Marketing and distribution group Inchcape said yesterday it was in advanced talks with Danish wholesale and graphics group East Asiatic, to merge the two companies' Thai distribution activities. The move, which will make the combined company a market leader in several product areas, is part of a drive by Inchcape to continually rationalise its activities, and focus on fewer, larger businesses around the world. The merger would create a company with an expected combined turnover of about 500 million Danish crowns (about HK$560 million), considerably higher than the present EAC Marketing Services (Thailand) business. Inchcape said a turnover of three billion baht (about HK$630 million) was expected in the first year of operation. It would also become the leading distributor of nutrition and other consumer products in Thailand, representing Novartis, which makes Ovaltine, as well as Dumex, President Foods, Synthelabo, 3M, Lego and Mattel. Inchcape's marketing operations is a key part of the group and is centred mainly in Asia and the Middle East, with its headquarters in Singapore. In the past three years the company has been keen to concentrate on four areas of its marketing activities, and has been progressively selling off interests which do not fit into the new strategy. It particularly wants to develop a stronger presence in areas such as consumer logistics, involving the storage and warehousing of fast-moving consumer goods, and branded lifestyle products comprising aspirational goods such as Timberland, Ferragamo and Sheaffer. An Inchcape official said it also wanted to build up its industrial products marketing activity and its specialised business such as contract manufacturing. Inchcape said it would achieve significant economies through the joint venture with EAC, and create significant cost competitiveness. Negotiations are expected to be concluded soon, with the venture becoming operational in October.