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AEC expected to be bright spot amid global challenges
KWANCHAI RUNGFAPAISARN
THE NATION



BANGKOK: -- BUSINESS leaders expect 2015 to be another challenging year because of the global economic uncertainty, but are quite optimistic about regional prospects under the Asean Economic Community (AEC).

Prapon Chanasenee, managing director of P-Value Co, a manufacturer of skincare products and supplements, said Southeast Asia was at the top of the list of regions around the world. It has a stable economy and people spend money to enjoy their lives and upgrade their lifestyles.

"P-Value suffered a negative impact in the second quarter of this year because it is the lowest season of the year and because the global national economies slowed," he said.

The company posted better sales performance in the other quarters. It will finish this year with double-digit growth.

The skincare and cosmetics market is expected to grow by 7-9 per cent next year, while the supplements market will enjoy higher growth of 15-20 per cent.

The factors next year will be both domestic, such as government spending, and the global economy.

"We expect to increase sales of our own-brand products by 200-300 per cent next year," he said. As these products were only introduced this year, sales will be building on a small base.

P-Value's major dietary supplement brands are So Kool for men, Rosaline for women and Roslim for weight control.

The implementation of the AEC next year will open up tremendous opportunities, Prapon said. Thailand is strong in the know-how needed for manufacturing skincare products and supplements. The country has played a leading role in this field longer than neighbouring markets.

The company will launch a joint venture in Phnom Penh next quarter, branding and distributing its personal-care products in the Cambodian market. In the next step, the JV will supply hospitals in Siem Reap, Phnom Penh and Sihanoukville.

"The intense competition in the domestic market will also allow all business players in the field of cosmetics, skincare and supplements to step forward to higher development both in manufacturing technology and know-how and business management," he said.

Chokdee Wisansing, chief operating officer of the food business group at Evolution Capital, said 2014 was a challenging year for the company, like other businesses.

"We posted a two-digit drop in the first two quarters from the same period last year. We were able to pick up business in the second half. Our sales for the whole year are slightly below what we made last year," he said.

"However, we have turned the crisis into opportunity. It is a good time for us to revise our strategy and find ways to improve our productivity."

The company recently invested Bt23 million in a 2,000-square-metre central kitchen in Ayutthaya's Wang Noi district that will serve more than 100 restaurants in remote areas. It has also expanded warehouses to reduce its operating and logistics costs.

Evolution Capital, listed on the Stock Exchange of Thailand, invests in Asia's rapidly growing consumer markets. It is primarily focused on budget hotels through its investment in Red Planet Hotels, the franchisee and shareholder of Tune Hotels across Asia.

It is also in the food and beverage business as a franchisee of Domino's Pizza in Thailand and The Coffee Bean & Tea Leaf in Thailand and Cambodia.

It will diversify risks by opening its first Domino's Pizza in Phnom Penh in the middle of next month and Kyochon, an authentic and trendy Korean fried-chicken restaurant, in the same city next quarter. It will add about 15 Domino's Pizzas next year to its chain of 17 in Thailand.

Chokdee believes the AEC will definitely benefit Thailand's hospitality industry, especially hotels and restaurants. With regional liberalisation, the country will be able to attract more foreign investors, expatriates and tourists, and that would bring more customers to local businesses.

The only obstacle is the shortage of skilled labour required by the local hospitality industry. Those workers need to have a good understanding of the hotel and restaurant businesses. They should know how to develop their skills and be service-minded, he said.

Agate Tantachon, managing director of Shining Gold Bullion Co, said Thailand's gold-ornament market had been affected by the dwindling purchasing power of grass-roots people, who were severely affected by the failure of the rice-pledging scheme of the previous government.

"However, we have seen a dramatic increase in the trade of gold bullion. Our sales of gold bullion have jumped fivefold this year," she said.

The wild fluctuations in gold prices attracted middle- and upper-class speculators.

The company spent Bt80 million to Bt100 million to expand capacity this year, especially in gold stock and state-of-the-art machinery that was installed in its factory in Pathum Thani's Lam Luk Ka Klong 6 area.

About 90 per cent of the company's sales are gold bullion and only 10 per cent gold ornaments. The company supplies 1,500 goldsmith shops throughout the country.

"We have focused on building our brand for gold ornaments and bullion this year, especially in the Northern and Southern regions of Thailand. We are dealing with potential sales agents for our gold bullion in the South and Northeast," she said.

The company has supplied gold bullion to Laos and Cambodia for the investment market. It is also looking to expand its gold-ornament business into Myanmar in the near future.

Shining Gold Bullion posted about Bt8 billion in sales last year. It expects its sales to increase dramatically to between Bt70 billion and Bt80 billion this year and up to Bt200 billion next year, driven by the speculation of individual customers.

Source: http://www.nationmultimedia.com/business/AEC-expected-to-be-bright-spot-amid-global-challen-30250598.html


-- The Nation 2014-12-25

[bangon04]

so the Nation is plugging whitening creams and supplements, fast food, and a gold shop. Great news.