boi investment promotion in 2006 and trend for 2007 · report. thailand survey responders indicate...

by The Thailand Board of Investment

THAILANDINVESTMENTREVIEW

March 2007 • Volume 17 • No. 3

NEWS BITES / BOI NET APPLICATIONS P. 2

ECONOMIC NEWS: THAILAND RECORDS 5.0% GROWTH IN 2006 P. 4

INDUSTRY FOCUS: FOOD INDUSTRY P. 6

COMPANY SPOTLIGHT:GRAMPIAN FOODS SIAM & AGRISOURCE CO., LTD. P. 8

RESONANCE OF THE CHAMBERS: DANISH -THAI CHAMBER OF COMMERCE P. 9

BOI INVESTMENT MISSION P. 10

INSIDE THE BOI P. 11

THAILAND ECONOMY-AT-A-GLANCE P. 12Continued on P. 3

The Board of Investment of Thailand finished the year 2006 with stability and a good forecast for the coming investment year, with the value of net applications for promotion privileges last year registering a healthy 514.3 billion baht, and the number of investment projects increasing 3% from 1,321 to 1,357 projects. These new projects have created more than 214,845 jobs.

The petrochemicals, paper and plastics sector attracted the greatest investment in 2006, receiving more than 153.3 billion Baht of investment capital. This amount is 49% more than in 2005, and is due primarily to two large petrochemical projects that are valued at more than 60 billion Baht, which were submitted in September 2006. Other important projects were in plastic parts or components

BOI Investment Promotion in 2006 and Trend for 2007

for electronic goods and automobiles, and also paper, which had over 60 billion Baht in investment capital.

The services and public utilities sector received the second-largest amount of investment, with 122 billion Baht in investment capital. There were 11 projects submitted for production of electricity or steam power, gas separation plants, and medium or low income housing, with a total value of more than 60 billion Baht.

Electronics and electrical appliances ranked as the third largest sector, with more than 79.3 billion Baht in investment capital. The bulk of the investment in this sector, more than 50 billion Baht, was for production of PCB, PCBA, HDD parts and electrical appliances.

Value of Investment Promotion ApplicationsBy Industry Jan 2006 and Jan 2007

THAILAND INVESTMENT REVIEWMarch 2007

RFID Vehicles

The National Science and Technology Development Agency (NSTDA), in cooperation with the Department of Land Transport, is set to begin a national radio frequency identification (RFID) project for vehicle tax stickers.

Tourism on target

Thailand’s tourism is on target with income from foreign visitors expected to reach THB 900 billion this year. The government plans to set up a multi-lingual one stop service centre at Bangkok’s new international airport to assist tourists.

Thailand Top 6

Thailand ranks among the top 6 countries in the world for

executive opportunities for women, according to the

la tes t Grant Thornton International Business Report. Thailand survey responders indicate that

81% of Thai businesses have women in senior management

positions.

MICE hub

The Thailand Convention and Exhibition Bureau (TCEB) plans to promote Thailand as a regional hub of the meetings, incentives, conventions, and exhibitions (MICE) business. TCEB has signed a contract with Paris-based UFI, the Global Association of the Exhibition Industry, to organize training facilities in Thailand for Asia’s first-ever exhibition management degree.

NEWS BITES BOI NET APPLICATIONS

1US$ = 40 THB

2006 2006 (Jan-Feb) 2007 (Jan-Feb)

Number of

ProjectsValue

Number of

ProjectsValue

Number of

ProjectsValue

Total ForeignInvestment 823 7,692 124 1,077 133 370

By Sector

Agricultural Products 46 621 11 96 14 70

Minerals / Ceramics 32 643 3 7 2 21

Light Industries / Textiles 73 234 17 36 11 65

Automotive / Metal Processing 220 1,296 19 131 34 227

Electrical / Electronics 180 1,794 37 445 27 122

Chemicals / Paper 80 1,011 8 24 15 138

Services 192 2,092 29 338 30 181

By Country

Japan 335 2,762 56 363 51 360

Europe 126 763 22 64 16 55

Taiwan 67 308 18 128 11 40

United States 61 926 7 25 7 18

Hong Kong 16 98 3 307 2 4

Singapore 86 723 13 259 9 31

By Zone

Zone 1 262 1,279 43 221 45 86

Zone 2 393 4,862 49 361 63 612

Zone 3 168 1,551 32 496 25 126

Unit: US$ Million

Note: Investment Projects with foreign equity participation from more than one country are reported in the figures for both countries.

9-13 May 200710.00 a.m. – 7.00 p.m.BITEC International Conference and Exhibition Center, Bangkok, Hall 105

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Continued from P. 1

The agriculture sector received 61 billion Baht in applications, primarily due to more than 40 billion Baht in projects for animal husbandry and ethanol manufacturing.

In terms of foreign investment, in 2006 Japan continued to maintain its position as the largest investor in Thailand with 110.5 billion Baht. The largest investment applications from Japan came from metal products and machinery, reflecting the health of the Thai auto industry, in the amount of 36.5 billion Baht for 132 projects, followed closely by E&E at 35.4 billion Baht for 72 projects.

Investment applications from ASEAN totaled to 41.2 billion Baht for 123 projects, with the United States at 37.1 billion Baht for 61 projects, followed by the European Union at 30.5 billion Baht for 126 projects.

Looking at investment applications in 2006 by individual sector, the Service Sector ranks number one with 83.7 billion Baht for 192 projects. This represents a near 56% increase year on year for this sector. Next was the E&E sector, at 71.8 billion Baht for 180 projects, followed by metal parts and machinery at 51.8 billion Baht for 220 projects. The remaining sectors are chemicals and paper, 40.4 billion Baht, 80 projects; minerals and ceramics, 25.7 billion Baht, 32 projects; agriculture products, 24.9 billion Baht, 46 projects, and light industries and textiles, 9.4 billion Baht, 73 projects.

Investment Trends in 2007

In 2007, the majority of investments are expected to be small and medium investment projects, including the manufacture of parts and components for use in automotive and electronics projects submitted over the past two years. For 2007, the value of investment projects should reach 400 billion Baht.

The chance for large-scale investments in 2007 for major basic industries, such as chemicals and electricity generation, is still high due to growing demand in both domestic and overseas markets. However, these investments depend on clear government policies, particularly policies relating to environmental issues on the Eastern Seaboard and the next round of IPP investments.

Thailand’s economic base remains quite strong, which supports the next round of investments. Therefore, the overall investment plans of domestic and foreign investors are not expected to be affected in the long-term.

2006 FDI Investment Applications by Sector

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Thailand’s economic stability in 2007 will remain strong, says the National Economic and Social Development Board (NESDB) in its newly released Economic Outlook. Key indicators such as the country’s low unemployment rate, its declining public debt to GDP and low inflation reflect the sound fundamentals that will provide for steady growth over the coming year. The economy is forecast to grow by 4.0 to 5.0 percent, due in part to a slowdown in the world economy to 4.2 percent, but accompanied by a decline in domestic interest rates, lower oil prices and increased government spending that will all combine to stimulate private consumption and investment.

The outperforming export of goods and services helped the economy to grow in 2006 by one half percent higher than anticipated, registering a 5 percent growth for the year. The NESDB report notes that “In the year 2006, the value of exports was 128.2 billion US dollars; increased 17.4 percent from 2005.” Exports of goods and services, in terms of volume, increased by a staggering 46.7 percent compared to an increase of 16.5 percent year on year.

The rise in exports combined with a like slowdown in imports, due in part to a decrease in domestic consumption owing to high oil prices and other events in 2006, led to a trade balance surplus of US $2.25 billion and a current account surplus of US$3.24 billion, or 1.5 percent of the gross domestic product (GDP). International reserves stood at US$66.98 billion at the end of the year, or 3.6 times short-term external debts.

In the last third of the year, the price of oil, which had seen a high average price increase of 24.2 percent year on year at US$ 61.52 per barrel, began to subside. The price of crude oil is expected to remain at similar levels for the forthcoming year, although volatility will persist in the global market. Nevertheless, it is projected that the price of oil will remain in the range of approximately 55 to 60 US dollars per barrel.

NESDB reports that inflation has been kept under control and continued to decline in the close of 2006, to close the year at 3.3 percent for the fourth quarter, and further declined in the opening months of 2007 to 3.0 and 2.3 percent for January and February respectively. During those two months core inflation also continued its decline to 1.6 percent and 1.4 percent respectively. For the full year 2007 the inflation rate has been revised downward to 2.5 – 3.0 percent, owing to lower oil prices and the appreciation of the Baht.

Despite the heavy rains and flooding that occurred in parts of the country in September and October last year, NESDB

writes that the rate of agriculture production actually increased by 4.4 percent, against a negative growth of 3.2 percent year on year.

Consumer confidence and business sentiment has also begun to pick up, in part due to the containment of inflation and increased purchasing power. It could be recalled that a recent survey undertaken by the Bank of Thailand indicated that most business sectors expect either recovery or positive growth this year, with an anticipated increase in domestic demand. And, the permanent secretary of the Industry Ministry was recently reported to say that Thailand expects a rather large inflow of investment once a new bilateral free trade agreement takes effect.

Government spending is being revised upward as disbursements are made more rapidly, something the government is committed to doing in order to stimulate the economy. The NESDB report notes that government expenditures for 2007 are now likely to expand by 5.0 percent, rather than the previous projection of 4.0 percent. Private investment is also expected to grow by 5.0 percent.

The NESDB has proposed a set of recommendations for implementation in 2007. These include accelerating budget disbursements and proceeding with investments in infrastructure projects, logistics development as well as a rail based mass transit system. Also included is to stabilize prices of agriculture products and drought alleviation measures, as well as promoting exports and tourism by exploring new markets and working on public relations. There is also a recommendation made to implement energy saving measures and develop alternative energy sources, which it should be noted is in line with the government’s energy policy and development plan that was adopted at the end of 2006.

And finally, also in the realm of public relations is to create and restore confidence of domestic and foreign investors by a better understanding of the facts, and supportive measures for investment opportunities, such as “the Japan-Thai Economic Partnership Agreement, mass transit and logistics development, integrated water resource management, energy and alternative energy investment, petrochemical industry investment, area spatial development for expanding production and investment base.”

ECONOMIC NEWS

Thailand records 5.0% growth in 2006

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Economic Projection of 2007 Preliminary Projection 2007_f 2004 2005 006_p 4 Dec 06 6 Mar 07

GDP (at current prices: Bil.Bht) 6,489.8 7,087.7 7,813.1 8,474.6 8,438.1

GDP per capita (Bht per year) 101,017.2 109,318.4 120,497.4 129,697.7 129,139.3

GDP (at current prices: Bil.USD) 161.0 176.0 206.1 229.0 237.7

GDP per capita (USD per year) 2,507 2,715 3,179 3,505.3 3,637.7

GDP Growth (at constant prices, %) 6.3 4.5 5.0 4.0-5.0 4.0-5.0

Investment (at constant prices, %) 13.2 11.1 4.0 6.2 4.8

Private (at constant prices, %) 16.2 10.9 3.9 7.0 5.0

Public (at constant prices, %) 5.0 11.3 4.5 4.0 4.0

Consumption (at constant prices, %) 6.1 5.5 3.2 3.8 4.0

Private (at constant prices, %) 6.2 4.3 3.1 3.8 3.8

Public (at constant prices, %) 5.6 13.7 3.4 4.0 5.0

Export volume of goods & services (%) 9.6 4.3 8.5 5.4 5.5

Export value of goods (Bil.USD) 94.9 109.2 128.2 139.0 138.3

Growth rate (%) 21.6 15.0 17.4 9.0 7.9

Growth rate (Volume, %) 8.4 4.3 9.0 5.0 5.4

Import volume of goods & services (%) 13.4 9.3 1.6 5.6 5.6

Import value of goods (Bil.USD) 93.5 117.7 126.0 139.8 136.1

Growth rate (%) 25.7 25.9 7.0 9.6 8.0

Growth rate (Volume, %) 12.3 8.9 -0.8 4.6 5.0

Trade balance (Bil.USD) 1.5 -8.5 2.2 -0.8 2.3

Current account balance (Bil.USD)1/ 2.8 -7.9 3.2 0.2 3.1

Current account to GDP (%) 1.7 -4.4 1.5 0.1 1.3

Inflation (%)

CPI 2.7 4.5 4.7 3.0-3.5 2.5-3.0

GDP Deflator 3.2 4.5 5.0 4.0 3.5

Unemployment rate (%) 2.1 1.8 1.5 1.8 1.5-2.0

Source: Office of the National Economic and Social Development Board. March 6, 2007

Note: 1/ Reinvested earnings has been recorded as part of FDI in Financial account, and its contra entry recorded as income on equity in current account.

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INDUSTRY FOCUS

Thailand has long been blessed with an abundance of natural resources and an industrious work force that has secured enough agricultural products to satisfy domestic consumption. Yet even as early as 1961 the major agricultural exports of Thailand included mainly rice, teak and rubber. It was only with the adoption of the country’s first National Economic and Social Development Plan in that year that the agro-industry really began to take off, and ultimately turn the country into one of only a handful of net food exporting countries in the world, and the only net food exporter in Asia, with major markets in the United States, European Union and Japan.

Beyond this impressive achievement, Thailand happens to be the world’s number one producer of natural rubber, rice, canned and frozen seafood, canned tuna, canned pineapples and cassava, as well as the number two producer of sugar. Thailand is also one of the top-ten exporters of frozen chicken in the world. Under the European Union annual quotas, Thailand has been allocated a large export total of chicken products, with its 2007 EU export forecast at 130,000 – 140,000 tons. It is little wonder that in the first half of 2006 food exports totaled nearly US$ 7 billion, with a 5.9% growth rate year on year for the same period. The export value of Thailand’s agriculture products continues to look bright throughout 2007, possibly with a value of 607 billion baht. There was some early concern that the floods which hit parts of Thailand in 2006 might have an impact on the agriculture sector, but the forecasts now indicate that this was minimal. Thailand has even managed to climb the export ranks of produce not grown in the country. Dole Thailand, a division of one of the world’s largest food companies, Dole Food Co., which has operated in the country for over three decades and has met with considerable success at 20% annual growth over the past five years, uses Thailand as a re-export base. This has given the country the distinction of being one of the world’s largest exporters of peaches.

Thailand is not complacent about maintaining its ranking in food exports and in agro-business and the government has been proactive, undertaking a coordinated effort to promote

Food Industryand encourage investment in the Thai food industry. The Ministry of Commerce has been tasked with creating image and value, such as through the Kitchen of World initiative. At the same time, the Ministry of Industry has taken responsibility for efficiency and product standards, with the Ministry of Agriculture overseeing the upstream capabilities.

The government has also recently implemented standardization measures for tuna and compliance with the guidelines established by Codex, an international food standards body set up by the United Nations. Furthermore, the Agriculture and Agriculture Cooperatives Ministry is accelerating its

standards and certification project. The Food and Drug Administration of Thailand works diligently to ensure product safety through product registration, manufacturing licenses, food labeling, pre and post-marketing control and adherence to Good Manufacturing Practices (GMP), which is a mandatory measure for 54 types of food products. And, the Asia-Pacific Economic Cooperation (APEC) members have accepted Thailand’s food-safety standards. In fact, the Food and Drug Administration moved recently to demand that the thirteen billion baht snack food industry offer better disclosure by providing health warnings on sugar and salt contents.

Thailand has the foresight to recognize the growing demand for safety in the manufacturing process. One example of this is Thai rice, which is free of genetically modified organisms (GMOs), and which remains in increasing demand, particularly as sixteen European countries and Japan have banned imports

6


of genetically modified rice. In that connection, the Ministry of Commerce is actively working to improve the rice planting and trading system, with a view to ensuring its high-quality status. Beyond that is the safety and attention to quality that goes into the overall processed food sector, such as canned and frozen foods, which are produced to international standard. Overall, it is the attention to offering a quality product that keeps Thailand’s agriculture products in great demand, with the potential for food exports to increase over ten percent this year.

The country is continuously adapting its agricultural goals and policies to meet the new challenges of globalization and the transformations taking place within the Thai economy. Thailand is gradually moving away from its erstwhile reliance on low cost competitive labor and advantages in the supply of

arable land. Agriculture now absorbs less than half of the labor pool, as against the 80% in the early 1960s and 70% as recent as the 1980s. Just as in its drive to transition to a knowledge-based economy, the country is increasingly turning to labor saving devices and machinery to increase production with low labor expenditure.

For generations the food industry catered to fresh produce markets, but since the early 1980s there has been a growing trend to expand the processed food market. In fact, the kingdom’s processed food sector, which accounts for 15% of manufacturing output, is today one of the most advanced in Southeast Asia. With about 9,000 food processing companies in Thailand, earning over US$ 25 billion, Thailand is ready to compete in the global market.

The opportunities for investors can be found not only in the food processing side, but also in the packaging, or more specifically in the machinery used to package agricultural products. There is a high and growing demand for machinery such as filling, closing, sealing, wrapping and labeling machines. Last year, Thailand had to import more than US$ 192 million worth of machinery to meet the market demand for these purposes. And, Kasikorn Research Centre has stated that the frozen instant food business is likely to grow significantly this year, with greater demand in the domestic and export market.

In order to maintain its competitive advantage and to reap the benefits of value-added products, the food industry has made significant investments in automation technology. To meet the growing demand, US$86.7 million worth of agricultural machinery needed to be imported in 2006, significantly

higher than the previous year when over US$ 54 million in agricultural machinery was imported for such diverse uses as soil preparation, harvesting, sorting, grinding and milling.

The Board of Investment offers promotion incentives for investment in many activities in the agriculture and agricultural products sector. The production or preservation of ready-to-eat or semi ready-to-eat foods; grading, packaging and storage of plants, vegetables, fruits or flowers using modern technology; cold storage; inspection analysis and certifying of quality standards of agricultural products are but a few of the many activities that qualify for corporate income tax exemptions and other rights and benefits. 2007 looks to be another great year for this growing sector.

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COMPANY SPOTLIGHT

AgriSource Company Limited began its food and agriculture consulting business in Thailand back in 1986, focusing on business development, crop research services and marketing. Mr. Timothy Welsh, Managing Director of AgriSource, explains that Thailand was a natural location given the country’s lead position as a food exporting country and one that has such a diversity of food and agriculture production. In fact, Thailand, he notes, is today one of the leading countries in the world on tropical corn research and development (R&D), thanks in large part to international development projects begun in the 1960s to improve agriculture production and quality. All of this has provided a good foundation for a company such as AgriSource.

The success of the company in crop research, particularly in corn seed, was so promising that in 2005 it incorporated its research division as Seed Asia Company Ltd., which

T h e G r a m p i a n F o o d Group U.K., a leading

m u l t i n a t i o n a l f o o d company based in the U n i t e d K i n g d o m , began its investment in Thailand in 2002 with the acquisition of Golden

Foods International, subsequently forming

Grampian Foods Siam Limited. The company is a

self-described “fully integrated chicken processor and one of the largest

chicken meat exporters in Thailand”, and its “modern and high standard facilities include breeder and broiler farms, hatcheries, two primary processing plants, and one further processing plant.”

Grampian Food Siam Finance Director Mr. Pankaj Madan says the decision to enter into the Thai market was based in large part on the country’s availability of low-cost skilled labor, and Thailand’s existing status as a lead exporting country in poultry. The costs in Europe were simply not competitive, especially when weighed against the skill level that can be found in Thailand. Also, of consideration were the promotion incentives that were offered by the Board of Investment, including corporate tax exemption benefits, which have helped during the initial phase of the investment. Mr. Pankaj notes that when you look at all the parameters that go into the decision, such as marketing and profitability, tax incentives were certainly helpful. He also expresses the satisfaction of the company with the services that the BOI has offered, and that there was a real sense that BOI officials work with the company throughout the application process, with both company officials and the BOI working towards the same positive outcome.

Thailand not only offers the company a good location in terms of its strength in poultry or in finding capable human resources, but also in the infrastructure that the country maintains. The port facilities and the ability to move the product to market are good, along with the telecommunications and electricity. With the Head Office in Bangkok, and plants in Pathumthani, and Nakorn Nayok, as well as a farm in Cholburi, communication and transportation is a necessity.

Today, Grampian Foods Siam employs approximately 4,000 Thais in various capacities, which is in addition those employed as contract farmers along stages of production. The company processes about 700,000 chickens per week, under a high quality control system that is HACCP and GMP accredited, and EFSIS and HALAL certified. And as noted on the company web site, “Apart from external quality assurance, we have to ensure quality of product throughout the process our own internal ISO17025-accredited “Central Laboratory” for microbiological and chemical testing.”

While much of the work is by its nature labor intensive, certain functions within the processing line require specific skill sets for which the company trains its employees, and then works to retain. These would include such business skills as the ability to discern market trends, looking at changes in consumer tastes, and being able to match products to specific markets.

The company provides a product portfolio that includes fresh meat as well as processed foods, and works to meet the food regulations of a variety of countries with different standards. In the United Kingdom, Grampian Foods Siam is a supplier of poultry to retail brands such as Iceland and Dunne Stores.

While Grampian Siam itself focuses mainly on its role as a supplier to other retail brand outlets, the company has begun to test the retail waters with its own brands, Spice & Company, and Grabbits, both of which are available in the U.K. market and offer a variety of dishes. The corporate philosophy is towards achieving a value-added product line and it has certainly succeeded in bringing quality to market.

Continued on P. 10

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RESONANCE OF THE CHAMBERS

The Danish-Thai Chamber of Commerce was established only fifteen years ago, when about 30 Danish companies in Thailand joined together to better promote Danish business interests. Since that time the membership has grown over three-fold and the chamber has achieved high regard among its peers. It hosts one of the more informative web-sites and its staff conducts research on various Thai industries that offer considerable insight on potential investment opportunities for its members. In addition to all that, the Danish-Thai Chamber of Commerce also manages to publish a monthly journal entitled Thai Danish Trade News, which contains informative and interesting articles on business in Thailand.

In his letter to the members, which appeared in the January issue of the Thai Danish Trade News, Mr. Leo Alexandersen, president of the chamber, wrote “The Danish business community has during 2006 supported the Danish Chamber of Commerce to a degree which is unseen in living memory. We have a record number of members, more than 160 now. The level of activities in the Chamber continues at full pace, with more and more participants in each event. The quality is good, conceptually as well as in the delivery of the product.”

Indeed that is an accurate statement. The Executive Director of the Chamber, Mr. Michael M. Nilsson, with a small but professional staff, guides the excellent work that is produced by the chamber. He notes that while the Danish business community in Thailand has a relatively young chamber, the ties between the two countries are strong and date back over several hundred years. And, the two countries continue to have common interests and a strong relationship.

A beautiful book which he presented, prepared by the Skandinavisk Samfund Siam, The Scandinavian Society of Thailand, on the occasion of the Society’s 60th anniversary, recounts Denmark’s early contact with Siam, when in 1621, during the reign of King Song Tham, the Danish first arrived. Much later, King Chulalongkorn, would form a close friendship with Prince Vlademar, the youngest son of King Christian IX. In fact, it was only last year that a flag thought to be the one King Chulalongkorn planted in Grenan, Denmark, during a visit in 1907, was found during a cleaning of the governor’s house in that town.

Denmark continues a close friendship with Thailand in addressing a number of important issues, such as assistance to refugees that are sheltered in the country, as well as training and human resource development. And the Danish-Thai Chamber of Commerce does its part in keeping the business community informed on the latest political and economic developments in Thailand, and in providing a forum for open and frank discussions between Thais and Danes on contemporary issues of concern. These have included such topics as the proposed amendments to the foreign business act, intellectual property rights in Thailand, and a discussion on investment opportunities with the secretary general of the Board of Investment, Mr. Satit Chanjavakul.

The relationship of the Danish business community with the Board of Investment is constructive and the BOI is seen as the most appropriate setting for a one-stop investment shop in Thailand. The net applications received by the BOI from Danish companies, which tend to be small and medium sized enterprises, totaled 336 million baht in 2006. Perhaps an auspicious sign of an improving economy, the January net applications total 425 million baht.

Like many other chambers of commerce, the Danish-Thai Chamber also provides a venue for networking and socializing. This year’s networking event began in cooperation with Australian Chamber of Commerce, celebrating the ties between them. Other means of providing a social setting for its members include breakfast meetings, participation in the Nordic Golf Tournament and the alumni meeting at the Danish Embassy. It should be pointed out, however, that unlike some other chambers of commerce, the Danish-Thai Chamber is wholly self-sustaining and operates independently of other Danish chambers and from the Danish Embassy, although on many occasions it works in cooperation with these entities, as well as with the other Scandinavian country chambers. It is truly an impressive chamber of commerce.

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BOI INVESTMENT MISSION

Commerce Minister Krik-krai Jirapaet led a delegation of investors, including Mr. Pichit Dejneeranat of the BOI, to Tunisia from 21 to 28 February 2007. The delegation attended the second meeting of the Joint Trade Committee between Thailand and Tunisia and discussed increased investments between the two countries.

Senior Investment Advisor, Mr. Vittaya Praisuwan, and Director of the International Affairs Division, Mrs. Vasana Mututanont, meeting with representatives of the Kenya Investment Authority during an investment mission to Kenya and Sudan, from 28 February to 8 March 2007.

Senior Investment Advisor, Mr. Vittaya Praisuwan, (second left) and Director of the International Affairs Division, Mrs. Vasana Mututanont, meeting with Sudan’s Deputy Minister of Agriculture (second right), Ambassador of Thailand to Egypt, H.E. Noppadon Theppitak, (center) and Honorary Consul Mr. Gamal El Nefeidi (left), during an investment mission to Kenya and Sudan, from 28 February to 8 March 2007.

subsequently was approved for investment promotion privileges by the Board of Investment in May 2006 for the production of 3,100 tons of hybrid corn seed. It is here at Seed Asia that advanced seed research is being done to naturally improve the yield of corn crops, and to create seed with better drought tolerance and greater resistance to disease. All of these factors will greatly increase productivity and profits for farmers.

Seed Asia is currently focusing on hybrid corn seed that can be exported to other tropical countries. With the right

selection process, a new breed of corn can be developed that is suitable for a particular country’s soil and pest conditions and weather.

Although China and India present the largest potential markets for Seed Asia, other countries in Southeast Asia, such as Indonesia, Vietnam, Laos and Cambodia hold significant potential. Each of these countries possess diverse zones for agriculture, but the hybrid seeds provided by Seed Asia can be used to grow corn in each location that in turn will produce stronger and healthier plants.

AgriSource, Continued from P. 8

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INSIDE THE BOI

On 20 February 2007, Secretary General Satit Chanjavanakul held a consultative meeting with companies in the 304 Industrial Estate, and gave a presentation on the new incentives and policies that were adopted by the government.

On 16 February 2007 officials of the Japan Bank for International Cooperation (JBIC) gave a presentation at the BOI Headquarters on the newly released Survey Report on Overseas Business Operations by Japanese Manufacturing Companies.

On February 21, Mr. Vittaya Praisuwan, Senior Investment Advisor, welcomed a visiting delegation from Bangladesh to the Board of Investment, and presided over a seminar on the investment opportunities that exist between the two countries.

Seed Asia currently has 34 full time employees, but is now in an expansion phase and plans to have 50 – 60 employees within the next two years. When the company is fully operational there will be upwards of 130 staff. The company is not in the corn farming business, but its seed R&D, testing, parent seed increase, and quality control operations are very labor intensive. While the company has not had problems attracting skilled personnel for the R&D aspects, there has been a noticeable increase in competition from other industries as Thailand moves closer towards being a knowledge-based economy.

The company takes a long term view when looking at its investment in Thailand, which it considers to be strong and stable, and is utilizing the advantages offered by the Board of Investment to bring its activities to the next level.

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THAILAND ECONOMY-AT-A-GLANCE

Head Office, Office of the Board of Investment555 Vibhavadi-Rangsit Road, Chatuchak Bangkok 10900, Thailand. Tel: +66 (0) 2537 8111, +66 (0) 2537 8555 Fax: +66 (0) 2537 8177 Website: www.boi.go.th E-mail: [email protected]

NEW YORKThailand Board of InvestmentNew York Office61 Broadway, Suite 2810New York, N.Y. 10006, U.S.A.Tel: +1 (0) 212 422 9009Fax: +1 (0) 212 422 9119E-mail: [email protected],[email protected]

LOS ANGELESThailand Board of InvestmentLos Angeles Office611 North Larchmont Boulevard, 3rd Floor, Los Angeles CA 90004, U.S.A.Tel: +1 (0) 323 960 1199Fax: +1 (0) 323 960 1190E-mail: [email protected]

PARISThailand Board of InvestmentParis OfficeAmbassade Royale de Thaïlande8, Rue Greuze, 75116 Paris, FranceTel: +33 (0) 1 5690 2600, +33 (0) 1 5690 2601Fax: +33 (0) 1 5690 2602E-mail: [email protected]

SHANGHAIThailand Board of InvestmentShanghai OfficeRoyal Thai Consulate-General2nd Floor,7 Zhong ShanDong Yi Lu, Shanghai 200002, P.R. ChinaTel: +86 (0) 21 6321 9621, +86 (0) 21 6323 4679Fax: +86 (0) 21 6321 9383E-mail: [email protected]

FRANKFURTThailand Board of InvestmentFrankfurt OfficeRoyal Thai EmbassyBethmannstr. 58, 5.OG60311 Frankfurt am Main, GermanyTel: +49 (0) 69 9291 230Fax: +49 (0) 69 9291 2320E-mail: [email protected]

TOKYOOffice of Economic andInvestment AffairsRoyal Thai Embassy8th Floor, Fukuda Building West, 2-11-3 Akasaka, Minato-ku, Tokyo 107-0052 JapanTel: +81 (0) 3 3582 1806Fax: +81 (0) 3 3589 5176E-mail: [email protected],[email protected]

OSAKAThailand Board of InvestmentOsaka OfficeRoyal Thai Consulate-GeneralBangkok Bank Bldg, 5th Floor1-9-16 Kyutaro Machi, Chuo-Ku, Osaka 541-0056, JapanTel: +81 (0) 6 6271 1395Fax: +81 (0) 6 6271 1394E-mail: [email protected]

Facts about Thailand

Population (2006, est) 62.38 millionASEAN population 570 millionLiteracy Rate 96%Minimum Wage (Jan 2007, Bangkok) 191 baht/day

GDP (2006) US $206.1 billionGDP per Capita (2006) US $3,176GDP Growth (2006) 5.0%GDP Growth (2007) Projected 4-5%Export Growth (2006) 16.5%

Trade Balance (2006) US $2.2 billionCurrent Account Balance (2006) US $3.2 billionInternational Reserves (2006) US $67 billionCapacity Utilization (2006) 74.2%Manufacturing Production Index (2006) 167.1Consumer Price Index (January 2007) 115 (2002 = 100)

Corporate Income Tax 10-30%Withholding Tax 10-15%Value Added Tax 7%

January 2007 Average Exchange RatesUS$ 1 = 35.93 baht€1 = 46.66 baht£1 = 70.37 baht100¥ = 29.84 baht

Top 10 Exports 2006

Product % growth(y-o-y)

Value(US$ bn)

1. Machinery and mechanical appliances2. Electrical machinery and equipment3. Automobiles and parts4. Rubber5. Fuel6. Plastic and articles7. Precious metals8. Prepared meats and fish9. Organic chemicals10. Cereals

18.0417.957.346.286.214.912.902.802.051.89

23.2723.159.468.108.016.333.743.612.642.44

Total 10 itemsGrand Total

70.35100

90.7512.90

Monthly Closing Values of The SET

Industrial Capacity Utilization (%)

Source: StockExchange of Thailand

International Reserves / Short-term Debt (%)

Source:Bank of Thailand

Exchange Rate Trends



boi investment promotion in 2006 and trend for 2007 · report. thailand survey responders indicate...

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