COMMERCIAL OPPORTUNITIES IN THAILAND4 Vietnam 3 India #2 Thailand 1 China Rank Country Promising...

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Thailand Department of export promotion

COMMERCIAL OPPORTUNITIES IN THAILAND

Presented byDr. Duangkamol Jiambutr

Director of Thai Trade CentreOffice of Milan

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• About Thailand• Thailand’s strong FDI statistics• Why Thailand• Commercial Opportunities with

Thailand

Thailand: CommercialDestination of Choice

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Thailand Department of export promotionPopulatioPopulation:n: 65.4 million65.4 millionPopulation between ages 15Population between ages 15--64: 64: 69.6 %69.6 %Population growth rate: Population growth rate: 0.87 %0.87 %Literacy:Literacy: 96 %96 %Government:Government: Constitutional MonarchyConstitutional MonarchyReligionReligion:: BuddhiBuddhismsm 94 %94 %*GDP rate 2005:*GDP rate 2005: 4.2 %4.2 %*GDP per capita:*GDP per capita: $2,562*GDP:*GDP: $ 156.1 156.1 billion

Agriculture: 9 %Manufacturing: 44.3 %Services: 46.7 %

ThailandThailand

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Japanese manufacturers rank Japanese manufacturers rank

Thailand #2 globallyThailand #2 globally

Thailand: Top Selection Factors1. Market growth potential2. Labor costs3. Political and social stability4. Supply base for assemblers5. Base for exports6. Developed local Infrastructure7. Tax incentives for investment8. Industrial clusters9. Domestic market size10. Policies to attract foreign capitalIncludes production, sales, R&D,

outsourced operations

Malaysia10Taiwan9Korea8Indonesia7Russia6U.S.5Vietnam4India3

ThailandThailand#2#2China1CountryRank

Promising CountriesPromising Countriesfor Overseas Business for Overseas Business Operations FY2004Operations FY2004

Source: “Outlook for Japanese Foreign Direct Investment” conducted by Japan Bank for International cooperation (JBIC), Nov. 2004

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ThailandThailand’’s Key Economic Indicators 2003s Key Economic Indicators 2003--20062006Percentage Change 2003 2004 2005 2006Real GDP Growth 6.9 6.1 3.5-4.0 3.5-4.5 - Comsumption 5.8 5.4 4.8 3.7 - Private sector 6.4 5.6 4.0 3.4 - Public sector 2.0 4.1 10.0 6.0Investment 11.9 14.4 15.2 14.6 - Private sector 17.5 15.3 12.0 10.0 - Public sector -0.8 11.7 24 26Exports (Bil. US Dollar) 78.1 94.9 110.4 123.7 - Growth 18.2 21.6 16.3 12.00Imports (Bil. US Dollar) 74.3 93.7 118.7 134.7 - Growth 17.4 26.0 26.7 13.5Trade Balance (Bil. US Dollar) 3.8 1.2 -8.3 -11.0As % of GDP 2.6 0.8 -4.5 -5.4Current account balance(Bil. US Dollar) 8.0 6.6 (-3.8)-(-4.3) -5.5As % of GDP 5.6 4.0 (-2.2)-(-2.5) -2.9Inflation 1.8 2.7 4.6 4.2-4.8Sources : 2003-2004 : NESDB and BOT2005-2006 : Bangkok Bank’s Research Department

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Thailand ForeignThailand Foreign TradeTrade

2001 2002 2003 2004 2005THAILAND - WORLDTotal Trade 126.912,4 132.395,6 155.074,0 190.568,0 229.106,2

Exports 65.183,2 68.156,3 80.040,0 96.531,0 110.883,2

Imports 61.729,2 64.239,3 75.034,0 94.037,0 118.223,0

Balance of trade 3.454,1 3.917,0 5.006,0 2.494,0 -7.339,8

Items Value: Milion US.$

2002 2003 2004 2005THAILAND - W O RLDTotal Trade 4,3 17,1 22,9 20,2

Exports 4,6 17,4 20,6 14,9

Im ports 4,1 16,8 25,3 25,7

Grow t rate %Item s

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Major Destinations of ThailandMajor Destinations of Thailand

2001 2002 2003 2004 2005

1 W ORLD 65,183.2 68,156.3 80,040.0 96,531.0 110,883.2

2 ASEAN 12,599.1 13,568.9 16,486.0 21,241.0 24,137.0

EU 10,551.9 10,214.6 11,747.7 13,815.8 14,294.9

ITALY 678 701,8 951,8 1340,1 1256,7

5 JAPAN 9,945.4 9,950.0 11,356.2 13,498.5 15,156.4

6 U.S.A. 13,199.6 13,509.4 13,596.2 15,508.5 17,064.4

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ITEM Value : Million US.$

2002 2003 2004 20051 W O R LD 4.56 17.44 20.60 14.87

2 ASEAN 7.70 21.50 28.84 13.63

EU - 3 .20 15.01 17.60 3.47

IT ALY 3,51 35.62 40,80 - 6 .23

5 JAPAN 0,05 14.13 18.86 12.28

6 U .S .A . 2 ,35 0.64 14.07 10.03

ITE M

3

G row t rate %

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1,929.101,929.10Fish and Seafood10102,362.752,362.75Cereals993,203.353,203.35Precious stones883,368.763,368.76Prepared meat, fish, etc774,733.724,733.72Mineral fuel, Oil665,998.395,998.39Plastic556,223.746,223.74Rubber448,134.798,134.79Vehicles, not railway33

19,337.5019,337.50Machinery2220,660.0420,660.04Electrical Machinery 11

Value Value (USD Mil.)(USD Mil.)

ThailandThailand’’s Top 10 Exports s Top 10 Exports (2005)(2005)

Source: Thai CustomsSource: Thai Customs

Strong, diverse exports reflect the strengths of Thailand’s industries

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Strong, diverse import reflect the strengths of Thailand’s industries

2.344,802.344,80MEDICAL INSTRUMENTS10102.785,362.785,36IRON/STEEL PRODUCTS993.548,353.548,35ORGANIC CHEMICALS884.036,444.036,44VEHICLES, NOT RAILWAY774.086,404.086,40PRECIOUS STONES,METALS664.233,904.233,90PLASTIC558.453.678.453.67IRON AND STEEL44

17.025,8717.025,87MACHINERY3320.889,6920.889,69MINERAL FUEL, OIL ETC2223.376,8323.376,83ELECTRICAL MACHINERY11

Value Value (USD (USD Mil.)Mil.)

ThailandThailand’’s Top 10 Imports (2005)s Top 10 Imports (2005)Source: Thai CustomsSource: Thai Customs

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Top 10 export Top 10 export goodsgoods toto ItalyItaly (2005)(2005)

Goods Fob Value (Euro)MACHINERY 229.014.725

RUBBER AND ART ICLES T HEREOF 106.702.419

VEHICLE 98.122.849

ELECT RICAL MACHINERY AND EQUIPMENT 91.918.238

FISH CRUST ACEAN MOLLUSC 77.409.254

RE-IMPORT ED ART ICLES 49.539.279

PEALS ; PRECIOUS ST ONES & MET ALS 43.171.025

PLAST ICS AND ART ICLES T HEREOF 28.704.798

PREPARAT ION OF MEAT FISH 26.344.123

OPT ICAL PHOT O CINE APPARAT US 24.189.443

TOP 10 EXPORT GOODS TO ITALY

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Top 10 import Top 10 import goodsgoods fromfrom ItalyItaly (2005)(2005)

Goods Cif Value (Euro)MACHINERY 324.857.748

ELECT RICAL MACHINERY AND EQUIPMENT 88.620.022

ART ICLES OF IRON OR ST EEL 72.292.102

OPT ICAL PHOT O CINE APPARAT US 47.892.446

PLAST ICS AND ART ICLES T HEREOF 46.077.093

PHARMACEUT ICAL PRODUCT 32.100.556

MISC CHEMICAL PRODUCT 28.591.063

RAW HIDE SKIN & LEAT HER 26.540.910

ORGANIC CHEMICAL 19.856.928

T ANNING DYEING EXT RACT ,PAINT 18.864.612

TOP 10 IMPORT GOODS FROM ITALY

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Stable Government, Economy, SocietyStable Government, Economy, Society

• Decades long pro-business environment

• Thai Business leaders, analysts and foreign investors bullish on the recent re-election of Prime Minister Thaksin, who won with a one-party government for the first time

• Tolerant society that values stability

• Friendly, welcoming culture to foreigners and foreign business

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• Thailand has a well developed infrastructure, a free-enterprise economy, and welcomes foreign investment. Thailand has fully recovered from the 1997-98 Asian Financial Crisis and was one of East Asia's best performers in 2002-04.

• Increased consumption and investment spending and strong export growth pushed GDP growth up to 6.9% in 2003 and 6.1% in 2004 despite a sluggish global economy.

• Thailand has preferential trade agreements with a variety of partners in an effort to boost exports and maintain high growth In 2004 began negotiations on a Free Trade Agreement with the US. In late December 2004

Stable Government, Economy, Society (2)Stable Government, Economy, Society (2)

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7 international airportsairports moving 700,000 tons of cargo and 25 million passengers per year

HighwayHighway system covering 64,000 km and connecting all 76 provinces

8 deep sea portsports

RailwayRailway system spanning 4,000 km linking to Malaysia and Singapore

57 57 industrial estates industrial estates in 21 provinces

World-class, WiWi--FiFi capabilities andinexpensive broadband broadband widely available

Mobile phoneMobile phone usage growing by 6 million/yr, more than 24 million users in 2003.

Suvarnabhumi Intl. Airport: 45 million passengers/yearSoft Opening Sept. 2005

Developed InfrastructureDeveloped Infrastructure

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New Budget: US$40-$60 Billion for Mega Projects

• Upgrade Mass Transit

• Improve Logistics throughout the nation:

- Railways- Multimodal transport- New roads & highways

Investing Boldly in Investing Boldly in New InfrastructureNew Infrastructure

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Free Trade AgreementsFree Trade Agreements

The Americas• Peru• United States

Asia• India**• Japan• ASEAN*• China (through ASEAN)• BIMSTEC

Oceania• Australia*• New Zealand

The Middle East• Bahrain

*FTAs Completed **Early Harvest Agreement

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ASEAN:ASEAN:503 million503 million

Australia:Australia:20 million20 million

China:China:1.3 billion1.3 billion

India:India:1.1 billion1.1 billion

Hub of Access to Major MarketsHub of Access to Major Markets(See countries and populations below)(See countries and populations below)

Japan:Japan:127 million127 million

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Thailand Department of export promotionComparative Business CostsComparative Business CostsVietnamIndia ChinaSingaporeThailandThailand

€0.27€0.53€0.34€0.68€$0.29Fuel Costs

€0.34€1.30€0.14€1.22€0.30Water Costs (Industry)US$/cubic m

€5.08€3.74€5.36€3.35€2.26Industrial Electricity(Off Peak)US$/kwH

€8.64€4.78€8.34€5.40€5.03Industrial Electricity (Peak)US$/kwH

Sources:Electricity: ASEAN Center for EnergyWater costs: Various government agenciesFuel: German Technical Cooperation (2003)

1 Euro=50 THB

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Commercial Opportunities in Commercial Opportunities in ThailandThailand

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6 Target Sectors:6 Target Sectors:• Agro-Industry: food and rubber products

• Fashion: Garments, Leather, Jewelry

• Automotive

• Electronics and ICT

• Alternative Energy

• High-Value Added Services: Long-Stay Tourism,

Regional Operating Headquarters, Film and

Animation, Software Development, and others

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Thailand Department of export promotionTarget Industry: AgricultureTarget Industry: Agriculture

TARGET:TARGET:Kitchen of the WorldKitchen of the World

Facts about Thailand:• 1 of 5 net exporters of food in world

• #1 exporter of natural rubber, rice, canned & frozen seafood, canned tuna, canned pineapples, cassava, tapioca

• #2 exporter of sugar

Agriculture 42.6%

Services42.4%

Industry

17%

Labor force by occupation

2222


• Exemption on machinery import duties • 8 years corporate income tax holiday

““MISSINGMISSING”” LINKS in ThailandLINKS in Thailand’’s Agros Agro--Industry Industry Value Chain:Value Chain:

• Production or preservation of ready-to-eat food• Farm Management• Packaging material, food packages • Cold Storage or Cold Storage Transportation • Crop Drying & Silo Facilities • Inspection analysis of crops, livestock or aquatic-

animal diseases• Inspection analysis of Soil or Water for Agricultural

use• Forestry Plantations• Production of farm / food-processing machinery

Agriculture Cluster StrengtheningAgriculture Cluster Strengthening

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Target: Detroit of AsiaBecome part of the Top 10 largest auto producers by year 2010,

producing 1,800,000 units/yr.

Thailand Facts:Auto sector: 12% of GDP

2nd largest producer and exporter of pickup trucks in world.

Largest auto producer in Southeast Asia, expanding at a rate

of 18-20% in 2005

Target Industry: AutomotiveTarget Industry: Automotive

1 Euro=50 THB

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ThaiThai autoauto salessales and exportand export

0

100.000

200.000300.000

400.000

500.000

600.000

700.000

800.000900.000

1.000.000

1.100.000

1.200.000

Years

Piec

es

Production 411.721 449.417 595.649 763.000 928.081 1.125.000 1.142.000 1.171.000

Sales 262.189 296.985 409.362 533.176 626.000 667.300 676.738 701.574

Exports 149.532 152.432 186.287 229.824 302.081 457.700 465.262 469.426

2000 2001 2002 2003 2004 2005 2006f 2007f

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Target Industry: Fashion Target Industry: Fashion Garments, Leather & JewelryGarments, Leather & Jewelry

Facts about Thailand:

Fashion is 1 of 5 Thai

Government priority sectors

Thailand is the Gem and

Jewelry Capital of

Southeast Asia.

Exports of gems and

jewelry are expected to

reach €3.8 billion by 2008

Bangkok Fashion City ProjectThe Thai Government has invested €36.4 million to further develop the fashion sector in Thailand:

1. International Fashion Schools2. Fashion Trend Center3. Textile/Garment Industry Competitiveness4. Leather Industry Competitiveness5. Jewelry Industry Competitiveness6. Bangkok Fashion Week7. Trend Setting (fashion workshops)8. International Fashion Contests9. Bangkok Fashion City Promotion10. Top Fashion Report11. Fashion Roadshow

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Thai textileThai textile production (2000production (2000--2004)2004)

3,346 pcs

1,707 yards

5,762 yards

608,014 tons

807,406 tons

2000

3,620 pcs

1,900 yards

6,138 yards

677,899 tons

806,411 tons

2004

31.5%Garments (million pieces)

26.9%Knitting(mln sq. yards)

23.3%Weaving (mln sq. yards)

39.1%Spinning (metric tons)

10.7%Synthetic Fiber (metric tons)

% Growth 2000-2004Textile products

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Target Industry: Fashion Target Industry: Fashion Garments, Leather & JewelryGarments, Leather & Jewelry

OpportunitiesItalian exports of textile machinery to Thailand are strong. Italy has significant market share especially in sub-sector of bleaching, dyeing, printing, finishing machinery.International marketing utilizing Thailand’s low labor costs for highly skilled craftsmen, such as diamond cuttingSpecialized services on Integrated Textile Industrial Estates, strongly BOI-promotedVery strong demand for design institutes & education centers. Thai culture places high importance on creativity and fashionItalian expertise to improve quality of raw materials in many areas such as in consulting services, machinery, design.

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DepartmentDepartment of Export promotion of Export promotion dutiesduties1. Promote and expand the market for Thai exports in

goods and services.

2. Develop and perform activities that promote trade and increase the competitiveness of the export sector.

3. Reinforce the ability of Thai exporters to deliver goodsand services increasing the competitiveness of Thai exporters.

4. Build a positive image of Thai goods and services and thereby increases the market's confidence in Thai product.

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DepartmentDepartment of Export promotion of Export promotion functionsfunctions1. Formulate policy recommendations and action plans on

issues related to trade and marketing and provide strategicdirections and measures for promoting export.

2. Provide Thai manufacturers and exporters as well as foreignimporters with trade information services.

3. Utilize the media and public relations as a mechanism forpromoting Thai products.

4. Improve the knowledge and skills of the private sectorpersonal in the field of international trades ensuringenhanced competitiveness in the export sector.

5. Reinforce coordination and cooperation with the relevantinternational institutions and organizations in support of export expansion.

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Thai InternationalThai International Trade FairsTrade Fairs 20062006EVENT TRADE

DATEPUBBLIC EXPOSITION

Thailand International Education Exibition

3-5 Feb

Bangkok Gems and Jewellery Fair 1-3 Mar 4-5 Mar

Thailand International Furniture Fair/interior design asia

8-10 Mar 11-12 Mar

Thailand International Business Materials and Services

8-10 Mar 11-12 Mar

Bangkok International Gift and Hoseware Fair

18-21 Apr 22-23 Apr

OTOP to the World 18-21 Apr 22-23 Apr

THAIFEX World of food Asia 17-19 May 20-21 May

Thailand Logistic Fair 13-15 July

Bangkok International Fashion and Leather Fair

27-29 Sep 30 Sep-1 Oct

TAPA Thailand Auto Part Accessories 11-13 Oct 14-15 Oct

Bangkok International Gift and Houseware Fair

17-20 Oct 21-22 Oct

Thailand Healt and Beauty Show 8-10 Nov 11-12 Nov

Made in Thailand December December

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Thai Trade Centre in Italy:

Milan: [email protected]

Thai Trade Centre Headquarters:

website: www.thaitrade.com

email: [email protected]

Contact Information

Thank You!

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