thailand: an asean hub, a world of opportunities
TRANSCRIPT
Thailand: An Asian Hub, a World of Opportunities
Ms. Ajarin PattanapanchaiDeputy Secretary General
Thailand Board of Investment
OutlineThailand 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 power• 27th biggest exporter (as %
of total world goods)
2nd largest economy in ASEAN (GDP US$385 billion in 2013)
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
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
Competitive
Highly Ranked
UNCTADThailand 8th top prospective host economy 2014-2016
World Bank26th easiest place to do business in the world and 2nd among emerging economies of East Asia
“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
5.815.875.94
6.176.21
6.66.64
7.137.24
7.577.597.657.847.98
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
Thailand’s Cost AdvantagesOffice 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$1=Bt32.48
Wage Comparison92.4
54.849.6
42.833.3
21.5 20.9 17 14.68.5 8 7.9 7.6
0102030405060708090
100
Tokyo
Seoul
DubaiHon
g Kon
gTaip
eiKuala
lumpur
Shangh
aiBeij
ingBan
gkok
Mumbai
Man
ilaJa
karta
Delhi
Wag
e L
evel
s (U
S$) Gross
Net
4
Cities ranked according to gross value of index. New York = 100Source: UBS/Prices & Earnings update September 2012
Top Destinations for Expat Experience 2013
by HSBC
1.Thailand
Source: Expat Explorer Survey 2013, HSBC
Thailand offers Best Expat Experienceand a Low Cost of Living
Thailand has been chosen as the best country in the
world forOverall Expat Experience& Overall Quality of Life
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)
Efficient Logistics NetworkSeaport - Land Transport – Airport
Laem Chabang Seaport
DonmuangInternational
Airport
SuvarnabhumiInternational
Airport
Map Ta Put Deep Seaport
Bangkok
GMS InfrastructureDevelopment
North-South Corridor
North-Eastern Corridor
East-West Corridor
Southern Corridor
Central Corridor
Southern Coastal Corridor
Investment PromotionPolicies and Services
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.
19Overseas 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
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 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
THAILAND
INNOVATIONHIGH VALUE-ADDEDGREEN TECHNOLOGYRESEARCH & DEVELOPMENT
Sustainable Development, More Competitive Economy
New Investment Promotion Strategy Direction
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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
Group Example Activities
A18-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
A28-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 A Activities (1/2)
Group Example Activities
A35-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
A43-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)
Sectors of Opportunity
Target Industries
Agriculture and food processing
Automotive
Machinery
Target Industries
Biotechnology
Alternative energy
E&E
High Value Added
• 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
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
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 55Export 143 179 201 288 303 274 364 383 414 419 491 39
Bt B
illio
n
Source: Ministry of Commerce, Mar 13, 2015
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
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
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
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% 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
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Major Companies in ThailandFor parts manufacturing & MRO
• 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 appliancesCompressors, motors, plastic and metal parts
Source:*E&E Intelligence Unit, as of Mar 10
Electronics & Electrical IndustryMajor Industrial Sector of Thailand
Thailand’s E&E Exports 2014
18,1637,790
3,9792,620
1,8261,5161,424
1,0997071,0271,1781,226952952945
0 5,000 10,000 15,000 20,000
Wire & Wiring HarnessMotorWashing MachinePrinted CircuitColour TVPower SupplyTV PartCompressorRadio Broadcast ProductRefrigeratorTV Video CameraCircuit BreakerAir ConditionerICComputer & HDD
US$ Million
Source : EEI
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
Success Electronic Design Companies in ThailandName Category Flagship Products Main
CustomersDesigners
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
Alternative Energy in Thailand
SolarBiogas WindBiomass
Garbage Water Bio Diesel Ethanol
National Policy to Promote Alternative EnergyTarget : To increase share to 25% by 2022
Fuel # of Project Capacity (MW)
Biomass 184 2,558Biogas 188 561Solar Farm 221 1,303Solar Rooftop 143 81Wind 28 1,468MSW 18 228Waste Heat 7 172Total 789 6,371
BOI Promoted Renewable Power PlantsAs of December 2014
Thailand’s Top 10 Food Exports in 2014
Jan-Dec, 2014
ExportsBt933,902
million
Fishery products22.2%
Rice and cereals17.9%
Meat and products11.0%
Fruits10.0%
Sugar and honey8.2%
Flour and starch3.5%
Cassava pellets and tapioca chip
3.4%
Non-Alcoholic drinks3.0%
Pet foods3.0%
Others17.7%
Source: National Food Institute (NFI) as of Feb 17, 2015
GMP and International Standard Good Manufacturing Practices is a
mandatory measure for 54 types of food products
Strengths of Thai Food Industry
AbundantRaw
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 millionMinimum Daily Wage Bt300
Source: Thailand Food Industry Outlook, Commercial Section, Royal Danish Embassy, Mar 2011
(50)
Support for US InvestorsBOI Office New York7 World Trade Center, 34th Fl., Suite F250 Greenwich St. New York NY 10007 USATel: (212) 422 9009 Fax: (212) 422 9119E-mail: [email protected]
BOI Office Los Angeles611 North Larchmont Blv. 3rd Floor Los Angeles, CA 90004 USATel: (323) 960 1199 Fax: (323) 960 1190Email: [email protected]
U.S. Desk @ BOI Headquarters555 Vibhavadi-Rangsit Rd.Chatuchak, Bangkok 10900 ThailandTel: (66 2) 537-8111 Fax: (66 2) 537-8098E-mail: [email protected]
Thank you