Minutes of 04/2008 Board of Directors’ Meeting
10.00 a.m. Thursday, 14 August 2008
Pacific Club, Two Pacific Place
Attendants:
Advisers:
1. Mr. Roh, Young-Guhk
2. Dr. Kim, Yong-Rae
3. Mr. Manob Song-Im
4. Mr. Kim, Hyung-Gon
Directors:
1. Mr. Ahn, Jong-Kug
2. Mr. Park, Wan-Mo
3. Mrs. Mira Kim
4. Mrs. Vongthip Chumpani
5. Mr. Kim, Jong-Gee
6. Mr. Chang, Soo-Kil
7. Dr. Boon Ketutassa
8. Mr. Kim, Jong-Kil
9. Mr. Park, Jong-Gak
10.Mr. Kim, Han-Jung
Proxies:
1. Kraisin Vongsurakrai
2. Mr. Lee, Hyun-Woo
3. Mr. Kim, Dae-Won
4. Mr. Kim, Jang-Soo
5. Mr. Jeon, Yong-Chang
6. Mr. Yim, Sung-Hyon
7. Mr. Teerawit Srisatidnarakul
8. Mr. Sombat Sinsarn
Opening of the Meeting by President Ahn, Jong-Kug
At 10.30 President Ahn requested Secretary General to report on the attendance and proxies. She reported that among the total of 26 Directors there were 10 present and 8 proxies received, which constituted a quorum to open the 04/2008 Board of Directors’ Meeting. After the report President Ahn, welcomed all the Directors and Advisers present at the meeting. The Meeting went on according to the items of the Agenda notified earlier, as follows:
Item 1. Review & Approval of Minutes of 03/2007 Board of Directors’ Meeting
Item 2. Reports by President, Vice Presidents, Secretary General,
Treasurer & Other Directors
Item 3. Progress on the publication of “Business Guidebook for Korean Investors” on the Occasion of 50th Anniversary Celebration of Thai-Korean Diplomatic Relationship
Item 4. Suggestions for improvement of KTCC Website
Item 5. Annual Golf Event in November 2008
Item 6. Other Matters
Item 1. Review & Approval of Minutes of 03/2008 Board of Directors’ Meeting
The Minutes of 03/2007 Board Meeting held at 10.00 a.m. on Tuesday, 24 June 2008 at Pacific Club, was reviewed by President Ahn, who went through it with the highlights as follows:
I. President’s Report
(1)Information that he compiled from the Business Forum and Joint Foreign Chambers of Commerce in Thailand (JFCCT);
(2)Amendments of the Foreign Business Act (FBA), which would influence the Chamber of Commerce Act and consequently our
Chamber’s Constitution;
(3)Proposals presented recently to the current government by the British Chamber of Commerce, which included various issues to the responsible Ministries;
(4)Thailand Investment Environment Seminar taken place on 3 July 2008.
II. Vice President Kraisin’s report on the ASEAN – South Korean FTA
According to the Ministry of Commerce, there would be a signatory ceremony between the representatives of South Korean and Thailand at the up-coming meeting of the Economy Ministers in Singapore in August 2008. The products that would benefit from 2010 include the computer and its components manufactured in Thailand for export to South Korea, as well as the electrical appliances, jewelry, automatics, seafood, air-conditioner, etc. When Thailand imports raw materials from South Korea, such as minerals, plastic resin, fertilizers, etc. would enjoy the benefit of the agreement.
However, the agreements on the investment had not progressed at all over the last two months. Both parties expected to conclude this part, as well as the rest of the agreement by the end of 2008.
III. Secretary General Mira Kim’s Report on her visit to Japanese Chamber
Her visit on 12 June was for a benchmarking of the JCC’s organization and
its services in order to improve ours.
1. JCC’s Organization
(1) The Board of Directors is composed of 1 President, 4 Vice Presidents, one Treasurer and other Directors in charge of other affairs of the Chamber
(2) 15 Divisions are based on the groupings according to the industries.
(3) 16 Committees are of major activities
2. The Main Activities of the JCC administration Office:
Issuance of the Certificate of Membership;
Publication of Monthly Magazine
Wage Survey for the Member-Companies
Annual Issuance of Membership Directory
Publication of Economic Book
3. Benefits of the Members who paid the Due
(1) Free attendance at the Seminar organized by JCC usually with lunch
(2) Use of the Meeting Facilities in its premises
(3) Special discount at the purchase of 24 JCC’s monograph publications
Director Yim Sung-Hyon expressed his observation that the rest of the business-oriented groups in Korean community should be put together under the umbrella of KTCC, so as to make them reinforced with legitimacy. They could be formed as Divisions and/or Committees as can be seen in the JCC’s organization.
IV. Treasurer Khun Vongthip’s Financial Report
As at 24 June, we had 12,859.25 Baht as cash in hand and 608,867.65 Baht
as cash at SCIB Bank.
In conjunction with the financial matters President Ahn pointed out the special donations from our Advisory Committee for the publication of “Guide Book” and the Web-site Project, amounted 360,000 Baht. Also indicated was the dues paid both by 12 Permanent and 17 Ordinary Members, reached 155,000 Baht.
V. Publication of “Business Guide-book” for Korean Investment
On behalf of Dr. Kim, Yong-Rae, who was excused from the meeting, Secretary General Mira Kim reported that this particular project, a joint effort between the Embassy and our Chamber, was designed as a total guide-book for Korean investors operating business in Thailand on the auspicious occasion of the 50th anniversary of Thai-Korean Diplomatic Relationship in 2008.
This business guide-book would contain four chapters and three appendices
Chapter I. Overall Economy of Thailand
Chapter II. Thai Economy and Business Laws
Chapter III. Policies on Economy and Industry
Chapter IV. Information on Doing Business in Thailand Appendices
1. Important Economy and Business Laws (in Korean or in English)
2. Frequently raised Questions and Answers in Business
3. Cases of Legal Arbitration and Solution
For the up-to-date data, the Task Force Team, chaired by Dr. Kim, would consult Thai government agencies, such as Ministry of Finance, Ministry of Commerce, BOI, DEP, Revenue Department, etc. When the FTA between Thailand and South Korea would have been signed in August this year, the bilateral import tax details are to be revised, the information of which would be crucial for the strategic business planning for certain industries. It is also important to know which industries would be in the main concerns for the economic development of Thailand, as a developing country. They seemed to include the plans of the electricity generation and the substitute energy development, such as the bio-diesel production.
Owing to the matters of FTA between Thailand and South Korea, as well as the matters in the intellectual property, it would have to be extended for another three months. Therefore, the amended deadline of the book is now set at the end of September.
The revision of the contents would take place regularly after the publication, which would appear in out website, as well as to be sent out as the KTCC Newsletter. Besides, once the book is published, it would be sent to the related organizations in Korea, hoping to serve as a vehicle to attract consulting and coordinating projects from such Korean business agencies as Korean Chamber of Commerce and Industry, Central Commission of SMEs in Korea, Association of Electronics Companies of Korea, etc. It is anticipated that through such future contracts, our Chamber would be able to secure some funds to enhance our services for the benefit of our members, and consequently the local Korean business community in general.
VI. Report on KTCC Web-site Reconstruction Project
On behalf of our web-master, Mr. Cho, Won-Ho reported on the status of our website, which was composed of Website Traffic Report, Improvement of Website and the Next Steps, as follows:
1. Website Traffic Report
2. Improvement of Website
(1) Flash Animation
(2) Improvement in Layout
(3) New Service
3. Next Steps
(1) Optimization of other language versions, English and Thai
(2) Creating further Contents of
(3) Keeping Information up-to-date
VII. Other Matters: Prof. Anucha’s briefing on his recent trip to Korea
Prof. Anucha Chintakanond reported on his observations of Korean development during his recent trip to Korea with a group of specialists on a mission endowed by the National Economic & Social Advisory Council.
The first point that the group concentrated on was the human resources development for an efficient management of an organization. For this particular purpose, the group visited KAIST, which at this time he could definitely confirm that it had already achieved its ambition of being one of the world’s leading Institutions in the fields of science and technology.
The 2nd important point was the eradication of corruption in Korea. Though Thai Government has anti-corruption agency, which works along with two other government agencies, corruption seems to be rampant in every layer of society from the grass-root up to the top level.
The last significant observation was the legal system of Korea, such as the taxation laws, on which the Korean authorities had tried to make them easily understandable for the business organizations to follow.
He concluded that KTCC could advise his working group for it to formulate proposals for a higher level of development in all aspects of the Thai society. Such advices and suggestions could subsequently be presented to the cabinet of Ministers.
Adviser Manob raised the issue of KDB’s return to its operation in Thailand after its withdrawal soon after the financial crisis in 1997. KDB’s come-back has now become crucially important in support of the Korean investors’ financial matters, especially of the small- and medium-sized businesses. During his tenure 4 years ago he submitted the petition letters to the then Prime Minister Thaksin, Finance Minister Somkit and the Bank of Thailand’s Governor, which had not properly been taken care of. He considered that this issue became an urgent matter lately, when the signing of the ASEAN and South Korean FTA gets closer. Therefore, it is the time to revive this matter for the Thai government’s reconsideration.
Director Yim, Sung-Hyon said that when he was urgently in need of KDB’s loan, he could only obtain it from its branch operation in Singapore. He also mentioned that the Shinhan Bank of Korea had recently signed an MOU to honor bilateral guarantee agreement with Kasikorn Bank. Khun Vongthip added that Krung Thai Bank has a similar agreement project with a Korean bank. And, according to the master-plan of Bank of Thailand, it has been a policy to encourage foreign banks to take over the small and weak Thai banks. It was concluded that a special meeting for this particular matter should soon be organized to follow-up the issue.
The Meeting approved the Minutes without any correction or addition.
Item 2. Reports by President, Vice Presidents, Secretary General, Treasurer & Other Directors
President’s Report
President Ahn began his report with the meeting with KDB’s representative recently to find out what kind of support our Chamber could render to help for the bank resume its branch office. He also invited the representative of the Woori Bank to attend, but he was unable to join because of his business overseas.
On this matter Director Chang, Soo-Kil expressed his opinion that Woori Bank would have a better chance than KDB, because the former had started to develop a close relationship with the Siam City Bank. Besides, the Bank of Thailand would grant any foreign bank’s operation license in Thailand, after a thorough consideration case by case according to the Master-Plan. To support the two Korean banks for this matter, our Chamber could come up with the detailed data on the Korean investments to Thailand, along with the official statistics based on the BOI’s list of investment promotion privilege. Also to be elaborated are the essential reasons why the Korean investments to Thailand would need Korean banking facilities, particularly the SMEs for their smooth operation. There are almost 200 BOI promoted Korean companies in Thailand. Also to be included are the Korean restaurants and other tour-oriented businesses in Thailand, and our Chamber would need to look into the actual situation of their business operations.
Adviser Manob suggested that our Chamber should rather support for Woori Bank’s license, because it had already decided to invest in a Thai bank. Khun Vongthip mentioned that as a Chamber we should maintain our position of being neutral, because the decision will be made by the Bank of Thailand anyway. There, Director Chang suggested our Chamber to organize a special Committee for this particular matter, having Dr. Kim, Yong-Rae, the Commercial Attache at the Embassy, representatives of both the KDB and Woori Banks. Also to study is what happened to Thai banks when they tried to operated their services in Korea
Adviser Manob emphasized that this particular issue has now become an urgent matter. And, when the signing of the ASEAN and South Korean FTA would have been executed, the trade volume between two countries would certainly increase. Consequently, without a Korean bank operating in Thailand, it has been difficult for the Korean investments to operate smoothly. Adviser Roh, Young-Guhk mentioned that the details of FTA between ASEAN and Korea including the tariff reduction schedule would be announced after the signing towards the end of August.
As Dr. Surin Pitsuwan, a former Foreign Minister of Thailand and now the Secretary General of ASEAN, indicated recently, Khun Vongthip pointed out that when the ASEAN would have achieved FTAs with both India and China, it would contain one third of middle class population in Asia by 2015, estimated some 567 million people. Therefore, it is advisable to plan to form a business council by putting both the Korean and Thai private sectors together, and our Chamber should act for its conception as soon as possible, especially the local Korean manufacturers as its core members. This is because that ASEAN would emerge as a big market in the region.
Lastly, President Ahn mentioned on the Farewell Golf and Dinner to Ambassador Han, Tae-Gyu to be held on Friday, 29 August. His departure for Korea is known to be in the beginning of September. Though, this particular event was originally planned as a monthly gathering of the Advisory Committee, the meeting agreed to include all the Past Presidents and incumbent Directors, as well as the top executives of KCAT. The further details of this event would soon be announced to all the concerned groups.
Treasurer Khun Vongthip’s Report
Treasurer khunVongthip report that in July 2008 we had an income of 120,000.00 Baht from the donations alone. The expenditure during the month amounted 73,733.86 Baht as indicated on the balance sheet. At the end of July, we had 12,720.75 Baht as cash in hand and 711,353.20 Baht as cash at SCIB Bank.
In August as at 14 August, on the day of the Board Meeting, we had the income of 37,000.00 Baht, composed of 30,000 Baht from a donation, 4,000 Baht from a membership fee and 3,000 Baht from an activities fee. The expenditure up to date amounted 20,530.03 Baht. And, as at 14 August, we have 11,588.75 Baht as cash in hand and 728,843.20 Baht as cash at SCIB Bank.
Solicitation of 10,000 Baht Donation to All the Board Members
President Ahn added that we have so far collected 390,000 Baht as donations for the publication of the “Guide-book” and the web-site maintenance expenses, mainly from the members of Advisory Committee, which is not sufficient for both projects. Therefore, he proposed to solicit a voluntary donation of 10,000 Baht to all the Directors and Advisers, to which the meeting agreed unanimously. In following up of this matter, Secretary General Mira Kim will soon notify all the current Advisers and Directors of the 10,000 Baht donation agreement.
Director Chang, Soo-Kil’s Report on Membership.
Director Chang presented a report on how to improve our Chamber’s financial situation in comparison with that of Thai-Dutch, of which his ABN Amro Bank is a member as well. In fact, his Bank pays 2,500,000 Baht annually for the smooth operation of the Chamber. There are a few other Dutch companies in Thailand who pay such an extensive amount of donation. On the other hand, small companies do not pay the membership fee for two years before they decide to subscribe to. Adviser Manob added that in the case of Thai-Finnish Chamber, Nokia is a so-called Volunteer Platinum Sponsor who pays a large amount of annual donation to support the office operation expenses, including the payments to the Secretary General and the staff.
Likely, big Korean conglomerates should also contribute large amounts of membership donations to our Chamber with the consent of their headquarters. Our Chamber should come up with a membership payment scale based on the business volumes of our members. In support of this change, we should organize certain attractive activities for the benefit of our members, such as meetings with high-ranking government officials. Through such events, our members could make suggestions for the improvements in their business environments.
President Ahn added that to ease our financial situation a special committee should be formed, for it to draft a revised membership fee scale. This particular committee would study the membership fee structures of other Chambers, and then, to present the result to our next Annual General Meeting for the members’ approval. Adviser Roh said that the membership fee of the Korean Chamber in U.K. 10 years ago when he was posted to there, was varied according to the business size of the members. Khun Vongthip suggested that we could even recruit certain business entities in Korea as our associate members to enlarge our membership base.
Item 3. Progress on the publication of “Business Guidebook for Korean Investors” on the Occasion of 50th Anniversary Celebration of Thai-Korean Diplomatic Relationship
Adviser Dr. Kim, Yong-Rae reported on this particular Item that this, a joint effort between the Embassy and our Chamber, is designed as a total guide-book for Korean investors operating business in Thailand, a publication of which will mark the auspicious occasion of the 50th anniversary of Thai-Korean Diplomatic Relationship in 2008.
Owing to the consequential matters of FTA between Thailand and South Korea, as well as the issues in the intellectual property rights, completion of this investment guidebook would have to be extended to the end of September. This book contains 4 chapters and additional information as follows:
Chapter I. Overall Economy of Thailand
Chapter II. Thai Economy and Business Laws
Chapter III. Policies on Economy and Industry
Chapter IV. Information on Doing Business in Thailand
Appendices
1. Important Economy and Business Laws (in Korean or in English)
2. Frequently raised Questions and Answers in Business
3. Cases of Legal Arbitration and Solution
The up-to-date data collected from various Thai government agencies, are contained in the volume. And, when the FTA between Thailand and Korea would have been signed, the bilateral import tax details are to be revised accordingly, the information of which would be crucial for the strategic business planning for certain industries, such as the electricity generation and the bio-diesel production as a substitute energy.
The four chapters will be contained in a 300-page hard copy, and the extensive additional information of 1,000 pages will be put together in disks. As its 1st edition 1,000 copies will be published: 700 for local distribution and rest of 300 copies to be sent to the concerned organizations in Korea, such as Korean Chamber of Commerce and Industry, Central Commission of SMEs in Korea, Association of Electronics Companies of Korea, etc. President Ahn remarked that we would need to have a few quotations for the printing expenses. While the total budget for this project and that of website maintenance was estimated at 800,000 Baht, we have now collected 390,000 Baht. Therefore, he suggested once more to all the Directors to make a donation of 10,000 Baht to fill up the rest of the budget. To generate further income he plans to put banner advertisements in our website.
Item 4. Suggestions for improvement of KTCC Website
On behalf of the web-master who was absent, Secretary General Mira Kim reported on the future additions to our website, which included banner advertisement, information on member-companies, and how to subscribe and attend to our website, the last of which had 6 steps to log onto as follows:
(1) Going to the “Sign In” Page
(2) Click “Subscribe” Button
(3) Fill the Subscription Form
(4) Confirmation through E-mail
(5) Click “Write” Button to upload Opinion
(6) Write Opinion and Save
She reminded the meeting of the future steps, including
(1) Optimization of other language versions, English and Thai
(2) Creating further Contents of
-Interview with KTCC members
-Inclusion of the contents from the Business Guide Book in preparation
-Information on Life in Thailand for the newly arrived Korean members
(3) Keeping Information up-to-date
Contact Information
Company and Business Profiles of the members
She also indicated that we have now some basic information of our Chamber in Thai, and requested Adviser Manob to supply with certain information in Thai, which he had compiled in the initial stage of our website during his tenure. Adviser Manob willingly agreed on this request.
Besides, she went onto the interview project of our member-companies, starting with those of our Advisory Committee with the survey questions, which had already been distributed to them, as follows:
(1) Introduction and Business Scope of the Company
(2) Future Vision and Plan
(3) Success and Hardship Experience in doing Business in Thailand
(4) Requests and Suggestions to Thai Government Agencies
(5) Opinion and Activities to Suggest to KTCC
(6) Opinion and Utilization Ideas on KTCC’s Website
Item 5. Annual Golf Event for Fund-raising
Director Kim, Jong-Gee reminded of our Golf Event in November last year in Celebration of our Chambers 30th anniversary at the Royal Lakeside Golf Course. We had 147 participants and generated 134,000 Baht of income, including special donations. It was one of the most successful golf events ever organized by the Korean community, with the strong support of LG Electronics, Asiana, POSCO who rendered not only the expertise but also the skillful manpower.
This year our Chamber has a plan also to organize another golf event on 6 November, and he proposed the meeting to decide on which goal are we to achieve: large participation of the business community in general, or for the raising of fund. Dr. Boon suggested that we should do it for friendship basically, rather that the generation of extra income, and also to make it as an opportunity to recruit as many new members as possible.
By the way, we should make a deposit of 75,000 Baht to reserve the golf course for the day by the end of August.
President Ahn suggested that we should set up a Task Force Team for both the preparation and the smooth running on the day of event. And, Director Chang suggested to Vice President Park a strong assistance from KCAT, like last year.
Item 6. Other Matters
Upon request of President Ahn, Khun Vongthip presented a briefing on the current economic trends highlighting the globalized world of today:
• We cannot separate politics from economy
• We cannot survive without knowing and understanding what goes on at regional and global level
She, then elaborated on the current situation globally and regionally with the following points:
Global trend
• Inflation – too much money/imbalances in demand and supply/both
• Economic slowdown – US/EU/Japan/China
• Instability in the financial sector – American sub-prime/USD
• The rise of speculative fever – stock markets/oil/gold/food
Regional
• The rise of China – as world’s factory and more
• The rise of India – as world’s outsourcing centre/IT and more
• Vietnam – flavor of the month – turned sour
Thailand
• Rising oil and food prices – killers at USD 140 or USD 120
• Inflation – 9.2% in 7/08 – highest in 11 years
• Growth 08 between 4.8%-6%
• Rising interest rates – a tuck of war between inflation and growth
• Capital flight – foreign funds leaving SET THB 50 billion this year
• Credit crunch coming – more NPL expected
• Weakest consumer and business confidence in last 5 years
• Government spending measures – populist – for votes canvassers - lacking direction – fraud with corruption
• Flip-flop government policies on economic issues and mega projects
Manufacturing
• Weak Baht is good for export but bad for oil import
• Weaker demand from the US and China after Olympic Games
• Production costs rising
• Transportation costs rising
• Labour costs rising – higher salaries and cost of living allowances
• Automotive industry – confusing E10/E15/E85/Hybrid/LPG/NGV
Service industries
• Number of tourists arrivals and departures - still resilient
• Less domestic and outbound trips - high oil prices
• Real estate projects especially with foreign elements doing all right
• Medical hub doing well especially from Middle East (oil $)
• Retail hurt as consumers tighten their belts
• Competition from modern trade – hurting SME’s
• Education industry doing well – need to upgrade skills
• Entertainment and recreation – weakening – less money to spend
Agricultural industries
• Thailand – 1 of 5 world’s net food exporters
• Doing well due to world’s food shortage
• Crops as alternative fuels biodiesel and gasohols – expanding
• Need better management of land/water/fertilizers/seeds/farm hands/tools
• Fisheries – hurt by high oil prices
Banking industries
• More rules and regulations – Base l II, Deposit Insurance etc.
• Fight for deposits – Government’s crowding out effect
• Flight to quality loans and prime customers
• NPL’s looming among weak performers
• Stiff competition from new foreign banks -Thanachart/TMB/Bank Thai
Thai politics
• Thailand is at a cross road – the giant has woken up
• Confusing situations – conflict widening and deepening further
• Unstable government – lacking credibility and trust
• No leaderships
• Struggles for power to continue and intensify
• Political instability to remain for a few more years
She ended her briefing with a question; What to do?
• Now is the right time to practice “Sufficiency Philosophy”
• Scale down expectations but think positive
• Watch out for early warning signs
• Be alert and prudent at all times
• Listen, substantiate, understand and reach own conclusions
• Accept Thai style democracy
At the end of the briefing, on behalf of the Board, President Ahn thanked Khun Vongthip for her highly informative presentation.
The meeting was adjourned at about 12.30, noon.
KOREAN-THAI CHAMBER OF COMMERCE
Certified by
Mira Kim Ahn, Jong-Kug
Secretary General President 2007-2008
18 August 2008
