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Thailand: An Asian Hub, A World of Opportunities (BIO 2015)


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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, June 15, 2015 at Courtyard Philadelphia Downtown (BIO 2015)

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Thailand: An Asian Hub, A World of Opportunities (BIO 2015)

  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 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)
  4. 4. Competitive
  5. 5. 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
  6. 6. “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
  7. 7. Thailand: (Baa1 stable) ratings Very strong government financial position, well-diversified economy and high foreign reserves "Thailand's low funding costs and favorable debt structure, which stem from prudent monetary policy and debt management, are a core strength in the government's debt carrying capacity" says Steffen Dyck, a Vice President and Senior Analyst at Moody's. Source: Moody's as of 28 May 2015
  8. 8. 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$1=Bt32.48
  9. 9. Wage Comparison 92.4 54.8 49.6 42.8 33.3 21.5 20.9 17 14.6 8.5 8 7.9 7.6 0 10 20 30 40 50 60 70 80 90 100 Tokyo Seoul Dubai H ong K ong Taipei K uala lum purShanghai BeijingBangkokM um bai M anila Jakarta Delhi WageLevels(US$) Gross Net 4 Cities ranked according to gross value of index. New York = 100 Source: UBS/Prices & Earnings update September 2012
  10. 10. 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
  11. 11. 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
  12. 12. GMS Infrastructure Development North-South Corridor North-Eastern Corridor East-West Corridor Southern Corridor Central Corridor Southern Coastal Corridor
  13. 13. Government Policy on S&T (12 September 2014) 1. Reform STI administration system to increase effectiveness of public-private linkage and partnership. Increase R&D expenditures to 1% of GDP with private/public sector ratio = 70:30 by 2021 2. Accelerate support for STI manpower development through STEM education, work-integrated learning, talent mobility, technological assistance to SMEs 3. Reform incentive systems, regulations and laws to enable commercialization of R&D and IP 4. Use public mega investment projects and government procurement to stimulate innovation in strategic areas. 5. Develop STI infrastructure & services to effectively support technology and R&D commercialization Source: Ministry Science and Technology
  14. 14. Investment Promotion Policies and Services
  15. 15. 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.
  16. 16. 17 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
  17. 17. 18 US Investment
  18. 18. Success Stories of US Companies
  19. 19. 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
  20. 20. THAILAND INNOVATION HIGH VALUE-ADDED GREEN TECHNOLOGY RESEARCH & DEVELOPMENT Sustainable Development, More Competitive Economy New Investment Promotion Strategy Direction
  21. 21. 22 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
  22. 22. Group Example Activities A1 8-year CIT exemption with no ceiling • Biotechnology • R&D, Lab service • Micro electronics design, embedded software/system design • Data center, Cloud service • Training center • Aerospace A2 8-year CIT exemption • Bio-Fuel, waste to energy • Active Pharmaceutical Ingredients • Advance Materials, Nano-material • High-risk Medical Devices • Telecommunication device, control and measurement device • Solar cell, Electricity from renewable energy • Aerospace parts and equipment • Automation machinery & equipment with design Examples of GROUP AActivities (1/2)
  23. 23. Group Example Activities A3 5-year CIT exemption • HDD, Semiconductor, flat panel display, thin film • Digital content, multimedia software • Product from Bio-Plastics • 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)
  24. 24. BOI Promotion Statistics in Life Science Business 2010-2014 Jan - May 2015 Product # of Project Value Million Baht # of Project Value Million Baht Product from Herbs/natural extracts 7 100.6 - - Medical Food 4 842.8 - - Medical Devices/equipment 93 19,877.3 16 7,112.3 Pharmaceutical 35 11,694.1 Actives Ingredient 16 3,633.4 Research & Development 65 5,418.8 4 326.4 Biotechnology 17 6,532.8 2 2,278.0 Lab Services 57 7,614.8 2 62.3 278 52,081.2 40 13,412.4
  25. 25. Sectors of Opportunity Target Industries Agriculture and food processing Automotive Machinery Target Industries Biotechnology Alternative energy E&E High Value Added
  27. 27. Biotechnology Sector Thailand is ranked 8th most bio-diverse country in the world About 165 biotech companies in Thailand 7 Intellectual property laws Good infrastructure: Science Parks and industrial estates
  28. 28. EXCELLENT SUPPORTING UNITS • Thailand’s Science Park (TSP) was established as a one-stop service center to assist companies engaged in scientific and technological research. • National Science and Technology Development Agency (NSTDA) • National Science Technology and Innovation Policy Office (STI) • The National Center for Genetic Engineering and Biotechnology (BIOTEC) • Thailand Center of Excellence for Life Sciences (TCELS) • Food and Drug Administration (FDA) • Ministry of Public Health (MoPH) • Ministry of Science and Technology (MOST) • National Innovation Agency • Health Systems Research Institute
  29. 29. Biodiversity in Thailand Biodiversity in Thailand is ranked as the eighth most bio- diverse region in the world. Thailand is the world’s highest biodiversity per unit area- hosting several forests types and aquatic habitats. Thailand supports up to 10,000 species of plants, • 980 species of birds, • 300 species of mammals, • 490 species of reptiles and amphibians, • 2,800 species of fishes and • 50,000 strains of bacteria, fungi and yeasts collected • 200,000 species of microbes-world’s largest and most diverse collection of micro organisms Source: Thailand BIOTEC Guide 2013 as of Mar 24, 2014
  30. 30. Biotech Business in Thailand Source: Private Sector R&D in Thailand’s Bioindustry, Thailand Biotech Guide 2009/2010 Agriculture/Food (51%) Medical/Health (35%) Others (4%)
  31. 31. Seed & Plant R&D Biopharmaceutical agents R&D Diagnostic kits for health, agriculture, food and environment Biomolecule & bioactive compounds using microorganisms, plant cells and animal cells Raw materials and/or essential materials used in molecular biological experiment Biotechnology: BOI Eligible Activities Exemption of import duty on machinery for all zones Exemption of 8-year-CIT A1 Incentives Projects located in Science Parks shall receive 5 year additional 50% corporate income tax reduction Biological substances analysis and/or synthesis services Quality control and product validation services
  32. 32. 33 Company Product/Services I- med Laboratory Thalassemia / Lymphocyte test kit Baxter Thailand Continuous Ambulatory Peritoneal Dialysis International Drug Development Aclires Bangkok Clinical Trial MBS Asia Antibody testing Bio-Innova and Synchron International Bio Service Bioequivalence Bionet Asia R&D for Vaccine Pacific Time Microbial testing/DNA testing Greater Pharma Manufacturing Vaccine and Allergy Testing Agent Siam Bioscience Therapeutic Biopharmaceutical Apsalagen Biological Reagent from Bacteria &Animal Cells Example of Promoted Projects in Life Science
  33. 33. Bioplastics Industry: Activities of special importance and benefits to the country • Manufacture of eco-friendly chemicals • Manufacture of eco-friendly products Incentives • Exemption of import duties on machinery for all zones. • 8-year exemption of corporate income tax with no cap for all zones. • Other relevant location-based incentives. Incentives for Bio Industry Source: A Guide to BOI as of March 2014
  34. 34. Bio Plastics: Why Thailand Bioplastics’ Investment Opportunities Potentially abundant at competitive price of sugar and starch based feedstock Trend of monomers’ cost reduction from agricultural wastes as cellulosic glucose from cassava pulp and bagasse Good strategic location near China and Japan with low logistics cost High R&D capabilities for technology development to support the existing bioplastics industry Source: Progress in Implementation of Thailand’s National Bioplstics Roadmap Inno Bioplast 2013 seminar by NESDB as of Jan 26, 2013
  35. 35. Source: MOST Support for US Investors BOI Office Los Angeles 611 North Larchmont Blv. 3rd Floor Los Angeles, CA 90004 USA Tel: (323) 960 1199 Fax: (323) 960 1190 Email: 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: 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:
  36. 36. Thank you