thailand situation

REVIEW 200/THAILAND

Team Player

A couple of successful joint ventures has Thailand's largest multinational sitting atop the heap

By Rodney Tasker/BANGKOK

Issue cover-dated December 27, 2001 - January 3, 2002

IN A YEAR OF continuing economic gloom in Thailand, it is little surprise to see the Charoen Pokphand Group yet again leading the business pack. Its agri-business core remains a solid constant, combined with sensible investment--particularly in China. As CP Chairman Dhanin Chearavanont says: "Don't take on more than you can handle and what you are good at."

With a $12 billion annual turnover, the group remains by far Thailand's largest multinational corporation, with companies and operations in some 20 countries. The group is building on a successful domestic-retailing venture with British giant Tesco in April 2002, and plans to develop what will become Shanghai's biggest shopping complex, Super Brand Mall. It is also involved in another major new venture in the telecoms industry called CP Orange, which it has entered into with Europe's Orange group. The project was launched in December 2001, and industry analysts expect it will eventually challenge Thai market leader Shin Corp., which finished fourth in this year's survey.

Also in this year's results, venerable industrial conglomerate Siam Cement nudged Thai Farmers Bank from its familiar No. 2 slot. Siam has completed its divestment of non-core businesses and in 2001 developed six strategic business units to handle its various operations. Its net income for the first nine months of this year jumped to 6.6 billion baht ($150.6 million), up from 735 million baht over the same period in 2000.

But Thai Farmers still leads Thailand's fragile banking sector despite a precipitous drop in nine-month net income from 1.2 billion baht in 2000 to 293 million baht in 2001. Bank president Banthoon Lamsam highlighted the importance of improving risk management in an interview with the REVIEW, and emphasized Thai Farmers' "restructuring of internal workings, particularly mindset and attitudes of employees."

Top Thai entertainment group GMM Grammy, formerly known as Grammy Entertainment, retained its No. 5 ranking on this year's list, and more importantly its perennial lead in the category of "innovative in responding to customer needs." Apirak Kosayodhin, president and CEO of the group, which derives 57% of it revenue from music and 30% from media, says GMM Grammy is moving increasingly into film-making, a burgeoning field in Thailand. On his management strategy Kosayodhin added: "We always like to be ahead and creative, and we are truly Thai."