Dr. Surat Rakhimbabaev
interviews the President of the Thai-Russian Chamber of Commerce Dr. Sombat Thiratrakoolchai on the Thai-Russian bilateral trade and investment. Dr. Sombat started the interview:
- Actually, I had been working as an architect and designed more than 60 buildings and completed 20 master-plans for 20 campuses in Thailand. Not to mention that I am also a professor for only 30 years. But now I am working for a food company. And in order to make my life more diversified, presently I am the President of the TRCC (Thai-Russian Chamber of Commerce). If not yet diversified enough, you know, I am also the Chairman of the Thailand-Pakistan Business Council. What a correlation! Ha ha ha! So what are we going to talk about? About architecture?, Pakistan?, or Russia? Q.
I wanna talk about you and your work - I say, especially about your diversified life and what leads you to the Thai-Russian Chamber of Commerce.
That's wonderful, – Dr. Sombat smiles slightly – everything boils down to work. I say, my main job is working for CPF ( Note: CP stands for Charoen Pokphand, and CPF stands for Charoen Pokphand Foods, Public Company Limited) which is one of the largest food companies in the world. You know, I use my architectural capability supervising the design and planning of CP's two modern food manufacturing plants. I am the one who brings in the new modern look of the new world of architecture to the CP's manufacturing plants. That was really fun! And with my 8-year services as the Dean of the School of Architecture, my boss at CPF thought I might do well as the President of the Thai -Russian Chamber of Commerce. Moreover, I am also the Director and Member of the Executive Board of the Board of Trade of Thailand (BOT), and the Chair of the BOT thought I could do very well as the Chairman of the Thailand-Pakistan Business Council. Believe me, it's not easy but I enjoy wearing many hats at the same time. It's ok, I have a strong head! Q:
Let's talk about your Russian role at the Thai-Russian Chamber of Commerce. What is the main challenges and how do you manage to get to the highest success? Basically tell us about the journey of the TRCC before it comes to this point? Dr. Sombat.
Oh, I am a lucky guy. The very fact that TRCC can come this far is because of the great effort by all of its predecessors, Mr. Chusak Direkwattanachai as the 1st
President, and Mr. Pisak Nivataphand as the 2nd
President. The organization started out in November 5th
, 2005 as the Thai-Russian Trade Association which Mr. Vitaly Kisselev took part as one of the co-founders, the organization has been elevated since then to become one of the most respectable "Thai-Russian Chamber of Commerce - TRCC" until today. Mr. Achava Smuthranond and Dr. Sourat Rakhimbabaev are key drivers of our Executive Team.
We have to gracefully praise and recognize the great contributions of the Ambassadors of the Embassy of the Russian Federation to Thailand, and the Trade Representatives of the Russian Federation to Thailand who work closely with the TRCC to strengthen the trade-promotions and economic-cooperation between the two countries continuously. "The duty of the TRCC is mainly to provide information and all kind of assistances to all of our members. Some of the duties includes business-matching and transactions, and participation in some bilateral governmental meetings, such as the meeting with H.E. Denis Manturov, and H.E. Dmitry Medvedev when His Excellencies visited Thailand this year. The successes of our members is the achievement of the TRCC".
The challenge at this point is the sluggish world economic and the devaluation of the Ruble due to the low oil and gas prices. Tourists from Russia to Thailand drop half, and the amount of import/export values drop also half of what they used to be. However, believe that the Russian people will be patient and adjusting themselves to this situation which I personally think it will take few years to come back to normal again where oil and gas prices will be higher and Ruble will be stronger. We are planning to take a group of Thai and Russian Business people to visit Russian Far East Region, to Khabarovsk Krai and to Vladivostok in the middle of 2016. There is a great potential where cost of initiating and running new businesses is lower than Moscow and St. Petersburg. The Governors of the two cities are fully supporting all foreign trade and investments. Furthermore, there are export markets nearby like Japan, Korea, China, and Mongolia, etc. Importanly, the sea-ports of Khabarovsk Krai and Vladivostok along the Sea of Okhotsk can directly connected to Thailand's Lam-Chabang Eastern Seaboard. There is a bright investment future in the Russian Far-East Region and as a matter of fact, a Thai company, Sutech Engineering Co. Ltd., is in the process of building a Sugar Refinery Plant in Khabarovsk Krai, taking advantage of the port zone "Sovetskaya gavan". The project is designed as the state of the art sugar refinery complex with logistic area and vessel terminal with annual capacity of 500,000 metric tons. As part of the "ASEAN Consortium", this project is co-financing by a Malaysian company and the total amount of investment is 300 million US Dollars: 200 million in construction of the plant, and 100 million in the infra-structure and equipment expenses. Q.
This year the TRCC is celebrating its 10th anniversary on November 3rd
, and the TRCC is organizing the Seminar on the "Thai-Russian Business, Investment & Cooperation"
which raises a great attention of the Thai and Russian newspapers and media. So, who are the key participants to this important seminar, and what is the outcome? Dr. Sombat.
We have always been receiving great attention and distinguished audiences in our seminars. The first group of audience is our members where at least 30 companies has participated. Our members list can be viewed through our website www.trcc.or.th
and, you may also find some valuable and interesting information from our website. Other than that, we have representatives from the Board of Trade of Thailand, Thai Bankers Association, Board of Investment, Thai-Russian Business Council, Russian Trade Representation, Joint Foreign Chamber of Commerce in Thailand, Center for Russian Study – Chulalongkorn University, Department of Russian Language – Thammasart University, Nation News Network, Co. Ltd., The Phuket Gazette Co., Ltd., Russia Beyond The Headlines, the Advertising Association of Thailand, and Tourism Authority of Thailand, etc. It will be crowed for sure! It means, our activity became known and respected not only within the Thai business community, but also among related Russian counterparts and governmental agencies.
The outcome from this seminar is the point-of-departure to a strong ignition of the Thai and Russian business-communities to stand up and shake the unfortunate slow-pace of economic growth, and starting to speed up into a bigger scale of trade and investment between the two countries. Sutech's Far East investment example, as well as the CP Group who is exploring opportunities for investment into its livestock Feed-Farm-Food-Trade business in Russia as well.
We need more attention, we need more movement, and we need more interaction between the business sectors of the two countries. Now the world economic is in a slow pace, but let's prepare ourselves to be ready for the faster pace when the economic is picked up in few years. Do not wait to drain-off, but be always active and be ready to execute, when the time comes! We do need cooperation from everyone. Mr. Dhanin Chearavanont, the Chairman of the CP Group and the richest person in Thailand ranked by Forbes 2015 said, "the more crisis you face, the more opportunity you will get". Therefore, let's work together to convert crises into opportunities for all Thai and Russian. How about that! Yeahhhhh. Q. What topics did you discuss in the Novermber 3rd seminar, and who do you invited as speakers to draw audiences' attention? Dr. Sombat.
I am so proud to mention our honorary, keynote, and distinguished speakers, starting from the Honorary Ambassador H.E. Dr. Kirill Barsky, then Mr. Nutthakrit Sivasri as the Keynote speaker from CP who is the biggest Thai investor in Russia.
Then it was the moment of the media block, where the President of Nation News Network, Mr. Pana Janviroj gave his views of the Thai and Russian media cooperation. The Russian Beyond The Headlines (RBTH) by Mr. Eugine Abov spoke about "Current images of Russia in Thailand and ASEAN", where his ideas have been supported by Ms. Mawzia Madni, who shared her rich working experience for the Times Group.
Although Russian tourism business generates a tremendous income to Thailand, however, we are facing some kind of economic difficulty, therefore, the Deputy Governor of the TAT (Tourism Authority of Thailand), Mr. Visanu Jaroensilp, addressed a scenario of how to bring back more Russian tourists to Thailand. And this was not the end yet, the head of research of the Thai Farmers Bank (K-Bank) Dr. Siwet Luangsomboon informed the audiences on the means of money transferring to and from Thailand and Russia, as well as the currency transactions via Thai Baht and Russian Ruble.
Last but not least, this will be 'the talk of the town' regarding the Russian investment in Thailand. As you all know that the best caviar on earth is made from Russian Sturgeon fish. Mr. Noppadon Khamsai, the Managing Director of the Thai Sturgeon Farm Co., Ltd. together with his co-owner Mr. Alexey Tyutin had surprised all the audiences with the unbelievable innovation of creating a sturgeon fish farm in Hua-Hin, Thailand. This project was amazing and I myself never thought it is possible to raise sturgeon fish in the warm climate like Thailand. This is truly an astounishing idea that an SME firm has the strong believe that they can do it successfully. This project received a great deal of assistance from the TRCC and TRCC's executive members who put together a great effort to make the 'dream comes true' for Noppadon and Alexey. This is truly wonderful! When you see this great example, please think what incredible ideas you can bring to Thailand, or what incredible ideas you can bring to Russia! Everything is possible, think carefully, think deep and hard, and think out of the box, then you will have a new business for yourself successfully. It is not easy, but only you who can make it happens! Come on, let's work together. TRCC will support you with any document you may need. You can take my words for it! Q. What kind of services the TRCC provides for its members regarding the Thailand-Russia bilateral trade and investments?
TRCC is a non-profitable organization, we do not involv in lawmaking or doing any business negotiations for our members. We are practically carry on with a principal and a solid goal aiming to assist our members-businessmen with business matching, suggestions, supporting documents, for example, Thailand's Board Of Investment (BOI) taxes and benefits, etc. TRCC members compose of mostly Thai big and medium companies – as well as Russian companies. At present, Thai SMEs are also presented in Russia, for example in Spa business, restaurants and fresh-produce shops that sell food, including fresh fruits and vegetables, etc. We are certain that the economic situation is changing for better, and Thailand will be more active on the Russian markets in the near future. Q. How do you think Thailand investment can be increased in Russia and in what sectors? Dr. Sombat.
First of all, I see a visible growth of investments the agricultural areas. I give you an example. In September, the "CPF Netherlands BV" as the subsidiary company of the Charoen Pokphand Group (CPG) signed the agreement to acquire the largest Russia's north-western region CJSC Poultry Parent Stock Production "Woyskovitsy" and CJSC Poultry Production "Severnaya" at the amount of $680 million, which is considered to be the fifth largest poultry producers in Russia with the market share of 5%. Experts believe that this deal is one of the first in the new trend of the M&A (Merger & Acquisition) in the poultry area in Russia.
Regarding the Far Eastern Region of Russia, there are lots of opportunities waiting there. After Sutech Engineering Co. Ltd. from Thailand set foot in Khabarovsk Krai, I believe that many other Thai companies will follow. Makro who is the largest wholesale retailer in Thailand is seeking seafood business engagement from the Far East Russian.
One of our TRCC member PTT, who is the largest State Enterprises in Thailand in oil and gas business is also looking for business opportunities with the Russian, etc.
The high ranking officials of the two countries are visiting each other during 2014-2016, and this may draw much more cooperation and increasing trade and investment in many areas of: agriculture, automobile and parts, steel, oil and gas, fertilizer, electronics, and possible some infra-structure projects, i.e., railways, and center for machine and equipment maintenance, etc. The commercial aircrafts and helicopters is another potential area to grow into the future. Q. At present, do you see any obstacles or difficulties in Thai-Russian trade?
Yes, I do. I see some difficulties, especially in different mentality, culture, and languages which makes it difficult to engage business negotiation, trade and investment. This obstacle is not a problem for large enterprise, but it is still a threat for SMEs of the two countries to pursue. The Executive Director of TRCC, Dr. Sourat Rakhimbabaev is constantly delivering weekly and monthly newsletter reporting on economic information and situation of politics, economic events, and forecasting on Russian currency, interest and inflation rates, for our members, etc.
Another obstacle is the financial transactions to facilitate bilateral trade and investments between the two countries. Fostering an inter-bank cooperation is necessary and one of the Thai largest bank, the "Thai farmers Bank" or "K-Bank", is currently working on this matter to explore ways to strengthen the inter-banking interaction and smoothening the trade settlement, including possibility of using local currencies either Thai baht and/or Russian Ruble. Last week, an initial meeting between the representatives of the K-Bank and the Bank of Thailand (BOT) was conducted at the office of TRCC to exchange information for the important meeting between the BOT and the Central Bank of Russia in Bangkok sometimes in December 2015. Q. What about Russian investments in Thailand? Can you name some?
Oh, many Russian business people are wise and smart. They have invested in the real estate projects in the Thailand's popular tourism areas such as Pattaya , Phuket and Samui. A number of bars and restaurants are owned by Russian in these areas, as well as many other related services such as legal office, shops, and Thai spa parlor, etc. I would like to suggest that, Russian investors may consider in making products from rubber, where Thailand is world's number 1 rubber exporter world. While rubber price is extremely low and export of Thai rubber is dramatically decreased, this may be a big opportunity for Russian investors to produce rubber value-added products such as tires for exporting. There is a great and brilliant example of a Thai-Russian company who recently invested in Hua-Hin in southern Thailand. As I mentioned earlier, the "Thai Sturgeon Farm Co., Ltd." who plans to supply caviar to the high end hotels and restaurants in Thailand. The Recirculation Aquaculture System (RAS) is used to produce 2 tons of black caviar a year. This is a vertical-integrated structure which combines the breeding facilities, cutting department, departments of cold and hot smoking, packaging and the construction of necessary infrastructure and utilities. Although Hong-Kong and Macau markets are aimed, perhaps when the business grows to its peak, extensions can be made for exports throughout the world with famous Sturgeon Caviar from Thailand. Wow, what a brilliant idea!
Dr. Sourat. Thank you very much Dr. Sombat for your interesting information and for your time. Wish you and the Thai-Russian Chamber of commerce success and prosperity. Dr. Sombat.
On TRCC's part, I would like to deliver cordial and sincere thanks to the Russian Embassy, The Russian Trade Representation, and Russia Beyond The Headlines newspaper for continuing the necessary supports for all endeavors of the Thai-Russian Chamber of Commerce. I will continue to promote friendly and mutually beneficial trade, investment, and economic cooperation with Russia Federation for years to come. Thank you very much and have a nice day!