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Thailand: An Asian Hub, a World of
Opportunities
Ms. Ajarin Pattanapanchai
Deputy Secretary General
Thailand Board of Inve...
Outline
Thailand in Brief
Competitive
BOI Policy & Services
Investment Opportunities
Thailand as the ASEAN Hub
Thailand is the World’s
• 16th largest manufacturer
• 12rd largest agriculture output
• 24th biggest economy by
purchasing...
Macro-Economic Basics
•GDP (2012): US$2.31 trillion
•GDP per capita (2012): US$3,748
•GDP Growth: 6.4% in 2012
•FDI US$ 11...
Free Trade Agreement
Note: * Thailand, Malaysia, Indonesia, Philippines, Singapore and Brunei only.
ASEAN
•+570 million po...
Competitive
Highly Ranked
UNCTAD
Thailand 8th top prospective host
economy 2014-2016
World Bank
26th easiest place to do business in t...
“Over the past 6 years, Thailand has suffered
bouts of political unrest on top of the global
financial crisis and severe f...
5.81
5.87
5.94
6.17
6.21
6.6
6.64
7.13
7.24
7.57
7.59
7.65
7.84
7.98
10
0 2 4 6 8 10
United Kingdom (15)
Poland (14)
Malay...
Thailand’s Cost Advantages
Office Space
• Grade A CBD $26.37 per square metre per month
• Grade B non-CBD rent of $17.50 p...
Wage Comparison
92.4
54.8
49.6
42.8
33.3
21.5 20.9
17 14.6
8.5 8 7.9 7.6
0
10
20
30
40
50
60
70
80
90
100
Tokyo
Seoul
Duba...
Top Destinations for
Expat Experience 2013
by HSBC
1.Thailand
Source: Expat Explorer Survey 2013, HSBC
Thailand offers Bes...
Infrastructure
• 7 international airports
 In 2009, 53.9 million passengers, 1.1 million
tons of cargoes
 Suvarnabhumi A...
(15)
Efficient Logistics Network
Seaport - Land Transport – Airport
Laem Chabang
Seaport
Donmuang
International
Airport
Su...
GMS Infrastructure
Development
North-South Corridor
North-Eastern Corridor
East-West Corridor
Southern Corridor
Central Co...
Investment Promotion
Policies and Services
BOI’s Liberal Investment Regime &
Attractive Investment Incentives
Policy
100% foreign
ownership
No local content
requirem...
19
Overseas offices
Country desks
1-Stop for visas & work permits:
work permits in 3 hours
Interaction with other govt. ag...
20
US Investment
Success Stories of US Companies
Investor Testimonials
“We are not low-cost manufacturing but we are high-tech
manufacturing. Human resources here are prof...
THAILAND
INNOVATION
HIGH VALUE-ADDED
GREEN TECHNOLOGY
RESEARCH & DEVELOPMENT
Sustainable Development, More Competitive Eco...
24
New Approach to Granting Investment Incentives
Activity-based Incentives Merit-based Incentives
+
Classified incentives...
Group Example Activities
A1
8-year CIT
exemption
with no
ceiling
• Electricity generation from garbage or waste
• Micro el...
Group Example Activities
A3
5-year CIT
exemption
• HDD, Semiconductor, flat panel display, thin film
• Digital content, mu...
Sectors of Opportunity
Target
Industries
Agriculture
and food
processing
Automotive
Machinery
Target
Industries
Biotechnol...
• Thailand continues to industrialize,
but is dependent on foreign
industrial machinery for
immediate future.
• High deman...
More Moulds & Dies Needed in Thailand
Molds for Die
Casting
Molds for Plastic
Injection
Transfer press
dies
Parts of Stamp...
Machinery and Parts:
Imports and Exports, 2004 – 2015 (Jan)
0
200
400
600
800
2004 2005 2006 2007 2008 2009 2010 2011 2012...
Automotive Industry
“Thailand: Automotive Hub of Asia”
9th largest automobile producer in the world in 2013,
Largest in AS...
World’s Automotive Production 2013
(Units of production)
World’s Production: 87.24 Million (+3.6%)
Thailand : 2.53 Million...
Assemblers SKD_ers
Automobile Manufacturers*
(Body + Engine +Parts)
Total Capacity: 3,000,000
Motorcycle Manufacturers*
(B...
Leading Auto parts makers
Thailand Aerospace Industry
Thailand Aerospace Industry
 Asia overtook North America as the largest aviation
market in 2009 and will account for 30% ...
Major Companies in Thailand
For parts manufacturing & MRO
• Thailand is the 13th Export Rank in the World
• Thailand is the world’s largest producer of HDDs,
# 2 for Air conditione...
Thailand’s E&E Exports 2014
18,163
7,790
3,979
2,620
1,826
1,516
1,424
1,099
707
1,027
1,178
1,226
952
952
945
0 5,000 10,...
Human Resource for Electronics Design, Embaded
System, Software Development
• Bachelor Degree in Electrical/Electronics En...
Success Electronic Design Companies in Thailand
Name Category Flagship Products Main
Customers
Designe
rs
Silicon Craft
Te...
Alternative Energy in Thailand
SolarBiogas WindBiomass
Garbage Water Bio Diesel Ethanol
National Policy to Promote Alterna...
Fuel # of Project Capacity
(MW)
Biomass 184 2,558
Biogas 188 561
Solar Farm 221 1,303
Solar Rooftop 143 81
Wind 28 1,468
M...
Thailand’s Top 10 Food Exports in 2014
Jan-Dec,
2014
Exports
Bt933,902
million
Fishery
products
22.2%
Rice and cereals
17....
GMP and International Standard
Good Manufacturing Practices is a
mandatory measure for 54 types of food
products
Strengths...
(50)
Support for US Investors
BOI Office New York
7 World Trade Center,
34th Fl., Suite F
250 Greenwich St.
New York NY 10...
Thank you
Thailand: An ASEAN Hub, A World of Opportunities
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Thailand: An ASEAN Hub, A World of Opportunities

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Presentation file on "Thailand: An ASEAN Hub, A World of Opportunities" by Ms. Ajarin Pattanapanchai, Senior Executive Investment Advisor, Thailand Board of Investment, May 21, 2015 at the Royal Thai Consulate, Chicago

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Thailand: An ASEAN Hub, A World of Opportunities

  1. 1. Thailand: An Asian Hub, a World of Opportunities Ms. Ajarin Pattanapanchai Deputy Secretary General Thailand Board of Investment
  2. 2. Outline Thailand in Brief Competitive BOI Policy & Services Investment Opportunities
  3. 3. Thailand as the ASEAN Hub
  4. 4. Thailand is the World’s • 16th largest manufacturer • 12rd largest agriculture output • 24th biggest economy by purchasing power • 27th biggest exporter (as % of total world goods) 2nd largest economy in ASEAN (GDP US$385 billion in 2013)
  5. 5. Macro-Economic Basics •GDP (2012): US$2.31 trillion •GDP per capita (2012): US$3,748 •GDP Growth: 6.4% in 2012 •FDI US$ 111 billion •Population: 616.6 million people •Area: 4.44 million km2 “ASEAN Economic Community (AEC)” by end 2015 ASEAN Snapshot Source: ASEAN Stats as of Mar 2014 ASEAN’s GDP to double to US$4.7 trillion in 2020
  6. 6. Free Trade Agreement Note: * Thailand, Malaysia, Indonesia, Philippines, Singapore and Brunei only. ASEAN •+570 million pop. •US$1.3 trillion GDP (2007) ASEAN+3 •+2 billion pop. (1/3 world pop.) •US$9trillion GDP (16% of world GDP) ASEAN+6 •3.3 billion pop. (>50% world pop.) •US$12.25 trillion GDP Thai-Peru Thai-Chile
  7. 7. Competitive
  8. 8. Highly Ranked UNCTAD Thailand 8th top prospective host economy 2014-2016 World Bank 26th easiest place to do business in the world and 2nd among emerging economies of East Asia
  9. 9. “Over the past 6 years, Thailand has suffered bouts of political unrest on top of the global financial crisis and severe flooding. Nevertheless, the economy maintains solid economic fundamentals that support its resilience, with high international reserves, relatively low inflation, a moderate amount of government and external debt, and a strong manufacturing base.” Asian Development Bank Outlook 2014
  10. 10. 5.81 5.87 5.94 6.17 6.21 6.6 6.64 7.13 7.24 7.57 7.59 7.65 7.84 7.98 10 0 2 4 6 8 10 United Kingdom (15) Poland (14) Malaysia (13) Maxico (12) Thailand (11) Japan (10) Singapore (9) Brazil (8) Canada (7) Taiwan (6) S.Korea (5) India (4) United States (3) Germany (2) China (1) Index score (10=High, 1= Low) 2013 Country Manufacturing Competitiveness Index Rankings Source: 2013 Global Manufacturing Competitiveness Index by Deloitte Touche Tohmatsu Ltd. And the U.S. Council on Competitiveness * ( ) = rank
  11. 11. Thailand’s Cost Advantages Office Space • Grade A CBD $26.37 per square metre per month • Grade B non-CBD rent of $17.50 per square metre per month Construction Costs • Standard Low Rise Factory $473 - $598 • Office, High Quality: $882 - $1,039 Corporate tax rate 20% Sources: CBRE, Tractus-Asia Exchange rate: US$1=Bt32.48
  12. 12. Wage Comparison 92.4 54.8 49.6 42.8 33.3 21.5 20.9 17 14.6 8.5 8 7.9 7.6 0 10 20 30 40 50 60 70 80 90 100 Tokyo Seoul Dubai H ong K ong Taipei K uala lum purShanghai BeijingBangkokM um bai M anila Jakarta Delhi WageLevels(US$) Gross Net 4 Cities ranked according to gross value of index. New York = 100 Source: UBS/Prices & Earnings update September 2012
  13. 13. Top Destinations for Expat Experience 2013 by HSBC 1.Thailand Source: Expat Explorer Survey 2013, HSBC Thailand offers Best Expat Experience and a Low Cost of Living Thailand has been chosen as the best country in the world for Overall Expat Experience & Overall Quality of Life
  14. 14. Infrastructure • 7 international airports  In 2009, 53.9 million passengers, 1.1 million tons of cargoes  Suvarnabhumi Airport – Capacity: 45 million passengers and 3 million tons if cargo per year • Over 70,000 km Highway Systems • 6 Deep Sea Ports & 2 International River Ports  Capacity over 10 million TEUs  Laem Chabang Sea Port – Capacity: 10.8 million TEUs, with additional 8 million TEUs expansion  e-Customs facilities • 4,346 km Rail links to Malaysia & Singapore • 60 Industrial Estates
  15. 15. (15) Efficient Logistics Network Seaport - Land Transport – Airport Laem Chabang Seaport Donmuang International Airport Suvarnabhumi International Airport Map Ta Put Deep Seaport Bangkok
  16. 16. GMS Infrastructure Development North-South Corridor North-Eastern Corridor East-West Corridor Southern Corridor Central Corridor Southern Coastal Corridor
  17. 17. Investment Promotion Policies and Services
  18. 18. BOI’s Liberal Investment Regime & Attractive Investment Incentives Policy 100% foreign ownership No local content requirements No export requirements No restriction on foreign currency Tax Import duty exemptions/ reductions Corporate Income Tax/ Exemption up to 8 years 50% reduction of corporate income tax for up to 5 years Double deduction on utility costs Deductions for qualifying infrastructure costs Non-Tax Land ownership rights Work permit & visa facilitation with in 3 hrs.
  19. 19. 19 Overseas offices Country desks 1-Stop for visas & work permits: work permits in 3 hours Interaction with other govt. agencies on behalf of investors Industrial Subcontracting Services Global Sourcing program (BUILD Unit) Intensive information ASEAN Supporting Industry Database BOI SUPPORT SERVICES
  20. 20. 20 US Investment
  21. 21. Success Stories of US Companies
  22. 22. Investor Testimonials “We are not low-cost manufacturing but we are high-tech manufacturing. Human resources here are professional with a good cost structure.” --Jeff Nygaard, Senior VP and Global Head of Operations, Seagate Technology “We relocated nine senior executives from Singapore to Thailand resulting in significant cost of living and operational savings.” --Roger Nesti, Director of International Real Estate, Kellogg Company
  23. 23. THAILAND INNOVATION HIGH VALUE-ADDED GREEN TECHNOLOGY RESEARCH & DEVELOPMENT Sustainable Development, More Competitive Economy New Investment Promotion Strategy Direction
  24. 24. 24 New Approach to Granting Investment Incentives Activity-based Incentives Merit-based Incentives + Classified incentives based on the importance of activities Grant additional incentives to encourage more investment/expenditures that benefit the country or overall industry A1 A2 A3 A4 B1 B2 1. Competitiveness Enhancement 2. Decentralization 3. Industrial Area Development
  25. 25. Group Example Activities A1 8-year CIT exemption with no ceiling • Electricity generation from garbage or waste • Micro electronics design, embedded software/system design • Data center, Cloud service • R&D, Lab service, Engineering Design • Biotechnology • Training center A2 8-year CIT exemption • Organic and printed electronics (OPE) • Active Pharmaceutical Ingredients • Solar cell, Electricity from renewable energy • Telecommunication device, control and measurement device • Advance Materials, Nano-material • High-risk Medical Devices • Aerospace parts and equipment • Automation machinery & equipment with design Examples of GROUP AActivities (1/2)
  26. 26. Group Example Activities A3 5-year CIT exemption • HDD, Semiconductor, flat panel display, thin film • Digital content, multimedia software • Manufacture of organic fertilizers • Machinery with design or part forming process • Manufacture of automobile engines • Functional fiber A4 3-year CIT exemption • Manufacture of products from agricultural by-products or agricultural waste • Heat Treatment • Audio visual, LED, Office automation • Assembling of machinery • Manufacture of fashion products with conditions on product development and design • Paper product Examples of GROUP A Activities (2/2)
  27. 27. Sectors of Opportunity Target Industries Agriculture and food processing Automotive Machinery Target Industries Biotechnology Alternative energy E&E High Value Added
  28. 28. • Thailand continues to industrialize, but is dependent on foreign industrial machinery for immediate future. • High demand for: • Metal forming • Food and farm machinery • Alternative energy/energy conservation machinery • Textile machinery • Automotive machinery • Mould & Die Opportunities in Machinery
  29. 29. More Moulds & Dies Needed in Thailand Molds for Die Casting Molds for Plastic Injection Transfer press dies Parts of Stamping die / Blanking die Parts of Plastic Injection Mold Parts of Mold for Die Casting
  30. 30. Machinery and Parts: Imports and Exports, 2004 – 2015 (Jan) 0 200 400 600 800 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (Jan ) Import 386 441 434 426 496 432 529 605 794 680 694 55 Export 143 179 201 288 303 274 364 383 414 419 491 39 BtBillion Source: Ministry of Commerce, Mar 13, 2015
  31. 31. Automotive Industry “Thailand: Automotive Hub of Asia” 9th largest automobile producer in the world in 2013, Largest in ASEAN 17 assemblers with production of 2.46 mil. unit in 2013 export >150 countries, Target production of 3 mil. units by 2017 High Local content of up to 90% for pick up truck, up to 70% for passenger car Strong Supporting Industry: > 2,300 parts maker Tier 1-3
  32. 32. World’s Automotive Production 2013 (Units of production) World’s Production: 87.24 Million (+3.6%) Thailand : 2.53 Million (+4.3%) #9 in Worlds’Automotive Production #1 in ASEAN for Automotive Production Source: OICA as of Mars, 2014
  33. 33. Assemblers SKD_ers Automobile Manufacturers* (Body + Engine +Parts) Total Capacity: 3,000,000 Motorcycle Manufacturers* (Body + Engine +Parts) Total Capacity: 2,700,000 Leading Auto-makers
  34. 34. Leading Auto parts makers
  35. 35. Thailand Aerospace Industry
  36. 36. Thailand Aerospace Industry  Asia overtook North America as the largest aviation market in 2009 and will account for 30% of air traffic by 2014, while North America will slip to 23% of the total.  Full support from the government: Maximum tax incentives from BOI  A capable and efficient skilled work force.  Many universities provide aerospace engineering degree  Civil Aviation Training Center provide training for high skill personnel of aircraft maintenance and repair services  Other support industries are widely available: stainless steel and aluminum fabrication, fiberglass and polymer supply 39
  37. 37. Major Companies in Thailand For parts manufacturing & MRO
  38. 38. • Thailand is the 13th Export Rank in the World • Thailand is the world’s largest producer of HDDs, # 2 for Air conditioner • A leading country in the manufacture of Integrated Circuits and White Goods • Strong supporting industries for electrical appliances Compressors, motors, plastic and metal parts Source:*E&E Intelligence Unit, as of Mar 10 Electronics & Electrical Industry Major Industrial Sector of Thailand
  39. 39. Thailand’s E&E Exports 2014 18,163 7,790 3,979 2,620 1,826 1,516 1,424 1,099 707 1,027 1,178 1,226 952 952 945 0 5,000 10,000 15,000 20,000 Wire & Wiring Harness Motor Washing Machine Printed Circuit Colour TV Power Supply TV Part Compressor Radio Broadcast Product Refrigerator TV Video Camera Circuit Breaker Air Conditioner IC Computer & HDD US$ Million Source : EEI
  40. 40. Human Resource for Electronics Design, Embaded System, Software Development • Bachelor Degree in Electrical/Electronics Engineering – Top10 universities: 1,000 – All: 10,000 • Master/Ph.D. Degree in Electrical/Electronics Engineering – Top10 universities: 100 – All: 1,000 • Qualified new graduates: < 200 students/yr • Demand of designer positions: > 300 positions/yr • Thailand Embedded System Association (TESA) provide advance training for skilled workforce Target : high-tech, high-value added Investment
  41. 41. Success Electronic Design Companies in Thailand Name Category Flagship Products Main Customers Designe rs Silicon Craft Technology IC Product RFID and NFC chips RFID makers world-wide <50 Wellograph Embedded Products Wellness watch End users world- wide <50 ThaiGerTec Embedded Products Car ECU BMW <50 Toyota Tsusho Electronic Thai Embedded Products Automotive Firmware Japanese Car Makers <200 Celestica Embedded Products Network Equipment CISCO <150 Saijo Denki Embedded Products Smart Air Conditioner End users world wide <50 Design Gateway Embedded Products Embedded Solution End users world wide <50 Forth Embedded Products Telecomm and Traffic Control Equipment Local & AEC <50 Mobilis Automata Embedded Products Food Taste Sensor Local & AEC <50
  42. 42. Alternative Energy in Thailand SolarBiogas WindBiomass Garbage Water Bio Diesel Ethanol National Policy to Promote Alternative Energy Target : To increase share to 25% by 2022
  43. 43. Fuel # of Project Capacity (MW) Biomass 184 2,558 Biogas 188 561 Solar Farm 221 1,303 Solar Rooftop 143 81 Wind 28 1,468 MSW 18 228 Waste Heat 7 172 Total 789 6,371 BOI Promoted Renewable Power Plants As of December 2014
  44. 44. Thailand’s Top 10 Food Exports in 2014 Jan-Dec, 2014 Exports Bt933,902 million Fishery products 22.2% Rice and cereals 17.9% Meat and products 11.0% Fruits 10.0% Sugar and honey 8.2% Flour and starch 3.5% Cassava pellets and tapioca chip 3.4% Non-Alcoholic drinks 3.0% Pet foods 3.0% Others 17.7% Source: National Food Institute (NFI) as of Feb 17, 2015
  45. 45. GMP and International Standard Good Manufacturing Practices is a mandatory measure for 54 types of food products Strengths of Thai Food Industry Abundant Raw Material Skilled & hard working Workforce Good Quality & Safety > 80% of raw materials used by the food industry are locally sourced at low prices Size of workforce now > 38 million Minimum Daily Wage Bt300 Source: Thailand Food Industry Outlook, Commercial Section, Royal Danish Embassy, Mar 2011
  46. 46. (50) Support for US Investors BOI Office New York 7 World Trade Center, 34th Fl., Suite F 250 Greenwich St. New York NY 10007 USA Tel: (212) 422 9009 Fax: (212) 422 9119 E-mail: nyc@boi.go.th BOI Office Los Angeles 611 North Larchmont Blv. 3rd Floor Los Angeles, CA 90004 USA Tel: (323) 960 1199 Fax: (323) 960 1190 Email: boila@sbcglobal.net U.S. Desk @ BOI Headquarters 555 Vibhavadi-Rangsit Rd. Chatuchak, Bangkok 10900 Thailand Tel: (66 2) 537-8111 Fax: (66 2) 537-8098 E-mail: head@boi.go.th
  47. 47. Thank you

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