Issuu on Google+

Thai-Norwegian Business Review 2011 – 3

Thai-Norwegian Chamber of Commerce

Norway to the Rescue AquaFence introducing Flood Protection Systems to Thailand

The Flood Crisis and its Aftermath, why still Thailand?


Contents Thailand Flooding

8

Joint Foreign Chambers Eager to Liberalise Economy

10

Theme: Why doing Business in Thailand?

13

Green Environment Technology

14

Norway to the Rescue

17

Norwegian traditions in Thailand

20

Why Base your Business in Thailand? WebOn Knows

22

dtac – 3G – Finally

26

A Platform Linking Europe and ASEAN

30

Communicating in a Multicultural Environment

34

Challenges and Opportunities for Telenor in India

36

The Business Menu of the Food Industry

38

Norway-Asia Business Summit 2011

40

Impact of new NACC Reporting Requirement

42

Polar Norway

44

Thai Economy at a Glance

47

Members Directory

49

14

26

44 Editor: Kristine Hasle Journalists: Eric Baker, Emma Long, Jørgen Udvang, Colin Jarvis, Nadia Willan, Anton Benzon Photographer: Jørgen Udvang Design/artwork: Karine Slørdahl Advertising: Elisabeth Bashari

Front page picture: Thailand Flooding Photographer: Jørgen Udvang


Recovery

Central Thailand is about to emerge from the worst floods in 50 years. Beyond the misery and the suffering of many people, especially people in the provinces immediately north of Bangkok, we now have to look ahead and see what can be done to avoid a repeat performance. Clearly one of the most crucial issues has been the unreliability of information and the conflicting messages issued by the national government as well as the Bangkok Metropolitan Administration. This has directly resulted in countries like Norway issuing travel advisories advising its citizens to stay away from the capital. The lack of reliable information has also had many investors worried about factories including workers, machinery and property eventually submerged in water. What became very clear was that Thailand is not an isolated incident. Ripple effects can be felt throughout the world as Thailand is a crucial part of the global supply chain in a number of industries, e.g. automotive and electronics, resulting in automobile and computer factories in faraway countries coming to a standstill due to lack of Thai components. The government needs to understand its role on the global arena and readdress investor confidence before companies decide to relocate to other countries. Thailand is also the world’s largest rice exporter as well as an exporter of other commodities like sugar and cassava. Efforts are needed to help farmers whose fields have been completely destroyed by the deluge. A proper water management system is badly needed. Norwegian companies are ready to help. During the flood, AquaFence, a Norwegian company arrived in Thailand to help erecting flood protection. Another company, Yara, is ready to assist farmers use the right type an amount of fertilisers to get the soil back in shape. Telenor is ready to contribute with technology making communications more efficient. Many of these technologies will be showcased at the technological part of the Polar Exhibition postponed till January 2012. Let me finally wish you all the best for Holiday Season and the coming New Year.

Sincerely, Axel Blom President Thai-Norwegian Chamber of Commerce

Thai-Norwegian Business Review

5


The Firm provides legal services in general commercial practice and renders advice in the wide area of legal environment, i.e. corporate related matter, commercial contracts, merger and acquisition, financial transaction, banking, real estate, foreign investment, project finance, intellectual property, customs, taxation, entertainment, environment, labour law, dispute resolution, litigation, company secretarial service, work permit, immigration, translation of legal related document. The Firm represents multinational companies as well as their executives, and individuals doing business in Thailand from Scandinavia, the Netherlands, England, Germany, etc. and Asia.

Level 8, Suite 3801, BB Building 54 Sukhumvit 21 (Asoke), Klongtoey Nua, Wattana, Bangkok 10110 Tel: +66 2 259-2627 thru 9 Fax: +66 2 259-2630 Email: wissen@csloxinfo.com Website: www.wissenandco.com

With the compliments of

Attorneys at Law

Kamthorn, Surachet & Somsak 31st Floor, Sinn Sathorn Tower 77/131-132 Krungthonburi Road Klongtonsai, Klongsarn Bangkok 10600 Telephone: +66 (0) 2440 0288-97 Fax: +66 (0) 2440 0298-00 E-mail: kss@kss.co.th www.kss.co.th


In Memoriam: Jørn Unneberg

The Norwegian community in Thailand and the Thai-Norwegian Chamber of Commerce have lost one of our key members. Jørn Unneberg was Managing Director of Jotun Thailand, Board Member of the Chamber and also husband of our Ambassador, Katja Nordgaard. Jørn passed away tragically last month. This is a big loss for the community and for those of us who could count Jørn as a friend. Personally I sat down with Jørn a few days before his passing and we discussed how Jotun could help with recovery efforts to those affected by the flood, both on a corporate but also on a personal level. I was touched by Jørn’s care and affection for his staff and the people of Thailand. Before he passed away, Jørn was central in establishing the Jotun Thailand Fund for Flood Relief to help staff and people affected by the deluge. Our hearts and condolences go out to Katja, Adele, Celine, Elida and Jørn’s family back in Norway in addition to colleagues, staff and friends at both Jotun and within the Orkla Group. May Jørn rest in Peace. Axel Blom President Thai-Norwegian Chamber of Commerce


8

Thai-Norwegian Chamber of Commerce


Thailand Flooding Text and photos by Jørgen Udvang

A

lthough Thailand has developed to become an important industrial base in Southeast Asia, the origins of the country have to a large extent been based on water. The central plains, the most fertile part of the country, is at the most a few meters above sea level, and Central Thailand has always been flooded regularly, mostly every year during the monsoon season.

  100 or more years ago, that was a good thing. The rice depended on it, people lived in house on stilts, most transportation was by boat and even the elephants could handle the floods well, at least better than the average Toyota. To optimie the usage of the water, canals, or klongs, were dug crisscrossing the country, to distribute this important resource, to serve as transportation routes and to enable draining of excess water when there was too much of it.   But times change, and Thailand changes too. Transportation nowadays is mostly by road, people live in house placed firmly on the ground and the klongs, although still there, haven’t been developed much lately. Rather the opposite seems to be the case, with several of them blocked or narrowed as a result of urbanisation and large infrastructure projects. So when there is more

water than usual, there isn’t really anywhere for it to go, except through people’s homes, shops and factories.   This development has accelerated the last decades, and mentality has changed. Only thirty years ago, the occasional flooding of Bangkok was seen as inevitable and rather normal. This year, with what is admittedly the worst flooding in decades, strong focus has been directed towards one question: Will Bangkok become flooded?   If that is important or not, I will leave to others to decide. What is increasingly clear however, is that Thailand will have to learn from the past; to live with the water rather than trying to fight it and to redevelop efficient ways of draining it out into the sea. On the positie side there are Norwegian companies that can help with their efforts, like AquaFence which is mentioned elsewhere in this issue, Yara that delivers technologies that make it easier to make things grow regardless of climate and Jotun that manufactures paints that are of a quality that offers superior protection, also against natural disasters.   Finally, it’s important to mention that, even during this difficult time for Thailand, after travelling to many of the flooded areas, it never seizes to impress me the way the Thai people handles the situation with a smile and a sensible attitude. Most people do continue with their lives, even though they have to wade or travel by boat or leave their houses altogether for weeks or months. There’s a reason why this is called “Land of Smiles”.

Thai-Norwegian Business Review

9


Joint Foreign Chambers Eager to text and photo by Eric Baker

E

ven as Thailand avoided the worst of the recent downturn in the West, the Joint Foreign Chambers of Commerce in Thailand (JFCCT) still feels the country can do better. Thai-Norwegian Business Review caught up with Nandor von der Luehe, chairman of JFCCT, to get a better idea of its current focus.

The JFCCT consults with relevant Thai agencies on a regular basis on matters of concern to its members, which form the largest umbrella organisation for foreign businesses in the kingdom. Its most recent event was a joint seminar with the National Anti-

Corruption Commission where they tried to emphasise education and prevention. Enforcement is something that needs to be handled by local authorities. And while it’s clear to most people how eliminating corruption is good for business, the JFCCT wanted to point out certain countries are passing new laws that could have major consequences on transactions. For example, the United Kingdom just enacted a statute stating any company in the UK that engages in corrupt practices in another country can be prosecuted in the UK. Norway has had similar regulations in place since 2003. Property leasehold extension is another longtime focus for JFCCT. When foreigners talk about buying a condominium in Thailand, what they really mean is an extended lease. Thailand allows foreigners to lease a residential property for 30 years with an extension for another 30 years. “But the second leasehold can be challenged in court and thrown out,” said von der Luehe. “We would like to have a single lease for 90 or 99 years, like in neighbouring countries, and we want these contracts to be enforceable.” Some of the other issues the JFCCT is working on have been thorny for several years, such as reducing the amount of paperwork and bureaucracy for visas and work permits, and trying to get annual review of the Foreign Business Act, which is written into the law but has never been carried out. But other issues have taken on a new relevance with the planned ASEAN Economic Community (AEC) becoming reality in 2015. The group has been trying to get the Thai service sector to liberalise for years, but now it is being forced to by a treaty that is attempting to open up goods, services,

Chairman of JFCCT, Nandor von der Luehe


o Liberalise Economy investment and movement of labour in the region. Even Surin Pitsuwan, the current secretary-general of ASEAN, noted, “Thailand cannot hide behind a wall. We have to open up,” recalls von der Luehe. The Foreign Business Act lists a number of industries in its annex that foreigners are prohibited from running because the country is trying to protect them from competition. But von der Luehe points out the World Bank and several other international organisations have stated that Thailand is very developed in many of these fields and ready to compete. “Sure, I realise politicians need funds to run and certain groups don’t want to change the status quo,” said von der Luehe. “But the private sector has to compete. Businesses in Thailand have to realise that opening up helps them.” Despite the AEC requiring that businesses from other ASEAN countries can completely own Thai businesses, the kingdom has maintained its 51% Thai ownership rules. Von der Luehe noted that Thailand currently tries to look at ownership structures to see if they’re legal, but it won’t have the time or money to examine whether all ASEAN businesses are shell companies once 2015 rolls around, meaning it is best served by changing its stance soon. “I feel Thailand could do so much more on foreign direct investment policies,” said von der Luehe. “The political climate has delayed progress on this front. Some 70% of the country’s GDP is still exports, and while the riots didn’t affect the economy that much, Thailand could have done better. “Thailand just dropped from 16th to 19th this year in the World Bank’s Ease of Doing Business Report, doing poorly in the Access to Finance and Opening up a Business sections. Malaysia has seized on these problems and just passed several reforms last year, so it’s up to Thailand to respond.” The JFCCT has a trusted relationship with the Board of Investment and has regular meetings with them, even on matters it doesn’t control, such as immigration and labour regulations. For instance, Thailand has an odd rule, which requires businessmen coming to Thailand to attend business meetings to acquire a

WP11 permit, but most people don’t know this and of course don’t obtain one. The organisation received a jolt a few months back when the American, British and Australian chambers decided to quit the umbrella group to go it alone. Von der Luehe was candid when discussing the move. “We very much regret that they took this step. But they had certain demands, specifically the Americans, who wanted 100% veto power and the chair of each committee to have complete control of that issue. They didn’t want people who weren’t a part of a committee to attend a committee meeting. But if you really want a joint foreign chamber, everyone needs to have a voice. “The positive effect that came of it was it led to us sitting down and writing a charter that spells out the roles and responsibilities of each position.”

The Joint Foreign Chambers of Commerce in Thailand (JFCCT) is the Umbrella body for the various Thai-foreign chambers or business associations operating in Thailand. 27 chambers and business associations representing some 8,000 companies. JFCCT’s mission is to promote trade and foreign investment, encourage skills development and transfer with the overall aim of contributing to the economy in which we live and work and to which we have made our commitments. JFCCT works with the Royal Thai government and various government agencies such as the Board of Trade, Board of Investment and the Federation of Thai Industries and by way of advice and recommendation to foreign governments - for the benefit of the Thai economy.

Thai-Norwegian Business Review

11


Why Thailand? Thai-Norwegian Business Review has talked with a number of Scandinavian business people to find out why they have chosen to start their business in Thailand. Thailand still has many advantages to offer international companies ranging from it´s geographic location, to comprehensive support industries, key industrial clusters as well as a growing domestic market, labour skills and investment incentives. Many have experiences with Thailand’s Board of Investment and the crucial help they are offering when starting up in Thailand. Fred Lambersøy, a producer of Norwegian National costumes in Thailand, says he decided on Thailand simply because of the attractive package Thailand was offering starting with inexpensive skilled labour, good communications, as well as excellent IT and telecom infrastructure. Founder of Get IT, Steinar Gjerde, tells us that Thailand is a pioneer compared to other countries in the Asia when it comes to supporting renewable energy. Renewable energy is high on the current government’s agenda. The authorities subsidises purchase of renewable energy at the same level as in Germany, Spain and Italy. This in addition to good tax initiatives provided by BOI affects the investment very positively. CEO in WebOn, Jon Anders Aas-Haug explains that loyal and highly competent employees in addition to competitive wages are other reasons to do business in Thailand. Easy living in a family situation helps too. Despite instability, political changes and riots, it seems like business in Thailand runs as usual. Hopefully, the recent flooding situation will not be an exception, even if many industrial areas are still being affected by the water. Thais have the ability to look at the bright side – and help each other when it’s needed. They handle the situation with a smile and a sensible attitude.


Green Environment Technology in Four Layers by Kristine Hasle photos from Get IT

G

et IT (Green Energy Technology in Thailand) was founded by Norwegian Steinar Gjerde and Dutch Derk Jan Bos in 2008. The two businessmen met in Thailand, and they both shared a strong commitment towards environmental causes and in doing the right thing for the planet and the society. This dedicated commitment became the foundation of their company. Gjerde and Bos have created a business focusing on renewable energy through solar panel farms. Get IT is situated central in Hua Hin. They have a staff of 20 people, and another 200 contractors who are directly employed on several different projects. They have many ideas and at their R&D centre in Hua Hin, they decide which projects and ideas can be realised and which can not. Get IT’s business idea is to produce environmental friendly electricity by installing a large number of solar panel farms throughout Thailand. The goal is to establish many small scale electricity generating facilities capable of delivering clean and constant energy to the neighbouring villages or cities. Since the electricity is produced at the same place as it is consumed, the loss of energy during transportation is minimal. As part of the company’s business concept Get IT has integrated energy production with the food chain by implementing a three dimensional vertical agriculture and vertical harvesting system. This three dimensional agriculture approach is according to the company one of a kind. A traditional solar panel farm will be installed on the ground to create green energy. For this installation, the solar panel farm is built in areas with fertile soil, that otherwise would have been used for agriculture. In a densely populated country like Thailand this means less land to cultivate, smaller crops and less work.

14

Thai-Norwegian Chamber of Commerce

Get IT’s solar panels are placed four meters up in the air, allowing the space below to be used for other purposes - like growing vegetable, fruits, or flowers. With this method, agriculture and the energy production are symbiotic. Crops are planted beneath the solar panels, as the space and shadow provides an ideal environment for the crop to thrive. The electricity is delivered to the grid at subsidized prices on long term contracts. Another advantage of the placement is that the installations will not be affected by flooding, like traditional solar panel farms. In cooperation with a Thai University, Get IT conducts extensive research to decide what kind of plants that are most suitable for cultivation below the panels. So far they have tested the possibility to grow pineapple, tomatoes, different type of salads and orchids with promising results. Exploring opportunities beneath the solar panels Get IT is exploring several additional ways of producing food below the solar panels. Hydroponics is a method of growing plants using mineral nutrient solutions in water and without soil. By using water and rock wool or gravel as a base for planting this method creates additional food without using additional land. The company is also testing out another concept called Aquaponics. The aquaponic installations are also situated beneath the solar panels and this project explores how fish can be used to fertilize the crops. Get IT’s concept also offers space between the solar panel rows which can be used for traditional agricultural practise and can be used to produce fruit and vegetable crops. Also producing bio fuel Another promising product from Get IT is bio fuel. As basis for such production the company has chosen the Jatropha tree as its growing conditions are ideal, and it delivers low cost bio fuel. On average one tree produces 15 kgs of seeds per year and up to 2.500 trees can be planted on one hectare. This gives a yearly harvest possibility of 37.500 kilo seeds. From the seeds it is possible to extract 30-40% oil providing about 13 000 litres oil per hectare each year. In addition to bio fuel, this plant can also deliver oxidant, pesticides from


Installation of the solar panels, four meters up in the air.

Thai-Norwegian Business Review

15


Continue from page 15

its leaves, soap produced from latex if the stem is cut and it reduces CO2.

Why did you choose to do business in Thailand?

Thailand has a lot of sun and a healthy view on the environment, and it is therefore ideal for renewable energy solutions and solar panel projects. However, this is not the main reason why we are here, says Mr. Gjerde. Thailand has acted where others only talks and is today a pioneer compared to other countries in the Asia when it comes to supporting renewable energy. Renewable energy has a high priority with the current government. The authorities subsidises purchase of renewable energy at the same level as in Germany, Spain and Italy. This in addition to good tax initiatives provided by BOI affects the investment very positively. Since the Thai government encourages and prioritises renewable energy, Get IT has had easy access to the Thai market. Only in the north of Thailand, Get IT has interests in 20 projects and they are the owners in ten of these projects. Another advantage for us is the long term contracts we are able to sign. With governmental contracts that lasts for ten years and a performance guarantee on the solar panels up to 25 years, there is no risk involved in these projects at all. Get IT has had many positive meetings with the authorities both regionally and nationwide, and they have shown a strong interest in our technology, Mr. Gjerde continues. By being a BOI promoted regional holding company, Get IT is experiencing many advantages in terms of support services. Competitive wages and access to highly skilled employees are also good reasons to do business here. Joint venture with Tatung In September, Get IT and Taiwan-based Tatung, one of Asia’s largest technology conglomerates, formed a joint venture. Together they will develop 1.2 gigawatts of energy from solar farms in next five years, including 200 megawatts in Thailand at a cost of 14 billion baht. The Taiwanese company has earlier produced solar farm components in China, Australia and Germany. In Taiwan, Tatung is the largest manufacturer of thin-film solar panels and wafers. Get IT holds 50% of the joint venture, Green Energy Technology Holdings, with the balance belonging to Green Energy Technology in Thailand. Tatung is known for their LCD screens they are producing for Samsung and LG Electronics. The technology for making solar panels is much of the same that is used for making LCD screens. Tatung delivers all the solar panels that is being used in Get IT’s projects. We have solid partners, and we have access to the best technology. The technology is getting better every year, and we are a part of this development, ends an optimistic Mr. Gjerde.

16

Thai-Norwegian Chamber of Commerce


Norway to the Rescue by Anton Benzon photos from AquaFence

A

telephone rings at AquaFence, a mid-sized Norwegian company in Tønsberg, Norway. The call is from Bangkok, Thailand. The caller, from Nestlé, explains that several of their factories are already under water and another is under threat. They have read about the AquaFence product on the Internet and believe that the Norwegian solution could be what they need to protect their factories from the oncoming water. In a matter of two days, a deal is negotiated with Nestlé. Three days later, Chairman Helge Krøgenes and CEO Fred S. Dahl arrive in Bangkok ready to take on the water. Each year, floods are responsible for enormous economic damage worldwide. AquaFence AS is a

Deployment of the AquaFence flood barrier at an industrial estate near Bangkok

company developing and offering systems for flood protection. Established in 1999, AquaFence has worked on development and improvement of flood protection systems in cooperation with the Norwegian University of Life Sciences (UMB) and Innovation Norway - with additional support from the Norwegian Water Resources and Energy Directorate (NVE). The company has developed flood protection systems which are patent protected in Norway and internationally. Dahl explains, “The products are highly competitive, and they have many benefits over alternative mediums and large scale flood protection solutions such as the traditional sandbag wall which tends to leak and break down.” Dahl has brought along several videos showing the product in action. The flexible yet durable solution is simply ingenious. The foldable AquaFence elements are made from waterproof panels, aluminium, stainless steel, and canvas. The units use water as a stabiliser,

Thai-Norwegian Business Review

17


Continue from page 17

so, as water rises against the wall, the system actually becomes stronger and more effective at preventing water from permeating it. Since the system is very light, it is easy to deploy, and, in addition, is one thousand times faster than sandbags, explains Dahl. The elements come in two heights, either 120 cm or 180 cm. “Once the risk of a flood is over, the system can be removed and stored for future use. It has been tested for deployment and take down up to 100 times,” says Krøgenes. AquaFence is typically used to protect industrial sites and whole communities and cities. When protecting a property, AquaFence can be used to prevent the water from touching the wall of the building. Building walls are ineffective as “water defences,” as, in most cases,

water penetrates the wall as well as destroys the wall itself. Krøgenes goes on to explain that the system can be either purchased or rented. “In Sweden, we have introduced an insurance type of system whereby the customer purchases an annual subscription, and, when needed, the AquaFence system can be deployed against a fee. Systems are stored at several flood-threatened locations across the country and can be deployed in a matter of hours.” AquaFence has an impressive list of clients including several across the United States as well as in central Europe where floods are an annual event. Krøgenes cites Mount Vernon in Washington as an example where the community used sandbags for flood protection. “It used to take 2,000 people 12 hours to protect 500 metres. After Mount Vernon invested in the AquaFence system, 25 people erected the same distance in a matter of 3 hours,” he explains. Due to its excellent reputation, AquaFence has been featured a number of times in newspapers and on TV. In 2010, CNN featured AquaFence on CNN Morning America. Earlier this year, several German TV stations showed documentaries on the system, and, at the beginning of November 2011, Dagens Næringsliv featured AquaFence in a double spread under the headline “Norwegian Flood Defence.” In the article, they wrote that several million sandbags had not been able to protect factories and properties in Thailand against the floods but that the Norwegian solution could be the answer to the problem.

CEO Fred S. Dahl and Chairman Helge Krøgenes overlook the installation of the AquaFence system in Thailand

18

Thai-Norwegian Chamber of Commerce

One of the installations in Thailand is special since this is the first time the system is used to alleviate flooding in a factory that is already under water. As soon as the water level goes below 120 cm, the water can be pumped out of the factory and clean up, rehabilitation, and production can begin even if neighbouring factories are still under water. Likewise, an access road can be protected in order for supplies to reach the site.


“Being Chairman of the Board is more than sitting in a nice wood-panelled office,” says Helge Krøgenes, seen here in floodgear from Norway

Dahl adds that the system also can be used as a water transporter to rid areas of water more quickly. An artificial waterway built up of AquaFence elements can be erected, allowing the water to flow away. During the years working with flood protection, Krøgenes and Dahl have perfected their skills in solving problems with water to exposed drains and other floodrelated challenges. “We have seen most of the problems related to floods, and yet every installation is unique,” says Krøgenes.

24/7 Assistance

The team from AquaFence has had a speedy introduction to Thailand. Several companies have already approached AquaFence and are eager to represent this unique solution. Others have approached the company both in terms of production and financing. “We are taking it all in and are working on both short- and long-term strategies for Thailand,” explains Dahl. “The local Innovation Norway office in Bangkok is assisting us in understanding Thailand and also to formulate and execute a strategy. One thing is clear,” says Dahl, “We are here to stay and help the people of Thailand in any way we can.” Innovation Norway is also exploring opportunities to use Thailand as a base to the entire Asia Pacific region, from Japan in the north to Australia in the south.

Thai-Norwegian Business Review

19


Norwegian Traditions in Thailan text and photos by Colin Jarvis

T

he Norwegian company limited is situated just off the superhighway in Chiang Mai amongst hospitals, educational establishments and many factories. I was very surprised therefore to find that I was not visiting a factory in the normal sense but a delightful spa like building where the various workshops and offices surround a delightful garden. There was a feeling of tranquillity and well-being that continued throughout my visit. I was there to interview Fred Lambersøy who runs the business with his wife Torhild Anita. What made you choose Thailand as the place to build your business? For most of my working life I have been an air traffic controller, working in places such as Oman and Hong Kong. When my contract finished in Hong Kong I was worried that if I returned to Norway I would be sent to some really awful place when my wife and I wanted to stay in the Far East. We decided on Thailand simply because of all the countries that had benefits such as inexpensive labour; things work in Thailand. Communications are good, the phones work as does the Internet and the infrastructure is excellent for this part of the world. It also helped that the BOI was able to help us.

time to spend like this and the number of people who have the skills is growing smaller and they are getting older. Thailand is a place where such skill and attention to detail are built into the culture. All we have to do is to train our staff to produce the designs we want at the best quality. How big is the market and how do you find your customers? There are at least 200 different local costumes in Norway. This has come about because until travel became much easier most communities kept to themselves. As I said before, the demand is growing but the ability to supply, in Norway, is falling. Currently we make about 500 costumes a year. This may not sound much but there is a great deal of work in each costume and every one is bespoke. The complete costume, including all the silverware and shoes, will cost about 200,000 baht in Norway. Obviously we do not make the whole costume, only the clothing but still the costumes can be considered costly though we believe offer good value for money.

Why did you set up a business making clothing when your experience is in air traffic control? It took us a year to decide on this business. My wife is a very creative person who has skills both in design and production of clothing. But we did not decide on this until we had discovered the market in Norway. In our home country every district has its own particular local costume. Each one features its own design of embroidery. At a time when more and more people wish to wear national costume, particularly on the 17th of May, our National Day there were fewer and fewer people able to make these costumes. In the olden days if you wanted costume you would ask your aunt or grandmother to make one for you and she would take, perhaps, a whole year to complete the project. In this modern world people do not have the Fred Lambersøy

20

Thai-Norwegian Chamber of Commerce


nd We do not sell direct to the public but have a number of specialist retailers who e-mail the details of the costume and the customer’s size to us and we make to order. Once the order is made we send it back to the retailer by UPS. Tell me about your workforce. My wife and I are very proud of our workers. They all work very hard and hardly ever leave. The first person who joined us was a 19 year old girl called Fah who had relatively little education but now, 15 years later, is my right hand. She gained her commercial qualifications and now manages most of the administration and deals with all the local officials, tax people and so on. Although I can speak Thai, I cannot read it and her assistance is invaluable. She is also a first rate embroiderer and if there is not enough administrative work to do she will pick up a needle and get to work. It takes about three months to train a new employee before they are able to join a team and contribute fully. We do manage to pay employees very well. After three months probation our staff earn more than the proposed minimum wage for a graduate and after three years, when they become fully proficient, they should earn about twice as much as the new proposed salary for graduates. None of the work is paid by piece work. Everyone is on a monthly salary as we are concerned about producing quality rather than volume. To produce quality takes as long as it takes. We will not accept shortcuts. That’s why everything is hand sewn rather than machined. Currently we employ 60 people but could easily increase it to 200 if we decided to take on the extra work. Whether we will or not remains to be seen. With over 200 patterns and about 500 individual costumes produced each year how do you keep track of the patterns and the work in progress? We keep a stock of material screen-printed with the various patterns. When a customer requires that pattern we pull out the material from stock and can then produce the embroidery. Once this is done we tailor each costume according to the needs of the customer.

Torhild and Fred Lambersøy, making sure everything is to their high standard

Each pattern has its own unique name in Norwegian but our staff often create a new name that they can understand better. For example the pattern featuring a thistle is called “Cow no eat” as I once explained to them that the cows will eat all the flowers in the field except the Thistle. How do your customers feel about wearing a traditional Norwegian costume made in Thailand? It is true that the embroidery is undertaken here in Thailand but all the material we import from Norway as well as the embroidery silks. Besides which, the quality is superb and if it were made in Norway, if you could find someone to do so, it would cost far more. We all gain satisfaction from knowing that Norwegian people can wear their national costume with pride whether it be to their confirmation, wedding or on the 17th of May. I felt very sad to leave as everyone in the company was very enthusiastic about what they were doing and their pride shone from their faces. The quality of the product is, indeed, excellent and the management style one that should be copied by other companies, whenever possible. Whether or not the company could be run elsewhere there is no doubt that this fusion of Norwegian quality with Thai skills is impressive.

Thai-Norwegian Business Review

21


Why Base your Business in Thaila by Emma Long photo from WebOn

D

oing business in any country other than your own can be a challenging exercise. Language barriers, cultural differences and fluctuating currency exchanges are just some of the issues that face foreign business owners when establishing bases overseas. But, for some, it is a smart and effective way to do business. For Norwegian software company, WebOn, Thailand is the place to be and it is where they plan on staying. Established in Norway in 1995, WebOn began its life as a dot.com company. After surviving the early years that saw many a dot.com enterprise fall by the wayside, WebOn made the transition to a formal business. Struggling to find the right people to lift the business off the ground, WebOn decided to look towards Asia as an alternative production base and initially set their sights on Beijing, China. It was not easy, recalls founder and CEO, Jon Anders Aas-Haug. “We saw many challenges whilst based in China. The people we recruited were good, but they were always looking for the next job that would see them climb the corporate ladder. So it meant that we couldn’t get what we were looking for which were people willing to learn our business and products, and that meant staying for 3 to 4 years. That kind of stability was not possible at that time and so we began to look around for alternative options elsewhere in Asia.” Thailand is a country that Jon was already familiar with as his wife’s family had purchased some property in Pattaya back in 1996. Jon and his family were frequent visitors to the town. It was during one of these visits that Jon had a light bulb moment. “I asked myself, why aren’t we doing business here in Thailand? I loved the country, we visited at least 2-3 times a year. It seemed to make sense. As a location, Thailand suited the needs of my family in being able to provide a good life and it suited the needs of the business.” During this time, Jon was also contacted by the Board Of Investment (BOI) and was invited to attend meetings in Oslo that were designed to attract foreign investment to Thailand. “I found the

22

Thai-Norwegian Chamber of Commerce

meetings in Oslo very interesting,” says Jon. “The BOI organised a trip for us to travel around Bangkok and its surrounding areas as a way of showcasing what the country had to offer as a production base. We decided to set up our business here. In 2007 we established a small office within the Central World office building. ”The support the BOI provide to foreign investors is crucial and WebOn see many positive benefits from their programmes including having 100% ownership without the need for a Thai partner, easier work permit processes and tax privileges. “We started off very small, hiring just 5-6 people and began operating with small jobs. We also brought over a staff member from our sales office in Norway to maintain consistency, but most importantly, to maintain our culture.” As most small business owners will attest to, the way you treat your staff is crucial to the success of your business and it is an approach that WebOn take very seriously. “We started our recruitment drive with a clear message. We are here looking for family members and that is how we see and run our business. We are a family at WebOn. We want our staff to feel like they were joining a family that cares about them and their future. At WebOn we purposely operate a flat structure. As CEO, I make the final decisions, but you will still find me on the floor fixing cables etc. like anyone else.” It is this approach towards their staff that has kept WebOn in good stead as they have not had anyone leave in 4 years, says Jon. “The loyalty from our employees is amazing. When we recruit people I ask them, would you share your opinions and problems with your parents, brothers and sisters? Of course they would say yes, and we say that is what we want you to do here, it is the same. We encourage them to speak their minds, and they do. Like anywhere, if you treat employees like your family, with fairness and respect, they will treat you the same in return and that is what we have found here in Thailand.” WebOn is an unusual company. They are based here, but they do not do business here. Their customers are exclusively in Northern Europe, and it is the nature of their business that enables them to operate this way. WebOn specialises in providing Product Information


and? – WebOn Knows Management systems for their clients. Product Information Management, or PIM, refers to processes and technologies that are focussed on centrally managing information about products, with a focus on the data required to market and sell the products through one or more distribution channels. WebOn works with their clients by providing e-commerce solutions and PIM systems that enable them to access their product information and use it for their online sites as well as catalogues and hard copy print media. The nature of their business allows WebOn to be based anywhere, however, they have bucked the trend of their counterparts who traditionally base themselves in India or China. For WebOn, Thailand is where they want to be. However, there are challenges. “As all our customers are in Northern Europe, we are not dependent on the Thai market”, Jon explains, “but, there are a number of factors on which we are dependent, the most important of which being the currency exchange rate. We are also heavily reliant upon a good internet network and that is an area that still needs improvement.” With the political turmoil and riots of May 2010 and the recent arrival of a new government and Prime Minister, many existing foreign business owners and prospective investors could be forgiven for being nervous about Thailand’s future as a production base, but not WebOn. “As we do not operate within the Thai market, the political situation is not as important to us on a day to day basis. However, during the riots of May 2010, some of our customers were, quite naturally, concerned, but once we reassured them that for us it was business as usual, their fears went away. We are fortunate that we can operate anywhere, just as long as we have a laptop and a power source! As our offices were in Exchange Tower we had to close for 5-6 days. But our staff simply either worked from home, Starbucks or wherever and our customers were none the wiser. Our production output only dropped about 20% during this time.” How does WebOn feel about the new government and its influence on the business landscape? “We hope that the new government will continue to build on the BOI programmes and visa and work permit processes. We are not really concerned about

the change in government, I think all sides realise that they cannot continue as before. If we had Thai customers I might be more concerned, but the key issues for us are on-going issues with the internet and 3G.” “We believe though that right now Thailand is a great place to be, it really works for us and I think it’s because we have been patient in our approach. We bring money into the Thai economy and we have access to great, well educated people, our employees are the stars of WebOn, not us, they are the ones who make money for the company. I don’t believe we would have been in the same position now if we had remained in Norway.” Despite having their development centre here, WebOn are still very much a 100% Norwegian owned company. They maintain a 40 person strong Sales and Marketing presence in Norway and to their customers they are a Norwegian outfit. Having grown steadily for the last 5-6 years, where does Jon see the company heading? “For the foreseeable future, we will continue to grow in Thailand as we are very happy. Now is a good time to be here.”

Thai-Norwegian Business Review

23


Continue from page 23

BOI attracting foreign investors In April and July 2010, Thai-Norwegian Business Review met with Khun Duangjai Asawachintachit, the Assistant Director General of the Board of Investment (BOI) to talk about the advantages of investing in Thailand with particular reference to the uprising that occurred in May 2010. We followed up with Khun Duangjai and asked her how Thailand has recovered as an attractive location for foreign investors a year after the uprising and following the recent political

change in government, a new political party and a new Prime Minister. How have these changes affected the on-going role of the BOI? – The BOI statistics indicate a remarkable recovery in 2011. Foreign investment applying for investment promotion during the first eight months of this year increased by 51% and 83% in terms of the number of applications and value of investment respectively. In particular, investment from Japan has risen significantly since towards the end of last year. The automotive and electronics industries continue to attract a large portion of foreign investment. Political stability always plays a role when companies decide where to put their investment. But, despite political changes, the BOI has consistently maintained welcoming policies towards foreign investment. Why does Thailand continue to be an attractive production base for international companies? How does it compare with its neighbours such as Malaysia, Singapore and Vietnam?

Khun Duangjai Asawachintachit

-Despite stronger competition from other countries, Thailand still has many advantages to offer international companies such as a strategic location, comprehensive supporting industries and key industrial clusters as well as a growing domestic market, labour skills and investment incentives etc. Moreover, Thailand’s economic fundamentals have remained strong albeit with political changes and the global economic recession.


Knowledge Building knowledge for future yields The use of mineral fertilizer is essential for sustainable agriculture. It stimulates plant growth, increases CO2 uptake in the soil, and helps to preserve natural land from being converted into cropland.

Yara’s measures to reduce GHG emissions include a pioneering use of life cycle assesments in agriculture. that includes energy efficiency of plants, best farming practice and fertilizer application techniques.

Yara’s well proven N2O catalyst technology is the solution of choice for reducing greenhouse gas emissions from nitric acid production, with N2O reductions of up to 90 percent. Its success builds on more than 15 years of dedicated research effort.

Climate change, population growth and consumption patterns challenge food security. To meet future food demand with limited land and water resources, world agricultural productivity has to be maximised. Yara International ASA, the global leader in mineral fertilizer and crop nutrition knowledge recognizes the connection between energy, climate and food, and contributes to solving major global challenges. Visit us at www.yara.com

Knowledge grows


Thailand’s Long-Running Courtsh of 3G About to be Consummated by Eric Baker photos from dtac

O

ur long national nightmare may soon be over. The Thai government looks excruciatingly close to allowing 3G into the country, putting it on an equal footing with Laos, Cambodia and several countries in Africa.

To help sort out what it might mean for Thailand, Thai-Norwegian Business Review interviewed Petter Furberg, Chief Marketing Officer for dtac. Like the other two big mobile operators in the kingdom, AIS and True, dtac was poised to participate in the 3G licensing auction last year when the state-owned CAT Telecom submitted a petition to the court saying the National Telecommunications Commission had no

26

Thai-Norwegian Chamber of Commerce

Petter Furberg, Chief Marketing Officer for dtac

right to issue the licences because this was under the authority of the unformed National Broadcasting and Telecommunications Commission (NBTC). A lot of the debate has to do with the frequency on which 3G will be offered. Internationally 3G has most commonly been offered on 2.1 Ghz, which also is supported by a wide range of mobile phones supporting 3G. This frequency is, with exception of one licence given to TOT, not yet available for licensing by NBTC due to the legal proceeding raised by CAT last year. The auction regime was N-1, meaning one of the big players was going to lose out in the first round. However, a third licence would be sold six months later according to the regulations, which would mean that all operators could have launched 3G


hip d almost at the same time, noted Furberg. Despite this setback, this year we have seen all the major operators launching 3G services on existing frequencies managed under concessions from CAT and TOT, but not under new licences from NBTC, he added. 3G, or third-generation service, will increase data speeds. Currently our EDGE 2G network normally provides 100-150 kilobytes per second and the speed is set to increase to more than one megabit per second for downloads with 3G. As consumers’ needs for data and the range of services offered over the internet is increasing, 3G alone will not be good enough and Thailand quickly needs to move to 4G, noted Furberg. As it stands, dtac has around 400 3G sites around Bangkok on the 850 Mhz frequency, expanding to 2,000 sites covering most big cities by February 2012. AIS offers 3G on the 900 frequency, while TrueMove offers 3G service under 850 Mhz. The challenge for consumers is that not all phones work on 3G for both 850 and 900 Mhz. Most iPhones do work on both, but the most optimal frequency used for 3G from a consumer point of view would be 2.1 Ghz.

offered on 2.1 Ghz by all the operators in the market. With new 3G licenses issued, we will see strong growth in mobile data usage, he said. “The country already has more than 12.5 million Facebook users, making it the 16th-largest in the world,” said Furberg. “Bangkok alone has 7.5 million users. However, it is the up-country market where the mobile internet will have the most impact, because access to fixed line and broadband is low, meaning most people will access the internet over their mobile. We expect to see an explosion in internet usage and access over the next few years, and customers here have shown a willingness to pay more for better services, especially over mobile.” “Right now operators are lagging customer demands. 2G is okay for downloading emails, but for watching video, for instance, we need better speed. dtac is also building Wi-Fi in high-traffic areas, like shopping malls, to ensure consistently good speed. More devices in Thailand have Wi-Fi capability than 3G. This is particularly true for teenagers, who tend to hang out in high-traffic areas like malls.”

“It is really sad to see how messed up the telecom regulatory situation is in Thailand and how this has led to continued delay in offering basic mobile data services to Thai consumers,” said Furberg.

“Two years ago we thought we needed to educate people on why they needed the internet, but it turns out the communities have taught one another how important it can be.”

So why the delay? The two state-owned operators, TOT and CAT Telecom, used to be not only telecom operators, but also regulators in their own right. As with most other countries, telecom grew out of state-owned monopolies, but in Thailand there has never been the political will or ability to implement necessary reforms. Today TOT and CAT get the majority of their income from concession revenues collected from mobile operators so they’ve never had incentives to reform. Even as other countries were downsizing their state monopolies they’ve fought hard to keep what they have, said Furberg. But from 2013 the concessionary revenues are expected to be collected by the Ministry of Finance, meaning CAT and TOT will have to fend for themselves.

Interestingly, Thailand is rapidly taking up social networking via mobile phones. Over time it is likely that some SMS usage will be substituted by communication through social networks and chat services. So far, however, the increase in social network and chat usage has not changed usage of voice and SMS services, which is continuing to increase for dtac.

Fortunately, the NBTC was just recently formed. This means a 3G licensing auction is likely in 2012, said Furberg, which would allow for 3G services to be

We are also seeing that consumers are starting to buy mobile devices from the operators themselves, as dtac has started bundling its services with mobile phone manufacturers, said Furberg. We started out offering Blackberrys and iPhones a year ago, and now we offer a wide range of smartphones ready for use with dtac’s 3G network. 3G service is available to all our customers at no extra charge and with a modern smartphone the experience will be superior, he added. The future’s not completely rosy for dtac, even as an erstwhile threat of a foreign-ownership investigation

Thai-Norwegian Business Review

27


Continue from page 27

dies down. Foreign dominance regulations by the NBTC were passed a few months ago, but for Furberg the concern is the regulations are vague. “It is unclear how you define whether a company is foreign dominant,” he said. “This creates a problem for the industry going forward because the rule is intentionally vague. With a clear rule, at least you can adjust to it, but this rule has the potential to be used to cripple a competitor if you don’t like them.” dtac launched its service in 1995 and Telenor became a partner in 2000. Its primary focus in the beginning was to provide voice connectivity for the mass market in Thailand. Now that the telecom market in Thailand has become more mature, said Furberg, dtac’s focus will be on expanding and improving services offered to our customers. Voice communication alone is no longer enough. “We have an opportunity to really make a difference in people’s lives,” he said. “Think of the children up north stuck in a poor school system—how much will access to the internet mean to their lives?”

28

Thai-Norwegian Chamber of Commerce

The Long and Winding Road to 3G

• 2008, May – dtac requested an upgrade to CAT to provide 3G HSPA on 850 under concession and agreed to the re allocation of it’s 850 MHz.  CAT imposed many conditions including S22.

• 2009, June – NTC 3G auction process

started, dtac focused on entering the auction.

• 2010, October – 3G auction postpone. • 2011, August – launched 3G HSPA on 850 under concession.

• 2011, October – AG confirmed the

conditions of the upgrade are within the existing concession.


A Platform Linking Europe and A by Nadia Willan photos from EABC

W

ith a relatively buoyant economy political traumas somewhat fading in the collective memory and a more global attitude to business, Asia, and in particular Thailand, at the heart of ASEAN is fast becoming an attractive base for European companies to establish trade links and invest. However, what sounds good in theory can sometimes fall down in practice, or at least not reach its full potential, without the right communication and support. The launch of the European-ASEAN Business Centre (EABC) this year aims to provide the right investment and market platform for European companies who are looking for the right business balance far from home.

Funded by the European Union, the EABC encompasses EU as well as some EFTA countries such as Norway and Switzerland, with the Thai-Norwegian Chamber of Commerce being a consortium partner. Bilateral European Chambers of Commerce in Thailand

have joined along with the Chambers in Europe. John Svengren who is the Director at EABC explains. “Just as much as Norway plays an essential part for Europe and indeed with the EU, the Thai-Norwegian Chamber of Commerce likewise does the same as an active part of the European Chambers of Commerce in Thailand. Within the EABC, the TNCC has thus been acknowledged as a full consortium partner since the beginning of the project development.” On a separate note it is worth to note that Norway contributes substantially to EU; in 2010 Norway contributed € 230 million to the EU programme budget. In addition, from 2009 to 2014, Norway is providing almost € 1.8 billion to efforts to reduce social and economic disparities within the European Economic Area (EEA) uniting the 27 EU member states and the three EEA EFTA states Norway, Iceland and Liechtenstein. Two sector organisations are also involved. These include DigitalEurope, which focuses on companies and associations linked to information technology and consumer electronics, as well as EURATEX, which is a non-profit trade association dedicated to the promotion of the European textile and clothing industry. The result will be to create a separate legal body that speaks with its very own European business voice which can be understood and heard by the members of the National Chambers of Commerce and Trade Promotion Agencies, key organisations the EABC aims to complement by focusing on value added activities such as an intellectual property rights (IPR) helpdesk to deal with patents and the suchlike, as well as FTA negotiations. With the Embassies, Chambers of Commerce, as well as such organisations as the EABC, seminars, events and publications can be expected. These all serve to co-ordinate efforts to keep issues current, to not deal in theory but relevant and real activities, not to mention offer a forum of practical interaction. The EABC is not a think-tank but a working Business Centre. EABC Director John Svengren has been running a one-man ship at the base next to the Thai-German Chamber, only now being joined by five key members who include a Policy Manager, Lawyer, Service & Events Manager as well as a PR & Media Manger, along with an Office Manager.

30

Thai-Norwegian Chamber of Commerce


ASEAN The EABC hopes to provide better access to Thailand for European businesses, alongside the work of the individual Chambers. There is a logic and wisdom in this approach in such a fast developing market as South East Asia. A myriad of situations, as well as rules, regulations and expectations can get lost in translation, over and above the obvious language differences. A sense of community means there is power, as well as safety in numbers to a large extent, in opening the gateway to trade and investment and providing a steady platform on which European companies can find a steady footing. The business world is part of a global economy and the EABC seems to be aware of this need to join ranks with a strong voice which will enable the sharing and understanding of information more readily, initiate compromise and even change. Indeed, one of the core components of the EABC is not just to create the right environment for European businesses seeking advice and legal help as they contemplate an emergence into Thailand, but to promote and enhance investment opportunities in Thailand through advocacy. For those businesses from Europe who are already established in the country, the EABC is setting out to support them by improving conditions. In essence, the EABC’s raison d’être is to improve the trade and investment environment for European companies in Thailand and increase investment so that there are more European companies operating in Thailand. Advocacy groups are in the pipeline to identify those areas where market access and business cooperation can be improved. It is the European companies in Thailand who will be the integral members of these groups, providing from the

ground-up concerns, ideas and gaps. Advocacy is not just about highlighting what is missing or not fully comprehended either, or finding ways to simply accept and work within limitations. The EABC is intent on the drafting, publishing and dissemination of joint European industry positions papers and using these to lobby the Royal Thai Government with regard to existing regulations and those due to come into effect. By offering advice as well as affirmative action through advocacy, the EABC is hoping to move one step further towards the wider EU strategy to support the internationalisation or European SMEs. Whilst the Chambers from countries outside of ASEAN can offer specific advice to their native business communities, the EABC seems to want to slot easily on top of the pre-existing support. The organizsation will act as a central hub and representative within the Thai business community for Europe at times when this consolidated, coherent and cohesive approach is really needed. Regardless of funding coming from the pockets of the European Union, it is business owners from both EU and non-EU countries in Europe such as Norway and Switzerland, running companies in Thailand, who are being touted as having true ownership of the EABC. Individual countries in Europe have their own economic variables, as well as cultural nuances, and specific trade demographics within Thailand. For a Norwegian business exploring the possibility of making future investments in the ASEAN region, these local aspects need to be addressed. This globalisation means one international European voice, such as the EABC will undoubtedly be welcomed by all.

Thai-Norwegian Business Review

31


N

O

R

W

A

Y

The most innovative Norwegian furniture manufacturer. We create great furniture for people that appreciate, quality, style and above all comfort.

IMG of Norway’s headquarter is located in the Sunnmøre area of Norway – famous for its steep mountains and deep fjords as well as the production and development center for Scandinavian comfort recliners. IMG have manufacturing facilities in both Vietnam and Thailand. IMG AS Postboks 163 N-6249 Orskog Norway Tel: + 47 70 27 10 40 Fax:+ 47 70 27 10 41 E-mail: office@imgcomfort.com www.imgcomfort.com


Melvær&Lien The Idea Entrepreneur Photo: Tom Haga

SMARTER LABELLING SOLUTIONS Skanem is a leading producer of self adhesive labels with 12 labelling plants in 8 countries in Europe and Asia. Skanem Bangkok opened June 2007 and is Skanem’s first establishment in South-East Asia.

Skanem Bangkok Co. Ltd. Amata Nakorn Industrial Estate 700/247 Moo 1 Bankao, Panthong Chonburi 20160 Thailand Tel.: +66 (0) 38 465 315-19 Fax.: +66 (0) 38 465 320-21 www.skanem.com

Bridging Societies is our business Nera Networks provides wireless transmission solutions to communication network owners in most market segments including: • Mobile • Broadcast • Enterprises and Internet Service Providers • Government and Educational institutes • Defence • Offshore and Utilities • Retail Payment Solutions Nera (Thailand) Ltd. 26th Floor, 253 Asoke Tower 253 Sukhumvit 21 (Asoke) Road Klongtoeynua, Wattana Bangkok 10110 Tel: +66 (0) 2664 1464, Fax: +66 (0) 2664 4002 www.nera.no


Communicating in a Multicultur by Colin Jarvis

W

orking in Thailand brings us into contact with people from many different nationalities and cultures. Communicating to others in business is difficult at the best of times but when confronted with differences of language, behaviour and expectations that task can become daunting. I have spent over 15 years working with Thai people, both in industry and the arts, and every time I feel I have begun to understand the Thai culture I realise I understand virtually nothing. Nevertheless the journey of understanding is interesting and rewarding and it will keep me busy for the rest of my life. Clear cross-cultural communication requires a good knowledge of the cultures involved and the linguistic and language pitfalls that may lay in wait for the unwary. In this article I will simply discuss some of the cultural pitfalls that can confuse cross-cultural communication and I will continue this theme and tackle linguistic and language problems in the next issue. To be successful in overcoming the cultural problems associated with cross-cultural communication we need to be sensitive to the likely pitfalls. The examples I give will be related to Thai - European communication as it is the area most likely to interest readers of this magazine. However we cannot possibly cover all aspects of cross-cultural confusion so these examples are simply to indicate the type of problem we can face. Similar problems will occur with other cultures though the details may be different. The main areas where cultural confusion can occur are: respect and deference, body language, interpersonal relationships, decision-making, organisation and planning and to understand the culture well one needs to understand the history and the religion of the culture. Respect and Deference: Remember when you went for your first job interview? When you met your interviewer did you put your hand out first to shake his hand? I doubt it. The handshake is 34

Thai-Norwegian Chamber of Commerce

a very subtle form of greeting and it is usual for the most senior person to initiate it. The length of time taken for the shake, the firmness of the grip and the vigour used requires a very subtle judgement. It is something we learn throughout our lives and we all know just how to do it with out being taught. When a handshaking partner gets it wrong we tend to feel uncomfortable. So it is with the wai. Who initiates the wai, the height of the hands and the steepness of the bow are all as subtle as in the handshake. If we are sensitive and aware we can quickly learn the more obvious traditions of the wai but it can take years to get it right automatically every time. We can assume therefore that on many occasions we can make our wai-ing partner feel uncomfortable as a clumsy handshake would make us feel. The wai is the initial outward sign of that amazing Thai characteristic, “Kreng Jai”. This is a complicated mixture of respect, reverence, acceptance of power, protection, affection, politeness and fear. It is why the Thais will very often refuse to say no. This sometimes maddening habit is a good illustration of the fact that in Western society we have no such all embracing cultural tradition as “Kreeng Jai”. To succeed in Thailand we all need to grasp this concept and obey it as best we can. Body language: I remember my first meeting with a group of about 15 Thais who wished me to become involved in their project. When I concentrate on listening to other people I often slump down in my chair until it becomes uncomfortable then I sit up straight only to slump again later. After I had done this about three times I became aware that the other people in the room had also tended to slump and sit up at the same time as me. I later learnt that the height of one’s head is important in relation to someone who is the more senior. As I’m sure you know it is surprisingly easy to defile an object or be rude to a person by incorrectly positioning of the feet. I was once working with a group of classical Thai musicians and attempted to step over one of their instruments. I was firmly restrained by about half a dozen anxious musicians as had I stepped over the instrument I would have completely defiled this precious and important, almost religious, object. I had learnt my lesson. Later I needed to leave the room for a few moments and when I returned and opened the door I found the floor around the door jampacked with these remarkable classical Thai musical instruments.


ral Environment The musicians had disappeared and I faced a long job of carefully moving these instruments until I could make a clear path. After a few moments of work the musicians returned, laughing their heads off and thus illustrating that delightful Thai cultural characteristic of having fun whenever possible. Interpersonal relationships: To enjoy a close personal relationship or effectively manage people of a different culture can be one of the most rewarding activities in life. In Western culture it is unusual for managers to become involved in their employees personal life. Yet in the East being a manager is rather like being a father and one is expected to be interested in developments within the employee’s family and, sometimes, to offer advice or other help. In other words the social relationship needs to be stronger in an Eastern organisation than would be normal in the West. However, it is interesting to see that many new Western companies, particularly in the creative industries and run by relatively young people, tend to be very keen for people in their organisations to be more socially cohesive.

Just as in some cultures it is normal to shake the head vertically when meaning no and from side to side when meaning yes, small signals of affection or friendship can be the opposite of what we expect in the West. I was quite startled once when a very senior Thai government official held my hand as we walked down the street. I will not describe the thoughts that rushed through my head but this behaviour is entirely natural and it is simply a signal of friendship and nothing more. One thing everyone learns in Thailand within the first day or so, that is if they are at all sensitive to cultural differences, is that if one loses one’s temper no one has any respect for you and whatever it is that caused the anger will not be solved by displaying this emotion. In fact, emotion of any sort can be thought to be inappropriate in Thailand, hence the concept of “Jai Yen”, cool heart. Understanding these differences and becoming fluent, not just in the language but also in the cultural mannerisms, is an adventure and a very rewarding one. I hope to continue this theme in the next issue.


Challenges and Opportunities fo by Emma Long photos from Telenor

M

ajor Norwegian Telecoms giant, Telenor, is one of the most recognisable and respected brands across the Asia Pacific region. A prominent Telecoms partner in Asia for the past 15 years, Telenor first entered the region in Bangladesh in 1996, followed by Malaysia in 1999, Thailand in 2000 and Pakistan in 2005.

For most multi-national organisations, India is a corner-stone in their Asia Pacific strategy and for Telenor Group it is no different. “The reasons for investing in India were for Telenor, very clear,” says Telenor Asia’s Director of Communications, Glenn Mandelid. “India is one of the world’s biggest markets for growth. The country has a strong positive economic development, a large population, and most importantly for us, it has a low mobile penetration. As a growth company, entering into India was the ultimate challenge and the obvious next step.“ After operating successfully in Asia for 15 years the timing was right. Telenor Group felt that it had the

knowledge and right experience to enter into the Indian market. Therefore, in 2008 the company invested USD 1.2 billion for 67.25 percent ownership stake in Unitech Wireless, a company that had just secured a mobile telecoms license from the government. The deal between Unitech and Telenor was finalised in early 2009, and later that year the new operator launched its services under the Uninor brand. Because of its size, India is divided into 22 telecom regions. In the first stage Uninor launched in 8 of the 22 regions, covering a footprint of 900 million people. 6 months later the new mobile operator expanded its reach by launching services in 5 additional regions. Today, the company has close to 30 million customers, and is by far the most successful of the young operators. “One of the challenges for us has been the level of competition, it is fierce. There are 14 different competitors in India and no operator has a dominant market share across the country. In our best performing regions however, we are among the top 6 and that is where we want to be. Our long term ambition is to reach 8% market share, and deliver on our financial targets”, says Glenn Mandelid. Entering into a new market brings its own set of challenges and for Telenor Group, there has been no shortage of these in India. One of the first challenges was finding a position in the market and establishing the strategy to support that market position. Just after Telenor Group invested in Uninor, an extreme price war within the telecoms industry in India began, and today India has one of the lowest tariffs in the world. In July 2010 Telenor Group appointed Sigve Brekke, the Head of Telenor Asia, to also take the position as Managing Director of Uninor. He immediately focussed on three areas: to be the best on distribution; to be the best in the provision of basic services; and to be low on cost. “Today, this sums up the India strategy”, says Glenn Mandelid.

Sigve Brekke visiting a market in Mumbai

36

Thai-Norwegian Chamber of Commerce

Another major issue for Telenor has been the regulatory system. About a year and a half ago, the regulatory system came under fire when the award of licenses in 2008 became a political issue. The Indian authorities started investigations, and set up a special court to handle charges against key people involved in the licence award process. The former telecom minister


or Telenor in India from the chairmanship of the Uninor Board of Directors. It’s important to be clear as well that the MD of Unitech has not been convicted of any wrongdoing. “Throughout all of this, it is important for Uninor to remain focussed and to motivate its sales people. Of course, all of these issues create a certain level of concern amongst the employees, but Uninor has been very proactive in keeping staff up to date with what is happening. MD Sigve Brekke has, to date, been the only Telecoms MD to speak openly to the media about these issues and has been very firm in reiterating our long term commitment to India. We recognise that reassurance is important, so we regularly have internal campaigns to keep the momentum going.

Sigve Brekke in Kolkata, July 2010

is now in jail facing charges, together with a number of heads from some of the companies that were awarded licences. How has this affected the role of Telenor and its relationship with Unitech? “Telenor has always been very clear that we entered into a partnership with Unitech after it had already awarded the license. As a foreign investor we undertook detailed due diligence and found no reason to believe that the license had not been awarded in accordance with the laws and guidelines set by the government. It is important to note that no-one in India sees Telenor as anyway involved in the court issues that are presently going on.” Where do the issues stand now? “The government has convened a special criminal court to deal with these charges, but, the trials will last for some time. From our perspective, everything Telenor has done has been in accordance with Indian law and governance. However, the steps we have taken have been to ask the MD of Unitech to step down

Fortunately, the court case does not seem to affect Uninor’s sales performance on a daily basis. What the public are focussed on is price. Price is the key. The average mobile phone user has more than one sim card in use at any one time. They will have a primary sim card for incoming calls, but they will then shop around for special promotions. It is not unusual for one individual to have 3 or 4 sim cards. Also, most customers don’t know which operator they want when they enter into a shop to buy a sim card. Therefore, Uninor has developed a unique and very close relationship with the distributors, based on experience from other Asian markets. Representatives from Uninor visit the 300 000 points of sales every day.” So, amidst all of this noise, what is the future for Uninor and overall for Telenor in Asia? “What is great about Uninor is that our market development has been really encouraging. For us, India is still a good place to be, the business reasons for being there are still sound and we are there for the long term. Overall, Asia is now driving growth for the entire Telenor Group. In the last quarter 40% of Telenor Group’s revenue comes from Asia.” So, whilst the issues in India are challenging and ongoing, so too is the commitment of Telenor.


The Business Menu of the Food by Nadia Willan photo by Karine Slørdahl

O

ver 40% of the working population in Thailand is involved in agriculture, and the country is the number one exporter of rice in the world, as well canned food products being at the top end of the export list. Although the US might be a mighty importer with around a third of canned pineapple being sourced from Thailand, Europe is not lagging behind when it comes to its growing demand from one of the top five food producing countries in the world.

Thai style in Norway

38

Thai-Norwegian Chamber of Commerce

Setting up nearly two decades ago, Presmann (Thailand) Co. Ltd is as established in exporting food to Scandinavia, as the hardiest crops in the country. Whilst the number of workers employed in agriculture might have dropped a third in the last 20 years, and with a growing emphasis on manufacturing industries, there is no denying that the first real production was based around crops and the fruits of the earth, not to mention tuna and shrimp exports of which Thailand is a world leader. Few people in Norway sit down to eat a shrimp cocktail in the local eatery and think about how their fishy delicacy made its way across the waters. However, the business of food is not only impressive in size but in its logistics and in terms of how it operates as well.


Industry From one of thousands of shrimp farms or the many pineapple groves in Thailand to a Norwegian dinner plate the foods from Presmann are usually frozen, canned or dehydrated. They are processed either the same or the next day at factories in Thailand and then sent by sea for around six weeks before finding their way to a distribution center in Denmark and ultimately the end users in the rest of Scandinavia. Their main product, pineapple, is typically sent in huge industrial sizes for further processing into jams, yoghurt and cheese. Whilst the journey from field to fjord might be streamlined and fairly straightforward there are certainly challenges closer to home in Asia. Søren Pressman, who set up the company after a decade of food production experience, is frank about the constraints put on suppliers’ plates. The company’s client list is a highly guarded secret, with big name buyers wanting to keep their contact and supplier details under wraps, the influence of supplier demands and industry guidelines cannot be underestimated. The end users might be hungry for rice and sweetcorn, but they also have a big appetite when it comes to corporate social compliance codes. There is an increased demand by suppliers for companies to have certain certifications which state international levels of social compliance and to follow UN guidelines. Søren Pressman reveals this pressure from European clients is positive but that there are other ingredients thrown into the mix which do create issues. “The buyer will demand that the supplier has a compliance audit and this is an expense covered by suppliers. There is more and more demand to comply and being able to produce documents to show codes of conduct have been followed is important. However, new demands are made and although a company might be positive about the audit they are then dealing with sub-contractors and this makes the whole process a big and sometimes difficult task.” Chain management throughout the food production cycle being one of the areas of difficulty. Certainly, whilst getting food from Thailand to Europe might be straightforward, the changing landscape of social corporate compliance might propel some companies to forgo the expense and logistics of being audited or earning certifications. The SA8000 for example, is about achieving global

standards in terms of the workplace, whether dealing with safety at work, child labor or overtime. “It’s a good move and is a process,” explains Søren, “however, sometimes companies might find some of the codes of conduct, such as overtime constraints, stricter than say the Thai law which poses real problems simply in having enough manpower, particularly in this industry, dealing with harvests and seasonal products.” Indeed, with 12 hours of overtime allowed per week under this standard, countries such as Thailand, which in reality already need the influx of migratory workers, might find that adding in the extra topping of an SA8000 certificate is something they just have to forgo and hope that their customers can stomach it. In fact, with companies such as Presmann in demand, and volumes of exported produce from Thailand to Europe in the billions of baht, there is an in-built need to operate hygienic and efficient manufacturing bases according to Søren. “You cannot look at the domestic restaurant market in Thailand and make direct comparisons to the food export factories. The reality is that the standard here is, in my opinion, higher than it is in Northern Europe. The certifications have also been more than a wake up calls to many businesses. But for well-established businesses there is a need to prove that we can not only meet but exceed many of these codes of conduct too.” Another change in terms of food exporting to such countries as Norway is the changing demand for different products. Whilst five or six years ago the demand for organic coconut milk might have only consisted of a few pallets, today there is a remarkably increased demand. Another area which is emerging is the value added product market. This is not about supplying bulk ingredients such as fruits and vegetables, but cutting these up into smaller pieces and cooking them up before serving to the ready to eat meal customers. As a domestic market within Thailand this is a growing retail option and the demand for Thai green curry and classic Thai dishes is high on the menu. This also creates an appetizing accompaniment to the exporters who appreciate and feed Europe’s love affair with the exotic foods of Thailand.

Thai-Norwegian Business Review

39


Norway-Asia Business Summit 2

T

he second Norway-Asia Business Summit kicked off in Singapore on Thursday 29 September, with the theme of how the Norwegian business community can stay relevant and grow further in Asia, the world’s fastest growing economic region. The strong agenda and top level set of speakers and panellists attracted more than 200 senior business leaders from Norwegian companies operating in Asia. There was a significantly higher turnout than at the inaugural show in Shanghai last year. Organised by the Norwegian Business Association in Singapore, it is the first time the Norway-Asia Business Summit is hosted in Singapore. Norway is consistently in the top five European countries investing in Singapore in FDI terms and the summit examined the growing trading relationship with Singapore and other economies in Asia. In total Norwegian business leaders from twelve Asian countries were present at the three day event. Kicking off the conference, Mr Tan Choon Shian, Deputy Managing Director of Singapore Economic Development Board gave the opening address. Framing Singapore’s economy against growth in Asia, he said: “According to a study by Boston Consulting Group, Asia will account for 60% of the world’s trade by 2015. Asia’s growth has outpaced that of the world, with major economies like India and China continuing to enjoy growth rates of around 10%. ASEAN, with a total population of 600 million people and a combined GDP of over SGD 2 trillion, is also growing as a major market.” Senior speakers and panellists present during the conference were echoing the same sentiments. They included Øyvind Eriksen, President and CEO of Aker Group, Carl Arnet, CEO of BW Offshore, Gunn Ovesen, CEO of Innovation Norway, Oliver Tonby, Director, McKinsey Asia Oil & Gas, Åse Aulie Michelet, Member of the Board of Orkla, Norske Skog, Cermaq and Photocyre, Hilde Tonne, Executive Vice President and Head of Group Industrial Development of Telenor Group, H.E. Knut Solem, Ambassador of Norway to the Philippines, Eva Bratholm, Counsellor Political Affairs, Royal

40

Thai-Norwegian Chamber of Commerce

Norwegian Embassy in India and Thor Jørgen Guttormsen, President of the Norwegian Shipowners Association, who gave brief presentations on investing in Asia. Victor D. Norman, Professor at Norwegian School of Economic and Business Administration and Jørgen Ørstrøm Møller, Visiting Senior Research Fellow, Institute of Southeast Asian Studies (ISEAS), Singapore had a lively exchange under the heading Asia 202; From West to East – the rise of the rest? Among the most optimistic economists was Dr Norman, who reasoned that the challenges faced by the West today are caused by structural problems arising from economic transformation. Over the past decade, the OECD countries successfully downsized their employment and production in traditional areas, made direct investment in emerging economies, but failed to reignite their own domestic economies in new industries. Pointing to statistics that the private sector in Europe saved 6-7% of GDP more than they invested, he believed that Europe will be facing massive depression today if governments had not intervened with deficit spending. Dr Norman believes that the current public debt levels in Europe are not disastrous. For the Eurozone as a whole, public debt amounts a little more than 60% of GDP. Greece is the only country that has a public debt of more than 100% of GDP. Is this a debt crisis? No. He reminded us that what the OECD area is experiencing today is not very different from what Britain had experienced in the late 1800s when Germany and the United States took up exactly the same role Asia has done today. In the 1930s, Britain had a public debt of 300% of GDP, but it went down to 150% of GDP in 1938 as economic growth picked up. Other economists with differing views expressed concerns that an abrupt downturn in economic sentiment due to the loss of confidence in sovereigns. Professor Møller pointed out nation-states brought global debt down to 30 per cent of GDP in the early 1970s, whereafter it exploded upwards over the first decade of the 21st century to again reach 100 percent. “We borrowed during good times instead of saving”, he said. Professor Møller argued that debt must fall or GDP must go up or a mixture of both, but economic growth in many countries is limited today due to their


2011 – A successful Experience! high public debt levels. Debt does not go away and has to be repaid in one way or another. The only way out of this impasse is to bite the bullet and comply with debt repayment, The professor painted a vastly different picture of Asia in 2020 with a Japan which had turned from west to east and become a truly Asian nation; an Asia filled with Asian multinationals. He talked about an era of scarcity where food, raw materials, energy, oil, water and environmental impacts all were linked. He claimed that the talent would be in Asia and that Asia would be a trend setter. Traditionally, Asia had looked to the west for ideals, but since the western model was not working, the ideal had been readjusted to Asia with reinvested values. Asia’s challenge would be to create enough jobs at the same time as social stability.

Saturday was a day of practical experiences from doing business in Asia in a vast number of sectors from telecom (Telenor), renewable energy (Sarawak Energy Behrad, KF Gruppen AS and SN Power), coatings (Jotun) to certification (DNV) Finally and equally important, the Business Summit made it possible to network by renewing relationships with old friends and colleagues as well as forming new business relationships. The Norway-Asia Business Summit 2011 would not have been possible without the dedicated team from Norwegian Business Association Singapore who did an excellent job of putting it all together.

Per M. Ristvedt, Managing Partner at Wikborg & Rein in Singapore talked about why Norwegians are not the world’s most effective negotiators. He believes that Norwegians need to adjust their ambition level to become more effective negotiators. His clear cut advice was to read up, to select good negotiators, and to prepare well, set ambition levels, to apply a team approach and finally to dress better and look the part. His final advice was to go back and evaluate the negotiation against one’s own ambition level every time. On a lighter note, Fredrik Hären, Founder of interesting.org addressed creativity in both organisations and on a national level. He gave plenty of very visible examples. Talking about developing countries versus developed countries, he discussed if developed countries like Norway were “done” and as a consequence people no longer had ambition to develop the country and learn from others. He summed up by encouraging Norwegian companies to adopt global values rather than Norwegian values; to have a global mindset and simply to choose the best people. On Friday night, the participants were invited to a beautiful and spirited live performance by the Norwegian artists, Helene Bøksle and Sindre Hotvedt on piano sponsored by the Telenor Culture Programme.

Hilde Tonne, Deputy head of Telenor Asia and Gunn Ovesen, CEO, Innovation Norway

Thai-Norwegian Business Review

41


Impact of new NACC Reporting R By Yingyong Karnchanapayap, Attorney-at-Law, Tilleke & Gibbins

also be subject to the disclosure requirement under the Notification.

A

If full payment under a contract is completed within a single accounting period (for juristic entities) or tax year (for individuals), the revenue and expense accounts shall be filed for that accounting period or tax year. If full payment under a contract is not completed within a single accounting period or tax year (for individuals), the revenue and expense accounts consisting of revenue and expenses arising in each accounting period shall be filed for that accounting period. The reporting requirement will commence from the date that the contracts are executed and will continue until the completion of obligations under the contract—meaning that businesses and individuals will still be required to report their revenue and expense accounts of the project during the warranty period.

recent notification by the National AntiCorruption Commission (NACC) is set to have a significant impact on companies that do business with the Thai government. On 11 August, 2011, the NACC issued the Notification regarding Rules and Procedures Concerning the Preparation and Disclosure of Revenue and Expenses Accounts of Projects which Individuals or Juristic Entities are Contractual Parties with Government Agencies (Notification). Pursuant to the Notification, effective 1 January, 2012, private sector entities entering into procurement contracts with government agencies will be required to prepare and electronically submit revenue and expense accounts to the Revenue Department every year, together with their Corporate Income Tax Return (for juristic entities) or Personal Income Tax Return (for individuals). The Notification will significantly impact entities in the private sector that enter into government procurement contracts, including individuals, Thai companies, and foreign companies with a local presence. The definition of “government agencies” is quite broad and includes majority state-owned enterprises such as Krung Thai Bank PLC, PTT PLC, and so forth. Importantly, the threshold for reporting is quite low— all government procurement contracts that have a value of THB 500,000 or more will be subject to the disclosure requirement. Businesses and individuals will also be required to submit one revenue and expense account for each contract and to keep supporting documents for at least five years. (However, if there is an investigation on incorrect disclosure or corrupt activities, supporting documents must be kept until the investigation is completed.) The Notification further requires that government agencies must set a condition that businesses and individuals entering into procurement contracts must receive and make payment via a current account, except for payments not exceeding THB 30,000, which can be made in cash. Government contracts executed before 1 January, 2012, will not be subject to this new disclosure requirement. However, if any material amendments are made to such contracts on or after 1 January, 2012, they will

42

Thai-Norwegian Chamber of Commerce

Although failure to comply with the new disclosure requirement does not entail criminal penalties, the sanction imposed under the Notification is commercially severe: violators will be disqualified from entering into new procurement contracts with government agencies. In addition, failure to comply with the reporting requirement or incorrect reporting could result in scrutiny by the NACC, Revenue Department, and other relevant government authorities. Aimed at curbing corruption, the revenue and expense reporting form (Form Bor Chor.1) requires businesses and individuals that enter into government procurement contracts to provide detailed information of each procurement contract, including the cost of sales or expenses, manufacturing costs, and selling and administrative expenses (which cover certain items such as personnel expenses, utilities expenses, and directors’ remuneration not specifically incurred under any particular contract). At this stage, it is still unclear whether and how these expenses will have to be allocated to each government procurement contract for the purpose of reporting revenue and expense accounts. The new reporting requirement will place a substantial burden upon the private sector because it requires a separate detailed report for each contract, and the threshold of contract value subject to the reporting requirement is set at only THB 500,000. (The NACC has explained that this threshold was set in accordance


Requirement on Private Sector with the existing requirement that government agencies are currently required to report contracts having a value of THB 500,000 or more to the Comptroller General’s Department.) Given that a business may enter into hundreds or thousands of contracts with government agencies each year, one can see the considerable impact that this new requirement will have on the private sector. The new measure will increase operating costs for preparing revenue and expense accounts, and businesses and individuals will be obliged to take such additional expenses into account when bidding for or entering into procurement contracts. On the other hand, those not wishing to be involved with complicated reporting may refrain from bidding or entering into government procurement contracts, which could effectively limit competition.

The new requirement could also divert regulators’ attention from larger cases of corruption, as the NACC and Revenue Department will be flooded with information due to the relatively low value of contract threshold. Thus, it remains to be seen whether this new measure will be effective in addressing major corruption in Thailand.

An earlier version of this article was first published in the Bangkok Post on 7 October, 2011. Please send comments or questions to Andrew Stoutley at andrew.s@tillekeandgibbins.com.

Find one Private Banking advisor, then make sure he knows many specialists Wealth management today involves much more than selecting the best stocks and bonds. At Nordea Private Banking, we offer you an experienced personal advisor and a comprehensive overview of your wealth based on thorough research and rigorous analysis. One private banker, many specialists – making it possible.

Contact Nordea in Singapore on +65 9725 4523, or e-mail ingemar.andersson@nordea.com

Ingemar Andersson, Private Banker

Nordea Bank S.A, Nordea Bank Finland Plc and Nordea Bank AB (publ) are part of the leading financial services group in the Nordic and Baltic Sea regions. Being the leading Nordic pan-European banking entity in Luxembourg, Nordea Bank S.A. focuses on international Wealth Management, Fund Distribution and Fund Management services. Our 400 employees serve a wide spectrum of international clients in more than 125 countries. Some products and services mentioned may, due to local regulations, not be available to individuals resident in certain countries. Published by Nordea Bank Finland Plc, Singapore Branch, 3 Anson Rd #22-01, Springleaf Tower, Singapore 079909. www.nordeaprivatebanking.com


Polar Norway

T

o celebrate the 100 year anniversary for Roald Amundsen’s arrival at the South Pole on 14 December 1911, the Norwegian Embassy in Bangkok in cooperation with the National Science Museum of Thailand will arrange a Polar Exhibition at the Science Museum’s downtown facilities at the 4th floor of Chamchuri Square. The exhibition will consist of three parts:

• A polar exhibition created by the Norwegian Polar Institute that has been travelling the world for 5 years. • An environmental exhibition created by the National Science Museum of Thailand with special focus on the polar areas. • Technologies developed by Norwegian companies enabling better protection of the environment locally as well as around the globe. Special emphasis will be put on showing how climates in all parts of the world are interlinked and have mutual influence on each other. The exhibition will be open until mid February. Norway has a long history in the Polar Regions. Not only do Norwegians live closer to the North Pole than most other humans, they have also been travelling to both the Arctic and the Antarctic for more than one hundred years. Today, Norway is the only country in the world that both has territories in the Arctic and maintains territorial claims in the Antarctic. This year it is exactly 100 years since the Norwegian adventurer Roald Amundsen and his team became the first humans to ever reach the South Pole. It is also 150 years since the birth of the Norwegian polar explorer, scientist, diplomat, international humanist and celebrity Fridtjof Nansen, who in March of 1895 came closer to

44

Thai-Norwegian Chamber of Commerce

the North Pole than anyone had previously been. These Norwegian Polar heroes have played an important part in developing Norway’s identity as a polar nation. Climate Change The Arctic is experiencing some of the most rapid and severe effects of climate change in the world, and the rate and severity of these changes is expected to increase. Melting ice in the arctic will affect the rest of the planet through increased global warming and rising sea levels. Changes in the Arctic will also affect the weather and ecosystems all over the globe. Heat radiation from the earth is trapped by greenhouse gases in the atmosphere, and the amount of these gases is increasing due to human emissions. This causes an increased average temperature and changes in the climatic situation. Annual average temperature in the Arctic has increased about twice as much as the global average the last decades. As the ice melts, more water is being added to the ocean, contributing to global sea level rise. Due to reductions and changes in sea ice, animals will also encounter difficulties. The sea ice extent in the Arctic has shrunk by almost 40 per cent since 1979, causing the polar bear to lose a significant area of its habitat. Polar Research The Arctic offers front row seat in the global theatre of climate change. The region is therefore very important for climate change research. The foundation for the Norwegian Polar Institute was laid by an expedition in 1906. In this period, the scientific focus was on geography and oceanography, and in particular on mapping the polar regions. Polar research has gradually turned more towards the climate, biology and hazardous chemicals. This type of research is based on international cooperation. The research community established at Ny-Ålesund on Svalbard (an archipelago


Roald Amundsen in full polar attire


Continue from page 45

situated on 79°N between the Norwegian mainland and the North Pole) has become a meeting place for polar scientists from such countries as Japan, China, Korea, France, Germany, Italy and the UK. New Opportunities There are important renewable and non-renewable resources in the Arctic. The prospect of developing the Arctic petroleum province is perhaps the main reason for the increased interest in the Arctic over the last few years. Some estimates indicate that the region may have significant petroleum deposits – perhaps more than 20% of the world’s total undiscovered resources. The melting of the ice is also opening up new opportunities for international shipping. For countries that are particularly dependent on imports and exports, the prospects of new shipping lanes in the Arctic are naturally of great interest. There may be substantial commercial benefits. The journey from Shanghai to Hamburg via the Northern Sea Route is 6 400 kilometres shorter than the route via the Strait of Malacca and the Suez Canal – saving time, fuel and money. The northern route also avoids bottlenecks like the Suez and Panama canals, and the security risks in the Gulf of Aden. However, there are substantial costs and difficult geographic challenges linked to Arctic shipping. This

46

Thai-Norwegian Chamber of Commerce

means that regular commercial, cost-effective logistics will be difficult, at least in the near future. The Arctic and the Antarctic The Antarctic is the highest and driest continent in the world and is 40 times larger than Norway. An ice cap covers 98 per cent of the Antarctic and accounts for over 90 per cent of all land ice in the world. The ice is up to 4776 metres thick. The lowest temperature recorded is minus 89.2º C. Seven countries have territorial claims in the Antarctic. These claims have been frozen in the Antarctic Treaty, and today the continent is dedicated to peace and research. Many countries have research stations in the Antarctic. There has been a permanent base at the South Pole since 1957. As many as 4000 people live at the research stations in the summer. While the Antarctic is a land mass surrounded by oceans, the Arctic is an ocean surrounded by national states with sovereign rights to sea areas off their coasts in accordance with international law. The five Arctic Ocean coastal states – Canada, Denmark/Greenland, Norway, Russia and the US – enjoy sovereign rights and have jurisdiction over maritime zones and continental shelves to the Arctic Ocean in the same way as it applies to any other sea area.


Thailand’s EconomyatataaGlance Glance Thailand’s Economy

60

6

40

4

20

2

-

0

0

2

4

Thai Consumer Price Index

Thai GDP Growth (%) 10.0

6

8.0

5

6.0

4 3

4.0

2

2.0

1 May11 Jun11 Jul11 Aug11 Sep11 Oct11

0 2006 2007 2008 2009 2010 2011p

Q3/11

Q2/11

Q1/11

Q4/11

-4.0

2011p

2010

2009

0.0

-1 -2

Stock Exchange Index (SET)

Exchange Rates 7.00

1,200 1,100 1,000 900 800 700 600 500 400

6.50

THB/NOK

6.00 5.50 5.00

Manufacturing Index

1109

1106

1103

1012

1009

1006

1003

0912

0909

0906

4.50

Bilateral trade 2010

2000=100

Import 1,175 (847) MNOK Export 2,284 (1,950) MNOK

600

220 400

200

200

180

Thai-Norwegian Chamber of Commerce

Thai-Norwegian Business Review

Computers

Clothing

Cars

Electronics

Sep11

Jul11

Aug11

Jun11

May11

Apr11

2010

2009

2008

2007

2006

140 Basic Figures: BOI. Comparisons: Wikipedia. GDP/Capita and Thai Population: Wikipedia/IMF. Thai GDP and CPI: Bank of Thailand. Quarterly GDP: NESDB. SET: Stock Exchange of Thailand. Exchange Rate THB/NOK: x-rates.com. Manufacturing Production Index: Thailand’s Ministry of Commerce. Bilateral Trade: Statistics Norway. Petrol and BigMac prices as of 23 November 2011

Food

0

160

Sources:

Misc. mauf

6.20 14.20 13.04 40.00

-2

Paper

Other bits and pieces Petrol/litre (95 E10) NOK: TH Petrol/litre (95 Octane) NOK: NO McDonald BigMac price NOK: TH McDonald BigMac price NOK: NO

-4

Mill

Fish

67.0 mill 4.9 mill 9,100,000 586,860 71/75 78/82

Female

0903

2

Male

Chemicals

2

80+ 70-74 60-64 50-54 40-44 30-34 20-24 10-14 0-4

0501 0507 0601 0607 0701 0707 0801 0807 0901 0907 1001 1007 1101 1107

Geography Geographic Area: TH 514,000 sq. km Geographic Area NO: 385,199 sq. km Highest peak TH: Doi Inthanon 2,565 m Highest peak NO: Galdhøpiggen 2,469 m Inland water areas TH: 2,230 km Inland water areas NO: 16,360 km Coastline TH: 3,219 km Coastline NO: 25,148 km

MY TH CN ID PH VN IN LA KH MM

8

-2.0

Some comparisons

Demographics Population TH: Population NO: Population Bangkok: Population Oslo: Life expectancy M/F TH: Life expectancy M/F NO:

80

2008

Top 10 Exports Jan-Jun11%/value USD bill EDP equipment 7.9%/9.1 Cars and automotive 7.6%/8.7 Precious stones/jewellery 5.7%/6.6 Rubber 5.6%/6.5 Polymers etc. 3.9%/4.5 Chemical products 3.6%/4.1 Electronic integrated circuits 3.6%/4.1 Rubber products 3.5%/4.0 Refined fuels 3.4%/3.9 Rice 3.0%/3.5

10

2007

10-30% 10-15% 7% 0-37%

Thai Population 2010

100

US NO SG KE TW

Corporate income Tax Withholding Tax Value Added Tax Personal income Tax

GDP/Capita 2010 (TUSD)

2006

Export Growth 2010 28.5% Export Growth 2011 projected 12.5% Trade Balance (2010) USD 14.0 bill Current Account Bal. (2010) USD 14.8 bill International Reserves (2010) USD 172.1 bill Minimum wage (Bangkok) Baht 215/day

Engineering

Basic Figures Thailand (2010)

47


Bangkok Office: 10th Floor Vibulthani Tower 1, 3195/15 Rama 4 Road, Klongton, Klongtoey, Bangkok 10110 Thailand Tel: +66 2 661 3486 Fax: +66 2 661 4385

Deadline for the next issue is 1. February 2012: director@norcham.com

torpong-t@papcothai.com www.norskeskog.com

Mill Location: 64/3 Moo 3, Asian Highway, Phokruam Amphur Muang, Singburi 16000 Thailand Tel: + 66 3 653 111 Fax: +66 3 653 1100


An employer of thousands. Built around equality, opportunity and people like us. At Telenor Group, we believe that being at the forefront of telecommunications isn’t just about technology. It’s about people. And whether those people are customers or employees, we always ask ourselves this simple question; ‘does this fulfill the needs of people?’ That’s why we have invested resources and time in developing new ways of working, creating new structures that dismantle the barriers and hierarchies of the past and replace them with freedom, openness and opportunity. We know that as we have grown internationally, our employees remain our most precious asset and we aim to help them realize and fulfill their ambitions and potential as individuals and as groups. Wherever they are based. To find out more about how the Telenor Group works hard at being ‘built around people,’ please visit www.telenor.com

This advertisement features Telenor Group employees

Telenor Group is a global provider of high quality telecom services with operations in 13 markets around the world. To find out more about how we put people at the heart of our business, visit www.telenor.com Telenor Group has telecom operations in these countries: Norway, Denmark, Sweden, Hungary, Montenegro, Serbia, Ukraine, Russia, Pakistan, Bangladesh, Thailand, Malaysia, India.

Telenor Group Asia:


expecting hidden fees? sorry to disappoint you Bangkok

From

| 38145 copenhagenB | 38805 stockholmB | 38705 osloB | 38620 helsinkiB | 38705 BergenB | 38720 gothenBurgB | 38705 staVangerB

To Scandinavia with SAS No hidden fees Fares include taxes and surcharges. Free 23 KG baggage Free online check-in

www.flysas.com/th Roundtrip fare in THB. Prices may differ due to availability, currency fluctuations and route variations at the time of booking. Conditions apply.


Tnbr201103web pages