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NEWS-Thai firm buys into Burmese op
Thai firm buys into Burmese operation
'Myanmar Spa has great
potential'
Sukanya Jitpleecheep
Two of Thailand's leading
advertising agencies, Future
Communications Group and Far
East Advertising, yesterday
announced a joint venture to
strengthen their positions in the
region and ready themselves to
compete with western advertising
agencies.
Under the joint venture, Far East
Advertising Plc will buy a two million
baht stake in Burma's Myanmar Spa
Today Advertising, a subsidiary of
Future Communications Group.
Myanmar Spa Today Advertising is
a leading agency in Burma and a
joint venture between Future
Communication and its Burmese
partner at the ratio of 60:40.
Under the joint venture announced
yesterday, Future Communication
will hold 34%, Far East Advertising
30% and the Burmese partner 36%.
Myanmar Spa Today Advertising,
with a registered capital of US$
83,000, was renamed Spa Today
Far East Co Ltd.
Future Communications Group,
which is the subsidiary of Osotspa
Group, comprises 20 advertising,
marketing research, public relations,
media and production companies
spread across Burma, Malaysia,
Cambodia, Hong Kong and
Indonesia.
At a joint press conference, Wasin
Teyateeti, managing director of Far
East Advertising Plc, and Kitti
Chambundabongse, president of
Future Communications, said they
agreed to invest in Myanmar Spa
Today Advertising because it has
become a local leading agency in a
short period of time.
The success of Myanmar Spa
Today Advertising has shown the
potential for the advertising
business in Burma, Mr Wasin said.
With forecasts of future strong
economic growth in Burma, the joint
venture would be able to expand its
business further, he said.
Future Communication president
Kitti said having Far East
Advertising as a co-partner would
strengthen its international
operations.
"Spa has lots of clients in the
Osotspa Group while Far East has
a strong client base from the Saha
Group that wants to expand
business overseas,' he said.
In the future, Spa will be able to
enter the new emerging market
areas in Indochina. At the same
time, the markets where Spa has
already established its presence will
become stronger through the
strength of both allies.
Wasin Teyateeti said the joint
venture with Future Communication
was based on the objective of
serving clients such as Siam
Cement and Saha Group in
overseas markets.
For its part Far East sees business
potential in the emerging Burmese
market which, it says, is more
challenging than established
markets like Hong Kong and
Singapore.
Currently, Spa Myanmar Today is
ranked second in the local
advertising industry worth about
US$4-5 million.
Last year, the company recorded
billings of US$1 million and is
forecasted the same this year. The
company has 12 clients, of which
60% billings are from Thailand, 30%
from regional firms and 10% from
local clients.
Mr Wasin said he found the
Burmese people were very
interested in watching TV and he
planned to produce TV programmes
for local consumption.
Future Communication has already
liquidated four subsidiaries out of 20
to improve the group's financial
status.
Group president and chief executive
Kitti Chambundabongse refused to
name the four closed subsidiaries,
however, he confirmed the number
of employees would be reduced
from 508 to 300.
Future Communication is involved in
direct marketing (Interactive
Communication), research
(Foresight Research), public
relation (Total Quality Public
Relation), advertising (Spa
Advertising), design (Centris Corp)
and advertising production
(Introvision Production).
"Last year, we lost 500 million baht
from our group's total annual billing
of three billion baht. And, we had a
7 million baht net loss for the first
time in a decade,' Mr Kitti said.
The group decided to dissolve four
non-profitable companies which
have no prospects for improvement
in the next two years.
"After cutting four companies, the
remaining 16 will have better
performances. We hope to maintain
2.5 billion baht in billing this year,'
he said.
This year the group will focus on
three main areas: advertising,
research and design.