Thailand Tobacco Monopoly seeking partner

by Jenny Novac on November 28, 2011

The Thailand Tobacco Monopoly (TTM) wants to pursue overseas markets by entering a joint venture with a global company, according to a Bangkok Post story quoting managing director, Torsak Chotimongkol.

Thailand Monopoly

The Thailand Tobacco Monopoly

Torsak said a joint venture with a multinational would bring knowledge of technology and management to help TTM improve its operations, especially in respect of quality tobacco for more up-market products.

“We have a very small share in the upper market: only 0.06 per cent,” he said.

If the Thailand Tobacco Monopoly could not improve its efficiency, Torsak added, it would have no potential beyond being just a production base for a foreign brand name, such as the Philippines was the base for Philip Morris.

Potential did exist, however, for TTM to export to Laos, Burma and Cambodia.

But Torsak said the state enterprise needed to restructure its organization to give it more flexibility. In the future, TTM might register as a corporation to allow it to pursue new ventures and expansion without the need for complicated bureaucratic approval procedures involving many agencies.

Torsak stressed that his idea had nothing to do with privatization, something that employees of many state enterprises had vigorously resisted in the past. He said any new corporate entity would simply be an arm of TTM.

Currently, TTM has a domestic-market volume share of 79 per cent, but foreign tobacco products enjoy a 75 per cent share of the market’s value.

TTM is in a hurry to improve its operations before tobacco import duties are eliminated under the Asean Free Trade Area agreement and the Asean Economic Community is formed in 2015, developments that will lead to increased competition.

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