fwiw
WSJ
CMRC locking up Asia
January 12, 2001
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Tech Center
Six Thai Companies to Form
Business-to-Business Venture
By UMESH PANDEY
Staff Reporter of THE WALL STREET JOURNAL
BANGKOK, Thailand -- Six leading Thai companies are forming a business-to-business Internet procurement site that could help save them billions of baht a year.
Four of the companies are the largest in their fields in Thailand: industrial conglomerate Siam Cement PCL, agri-business giant Charoen Pokphand Group, commercial bank Bangkok Bank PCL, and private fixed-line telephone operator TelecomAsia PCL. United Communication Industry PCL and Siam Commercial Bank PCL are the other companies in the new business-to-business joint venture.
The companies hope the B-to-B site will cut their collective 90 billion baht ($2.08 billion) annual outlay for purchases of so-called indirect goods and services. Indirect goods and services aren't used directly in the production process; they include items such as computer equipment, office equipment and supplies, paper and nonproduction-related services.
Asia Freewill Ltd. -- an Internet management concern that will set up and manage the B-to-B site for the Thai companies -- estimates that Thailand's market for indirect goods and services is about 500 billion baht a year.
"Just a fraction of this amount [500 billion baht] is more than enough to make it [the new company] viable," said Subhasiddhi Jumbala, chief financial officer of Asia Freewill. He declined to predict revenue or profit figures for the venture, but he said the company should be operating by May. By then, suppliers for the six partners are expected to be equipped to use the new B-to-B site, which will use software developed by U.S.-based Commerce One Inc.
Setting up the new company will cost about 500 million baht, according to Supachai Chearavanont, president and chief executive officer of TelecomAsia PCL. He said TelecomAsia will provide the infrastructure for the venture. He expects the companies in the partnership to save 3% to 5% each on annual procurement costs. Charoen Pokphand Group is a major shareholder in TelecomAsia.
To date, electronic procurement hasn't really taken off in Thailand and very few companies are using the method.
"The venture should be successful, as this is the first Thai e-procurement company for indirect goods," said Mikael Olausson, Internet analyst at Indosuez W.I. Carr Securities in Thailand. He said the size of the companies involved in the partnership should make the new B-2-B concern viable.
Write to Umesh Pandey at umesh.pandey@awsj.com |
