts have been made to ensure accuracy, readers are referred to original sources for definitive statistics.

Note 1: month-by-month figures are updated as adjustments are made in the original statistical sources Note 2: up to December 2010, Index was 2000 = 100; From January 2011, Index is 2005 = 100

The Brief

December 2011

57

Crucial to keep stock of your investments

By Eric Jordan

G

lobal stock markets have been experiencing significant volatility trending down for several weeks. Economic news is predominantly bad and no-one knows how the US and Europe will wriggle out of their massive debts.

Savings and pension schemes, still trying to recover from the financial meltdown of 2008, are reeling yet again. Most investors are no better off now than they were 10 years ago. Investors are now asking if this is the time to pull the plug on their stock holdings?

The days of double digit growth each year in the value of shares seem to have gone – perhaps forever.

Relying upon a portfolio of shares as a secure basis for retirement is now looking to be a very risky strategy. To understand what the capital markets are all about it is easier to think of them in their simplest terms.

Let’s say you decide to start a small business. If you have enough money of your own you plough it into the business and reap all the profits. Or suffer the losses. If you do not have enough resources yourself you might find say four other people to invest equal amounts. Thus the business now has five shareholders. If the business is profitable you decide how to share the profits, effectively paying yourselves dividends. If the venture fails, you all lose your money, but not as much as if just one person was the investor. If one of the group wishes to sell his share he can do so to a willing and able buyer and for an amount that reflects the market value.

This is exactly how the capital markets work, except on a much grander scale. When the company is 58

The Brief

December 2011

large it can trade on recognised stock markets so that anyone can freely buy or sell its shares. If you invest in the right companies you can make a lot of money. Warren Buffet became the second richest man in the world through his stock-picking skills.

But Warren Buffet’s strategy was to seek out good value, buy the shares and hold on to them for years. This was his way of showing faith in those companies and giving them his support. Once he helped salvage American Express. Only recently he pumped billions of dollars into the Bank of America.

Apart from his obvious patriotism his strategy has usually paid generous dividends for himself and investors in the huge investment company he created, Berkshire Hathaway. This was an example of the type of capitalism that helped to make the US the strongest economy in the world and its people the most prosperous.

But what do we see now? In recent times, when the major markets were gaining and losing at least four percent each day, stocks on the US stock exchange were changing hands on average every 20 minutes! Shares were often held for as little as three minutes. Computerised trading has largely replaced the human effort and the analysis applied before making investment decisions.

Of course, humans have created the programmes but, once created, the computer makes all the decisions – at lightning speed. Some would say the stock market has become a casino. There is no way the small investor can compete with the computers. And even the computers can get things very wrong.

Many individual investors, including those who have lost small fortunes, have long decided they will not go near the markets. But in most cases this can be put down to timing and human nature. Investing, essential

as it is to everyone who wishes to conserve or build up their wealth, is driven by greed and fear.

When an asset class, whether it be stocks, gold or property, is riding high everyone wants a piece of the action. When it collapses in value everyone wants out. Consequently most people tend to buy high and sell low. One well-known fund once gained 80 percent in five years. Yet most of the people who invested in it lost money! How is that possible?

Because during those five years there were several peaks and troughs. And yes, you guessed it, most people bought when the market was high and sold when it fell.

You may think it is no longer a good idea to invest in the S&P 500 which represents the top 500 companies on the New York stock exchange. Yet, the S&P index rose 100 percent from its depths following the financial meltdown in March 2009 to May of this year.

In other words, if you had invested in March 2009 when everyone was predicting the end of the world you would have doubled your money in just over two years! Nobody to my knowledge did, and if anyone did they probably stayed in the markets which are now spiraling down again!

But this does show that profits can still be made in stocks – if you get the timing right.

Getting it right perfectly is impossible but there are certainties you can depend upon. For example, if the market has gone down 20 percent there is no arguing that you can buy

in at a price 20 percent lower than it was previously. Similarly, if your shares have risen 20 percent your gain really is 20 percent – but only if you sell.

Another strong argument for not abandoning the markets is that today many, if not most, companies remain highly profitable. The private sector continues to thrive. It is governments and in many cases the banks that have squandered or misused the money. If everyone abandoned the capital markets governments and banks as we know them would cease to exist.

Finally there are excellent opportunities in emerging markets.

Future growth lies more in Asia than the West and we are going to see more and more capital moving in this direction.

My conclusion is that, tempting as it is, after a decade of disappointments, we cannot and should not abandon investing in stock markets.

I do, however, strongly believe that individual investors and institutions such as pension funds should reduce the proportion of funds traditionally held in stocks and seek more innovative ways of investing and generating income.

If the trustees or managers of a pension scheme are still blindly following the old formula of cash, bonds and equities, perhaps in a ratio of say 10-40-50 then they are likely to have achieved little or nothing in the past ten years and perhaps even worse if they have been reactive rather than proactive.

Many huge pension schemes are in big trouble and continuing to fund them has put an immense burden on their companies’ balance sheets. Large institutions can make the same errors as individuals. Pension schemes as well as portfolio managers are often persuaded either by themselves or their members or investors to pull out of stock markets after a crash, only to find their funds are making no money in cash or bonds when stock markets are rising again.

But since human nature cannot be changed we can reduce its influence by seeking asset classes that are not correlated with the stock and bond markets and there are plenty of them.

In summary, do not abandon the stock markets. They will continue to be an essential wealth-building block. My advice is to reduce your reliance upon them and to look at the broader investment horizons to seek alternative opportunities for wealth creation.

Eric Jordan is Managing Director of Professional Portfolio International (PPI) with offices in Thailand, Malaysia and Indonesia.

Tel: 02 664 0968 Email: eric.jordan@ppiadvisory.com

The Brief

December 2011

59

Join the BCCT board I

f you would like to contribute more to the work of the BCCT please consider standing for election to the BCCT board of directors. Unless they change their minds three current directors have so far indicated that they will not stand for the next board at the Annual General Meeting in January 2012.

The role of a BCCT Board Director includes: • Attendance at monthly Board meetings (dates set at the beginning of the year). A minimum of 6 Board Meetings must be attended • All directors will be expected to actively participate in at least one of the BCCT Groups and other meetings/events as and when applicable • Preparation of regular reports on news, developments, opportunities, etc in your sector or area of expertise, or articles in The Brief magazine (no specific numerical requirement) • Input and advice on any issues raised by BCCT members, officers or the BCCT office • Promotion of the BCCT among the Thai and foreign business and government communities in Thailand • A Board Director may not miss three Board Meetings in a row otherwise he/she is deemed to have vacated office More formally the board’s main responsibilities are:1. To oversee the operation, support and advancement of the British Chamber of Commerce Thailand (BCCT), in accordance with the “Constitution and Regulations of BCCT”, “BCCT Group Rules & Guidelines”, and “BCCT Board Principles”.

2. To provide leadership to the BCCT through oversight, review and counsel.

60

The Brief

December 2011

3. To provide strategic input and set the strategic direction for the BCCT. 4. To be the primary decision-making body for all matters considered as significant to the BCCT. 5. To ensure a robust governance framework and the establishment of sound policies and procedures to successfully achieve the BCCT Mission Statement and objectives, in compliance with statutory and regulatory obligations and generally accepted best practice.

6. To ensure the availability of adequate financial resources, such that the BCCT remains a fully self-funded organization, and to

approve the BCCT annual budget.

7. To be accountable to BCCT Members and Stakeholders for BCCT’s performance.

8. To oversee and appoint appropriate Groups, Committees, Common Interest Groups, and administrative operations in order to further the objectives of the BCCT. If you would like to discuss the role and/or responsibilities of a board director or if you have any other queries please contact BCCT Executive Director Greg Watkins: greg@bccthai.com

Member News

New scholarships from Banyan Tree

B

anyan Tree Bangkok General Manager Sriram Kailasam has presented scholarship awards as part of the hotel’s Bangkok Seedlings Project.

The scholarships, worth THB 166,700, were awarded to students from the Duang Pateep Foundation and the Mahamek Home for Boys.

The Bangkok Seedlings Project is a community support programme that creates opportunities and support to children aged 12 to 18 years that are considered to be at risk of societal exclusion. This group-wide initiative is divided into three stages of mentorship and internship to provide students with the motivation and means to complete their education and careers.

Open door policy at BIS Phuket

N

eil Richards MBE has been appointed Headmaster of the British International School in Phuket. His appointment, which took effect in late October, follows a four-year spell as Head of the United World College of the Atlantic.

D

r. Virachai Techavijit, Chairman of The Regent’s School, in cooperation with Cambridge University, Faculty of Education, led the Global Student Education Forum in a lecture titled ‘Is education effective in tackling collective corruption’. Dr. Virachai pointed out three elements to success, namely the government’s intention to educational reform, having clear blue prints to strengthen youths’ ethics and the prevention of a new government from destroying those blue prints.

Neil Richards has shown a deep commitment to the local and national communities in which he has found himself. An early decision in his new role was to open the school doors to the children of international school families that had moved to Phuket to escape the flooding in Bangkok.

Mr. Richards, pictured below, strongly believes that ‘acts of compassion’ should not only operate on a personal level but also at an institutional level and he will be directing much of his attention in the years ahead to involvement of the school within the wider community’, according to a BIS statement.

From left to right: (seated) Tim Cleary, Executive of London Metropolitan University; Andrew Watsons, Assistant Director of Board of Investment (BOI); Prof.

Richard Higginson, Director of Studies in Ethics, Cambridge University; Dr. Virachai Techavijit, Chairman of The Regent’s School Thailand; Keith Bolter, Chairman of Riddlesworth Hall Preparatory school. Second row: Miss Kwanshanok Techavijit, Executive Director of The Regent’s School (third from left) and Mrs. Thiphavan Techavijit, Vice Chairman of The Regent’s School ( fourth from left).

The Brief

December 2011

61

Member News

Gold tips from Sheila A

merican swimmer and Olympic gold medalist Sheila Taormina has been giving tips on how to be a world champion. Sheila held two one-day clinics at New International School of Thailand (NIST), Bangkok at the start of a world tour that also takes her to Hong Kong, Singapore, Johannesburg, Cape Town and Dubai.

Sheila Taormina, the smallest swimmer to win Olympic gold since 1920, is also the only woman to have competed in three different sports (swimming, triathlon and modern pentathlon) in four consecutive Olympics (1996, 2000, 2004, 2008).

Before meeting the NIST athletics teams she said, “This will be my first ever school assembly outside the US. I hope that the student-athletes find a connection when we meet and are able to use the tips I give them to reach their dreams.”

act with such an inspirational figure in world sport, we hope that Sheila’s visit will help our students realise their own sporting goals”, said NIST Athletics Director Paul Hodgkinson.

“This was a fantastic opportunity for our NIST student athletes to inter-

Bike Zone, popular among triathletes in Bangkok, supported the

clinic. “The triathlon community in Thailand is growing and also becoming savvier. We notice that our customers care more about quality and excellence than just a year ago.

The interest in Sheila’s clinic reflects this trend”, says Tri Pramoj, Bike Zone Director.

Gilles Cretallaz, General Manager of the soon-to-open Sofitel So Bangkok, has announced five additions to the hotel’s F&B management team. Pictured, from left to right, are Barthelemy Bauters - Assistant F&B Manager; Nicolas Vienne - Executive Chef; Chidchanok Pasinpong - F&B Manager; Paul Smart - Park Society Chef, and Gregory Philippe - Director of Food & Beverage. The hotel enjoys a prime position on North Sathorn road in Bangkok’s Central Business District. The new property is targeting both business and leisure travellers.

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The Brief

December 2011

Architecture and interior design firm dwp created the new interiors for the Emporium Suites Penthouse, Bangkok that hosted the King and Queen of Bhutan in late November. Their Royal Highnesses King Jigme Khesar Namgyel Wangchuk and newly-crowned Queen Jetsun Pema Wangchuk met with Thailand’s Prime Minister Yingluck Shinawatra in this luxury setting.

Asia set to drive global expansion A

sia trade volumes will grow by 96 percent to nearly US$14 trillion by 2025 and will be the key driver of world trade growth – predicted to increase by 73 percent in the same period, according to a report from HSBC.

The HSBC Trade Connections report also states that India, Vietnam, Indonesia and mainland China are amongst the top five international powerhouses that will drive world trade growth until 2025. Trade in Asia is expected to grow by 4.8 percent year-on-year until 2025 (vs.

3.8% globally).

HSBC also reveals a dip in confidence amongst importers and exporters in Asia in its Trade Confidence Index. Asian traders reported a dip of three index points, in line with the views reported by global traders (-2 index points) from the first half of 2011. Traders expect global economic headwinds to impact global trade over the next six months.

Noel Quinn, HSBC’s Regional Head of Commercial Banking AsiaPacific, said: “International trade is set to increase despite current economic uncertainty; for businesses that are looking to grow, international trade is the real opportunity.

Whilst traders recorded a dip in confidence levels for the next six months, companies must prepare themselves now for the expanding trade markets across the world and especially within the Asia-Pacific region. There are undoubtedly short term risks for businesses given the challenging economic conditions but some mitigation is possible if companies start preparing now to capitalise on the growth in global trade.

“As the centre of international business shifts from developed to emerging markets, companies wishing to take advantage of the opportunities international markets offer must have the right strategic partners in place to be successful.”

Alexandre de Juniac is the new Chairman and CEO of Air France.

Msr de Juniac is a graduate of the Ecole Polytechnique de Paris and the Ecole Nationale de l’Administration (1988, “Michel de Montaigne” class).

Project by design Anthony Collier Associates (Thailand) have overseen the design and completion of their first major Thailand project – a factory expansion for European company Neuman & Esser’s south east Asia headquarters in Rayong. Anthony Collier Associates, established in the UK as an architecture and interior design in 1980, is now operating from Chonburi.

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Member News

Students push school campus as new Pattaya MICE venue

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new student-led enterprise at The Regent’s School, Pattaya is pushing the campus as a tempting venue for corporate events.

And the new enterprise, operating as Zelia Property Consultants, is confident of success.

The concept was born from a creative, business minded group of students who have been involved in real life business situations over the previous three years of education at the Pattaya based international school. Acting as letting agents, they researched the main competitors, considered their client’s products (the school’s facilities) and created a structured price list to reflect a competitive market.

Project Manager and year 12 student Apinan Hasthanasombat says, “Offering companies an alternative to expensive corporate hosting, con-

ferences or teambuilding facilities seemed obvious to us. Seeing the school’s fantastic facilities standing empty whilst the students weren’t using them seemed almost criminal.

The facilities on offer at the school are some of the best in the area. We have a 450 seater purpose-built theatre and two large new meeting/seminar rooms available for hire.”

Lyreco (Thailand) Managing Director David Record led a team of more than 60 company employees in a mangrove tree planting project at Samut Prakan, west of Bangkok. The project is part of the company’s commitment to eco-friendly initiatives and to promote sustainable development.

David Record and his colleagues were also celebrating their success in winning the Lyreco CEO Challenge Award against stiff competition from 26 other global subsidiaries in Europe, Asia and north America.

For more details on the company’s sustainable development programme, visit http://eco.lyreco.com.

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Top chefs from the Marriott hotel group have been giving some expert culinary tips to mothers based at the SOS Children’s Village in Thailand.

The cooking class, staged at the Renaissance Bangkok Ratchaprasong hotel, included popular Italian and Thai dishes created by seven chefs based at Marriott properties in Bangkok and Hua Hin. It’s an initiative designed to give children living at the Village a more interesting and varied diet.

BCT to stage recordbreaking musical

T

he Bangkok Community Theatre kicks off the New Year with their interpretation of Nunsense, a musical comedy.

The original production of Nunsense, directed by Dan Goggin (who wrote the music and lyrics), opened in December 1985 at the off-Broadway Cherry Lane Theatre before moving to the Douglas Fairbanks Theatre for the majority of its ten year run. It ran for 3,672 performances and became the second-longest running off-Broadway show in history.

The show has since been adapted for television, starring Rue McClanahan, and has spawned six sequels and three spin-offs.

The BCT production of Nunsense is scheduled for mid-February. More details from Bonnie Zellerbach on 087 936 3798.

Spark team lands top PR award S park Communications has been recognised at the 2011 Asia-Pacific SABRE Awards with an award for a campaign that helped raise awareness of the Lenovo brand in Thailand.

The Bangkok-based PR consultancy won the prize for the ‘Best PR Campaign Tom Athey for Marketing to Consumers in APAC’ for its work on the ‘Are you Lenovo?’ project.

The campaign, initiated to increase Lenovo’s profile among consumers, comprised public relations, consumer activation and social media.

Spark’s Managing Director Tom Athey said, “Lenovo continues to grow in the Thai market and it’s been invigorating to be part of that.”

Spark was also nominated for two global awards at the SABRE Awards – an international competition that recognises ‘superior achievement in branding and reputation’.

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Chamber Events

Chamber Events Ploenchit Fair 26 November 2011 Ploenchit Fair once again captured the imagination of the local and international communities in Thailand. Our thanks to Bangkok Patana School for providing the venue for this year’s event. Our sincere thanks also go to our members, volunteers, board directors and staff for their incredible efforts in selling raffle tickets. Proceeds total almost THB 800,000.

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Chamber Events

Thanks to all sponsors for prizes donated for the grand raffle.

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Chamber Events

Joint AMCHAM/BCCT: Visits To Dana Spicer & Visteon 23 September 2011

On 23 September, Dana Spicer (Thailand) Ltd. and Visteon (Thailand) Ltd. opened their gates to AMCHAM and BCCT members to a half day site visit at Eastern Seaboard Industrial Estate (ESIE), Pluak Daeng, Rayong. Grateful thanks to Dana Spicer (Thailand) Ltd. and Visteon (Thailand) Ltd. for their support.

Joint AMCHAM/BCCT Eastern Seaboard Networking Evening 23 September 2011 The BCCT joined with AMCHAM for an Eastern Seaboard Networking Evening on 23 September at Holiday Inn Pattaya. It was a great night and well attended. Thank you to our sponsor Hemaraj Land and Development Public Co., Ltd.

01 01 (From left to right) - Robert Marchant - Greg Watkins, BCCT - Gary Biesty, South Asia Law Co.,Ltd.

02 02 (From left to right) - Iain Corness, Pattaya Mail Publishing Co., Ltd. - Graham Macdonald, MBMG Group and BCCT Chairman - Judy Benn, AMCHAM

Thank you to our sponsors and partners.

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Chamber Events

Joint Evening Presentation & Visit on Intellectual Property 27 September 2011 Thailand Intellectual Property Perspective On 27 September, the BCCT, AMCHAM and TCCC in association with Tilleke & Gibbins organised a Joint Evening Presentation on Intellectual Property at Tilleke & Gibbins International Ltd. The IP presentation was followed by a visit to the Tilleke & Gibbins Museum of Counterfeit Goods. Thank you to our sponsors for their support.

01 01 (From left to right) - Chris Thatcher, BCCT board director - Aleksandra Agapitova, ABC Asian Business Consulting Co., Ltd

02 02 - Paul Russell, Tilleke & Gibbins International Ltd

BCCT Business Leaders Dinner 29 September 2011 The political and economic transformation of Thailand and mainland South-east Asia Tim Johnston, Bangkok Correspondent, Financial Times was guest speaker at the BCCT Business Leaders Dinner on 29th September at The Cellar, Tables, Grand Hyatt Erawan Bangkok on the topic of ‘Political and economic transformation of Thailand and mainland South-east Asia’.

01 01 (From left to right) - James Pitchon, CB Richard Ellis (Thailand) Co., Ltd. and BCCT board director - Tim Johnston, Financial Times - Peter Shelford, DLA Piper (Thailand) Limited - Ewen McDonald, Rolls-Royce (Thailand) Ltd.

02 02 (From left to right) - Andrew Wynne, Deacons - Stephen Ferraby, DKSH (Thailand) Limited

Thank you to our sponsors and partners.

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Chamber Events

BCCT Evening Panel Discussion 6 October 2011 How do you successfully integrate new university graduates into the workforce?

On 6 October, guest panelists Matthew Grose, Bubphawadee Owararinth, Jonathan Fryer and Joe Barker-Bennett formed the panel discussing the topic of ‘How do you successfully integrate new university graduates into the workforce?’ at the Grand Millennium Sukhumvit.

01 01 (From left to right) - Joe Barker-Bennett, Crestcom - Jonathan Fryer, Mazars (Thailand) Ltd. - Bubphawadee Owararinth, Standard Chartered Bank (Thai) Pcl - Matthew Grose, MSIG Insurance Thailand

02 02 - Heather Preen, Shrewsbury International School Bangkok Co. Ltd.

Joint Eastern Seaboard Property & Infrastructure Panel Discussion 14 October 2011 Update on the High Speed Rail Project in Thailand and how this will benefit the Eastern Seaboard On 14 October 2011, the BCCT in co-operation with AustCham held an Eastern Seaboard Property & Infrastructure Panel Discussion at the Amari Orchid Pattaya. Dr.Chula Sukmanop and Abigail Evans presented on the topic of “Update on the High Speed Rail Project in Thailand and how this will benefit the Eastern Seaboard”.

01 (From left to right) - Abigail Evans, Meinhardt (Thailand) Ltd. - Dr. Chula Sukmanop, Ministry of Transport 02 - Simon Landy, Colliers International Thailand and BCCT Vice Chairman

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Thank you to our sponsors and partners.

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Chamber Events

Oktoberfest in Pattaya 14 October 2011

The BCCT, Irish-Thai Chamber of Commerce and Austcham in co-operation with ABC Asian Business Consulting Co., Ltd. and Amari Orchid Pattaya invited members and non-members to join and enjoy The Oktoberfest on 14 October at the Amari Orchid Pattaya.

01 01 (From left to right) - Mark Butters, RSM Advisory (Thailand) Limited - Simon Matthews, Manpower Thailand and BCCT board director - Helmut Buchberger, ABC Asian Business Consulting Co., Ltd.

02 02 (From left to right) - Graham Macdonald, MBMG Group and BCCT Chairman - Abigail Evans, Meinhardt (Thailand) Ltd.

BCCT SME Lunch (BOI) 20 October 2011 The BCCT SME Group offered a lunch on 20 October at the Landmark Bangkok. Guest speaker was Ms Duangjai Asawachintachit, Deputy Secretary General of the Board of Investment (BOI) on the topic of “Updates on the BOI’s latest policies and measures, particularly those relevant to SMEs and immediate impacts of ASEAN Economic Community (AEC)”.

01 01 - Khun Duangjai Asawachintachit, Board of Investment (BOI)

02 02 - Anika Tolani, Jus Laws & Consult Company Limited

Thank you to our sponsors and partners.

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Chamber Events

Third Thursday Social Event 20 October 2011

Swissôtel Nai Lert Park Bangkok and Samitivej Hospital sponsored the T3 – Third Thursday Social Networking Evening at Syn Bar, Swissôtel Nai Lert Park Bangkok on 20 October. Thank you to our sponsors for their support of this event.

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01 (From left to right) - Andre Geertsma, Zi-Argus Ltd. - Nicolas Leloup, Samitivej Public Company Limited - Jonathan Booth, Grant Thornton

02 (From left to right) - Nigel Oakins, Blue Mango Publishing Co., Ltd. and BCCT board director - Porntip Utsahaphan, Samitivej Public Company Limited - Colin Hastings, The Big Chilli Co., Ltd. and BCCT board director

Joint BCCT/AMCHAM P&I Breakfast Briefing 8 November 2011 Perspectives on Bangkok and Urban Transport Infrastructure Plans – Still on Track?

On 8 November, the BCCT joined with AMCHAM for a breakfast briefing at the Westin Grande Sukhumvit. Guest speakers were Abigail Evans and Ali Adam on the topic of “Perspectives on Bangkok and Urban Transport Infrastructure Plans – Still on Track?”

02 01 (From left to right) - Ian Hamilton, TICon Industrial Connection PCL - Dennis Berkompas, PB Agencies - Ali Adam, Halcrow Group - Abigail Evans, Meinhardt (Thailand) Ltd. - Simon Landy, Colliers International Thailand and BCCT Vice Chairman 02 - James Pitchon, CB Richard Ellis (Thailand) Co., Ltd. and BCCT board director

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Thank you to our sponsors and partners.

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Third Thursday Social Networking Evening 17 November 2011 The November FREE featured event Manpower Thailand and Ramada Encore Bangkok kindly sponsored the T3 – Third Thursday Networking on 17 November at Leapfrog Restaurant & Bar.

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01 (From left to right) - Dean Thompson, Boots Retail (Thailand) Ltd. and BCCT board director - Stephen Frost, Bangkok International Associates Ltd. and BCCT board director - David Milne, Investigations Asia

02 (From left to right) - Olivier Berrivin, Ramada Encore Bangkok - Simon Matthews, Manpower Thailand and BCCT board director

BCCT Eastern Seaboard Networking Evening 18 November 2011 Pullman Pattaya Aisawan sponsored the BCCT Eastern Seaboard Networking Evening at Buasawan Room on 18 November. It was a great night and well attended.

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01 (From left to right) - Clinton Lovell, Pullman Pattaya Aisawan - Graham Macdonald, MBMG Group and BCCT Chairman

02 (From left to right) - Garry Irvin, Paragon Executive Search (Thailand) Ltd. - Craig Muldoon, PFS International Consultants Co., Ltd.

Thank you to our sponsors and partners.

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Chamber Events

BCCT Evening Panel Discussion 22 November 2011 The Impact on businesses of the flooding crisis and new government policies The BCCT organised an evening panel discussion at the Centara Grand & Bangkok Convention Centre at CentralWorld. Mr. Pornsil Patchrintanakul, Dr. Thitinan Pongsudhirak and Dr. Sethaput Suthiwart-Narueput presented on the topic of “The Impact on businesses of the flooding crisis and new government policies”. Christopher Bruton from Dataconsult Co., Ltd. was the moderator.

01 (From left to right) - Pornsil Patchrintanakul, Thai Chamber of Commerce and Board of Trade of Thailand - Sethaput SuthiwartNarueput, Advisor Co., Ltd. - Thitinan Pongsudhirak, Chulalongkorn University - Christopher Bruton, Dataconsult Co., Ltd. 02 - John Marshall, DST Worldwide Services (Thailand) Limited

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BCCT Breakfast Briefing 23 November 2011 The BCCT organised a breakfast briefing at Siam Kempinski Hotel Bangkok on 23 November. Stephen McDonald from Save the Children was a guest speaker and presented on the topic of ‘The social and humanitarian impact of the Thailand floods’ 01 Chris Thatcher, BCCT board director 02 (From left to right) - Nigel Oakins, Blue Mango Publishing Co., Ltd. and BCCT board director - Stephen McDonald, Save the Children

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Comings and Goings The British Chamber of Commerce Thailand welcomes the following new members: DTZ Debenham Tie Leung (Thailand) Co Ltd 8th Floor, Tonson Tower 900 Ploenchit Road, Lumpini Pathumwan, Bangkok 10330 Tel: +66 (0) 2257-0499 Fax: +66 (0) 2257-0501 Representative: Mr. Porameth Chantanakomes, Country Head Business Activity: International Real Estate Consultants School of Sound Recording Siam Royal View 78/33 House 61, Moo 10, Soi Khaotalo Nongprue, Banglamung, Pattaya 20150 Tel: +66 (0) 85-392-1643 Representative: Mr. John Breakell, Managing Director Business Activity: Education, Media / Advertising & PR, Training 9 Active Co., Ltd. 51/10 Soi Prompong Sukhumvit Soi 39, Klong Tan Nua Bangkok 10110 Tel: +66 (0) 2260-7750 Fax: +66 (0) 2260-7750 Representative: Mr. Simon Littlewood, Managing Director Business Activity: Events / Event Organisation Pullman Pattaya Aisawan 445/3 Moo 5, Soi Wongamart Pattaya-Naklua Road, Banglamung Chonburi 20150 Tel: +66 (0) 38-411-940-8 Fax: +66 (0) 38-411-949 Representative: Mr. Clinton Lovell, General Manager Business Activity: Hotel PPCNSEO Co., Ltd. 284/19 Moo 10, Soi 12 Beach Road Nongprue, Banglamung, Chonburi 20150 Tel: +66 (0) 38-412-067 Representative: Mr. Mark Bond, CEO Business Activity: We provide a total online marketing solution, Web design, E commerce web system, SEO and Pay per Click.

Plant A Tree Today (PATT) Foundation BB Building, 7th Floor Sukhumvit 21 (Asoke), Klongtoey-Nua Wattana, Bangkok 10110 Tel: +66 (0) 2259-6255 Fax: +66 (0) 2259-6456 Representative: Mr. Andrew Steel, Chief Executive Officer

Business Activity: Charity / Non-Profit, Environmental Services, Education Lampl Consulting Company Limited 42 Floor, 388 Exchange Tower Sukhumvit Rd., Klongtoey, Bangkok 10110 Tel: +66 (0) 2302-1400 Fax: +66 (0) 2262-1400 Representative: Mr. Stefan Buerkle, Executive Director Business Activity: Business Consulting Mr. Ewan Munro Unit 7F, 28/34 New House Condominium, Soi Somkid, Ploenchid Road, Pathumwan, Bangkok 10330 Tel: +66 (0) 2625-3000 Representative: Mr. Ewan Munro Resignations: • Soho Properties Co., Ltd • Pall Corporation • Thai Property & Media Exhibitions Co., Ltd. • Schneider (Thailand) Ltd • Ginger Mint Company Ltd. • Executive Alliance Co., Ltd., The • HBO+EMTB (Thailand) Co., Ltd. New Company Representatives:

• TNS Research International: Mr. Abhijeet Dutta Ray • Jardine Schindler (Thai) Ltd: Mrs. Suwanna Kongkanjana • Landmark, Bangkok (THE): Mr. Albert Cheong • Thaitan Logistics Co., Ltd: Mr. Peera Thaweechart • Horseshoe Point Resort & Residence: Mr. Patanapong AnumanRajadhon • Air France / KLM: Mr. Hervé Moulin • T.C.C. Commercial Property Management Co., Ltd: Ms. Surachwadee Rungcharoenpisarn • Mazars (Thailand) Ltd: Mr. Jonathan Fryer • British Club Bangkok: Ms. Premrudee Tanyaluck • Frasers Hospitality: Mr. Charlie Feng • Pan Pacific Serviced Suites Bangkok: Ms. Jacqui Cuthbertson • Four Seasons Hotel Bangkok: Mr. Rami Sayess • HASSELL (Thailand) Limited: Mr. John Stenton

Change of company name:

• Thai National Power Co., Ltd. International Power Plc, change to Glow Company Ltd Members with new addresses: • Saatchi & Saatchi Advertising Ltd.

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12th Floor, 130-132 Sindhorn Tower 3 Wireless Road, Lumpini Pathumwan, Bangkok 10330 Tel: +66 (0) 2640-4700 Fax: +66 (0) 2640-4701 Comcon Services (Thailand) Co., Ltd. 219/32, 10th Floor, Asoke Towers Sukhumvit 21 Road, Klongtoey-Nua Wattana Bangkok 10110 Tel: +66 (0) 2259-7471-3 Fax: +66 (0) 2259 7470 Consortium UK Ltd. 4th Floor, 246 Times Square Sukhumvit Road, Bangkok 10110 Tel: +66 (0) 2653-2384 Fax: +66 (0) 2653-2385 The Creative Partnership Co., Ltd. 25 Narathiwat Rajanagarindra Road Chongnonsee, Yannawa Bangkok 10120 Tel: +66 (0) 2285-4721-2 Fax: +66 (0) 2285-4723 Securitas Security Services Thailand Ltd. 10/63 The Trendy Office Building Sukhumvit Soi 13 Kwaeng Klongton Nua, Khet Wattana, Bangkok 10110 Tel: +66 (0) 2168-7400 Fax: +66 (0) 2168-7402 Royal Prestige Wine Co., Ltd 111/69 Moo 9, Patara Motwon Village Bangpood Sub-District, Pakkred Nonthaburi 11120 Tel: +66 (0) 2962 1482 Fax: +66 (0) 2962 1482 MI Squared Ltd. 99 Berli Jucker Building, 17th Floor Soi Rubia, Sukhumvit 42 Road Phrakanong, Klongtoey Bangkok 10110 Tel: +66 (0) 2365-7755 Fax: +66 (0) 2381-5137 Market-Edge Asia Ltd SSP Tower 2, 22nd floor, Na Ranong Road, Klong Toey Bangkok 10110 Tel: +66 (0) 2672-8860 Fax: +66 (0) 2672-8872 The Brief

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FINAL WORD

Luxury condo blaze fans flames on safety issues in Bangkok

By Dale Lawrence

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igh-rise residents in Bangkok have cause for concern following a fire at a luxury condominium building in Sukhumvit Soi 24. Questions are being asked about the effectiveness of fire detection and suppression systems in residential buildings in the city.

One tenant at the building in question wrote to the Bangkok Post claiming that ‘no alarms or sprinkler system worked during the fire’. The same correspondent also stated that, contrary to claims by the building’s management team, there were no evacuation procedures and that they were saved only by firemen whilst trying to escape the fire by taking the stairs.

Whilst no building is 100 percent safe from fire as long as there are flammable materials and supplies contained within, the compliance with fire safety regulations as well as understanding what causes most fires and how to prevent them will help better ensure safety, according to real estate experts Jones Lang LaSalle.

Mrs. Suphin Mechuchep, Managing Director of Jones Lang LaSalle Thailand, said, “First and foremost, building owners must be compliant with the law, which requires the building to receive an inspection by a certified inspector. Results from the inspection will tell if any repair or improvement to the fire safety systems is required. It is important that the building owner must take actions accordingly.

“The building inspection is also beneficial to those who are looking to buy or rent condominium units

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within the property. Most fires in residential property can be traced to cooking/kitchen blazes, electrical short circuits, heating elements such as stoves or water heaters and cigarettes as well as child fire play.

Understanding what causes most apartment fires will help prevent them,’ said Mr. Norville. “It must be understood that fire safety is everyone’s responsibility. Owners, occupiers, juristic persons and property managers must plan to ensure that a development is fire safe.” in completed buildings. Most people only look at the basic selection criteria including the location of the property, quality of the construction and design of the unit. Very few would pay attention to the safety management of the building,” added Mrs. Mechuchep.

“Before making a decision to buy or rent, one should ask for a copy of the valid building inspection report from the owner.”

Dexter Norville, a director of Property and Asset Management at Jones Lang LaSalle, stressed, “While buildings that are professionally managed should be fire safe, the building inspection will help ensure that the building meets the minimum fire safety standard required by law.” Indeed. But how frequent are these inspections? And are we placing too much trust in residential building management companies to ensure that fire exits remain clear, fire extinguishers are in working order and alarm systems are fully operational?

“While the lack of professional property management and care leads to serious loss and damage from fire, many fires are caused by residents

Did you know?

• All high-rise buildings are required by law to receive a building inspection and host a fire drill at least once a year • As most high-rise buildings are constructed of fire-resistant materials, fires are generally confined to individual rooms or apartments or possibly one floor • Stairwell doors are fire doors that must be closed at all times to prevent the spread of fire, smoke and poisonous gases • Smoke alarms should be tested once a year and cleaned at least once every six months by gently vacuuming the exterior. For battery-operated smoke alarms, the batteries should be changed at least once a year • Floor plans and evacuation procedures must be posted and visible on every floor Maintaining vigilance on all these points – at home and in the workplace – as well as checking out all possible escape routes, particularly from condos on high-floors beyond the reach of fire tender ladders, could save lives. You have been warned.

British Chamber of Commerce Thailand Thailand and UK: partners in progress Who we are We represent close to 600 members • Individuals and organisations • Small, medium and large sized companies • Open to all nationalities

Our focus • Promoting Thailand-UK ties • Facilitate and build opportunities for members What we do • Business presentations with expert speakers • Networking functions • Business surveys, industry specific reports and economic outlook forecasts • Training workshops • Business introductions and referrals • Sports, social and charitable initiatives

To join us or for more information visit www.bccthai.com British Chamber of Commerce Thailand 7th Floor, 208 Wireless Road Bangkok 10330, Thailand Tel: 02-651 5350/3 Fax: 02-651 5354 Like us on

The Seeds of Success UK Alumni Grand Reunion 2012 Meet your friends and university representatives and gain new business contacts.

The reunion is part of the Education UK Exhibition 2012.

Saturday 28 January 2012 Book for the Grand Reunion or register for the Thai-UK Alumni Professional Network, call 02 657 5678 or visit www.britishcouncil.or.th 78

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