To what extent is entrepreneurship encouraged here in Thailand?
HEINECKE: I think it’s encouraged a great deal because most companies have started from family businesses and so entrepreneurship is groomed right in the family and it has been there for generations. This is probably one of the oldest cultures in Asia so I think it is ahead of some of its neighbors like Singapore and Taiwan and even China.
What role does the education system play in entrepreneurship?
HEINECKE: There are many universities that are now teaching entrepreneurship and it is something that can be taught. Certainly, many of the schools in the US are far more advanced in that area than perhaps in Thailand, but they are catching up quickly; Sasin University has some wonderful courses.
What is the balance between nature and nurture in entrepreneurship?
HEINECKE: I have always said that the real basis for entrepreneurship is passion. You can never work for just money or power, you have to have a real passion for your business and you have to have more faith in your business than anyone else. These are the things that true entrepreneurs have and once you have that passion, nothing can stop you.
What are Thailand’s strengths with regard to creativity and innovation?
HEINECKE: I think you have to remember that Thailand is a very old culture, one that goes back thousands of years. One of the things that Thailand is world-class at is tourism and the service industry. But they also have tremendous talents when it comes to arts, crafts, and food, and these are the things that have made Thailand the number 1 tourist destination in the world. Clearly Thailand has a leg up on almost all of its neighbors.
Do you have any words of wisdom to up and coming Thai entrepreneurs?
HEINECKE: What I always say is work hard, play hard. It takes total commitment to be a successful entrepreneur. You have to be totally committed not only to your business but also to your colleagues and knowing what is happening inside the organization and outside the organization. Thailand has a huge emerging middle class and you have to be able to tap that and I think this is really critical.
Are Thailand’s financing institutions equipped to enable entrepreneurship?
HEINECKE: If you are looking for financing for an entrepreneurial venture, Thailand is probably one of the best countries you could still obtain financing because the banking system is one of the strongest in Southeast Asia. We came through the 1999 crisis, what they call often the Tom Yum Kung crisis, very strong. As a result of that, more funding is available today than ever before and at lower interest rates. Certainly a lot lower than what I started at back in the late 60’s.
What new initiatives is Minor International Currently involved in?
HEINECKE: We have a very wide footprint that stretches from Africa to Australia and we have initiatives going on in almost all of those areas. We have Mozambique, where we have opened an Anantara recently and we have a new Anantara in Cambodia. We have a couple of new hotels under our Oaks brand in Australia.
We have just opened on the Palm with the Anantara Dubai next to the Atlantis, which is an incredible hotel. We also have a number of hotels in Abu Dhabi, which is where we started in the Middle East with our partner TDIC. We have one hotel, Eastern Mangroves, which is right there in the city, plus we have what is considered the finest hotel in the Middle East in the Liwa Desert, which is called Qasr Al Sarab. That is one of the finest hotels you are going to find in the UAE. We also have a tremendous development in Sir Bani Yas Island where we have opened 2 hotels on behalf of TDIC.
We are very focused on the emerging high-growth economies and those really are from Africa to Australia. We don’t really have in our plans at the moment Europe or the United States, these being slower growth markets. Thailand is looking at 4.4% average growth over the next 10 years, so this makes it a very unique and fast growing country.
We are very focused on the emerging high-growth economies and those really are from Africa to Australia. We don’t really have in our plans at the moment Europe or the United States, these being slower growth markets.
What are your business mix goals going forward?
HEINECKE: I think it is going to remain very similar. The majority of our business comes between the hotels and the food business. We have a number of initiatives on the food side. In the Middle East, we have embarked on a joint venture in the UAE with Al Nasser Holdings, to develop The Coffee Club, one of our brands, which we successfully brought from Australia. We recently launched it here as well as in the Maldives. So I think you are going to see a continuation of what we have been doing with the main emphasis on remaining with food and hospitality. One of the strengths of Minor is the amount of intellectual property that it has.
We have recently launched a Thai Express in the Maldives, which is a brand that we acquired in Singapore. Coffee Club has started moving; again we opened a couple of Coffee Clubs in the Maldives. We have been taking a number of what we call our own intellectual property elsewhere. In addition, we have launched a new brand called Avani in the hotel business as well as acquired a 50% stake in Per Aquum, which is an ultra luxury hotel brand that has properties in the Maldives as well as in Dubai.
How has Minor performed for shareholders?
HEINECKE: Minor has been very successful at what it has been doing. We have a return to shareholders of about 31% over the last 14 years, which is an incredible return and it comes from being very focused and very passionate about what we are doing and the areas we are doing it in.
I think the message that I tell people is that with the sort of returns that we are generating they should be getting in now. We expect that the initiatives that we started are going to drive our share price a great deal higher. But this is driven primarily by profits. We are a profit-focused company and as our earnings grow we expect the share price to grow too. This return that we have been giving to shareholders over the last 14 or 15 years, we do not expect that to slow down.
What are your thoughts on changes in tax structures in Thailand?
HEINECKE: I think we have all seen that the tax base has grown whenever the tax rate is reduced. Thailand has been reducing its corporate business tax for years now and as a result, we have seen the tax base grow. I think one of the things that could be done would be to reduce or eliminate taxes on luxury goods, which would bring more and more tourists.
This is what Thailand is world-class at and we are growing at a phenomenal rate. If we could remove the taxes on luxury goods, we could bring even more tourists to Thailand and that would be a major step. I think another major step would be to reduce visa regulations for the Chinese so that there is more free travel into Thailand. This would encourage tourism to grow at an even quicker pace. The Chinese are our fastest growing market in Thailand.
What do you see as the most positive economic trends taking place in Thailand today and which remain challenges?
HEINECKE: The most positive trends are the fact that Thailand is still growing at a very good clip with this 4.4% growth rate projected annually over the next 10 years. The negative aspects, I do not see any negative aspects that are greater than any other country. We have our challenges; certainly political stability is very critical to tourism. We can see that not only in the Thai market, but also even in the Maldivian market, we can see that is something that is necessary. All in all, Thailand has more positives than negatives.
To what extent is Thailand in the position to take a leadership role in the ASEAN Economic Community (AEC)?
HEINECKE: Geographically, we are the natural hub for the region. From an educational standpoint, we have a strong base, which will allow us draw many people from Laos, Cambodia, and even from Malaysia. We are also very advanced in medical, and this has implications on tourism. Medical tourism is a major part of the tourism picture today.