Dear Anawat,
I am writing to you following our meeting at your office. There are a number of issues that we must address urgently in FMAS and as Managing Director I need you to spearhead and support these changes.
1. Move of office premises.
The offices we currently have are not fit for purpose. We will move all operating companies into the new offices at Central Bangna. These are indeed only 16 km away from your current office and on a main arterial route. Having all the opcos together will facilitate better communication, efficiencies in shared costs (accounting , finance and administration). It will perhaps more importantly encourage cross selling and the development of an FM approach to the market.
2. Brand Name.
I wish to change the company names in Thailand to take advantage of a multi service approach. Atalain technical services, security services, cleaning services etc. This will allow for uniformity in branding, presentations, employee induction and visability.
3. Shared services
We have tried on many occasions to employ individual accountants, sales people with not much success over the last couple of years. I have invested in a group resource with a country sales manager and accountant. They have been in their respective professions for many years and will again help us to develop a uniform approach to maintaining management information and developing new sales. I expect you to utilise this resource to the fullest so that we can get the business moving faster.
4. Management Fees
Unfortunately this seems to be a constant source of angst. The region needs to charge this fee to cover regional costs. As mentioned many times this does not effect your share valuation since it is accounted for below the EBIT line. This is more about the region managing cash. Where you need cash injected for working capital this will be made available. ( Indeed SRT is an examole of this with a high amount of cash still stuck in the project).
5. Loan interest
On the basis that the business is growing and management fees are being paid , I have no problem to defer payment of this until the company is generating sufficient cash. If there is an objection ongoing to management fees we can of course put in place a plan for repayment of the loan.
6. Insurances
I understand we still have a potential insurance claim outstanding from an old insurance provider and I am concerned that we informed them late . They may potentially the possibility to turn down any claim.
7. Old outstanding
I understand that we still have on the balance sheet one disputed debtor. At the time of acquisition this was discussed but I need you to come up with a strategy for dealing with this.
8. SRT
I understand you are keen to look into a new new JV to continue this work. I also understand that you believe the payment terms, penalties etc will change. We must however learn from our mistakes ( we still have a large outstanding with them) and this contract is not in our control. I therefore do not want us to consider rebidding. In the end we have made nothing from the initial contract and it hold no strategic value to us.
9. Management
In closing Anawat there is a couple of serious misconceptions about the partnership. In the end FMAS is now an integral part of Atalain. As such we need to take full advantage of the brand name, the in country capability to offer multi services. In order to do this there are various actions as above we need to take.
At no point did I ever state that Grant was the Number one employee as stated by Tarnchit. I expect you to work with him – not for him and vice versa. In relation to the comment on your mail about wishing to reduce the power of the local management – again I have made no reference to this. I do want to look at the structure ( especially the overhead) and I do want to look into how effectively we are managing the business.
In relation to support from Atalain please be prepared to clearly explain what help and resource you need. We are ready to help in all possible ways but need to understand your needs.
I have very good reason for wanting to take action on all of the above and this can only take place through you as the Managing Director.