The new Thai connection
POULTRY PLAN
special
WHAT'S NewS Issue 4 April 1998
13
not applv for rnany other
industries and organizations.
In addition to rising
unemployment - and the
extended family culture
prevalent in Indonesia means
one breadwinner is often
responsible for rnany relatives
- there will soon be a lack of
imported essentials, such as
medical equipment and
pharmaceuticals. Recently,
Our Bangkok office is buzzing.
Hans Winkelmolen, the rep
there, is hoping to finalize a
major deal with one of the
country's top sugar companies.
'People elsewhere in the
network probably think the
only thing we're doing is
restructuring,' he says, clearly
happy that the news on this
potential deal is quite positive.
He's very much involved with
the dedicated work out team
based in Singapore, but adds
that 'I prefer to call it
Rabobank Duta guaranteed a
shipment of medications and
other health care related
imports. No other foreign
bank would touch it and the
domestic banks no longer have
financial credibility in the
international market.
'Basically,' says Chris Mol, 'it
won't solve the problem, but
as a bandaid, it was very much
the Rabo thing to do.'
restructuring. Work out has
such negative connotations. It's
bad here. But it's not all bad.'
What is good is the shift
towards a new transparency.
'Before the crisis,' he explains,
'it just wasn't done to enquire
too closely into a corporate's
financial situation. You didn't
dig too deep. The devaluation
of the baht has meant
corporates are now having to
look to foreign banks and
financial institutions for
liquidity because the domestic
Bangkok rep Hans
Winkelmolen
banks, which used to have a
near monopoly on finance,
cannot do the business. As an
example, domestic banks had
certainly cornered the sugar
industry in the past - now
Thailand is one of the world's
top players in this important
global sector. Thai companies
have to work with foreign
institutions, indepth
information has to be more
readily available.'
FOOD SECURITY
Unlike other crisis-stricken
countries in the region,
Thailand is in a relatively
favourable position. A new
government took power in
November 1997. 'You must
not be too optimistic,' says
Winkelmolen, 'but this
administration appears to be
sticking to its strategy for
reform. And it has the broad-
based support of the people.'
salvaging what they can.
As one of the major F&A
sectors in the region, it is
hardly surprising that our
exposure to both poultry and
feed is huge. 'Part of the
commitment is to try and come
up with solutions when the
customer isn't bringing in
doublé figure results,' says
APFT's Twan Geurts who has
only been with Rabobank
Indonesia for a few months
and had expected to be
arranging deals rather than
picking up pieces. For
example, he is representing
creditors of one of Indonesia's
largest feed and poultry
One major factor affecting
other countries, food security,
is not an issue in Thailand.
Even though the difference
between rich and poor is huge,
the country is self-sufficient
and a net exporter of food and
agri-produce. 'This is still a
recession,' Winkelmolen
continues, 'and as is said, it is
not easy for the man in the
street. Many are losing their
jobs. Yet, for a lot of the
people who moved to the city
to find work, there is still the
option of returning to their
rural homes. And people are
certainly doing that.' Those
who remain are suffering from
a psychological shock. 'Many
cannot believe this has
happened after 10 years of
continual strong growth,' he
says. 'Motivation and finding
ways to inspire it has become a
real challenge for many people
in Bangkok.'
companies. 'Literally, they sent
a letter to all 48 banks they
deal with saying: call
Rabobank,' he says. 'And they
are calling, all the time.'
Sometimes, Geurts feels a little
likt' the Dutch boy with his
finger in the dike. 'What is
surprising here is that even
though there is vertical
integration, it didn't function
properly when it was needed.
Demand for chicken meat has
certainly declined. But at the
primary end of production,
farmers who were squeezed
initially by processors have
since slaughtered their birds.'
For the hugely successful original tiger, the crisis that
started last summer and quickly descended into economie
disarray, has meant radical changes in how the Thais do
business.The days when business was an exclusively
national affair known as the Thai connection, often handled
on the golf course, are over. Withcrisishascomean
opening up of business and an - albeit reluctant -
willingness to create the transparency typical of corporates
in the industrialized world.
The consumption of poultry meat in Southeast Asia has
grown significantly as purchasing power increased. As a
result, corporates operating throughout the whole
production chain, and often with fully integrated activities,
have seen business grow dramatically.The downside now is
that many of the raw materials for feed are imported and
many formerly successful corporates are facing problems
so great that restructuring is out of the question. RI's
response is a poultry task force to assist corporates in
