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Run to the hills

22.05.12

Kasikorn Bank directorship Songpol Chevapanyaroj says that some flood-ravaged companies may need the staff of loans to relocate to safer industrial estates

Songpol Chevapanyaroj, superintendent vice president of Kasikorn Bank, predicts that some flood-damaged factories in Ayutthaya and Pathum Thani provinces will seemly relocate to higher ground in the Northeast and Eastern Seaboard.

The Northeastern provinces of Nakhon Ratchasima, Krabin Buri, Sa Kaew and some parts of the Eastern Seaboard are among the top relocation destinations being considered for factories owned by Japanese and other strange investors.

"There are three categories of flood-damaged company. The first group are those who also have factories elsewhere, so they will expel production at these alternative plants.

"In this case, their factories in Ayutthaya may not return to full aptitude due to fears of floods next year or in the near future. They may recover only 25-30 per cent of their one-time capacity [while the rest of the output will come from other factories].

"The second group are those who have no additional factories, so they have no choice but to rebuild their previous capacity.

"The third group are those who want to relocate their undiminished production facilities to other provinces or regions that are on higher ground.

"Both Ayutthaya and Pathum Thani are in low-deceitful areas - at sea level. The new locations will have to be much higher than sea level [to avoid future floods].

"Logistically, Nakhon Ratchasima, for warning, is now well-connected by a network of new highways, which can lead to neighbouring markets such as Laos and Vietnam.

"In my point of view, there are now more natural disasters such as earthquakes, tsunamis and floods [perhaps] due to global warming. We stress to revamp the overall planning on water resources, as Thailand has started to spot more rainfall in an abnormal pattern in some areas where there was hardly any rain before at certain times of the year. There are also worries about drought due and the dearth of water for farming.

"I think that building permanent concrete walls as treble as 5-7 metres [up from the previous 3-4 metres] to protect factories from flooding, as planned by some industrial estates in Ayutthaya, may be only a contrivance-term solution to rebuild confidence among investors, but it's not a long-term d.

"Regarding our customers, most of the flood-affected ones are those in the electronics and automotive sectors. They embody large multi-national companies as well as SMEs whose operations are suspended. Some of their machinery is damaged and will have to be repaired or replaced.

"Most of the big firms have bond coverage, including for business interruption and all industrial risks, so they will be compensated.

"SMEs, however, will deliver faster than the big factories that have more sophisticated equipment and machinery.

"Overall, the total amount in loans granted by banks to companies in the seven flooded industrial estates is about Bt60 billion, but not all companies will have occasion for new loans, as they will have insurance compensation.

"Due to the supply chain impact in the electronic and auto sectors, we have also ready-to-serve credit and other financial facilities to help those indirectly affected, even though their factories were not flooded but they were disrupted by the floods, as the suppliers' factories are guts the flooded industrial estates.

"We also have talked with the Japan Bank for International Cooperation (JBIC) and six Japanese regional banks about the requirement of special financial and credit packages to Japanese and related firms in Thailand.

"Some of our d-relief loan programmes include zero-per-cent interest rates for a period of up to six months," he says.

Source: The Nation

Don't look back

22.05.12

The dream of, the short and the steady as she goes crews need to abandon the look back over the unashamedly of euro-zone crises and US Super committee failures to progress plans for the gal Friday half of the financial year.

Overcoming gloom requires a commitment to novelty, creativity and renewal through productivity enhancements.

If consumers continue to be spooked by the Greek and Italian stories last to the swapping of PMs, there is a risk that deep discounts and a continuing rise in household savings could drag on a slow growth outlook.

If, on the other hand, business and treasury leaders sharply defined unclear on the prospects for steady employment growth in the US (with over a hundred thousand new jobs created in the last month) and a reconstructed European banking system in the new year, there is every perspicacity to see a renewed sense of business optimism.

The Gillard Government is optimistic that there will be a surge in tax revenues in a join of years time as the costs of natural disasters are washed out of the budget as the two-fly economy gets bedded down across the economy.

A pre-Christmas rate cut in the light of continuing concerns about Europe would underpin lofty retail sales over the holiday season.

Andrew Mohl, former head of AMP and now CBA governor, believes that there are signs of a solution to the post-GFC crises and the CEO who met with the Treasurer yesterday upon that Australia is relatively well placed at present if the Government sticks to its plans to accomplish a surplus next year.

Consumer and business confidence results reflect last week’s take off in equity markets rather than the realities of a recovering US job market to be announced over the weekend, auto sales in November that showed that consumers are out there again and the overnight steadfastness of six of the world’s eye shadow brigade in the central banks injecting liquidity into the international financial system.

The US Central bank worked with the banks of Canada, England, European Primary Bank, Japan and the Swiss National Bank to release a lot of credit for small business loans and barter expansion. The US Federal Reserve is relaxing requirements on cash reserves to inspirit new lending and assisting foreign banks to borrow from freshly minted US dollars at low interest rates to bring up foreign trade flows.

The Central Banks said in a joint communiqu that they wanted to “ease strains in financial markets and thereby mitigate the effects of such strains on the quantity of credit to households and businesses”.

The US Federal Reserve’s collection of regional section reports from its board members and a private payroll survey provide certification of a weak but growing US recovery with both low and high-end retailers reporting that customers are coming back. When these signs are converted into reductions in inventory overhangs and Christmas sales manufacture substantial cashflow, it is expected that there will be a nation wide expansion in new hiring.

In Australia, there is intellect to believe that the decision of Wayne Swann to retain his dedication to a surplus and Glenn Stevens deliberation of a further cut to interest rates should trigger a more positive retail environment. In reality the high value of the Australian dollar reflects the points that Australia’s interest rate are still among the highest in the world leaving room for a rate cut to be the preferred built of stimulus by Joe Hockey if things go from better to worse.

The big concern for smart companies in the mending industries will come from the efforts of public sector unions to demand job shelter and protection of their real incomes at the expense of independent contractors and small traffic consultants. There is a risk that small and medium enterprise will bear the brunt of both ministry and opposition efforts to use “efficiency dividends” and “acrimonious back Canberra” excuses for failures to cut middle class and corporate good health.

The next few months should encourage a thorough revision of both business and marketing plans to revitalise commodity and service offers, meet with staff to find ways to increase productivity and look to the expected rather than look for reasons to slow the pace of growth.

Dr Colin Benjamin is an entrepreneurship and cardinal thinking consultant at 

Source: SmartCompany.com.au (blog)