Eastern Seaboard Report June 2014 – Prepared by Mark Bowling, Chairman ESB •
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SAIC Motor-CP Co, the Chinese-Thai car maker, is planning to invest 30-40 billion baht in a second Thai plant after its first plant in Rayong rolled out the MG6 1.8-litre saloon in early June. The company has already acquired 500 rai of land in Chon Buri for the plant, which is expected to be ready by 2018. The company has already acquired 500 rai of land in Chon Buri for the plant, which is expected to be ready by 2018. The company is investing 9 billion baht in the first phase for the plant in Rayong's Hemaraj Eastern Seaboard Industrial Estate. SAIC holds a 51% stake in the venture, with CP holding the rest. The company expects to sell 2,000 MG6s this year, mainly in the Thai market. Two automotive shows are planned for next month, aimed at stimulating domestic sales thanks to the improved political situation this past month. Show organisers have recently seen hopes after the prolonged political doldrums that had dampened their sales and ruined car buyer's sentiment. The five-day event is expected to draw 300,000 visitors and 4,000 orders, up from 270,000 visitors and 3,900 orders last year. Twelve car makers will join the show — Citroen, Deva, Ford, Honda, Hyundai, Isuzu, Mazda, Mitsubishi, Nissan, Skoda, Suzuki and Toyota — along with six major used-car distributors. Thailand's ambitious plans to make 3 million vehicles a year by 2019 remains intact despite the country's current weak market demand. “The eco-car project will play a crucial role to drive domestic production to achieve that goal," said Chokedee Kaewsang, deputy secretary of the Board of Investment (BoI) at the automotive summit 2014 held at Bangkok International Trade and Exhibition Centre recently. Ten car makers including five existing eco-car manufacturers officially applied, with total expected investment of 139 billion baht. ZF Friedrichshafen AG, the German auto parts maker, expects 2014 revenue from its Thai unit be on a par with last year's 103 million euros (4.51 billion baht), as the country’s car output is projected to slow down this year. ZF Lemforder (Thailand) has its production facility in Rayong with a capacity 200,000 to 240,000 units a year, making axle systems, part of the chassis in passenger cars for General Motors, Ford, Mercedes-Benz and BMW, while ZF (Thailand) distributes replacement parts via 20 partner companies nationwide. Mazda Sales (Thailand) says it will be “more than satisfied” if the company ends the year with sales of 50,000 cars even though that would be much lower than the number sold in 2012 or 2013. Mazda sold 52,914 cars in Thailand last year, down by 28.3% from 73,764 in 2012, when sales were driven by the government’s first-time car buyer scheme. For the first five months of this year, sales totalled 14,017 cars, down by 47% year-on-year. That total comprised 2,849 of the Mazda2, 2,772 of the Mazda3, 2,365 of the CX-5, 6,025 of the BT-50 Pro and six from the premium line-up. BMW Group Thailand has succumbed to the unfavourable economic and political climate, projecting single-digit sales growth this year. “Due to cloudy economic prospects, many customers have baulked at purchasing new cars both in the mass and luxury segments,” said the company president Matthias Pfalz. But for the first four months of this year, sales of BMW and Mini fell 9% to 2,402 units. BMW Motorrad was fortunate to secure sales of 129 units, unchanged from the same period last year. He said overall luxury car sales were unlikely to hit 20,000 this year as forecast earlier, after sales in the first four months increased th
British Chamber of Commerce Thailand, 7 Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 038 427 771 Fax: 038 427 772 Email: mark.bowling@colliers.com www.bccthai.com
only 3%. Sales of luxury cars stood at 18,000 units last year. “Despite that, we remain committed to our expansion plans,” he said. •
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The National Council for Peace Order (NCPO) on 3rd June issued an announcement ending the night curfew in Pattaya City in Chon Buri province, Koh Samui in Surat Thani, and the entire island province of Phuket. The NCPO has also told the Tourism and Sports Ministry it may seek extra funding of more than 1 billion baht to help achieve industry revenue targets of 2 trillion baht this year and 2.2 trillion next year. Of the more than 100,000 Cambodian workers who fled Thailand, 60-70 per cent were in the construction and agricultural sector in the East, permanent secretary for Labour Jeerasak Sukhonthachart said yesterday. Speaking to 1,500 employers and migrant workers in Chon Buri's Sri Racha district yesterday, Jeerasak said Rayong had seen 30,000 documented Cambodian workers and possibly another 30,000 undocumented ones departing Thailand. Chon Buri employment official Pichit Nilthongkham said the province's 90,000 documented workers included some 40,000 Cambodians. The worker exodus - although mostly by undocumented Cambodians - affected all sectors especially agriculture and fisheries, followed by construction and tourism and hospitality. Pichit said Thai authorities tried to have employers keep records of migrant workers for easier checking. At the same time, other business operators could be asked to "lend" their workers to the hard-hit agricultural sector. IRPC estimates the damage from a fire and two explosions at its oil-and-gas filtration plant in Rayong province at 6pm on Sunday to be at least Bt480 million. The company said the cause of the incident was likely equipment-related rather than human error. The plant will have to be closed for about three months for repairs, causing loss of revenue of about Bt160 million per month. According to IRPC president Sukrit Surabotsopon, hydrocarbon leakage probably caused the explosion at the vacuum gas oil hydro treating (VGOHT) unit. Bidding is underway to choose a contractor that will begin the eight-month process of rebuilding Pattaya Beach’s eroding shoreline. At city hall’s monthly press conference June 13, city council members Athiwit Wattanasartsathorn and Banjong Banthoonprayuk said Pattaya has transferred 400 million baht to the Marine Department to begin the sand-refill project starting from the Dusit Curve. Local luxury property developer the Tulip Group has entered into a management agreement with world renowned hospitality giant Accor for the prestigious Waterfront project at Bali Hai in Pattaya, joining Accor’s MGallery collection of unique hotels. Patrick Basset, Chief Operating Officer for Accor South East Asia said, “We have been searching for the right property in Pattaya with a unique story and distinguishing characteristics that will fit the profile of the upscale MGallery brand, and now we have found it. With a meticulous modern design and striking avant-garde exterior, this new member of the MGallery collection will change the landscape of Pattaya”. Jesters Care for Kids Charity Drive 2014 - Please remember our events are coming up fast: Children’s Fair, Sunday, September 7th, at Regent’s International School Pattaya and Gala Party Night, Saturday, September 20th at Amari Ocean Pattaya. Contact Deborah Philbrook for further details and tickets: vicechairperson@care4kids.info
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British Chamber of Commerce Thailand, 7 Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 038 427 771 Fax: 038 427 772 Email: mark.bowling@colliers.com www.bccthai.com
Following news reproduced with kind permission SATCC •
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Former F1 driver Tomas Enge, Piti Bhirombhakdi, Chonsawat Asavahame, Sanchai Engtrakul, Sontaya Kunplome, Pete Thongchua, Ray McDonald and many others confirmed participation in the Thailand Super Series at Bira International Circuit from July 5 and 6. Thailand Super Series 2014 is divided into eight races. The first two races were held last month at the Sepang International Circuit with another two to follow next Friday and Saturday at Bira Circuit in Pattaya, More races will be held at the Buriram United International Circuit in Buri Ram on November 1-2, and 7-8 with races 7 and 8 taking place at the Bangsaen Street Circuit in Chon Buri on December 10-14. Overall realty market expected to recover in H2. The residential, office and retail property markets in Bangkok and the provinces are expected to recover in the second half of the year, with confidence now returning following the coup on May 22, according to research by property agency Colliers International (Thailand). Meanwhile, some 20 per cent of its clients' new investment projects have been delayed following the coup, executive chairman Simon Landy said yesterday. Many developers had decided to delay their investment decisions since late last year because of concern about the country's political problems, and - even though the political situation is now more stable - some of them still prefer to wait and see whether the economy will recover following the junta's announcement of its economic road map, he said. Other tourist destinations such as Pattaya, Chiang Mai, Khao Yai and Phuket are still witnessing only slight growth after demand from foreign buyers dropped, he added. Meanwhile, developers are concerned about commercial banks' tight restrictions on the provision of mortgages to customers. Surachet said that with most residential transfers to customers taking place in the second half of the year, property firms would be directly affected if the banks continued with their tighter lending criteria and rejected housing-loan applications at the current rate. PTT had a board meeting in late June whiche board meeting yesterday also approved the rollout of the fourth natural-gas pipeline route (Rayong-Kang Koi) and that it should quickly complete the project. Sansiri has revised its 2014 investment plan, given that the residential market looks likely to decline by at least 20 per cent this year. Sansiri had set aside an investment budget of Bt6 billion for the year, but will now only use it for land purchases if the best plots can be found. At present, the company has 49 residential projects worth Bt52.47 billion in 11 provinces outside Bangkok and its surrounding provinces. They are located in Khon Kaen, Chiang Mai, Prachuap Khiri Khan (Hua Hin), Chon Buri, Phuket, Chiang Rai, Surat Thani, Songkhla (Hat Yai), Nakhon Ratchasima (Khao Yai), Rayong and Udon Thani. There will be no change in policy with regards to these. Quality Houses May presales were up , helped greatly by condo presales of Bt600mn (from Bt150mn) thanks to presales of The Trust Condo Amata Nakorn. Four companies under Saha Group will together allocate almost 5 billion baht to expand their businesses domestically and internationally from 2015-16
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British Chamber of Commerce Thailand, 7 Floor 208 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand Tel: 038 427 771 Fax: 038 427 772 Email: mark.bowling@colliers.com www.bccthai.com