Thailand Country Outlook 2007

Thailand Country Outlook 2007

Ann Bacher

Senior Commercial Officer

U.S. Embassy, Commercial Service, Bangkok

Is Thailand right for you?Is Thailand right for you?

Thailand:Vibrant Market in the Heart of ASEAN

• 10 Country members

• 500 Million Consumers

• Combined GDP of US$737 billion

• $88 billion in US direct investment

• 4th largest US export market

• Total 2-way trade $168 billion

Thailand: A Nation in Transition 2005-2007

• Political changes

• Economic changes

• Social changes

Thailand Overview : Politics

Chief of state: King Bhumibol Adulyadej (since 1946)

• Principal Government Officials

• Chief of State: King Bhumibol Adulyadej

• Interim Government CNS/PM:Surayuth Jalanont

• Political type: Constitutional monarchy

• Interim Constitution

• Independence: Never colonized; traditional founding date 1238

Head of Government: Prime Minister Surayuth Jalanont

Thailand: AT A GLANCE

• Population

• Religion

• Literacy

• Language

                                                                                                                               

Thailand Outlook : Economy• GDP: $176.38 billion• Per capita GDP: $ 2,724 (05),$ 3,600 (06) • GDP Growth rate: 6.1% (04), 4.7% (05),

4.8 % (06), 4.5% (07) • Inflation Rate: 2.7% (04) 4.6% (05), 4.5%

(06), 5.1% (07)• Unemployment rate: 2.0% of total labor

force• Key Industries: tourism, textiles, garments,

agricultural products, automotive, manufacturing, services

Thailand: A Trader

• Export Economy

• 15th Largest Trading Partner for U.S.

• 2 way trade 30 Billion

• Exports to U.S. 22 Billion up 13%

• In Asia: China, Japan, Taiwan, Malaysia, Thailand

Thailand: Investment

• Japan Largest Investor

• U.S. #2

• Singapore, Europe, Hong Kong, Taiwan

• Sectors: Automotive, Electronics, Chemicals, Services, Manufacturing

US Investors23 billion USD – 250,000 employees

Building Stronger U.S –Thai Business Ties

Bilateral Agreements• Treaty of Amity and Economic

Relations (1833, amended 1966)• Double Taxation Convention

(Dec. 15, 1997)• The Economic Cooperation

Framework (Dec. 2001)• Trade and Investment

Framework agreement (TIFA) (Oct. 23, 2002)

• Free Trade Agreement (suspended)

Private Partnership

• American Chamber of Commerce in Thailand

• U.S-Thai/Thai-US Business Council

• U.S – Thailand FTA Business Coalition

• U.S-ASEAN Business Council

Market Strengths

• Good Fundamentals• Strong domestic

consumption• Increase in exports• Open to Foreign

Investment• Low-cost skilled

workers

• Low inflation• Good infrastructure• Government support

& incentives• Location

Challenges in Thailand

• Political Turmoil• Unrest in Southern

Provinces• Corruption/Transparency• Weak IPR Protection• AVIAN Influenza Threat• Customs/Tariffs Issues• Thai Way

Where do U.S. Exporters Succeed ?

• Electrical Power Equipment

• Education and Training• Food Processing and

Packaging Equipment• Medical/Laboratory /

Healthcare

• Defense Sales• Automotive Parts and

Aftermarket• Safety and Security• Information Technology• Environmental

Technologies

Cosmetics• Market size : $1,078 million (FY06)• Total imports: $261 million with $57 million from U.S. • Expected growth rate: 12% this year• US products are highly sought after and well regarded• Competition from France, Japan, UK and Germany getting stronger

Best Prospects• Anti-aging facial treatments• Whitening facial treatments, body lotions• Hi-end makeup and skin care• Cosmetic products for men

Best ProspectsPramot

• Medical Devices Market in Thailand :– $553 million market with 20% growth rate– 89% import and products from the US has 36% share– 978 public hospitals (105,600 beds) and 356 private

hospitals (35,900 beds)– Leading best prospect: orthopedic devices, rehabilitation

devices, diagnostic test kits, and cardiovascular devices. • use of local distributor is highly recommended.

• Education and Training Service– US largest share with – 10th leading country – Overall sector is a $720 million market in Thailand– The market is untapped and always opens to new-comers – Brand recognition is high and word of mouth is crucial

Nalin

Best Prospects

Best Prospect • Food and drink processing equipment, Cooking or heating

food machinery, Fruit, vegetable and herb processing equipment, Fruit juice machinery, Snack food and confectionery equipment, and Meat processing equipment

Pramot

Food Processing and Packaging Equipment• Market size: $696 million (FY05)• Total imports: $493 million with $26 million from U.S. • Expected growth rate: over 20% for the next few years• In FY2005, the U.S. Suppliers shared about 5% of the total imported market

Best Prospects

Market Overview - Electric Power System• Generation capacity – 26.4 GW • Growth in electricity demand – 5% • Fuel mix – gas 72%, coal 12%, hydro and other

16% - renewable growing • Total imports of transmission and distribution

equipment - 3.5 billion• U.S. market share – 10%

Best Prospects• Generators & parts, Power transmission & distribution

equipment, Equipment for substations & terminal stations, Energy efficiency equipment

Kitisorn

Best Prospects

Automotive Parts and Services/Equipment• Thailand: Detroit of the ASEAN Region• Largest vehicle assembling capacity• Largest domestic market • Assembling industry of double digit growth – 16% - 1.3 million• Parts manufacturing of highest quality  

Best Growth prospect for after market• General automotive service equipment & tools

• Tire (wheel) & brake service equipment

• Body and paint repair service equipment

Wanwemol

Best Prospects

Thailand: Growing demand for safety & security equipment • Increasing Government Investment for Public Safety

– Global Requirements: International Airports, Seaports– Market size- $459 Million

•  Increasing Private Investment for Property Security – Hi-end property market Boom: Condominium, Hotels, Detached Houses– Commercial Property: Shopping Malls, Office Buildings

Best Growth prospect for after market• Access control systems: card technology systems (smart card, proximity-card, magnetic

strip card), biometric devices, security doors and power fences

• Alarm systems: fire/ intruder alarm systems

• Video surveillance systems: digital video recording and network transmission, CCTV

• Detection equipment: handheld/ walkthrough metal detectors, motion detectors, smoke detectors, x-ray/ screening equipment, anti-shop lifting devices

Wanwemol

Best Prospects

ICT Market in Thailand• In 2005, total ICT market was around $ 10.79 billion, comprising

of $ 7.9 billion for communication, $ 1.6 billion on hardware, $ 1.06 billion for software, and $ 171 million in service

• Forecasted growth rate of 12% in 2006 to a value of $ 12.64 billion.

• U.S Share of Import market estimated around 70-80%

Best Prospects:• Data Communication Infrastructure, Wireless network,

Package software such as CRM application, security software, Internet Infrastructure

OraphanBest Prospects

What do you need to do to Succeed?

• Know the MarketExport Counseling

• Develop a Trusted Local PartnerInt’l Partner Search/International Company Profile

• Learn the RulesFlexible Market Research

• Build the RelationshipGold Key Service/Trade Events

For More Information on Doing Business with Thailand

http://www.buyusa.gov/thailand/enhttp://www.buyusa.gov/thailand/en http://www.Export.govhttp://www.Export.gov

http://www.buyusa.gov/asianowhttp://www.buyusa.gov/asianow

Thank you