PTT Thailand Told To End Bid To Buy Carrefour

[webfact]

BIDDING FOR CARREFOUR

PTT told to end bid

By THE NATION

BANGKOK: -- The government yesterday ordered PTT to end its bid to buy Carrefour's retail assets in Thailand, saying the state-controlled company should not be competing with private firms.

Deputy Government Spokesman Watchara Kannikar said the Cabinet considered it inappropriate for PTT - as a state-owned company - to be competing with private companies to bid for a retail business.

Carrefour, the world's second-biggest retailer, wants to divest its operations in three Southeast Asian markets - Thailand, where it operates nearly 40 stores; Malaysia, where it has more than 20 stores; and Singapore, where it has two stores.

PTT, Berli Jucker, Big C Supercentre and the Central Group have expressed interest in bidding for Carrefour's assets in Thailand, which have an estimated value of US$600 million (Bt18.47 billion).

A Finance Ministry source said Finance Minister Korn Chatikavanij had discussed the issue with PTT executives two weeks ago. The Finance Ministry holds 51 per cent of PTT.

"The minister talked with PTT's board of directors and both agreed that PTT should end the bid. PTT will not officially announce its withdrawal, but the company will not submit a bid for the second round," the source said.

The ministry considers that retailing is not one of PTT's core businesses and it may incur business risks in the future, considering the huge investment involved, the source said. However, PTT can forge an alliance with the eventual acquirer of Carrefour's assets, should it want to expand its retail oil business on Carrefour property.

"If it is ready to spend Bt20 billion in cash to buy Carrefour, it should give the sum to the Finance Ministry instead," the source said.

Energy Minister Wannarat Charnnukul said PTT's board of directors had informed him that the bid would be cancelled.

PTT should focus on the nation's energy security, and not retail businesses, he said.

None of PTT's executives were available for comment yesterday.

During a presentation on PTT's corporate governance on Monday, president and chief executive Prasert Bunsumpun said the group had established a presence in all energy-related segments. However, PTT does not want to monopolise the market.

He said businesses needed competition, because competition challenged all businesses to improve themselves.

Carrefour is expected to announce the potential buyer of its Thailand assets after a further round of bidding in early November.

PTT's stock rose by Bt3 to Bt287 yesterday. Berli Jucker was also up, by 70 satang to Bt18. Big C Supercentre's stock fell by Bt1.75 to Bt59.25.

-- The Nation 2010-09-22

[IAMSOBAD]

Somebody didnt get their tea money at the top.

[Suradit]

Somebody didnt get their tea money at the top.

Ah yes. When nothing intelligent comes to mind, the "tea money" line just never gets old does it.

[VictorOne]

Probably one of the first inteligent decisions ever made in the realy.

[Pib]

"The government yesterday ordered PTT to end its bid to buy Carrefour's retail assets in Thailand, saying the state-controlled company should not be competing with private firms."

Does this mean the state-controlled PTT will be pulling out of the fuel/energy business also; I'm sure the govt don't want PTT competing against all the private fuel/energy firms like Esso, Shell, Chevon, Petronas, etc.

[rheinwiese]

Seems to me the way is paved for Central Group.

1 step further to monopolize the retail business in the Kingdom.

Not good for us consumers IMO.

[CosmicSurfer]

Seems to me the way is paved for Central Group.

1 step further to monopolize the retail business in the Kingdom.

Not good for us consumers IMO.

Better Central than BJC or Big C....

At least there is a better shot of maintaining some quality standards and assortment of imported merchandise.

Personally I'd rather see Wal-Mart take it over.. but they probably are staying as far away from Thailand and its protectionist/isolationist business laws as possible.

Just wait and see what Ikea will do to Index and other stores in the home-furnishings market. I'm predicting a blood-bath, and the setting of new standards in Customers Service, Product Selection and Inventory Control procedures.

Ikea may revolutionize retailing here in Thailand.

Big C or BJC taking over Carrefour would be a definate step backwards... I'm real glad Tesco is no longer in the running.. Their stores in Thailand have never been up to the Carrefour standard.

CS

[frenchfarangjomtien]

Wondering who will be the next owner of Carrefour Thailand, as it seems that it won't go to Tesco or Aeon, and now Ptt...

[Pib]

Seems to me the way is paved for Central Group.

1 step further to monopolize the retail business in the Kingdom.

Not good for us consumers IMO.

Shut your mouth!!!! If Central takes over their inflated retail prices would makes things cost a lot more. I'm just amazed on the HIGH prices in Central stores...I only go to them when I need to cut through their stores to get to another store with reasonable prices.

[asiawatcher]

Probably one of the first inteligent decisions ever made in the realy.

Agree - unless PTT want to flog a larger range of supermarket items at their fuel outlets! LOL.

[TheBarbarian]

Besides the question if it makes sense for a company of PTT to buy a retailer, government interference in a public traded company points out why nobody should ever invest one baht in a (former) state owned company. Thai airways is financially raped by politicians and rich people and forced to sent airplanes changes routes and let charlatans fly. The PTT is forced to keep petrol prizes low for political reasons, the TOT and CAT are told by the Democrat party to oppose 3G and so on. The lesson: Stay away from Thai stock markets. Thai politicians who can not let a time run on time think they are the smartest businessmen on earth.

[Buchholz]

The lesson: Stay away from Thai stock markets.

that was very clear after a 23 year-old led the way...

PM Thaksin’s daughter is Thailand’s richest stockholder for 2nd year at US$0.5 billion

Pinthongtha Shinawatra, daughter of Prime Minister Thaksin, has retained the title of Thailand’s richest stockholder for two consecutive years, with an estimated Bt19 billion worth of corporate stock in her portfolio.

The country’s second richest stockholder is Bannapot Damapong, brother of Thaksin’s wife, Khunying Pojaman Shinawatra. Bannapot owns stock worth Bt16 billion.

http://www.pattayamail.com/647/business.shtml

[rheinwiese]

Seems to me the way is paved for Central Group.

1 step further to monopolize the retail business in the Kingdom.

Not good for us consumers IMO.

Better Central than BJC or Big C....

At least there is a better shot of maintaining some quality standards and assortment of imported merchandise.

Personally I'd rather see Wal-Mart take it over.. but they probably are staying as far away from Thailand and its protectionist/isolationist business laws as possible.

Just wait and see what Ikea will do to Index and other stores in the home-furnishings market. I'm predicting a blood-bath, and the setting of new standards in Customers Service, Product Selection and Inventory Control procedures.

Ikea may revolutionize retailing here in Thailand.

Big C or BJC taking over Carrefour would be a definate step backwards... I'm real glad Tesco is no longer in the running.. Their stores in Thailand have never been up to the Carrefour standard.

CS

Big C is a Central Group subsidiary. Chairman is Suthichart Chirathivat.

So whether Central Group or Big C will be the successful bidder, it stays in the family.

I see little chances for BJC.

[Phuket Stan]

Having only been in 3 Carrefoure stores in Thailand give me Tesco any day of the week...the Carrefoure store in Patong Phuket is a lesson in not how to run a supermarket right from the forever broken trolleys to the grumpy checkout girls....during high season only 60-70% of the checkout lines open with 10 or 12 people in the queues...yet you go to Tesco and the place is packed but the service is so much better....and you always get a nice smile and a WAI from the till operaters...thats IMHO....correct me if I am wrong...the other couple of Carrefoures I have been to in Bangkok show just a slight improvement from the one in Patong

[CosmicSurfer]

Big C is a Central Group subsidiary. Chairman is Suthichart Chirathivat.

So whether Central Group or Big C will be the successful bidder, it stays in the family.

I see little chances for BJC.

Central Group was the Founder and Original Owner, but now it is majority owned by the Casino Group of France

That is why Central is in the running... they want to get back into the Super/Hyper Store Market.

CS

[MILT]

Seems to me the way is paved for Central Group.

1 step further to monopolize the retail business in the Kingdom.

Not good for us consumers IMO.

Better Central than BJC or Big C....

At least there is a better shot of maintaining some quality standards and assortment of imported merchandise.

Personally I'd rather see Wal-Mart take it over.. but they probably are staying as far away from Thailand and its protectionist/isolationist business laws as possible.

Just wait and see what Ikea will do to Index and other stores in the home-furnishings market. I'm predicting a blood-bath, and the setting of new standards in Customers Service, Product Selection and Inventory Control procedures.

Ikea may revolutionize retailing here in Thailand.

Big C or BJC taking over Carrefour would be a definate step backwards... I'm real glad Tesco is no longer in the running.. Their stores in Thailand have never been up to the Carrefour standard.

CS

All I can say is "There goes the Neighbor Hood, They should all pack up. None of them are worth the trouble. Especially Wal-Mart

[ryladie99]

Seems to me the way is paved for Central Group.

1 step further to monopolize the retail business in the Kingdom.

Not good for us consumers IMO.

Better Central than BJC or Big C....

At least there is a better shot of maintaining some quality standards and assortment of imported merchandise.

Personally I'd rather see Wal-Mart take it over.. but they probably are staying as far away from Thailand and its protectionist/isolationist business laws as possible.

Just wait and see what Ikea will do to Index and other stores in the home-furnishings market. I'm predicting a blood-bath, and the setting of new standards in Customers Service, Product Selection and Inventory Control procedures.

Ikea may revolutionize retailing here in Thailand.

Big C or BJC taking over Carrefour would be a definate step backwards... I'm real glad Tesco is no longer in the running.. Their stores in Thailand have never been up to the Carrefour standard.

CS

Big C is a Central Group subsidiary. Chairman is Suthichart Chirathivat.

So whether Central Group or Big C will be the successful bidder, it stays in the family.

I see little chances for BJC.

You hit the target and I agree with you 110%. I wish Wal_Mart or Ikea move in. The Thai can have more choices for shopping??? I am standing tall....

[Changian]

Just wait and see what Ikea will do to Index and other stores in the home-furnishings market. I'm predicting a blood-bath, and the setting of new standards in Customers Service, Product Selection and Inventory Control procedures.

Ikea may revolutionize retailing here in Thailand.

Before you get too excited, bear in mind Ikea's Thai partner is the company responsible for the deserted 'Avenue' shopping mall in Pattaya.

[CosmicSurfer]

Just wait and see what Ikea will do to Index and other stores in the home-furnishings market. I'm predicting a blood-bath, and the setting of new standards in Customers Service, Product Selection and Inventory Control procedures.

Ikea may revolutionize retailing here in Thailand.

Before you get too excited, bear in mind Ikea's Thai partner is the company responsible for the deserted 'Avenue' shopping mall in Pattaya.

First of all.. as I have personally spent about 3 hours in Pattaya in the last 9 years of living in Thailand and have never found any need to increase that, I feel that comparing a small town with a major city as head-to-head markets is like comparing an orange with a watermelon. Pattaya is a fraction of the available market in Bangkok.

Secondly.. a mixed purpose mall as compared to a major international brand such as Ikea is also uncomparable....

Bottom line... Ikea sets it's own standards.. always has... always will.... Ikea is a destination store.. as long as they have adequate access and parking, they will do well wherever they are.. which is almost always in the suburbs of Large Cities... The exception being places like Hong Kong which had a number of small satallite stores, all serviced by a central distribution point. (I'm not sure what's happening in HK now.) Ikea's biggest problems will come from dealing with the Thai work ethic, and the corruption of the Customs department, with so many items in their inventory being imported. Maintaining their norm of almost 90% In-Stock Inventory control will be an effort.

Being familiar with Ikea's business plan and culture, I'm sure that they locked whatever Thai partner they are with, into an Iron-Clad management contract. I'm positive they wouldn't allow their Global Brand to beome tarnished with the standard of Thai retailing as it exists today... They would demand adherence to the IKEA standard, or someone will be paying the price!.... Their way... Or the Highway!

CS

[chantorn]

PTT is government own, hence it is not allowed by law to complete with the private sector. The law is the law. Sorry.

[CosmicSurfer]

I think Ikea can take care of itself!

IKEA INFO

Type - Private

Genre - Retail (Specialty)

Founded - Älmhult, Småland, Sweden (1943)

Founder(s) - Ingvar Kamprad

Headquarters - Delft, Netherlands

Area served - Worldwide

Key people - Mikael Ohlsson (President), Hans Gydell (President Inter IKEA Group)

Products -Self-assembly furniture

Revenue - ▲€22.71 billion Euros (2009)

Employees - 127,800 (2008)

Ikea, which is privately held and originated in Småland, Sweden, distributes its products through its retail outlets. As of May 2010, the chain has 313 stores in 37 countries, most of them in Europe, North America, Asia and Australia. The IKEA Group itself owns 276 stores in 25 countries and the other 37 stores are owned and run by franchisees outside the IKEA Group in 16 countries/territories. 2006 saw the opening of 16 new stores. A total of at least 15 openings or relocations are planned for 2010. > Ikea

Ikea prints approximately 175 million copies of its catalog worldwide annually, meaning that it has published more than 3 times as much as The Bible. > Ikea Catalog

[swerver]

"The government yesterday ordered PTT to end its bid to buy Carrefour's retail assets in Thailand, saying the state-controlled company should not be competing with private firms."

Does this mean the state-controlled PTT will be pulling out of the fuel/energy business also; I'm sure the govt don't want PTT competing against all the private fuel/energy firms like Esso, Shell, Chevon, Petronas, etc.

No this doesn't mean PTT is getting out of the business it is in. What it means is as the saying goes in Holland:

Boer blyf by je beest

Schoenmaker blyf by je leest

For the ones who cannot read Dutch:

Farmer stay with your animals

Shoemaker stay with your shoe anvil

To prevent menopoly Burli Junker should be the winner.

Central already has TOPS.

Casio already has Big C - the last time when things got difficult Casio ran back to France and left the buying public without a place to do their purchases.

Tesco is already bigger than what is good for the buying public.

Burli Junker is in the consumer products whole sale busines and has been in Thailand long before the others ever found out were Thailand was located on the map. As for quality products, that is what Burli Junker stands for.

If Carrefour goes to Big C it will become another junk store.

If it goes to Tesco it will become another store using dart games to set prices.

Waiting for the November 2010 outcome.

[Thai at Heart]

The old chestnut of a "state controlled" private company standing astride a market trying to act in the rather confusing way of both in the "public interest" and making a profit.

When I heard the idea of PTT bidding for Carrefore, I thought it was a rather crazy idea, but that doesn't preclude the fact that it would probably make a good profit if it employed retail PROFESSIONALS. If the management at PTT had decided simply to employ the best people be they foreign or Thai and leave them alone to run their retail subsidiary, it would probably work.

Unfortunately being a Thai "government" controlled company, what odds do you think they would have gone out and hired a lot of people from Tesco, Walmart or for example some of the larger British retailers? It is interesting, because the chaebol in Korea have been largely successful in conducting their business in many spheres. The companies are divided on operational basis and they don't move management from shipbuilding to run super conductors manufacturing or road construction , so it can be done.

This is simply why as someone said earlier, shoe makers should stick to shoes.