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Serm Suk seeks revision of contracts

Posted by arnon_k On November - 19 - 2010 ADD COMMENTS

Serm Suk is going ahead with negotiations with PepsiCo for revisions to the contracts for supply of concentrates and marketing, amid a looming legal battle and scrutiny by the Stock Exchange of Thailand into any share-price manipulation..
In a statement, Serm Suk said its board of directors sought a delay in completing the negotiations, which had been scheduled for completion by December 15.

The company has extended the period so that shareholders can vote on the contract revision or the company’s new business plan by February 15.

Serm Suk wants a reduction in the price of concentrates. Sources in the company say that if PepsiCo refuses to accept the proposal, Serm Suk may terminate the |bottling contract and pursue the logistics business.

The shareholders on October 4 approved the two moves, but Pepsi-Cola (Thai) Trading, which holds a 24.94-per-cent stake in Serm Suk, launched a lawsuit, saying it was barred from voting on the two issues. The lawsuit was filed after SS National Logistics announced a tender offer for Serm Suk’s shares.

This followed a failed takeover attempt by PepsiCo and partners.

SET senior vice president Sakkarin Ruamrangsri said Serm Suk would need to answer to the public whether the tender offer would change its plan given the emerging legal battle. “This is a complicated issue, as the tender offer is not complete. The tender offer can change its plan,” he said. Both tender offers led to an increase in the value of Serm Suk shares, but Sakkarin said SET investigation has not found any irregularity so far.

Serm Suk yesterday gained Bt3.50 to close at Bt45.25, with turnover totalling Bt98 million.

A source from Serm Suk told Krungthep Turakij that SS National Logistics maintains the tender offer, on expectation that the lawsuit will not affect the offer.

Serm Suk yesterday revealed that the Bulsook family, a founding and major shareholder, had no direct or indirect involvement with SS National Logistics.

15m foreign tourists expected this year

Posted by arnon_k On November - 18 - 2010 ADD COMMENTS

About 15.5 million foreign tourists will probably visit Thailand this year, according to Kasikorn Research Centre.

The leading think tank forecasts that the number of foreign tourist arrivals for 2010 will increase by 10 per cent over last year.

This would pump about 536 billion baht into the economy.

The foreign tourist arrivals in 2011 should rise by another five per cent over this year if there is no new violence, generating about 555 billion baht in revenue next year, the centre predicts.

“Tourism growth cannot be achieved without cooperation from all sides.

“With a stable political situation, peace will be achieved and there would be no disunity in the country. This would make foreign tourists more confident of their safety while in the country,” the KRC said.

Sharp corporate tax cut considered

Posted by arnon_k On November - 18 - 2010 ADD COMMENTS

VAT rise would make up for lost revenue; officials to put package to Korn in new year.
Finance Ministry officials are tweaking a package of tax reforms, with the likelihood that the corporate-income-tax rate will be cut aggressively from 30 per cent to 18 per cent in return for an increase in value-added tax.

Satit Rungkasiri, director-general of the Revenue Department, said at a seminar yesterday hosted by Siam Rath that the proposed reform package would be presented to Finance Minister Korn Chatikavanij early next year.

One proposal is to increase VAT from the current rate of 7 per cent, he said, adding that every percentage-point VAT increase would increase government revenue by Bt60 billion.

Corporate and personal income tax would be reduced, with every percentage-point cut slashing revenue by Bt6 billion.

Satit said corporate income tax might be cut to 18 per cent from the current 30 per cent, while the highest progressive rate of personal income tax would be lowered to 25 per cent from 37 per cent.

Local and foreign corporations have complained that Thailand’s corporate tax rate is too high when compared with those in other countries in the region. Many business leaders have therefore proposed a cut to make the Kingdom more attractive to foreign companies.

Thailand recently advertised itself as a destination for the regional headquarters of multinational firms, but only a few have submitted proposals so far. Under that package, expatriates working for a regional HQ are also subject to lower individual income tax.

According to KPMG’s 2010 tax survey, global average corporate income tax stands at 24.99 per cent. However, in Southeast Asia, the rates of Thailand and the Philippines are the highest at 30 per cent, compared with the 17 per cent imposed by Singapore.

Satit also said there was an option partially to remove tax privileges granted by the Board of Investment. The ministry could even completely abandon the BoI’s tax incentives.

At present, to attract new investment, the BOI extends the maximum eight-year corporate-income-tax exemption on approved investment projects. Some tax privileges also cover the import of machinery.

The ministry has also studied introducing a law to impose a “Tobin” tax on capital inflows.

Satit said such a tax was not necessary at this stage, but it was best for the government to have an additional tool at the ready to stem the flow of capital.

Meanwhile, Pongpanu Svetarundra, director-general of the Excise Department, said he wanted to impose a tax on gambling such as government lotteries and horse racing, as well as increase the tax rate on cigarettes and alcoholic beverages.

He said the Finance Ministry should collect tax based on the retail price of cigarettes, instead of on ex-factory prices.

While this would boost the tax rate, it would also help reduce smoking and therefore protect the nation’s health, he added.

ThaiBev denies Serm Suk takeover news

Posted by arnon_k On November - 17 - 2010 ADD COMMENTS

Thai Beverage managing director Auychai Tanta-opas today insisted that the company has no plan to take over Serm Suk Plc, the local bottler of PepsiCo.
“In the past two years, ThaiBev has been investing over Bt3 billion in the logistics business, including the opening of three distribution centres in Surat Thani, Chon Buri and Nakhon Ratchasima. The DCs in the North and Northeast are under construction. This is supported by 93 sale units across the nation, as well as 1,100 distribution teams. We have over 2,000 trucks which can cover 280,000 outlets. The investment is also put in order placement technology as well as the point-of-sale technology,” Auychai said.

He noted that with the strong logistics network, the company has no need to join hands with any company to strengthen the network.

Sources in the beverage industry said Thai Bev’s founder and major shareholder, Charoen Sirivadhanabhakdi, is joining hands with some founding members of Serm Suk, in launching the tender offer for Serm Suk shares. His daughter and son-in-law are directors of SAS Trading, which is a major shareholder of SS National Logistics, who launched the tender offer. His property arms, TCC Land and TCC Hotels Group, are also the major shareholders of SAS Trading.