Thai-Norwegian Business Review by Thai-Norwegian Chamber of Commerce

Thai-Norwegian Business Review 2014 – 04

Thai-Norwegian Chamber of Commerce

Profiling the Tug of War on Thailand’s Foreign Business Act Amendments

ASEAN Economic Community: Are we ready?

Contents President’s foreword 5 Profiling the Tug of War on Thailand’s Foreign Business Act Amendments

Letter from India: Indian Businesses Look to Norway

Yara Thailand’s New Boss Gets His Britches Dirty

Innovation Norway: Providing a Steady Hand to Hold Overseas

Cover story: AEC

The Crush of Progress: Dr Surin Pitsuwan on How the AEC Will Change the Region

Andrew Durieux on What the AEC Really Mens for Thailand

Are Thai Female Entrepreneurs Ready for the AEC?

TUF: King Oscar moves to Thailand

WWL: Managing Thailand’s Automotive Export

An Automotive Industry Lifer Takes a Look Under the Hood

Telenor: Building a Digital Future for Myanmar

Flashback to the Summit: Prof. Torger Reve looks at China

Thailand and Malaysia: Whose Star Shines Brighter?

Putting Norway’s Stamp on the New Cambodian Stock Exchange

Giving Expat Entrepreneurs Their Do

Reading the Tea Leaves on Thailand’s Inheritance and Property Taxes

The Chamber Welcomes a New Ambassador

Norwegian Properties: Building a Future in Jomtien

MIT: Making Trade Statistics Less Boring

Thailand’s economy at a glance

Membership Directory

Editor: Thitikul K. Opdal Advertising: Anders Magnusson Journalists: Eric Baker, Christopher Caillavet Graphic Design: Graphics-Related Co., Ltd. www.norcham.com

Presidentâ&#x20AC;&#x2122;s foreword Life is for

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The Holiday Season and the end of the year is fast approaching. 2014 will go into history as a very eventful year, both for Thailand and for the Thai-Norwegian Chamber of Commerce. The most burning issue for the Chamber and for the foreign business community right now are the discussions concerning a tightening of Thailandâ&#x20AC;&#x2122;s Foreign Business Act (FBA). Through the Joint Foreign Chambers of Commerce (JFCCT) we have long recommended an opening up of the services sectors, which would benefit citizens, the economy and Thailandâ&#x20AC;&#x2122;s standing in the region. Such liberalisation would position Thailand and its businesses to compete in the USD 1 trillion global â&#x20AC;&#x2DC;trade in servicesâ&#x20AC;&#x2122; market and do so domestically, regionally and globally. We see liberalisation as being not just about equity limits, it also includes free movement of skills (talent), sector specific changes and mandates â&#x20AC;&#x201C; relaxation to restrictions on permits, licenses and other barriers to entry and other sector-specific reforms. Although it is not clear what is being proposed, we view with grave concern any initiatives which would further restrict foreign business in Thailand, such as any moves to tighten restrictions on equity and investment, regardless of origin. These moves would misalign Thailand with other ASEAN countries and as they have not taken into account the need to consult with GATS trading partners under the WTO framework, they would convey the message that Thailand is not really interested in welcoming and integrating foreign investment. The AEC, ASEAN and the regional perspective is extensively covered in this magazine. We are indeed hopeful that the AEC will open up new opportunities for Norwegian companies in the region, not least considering the fact that Singapore is one of the largest Norwegian business hubs outside Norway. Across the border in Myanmar, both Norwegian and Myanmar authorities are preparing for the first State Visit to Asia in ten years by Norwayâ&#x20AC;&#x2122;s King and Queen. This is a historic visit in many regards and clearly shows Norwayâ&#x20AC;&#x2122;s strong commitment to the changes taking place in Myanmar. A trade delegation of close to 70 persons is accompanying Their Majesties. These businesses are mainly representing energy companies; hydropower and renewable energy as well as oil and gas â&#x20AC;&#x201C; and telecommunications. Our Chamber has been instrumental in bringing Norwegian businesses into Myanmar. Our Chamber has decided to establish a branch in Myanmar in preparation for a fully independent MyanmarNorway Chamber of Commerce. The plan is to launch the Business Association during the Norwegian Parliamentâ&#x20AC;&#x2122;s Standing Committee on Business and Industryâ&#x20AC;&#x2122;s visit to Myanmar in February. Let me end by wishing you all the best for the Holiday Season and the Coming Year, 2015.

Vibeke Lyssand LeirvĂĽg President Thai-Norwegian Chamber of Commerce Thai-Norwegian Business Review

Profiling the Tug of War on Thailand’s Foreign Business Act Amendments By Eric Baker

oreign investors and Thai companies are digging in for what could be a dogfight in finalising changes to amendments to the Foreign Business Act of 1999 (FBA). At stake is how foreign ownership should be counted, especially whether voting rights should be accounted for in addition to proportion of shareholdings, capital and management control. The Federation of Thai Industries and the Thai Chamber of Commerce have insisted that voting rights are considered in determining which businesses are foreign, while the Joint Foreign Chambers of Commerce (JFCCT) has been adamant that competitiveness should be considered instead, reported the Bangkok Post. For its part, the Thai government has stated foreign businesses already invested in Thailand will not be affected by any amendments. In fact, the government has said it wants to ease restrictions on foreign businesses operating here in order to improve the country’s competitiveness, provided Thai authorities are better prepared to supervise. The government is feeling pressure from the international community to upgrade its foreign business rules to global standards so that it can compete in attracting foreign firms and investment. But it also faces heat from powerful local interests wary of foreign competitors. Foreign investors are concerned amendments to the FBA will make some of their business practices illegal, a government official told the Bangkok Post. He said the government believed it would be “unfair” to change the rules for companies that have already invested here, something the state would not do. The position the JFCCT takes is whatever changes are made should benefit the Thai economy. While the country has done a remarkable job opening up the manufacturing sector, the services sector still lags far behind. The FBA was clearly intended to be used as a tool for liberalising the economy, and the fact that services continue to be protected is hurting Thailand, noted a policy paper by JFCCT.

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Logistics, banking and telecommunications are strategic vertical sectors that drive economic growth and have been hindered by unhelpful restrictions, noted the JFCCT paper. In order to liberalise the services segment, the JFCCT advocates the free movement of skilled workers through eased immigration and labour regulations as well as sectorspecific changes and mandates that relax restrictions on permits, licences and other non-tariff barriers to entry in the market. The foreign chambers note that the Board of Investment recently started promoting Thai companies to compete overseas, yet other than a few tourism firms, no service sector companies have gone abroad. “If Thai companies are not strengthened at home through competition, they will either fail on the global stage or not even feel they can get there in the first place,” noted the paper. The global “trade in services” market amounts to USD 1 trillion annually and if Thailand does not want to lose out it needs to open up the sector now, said the JFCCT. Large law firms also called on the government to facilitate investment by multinational corporations that invest in Thailand and reduce obstacles to foreign involvement, reported the Bangkok Post. The firms agreed the services sector should be liberalised as the amendments should narrow the scope of the industries included on List 3, which catalogues segments where foreign involvement is banned. Rungtip Sathienrapabayut, an associate of International Legal Counsellors Thailand, told the newspaper the proposed changes are unclear and foreign companies in Thailand are insistent that they don’t want the government dictating terms of management control to them. “Services that don’t affect the country’s national security or harm the economy should be opened freely for foreign involvement,” she said. “For instance, it’s still quite difficult for foreign parent firms to extend interest-free loans to their local subsidiaries. The existing law requires them to ask for permission from the authorities and pay a permission fee

of a maximum THB 250,000. Then it takes three to four months for the authorities to give their permission.” Ms Rungtip said foreign firms that sign agreements to invest in infrastructure with the Thai government should be automatically granted business licences. Duenden Nikomborirak, research director of Thailand Development Research Institute, said the government should explain why if it keeps restrictions on foreign involvement for sectors placed on List 3, justifying why they need to continue to be protected. “We believe service businesses that will cause no harm to the country or national security such as telecom should be liberalised for foreign investment,” she said.

While other ASEAN countries are opening up their services sectors in view of the ASEAN Economic Community integration, Thailand seems to be going the other way.

Rolf-Dieter Daniel, president of the European Association for Business and Commerce-Thailand (EABC), said in a policy paper that European investors are very worried about the proposed changes to foreign shareholding rules, which should concern Thailand as its economy is struggling for growth. He said implementing the suggested shareholding changes to the FBA would likely lead to an exodus from Thailand to other ASEAN countries in such sectors as information and communications technology, health care, insurance, transport, logistics and distribution.

“While other ASEAN countries are opening up their services sectors in view of the ASEAN Economic Community integration, Thailand seems to be going the other way, sending the wrong signal to European investors that direct foreign investment in the country will become even more restrictive, in particular in services,” said Mr Daniel. Like the JFCCT, the EABC believes service sector liberalisation is the key to Thailand’s economy maturing and overcoming the middle-income trap, he said. The country’s service sector is in dire need of an infusion of new skills and technologies to improve the productivity of workers, said Mr Daniel, which can be accomplished by easing of visa and work permit rules and stricter intellectual property protections for new technologies. European investors were surprised that under the World Trade Organization framework no consultation with General Agreement on Trade in Services trading partners took place concerning the proposed amendments, he said. “This could hurt ongoing negotiations for a free trade agreement between Thailand and the EU,” said Mr Daniel. “A pact is important for Thailand because without one it will not be in a position to compensate for the expiration of Generalized System of Preferences privileges, especially for agricultural products, which will mean permanently higher costs for imported Thai products to the EU.” The JFCCT concluded with a quotation from an international law firm pointing out how including voting rights would be violating its commitments under GATS. “Thailand is legally bound to provide full ‘national treatment’ for companies with foreign ownership ‘as long as foreign equity participation does not exceed 49%’, regardless of voting rights,” wrote Herbert Smith Freehills in 2007. “If Thailand adds the voting rights requirement as a condition for receiving the same treatment as a Thai company, Thailand adds a condition that does not appear in its GATS commitments. In doing so, it violates its GATS obligations.”

Thai-Norwegian Business Review

Letter from India: Indian Businesses Look to Norway By Ambassador Eivind Homme

arm greetings from New Delhi, with many thanks and warm congratulations for the excellent way you organized Norway Asia Business Summit. It will be a tough act to follow here next year! I am pleased to share that a very first state visit from India to Norway took place on 13 – 14 October. President Mukherjee brought a business delegation with him to Oslo. This has never happened before, and it ended up being almost 50 participant. They came in addition to the parliamentary delegation and a delegation on science and higher education. The biggest news served by Prime Minister Solberg and the President during the visit were a new and boosted Consulate General in Mumbai and tourist visa upon arrival in India for Norwegians. 13 agreements were signed, mostly on research and higher education, resulting in exiting opportunities for new bilateral cooperation. As the world looks to India and to the new Government of Prime Minister Narendra Modi, India looks to Norway and to the Nordic region. This is the way that we at Embassy like to look at things, and act upon. Private enterprise, business associations and universities are keen to explore the potential for more collaboration. Significantly, president Mukherjee proceeded to Finland after Norway.

The President invited Their Majesties the King and the Queen, the Prime Minister and the President of the Norwegian Parliament to visit India.

Global and national challenges “India is set to play a prominent role in global affairs. The path that India chooses will influence the entire world. The world is facing pressing tasks, in particular fulfilling our common responsibility to combat climate change, and securing robust global governance, security, education and health for all” said Prime Minister Solberg in her speech to the prominent guests and friends of India during the Government’s official lunch in Oslo During the Gala Dinner at the Royal Palace His Majesty King Harald recalled their own visit to India and paid tribute to the 13.000 Indians residing in Norway. He hoped the President would experience how much we value the Indian community’s “contribution to the development of our society, business and industry”.

“In the future, a big share of the world’s economic growth will come from Asia and India. Norway will thus reestablish our Consulate General in Mumbai, to better assist Norwegian businesses also in this part of India”, Prime Minister Solberg said.

To us, Indians have always been pioneers of exploration, adventure and globalisation. Indians were at the forefront of the wave of immigration that subsequently transformed Norway into a multi-ethnic society, starting in the 1970s. What is more natural then, but to pay a visit to the Fram Museum, where the President met Indian researchers on video link from the research station manned by Indians in Ny-Ålesund and Indian students at the University Centre in Svalbard. He discussed the climate changes in the Arctic’s possible effects on the monsoon in India, a vital concern for the whole sub-continent. He also noted that is must be hard to live so far north with the cold!

Norway has had consular representation in Bombay/ Mumbai since 1857, including a Consulate General from 1943 to 1973. Since then, is has been an honorary Consulate General, a very good one. The new Consulate General in Mumbai will as such reopen a proud historic tradition, now to be managed by three diplomats, one of them heading a new Innovation Norway office there.

With an Indian and a Pakistani winner of the Nobel Peace Prize, children’s right to education was given a central and prominent place in the speeches and news during the state visit. Prime Minister Solberg greeted the laureates and the President, who himself said to media that it was a great honor for India to receive such an award, also honoring the vibrant Indian civil society.

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The Embassy actively informed the public about the events taking place in Oslo and several media agencies covered the visit, including an interview with H.M. the King, the CEO of Innovation Norway, chess guru Magnus Carlsen and author Jo Nesbø, as well as an OpEd by the Foreign Minister on the Arctic.

The first business delegation ever For the first time, the President took a business delegation with him on a state visit. Close to 50 businesspeople from sectors such as marine, seafood industry, ICT, technology, agriculture and oil and gas. The head of the business delegation, Dr Ajay Bakshi put it nicely to the 250 participants at the conference hosted by NHO on business, education and research: “We already take care of your ICT systems – so why can’t we now take care of your health systems as well?” “With India’s work force, Norwegian investments and innovation on both sides, there are great possibilities, said President Mukherjee, the Minister of Trade and Industry Ms. Mæland and the Minister of Education and Research Mr. Røe Isaksen. 15 college and university projects for increased cooperation and mobilisation within higher education were launched. Among the cooperating partners are the best institutions in both countries. The research seminar presented existing cooperation within global health and the arctic, and laid foundation for joint calls for proposals on antibiotic resistance, geohazards and polar research. A group of businessmen also met the Government Pension Fund Global and there were specific side events on education, research and business during the first day of the state visit. Innovation Norway had prepared a tailor made business program for the high level business delegation from India. An agreement on aquaculture and one on research within the defence sector was signed. The Indian government is very clear on what they want to achieve within the

Indian President Pranab Mukherjee and Norway’s King Harald V greet children in front of Oslo’s Royal Palace. Photo: Thorstein Bøe/NTB Scanpix

cooperation on aquaculture. They want Norwegian experts to India already this winter to explore innovative fish farming, both on-shore and off-shore, and Norwegian technology to develop the industry.

Norway Asia Business Summit The first major event following-up and highlighting the relations between Norway, India and Asia will be the “Norway Asia Business Summit” to be held in India 16-18 April 2015. Team Norway; The Norwegian Business Association India (NBAI), Innovation Norway and the Norwegian Embassy - take great pride in facilitating this event. NBAI was established less than two years ago, and now we have 60 members. This is a testimony to the strong and growing presence of Norwegian business in India. We welcome all of you to further explore the “Incredible !ndia”, together with Team Norway, in New Delhi in April 2015. With warm regards, Eivind S. Homme Ambassador

Thai-Norwegian Business Review

Yara Thailand’s New Boss Gets His Britches Dirty By Eric Baker

lejandro Vollert worked in the Yara family for several years before taking over as country manager of Thailand this May. He recalls being surprised several times when the different offices would have to present their growth strategies because Thailand’s was always very creative and robust.

The Argentinian said he is still getting used to some aspects of living in Thailand, such as the sweltering heat, but one Yara bedrock that doesn’t require any adjustment is the company’s hands-on approach with farmers. “We firmly believe in following the best practices, which means using fertiliser,” he said. “But our involvement doesn’t stop at just selling the fertiliser. We want the farmer to increase his income. Our global and local experts ensure that for every crop we target, we can advice farmers on the right fertiliser product, the right rate, and the right timing for application.“This is how you build trust with farmers, teaching them different techniques and working over a long period of time. You can’t just tell them, you have to show them too, which is why we plan to increase our demonstration plots to 70 next year, and we will start to invite more farmers to view these field trials as well. They want to see how our products perform in a real-world setting.” Mr Vollert expects certain changes in the Thai market in the near future. Although he described the rate of fertiliser application here as “good”, he said there are better ways to use certain fertilisers. Yara (Thailand) will invest a significant sum in a new bagging line next year to ensure the products that arrive here are of the highest quality when they reach the customer. Another change will be the introduction of its gold package in 2015. During this year and last Yara installed 550 silver packages aimed to make distributors more identifiable with the Yara image and logo. The gold programme will make information more accessible to farmers at local distributors. Farmers can check the correct product to use or bring in leaves from their crops to determine if it has any deficiencies.

Alejandro Vollert already busy planning his next moved in Thailand. Photo: Eric Baker

Along the same lines, farmers can use a smartphone app now to check nutrient deficiency symptoms and find the right product to solve their problem. Though smartphone penetration is low among farmers, Mr Vollert estimates this will be a massive change in the years to come. The company also plans to continue its pioneering venture with CIRAD, the French agricultural research firm, on rubber trees. They are working to find out optimal fertiliser requirements under intensive rubber tapping regimes. “We are proud that Yara is recognised as the top brand of fertiliser for the crops we target here,” he said. “We are known for our quality, service and research and development, but we have to work at the level of farmers and show them our practice is sustainable to gain that trust and brand recognition. “For me, the best part of the job is getting out in the field and meeting with farmers. Everybody is very friendly here, and we’ve had customers actually tell us we changed their lives for the better.” Yara focuses on tropical fruit trees, vegetables, oil palm and rubber crops in Thailand. It plans to hold 2,300 farmer meetings next year.

Continued on page 72

Thai-Norwegian Business Review

Innovation Norway: Providing a Steady Hand to Hold Overseas By Eric Baker

he regional office for Innovation Norway has a new face, and Torunn Aass Taralrud feels confident there are massive opportunities for Norwegian companies that look to Asia.

with companies and partners abroadMany of the companies that work with us want to know more about the culture of the markets where they are starting up. They ask, ‘Are there certain people w ho they must be in contact with? How do you conduct your business in a different cultural setting?’ Several of the companies already have their product or service fully realised, but they want to know more about the market.

“The Asian Development Bank has said the world’s economic centre has moved to Asia because a higher percentage of economic growth will occur here than elsewhere in the world, and I believe them,” she said. “The size of the population here is immense, and there is great demand for new technologies in the energy, maritime and oil and gas sectors. “Singapore houses the largest Norwegian business community in Southeast Asia, that’s the main reason I’m stationed here.” The Norwegian business community is mainly involved in the maritime and oil & gas sectors, as well as in finance. Transparency and predictability are important for Norwegian businesses when choosing location, so the fact that Singapore was just ranked No.1 in the world for ease of doing business by the World Bank underscores Singapore as a prime location. Innovation Norway is an organisation owned by the Norwegian Ministry of Trade, Industry and Fisheries as well as the country’s 19 counties. It offers grants, loans and competence to companies that are in a position to start up or are looking to expand abroad. “We are a door opener for Norwegian companies in other countries,” said Ms Taralrud. “We have local employees who know the market, have a myriad of contacts, understand the local laws and regulations, and can help to educate about cultural barriers to doing business. In essence we are like a hand to hold when a company goes overseas.

“We are a door opener for Norwegian companies in other countries,”

Innovation Norway’s Torunn Aass Taralrud with Singapore’s modern skyline in the background. Photo: Innovation Norway

Brunei. There are about 30 Innovation Norway overseas offices and they are connected to the embassies, so they serve as commercial counsellors, she said. “All these countries in Asia are very different from Norway, but in some key ways Singapore is similar to European nations because it is orderly and has a clear set of laws, so we often advise start-ups that are interested in the region to begin in Singapore,” she said.

“It is very difficult to go into a new market and stand alone. You need a wealth of resources and you have to be very patient. We provide advisory on these matters.”

“We actually have a start-up programme called Tech Incubator located here in Singapore where participants can learn about which market is right for them, develop a business plan and determine if there is true demand for their product or service.

Ms Taralrud is regional director for South and Southeast Asia, which covers Thailand, Vietnam, Indonesia, Malaysia, India and Singapore, and there are some countries where the agency doesn’t have representation like Myanmar and

“The majority of what we do is working on competence regarding international business and offering services as partner search, market analysis and networking . It also means teaching intercultural behaviour and how to interact

Thai-Norwegian Chamber of Commerce

Ms Taralrud said Norwegian small businesses positioned abroad that want help with financing should contact their district office in Norway, as overseas Innovation Norway offices lack financial services.

“Norwegian companies looking to branch out overseas need to know they will have to hold more meetings, do more networking, and make sure they are in contact with the right people in Asian countries. They also have to deal with a culture of corruption. Innovation Norway holds several events and exhibitions overseas to help advice on these matters and to promote the reputation of Norwegian businesses in general. “In some countries, a foreign company must have a partner to do business. In the energy sector, where there are often subsidies involved, some type of joint venture may be required.” Ms Taralrud insisted because the Norwegian market is limited, it is imperative more companies look abroad to expand, especially as so many markets are now open to global competition. “Innovation Norway feels it is important to give local ideas global access,” she said. “Our goal is to strengthen value creation in Norway. This is why we expect companies that expand abroad to return to Norway to share their competencies.”

Torunn Aass Taraldrud discusses investment opportunities with Myanmar’s Deputy Minister of Livestock, Fisheries and Rural Development, U Khin Maung Aye. Photo: TNCC

“We want small businesses to know we are open and available for advisory services,” she said. “There are several large Norwegian companies with overseas branches, and they often turn to us to provide contacts. It is with small businesses that we can perhaps provide the most assistance.” Ms Taralrud started the position in Singapore this May, and before that headed the Innovation Norway district office in Oppland. Prior to that she headed a family transport and logistics company in Norway that eventually grew into an international company, and Ms Taralrud also served on Innovation Norway’s board. “I believe if Norwegian companies do their homework about which market to enter and commit for the long term, they can find success and receptive countries for their products and services,” she said.

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Cover story

SEB Group

AEC

Singapore Branch SEB is a leading Nordic financial services group with 16,000 employees, total assets amounting to SEK 2,651 billion and assets under management totalling SEK 1,504 billion. Rewarding relationships are the cornerstones of the bankʼs business. Ever since the foundation in 1856, SEB has provided financial services to assist itʼs customers in reaching their financial objectives. The foundation of SEB´s client activities are trust, active listening, developing solutions together with the clients as well as strong and lasting dedication to professional and pro-active high level services. According to a recent Bloomberg ranking, SEB is one of the worldʼs ten strongest banks.

The AEC, ASEAN and the regional perspective is the main theme of this magazine. We look at the big picture and how the AEC will change the Mr. Jan Stjernström

region, building on the strength of each country to truly make Southeast

Phone : +65 63501 381

Asia one of the world’s powerhouses. Readiness is a central theme in several

General Manager

E-mail : Jan.Stjernstrom@seb.se

SEB is serving large corporations and financial institutions with corporate banking, trading and capital markets and global transaction services. The international nature of SEB's business is reflected in its presence in some 20 countries worldwide. The bankʼs focus in the Asian region is serving Northern European and German clients. SEB helps these home market companies entering and establishing operations in Asia as well as Asian companies expanding operations into Northern Europe and Germany. SEB has been working with homemarket clients in Asia since 1979. The bank knows the market and its opportunities. It has a broad footprint in Singapore, Shanghai, Hong Kong, Beijing and New Delhi. Close working relationships between the sites, in Asia and home markets, provide a seamless experience. With more than 170 employees in the region we have the knowledge and competence to meet customer needs. SEBʼs corporate banking services in Singapore: Trade and Export Financing Commercial Loan Facilities including Working Capital and Capital Investment Financing in global and local currencies Broad range of Cash Management and Treasury solutions With a 24 hour Foreign Exchange network service we offer a full range of FX products tailored to the specific client needs. We provide a locally based research team covering the major Asian economies.

articles. We also discuss opportunities arising from the AEC, and in broader terms acquisitions by Thai companies abroad. In addition, we address the automotive industry, one of the backbones of Thailand’s export economy. Across the border in Myanmar, Telenor has just launched their operation, while Norwegians are exploring the new Cambodian stock exchange. Finally, we look at the facts behind the traditional rivalry with Thailand’s southern

Mr. Lars Hagne

neighbour, Malaysia.

Head of Corporate Coverage Phone : +65 63501 384

E-mail : Lars.Hagne@seb.se

On the legal front, Thailand is again discussing the introduction of a new version of the Foreign Business Act, with stricter controls of foreign businesses. The Thai-Norwegian Chamber of Commerce, through Thailand’s Joint Foreign Chambers of Commerce, is trying to warn the Thai government against such moves, as they could scare foreign investors away. The Business Review also examines the proposed inheritance and property taxes, which

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Skandinaviska Enskilda Banken AB (publ) Singapore Branch 50 Collyer Quay #12-03, OUE Bayfront Singapore, 049321 Phone: +65 6223 5644 Website: www.mb.seb.se

have taken up a lot of column space in the newspapers lately. We hope you will enjoy the articles.

Thai-Norwegian Business Review

The Crush of Progress: Dr Surin Pitsuwan on How the AEC Will Change the Region By Eric Baker

r Surin Pitsuwan, a long-time advocate of the ASEAN Economic Community (AEC) and building coalitions in the region, is almost stoically optimistic about the grouping. Though several of the ASEAN member nations are behind in their deadlines to meet AEC obligations, he believes the overwhelming crush of globalisation and liberalisation will force countries to become more competitive and open their doors.

of those countries’ revenue is coming from overseas. The Thai business presence in Indonesia is already impressive, as I recently returned from a visit there. There are good opportunities for joint ventures with Singapore, Malaysia, Indonesia, Japan and Korea, as all these countries are going to be looking for foreign partners and bases for their investment capital.” Another focal point of concern for Dr Surin is corruption, as he estimates the cost of doing business in Thailand is 30% higher because of it. Though reports show many Thai

Despite some ASEAN countries still keeping protectionist policies in place, Dr Surin holds that the AEC agreement itself represents progress. “I would say some 75-80% of the agreements for the AEC are already in place,” he said. “The trick is implementing them. But the launch in late 2015 is still a commitment, and this is going to increase pressure on nations to prepare. Customs and immigration have already made some changes to their credit. The ASEAN nations need to realise this is not just a regional agreement but a global one, as over 600 people are going to be covered by the pact once all the nations join.” Dr Surin described efforts in several of the areas the AEC covers as a “work in progress”. He acknowledged that several countries are lacking in their English-language skills, but insisted they will improve mainly via the push of competitiveness. “These countries will have to learn the language of profit,” he said. “Aung San Suu Kyi said Myanmar is looking for companies eager for profits, but that also want to help the people in that country. The two don’t have to be mutually exclusive. Countries are opening up for a reason, so it makes no sense to despise profit. “English is the working language of professionals; even the ASEAN charter is written in English. Countries are simply going to have to learn better English to compete.” One of Dr Surin’s main messages in his speaking engagements is about how small and midsized entrepreneurs (SMEs), both Thai companies and other

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Dr Surin Pitsuwan describes the way forwad at Norway-Asia Business Summit in April 2014. Photo: TNCC

ASEAN countries, need to broaden their outlook to a regional one. Only 25% of ASEAN trade is coordinated within the region, compared to 75% for the EU and 65% for NAFTA countries. “SMEs are key to increasing trade in the region, as they represent 90% of the commercial establishments in Thailand and a similarly high percentage in neighbouring countries,” he said. “We need the trading percentage within the region to be higher to be a viable economic community, but once SMEs develop a foothold in neighbouring countries that is going to mean an increase in management and technical expertise crossing borders as well. “Large regional companies already know this and have developed a presence in other countries beyond where they were founded, such as Air Asia, CIMB, Siam Cement, CP and ThaiBev. But SMEs are apprehensive, in part because it requires an investment that might not have an immediate return. “Thai companies cannot be complacent. They should follow the models of Japan and Korea, where increasingly more

Thai companies cannot be complacent. They should follow the models of Japan and Korea, where increasingly more of those countries’ revenue is coming from overseas. institutions and companies, even some listed on the stock market, are not opposed to bribery, Dr Surin singles out Europe and other markets that do business with Southeast Asia to resist the temptation of deals laced with corruption.

Dr Surin admitted several of the AEC rules and laws require fine-tuning, mainly because each country has a different legal system, and this will take a lot of time to overhaul. Just as Customs and Immigration departments have changed their systems, so must ministerial regulators, he said. He pointed to aviation and a recent “Open Sky” initiative as an example of a positive agreement improving the region connectivity. Low-cost carriers have already started to penetrate the other markets in the region. “Larger industries are going to be the last to open up because they’re going to feel they are fine, but even they will come around,” he said. “Which sectors open up and when is being hashed out with mutual recognition agreements, but if ASEAN is serious about building a bloc there will be pressure for these to happen sooner rather than later.” Dr Surin said build-transfer-operate concessions can be useful in helping countries in the region develop, in addition to long-term public-private partnerships. He even said some perceived disadvantages could be utilised to good effect. “Despite the years of tumult in Thailand’s deep South, over half the AEC population is Muslim,” he said. “It could be an asset if the government doesn’t try to make them conform to Bangkok’s culture.”

“There will be pressure with the AEC to see who can provide a better environment for business,” he said. “If you are willing to see your business go to your neighbour because of your attitude on corruption, then fine. Try to compete. But Europeans companies have a responsibility to resist corruption so we can try to develop a different, more transparent mindset here. “I certainly don’t expect Norwegian companies to succumb to the pressure of corruption here as the country has a long history of zero tolerance for the vice. And with the AEC there are no more quota systems from economic superpowers as in the past, meaning countries will have to do a better job of looking out for themselves.”

A relaxed Dr. Surin Pitsuwan looks ahead to the AEC integration at the end of 2015. Photo: TNCC

Thai-Norwegian Business Review

Andrew Durieux on What the AEC Really Means for Thailand By Christopher Caillavet

ndrew Durieux wants to tell you that everything you think you know about the ASEAN Economic Community is probably wrong.

The Bangkok-based Australian consultant is the point man for AEC readiness at the Joint Foreign Chambers of Commerce in Thailand. As he sees it, local press accounts are missing the mark in explaining what regional integration means for the country. He aired some of his concerns for the Business Review. “Many media outlets make it look like Thailand’s about to be invaded by foreigners and that Thais will lose their jobs,” Mr Durieux said. “The truth is, the protections for workers are still there and aren’t really going to change.” The sense of foreboding among Thais may stem from the “countdown” aspect, which seems to portend a monumental shift when the AEC finally comes to fruition at the end of 2015. In Mr Durieux’s view, it’s much ado about nothing.

“The long-term benefit to Thailand,” Mr Durieux said, “is that it becomes more competitive, but also the making of profits in other countries “When people ask if the AEC will be completed at the end of 2015, it’s not really the right question,” he said. The end of 2015 is merely the latest in a series of moving targets for AEC countries to come into compliance with services liberalisation and labour guidelines. Thailand, among others, needs to step it up on this front.

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“I don’t think that we’ll get through the services liberalisation changes,” Mr Durieux said, “which is a big concern for the Foreign Chambers of Commerce in Thailand, because that will be a key driver in Thailand’s ability to get over the middle-income trap. Some of the labour changes, we can probably achieve; however, the implementation of most of those is effectively not a real change from what we do today.”

“The ACIA says, and the Thai government have told us, that they will open up 100% ASEAN ownership of mining, fisheries and agricultural businesses as part of this agreement,” Mr Durieux said. “But, under the Foreign Business Act in Thailand, those things are specifically protected.” One selling point of the AEC is the opportunity for Thais to expand their businesses into other countries.

Take, for example, an engineer or an architect or a doctor who is an ASEAN citizen and should be eligible to come to Thailand to work. “That will probably be able to happen at some point,” Mr Durieux said. “However, the requirement of 2 million baht in capital per foreigner, and the work permit, and various other pieces of paper that are required — it doesn’t look like any of these things will go away. So there’s not a real difference from what we have today.”

In that case, what big changes can we expect once the AEC is in place? “Well, one of the biggest changes is the fact that the governments will implement free ASEAN tourism movement,” Mr Durieux said. “Within Asean today — with the exception of Myanmar, which is still catching up — all the other nine countries already don’t require visas for each other’s citizens to travel. So that’s a big step, because it promotes tourism, it allows people to move freer, at least for a short period of time.” Much of the brush-clearing on trade is complete: “We have already seen tariffs and duties come down on about 98% of all the products that are commonly traded within the ASEAN region.” To the layman, it doesn’t sound like there’s much left to do. “There’s still a lot that could be accomplished,” Mr Durieux said. “Things like the work permits and visas should be cleaned up and fixed. Malaysia and Singapore have changed their system to allow ASEAN citizens to move. But at

JFCCT’s Andre Durieux addresses the Norway-Asia Business Summit in April 2015. Photo: TNCC

the same time they’ve said, ‘If we bring in engineers and doctors, we should be able to bring them in from anywhere, and it doesn’t really matter if they’re ASEAN citizens.’ So we would argue that it’s better to have a more expansive view on some of these things.” Other items on the wish list include easy and open movement of money by investors, and protections for ASEAN citizens investing in other countries. “The basic concept of the investment agreement, the ACIA, is that you should be treated as an equal,” Mr Durieux said. “If you’re a Malaysian and you’re investing in Thailand, you should be treated as a Thai. If you’re a Cambodian investing in Vietnam, you should be treated as a Vietnamese.” In Thailand, foreigners have long been able to invest in manufacturing operations and own 100%. In Cambodia and Vietnam, by contrast, practically any business is open to full foreign ownership. And while the Foreign Chambers consider the Board of Investment one of the bestfunctioning departments in Thailand, the BoI’s hands are tied by its limited mandate of attracting factories.

“The long-term benefit to Thailand,” Mr Durieux said, “is that it becomes more competitive, but also the making of profits in other countries, and then returning those profits to the Thai citizens, or through tax payments to the Thai government, or at the very least to Thai workers through wages and salaries.”

How will different countries react to the changes wrought by the AEC? “Singapore didn’t need to make any change,” Mr Durieux said. “It already allows foreign investment. It already protects foreigners. A lot of duties on products coming in are already low anyway. Whereas, a country like Thailand, which is protectionist in many areas, has to make a lot of changes. Most of the governments since 2007 have been fighting internal battles and haven’t been able to sit down and think about these macroeconomic things.”

Can working- and middle-class Thais expect to gain from the AEC? “I don’t necessarily think that they’ll get higher salaries,” Mr Durieux said. “What I do think is that Thai citizens should have an opportunity to purchase products and services at a lower price. They should have more disposable income. They should be able to get products and services of a better quality.”

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Are Thai Female Entrepreneurs Ready for the AEC? By Eric Baker

s women make up a disproportionately large share of small business operators in Thailand, whether female entrepreneurs are prepared for the launch of the ASEAN Economic Community (AEC) in late 2015 can serve as a barometer for much of the country.

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Ulrike Guelich, a professor at Bangkok University’s School of Entrepreneurship and Management, told a crowd at the Foreign Correspondents’ Club of Thailand that she is concerned about small and micro businesses operated by Thai females being unprepared for the AEC.

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“About 90% of small Thai entrepreneurs have no customers outside Thailand,” said Ms Guelich. “The AEC is going to open Thailand up to competitors and in order to fully take advantage of the benefits it offers, Thai companies need to look outward.” In addition to the lack of internationalisation, she is worried that female Thai entrepreneurs of small businesses are without a growth outlook for the next five years, lack innovation, have a high fear of failure, and in some instances lack the education needed to excel. Ms Guelich is less concerned about medium-sized businesses in Thailand, as they are further along in following the lead of large firms in standardising production processes, moving from OEM projects to branding, having employees fluent in other languages, acquiring foreign customers and having access to market data. Much of her research is taken from a 2013 Global Entrepreneurship Monitor study that she helped to conduct. Ms Guelich found a couple of unique characteristics for Thai entrepreneurs, namely that most started up as part of a large family business, and that many had females in high-profile roles as gender was not an impediment to school enrolment or business success because becoming an entrepreneur is considered one of the top career choices for women in the country. Thailand is third in ASEAN to Indonesia and the Philippines for early-stage entrepreneurial activity, which comprises start-ups, nascent entrepreneurs (first three months) and young businesses (three to 42 months), at 17% of the female

population. Almost half the Thai population is engaged in entrepreneurial activities, and half of those are women. Thailand ranks second in the world behind Uganda for established business owners, and entrepreneurs are accorded high status and respect here, rewarded with media attention, she said. The country also offers sufficient social services so that women can continue to work in Thailand even after they start a family.

About 90% of small Thai entrepreneurs have no customers outside Thailand. As with most small businesses including those operated by men, female entrepreneurs of micro (zero to five employees) and small firms in Thailand have limited access to financial support, lack entrepreneurial training skills and research and development capacity, and suffer from paltry government support. The outlook is bleak for established businesses with zero employees owned by women in Thailand, as only 0.9% plan to add employees over the next five years. Ms Guelich has a whole host of prescriptions for improving female entrepreneurs’ readiness for the AEC, which could be applied to a majority of businesses in the country. In addition to following the lead of larger companies mentioned above, such as standardising production processes, moving from OEM projects to branding, training employees to learn other languages, acquiring foreign customers and having access to market data, she recommends the government offer more budgetary support, especially in terms of venture capital. Ms Guelich wants to improve the networking and finance skills of female entrepreneurs through training and establishing consulting networks, while employees can improve their competency through regionally based training programmes.

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TUF: King Oscar Moves to Thailand By Eric Baker

hai Union Frozen Products (TUF), the world’s largest seafood company by sales, recently finalised its purchase of Norwegian sardine canner King Oscar for an undisclosed sum in the fourth quarter. The move is the latest in a series of acquisitions for the global leader in canned tuna production as it aims to expand its reach and diversify its product portfolio.

“We are very excited about the King Oscar acquisition, as the brand is known for its very high-end products, including sardines, brisling, sprat and herring sourced exclusively from the Norwegian fjords, the Baltic Sea and the North Sea,” said Thiraphong Chansiri, president and CEO of TUF. “It represents an expansion to a real market, which is part of our focus going forward. “This is the only brand in our industry that was given royal permission to use a monarch’s name and likeness for a product, and we expect that should help us as we look to new markets. King Oscar already has an established network, with plants in Norway and Poland, and TUF plans to introduce that network to other markets.” King Oscar has annual total production capacity 135 million cans and turnover of USD 80 million. Its premium sardines are top sellers in Norway, the US and Australia. Tuna made up 47% of TUF’s sales last year, with shrimp adding 25%, value-added businesses and other products 11%, pet food 7%, sardines and mackerel 6%, and salmon 4%.

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TUF’s business has always been export-based, and only 7% of its sales were in Thailand in the first half of 2014. The US made up the bulk with 41%, while Europe contributed 33% of sales during the same period. “Mergers and acquisitions have been a key growth strategy for TUF for 15 years, but we continue to focus on organic growth,” he said. “We will keep striving to improve our margin, and that is accomplished through either adding value or premium products.

TUF’s President and CEO, Thiraphong Chansiri, is optimistic about the future. Photo: Eric Baker

“King Oscar is our first premium product, and Norway is known in the seafood industry for its high quality. “We import frozen Norwegian salmon for re-export elsewhere, so we understand Norwegian expectations for their seafood.” The King Oscar deal comes only weeks after TUF acquired French smoked salmon producer MerAlliance for an undisclosed sum. “TUF is very excited about the MerAlliance purchase because the business model for chilled seafood is completely different than frozen,” said Mr Thiraphong. “The shelf life of their products is only 21 days, so the production facilities need to be close to the consumer markets. It should be useful to learn how to operate in a new market segment.” MerAlliance has annual turnover of USD 220 million and production facilities in France, Scotland and Poland. “Our company’s objective is to deliver a top line of USD 5 billion in 2015, and we are confident we can meet that goal,” he said. TUF’s brands include John West, Petit Navire, Hyacinthe Parmentier, Mareblu and now King Oscar in Europe, as well as Chicken of the Sea in the US. It sells under the Century brand in China and Sealect in Thailand. The company’s value-added products division includes several ready-

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OF FREE, RENEWABLE ENERGY TO REDUCE OPEX? to-eat meals, manufacturing bakery items and desserts such as ice cream, brownies and chocolate lava cakes, and even providing food for such household names as Oishi, McDonald’s and MK. TUF’s own brands make up 43% of revenue while private labels comprise 57%. “There is a lot of room for us to grow our brands and we plan on continuing to expand our brand portfolio,” said Mr Thiraphong. “We want to be in every market where there is demand for the products we make. TUF is only in 10 countries in Europe, so there is vast room to grow there. And we don’t have a presence in Latin America, Africa or the Middle East. “For Asia, Sealect is in Thailand, Hong Kong, Singapore, Vietnam, Myanmar and Laos, but revenue in Asia excluding Japan and Thailand makes up only 3% of the total. Tuna is not really established as a product in Thailand, especially canned tuna, so that takes some time to change. “One of our keys to success is to buy brands that are well-established in their markets. Another is to make sustainability a part of our business strategy, as this issue is important to our stakeholders and customers,” he said. TUF became the first Thai company to be selected for the Dow Jones Sustainability Index in September, as well as the first food firm from the emerging markets sector. “We are pleased with being included in the index because it demonstrates our commitment to sustainability,” said Mr Thiraphong. “We are eager to figure out how we can improve on sustainability and we want to benchmark ourselves against our competitors. “In the current commercial environment, the industry is pressured by countless challenges with the aim to competitively grow and add value to the business. TUF has humbly managed to enjoy the best of both worlds – a balance between corporate’s viable business development and a keen focus on economic, environment and social practices.

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“TUF just produced its first sustainability report, which shows our policies, activities and progress towards sustainability.” The Thai fisheries industry was recently rocked by a report in The Guardian alleging slavery and inhumane working conditions, followed by the US downgrading Thailand Norway’s King Oscar to the lowest level in its brand, recently acquired human trafficking report. by TUF. Photo: TUF TUF was held up as a role model by the Thai government in its charm offensive response, inviting diplomats to its facilities to oversee operations. Mr Thiraphong believes TUF has an obligation as a market leader to drive change in the industry, especially as people in other countries might be unaware of the company’s policies, tarring the whole Thai fisheries industry with one brush based on the report. “Other fishery companies look at us to lead; we have a responsibility,” he said. “We cannot say we are a market leader if we don’t try to improve the situation in the industry. TUF is not perfect, but we are willing to learn and improve. Hopefully the whole industry can see it needs to take the same position, and see that we share some common goals. “Thailand is an export-oriented economy so companies need to learn to live up to international standards. TUF always has third parties check on our employment practices, so hopefully other companies can follow our lead.”

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WWL: Managing Thailand’s Automotive Export By Christopher Caillavet

labour, a good workforce around car manufacturing. And not least, maybe the most important part, is that car manufacturers can own their own facilities, own the production 100% in Thailand. There’s no other country in Asia where you can do that.” This freedom of ownership for foreign firms gives Thailand an advantage over other emerging car-making hubs like China, Indonesia and Mexico, which tend to build for the local market rather than for export.

“Car manufacturers can own their own facilities 100% in Thailand. There’s no other country in Asia where you can do that”. WWL operates a fleet of more than 60 state-of-the-art vessels, capable of carrying a mix of products, from auto and large construction and agriculture machines to various breakbulk products. Photo: WWL

allenius Wilhelmsen Logistics, WWL for short, bills itself as a provider of logistics solutions for manufacturers of cars, trucks, heavy equipment and specialised cargo. If the job calls for the shipment of vehicles en masse from Point A to Point B without a scratch, WWL is ready to take on the task. All of this makes the Norwegian-Swedish company a good fit for Thailand’s car-exporting economy and Southeast Asia’s growing auto markets. Trond Tønjum is WWL’s vice-president in charge of Southeast Asia, a position he has held for nearly two years after a previous posting in China. Mr Tønjum took time to speak with the Business Review at his office in Bangkok. “If we look at cars in Southeast Asia, Thailand is the main hub of production,” he said. “There are three good reasons for that. One is that Thailand has been very accommodating of production of parts and technology. You have the skilled

Another enticement for car companies in Thailand is the eco-car programme, which offers huge tax incentives for making small, fuel-efficient cars in the country. At least ten major brands have signed on to the latest phase. While Thailand has traditionally welcomed various Japanese makers, Ford is also rising through its partnership with Mazda, AutoAlliance Thailand (AAT), and its own new factory that will ultimately have capacity to make 500,000 cars — most of them for export not just to other parts of Asia, but also to North America, Europe, Australia and the Middle East. Thailand is the third-biggest exporter of cars in Asia (after Japan and South Korea). All told, Thailand ships 1.4 million cars annually, and the figure is expected to rise to 2.4 million within a few years. That’s where WWL comes in. The company provides logistics services for finished vehicles from the factory door to the dealer. In Thailand, WWL performs services for many manufacturers with AAT and Chevrolet as their top customers, handling more than 335,000 cars domestically in 2013. In addition WWL provided ocean transportation

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A Car Industry Lifer Takes a Look Under the Hood By Christopher Caillavet

The fully functional AEC is expected to eliminate these barriers. WWL incorporated in Myanmar in August 2014 as the first company offering car-carrying trucks in the country. To illustrate Myanmar’s potential as an automotive market, Mr Tønjum threw out some statistics on “car penetration”.

WWL staff in Myanmar readies themselves for their shipment of imported cars. Photo: WWL

to Japanese as well as Western Manufacturers to other destinations in Asia, as well as Americas and Europe. In addition to cars WWL also see the growth of high and heavy vehicles like, trucks, busses and construction equipment.

WWL thus sees vast room for growth in Myanmar once weaknesses like the lack of infrastructure, dealerships and bank financing are addressed. The market requires mostly low-spec cars and pickup trucks of the type made in Thailand.

“We truck the cars straight from the yard to dealers throughout Thailand, and also to the ports for export,” Mr Tønjum said. “There we do the terminal handling and loading onto vessels, and we transport the vehicles to the importing countries. Then it’s the reverse thing: terminal handling, customs clearance, storage and distributing the cars to the dealers.”

In addition to Thailand and Myanmar, WWL has offices in Indonesia and Singapore, with local agents in Malaysia and the Philippines. Within the region, Mr Tønjum sees lots of growth potential in Vietnam, a 90-million-strong market whose car tax is due to drop in 2016, and in the Philippines, where income growth is surging.

WWL has been in Thailand for 15 years and has a fleet of 60 company-owned trucks and about as many under contract. Each truck can carry up to eight cars at a time. For oceangoing shipment, WWL uses mammoth RoRo (roll-on/ roll-off) vessels — essentially seaborne parking-houses that can carry thousands of cars. The company employs over 400 people at logistics facilities in Rayong, at Laem Chabang port on Thailand’s eastern seaboard, and at the main office in Bangkok. WWL does cross-border shipping from Thailand into Myanmar, Laos and Cambodia. This aspect of the business should get a boost once the Asean Economic Community is firmly in place by the end of 2015. “Into Laos we can drive the same truck,” Mr Tønjum said. “Into Myanmar we have to change trucks at the border, and the same with Cambodia.”

With a population of roughly 55 million, Myanmar has a mere seven cars per thousand people. By comparison, similar-sized Thailand has 206 cars per thousand. (Other states and their figures: Vietnam, 23 cars per thousand; Indonesia, 69; China, 188; Norway, 580; USA, 809.)

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When asked about the much-hyped Dawei project in eastern Myanmar, with its proposed deep-sea port on the Andaman, Mr Tønjum gave a cautious endorsement. “It’s still long in the future,” he said. “It will take time to develop, to find the money to develop it, and to build the infrastructure around the port. It’s only 350 kilometres from Bangkok. It’s very close. So you would save a lot of time on exports. For us, as ocean operators, we would see exports going westward out of Dawei and eastward out of Laem Chabang.” In his view, Myanmar needs a deep-sea port and Dawei is the eventual solution. When that day finally comes, WWL figures to be right in the thick of things, carrying on with its bold moves in the region.

loods, economic meltdowns and the occasional coup d’état: Yeap Swee Chuan has seen his share of upheaval during three decades spent in Thailand’s car industry. The Malaysia native arrived in 1985, setting up shop as an assembler and distributor of Ford parts. Today Mr Yeap’s company, Aapico Hitech, employs 4,500 workers at plants in several Thai provinces, supplying the major car makers with components ranging from steel fuel tanks to plastic panels. Aapico’s technology unit recently added 3D navigation and mapping software to the firm’s impressive stable of products. While Mr Yeap’s official titles at Aapico are president and CEO, he is quick to note the self-sustaining nature of the company he built. Greying but still energetic, the 66-year-old has served as chairman of the Malaysian-Thai Chamber of Commerce for ten years and enjoys mentoring Thammasat University marketing students in his spare time. Mr Yeap is frequently sounded out by business and political leaders for his insights. In a sit-down with the Business Review, he offered a cautiously upbeat take on Thailand’s car industry after a difficult 2014. In terms of raw number of vehicles made in the country, “2013 was so-so, not so bad,” Mr Yeap said. “2014 was bad. 2013 was 2.4 million, while 2014 was about 2 million. So we hope that 2015 is 2.4 million, same as 2013. Which I think is possible, because the slowdown has been so slow already. I think the buyers will come back. Whatever squeeze that was, the market will stabilise.” Successive Thai governments have dished out financial incentives for eco-car makers. Many of these models make use of parts supplied by Aapico, but Mr Yeap is circumspect about the long-term prospects for alternative vehicles. “Full electric vehicles, I think, will be many years down the road,” he said. “I can’t see them taking over the market. Maybe within ten years’ time they are 10%, 20% of the market, as a ceiling. But the potential is for the hybrids. There is nothing changed in the hybrids; you just have

Yeap Swee Chuan, Managing Director and CEO of Aapico Hitech. He is also the Chairman of the Thai-Malaysian Chamber of Commerce. Photo: Aapico Hitech

additional parts. The balance of 80% or 90%, I think half will be hybrids. It makes sense to have a hybrid, because a hybrid saves on about 50% of fuel. It is a good alternative to reduce fuel consumption. But the talk of gas, water, sunlight...I’m not too sure. This has been spoken of for years. You never see it coming.” Thailand is Southeast Asia’s biggest car exporter by far, the so-called “Detroit” of ASEAN. How firm is the country’s grip on the title? “I think we still have a good position,” Mr Yeap said. “What is the landscape of Thailand in five or ten years, we don’t know. The first attraction in Thailand was the low salaries. Second, it’s a good location with good government policies. The pickups of the world are made here. And now, the small eco-cars for the world are made here. So we have two good prongs in place.”

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Attorneys at Law Surveying the region, Mr Yeap spied a potential car-making rival: “The next country that would be a possibility is Indonesia. But how soon they could take over the role, I’m not sure.” Will the onset of the ASEAN Economic Community in late 2015 benefit Thailand? “When it comes to the AEC, Thailand has many advantages,” Mr Yeap said. “I think there will be a great income into Thailand from Malaysia, from other countries. Thailand’s salaries are high now for the professionals. From my experience, except for Singapore, they are probably the highest anywhere in the region. The standard of living, overall, in Thailand is not too bad. Thailand is a big country. Many people own farms, own land. The population density is not that high, even less than China. That’s why people here are not so stressed out, compared to China and India. I think it’s a paradise country.”

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Mr Yeap expects the newly opened-up Myanmar to become a hotbed of industry activity and new sales. “Everybody is rushing in there,” he said. “All the auto brands are there. Suzuki has an assembly plant, Mazda has an assembly plant, Nissan is starting an assembly plant. Everybody seems to say Myanmar will be the next destination. The resources, the people, the size of the country. It was a strong economy before. Maybe the history is there to spring back quickly again, because it was there before. Maybe it was even ahead of Thailand then.”

One phenomenon that Mr Yeap doesn’t see catching on in ASEAN is “national champion” makes in the mould of Malaysia’s Proton. “The Proton is not too successful,” he said. “The volumes have come down greatly. Maybe the global market was too small. Maybe the policies needed to be tweaked. Maybe the support from the government wasn’t adequate.” Trumping all is the prohibitively high capital cost of starting a car company from scratch, a reality that favours established players. Mr Yeap in the past has described Thailand as a ship that tends to right itself on its own. With that in mind, how important to the Thai economy is restoration of elective democracy?

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“Democracy is important for everybody,” Mr Yeap said. “Everybody wants to be free. So I think it’s the ideal way. Thailand has been democratic before. Thailand has gone through coups. My assessment of Thailand is, no matter what happens, it will bounce back and be slightly better than it was the day before. It will never bounce back and retract. When the trend will plateau, that is the question that everybody’s guessing.” After the catastrophic floods of 2011, “people were forecasting doom,” he recalled. “I said the industry would come back. I didn’t know it would come back so fast. I’ve never seen this in my life. We could not produce enough cars, running twenty-four hours a day, seven days a week. But even that is no good, that sort of spiky growth. Too strong. We should want steady, stable growth.”

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Telenor: Building a digital future for Myanmar By: Bridget Di Certo

ere, in Yangon, like most of the country, for most of the 20th Century, progress and modern development has been scarce. But in this downtown lane, in a former tea shop front, a man polishes his new display case of retail handsets. It is the marker of a city that has been waiting for change and has now stepped out into the spotlight of the international stage. When the newly-formed government announced in early 2013 that it would award two nationwide telecom licences to international companies, it was a particularly pertinent sign of dramatically changing times. For decades, under military rule, the simple task of placing a phone call was wrought with risk, expense and ardor. Most urban communities only had access to a few phone lines, generally run from a slapped together wooden table in front of someone’s house. The changes ahead for Myanmar will continue to unravel at an astounding pace In rural areas, the obstacles to telecommunication were even more extreme. Myanmar people will tell stories of waiting on the phone up to two hours – or even longer – to get a line connection. That could end up costing as much as a daily wage in the far-flung regions of the nation. SIM cards that did exist could cost USD 2,000 or more to purchase and handsets ran into the high hundreds. As well as underdeveloped infrastructure, Myanmar people endured intentionally restricted access to communication lines in Southeast Asia’s second geographically-largest country as a way for the generals to enforce secrecy and to prevent mass communication that could spur challenges to the military government. But a new nation is being built. The new civilian-government’s ambitious reform agenda, rolled out in 2010, sees Myanmar’s sights set on building a nation of the 21st Century and, in the digital age, a critical part of building a nation is telecommunications. On 27 June 2013, Telenor Group became a successful applicant for one of the two telecoms licences the Myanmar government put out to tender. Telenor Myanmar CEO

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Petter Furberg said he believes the changes ahead for Myanmar will continue to unravel at an astounding pace. For him, mobile connectivity is no longer a luxury, but a universal service. “People across the world are using mobiles whether they are rich or poor. Handset prices have come down substantially –handsets are down to twenty dollars,” Mr Furberg said. The company has committed to providing 1500kyat SIM cards (about USD 1.50) with no limitation on supply. “People know what it is to make a phone call, if they live in a remote village they will go to someone who has a village phone, so they know what it means to make phone calls, it’s just that [mobile phone service] hasn’t been available,” Mr Furberg said. “The evolution of industry has clearly made it much more affordable and much more a mass market product then [it used to be],” he said. The task ahead is not a small one: The government plans to increase Myanmar’s mobile phone density to between 75 and 80 percent between 2015 and 2016.

“One of the most important strategic decisions that Myanmar can make is to explore how it can leverage digital technology as a central platform of its development plans” Current mobile phone penetration for voice calls only is estimated at about 9 percent and internet about 5 percent. This pales in comparison to 57 percent mobile phone penetration in nearby Cambodia, 64 percent in Laos and more than 100 percent in neighbouring Thailand, according to 2012 Deloitte data. The social impact of a nationwide phone and internet network extend far beyond increased communications. There is a correlation between technology, innovation and economic growth, McKinsey Global Initiative stated in a 2013 report. “One of the most important strategic decisions that Myanmar can make is to explore how it can leverage

digital technology as a central platform of its development plans,” the report said. “Digital technology is accelerating development across emerging economies – and Myanmar has barely begun to tap its power.” With every 10 percent increase in mobile penetration, gross domestic product grows by 1.2 percent, according to Deloitte data. With little legacy infrastructure in place, “Myanmar can use digital technology to avoid some of the cost of a more conventional bricks-and-mortar approach to such sectors as banking, retail, education, health care and agriculture,” McKinsey Global Initiative found in its report on Myanmar published in 2013. In the report, McKinsey highlighted the success of the mobile revolution in Africa spurring a mobile-banking revolution – a sector sorely underused in Myanmar. “Myanmar is in the throes of remarkable change: Authoritarianism is giving way to political and governmental reform, a peace process could bring an end to decades of civil war, and the government is opening its economy up to the world after years of isolation,” the McKinsey authors said in their report. “But nobody should be in any doubt that the journey ahead will be long and challenging. Myanmar needs to seize its moment.” Before the recent introduction of the 2013 Telecoms Legislation, Myanmar was using an antiquated 1885 Myanmar Telegraph Act and a 1934 Myanmar Wireless Telegraphy Act. The previous framework has been rightfully referred to as “bewildering”. UK-based risk consultancy firm Maplecroft has said that the government-owned Myanmar Posts and Telecommunications – currently the sole provider of telecommunications services – is “widely reported as one of the most corrupt institutions in Myanmar”. The Wall Street Journal reported that in January 2013, the telecommunications minister and other high-ranking officials were removed from their posts under allegations of corruption. Despite this history, the country’s telecoms sector is seeing a new dawn with the fresh regulatory framework, which has been praised for its inclusive drafting process and more

Telenor Myanmar CEO Petter Furberg and dignitaries incl. Norway’s Ambassador Ann Ollestad ready with the scissors to release Telenor blue balloons at the launch in Yangon. Photo: Telenor

streamlined approvals and applications system. Myanmar is in the throes of remarkable change: Authoritarianism is giving way to political and governmental reform However, lessons from other telecoms market openings in Southeast Asia have shown that a balance must be struck in the regulatory framework between growth – so slow as to be tantamount to stagnation – and excessive liberalization, that could lead to price wars. The price war that broke out in Indonesia’s mobile sector from 2007 to 2008 saw prices fall as low as USD0.01 per minute and resulted in severely diminished revenue and operating profits for telecommunications operators. In addition to striking the right balance between regulation and competition, infrastructure and geography realities of Myanmar will pose unique challenges for incoming telecoms operators. Two thirds of the country does not have access to constant and reliable electricity, and while landmark peace agreements have been inked in the country with the world’s

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Continued from page 33

longest running civil war, many parts of the nation are still under the control of rebel armed groups. But on Myanmar’s path to building a nation of the digital age, one that hopes to be a regional leader, these challenges are no longer the unsurpassable obstacles they once were. Just as the old, colonial vine-covered buildings are cleared away, the old ways of Myanmar are giving way to a new future. And that future started on September 27, 2014, when Telenor Group began connecting customers in Myanmar. This day marked the official roll-out of Telenor’s network, starting in the nation’s second-largest city of Mandalay. Telenor continued its roll-out in the metropolitan hubs of

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Nay Pyi Taw and Yangon, and plans to expand coverage into more towns, villages and rural areas throughout the country in the months ahead. With customers now connected for the first time on its network, Telenor has officially started its journey to deliver affordable voice, data and value-added services over 2G and 3G technologies, designed for the Myanmar mass-market. Originally written for Telenor’s Reach magazine. The author, Bridget Di Certo is an Australian writer who has been living in Southeast Asia for four years. She is the author of two published books and numerous articles on social issues in the region.

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Flashback to the Summit: Will China Continue to be the Driver of Global Growth?

Being involved in business dealings between Thailand and Norway, you have constant needs for commercial contacts, information and networking. The Thai-Norwegian Chamber of Commerce can be one of your valuable links in these matters. In a business forum the members can interact, gather and exchange information through a variety of functions and activities. The Chamber organises business related events from Breakfast Meetings covering current business affairs, to topical Business Seminars and Dinner Events featuring guest speakers.

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The members can get helpful assistance from our Chamber office located in central Bangkok. The Chamber is co-located with Innovation Norway and cooperates closely with them at the Norwegian Business Centre. The Chamber has a good relationship with the Royal Norwegian Embassy, and several Chamber members also offer valuable support in many key business areas.

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eading economic groups and publications, including the World Economic Forum and Forbes, have heralded China’s economic development as one of the main engines driving global growth.

Even though China’s economic growth has cooled in previous quarters, few economists are keen to back away from a position that places primacy on China pacing worldwide growth. “All we see are the same graphs,” said Torger Reve, a professor with the BI Norwegian Business School. “Ever since the fall of the Berlin Wall, they all have the same numbers with Chinese growth gaining unchecked.” Dr Reve’s experience with China dates back to 1996, when he joined BI’s international MBA programme in that country. He was speaking in Bangkok at the Norway-Asia Business Summit in April.

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But China is building a centralised capitalism, where the public accepts authoritarian rule in exchange for economic prosperity.

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Dr Reve had his curiosity piqued by the unusual Chinese economic model, which combines authoritarian rule with aggressive capitalism. In some ways, much of the behaviour was similar to previous economic development: a mass migration into manufacturing positions and urban landscapes, gaining profits from exporting, heavy investment in infrastructure and education, and the gradual development of a consumption economy.

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“Transforming communism into a technocracy, controlling the media and keeping dissidents quiet, the one-child policy; these are all part of the bargain in China. The people have agreed to this thus far because their livelihoods have improved,” he said. There has also been an emphasis to restore Chinese greatness, to take the economic leadership in the region away from Japan, its traditional rival, said Dr Reve. He admits China has made great strides. They are working on building Chinese brands into Chinese multinationals.

The country bought a majority of the US government debt, which forces the both sides to work with one another. Even Norway has gained from Chinese growth. “Norway enjoys a triple China effect. Chinese growth increases the value of our exports there, decreases Norwegian import costs, and increasing Chinese imports and exports helps Norwegian shipping,” said Dr Reve. Yet he feels China has reached its economic growth limits following its current model.

“Transforming communism into a technocracy, controlling the media and keeping dissidents quiet, the one-child policy; these are all part of the bargain in China”.

“You have to wear a mask to get around in Beijing now because of all the pollution,” he said. “The recent decrease in growth is going to require more stimulus, and there are already strains on energy, water and natural resources. The heavy pollution threatens the quality of life for the locals, and CO2 emissions from coal processing threaten to worsen the climate. “To maintain foreign investments that could easily move elsewhere and rebuild its growth, China needs to increase its investment in infrastructure and renewable energy, work on raising private consumption, and make sure it avoids the Japanese savings trap that could lead to stagnation. The country also needs to steer clear of bubbles and financial crises, fight against rising costs and battle corruption, all easier said than done.” Dr Reve gives the Chinese government credit for developing its recent Emerald Agenda that attempts to address several of the country’s long-term needs. This agenda comprises

Torger Reve is one of BI’s most well known professors. He paints an optimistic picture of China’s future. Photo: TNCC

building global clusters of excellence in industries, similar to the model Norway uses, educating its people to the needs of businesses, developing world-class universities, increasing research and development work, soft-skills training to bolster innovation and continuing to attract foreign investment. Though China recognises it problems and is taking steps to address them, Dr Reve is sceptical about whether it will be enough to keep China at the top of the growth mountain. He utilised a familiar country for comparison.

Jeff Immelt, the CEO of General Electric, said ‘I trust Norwegian workers to innovate.’ What the head of a major US conglomerate was saying is that despite the high costs, which are a concern for any company, Norway’s flat hierarchy where workers are given more responsibility is better at producing innovation than most other models. That trust-based economy, along with zero tolerance for corruption, continue to draw foreign investment to Norway. “In my opinion, China will not be able to drive global growth if it continues along its current path.”

“Norway has the highest costs in the world, yet it still continues to function quite well,” he said. “I believe this comes down to two reasons: a reliance on technology and the Norwegian version of a trust-based economy.

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Thailand and Malaysia: Whose Star Shines Brighter? By Christopher Caillavet

s neighbours and trading partners, Thailand and Malaysia are closely entwined, and the pairing is rarely without tension.

The relationship reached a nadir in 2004, when then-Prime Minister Thaksin Shinawatra, on the flimsiest of evidence, accused Muslim-majority Malaysia of supporting the violent insurgency in southern Thailand. Malaysia denied the charge and blasted what it called the singling out and abusive treatment of Thai Muslims under the Thaksin government. Flash forward to today and the southern unrest has receded to a low boil, though the conflict still provides a potent reminder of the cultural friction that presents such a challenge to stability in this corner of Asia. In their economics, politics and culture, Thailand and Malaysia evince sharp differences and surprising similarities. Which country has the winning hand going forward? To get a sense of direction, one must first look at the history. Malaysia is a former colonial holding of the late British Empire. It is a multicultural, multilingual nation that threw off a decade-long Communist uprising and ultimately emerged as an economic success story, routinely cranking out strong GDP growth under the stewardship of strongarmed former Prime Minister Mahathir Mohamad. According to the CIA Factbook, Malaysia’s population of 30 million comprises a narrow Malay majority (50.1%) and significant cohorts of ethnic Chinese (22.6%), indigenous peoples (11.8%) and Indians (6.7%). Malaysia is an officially Islamic, constitutional monarchy that extends benefits to the majority and affords protections to the minority. Malaysia’s economy, a liberal free-trade regime with hints of autarky, is anchored by abundant resources of tin, petroleum, palm oil and rubber; the manufacture of electronics, pharmaceuticals, finished food products and vehicles like the home-grown Proton car; and a service sector shepherded by the industrious Chinese commercial class.

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In common with Malaysia, Thailand is a constitutional monarchy — indeed, one of the longest-standing examples of the form in the world. Some 95% of Thais practise Buddhism, but Islam wields influence as well, especially in the southernmost provinces. Of the 67-million-strong Thai population, it is estimated that 40% have at least partial Chinese ancestry, and Bangkok-based Sino-Thai families cast a long shadow over the country’s business landscape. The Thai economy is a mixed bag: its strengths include a robust farm sector that serves as a breadbasket for Southeast Asia and beyond, and an investment climate that welcomes foreign-led factories and fuels export-driven growth. There are downsides, though. Infringement of intellectual property is rife, and correcting the problem seems low on the agenda. Red tape hampers small-business formation and job creation. Disparity in household income is getting belated government attention. Then there is the question of stability. After a promising leap of progress in the early 2000s under the effective but erratic Mr Thaksin, Thailand’s growth has stalled against a backdrop of intractable political crises, culminating with the military’s seizure of power in 2014. Malaysia, too, has its worries about stability. A high-profile crime wave in Kuala Lumpur, replete with bag snatchings and smash-and-grab raids on cars, has thrown into doubt the carefully crafted image of a harmonious multiethnic society. Press accounts weave dark tales of rising Islamic radicalism. Both Thailand and Malaysia suffer from a top-down management style and overly centralised government. In Thailand, for instance, the only democratically elected executives of any note are the Bangkok governor and (in theory) the prime minister. Malaysia, meanwhile, has been controlled by a single party since independence in 1957. With the ASEAN Economic Community looming in late 2015, English proficiency comes to the fore. Here, at least, the result is a knockout: the global language consultancy EF Education First puts Malaysia in 11th place among all countries — the best showing in ASEAN — while Thailand struggles along at 55th.

The border crossing between Thailand and Malaysia at Rantau Panjang. Photo: Mohd Fahmi Mohd Azmi

Transport? In this zone, Thailand excels with an unrivalled central location. Both countries boast airports among the ten busiest in Asia. Malaysia Airlines is in rebuilding mode, shaken by the loss of two in-flight aircraft in 2014, while unprofitable Thai Airways International is in the midst of its own turnaround effort. Down at the docks, Malaysia holds the edge with its buzzing Port Klang and Tanjun Pelepas operations. Thailand has pinned hopes on construction of a deep-water port at Dawei, Myanmar, to create a much-needed shipping channel to the Andaman Sea. Since the name of the AEC game is integration, the multilateral relations and global alliances of our two subjects need a hearing. As an Islamic state, Malaysia enjoys close ties with the oil and gas giants of the Persian Gulf. Foreign entrepreneurs also find it easy to set up shop under an open rule-of-law regime. One caveat is KL’s strained relations with regional

powerhouse Singapore, a former Malaysian territory and thirsty client of its northern neighbour’s water resources. For its part, Thailand sits firmly in the sphere of the CLMV countries (Cambodia, Laos, Myanmar, Vietnam) and behemoth China to the north. Malaysia (and southern Thailand) will often take a back seat under policies formulated in, and designed to benefit, far-away Bangkok. In the broader Pacific, Thailand has strong business partnerships with Japanese companies and long historic and military ties with the United States. The purpose of this article is not to choose a side between Thailand and Malaysia, but rather to provide food for thought to the curious in respect of these two fascinating and complex countries. Thus nourished, readers are urged to use the above thumbnail sketch as a starting point to seek their own conclusions. Let the debate begin.

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Putting Norway’s Stamp on the New Cambodian Stock Exchange By Eric Baker

ambodia has always held a certain attraction for Morten Kvammen. Starting out in Dubai running a private equity fund, he had a circle of friends in Thailand that wanted to get in on the ground floor of Cambodia’s planned stock exchange. As the new bourse was scheduled to open in 2009, Mr Kvammen and his associates launched Cambodian Capital in 2008 and gained the first broking licence from the authorities. “We felt this was a huge opportunity because Cambodia is an ignored market. We thought there was the potential for several companies to list and set about finding a wellcapitalised underwriter,” he said. However, the investing environment there was beset by delays and disappointments. The Cambodian Securities Exchange didn’t launch until 2011 and trading opened in 2012. Only two companies are listed—the state-owned water supply firm and a private garment business—as the combined market capitalisation is under $2 million. “Unfortunately the market hasn’t been very active. Right now it’s a market that no one really cares about. The government has done next to nothing to list state enterprises or encourage private firms to list. The main international port in Sihanoukville is not listed, and neither is EDC, the major power supplier and generator. I don’t think local companies fully appreciate some of the less tangible benefits of listing,” said Mr Kvammen. These benefits include liquidity for shareholders, a level of prestige in the business world, and being able to use a company to acquire other companies. He said companies see very few tangible benefits to listing, especially in a market without an active investor base. Still, his holding group set up a company trading public securities in the region and an advisory group in Cambodia because it insists there is potential there. “There are several interested investors in Cambodia, but their only choices are bank deposits, real estate or investing in their own business,” he said. “If people had an

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opportunity to invest in more stocks, you would see a lot more activity in the bourse. “In talking to private investors, most want to gain access to the underlying factors driving growth, which are financial services, telecommunications and the retail sector. “There are several steps that can be taken, such as financial and tax incentives for listing that include reducing reporting requirements until the market matures, and offering a clean

“We felt this was a huge opportunity because Cambodia is an ignored market”. Phnom Penh, Cambodia’s capital is ready for capital inflow into its new stock market.

slate for any past accounting monkey business, but the government is relatively fragmented here. You have little fiefdoms in various ministries as well as the state-owned enterprises. There is a lack of follow-through because ministries feel they have little to gain as there is little appreciation for the benefits of listing.” The advisory group is called Lotus Capital and it specialises in raising funds, business plan management and project management. The firm has two large projects now, with the primary one an USD 8 million investment in an ocean fish farm with a Norwegian entrepreneur who is a pioneer in the field. “We think this will change the fishing industry here and improve food security as well as competitiveness,” said Mr Kvammen. “Most of the seafood caught here is freshwater fish from the Mekong River and Tonle Sap Lake. But the Chinese are building several dams along the Mekong that is going to severely affect fish populations here. Between 70-80% of the average protein intake for Cambodians comes from

fish, so that needs to be met if the amount of freshwater fish dwindle. We believe we can meet this need with farming fish in the sea.”

“We now view the Greater Mekong Subregion as a single market, and so do many other analysts. Myanmar, Thailand, Laos and Cambodia are very similar culturally.

Lotus Capital’s second project is an office tower projected to be the fourth-largest in Cambodia with 20,000 square metres of space. It is also mulling a hotel and resort project with over 100 rooms and an affordable housing project with a local partner for the emerging Phnom Penh middle class.

“I would tell investors looking at the region to give Cambodia a fair shot. It’s an easy market to start in because it’s not dominated by large companies as in Thailand, where even international companies find it hard to compete. Cambodia has a small population, it is relatively flat, you can own 100% of a business here, and there is less red tape than in most other countries in the region.

Mr Kvammen still holds that affinity for Cambodia and feels investors are overlooking the country by getting in line to court Myanmar. “Cambodia stands to benefit more from the ASEAN Economic Community than other member countries because of the low cost of labour,” he said. “The easing of customs barriers should make it attractive to investors in other countries and it has a good geographic location between the two powerhouses of Thailand and Vietnam. Being a facilitator could greatly improve Cambodia’s logistics systems.

“For the last two years all the rage has been Myanmar, but Cambodia has been open longer so it’s easier to set up a business here. The country has very good investment laws and the culture is pro-business. I would say it’s a lot easier to do business here than in many of the other markets in the region. “The drawbacks to investment in Cambodia are a relatively untrained labour force and expensive electricity costs.”

Thai-Norwegian Business Review

Giving Expat Entrepreneurs Their Do By Eric Baker

xpat entrepreneurs in Thailand have brought a wealth of know-how, ideas and energy to the business community, making their presence known for decades. They were finally recognised at the inaugural Expat Entrepreneur Awards 2014 on Oct 14th at Rembrandt Hotel, with 200 guests watching celebrity teacher and expat Andrew Biggs emcee the proceedings. Organised by The Big Chilli magazine in collaboration with the Bangkok Now (BNOW) networking group, the awards were presented to 16 expat entrepreneurs representing various categories. The expatriate community was lauded for their creativity, ingenuity, excellence and proven success. Several of our readers will be familiar with some of the 80 nominees from their daily lives. Joe Sloane has helped redefine the role of a butcher in Thailand, sourcing the best locally reared pigs and following best practices in butchery and charcuterie at Sloane’s. Dane Martin Toft Sørensen brings a Scandinavian touch to the proceedings with his WearYouWant.com fashion and beauty website. Brian Bennett’s 9FilmFest helps budding filmmakers establish a toehold in a creative field, while BKK Kids is an online resource for English-speaking parents living in or visiting Thailand, with over 500 listings of events, activities, classes, healthcare providers and services. Beervana helped start the imported craft beer craze sweeping the country, and Smiling Albino customises authentic, socially-conscious, luxury trips throughout the region. HotelQuickly is one of the largest last-minute hotel booking apps in Asia Pacific. Andovar is one of the first translation and localisation companies in Thailand. Frustrated by the lack of web design skills among local businesses in Bangkok, Carl Heaton set up Web Courses Bangkok to train people in web design, graphic design and online marketing. “This is the first time the foreign business community’s contribution to the Thai economy has been recognised. Apart from being long overdue, the Expat Entrepreneur Awards revealed a wealth of brilliant business ideas from

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retail category; and Web Courses Bangkok won Tech and IT.

foreigners living in Thailand and we are extremely proud to have helped create this event,” said Colin Hastings, publisher of The Big Chilli.

“Though we had over 80 nominations this year, I think in future years we could easily receive hundreds of nominations,” said Mr Hastings.

“We have featured some incredible stories on expats and their businesses during the past 15 years and it’s time we acknowledge their efforts. I think these awards are a natural progression from what our magazine tries to do. “It was this month 40 years ago that I first stepped foot in Thailand. Though I took a circuitous route before I started my own company, I always encourage expats here to consider setting up a business because with creativity and hard work, you can be a successful entrepreneur here.”

Steve Jobs: “I’m convinced that 50% of what makes an entrepreneur successful is pure perserverance”

“If you want to be an entrepreneur, I think you need to ask yourself two questions,” said Rafiq Razali, CEO of Groupon Malaysia, in a video message. “One, are you adding any value to your customers’ lives? And two, how hard are you willing to try to succeed?” “I think a quote from Steve Jobs is appropriate here,” said Pawoot Pongvitayapanu, founder of Tarad.com, Thailand’s largest e-commerce site. “He said ‘I’m convinced that 50% of what makes an entrepreneur successful is pure perserverance.’” “It was a privilege to meet so many expat entrepreneurs who have successfully built and grown their businesses in Thailand. We hope more budding entrepreneurs have drawn inspiration from their stories,” said Pacharee Pantoomano Pfirsch, founder of BNOW. Nominees were judged on (a) originality of business concept, (b) effectiveness of marketing strategies and

Judges and organisers among Bangkok’s expat entrepreneurs: left to right are Colin Hastings, Kent Wiley, Pacharee Pantoomano Pfirsch, Stanley Kang, Fred Mouawad, and Roy Howard.

promotions, (c) job creation, (d) effectiveness of CSR (corporate social responsibility) campaigns, (e) growth potential, domestically and overseas, (f) overall impact of the business in the marketplace and (g) a YouTube video highlighting their business. The judging panel comprised Fred Mouawad, chairman and CEO of Synergia One; Stanley Kang, chairman of the Joint Foreign Chambers of Commerce in Thailand; Roy Howard, chairman, Format & Partners; and Kent Wiley, an independent management consultant. “Thailand is putting more of a focus on entrepreneurship, moving away from mass manufacturing,” said Mr Kang. “This will become more important as the ASEAN Economic Community opens doors starting in late 2015.” Some of the winners include In Search of Sanuk for the charity category; Monroe Consulting Group took the consultancy category; Eatigo won for discount trade; Check Inn 99 nabbed the entertainment category; Tea & Fruits won for F&B drinks; Jeff Thompsen Collection took the fashion gong; Vimi nabbed the graphic design category; The Lab landed the health and wellness trophy; Smiling Albino took hospitality honours; Tuk Tuk Factory won for manufacturing; Capital TV nabbed the media category; Town & Country won for property; What’s New took the

Some of the other nominees include In Search of Sanuk foundation, which provides food, shelter and educational support for survivors of torture and trauma, focusing special attention on at-risk women and girls. For over 30 years Siam Costumes has been making outfits for films, TV shows, opera productions, and plays both locally and abroad, including Broadway and the West End.

Passionate about the need to take fossil-fuel guzzling vehicles off the road, Dutch engineer Dennis Harte and his team at Tuk-Tuk Factory assemble four models of electric tuk-tuks in Thailand for export. Thailand-Property.com is the country’s leading real estate portal for Thailand’s expat community. Rather than focus on machines, The Lab has created a niche gym market focusing on classes and inclusiveness. Eatigo offers an alternative spin to the online daily deal sector, offering discounts at off-peak times through yield management principles. In six years Popscene events has gone from a monthly night at a dingy club on Khaosan Road to booking acts such as The Cribs, Young Knives, and Andy Rourke at Bangkok’s most prestigious venues, giving the city’s nightlife a jumpstart. Patricia’s Homemade is a line of homemade jams, pickles, chutneys and antipasto dishes sold at farmer’s markets and catered events.

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Reading the Tea Leaves on Thailand’s Inheritance and Property Taxes By Eric Baker

hai politicians have long murmured about proposing inheritance and property taxes, but few have had the clout or interest in passing either tax into law. The new military regime now insists it will pass both as it seeks to reduce income inequalities in Thailand.

As for the property tax, the Finance Ministry’s Fiscal Policy Office (FPO) proposed a ceiling rate of 4% for unused and commercial land. The tax rate for unused land would double every three years, not exceeding 4% of the appraised value, while the maximum rate for agricultural use is 0.5% and residential land 1%.

Deputy Prime Minister MR Pridiyathorn Devakula has publicly stated the government plans to impose a 10% inheritance tax on estates of over 50 million baht.

The ministry is expected to provide a grace period of two to five years before imposing the land and property tax so landowners are not overburdened, said the FPO to the Bangkok Post.

“If we don’t start with a wealth tax, it will be very difficult to start with land and property taxes,” said the former central bank governor. The government is trying to avoid double taxation, where assets are taxed when transferred to the living spouse, and again when children inherit assets when the last parent passes. MR Pridiyathorn dismissed suggestions that 10% is too high.

Thailand already has a property tax, but it has been widely derided because the rates are too low, based on improper or old appraisal values, and is rarely collected.

Tan Passakornnatee, chief executive of Ichitan Group, told the Bangkok Post the government needs to look closely at the practices of other countries to make sure the new law doesn’t trigger massive outflows.

“If we don’t start with a wealth tax, it will be very difficult to start with land and property taxes”.

Gregory Lamont, a tax and legal services partner at PwC Thailand, told the same newspaper that practical hurdles explain why only 21 countries have an inheritance and estate tax. As the proposed law would apply on to assets in Thailand, he fears a massive outflow of funds to tax havens such as Hong Kong and Singapore. “Take the US. The country has the most sophisticated estate tax, yet in 2013 it generated only 0.7% of all government revenue. One would expect that Thailand wouldn’t even get close to 0.7%, but would spend a lot on administrative costs,” said Mr Lamont.

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He suggested for such a tax to work it should apply to worldwide assets, there should be no delay between the announcement of the law and the effective date so the wealthy cannot move assets, and a gift tax is imposed so that donors do not prematurely transfer their assets. A third party should be allowed to appraise assets to avoid corruption, he added. Teera Phutrakul, the chairman of the Thai Financial Planners Association, pointed out inheritance taxes offer such a low yield most governments have given them up. Failing that, he urged Thai policymakers to rethink the 10% tax on assets above 50 million baht, as such a threshold puts the country in the same league as Japan and the Netherlands, even though these nations earn eight times higher per capita income than we do. “Another reason to cut the tax is more practical than theoretical — international tax competition. The top bracket for personal income tax in Thailand is already quite high

at 35% compared with 20% in Singapore and 15% in Hong Kong. If the government goes ahead and tries to tax people on their inheritance windfall at the same high rates as their income, the tax base will shrink dramatically and little revenue be raised,” wrote Mr Teera in the Bangkok Post. “A general rule for efficient taxation is for governments to tread lightly on mobile tax bases, and inheritance and capital gains are some of the most mobile. Capital is highly mobile across borders, which has prompted nearly every country in recent decades to cut tax rates on corporations, wealth, estates, dividends and capital gains as well as withholding taxes on cross-border investment flows.” His suggestions for how to reduce the amount liable to inheritance tax are make a gift, corporatise your assets, create an offshore trust, and buy life insurance, which won’t reduce your liability but could make it easier for your family to pay the tax bill.

The Chamber Welcomes a new Ambassador On 24 September 2014, Thai-Norwegian Chamber of Commerce invited members and friends to its networking evening to get to know the each other and welcome the new Norwayâ&#x20AC;&#x2122;s Ambassador H. E. Kjetil Paulsen at the beautiful Four Season Bangkok Hotel. Thank you everyone who attended and specials thanks to Nordea Bank and Samitivej Hospital for their support in holding the event.

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Norwegian Properties: Building a Future in Jomtien

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ารเสด็จพระราชดำาเนินเยือนนอร์เวย์ของพระบาทสมเด็จ พระจุลจอมเกล้าเจ้าอยู่หัว ในปี ค.ศ. 1907 ถือเป็น ช่วงเวลาอันเหมาะสมยิ่ง เนื่องจากเป็นการเริ่มต้น ศตวรรษแห่งการสร้างพันธมิตรใหม่ของกลุ่ม ประเทศยุโรป ในขณะที่การเมืองเริ่มส่อเค้าการเปลี่ยนแปลง และการพัฒนา อุตสาหกรรมกำาลังเปลี่ยนรูปแบบความสัมพันธ์ของนานาประเทศทั่วโลก นอร์เวย์ในขณะนั้นเพิ่งได้รับเอกราชจากประเทศเพื่อนบ้านอย่างสวีเดน และอยู่ภายใต้การปกครองในระบอบประชาธิปไตย ผู้นำาของนอร์เวย์ให้ความ สำาคัญกับการพัฒนาโครงสร้างพื นฐานทางสังคมและอุตสาหกรรมเพื่อ ประโยชน์ของประชาชนและคนรุ่นหลัง สิ่งที่พระบาทสมเด็จพระจุลจอมเกล้า เจ้าอยู่หัวทรงประจักษ์ด้วยพระองค์เองในปี 1907 คือชาวนอร์เวย์มีจิตสำานึก สูงในเรื่องความเท่าเทียมกัน ในสังคม การประดิษฐ์คิดค้น นวัตกรรมใหม่ๆ และการ ทำางานหนัก ซึ่งยังมีอิทธิพล อย่างมากในสังคมนอร์เวย์ การเสด็จฯ เยือน นอร์เวย์ของพระบาท สมเด็จพระจุลจอมเกล้า เจ้าอยู่หัว เพื่อแสวงหา เทคโนโลยีสมัยใหม่ จึงมีความ สำาคัญทางประวัติศาสตร์ซึ่งส่งผล ต่อเนื่องยาวนานถึงความสัมพันธ์ อันใกล้ชิดระหว่างนอร์เวย์และไทย จวบจนทุกวันนี้ พระบาทสมเด็จพระจุลจอมเกล้าเจ้าอยู่หัวทรงนำาพา “สยาม” ให้ปรากฏ อยู่บนแผนที่โลก และใน ค.ศ. 1907 ประเทศไทยก็กำาลังจะก้าวเข้าสู่ยุคใหม่ ซึ่งขับเคลื่อนด้วยการพัฒนาทางสังคม เศรษฐกิจ และอุตสาหกรรม พระบาทสมเด็จพระจุลจอมเกล้าเจ้าอยู่หัวไม่เพียงทรงประจักษ์ด้วย พระองค์เองถึงกระแสการพัฒนาอุตสาหกรรมในนอร์เวย์เท่านั้น หากยังทรง ค้นพบความงดงามของธรรมชาติแบบดั้งเดิม ภูเขา ธารน้ำาแข็ง และฟยอร์ด ตลอดจนผู้คนชาวนอร์เวย์ที่เปี่ยมไปด้วยมิตรภาพ และพลังแห่งการ สร้างสรรค์ การเริ่มนำาไฟฟ้าพลังน้ำามาใช้ในเวลานั้นถือเป็นโอกาสครั้งใหญ่สำาหรับ อุตสาหกรรมพลังงาน นอร์เวย์ ได้สร้างประวัติศาสตร์ที่สำาคัญใน ค.ศ. 1905 เมื่อบริษัท นอร์สค์ ไฮโดร ซึ่งปัจจุบันเปลี่ยนชื่อเป็น “ยารา” ได้เริ่มผลิตปุ๋ยแร่ ธาตุ โดยใช้ไฟฟ้าพลังน้ำาเพื่อแยกไนโตรเจนออกจากอากาศ พระบาทสมเด็จ พระจุลจอมเกล้าเจ้าอยู่หัวทรงเสด็จฯ เยี่ยมโรงงานของนอร์สค์ ไฮโดร เพื่อ

และการจัดสรรเงินกองทุนด้วยระบบภาษีที่มีประสิทธิภาพ นับแต่ศตวรรษที่ 19 นอร์เวย์ค่อยๆ พัฒนาเศรษฐกิจอย่างต่อเนื่องโดย อาศัยทรัพยากรธรรมชาติที่อุดมสมบูรณ์ การปกครองด้วยธรรมาภิบาล และความมุ่งมั่นของประชาชน เมื่อได้เข้าร่วมอยู่ในพื้นที่เศรษฐกิจยุโรป (European Economic Area) ในปี ค.ศ. 1994 นอร์เวย์จึงมีเสถียรภาพ ทางเศรษฐกิจและสังคมสูงกว่าประเทศสมาชิกอื่นๆ ปัจจุบันนี้นอร์เวย์เป็น ประเทศที่มีดัชนีการพัฒนาอยู่ในลำาดับต้นๆ ในด้านการบริหารจัดการ เศรษฐกิจและความยุติธรรมทางสังคม ประเทศไทยเป็นหนึ่งในตลาดใหญ่ของนอร์เวย์ในทวีปเอเชีย ทั้งในด้าน การส่งออกและการลงทุน โดยเฉพาะธุรกิจโทรคมนาคม ปุ๋ย และปลา ตลอด จนอาหารทะเลแปลรูป ในขณะที่สินค้าส่งออกจากประเทศไทยไปยังนอร์เวย์ ก็เพิ่มขึ้นอย่างต่อเนื่อง ในฐานะที่เป็นประเทศเล็ก ต้องถือว่านอร์เวย์ประสบความสำาเร็จทางด้าน การค้า และเป็นประเทศที่เปิดกว้างสำาหรับการลงทุนจากต่างชาติ บริษัท ต่างชาติเองก็รู้สึกวางใจ ต่อการทำาธุรกิจใน นอร์เวย์ เนื่องจาก มีกฎเกณฑ์ที่ โปร่งใสและมี ประสิทธิภาพ คล่องตัว ทำาให้ กลุ่มธุรกิจสามารถคาดการณ์ก่อนที่จะลงทุนได้ กิจการด้านพาณิชยนาวีของนอร์เวย์ ก็มีบทบาทสำาคัญต่อความ สัมพันธ์ระหว่างไทย-นอร์เวย์เช่นกัน ในปี ค.ศ. 1907 เรือทุกๆ 4 ลำาที่เข้า เทียบท่าในกรุงเทพฯ จะเป็นเรือจากนอร์เวย์ 1ลำา ปัจจุบันเรือเดินทะเลของ นอร์เวย์ยังคงความก้าวหน้าด้านเทคโนโลยีสูงที่สุดในโลก นอร์เวย์จึงยัง เป็นผู้นำาตลาดด้านการขนส่งสินค้าพิเศษ อันได้แก่ ผลิตภัณฑ์ปิโตรเลียม เคมีภัณฑ์ ก๊าซ กระดาษ ยานพาหนะและรถบรรทุกสินค้า นอกจากนี้นอร์เวย์ยังเป็นผู้ผลิตปลาแซลมอนแอตแลนติกชั้นนำา ของโลก ด้วยแนวชายฝั่งเป็นรอยฟันเลื่อยทอดยาวไปกับน้ำาทะลใสสะอาดและ เย็นจัด ซึ่งเป็นสภาพแวดล้อมที่เหมาะสมที่สุดสำาหรับการเพาะเลี้ยงสัตว์น้ำา แบบยั่งยืน ความยั่งยืนเป็นหัวใจสำาคัญของอุตสาหกรรมส่วนใหญ่ในนอร์เวย์ รวมถึงอุตสาหกรรมประมงด้วย และปัจจุบันศักยภาพในการเพาะเลี้ยงสัตว์น้ำา ของนอร์เวย์ก็กำาลังเป็นที่ต้องการในระดับสากล ในฐานะผู้ผลิตน้ำามันและก๊าซธรรมชาติรายใหญ่ และหนึ่งในประเทศ ผู้ส่งออกพลังงานรายใหญ่ของโลก นอร์เวย์มีบทบาทในการสร้างความมั่นคง ด้านพลังงานให้กับประเทศผู้ใช้พลังงาน และเนื่องจากชาวนอร์เวย์ให้ความ สำาคัญกับความยั่งยืนของสิ่งแวดล้อม จึงมีการดำาเนินนโยบายที่เกี่ยวข้องกับ

ทอดพระเนตรนวัตกรรมดังกล่าว และทรงนำาตัวอย่างกลับมาประเทศไทยด้วย ในพระราชหัตถเลขาฉบับหนึ่งที่ทรงเขียนระหว่างเสด็จฯ เยือนนอร์เวย์ พระบาทสมเด็จพระจุลจอมเกล้าเจ้าอยู่หัวทรงแสดงความประทับใจที่ชาว นอร์เวย์ใช้เทคโนโลยีสมัยใหม่ เพื่อบริหารจัดการโรงงานขนาดใหญ่เช่นนี้ โดยใช้แรงงานน้อยที่สุด การบริหารจัดการป่าไม้ การทำาประมงอย่างยั่งยืน และธุรกิจการขนส่ง ถือเป็น 3 ภาคส่วนที่มีความสำาคัญต่อเศรษฐกิจแบบผสมของนอร์เวย์ และเมื่อประเทศยังเดินหน้าต่อไปสู่ความทันสมัย ภาคส่วนอื่นๆ เช่น ก๊าซ ธรรมชาติและน้ำามันนอกชายฝั่ง การสื่อสารโทรคมนาคม เทคโนโลยีด้าน สุขภาพ การท่องเที่ยว พลังงานหมุนเวียน ตลอดจนเทคโนโลยีด้านพลังงาน และสิ่งแวดล้อม ก็เข้ามามีบทบาทสำาคัญด้วย

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ing Chulalongkorn’s visit to Norway in 1907 was perfectly timed. This was the beginning of a new century, the countries of Europe were making new alliances, political changes were on the horizon and industrialisation was transforming the way countries would relate to each other. Norway had only recently achieved independence from its neighbour Sweden, and was governed by a democratic constitution. The nation’s leaders were actively developing a new social and industrial infrastructure, focusing on the betterment of present and future generations. This strong Norwegian sense

At that time, the introduction of hydroelectric energy presented massive opportunities for energyintensive industries. Norway made history in 1905 when Norsk Hydro, now called Yara, started producing mineral fertiliser using hydroelectric power to extract nitrogen from air. King Chulalongkorn visited the Norsk Hydro facilities to review this invention and even brought samples back to Thailand. In one of his many letters written during his visit, he noted how impressed he was at how the Norwegians used modern technology to operate such large facilities with a minimum of labour. Norway’s forestry management, sustainable fisheries and shipping sector have always been important in the country’s economic mix, and as Norway continues to modernise, other sectors such as offshore natural gas and oil, telecommunications, health technology, tourism, renewable energy and environmental and energy technology all play a major role. Norway also developed the concept of grouping together related industries to focus on research and knowledge, then sharing this knowledge within the group to build upon it. This concept builds competency and expertise that is sought after throughout the world. A strong focus on research and education enables Norway to be receptive to new ideas and technology, which is pivotal to the nation’s development. Although Norway is fortunate to have abundant oil and gas deposits within its territories, decisionmakers have recognised that this new wealth could easily create an economically imbalanced society. Part of what makes Norway special is that it aims for inclusive growth and has been able to achieve this through a set of core beliefs: a strong dialogue between employees and employers, a robust social safety net, an open economy, gender equality and a substantial

King Chulalongkorn (Rama V) travelled to Norway in 1907... นอร์เวย์ยังได้พัฒนาแนวคิดในการรวมกลุ่มอุตสาหกรรมที่มีความ เกี่ยวข้องกัน เพื่อมุ่งเน้นในเรื่องการศึกษาวิจัยและองค์ความรู้ จากนั้นจึงนำา องค์ความรู้มาแลกเปลี่ยนกันภายในกลุ่มเพื่อนำาไปใช้ประโยชน์ แนวคิดนี้ช่วย สร้างศักยภาพและความเชี่ยวชาญ อันเป็นคุณลักษณะซึ่งเป็นที่ต้องการทั่วโลก การให้ความสำาคัญกับการค้นคว้าวิจัยและการศึกษาอย่างจริงจังทำาให้ นอร์เวย์สามารถรับแนวความคิดและเทคโนโลยีใหม่ๆ ซึ่งถือเป็นหัวใจสำาคัญ ของการพัฒนาประเทศ แม้ว่านอร์เวย์จะโชคดีที่มีทรัพยากรน ำามันและก๊าซธรรมชาติสะสมอยู่ มากมายในประเทศ แต่ผู้มีอำานาจในการตัดสินใจล้วนตระหนักดีว่าความมั่งคั่ง เหล่านี้ทำาให้สังคมเสียดุลยภาพทางเศรษฐกิจได้ง่าย สิ่งที่ทำาให้นอร์เวย์มี ความพิเศษโดดเด่นกว่าประเทศอื่น คือการวางเป้าหมายเพื่อการเจริญเติบโต ของประเทศโดยรวม และสามารถบรรลุเป้าหมายนั้นด้วยแนวคิดหลักๆ ใน สังคม ได้แก่ การพูดคุยรับฟังกันระหว่างนายจ้างและลูกจ้าง เครือข่าย ประกันสังคมที่เข้มแข็ง ระบบเศรษฐกิจแบบเปิด ความเสมอภาคทางเพศ

of social equality, innovation and hard work, which King Chulalongkorn discovered in 1907, is still a leading influence in Norwegian society. The historical importance of King Chulalongkorn’s visit to Norway in search of modern technology had an everlasting effect on the close relationship that Norway and Thailand still enjoy today. King Chulalongkorn put ‘Siam’ on the world map and by 1907 Siam was standing on the doorstep of a new era that would be fueled by far-reaching social, economic and industrial development. Not only did King Chulalongkorn witness first-hand the wave of industrialisation that was taking place in Norway, he also discovered an inspiring panorama of pristine nature, mountains, glaciers and fjords, as well as a nation of friendly, innovative people.

สภาพภูมิอากาศอย่างจริงจัง ตลอดจนพัฒนาเทคโนโลยีการผลิตที่เป็นมิตร กับสิ่งแวดล้อม ซึ่งกระบวนการเหล่านี้ได้ขยายผลไปสู่ผู้ใช้ด้วย เป็นเวลากว่าศตวรรษที่นอร์เวย์เป็นผู้ผลิตพลังงานจากน้ำาสะอาด และ ปัจจุบันยังเป็นผู้บุกเบิกในการพัฒนาและผลิตแผงโซล่าเซลล์ เนื่องจากมี ความเชี่ยวชาญในการผลิตเหล็กซิลิคอน ทั้งยังให้ความสนใจกับการพัฒนา ประสิทธิภาพของพลังงาน การดักจับและกักเก็บคาร์บอน รวมถึงการทดลอง เกี่ยวกับพลังงานคลื่น พลังงานน้ำาขึ้นน้ำาลง พลังงานจากน้้ำาเค็ม และกังหันลม ลอยน้ำา ถึงแม้นอร์เวย์จะมีทรัพยากรมั่งคั่ง แต่ทรัพยากรมนุษย์ก็ยังคงเป็น สินทรัพย์ที่มีค่าที่สุดของประเทศ กุญแจสำาคัญที่ทำาให้นอร์เวย์ประสบความ สำาเร็จมาโดยตลอดก็คือ ประชาชนที่มีการศึกษา เปิดกว้าง และรู้จักปรับตัว สิ่งเหล่านี้จะนำาพาประเทศให้เจริญต่อไปในอนาคต การเสด็จประพาสยุโรปของพระบาทสมเด็จพระจุลจอมเกล้าเจ้าอยู่หัว ในปี ค.ศ. 1907 นับเป็นจุดเริ่มต้นมิตรภาพอันยาวนานและลึกซึ้งระหว่างสอง

redistribution of funds through an effective tax system. Starting from the 19th century, Norway steadily built up its economy thanks to its abundance of natural resources, good governance and the steely determination of its people. By 1994, when Norway integrated into the European Economic Area, it had the highest socioeconomic stability of any member. Today Norway ranks high on many development indices due to its sound economic management and social justice system. Thailand is one of Norway’s major markets in Asia for both exports and investments, in particular in the fields of telecommunications, fertiliser and fish and seafood processing. Exports from Thailand to Norway have also continued to increase. As a relatively small country, Norway thrives on trade and is open to foreign investment. International

ประเทศที่อยู่ไกลกันคนละมุมโลก ดังจะเห็นได้จากพระราชหัตถเลขาหลาย ฉบับที่ทรงเขียนระหว่างเสด็จฯ เยือนนอร์เวย์ ทรงชื่นชอบความทันสมัยของ นอร์เวย์ที่พระองค์ ได้ทรงค้นพบ ทั้งยังทรงสนุกกับการพบปะพูดคุยกับชาว นอร์เวย์อีกด้วย นอร์เวย์และประเทศไทยจึงเริ่มมีการติดต่อสัมพันธ์กัน และมีความเข้าใจ อันดีระหว่างสองประเทศนับแต่นั้น การแลกเปลี่ยนเรียนรู้ทั้งในด้านเทคโนโลยี การลงทุน และทรัพยากรบุคคลที่เกิดขึ้น จึงมีจุดเริ่มต้นจากการเสด็จ ประพาสนอร์เวย์ในปี ค.ศ. 1907 และยังส่งผลสืบเนื่องต่อไปในอนาคต

companies feel comfortable doing business in Norway because of its transparent and streamlined regulations, providing the predictability businesses crave when looking to invest. The Norwegian maritime sector has also been important in the Thai-Norwegian context. In 1907, every fourth ship calling on Bangkok was a Norwegian vessel. Today, Norway maintains the world’s most technologically advanced offshore fleet, resulting in it being the market leader in specialised shipping of petroleum products, chemicals, gas, paper, vehicles and rolling stock. Norway is also the world’s leading producer of Atlantic salmon. Norway’s long and jagged coastline of cold, clean, fresh seawater provides excellent conditions for sustainable aquaculture. Sustainability is a core value for most industries in Norway, and fisheries are no exception. Norway’s aquaculture competence is internationally sought after.

NOW NOW

THEN THEN

4:47 PM /57 BE

“…we fortunately witnessed both the midnight sun and the northern light phenomena from here…” King Chulalongkorn, July 19, 1907

“ห่างจากนอทเคปไม่ถึง ๕๐๐ ไมล์ อาจจะเห็นพระอาทิตย์ในเวลาเที่ยงคืน อาจจะเห็นนอทไลต์ แสงสว่างข้างฝ่ายเหนือ ซึ่งเปนโอภาศอันควรจะพิศวง” พระบาทสมเด็ จ พระจุ ล จอมเกล้ า เจ้ า อยู ่ ห ั ว 19 กรกฎาคม ค.ศ. 1907

มหัศจรรย์แห่งธรรมชาติอันเลื่องชื่อของ นอร์เวย์ ได้แก่ปรากฏการณ์แสงเหนือในช่วง ฤดูหนาว หรือ “ออโรรา โบเรลลีส” ที่ดึงดูด นักท่องเที่ยวจำานวนมากให้มาเยือนดินแดน มหัศจรรย์ทางตอนเหนือของนอร์เวย์ทุกๆ ปี Norway is rightly famous for its winter display of the Northern Lights, or aurora borealis in Latin, which draws large numbers of visitors every year to Norway’s vast northern wonderland. 150

As a major natural gas and oil producer and one of the largest exporters of energy in the world, Norway contributes to the energy security of consuming countries. As Norwegians place a premium on environmental sustainability, the country is taking climate policy seriously and developing advanced environmentally friendly production technology and procedures that span from exploration to end user. For over a century, Norway has been producing clean hydropower. Today it is a pioneer in the development and production of solar cell panels because of its metallurgical expertise in producing silicon metal. Another focus is the development of energy efficiency and carbon capture and storage, in addition to experiments with wave energy, tidal energy, salt water energy and floating windmills. Although Norway is a country rich in natural resources, its human capital is still the country’s most valuable asset. A nation of well-educated, open, adaptable people has always been the key to Norway’s success and will continue to be well into the future. The visit of King Chulalongkorn to Norway in 1907 was the start of a long and deep friendship between two nations that are geographically far apart. As can be seen in King Chulalongkorn’s many letters written during his visit to Norway, His Majesty appreciated the modern Norway he discovered and enjoyed meeting the people of Norway. Since that time, mutual understanding and contacts between Norway and Thailand have grown. Continued exchanges of people, technology and investments will ensure the common journey that began in 1907 will continue into the future.

151

ปูราชาเป็นความน่าตื่นใจอย่างใหม่ใน อุตสาหกรรมประมงของนอร์เวย์ และยัง กลายมาเป็นอาหารเลิศรสที่ทำากำาไรอย่างงาม และส่งออกไปขายทั่วโลก King crab is an exciting new addition to the Norwegian fisheries sector and has already proven a highly lucrative delicacy that is exported around the world.

...in search of modern technology

To celebrate more than a century of close relations between Norway and Thailand, the Royal Norwegian Embassy in Bangkok has produced a 200 page book entitled ‘Modern Norway Then and Now’, presenting H.M. King Chulalongkorn’s impressions and photographs from his visit to Norway in 1907, with images of the modern Norway of today.

Photo: King Chulalongkorn

“…I took a photograph of an old man… he was a kind man with a reserved smile when I photographed him…”

We hope this book will inspire more Thai people and companies ‘in search of modern technology’ to travel to Norway and share our common history... strengthening even further the already excellent ties between our two countries.

King Chulalongkorn, July 11, 1907

“ได้ถ่ายรูปตาแก่ตามปรกติของแกที่แต่ง นุ่งกางเกงแลเสื้อเชิ้ต เหน็บมีด, ใส่ตุ้มหู, สูบกล้อง, ใจแกดี อมยิ้มอมแย้มยืนให้ถ่าย” พระบาทสมเด็ จ พระจุ ล จอมเกล้ า เจ้ า อยู ่ ห ั ว 11 กรกฎาคม ค.ศ. 1907 138

139

Norway’s buildings consume only 37% of the country’s energy and generate less than 5% of its greenhouse gas emissions because hydroelectric power is used for central heating. In Europe buildings generate 40% or more of the greenhouse gas emissions.

King Chulalongkorn, July 9, 1907

“ทางที่มาตั้งแต่ทรอนด์เยมคืนนี้ นับว่าคนไทยยังไม่มีผู้ใดได้เคยมาถึงเลย มีคนไทยที่ได้เคยมาถึงทรอนด์เยมแล้ว สามคนเท่านั้น ระยะทางที่จะขึ้นไปจนถึง นอทเคปไกลมาก” พระบาทสมเด็ จ พระจุ ล จอมเกล้ า เจ้ า อยู ่ ห ั ว 9 กรกฎาคม ค.ศ. 1907

“…they say that their church design is ‘old Norwegian’ although it is very similar to the design of temples in Myanmar…” King Chulalongkorn, July 24, 1907

“วัดนั้นทำ�ด้วยไม้ชำ�ฉ�ทั้งสิ้น แต่ได้สร้�งม�แล้วถึง ๘๐๐ ปีเศษ จนกร่อนหรอในที่ต่�งๆ รูปร่�งทรวดทรงเปน อย่�งนอรวิเยียนแท้ คล้�ยรูปวัดพม่�ม�ก” พระบ�ทสมเด็ จ พระจุ ล จอมเกล้ � เจ้ � อยู ่ ห ั ว 24 กรกฎ�คม ค.ศ. 1907 64

Photo: King Chulalongkorn

The new waterfront skyline in Oslo mixes a healthy enthusiasm for modern design with a solid respect for its history and traditions. The city has become a haven for adventurous design, with dozens of new architectural projects underway.

นอร์เวย์เป็นหนึ่งในผู้ผลิตปลาแซลมอน แอตแลนติกชั้นนำา และหนึ่งในผู้ส่งออกอาหาร ทะเลรายใหญ่ที่สุดของโลก ด้วยแนวชายฝั่งที่ยาว เว้าแหว่งเป็นรอย ฟันเลื่อย โอบล้อมด้วยน้ ทะเลใสสะอาด จึงเป็น สภาพแวดล้อมตามธรรมชาติที่ดีเยี่ยมสำาหรับ อุตสาหกรรมประมงแบบยั่งยืน

“The Queen is very beautiful and has a fine disposition rather like Princess Victoria… our relationship was informal…”

King Chulalongkorn, July 6, 1907

“ในการที่มาอยู่เมืองนี้ ช่างรู้สึกสบาย เสียจริงๆ เพราะทั้งเจ้าแผ่นดินแลพระมเหษี จะพูดจาเล่นหัวอะไรกับเราเหมือนดังกับ เปนญาติกันจริงๆ จะถามอะไรก็ถามกันได้ พูดจากันตรงๆ หมด”

King Chulalongkorn, July 5, 1907

“กวีนก็งามมาก ดูเหมือนจะงามกว่าพี่ๆ ทั้งหมด อัชฌาไศรยก็ดีมากคล้าย ปรินเซสวิกตอเรีย อยู่ข้างจะกระดากๆ ในการรับแขกถึงบ่นออกมาว่าไม่ชอบรำาคาญ เจ้าแผ่นดินบอกว่า ต้องพูดกับคนนั้นคนนี้ ก็บ่นออดแอดเบื่อต่างๆ แต่กับพ่อนั้นสนิทสนม ต้อนรับพูดจาไม่มีกระดากกระเดื่องเลย”

พระบาทสมเด็ จ พระจุ ล จอมเกล้ า เจ้ า อยู ่ ห ั ว 6 กรกฎาคม ค.ศ. 1907

พระบาทสมเด็ จ พระจุ ล จอมเกล้ า เจ้ า อยู ่ ห ั ว 5 กรกฎาคม ค.ศ. 1907

หน้าถัดไป: การพัฒนาเทคโนโลยีอย่างต่อเนื่องนำาไปสู่ การปฏิวัติอุตสาหกรรมเพาะเลี้ยงปลาด้วย วิธีใหม่ ผ่านการตรวจสอบควบคุมคุณภาพ อย่างเข้มข้น การจำากัดจำานวน และเทคโนโลยี การเพาะเลี้ยงปลาในมหาสมุทรแบบยั่งยืน ทำาให้นอร์เวย์ยังเป็นผู้นำาในการส่งออก อาหารทะเลมาหลายทศวรรษ Next page: A continuous focus on technological development has led to revolutionary new methods for the fish farming industry. Through strict quality monitoring, quotas, and sustainable ocean farming technology, the country has remained a leader in seafood exports for decades. 72

194

195 Photo: King Chulalongkorn

“…as our ship turned around for the journey home… Prince Sommot proclaimed in Magadhi that “a new chapter in life had begun”…” King Chulalongkorn, July 12, 1907

“วันนี้นับว่าเปนวันขากลับ ถึงว่าวันข้างหลัง ยังมากกว่าวันข้างน่าที่ล่วงไปแล้วก็รู้สึกว่า เปนขากลับ มันขรึมๆ ในใจอยู่นั่นเอง โล่งว่ากระไรก็ไม่รู้ แปลว่าคิดถึงบ้านเท่านั้น” “วันนี้กรมขุนสมมตบอกศักราชตามธรรมเนียม ที่เคยบอกกันเมื่อบ่ายหัวเรือกลับ แต่บอกวิเศษขึ้นทบอกภาษามคธด้วย” พระบาทสมเด็ จ พระจุ ล จอมเกล้ า เจ้ า อยู ่ ห ั ว 12 กรกฎาคม ค.ศ. 1907

196

197 Photo: King Chulalongkorn

“…I greatly admire the Norwegians for building roads to areas where only a few people live…”

200 Pages Collector’s Edition In Thai and English 64cm x 24cm Hard Cover Can be aquired exclusively through the Thai-Norwegian Chamber of Commerce: Telephone: 02 650 8444 secretary@norcham.com One to nine books: THB 2,000 each plus VAT Ten or more books: THB 1,500 each plus VAT Available at the Thai-Norwegian Chamber of Commerce

King Chulalongkorn, July 25, 1907

“น่าชมความพากเพียรในเรื่องตัดถนน ของเขาจริงๆ คนก็น้อย พื้นที่ก็ไม่มี ผลประโยชน์อะไรนอกจากหญ้าแลฟืน” พระบาทสมเด็ จ พระจุ ล จอมเกล้ า เจ้ า อยู ่ ห ั ว 25 กรกฎาคม ค.ศ. 1907

Norwegian Properties was beginning to gain a head of steam at this point as it started to branch out from solely marketing to Norwegians.

“We can converse with the King and Queen as if we were relatives…”

Norway is one of the world’s leading producers of cold-water Atlantic salmon and one of the largest seafood exporters in the world. The country’s long and jagged coastline surrounded by fresh seawater provides excellent natural conditions for a sustainable fishing industry.

The business started in 2005 and right away it became a developer for a housing resort with nine houses, a garden and a swimming pool. Mr Eiksund said he decided to focus on Jomtien from the beginning because it is relatively close to Bangkok, the area was growing rapidly and it has a lot of Scandinavians.

The new development was a 22-unit condo building dubbed VN Residence 1, and was finished in 2009. Another success, so the group started a 43-unit condo called VN Residence 2 that it finished in 2012.

ตึกสูงระฟ้าริมน้ ในกรุงออสโลคือการ ผสมผสานระหว่างรสนิยมในการออกแบบ สมัยใหม่กับความเคารพในประวัติศาสตร์ และวัฒนธรรมดั้งเดิม กรุงออสโลจึงกลาย เป็นแหล่งรวมงานออกแบบที่น่าตื่นตาตื่นใจ และสถาปัตยกรรมใหม่ๆ ที่กำาลังจะเกิดขึ้น อีกหลายสิบโครงการ

hen Gudmund Eiksund arrived in Thailand in 2004, he was not unlike many Scandinavians, looking for a warmer change of scenery and an opportunity to start a business. Some location scouting and a year later Norwegian Properties Group was born, and it’s been a whirlwind trip for him ever since.

The initial project was completed in 2006 and immediately Norwegian Properties started a new one. It finished the subsequent development a year later, and having sold out both single house projects, it moved to condominiums in 2007.

อ�ค�รต่�งๆ ในนอร์เวย์ใช้พลังง�นของประเทศ เพียงร้อยละ 37 และก่อให้เกิดก๊�ซเรือนกระจก น้อยกว่�ร้อยละ 5 ทั้งนี้เพร�ะมีก�รนำ�ไฟฟ้� พลังน้ ม�ใช้ในระบบทำ�คว�มร้อนให้กับอ�ค�ร ในขณะที่อ�ค�รในยุโรปก่อให้เกิดก�ร ปล่อยก๊�ซเรือนกระจกถึงร้อยละ 40 หรือ ม�กกว่�นั้น

“…no Thai has ever travelled the route we took last night going north… we are on our way to North Cape which is really far away…”

By Eric Baker

“Our first two projects the customers were solely Norwegian,” he said. “But now we sell to Thais, Europeans and Australians. And we only conduct marketing in Thailand.” The company started on a 53-unit condo last year that is scheduled to be finished in March 2015. The next project is called 5th Avenue, a batch of 73 luxury condos slated to be completed in 2017. Norwegian Properties opened its own construction company in 2009 and immediately started to reap the dividends.

From left to right: Gudmund Eiksund, Jeanette Eiksund Heltne and Jan Håkon Trandal

drainage from Norway, but now we’re able to find most of what we need in the local market.” “Customers tell us they love the quality of our construction, so that has been a real draw. They also love the maintenance we perform.” The company has sold out all its projects to date, and its VN Residence 3 projected to be finished in March is 80% sold. Norwegian Property also feels an obligation to give back to society as it takes part in local Rotary activities. The organisation has roughly 150 employees, with half situated in the office. The group also decided to open Linda’s Restaurant in Jomtien in 2005. It features entertainment including singing and dancing live from Norway during the high season, and has proven so popular it had to open a second branch in 2012. Norwegian Property also decided to buy the oldest Scandinavian magazine in Thailand in 2010, diversifying its portfolio. Mr Eiksund said he’s quite pleased he decided to make the move here, highlighting the supportive Norwegian community in the Pattaya area.

“We build everything in our projects now. We insist on the best materials, even if that means we have to import,” said Mr Eiksund. “We’ve used piping from Germany and

Photo: King Chulalongkorn

Thai-Norwegian Business Review

-4

Mill

-2

Thai Consumer Price Index

Thai GDP Growth (%) 10.0

8.0

6.0

4 3

4.0

2.0

-2

Stock Exchange Index (SET) 1,800 1,600 1,400 1,200 1,000 800 600 400

May14 Jun14 Jul14 Aug14 Sep14 Oct14

0 -1

2008 2009 2010 2011 2012 2013 2014p

Q2/14

Q1/14

Q4/13

Q3/13

-4.0

2014p

0.0

Exchange Rates 7.00 6.50

THB/NOK

6.00 5.50 5.00 4.50

Bilateral trade 2013

Manufacturing Index 2000=100

Import 1,550 (1,743) MNOK Export 2,494 (3,378) MNOK

800

200

600

180

400

160

200

140

Others

Semi-manuf

Machinery

Cars

Computers

2007 2008 2009 2010 2011 2012 2013

100 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: OANDA. Manufacturing Production Index: Thailand’s Ministry of Commerce. Bilateral Trade: Statistics Norway. Petrol and BigMac prices as of 16 November 2014

Food

120

Electronics

7.26 15.28 14.45 40.00

MY CN TH ID PH VN LA IN KH MM

Pulp

69.9 mill 5.0 mill 10,300,000 875,000 71/76 79/83

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 Sources:

Other

Automobile exporter 2012

Fish

Thailand’s rice export 2012

Female

Engineering

Thailand’s export to Norway 1995-2012

Male

0801 0807 0901 0907 1001 1007 1101 1107 1201 1207 1301 1307 1401 1407

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

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

Chemicals

Norway’s export to Thailand 1995-2012

Apr14 May14 Jun14 Jul14 Aug14 Sep14

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 2

Norway’s import destinations 2012

-2.0

Some comparisons

Norway’s import goods 2012

2013

Norway’s export destinations 2012

Top 10 Exports Jan-Jun14 %/value USD bill Motor Cars and automotive 10.8%/12.15 EDP equipment 7.8%/8.8 Precious stones/jewellery 5.0%/6.6 Refined fuels 4.7%/5.3 Polymers etc. 4.4%/4.9 Chemical products 3.9%/4.4 Rubber products 3.5%/4.0 Machinery and parts thereof 3.2%/3.6 Electronic integrated circuits 3.1%/3.5 Rubber 3.0%/3.3

100

2012

Norway’s export goods 2012

10-20% 10-15% 7% 0-35%

Thai Population 2012

120

2011

The opening screen showing Thailand’s export goods in 2012

Corporate income Tax Withholding Tax Value Added Tax Personal income Tax

GDP/Capita 2013 (TUSD)

2010

Below are various examples from the Observatory. Try it out yourself by going to http://atlas.media.mit.edu/.

Export Growth 2012 3.1% Export Growth 2013 projected 7.6% Trade Balance USD 6.0 bill Current Account Balance USD 1.5 bill International Reserves USD 181.6 bill Minimum wage (Bangkok) Baht 300/day

NO US SG KE TW

The observatory provides access to bilateral trade data for roughly 200 countries, 50 years and 1000 different products of the SITC4 and HS classifications. So jump right in and let the observatory do the job of making sense of the huge amount of data available.

Basic Figures Thailand (2013)

2009

The Observatory of Economic Complexity is a tool that allows users to quickly compose a visual narrative about countries and the products they exchange. It was Alexander Simoes’ Master

Thesis in Media Arts and Sciences at the MIT Media Lab and is one of my favourite tools helping people to make sense of trade statistics.

Thailand’s Economy at a Glance

2008

How many times have we all dreaded times when we had to work with boring trade statistics when doing business plans, annual updates etc.? Believe it or not, one doesn’t have to be a nerd to get some fun out of trade statistics.

Thailand’s economy at a glance

0501 0507 0601 0607 0701 0707 0801 0807 0901 0907 1001 1007 1101 1107 1201 1207 1301 1307 1401 1407

MIT: Making Trade Statistics Less Boring

Thai-Norwegian Chamber of Commerce

Thai-Norwegian Business Review

Continued from page 11

Yara focuses on tropical fruit trees, vegetables, oil palm and rubber crops in Thailand. It plans to hold 2,300 farmer meetings next year. Mr Vollert joined a Yara subsidiary in Argentina in 1998 before moving to Oslo in 2006 as NPK product manager. He returned to Argentina in 2011 to handle commercial markets in Latin America, and became country manager of Yara (Thailand) in May 2014. He admitted a few obstacles remain for the Thai market.

“We are proud that Yara is recognised as the top brand of fertiliser for the crops we target here, but we have to work at the level of farmers and show them our practice is sustainable to gain that trust and brand recognition”. “Yara partnered with a local company here in the past before splitting in 2009,” said Mr Vollert. “But the local company continued to use a version of our logo to capture part of the value of our brand after the split. We’re pleased to announce a court in Thailand sided with our position, but the other company appealed and can still sell their product during this appeals process. “The fertiliser industry in Thailand (including Yara) has had some difficulties with government analysis of fertiliser. Certain results have been below the declared values. This is a complex problem, but we are certain Yara is meeting

Thai-Norwegian Chamber of Commerce

every legal standard and the products are within tolerance levels.We sell to 120 countries, all of which have different standards for nutrient content to which we strictly conform. In addition, we are held responsible for product quality even after the product has been sold through many levels in the distribution chain, long after being imported.. “Next year Yara plans to work more closely with the authorities to make sure there aren’t any misunderstandings. We’ve had this problem for a while, and it creates unease because the company is subject to significant legal penalties and sanctions if products are found to be substandard. “Corruption is a business risk that we need to consider, and unfortunately Thailand dropped in the Corruption Perceptions Index from 50 to 102. Yara is working hard to mitigate this risk and is registering with the Coalition Against Corruption. We expect to be certified in the second quarter of 2015. It is clear we cannot do this on our own, as we need to fight corruption on an industry-wide scale.” Mr Vollert believes Thailand has the opportunity to become an even bigger global food producer and Yara wants to help it achieve that goal. “We want to keep growing in Thailand, and we want Thais to know we are here for the long term,” he said.