Advance August 2014

A MONTHLY PUBLICATION OF THE AUSTRALIAN-THAI CHAMBER OF COMMERCE IN PARTNERSHIP WITH THE AUSTRALIA THAILAND BUSINESS COUNCIL www.austchamthailand.com August 2014

Deciphering the Middle-Income Trap in this edition

Profiling Phuket’s Travel and Tourism Industry Business brief Business brief Thailand’s new investment promotion 15 Great Ways to Innovate strategy – a step in the right direction

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chamber events Creative and Cultural Brand Development

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chamber events AustralianAlumni Annual Gala Dinner at Grand Hyatt Erawan Bangkok

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specialist mortgage

specialist mortgage

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Contents PATRON His Excellency James Wise Australian Ambassador to the Kingdom of Thailand PRESIDENT Leigh Scott-Kemmis Lee Hecht Harrison / DBM (Thailand) Ltd VICE PRESIDENTS M.L. Laksasubha Kridakon Baan Laksasubha Resort Hua Hin

6 business briefs 6 Deciphering the Middle-Income Trap 8 Thailand’s new investment promotion strategy – a step in the right direction 12 15 Great Ways to Innovate

Australian Business Forum 14 Profiling Phuket’s Travel and Tourism Industry

Sam McMahon NS BlueScope Steel (Thailand) Limited TREASURER Warwick Kneale Baker Tilly Corporate Advisory Services (Thailand) Limited DIRECTORS Shane Burt CEVA Logistics (Thailand) Ltd Josh Hyland AEC South East Asia

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Angus Kent Macquarie Securities Thailand Limited | Macquarie Group Limited Alan Polivnick Watson, Farley & Williams Rananda Rich Blackmores Ltd Simon Shale Visy Packaging (Thailand) Ltd & Visy Industries Wayne Williams Minor International Charles Wrightman Natural Ville

22 community services 16 Voluntary English Teaching, Wat Phra Patharnporn School, Sri Ra Cha chamber events 18 In recognition of NADOC week: Creative and Cultural Brand Development 20 AustralianAlumni Annual Gala Dinner

EX-OFFICIO Greg Wallis Australian Trade Commission

22 Stars and Stripes Bangkok Sundowners

AUSTCHAM MEMBERS 24 AustCham Welcomes New Members

From the Chamber Office 26 Message from the Executive Director

HONORARY ADVISOR TO THE BOARD David Armstrong ADVISORS TO THE BOARD Raine Grady Capital TV Chris Larkin CLC Asia

From the Board

COORDINATORS Paul Wilkinson Cooper International Engineering & Services Co., Ltd ESB Coordinator Email: paul.wi@cies-group.com Trevor Dick Indochine Asset Managmenet ESB Coordinator Email: trevor@indochine-asset.com Harry Usher Lady Pie Phuket Coordinator Email: Phuket@austchamthailand.com Australian-Thai Chamber of Commerce 20th Floor, Thai CC Tower 889 South Sathorn Road Bangkok 10120 Tel.: +66 2 210 0216 Fax: +66 2 675 6696 office@austchamthailand.com www.austchamthailand.com For more information on individual Board Member focus please visit www.austchamthailand.com/ boardmembers

Editorial Committee Rananda Rich, Janna De Vos, Gary Woollacott Marketing & Production Scand-Media Corp. Ltd 4/41-42 Moo 3, Thanyakarn Village Ramintra Soi 14, Bangkok Tel.: +66 2 943-7166/8 Fax: +66 2 943-7169 scandmedia@scandmedia.com Advertising Finn Balslev Email: finn@scandmedia.com Contributions to Advance magazine are welcome. Please submit content to communications@austchamthailand.com.

Opinions expressed in Advance do not necessarily reflect the views of the Chamber.

AustChamThailand Advance

President’s Message

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hese days we are hardly ever short of things to keep us focused and alert. In Thailand, the plan for future governance is slowly emerging, and as it does so, it is important that we all pick up on the pending possibilities. To help us understand Thailand’s plan, two key economic advisers to the NCPO, Mr Pridiyathorn Devakula and Dr Narongchai Akrasanee, presented their views on the economic impact of recent political developments and the possible future direction of the Thai economy.

Their presentations are available from the following links: http://www.youtube.com/watch?v=DE y_8AZwPD4&feature=youtu.be). http://www.nesdb.go.th/Portals/0/ news/academic/Executive%20 Summary%20of%2011th%20Plan.pdf Both Mr Pridiyathorn and Dr Narongchai recognise that the growth in manufacturing that has been averaging in excess of 8% pa for the last fifteen years will unlikely provide the lead in moving forward. Manufacturing will still grow, but not enough to take Thailand out of the middle income trap.

New areas of growth are needed.The recent AustCham /Australian Embassy conference on the middle-income trap was very timely in highlighting the challenges and possible strategies in escaping the trap.

Digitization seems to be the buzz word when talking about the new growth focus and the policy settings and framework necessary to impact productivity and growth. The recent delay in the 4G actions is about making sure all of Thailand can benefit and participate in this so called digitization – an area I suggest that we keep a focus on.

There is also a focus on leveraging Thailand’s regional position and role with specific attention towards adjoining countries. The establishment of boarder zones and supporting infrastructure is part of the drive for development outside of Bangkok and

the Eastern Seaboard, a trend to be watched.

For all of this to work,the service sectors will need to play a far larger role in Thailand’s future economic and productivity growth.Reforming the policy and legal framework for this to happen is critical. Let’s see what happens, but without an open and vibrant service sector escaping the middle-income trap will be extremely hard.

We are working with other Chambers in putting our collective views and recommendations for the economic advancement of Thailand forward to the NCPO. We will talk more about these ideas at the member briefings prior to Sundowners.

The new Australian Business Forum Express, which builds on the grant driven ABF’s, got off to a great start with interesting insights in working with the Thai civil service from Chris Larkin and Trevor Bull. The ABF Express is designed to allow our members to have aces to a range of ideas and experiences and for members to bring forward ideas and knowledge and experience that can benefit other members.

Talking of the Grant, congratulations to Renee, the Office team and the Board members who worked on the submission. Also a special thank you to Austrade and the Embassy for supporting AustCham with this initiative.

This is a super outcome that will lead to real value for AustCham members through great insights in access to supply chains and networks. More on this will come from Renee over the coming months.

Leigh Scott-Kemmis President, AustCham Thailand www.austchamthailand.com

August 2014

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business brief

Deciphering the MiddleIncome Trap

By Janna De Vos

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f you follow our LinkedIn posts or attended our conference in June, you will already have a thorough understanding of the middle-income trap concept and how it applies to Thailand. For those who are still a little unsure, the concept is actually quite simple.

What is it?

The “middle-income trap” (MIT) describes a situation in which an undeveloped low-income country has successfully lifted its economy to middle-income status but lacks the necessary innovation, technological advancements and economic vigour to progress to a high-income country. In this trap, the country is unable to compete with both low-income economies that thrive on cheap labour and high-income economies that are highly productive and pioneering.

In recent years, the concept has been used to describe Thailand’s development trajectory. In the late 1980s and 1990s, the Thai economy developed at an exponential rate. Since the economic crisis in 1997 however, growth rates have dropped persistently, only realizing medium-term growth (as measured by an 11-year moving average of annual growth rates) of about four per cent. This is a drastic decrease from the approximately eight per cent Thailand achieved previously.

Volatile and persistently low growth rates indicate fundamental problems within Thailand’s economy and suggest that it may be falling into a middle-income trap.

Why is it a problem?

The MIT is likely to have considerable long-term economic, political and social implications, which will eventually transpire into the business community. In the short-term, however, the impact on businesses is actually quite small, and could even be regarded as positive! This is particularly true for large corporations who are able to import technology and knowledge from oversea affiliates. In the short-run, these companies reap the benefits of innovation, technology and relatively cheap labour without facing much competition from domestic firms who lag in expertise and technical know-how.

In the longer-term, however – about 10 to 15 years from now – the burden of the MIT will become real. The combination

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of a lack of innovation, low investment in technology, underdeveloped infrastructure, lack of skilled labour, rising labour costs with stagnant productivity and ineffectual institutions, is likely to make the economy highly unconducive to business. As a result, the Thai economy and the average business will experience a weakening in total productivity growth and global competitiveness. Even international businesses will start to feel the pressure as the opportunity cost of operating in Thailand versus operating in a cheaper or highervalue economy rises.

Aside from the direct impact on businesses, the MIT also has considerable social and political implications. In the past decade, growth in Thailand has been highly centralised among the rich minority. Education, too, has been centralised and fragmented across the country. As we have seen in recurring and recent events, such inequalities foster political and social instability as well as deter investments into the country.

What should be done?

Thailand’s recent sluggish economic performance suggests that its traditional export-heavy and cheap labour-focused growth strategies have lost momentum and are unlikely to push Thailand beyond the MIT. Instead, Thailand should embrace inclusive growth strategies that promote higher labour productivity, innovation, and infrastructure development while at the same time reducing poverty and compressing inequality of incomes and opportunities.

In such strategies, education and training are key. The first step is to eliminate illiteracy, followed by improvements in progression rates to secondary education and increasing both stock and flow of tertiary graduates, especially in technical areas. Improving the quality and availability of education across the whole country will not only improve the quality of the Thai labour force, but also tackle social immobility – a significant structural barrier to growth in Thailand.

In the absence of agreed and consensual reforms to accelerate productivity, Thailand will remain highly volatile.

AustChamThailand Advance

business brief

Somkiat Anuras, Vice-Chairman of the Thai Chamber of Commerce and Chairman of the Committee on Reducing Inequality

Dr Narongchai Akrasanee, former Minister of Commerce and Senator of Thailand

Peter Michener, Vice President of Business Development at Mitr Phol Group

Education and training should also lead to greater innovation.

But, this is not always the case. Private sector incentives and Government transfer payments are necessary to further drive innovation and productivity. For example, private sector training programmes and schemes can have significant impact on labour productivity. As more and more firms introduce training, benefits trickle down through the economy. Similarly, benefits from knowledge and technology transfers from overseas can spread beyond individual companies if and when the transfers are appropriate and accessible to local producers.

Investing in infrastructure is equally important to promote growth. Successful progression involves high and consistent investments into a country’s fixed assets such as land improvements, machinery, construction of roads and rail-

AustChamThailand Advance

Peetachai Dejkraisak, CEO of Siam Organic

ways, and public buildings such as schools, offices, hospitals, housing and industrial areas.

Thailand also requires better business and transparency ratings as well as reduced corruption. Its political institutions are in need of reform and must become legitimate in the eyes of the Thai people. In the absence of agreed and consensual reforms to accelerate productivity, Thailand will remain highly volatile.

Moving beyond the MIT is not just about one solution within one industry or by one entity. Rather, it requires sustainable commitment by all organisations operating across and within public and private sectors alike. A collective and calculated effort has the best likelihood that Thailand will break through the MIT to become a highly competitive and dynamic economy.

August 2014

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business brief

Thailand’s new investment promotion strategy – a step in the right direction

by Mark Jayasinghe

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ver the past 60 years Thailand has grown significantly through various strategic initiatives (starting with the Industrial Promotion Act of 1954) that have culminated in it being classified as an ‘upper-middle income’ economy by the World Bank in 2011.

We have generally seen good but not stellar growth rates through those years (bar the blips which were seen through events such as the financial crisis of 1997) although it is notable that in more recent times rates have been lower than in the late 1980s and early 1990s. It has been proposed by many (including the Thai Board of Investment) that Thailand is caught in a middle income trap and will need to address a number of structural inadequacies in order to enable it to move onwards and upwards.

In an attempt to address this issue, the Thai BOI drafted a new investment promotion strategy that was due to be approved in January of this year. Recent political tensions unfortunately limited the powers of the BOI at that time and delayed any approval. Although we now have a newly appointed board, the draft will need to be considered with a fresh set of eyes that are no doubt busy clearing the current backlog of BOI applications. Hence further delays in approval should be anticipated.

The draft attempts to move promotion incentives from a more simplistic and broad sector based incentive scheme to a more focused one which looks to prioritise certain activities. These could be seen as either ‘value adding’ or bringing technological advancements to Thailand as well as some other identified goals such as promoting green industries and/or sustainable growth.

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As before there are seven categories of activities that are eligible for promotion: (i) agriculture and agro-industries; (ii) mining, ceramics and basic metals; (iii) light industry; (iv) metal products, machinery and transport equipment; (v) electronics and electrical appliances; (vi) chemicals, paper and plastics; and (vii) services and public utilities. However a significant number of activities within these categories have been deleted from the current list of eligible activities (approximately 80 activities have been earmarked for exit).

In general the activities that are being exited are considered to be: (i) low value-adding, low tech or have low complexity in the production process, such as consumer plastic products and paper articles; (ii) are labour intensive or have low linkages with other industries or are what are referred to as common businesses such as primary rubber and hydroponic cultivation (iii) are subject to environmental issues such as high energy consumption in the production process; or (iv) are subject to other issues, such as being a concession activity, e.g., hospitals.

In addition to excluding numerous activities, the new proposals include dividing incentives available to the remaining eligible activities into eight different categories ranging from category A1*, which enjoys the most generous corporate income tax benefits of eight years CIT exemption (with no cap), down to category B4 which benefit only from non-tax incentives. There are a total of 10 A1* promoted activities (eight of these being in the services category and two being in electronics). These are activities that are considered to be of great importance to the country’s economic restructur-

ing and therefore need to be granted CIT exemptions to stimulate increased investment in these sectors.

Companies categorised as carrying out the following activities – (i) biotechnology, (ii) energy service companies, (iii) research and development, (iv) scientific labs, (v) calibration services, (vi) engineering design, (vii) technological estates and zones, (viii) vocational training centres, (ix) electronic design, and (x) manufacture of embedded software – will therefore enjoy maximum BOI/CIT incentives.

This list of activities clearly shows the direction that the country is trying to take in its bid to move away from being considered a low labour cost base of operations to being a value adding, creative and innovative country which is able to compete with its knowledge base and high-level skills.

We have seen other countries in the region achieve similar goals, South Korea and Singapore being excellent examples. In the case of South Korea, GNI per capita in the 1960s was in fact lower than that of Thailand’s. In 1968 the two counties were exactly equal (USD 180). But from then on their paths have diverged to such an extent that South Korea’s is now more than four times greater than that of Thailand’s (2012: South Korea USD 22,670 vs. Thailand USD 5,210, based on World Bank data).

Korea (perhaps the more comparable country of the two) has achieved this success partly through a series of five year economic plans which begun in 1962. It is easy to see that Thailand is attempting to replicate this type of success perhaps through a series of similar programs (the current changes are AustChamThailand Advance

business brief

being billed as a ‘Five-Year Investment Promotion Strategy’).

It is important to note, however, that Korea’s success is the result of a number of policies, not just one in isolation. Another key to the Korean success story has been an educated and extremely hardworking workforce.

When it comes to education Korea tops many of the global measure tables. For instance 98 per cent of 25 to 34 year olds have attained at least upper secondary education (ranked number 1 in the OECD per OECD Education Indicators 2011). Another number 1 OECD ranking is obtained for the percentage of 25 to 34 year olds that have attained tertiary education with and incredible 64 per cent of the population achieving this status compared to the OECD average of just 39 per cent.

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Despite this ranking, it is easy to see that this is in fact quite a recent phenomenon. With regards to the older population, the date shows that Korea is still some way behind OECD averages for those same measures. This stark contrast should fill emerging nations with hope as it seems to show that if the right policies are implemented there is indeed hope and a definite possibility of raising the status of the nation to higher and higher levels.

It is certain that changes are needed and the draft proposals would appear to be a step in the right direction. However, it is also certain that it will take more than a revised set of BOI incentives to drive through the types of changes that will be needed for Thailand to continue to progress. Amongst other things, educational reforms, further progress on income inequality and

political stability will also be needed to see Thailand’s continued progress both in the region and on the world stage.

It has recently been announced that the National Council for Peace and Order are drafting the next Five-Year National Economic and Social Development Plan.

I for one hope that they will consider the lessons to be learnt from the past, as well as lessons from others in the Region to help formulate a comprehensive and cohesive plan that will see Thailand continue to move onwards and upwards.

Mark Jayasinghe is a member of the Institute of Chartered Accountants in England & Wales and works at BDO Advisory Thailand, specialising in corporate and international tax.

AustChamThailand Advance

Eric Kenso Ward, ISB Class of 1979

International School Bangkok Bringing out the superhero in each of us since 1951. www.isb.ac.th

business brief

15 Great Ways to Innovate

By Paul Sloane

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ow hard is it to innovate? Not once but over and over?

How can you repeatedly implement great new products, processes or services? Continuous innovation is not easy and if you keep using the same method you will experience diminishing results. Try innovating how you innovate by employing some of the following ideas.

1. Look around for ideas. One of the best ways to innovate is to pinch an idea that works elsewhere and apply it in your business. Henry Ford saw the production line working in a meat packing plant and then applied it to the automobile industry thereby dramatically reducing assembly times and costs.

2. Ask customers. If you simply ask your customers how you could improve your product or service they will give you plenty of ideas for incremental innovations. Typically they will ask for new features or that you make your product cheaper, faster, easier to use, available in different styles and colours etc. Listen to these requests carefully and choose the ones that will really pay back.

3. Observe customers. Do not just ask them, watch them. Try to see how customers use your products. Do they use them in new ways? This was what Levi Strauss saw when they found that customers ripped the jeans – so they brought out a line of pre-ripped jeans. Heinz noticed that people stored their sauce jars upside down so they designed an upside down bottle.

4. Use difficulties and complaints. If customers have difficulties with any aspect of using your product or if they register complaints then you have a strong starting point for innovations. Make your product easier to use, eliminate the current inconveniences and introduce improvements that overcome the complaints.

5. Ask your staff. Challenge the people who work in the business to find new and better ways to do things and new and better ways to please customers. They are close to the action and can see opportunities for innovation. Often they just need encouragement to bring forward great ideas.

6. Plan. Include targets for new products and services in your business plan. Put it onto the balanced scorecard. Write innovation into everyone’s objectives. Measure it and it will happen 7. Run brainstorms. Have regular brainstorming meetings where you generate a large quantity of new product ideas.

Use diverse groups from different areas of the business and include a provocative outsider e.g. a customer or supplier.

8. Collaborate. Work with another company who can take you to places you can’t go. Choose a partner with a similar philosophy but different skills. That is what Mercedes did with Swatch when they came up with the Smart car.

9. Minimize or maximize. Take something that is standard in the industry and minimise or maximise it. Ryanair minimized price and customer service. Starbucks maximised price

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and customer experience. It is better to be different than to be better.

10. Run a contest. Ask members of the public to suggest great new product ideas. Offer a prize. Give people a clear focussed goal and they will surprise you with novel ideas.

Good for innovation and PR. 11. Ask – what if? Do some lateral thinking by asking what if…..? Challenge every boundary and assumption that applies in your field. You and your group will come up with amazing ideas once the normal constraints are lifted.

12. Outsource. Subcontract your new product development challenge to a design company, a University, a start-up or a crowdsourcing site.

13. Use open innovation. Big consumer products companies like Proctor and Gamble or Reckitt Benckiser encourage developers to bring novel products to them. They are flexible on IP protection and give a clear focus on what they are looking for. A large proportion of their new products now start life outside the company.

14. Go back in time. Look back at methods and services that were used in your sector years ago but have now fallen out of use. Can you bring one back in a new updated form? It has been said that Speed Dating is really a relaunch of a Victorian dance format where ladies had cards marked with appointments.

15. Use social networks. Follow trends and ask questions on groups like Twitter or Facebook. Ask what people want to see in future products or what the big new idea will be.

Many early adopters are active on social network groups and will happily respond with suggestions.

The ways to innovate are legion. Try some approaches that are new to you in order to boost your innovation capability.

Paul Sloane is the head of the BQF Innovation Unit, UK. His website is http://www.destination-innovation.com/. His new book, The Innovative Leader, is published by Kogan Page.

AustChamThailand Advance

Australian business forum

Profiling Phuket’s Travel and Tourism Industry

stay longer from one to two weeks. Asian visitors stay for a shorter period of five days” said Mr Langdon. The growth in Asian visitors has thus had an length of time hotels can expect to host their visitors. This has not had a nega the overall hotel market however. In 2013 the hotel market experienced stea

By Janna De Vos steady growth with occupancy being about 74 occupancy being about experienced 74 per cent along with an Average Daily Rate (ADR per cent along with an Average Daily Rate (ADR) of THB hailand’s recent political unrest took strong its toll on performance the Thai 4,113.is “The strong performance primarily driven bygrowth the “The primarily driven by is the continual in travel and tourism industry. Between January and continual growth in the number of international visitors” said international visitors” sMr aid Langdon.

Mr Langdon.

May 2014, the number of foreign visitors to Thailand

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plummeted by over 500 thousand while hotel occupancy dropped nearly 15 per cent. Particularly Bangkok took a hit, with May occupancy being 18 per cent lower than the previous year.

Despite this, not all of Thailand’s travel destinations have suffered. Phuket, one of the most popular tourist destinations in the country, experienced a surge in international visitors with many travellers bypassing Bangkok and heading straight to resort destinations. As a result, the hotel market in Phuket has been doing well. New hotel developments continue to attract investors, and room supply is expected to increase significantly in the following years.

Speaking at the second Australian Business Forum (ABF) in Phuket, Mr Andrew Langdon, Executive Vice President (Thailand and Indochina) at JLLRoom Hotels supply and Hospitality Room has supply on the island has also expanded consistently on the island also expanded consistently over past years.

Group, explored Phuket’s travel and tourism industry. In his over past years. A total of 555 rooms have opened in the rooms opened the first ofquarter 2014 and rooms a further 5,137 room presentation, Mr Langdon identified trends,have examined the in first quarter 2014 and of a further 5,137 will become market and subsequently analysedavailable industry investment and now available betweenMost now and 2016.additional Most of the supply additionalis in the between and 2016. of the sales. supply is in the midscale and upscale categories. upscale categories.

Starting with tourist statistics, Mr Langdon showed how Investment into the industry is also bouncing back after the the number of international tourists traveling to Phuket has 2008 financial crisis. In 2013, Phuket led hotel investment Investment into the industry is also bouncing back after the 2008 financial increased over the past decade. Visitors from China and within Thailand with 57.9 per cent (THB 5.9 billion) of total Russia in particular have become more attracted to Phuket investment going into its market.

This compares 21.4 per Phuket led hotel investment within Thailand with 57.9 per tocent (THB 5.9 as a holiday destination. According to the latest statiscent (THB 2.2 billion) flowing into Bangkok’s hotel industry investment going into its compares to Koh 21.4 per cent (THB 2.2 tics released by the Thai Immigration Department, China, and market.

5 per cent This (THB 513 million) into Samui.

Russia, South Korea, Australia andinto Malaysia are the top five Bangkok’s hotel industry and 5 per cent (THB 513 million) into Koh Samui international source markets. Domestic visitor arrivals have Like tourist profiles, investor profiles are also changing. Staincreased too. In 2013, the number was up 10.8 per cent tistics show that Asian investors are gaining market share compared to 2012. in Phuket. Between 2012 and 2013, Asian investment into THB Billions Phuket increased by 218 per cent from USD 2.4 billion to While the numbers of visitors have increased, duration of 7.5 billion. In 2013, around half of Thailand’s investment stay has reduced. “Based on our recent market research was attributed to domestic players, 34 percent by Ameriand interviews, we understand that Europeans and Ruscans, and 10 per cent by Chinese investors. sians tend to stay longer from one to two weeks. Asian visitors stay for a shorter period of about three to five days” The figures do not lie: Phuket’s travel and tourism industry is said Mr Langdon. The growth in Asian visitors has thus in good shape. As the global economy bounces back from had an impact on the length of time hotels can expect to the 2008 financial crisis and tensions in Bangkok subside, host their visitors. This has not had a negative impact on Phuket will continue to attract visitors and investors as one the overall hotel market however. In 2013 the hotel market of Thailand’s most popular tourist destinations.

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THB 9.6

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THB 5.5

THB 0.9

THB NIL

THB 8.4

THB 9.6THB

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AustCham Silver Corporate Sponsor: SINGAPORE AIRLINES

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August 2014

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community services

Voluntary English Teaching Saturday 19 July 2014, Wat Phra Patharnporn School, Sri Ra Cha As part of the Community Services Programme, AustCham sponsors a number of schools in the provinces of Chonburi and Rayong. This month, AustCham staff and volunteers went to the Baan Khao Din School to teach and encourage the students to use English language. This exposes them to the English language and also opens new doors for them to experience multi-cultural environments. No prior teaching experience is necessary. If this volunteering opportunity is of interest to you, please contact K. Sasipa at sasipa@austchamthailand.com

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Chamber events

In recognition of NADOC week:

Creative and Cultural Brand Development

“I would really see it from an indigenous business perspective with Asia as an opportunity to expand into those markets.

And whether your product would actually be relevant to that market,” he said.

By Ron Corben

A

ustralia’s indigenous businesses need to build on cultural “brand recognition” in a push into Asia’s markets, already proven by major Australian businesses, ranging from airlines to wine exporters, says David Williams, from Brisbane based creative agency, Gilimbaa. Mr. Williams, a musician and artist, during a visit to Thailand, said drawing on cultural heritage offered potential for indigenous entrepreneurs to gain a foothold in Asia’s markets.

Mr Williams says the way forward for indigenous business into overseas markets is to build on the gains made in the home market.

“For us it’s quite simple from a cultural branding point of view. For us, doing business in Asia it will be looking at replicating what we’ve done in indigenous communities back home,” he said.

“In terms of any indigenous entrepreneur – (or generally) – you’re looking at the growth of Asia and opportunities that exist in terms of Asia as an export market from Australia,” he said in an interview.

A descendent of the Wakka Wakka people from central southwest Queensland and graduate of music from Queensland University of Technology, Mr. William’s skills as a player of the didgeridoo has seen him travel extensively, including performing at the Opening Ceremony of the 2008 Beijing Olympics.

Mr. Williams says more Australian indigenous businesses need to build on the strong brand recognition of Australian Aboriginal art and culture and push into the Asian market.

The CEO and director of creative agency Gilimbaa, Mr Williams says indigenous business aided by support from organizations such as “Supply Nation” need to look “at Asia as a growth area and a big part of that strategy”.

Supply Nation provides a direct business to business purchasing link between corporations, the Government and Indigenous owned businesses. Under the guidelines, membership requires at least 51% ownership of the company by indigenous Australians with the company led by indigenous Australians.

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the success of companies such as telecommunications and video conferencing company, Message Stick Group, and its inroads into the United States market.

Message Stick also recently signed a A$10 million agreement with Westpac Bank to provide teleconferencing services to Westpac branches throughout Australia.

He says issues lie in how an Australian brand is able to align itself with Australia and how they promote it to a worldwide audience.

National carrier, Qantas, has drawn on the inspiration of aboriginal art to adorn aircraft, while wine makers such as the Yellowtail brand have drawn inspiration from indigenous art that promotes Australian culture internationally.

Qantas Flying Art has included the works of four Aboriginal artists on aircraft since 1995, the most recent adorning a Boeing 737-800.

“So you are looking at an iconic Australian product or brand that wants to break through on the international stage and using something that’s familiar internationally is Aboriginal art or Aboriginal culture, so that’s one way of promoting culture,” he said.

In Australia the growth in indigenous owned business is evident, highlighted by

That success can then be carried throughout the region, including markets away from core centres, such as northern or central Thailand. But there are also cultural areas of common understanding within the region where traditional cultures are still alive, he said.

But Mr Williams sees wider issues than purely business success from supporting indigenous business entrepreneurs. Crucially it is a way to reduce the high rates of unemployment within the indigenous communities; often four times above the national average and those indigenous businesses will “inherently be Aboriginal people employing other Aboriginal people”.

“The idea is to create economic independence among Aboriginal people and to break that whole welfare cycle,” he said. “If you’re economically independent or you’ve got that sense of business ownership within a community or a family or whatever, that might be of Aboriginal people, you’re not relying on those government handouts.”

“That is really exciting because it’s very empowering and that level of self-determination,” he said.

Ron Corben is a long standing journalist based in Bangkok reporting for Australian Associated Press (AAP).

AustChamThailand Advance

Chamber Events

AustralianAlumni Annual Gala Dinner Wednesday 25 June 2014, Grand Hyatt Erawan Bangkok The Winners of 2014 Awards The AustralianAlumni Group, in conjunction with AustCham and the Australian Embassy Bangkok, invited members and friends to its Annual Gala Dinner to celebrate Australian education and the successes of Australian alumni in Thailand.

Thank you to everyone who attended and special thanks to the Australian Embassy Bangkok, NS BlueScope and NIST International School for making the evening possible. Also thank you to the AustralianAlumni Partners, Blackmores and Opus, for their continued support.

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Young Alumni – Community Engagement Award Sutthi Suteerasan, University of Queensland Alumni Entrepreneurial Award Apichai Sakulsureeyadej, The University of Melbourne Alumni Leadership Award Dr. Virasakdi Chongsuvivatwong, University of Newcastle Alumni of the Year Award Ubon Sanpatchayapong, The University of Melbourne

AustChamThailand Advance

Chamber Events

AustChamThailand Advance

August 2014

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Chamber Events

Stars and Stripes Bangkok Sundowners Wednesday 2 July 2014, The St. Regis Bangkok AustCham held the special Stars and Stripes July Sundowners in conjunction with AMCHAM to celebrate the United States’ 4th of July National Day. Members and friends were welcomed to the beautiful Astor Ballroom of The St. Regis Bangkok hotel. We would like to thank Minor International, Corporate and Venue Sponsor of the evening, for its support in holding the event.

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August 2014

AustChamThailand Advance

Chamber Events

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1) Wayne Williams, Minor International, AustCham Director; Renee Bowman, AustCham Thailand; Holger Jakobs ,The St. Regis. 2) Supat Petchprakong, Ocean Property Company Limited; Benyapa Permpul, Ocean Property Company Limited; Supatra Angkawinijwong; Ocean Property Company Limited; Stuart Winters, Sodexo (Thailand) Ltd; Kylie Winters;Porntip Utsahaphan,Samitivej Hospital. 3) Tyrone Jenkins, Bazi Co.,Ltd; Kwanchanok Tenprasert, Oakwood Residence Sukhumvit 24 Bangkok. 4) Yaowaled Kosai, Assa Abloy (Thailand) Ltd;Jutawat Changtrakul,Assa Abloy (Thailand) Ltd. 5) Holger Jakobs ,The St. Regis Bangkok; Wayne Williams, Minor. 6) Kelly Cherkowski, Nikanti Golf Club; Jack Coleman; Anyaphat Thanaratana; Anthony Tsoflias, Parker Bridge Recruitment Co., Ltd; Arwee Manigluck, Parker Bridge Recruitment Co., Ltd. 7) Dr Ian Dacre, World Animal Protection; Peter Burgess; Edward Haworth, Gift of Happiness Foundation; Michael Grisaffi ,United Relocations (Thailand) Co., Ltd; Ivan Kovarik, The Siam Gypsum Industry (Saraburi) Co., Ltd. 8) Jonathan Lynch, DLA Piper (Thailand) Limited; Larry Jackson, ThyssenKrupp Elevator (Thailand) Co., Ltd; Thomas Hoar, Precision Translation Tools Co., Ltd; David Carden, FedEx Express; David Nardone, Hemaraj Land and Development Public Co., Ltd, AMCHAM Vice President. 9) The St. Regis Bangkok Team. 10) Wang Rattanatrakulchai, The St.Regis Bangkok; Chadsama Nitchote, Mode Sathorn Hotel; Kunlasarp ,American Airlines; Chaicharn Khongsrithong,American Airlines. 11) Wayne Williams, Minor International, AustCham Director; Rajir Puri, Minor Hotel Group; Amjad Audat, Anantara Hotels, Resorts & Spas. 12) Nick Gomez, Bangkok Golf Centre; Matthew Jones-Bangkok Golf Centre; Matt Wiltshire, Bangkok Golf Centre; Renee Bowman-AustCham Thailand.

AustChamThailand Advance

August 2014

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AUSTCHAM MEMBERS

AustCham Welcomes New Members

Hyatt Regency Phuket Resort 16/12 Moo 6 Tambon Kamala Amphur Kathu, Phuket 83150 Phone: +6676 231 234 Fax: +6676 231 233 Email: phuket.regency@hyatt.com Website: www.phuket.regency.hyatt.com

Company Profile: Mad Appe is formed by a group of people with the passion to change the face of Digital Marketing and to set the standard of online data mining. Mad Appe started in Indonesia since 2013 and have now expanded to two other countries which is Thailand and Australia.

Products or Services Offered: Business programs (taught in English) include: MBA (19-month, full-time), Executive MBA (19-month, part-time), M.Sc. in Human Resource Management (18 month, parttime), Diploma in HRM (7 month, parttime), Ph.D. in Finance & in Marketing (4 years, full-time).

Products and Services Offerred: 1. Website Development 2. Mobile/ Tablet Application Development 3. Content Management System (with Analytics integration) 4. Internet Marketing 5. Social Network Marketing 6. Digital Marketing Consultancy

Sasin also offers Executive Development seminars including: Senior Executive Program (SEP), and specialized and in-company programs. In addition, Sasin provides a range of Business English certificate programs.

Representative Mr Keith Massey - General Manager Company Profile: Hyatt Regency Phuket Resort is the first Hyatt-branded resort to open in Phuket, a premier resort destination in Southeast Asia.

Products and Services Offerred: Accommodation, F&B, Spa

Mad Appe Development Co.,Ltd 1/7 Sribunruang 2 Building, 4FL, Suite 404 Convent Road, Silom, Bangrak Bangkok 10500 Phone: 082 344 5667 Email: rj@madappe.com Website: www.madappe.com

Representatives Mr RJ Rojvirasingh - Managing Director Ms Mananya Karnjanakrapong - Marketing Director

Sasin Graduate Institute of Business Administration of Chulalongkorn University Sasa Patasala Building, Soi Chula 12 Phyathai Road, Bangkok 10330 Phone: 662 216 8833 Email: marketing@sasin.edu Website: www.sasin.edu

Representative Mr Dean Outerson - Head of Marketing and Corporate Communications Company Profile: Sasin Graduate Institute of Business Administration was established in a collaboration among Thailand’s leading university (Chulalongkorn University) and two of the world’s foremost business schools: the Kellogg School of Management at Northwestern University and The Wharton School of the University of Pennsylvania. The result is an Asian business school offering world class programs.

Sasin is the first internationally accredited business school in Thailand, with both AACSB and EQUIS accreditation.

Sasin Management Consulting (SMC) provides a full-range of consulting solutions and implementation. Sasin Japan Center (SJC) offers consulting and research services to help bridge the gap between the Japanese and Thai business communities.

Sasin Institute for Global Affairs (SIGA) is our public policy think-tank. Sasin Centre for Sustainability Management (SCSM) focuses on consulting, teaching and research on all aspects of sustainability.

Change of Representatives - Ms Kasinee Saensom, is a new representative of Five Star (Thailand) ltd.

- Mr Peter Emblin, Advisor is a new representative of MBMG Group Change of Company Name - Jarrett Lloyd has changed company name to AEC Enlist Co., Ltd 800 Unit A, Sukhumvit 71 Road, Klongton-Nua Subdistrict Wattana District Bangkok 10110 Change of Company Address - International SOS Services (Thailand) Ltd 14th Floor, 93/1 GPF Witthayu Tower Tower B, Wireless Road Lumpini, Pathumwan, Bangkok 10330 - SiteMinder Level 19 Lake Rajada Building 193-195 Rachadapisek Road Khwaeng Klongtoey, Khet Klongtoey Bangkok 10110 Tel:+662105 4160 Ext 1107

Convoy for Kids Golf Day The Convoy for Kids Committee would like to apologise to Tellus Systems Thailand for not listing them as a Hole Sponsor for the Convoy for Kids Golf Day in the article covering the event in the July edition of “Advance”. Tellus have been a regular supporter of the event over the years and their sponsorship is greatly appreciated. We apologise for this oversight.

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August 2014

AustChamThailand Advance

Thailand Board of Investment (BOI) Sponsored Seminar: Australian Company - Investment in Thailand “New Markets, New Opportunities, New Business Models” The Thailand Board of Investment (BOI) is currently promoting foreign investment, especially by Australian manufacturing companies, looking to expand their business into South East Asia. South East Asia has a combined domestic market of over 600 million people and will become the single market of the ASEAN Economic Community (AEC) commencing 2015.

Thailand is in an ideal location as a leading economy in the region and gateway into China, India, Myanmar (Burma), Laos, Cambodia, Vietnam, Malaysia and Singapore.

Come and hear what local Australian business people have to say about “doing business in Thailand” and what the BOI has to offer as incentives to Foreign Direct Investors (FDI’s). The BOI will be represented by one of its most senior executives directly from the Thai government in Bangkok.

Half day seminars will be held at Pitcher Partners firms in Sydney, Melbourne and Adelaide. Pitcher Partners is an association of independent firms and a member of Baker Tilly International, 8th largest accounting group globally.

These seminars are suitable for those in auto manufacturing and supplies, engineering companies and toolmakers and general manufacturers.

For more information, please contact Thailand Board of Investment on 02 9252 4884 or Tim Gauci on 0410 173 268

Sydney

Melbourne

Adelaide

Date

Monday 25 August 2014

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Friday 29 August 2014

Time

9.30am arrival, presentation to commence 9.45am

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9.30am arrival, presentation to commence 9.45am

Venue

Pitcher Partners Level 22, MLC Centre 19 Martin Place Sydney

Venue

Pitcher Partners 160 Greenhill Rd Parkside

Register

Friday 22 August 2014 online registration here

Register Monday 18 August 2014 online registration here Light refreshments will be served

Wednesday 27 August 2014

10.30am arrival, presentation to commence 10.45am Venue

Pitcher Partners Level 19, 15 William St Melbourne

Register

Wednesday 20 August 2014 online registration here

Light refreshments will be served

Proudly supported by

Light refreshments will be served

From the Chamber Office

Message from the Executive Director

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ustCham Thailand has secured funding from the Australian Government for the second year running as part of the Asian Business Engagement Plan. In 2014/15 AustCham Thailand will receive $66,800 AUD to improve Australian business links with Asia; that’s more than double the funding received in 2013/14.

There is no doubt that leveraging business relationships is an important strategic facilitator for all businesses. To make business networks more accessible for Australian SMEs, AustCham will use this new grant to undertake several new initiatives that will collectively strengthen and expand the Thai-Australian “sphere of influence”. These projects will not only help member companies develop new relationships and access in-market networks, but they will also help build the institutional capacity of AustCham to support and promote business in years to come. This grant will also harness business opportunities emerging in the Asian region, reinforce the capability of Australian-affiliated companies and allow firms to succeed in regional value chains.

To be more precise, AustCham will expand its industry contacts by identifying and developing close working relationships with influential Australian and Thai Australian-Alumni executives. To institutionalize these connections, we will strategically look for collaborative opportunities, foster new leads for SME’s, and generate new business ventures and investments. Many of these people will be able to assist in unravelling the complexity of supply chains in Thailand, thereby creating transparent access for SMEs. Building on the success of Australian Business Forums (from 2013/14 ABE funding), AustCham will introduce industry specific workshops across four sectors; manufacturing, hospitality and tourism, retail and consumer goods, and enabling services. These sessions will broaden knowledge, broaden advocacy, and generate dialogue about emerging business issues in Thailand.

AustCham recognizes that a growing challenge for businesses in Thailand is find-

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August 2014

Calendar of Events Wednesday 6 August Member Briefing

17.00 – 18.00 Venue: Eastin Grand Hotel, Sathorn All-Chambers Bangkok Sundowners

18.00 – 21.00 Venue: Eastin Grand Hotel, Sathorn Corporate Sponsor: NSBlueScope Tuesday 12 August AustCham Office Closed Mother’s Day Tuesday 19 August ABF Express

7.45 – 9.00 Venue: Servcorp Park Venture Ecoplex ing highly skilled and qualified staff. To address this, AustCham will introduce and facilitate a new digital skill-sharing platform. Here we will connect individuals and companies throughout Australia and Thailand for expertise, mentoring and job placement. AustCham will also seek interest from companies who are willing to host Australian interns as part of the Government’s New Colombo Plan. To conclude the funding year, AustCham will bring together its extensive network of contacts for a business conference which will showcase learnings gained throughout the year.

A special note of thanks is offered to the Australian Government for the opportunity to carry out our ‘sphere of influence’ initiatives; a project that would not be possible without financial support. This grant will enable ongoing expansion of business links between Australia and Thailand, and with its central Southeast Asian location and evolving connectivity, Australians can continue to seize business opportunities across the region.

Thank you to our July Sponsors

Warm Regards, Renee Bowman Executive Director, AustCham Thailand www.austchamthailand.com

AustChamThailand Advance