Thailand Investment Opportunities for Quebec Companies Ms. Ajarin Pattanapanchai Deputy Secretary General Thailand Board of Investment
Outline Facts & Figures Why Thailand BOI Investment Promotion Policy US Investment Investment Opportunity
Thailand s Fast Facts Thai population 67 million (2013) Thailand s GDP US$385 billion (2013) US$5,647 per capita GDP Agriculture: 12% Thai GDP by sector Industry: 45% Services: 43% Thai labor force 39.13 million (2013) Thai exports US$225.4 billion (2013) Thai imports US$219.0 billion (2013) Source: NESDB as of Feb 17, 2014 and Pocket World in Figures 2014 Edition
THAILAND is the world s 17 th largest manufacturer output 28 rd largest exporter 24 th largest economy by purchasing power And the 2 nd largest economy in ASEAN *Source: Economist Pocket Facts
Top 10 Exports in 2011 2014 (Jan-Feb) 2011 2012 2013 2014 (Jan-Feb) Unit: A$ Billion Growth (yoy) Motor cars, parts and accessories 17.5 24.2 25.2 4.3 10.35 Computer parts 17.5 20.1 18.4 3.3 17.09 Precious stones and jewellery 12.7 13.9 10.4 2.1 91.90 Refine fuels 10.4 13.6 13.2 1.8-2.58 Plastics resin 9.1 9.0 9.3 1.7 12.78 Chemical products 8.5 9.0 9.4 1.6 4.44 Rubber 13.1 9.2 8.5 1.6-5.51 Rubber products 8.6 8.9 8.8 1.5 7.17 Machinery and parts 6.3 6.6 7.0 1.2 13.70 Electronic integrated circuits 8.1 7.1 7.5 1.1 14.65 Others 117.3 120.4 118.5 20.0 4.06 Total 229.2 242.0 236.1 40.2 8.54 Source: www.moc.go.th as of Mar 27, 2014 Exchange rate: A$1=Bt29.27 in Q1, 2014
WHY THAILAND
Highly Ranked UNCTAD Ranks Thailand 8 th as a top prospective host economy 2013-2015 World Bank Ranks Thailand among the easiest places to do Business in Asia and 18th in the World
Over the past 6 years, Thailand has suffered bouts of political unrest on top of the global financial crisis and severe flooding. Nevertheless, the economy maintains solid economic fundamentals that support its resilience, with high international reserves, relatively low inflation, a moderate amount of government and external debt, and a strong manufacturing base. Asian Development Bank Outlook 2014
2013 Country Manufacturing Competitiveness Index Rankings China (1) Germany (2) United States (3) India (4) S.Korea (5) Taiwan (6) Canada (7) Brazil (8) Singapore (9) Japan (10) Thailand (11) Maxico (12) Malaysia (13) Poland (14) United Kingdom (15) 10 7.98 7.84 7.65 7.59 7.57 7.24 7.13 6.64 6.6 Index score (10=High, 1= 6.21 Low) 6.17 5.94 * ( ) = rankings 5.87 5.81 0 2 4 6 8 10 12 Source: 2013 Global Manufacturing Competitiveness Index by Deloitte Touche Tohmatsu Ltd. And the U.S. Council on Competitiveness
Prime Office Occupancy Costs A$/sq ft/annum 300 250 275 249 200 201 166 164 150 100 50 105 83 71 47 36 34 - Source: CBRE Prime Office Occupancy Costs, Q3/2013 as of December 18, 2013 Note:US$1=Bt30.73 and A$1=Bt29.69 in 2013
Wage Comparison Wage Levels (US$) 100 90 80 70 60 50 40 30 20 10 0 92.4 54.8 49.6 42.8 33.3 4 21.5 20.9 17 14.6 Gross Net 8.5 8 7.9 7.6 Tokyo Seoul Dubai Hong Kong Taipei Kuala lumpur Shanghai Beijing Bangkok Mumbai Manila Jakarta Delhi Cities ranked according to gross value of index. New York = 100 Source: UBS/Prices & Earnings update September 2012
Low Corporate Income Tax 2013 Percent 40 35 30 25 20 15 17 20 20 25 25 25 26 30 30 35 10 5 0 Singapore Thailand Cambodia Vietnam Malaysia Indonesia Source: KPMG ASEAN Tax Guide, as of 2013
Thailand offers Best Expat Experience and a Low Cost of Living Top Destinations for Expat Experience 2013 by HSBC 1. Thailand Thailand has been chosen as the best country in the world for Overall Expat Experience & Overall Quality of Life Source: Expat Explorer Survey 2013, HSBC
IPR Framework Thailand has 8 intellectual property-related laws, all of which are consistent with international standards: Copyright Act of 1994 Patent Act of 1979, as amended by the Patent Act (No.3) of 1999 Trademark Act of 1991, as amended by the Trademark Act (No.2) of 2000) Act for the Protection of Layout-Designs of Integrated Circuits 2000 Trade Secret Act of 2002 Protection of Geographical Indication Act of 2003 Plant Varieties Protection Act of 1999 Traditional Medicine and Practice Act of 1999 14
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
GMS Infrastructure Development North-South Corridor North-Eastern Corridor East-West Corridor Southern Corridor Central Corridor Southern Coastal Corridor Source: NESDB as of Jan 20,2009
Free Trade Agreement 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 Note: * Thailand, Malaysia, Indonesia, Philippines, Singapore and Brunei only.
ASEAN Economic Community(AEC) 2015 AEC A Single Market & Production base Transform ASEAN into a stable, prosperous and highly competitive region with equitable economic development, and reduced poverty and socio-economic disparities Free flow of goods Free flow of services Free flow of investment Free flow of capital Free flow of skilled labor Source: Reaping the benefits of AEC &,www.asean.org, as of December 2009
Investment Promotion Policy 19
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.
BOI SUPPORT SERVICES Intensive information 1-Stop for visas & work permits: work permits in 3 hours Industrial Subcontracting Services Global Sourcing program (BUILD Unit) ASEAN Supporting Industry Database Interaction with other govt. agencies on behalf of investors Country desks Overseas offices 21
Success Stories of Canadian Companies
Sectors of Opportunity Agriculture and food processing Automotive Biotechnology Target Industries Machinery Target Industries Alternative energy Aerospace E&E
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 25
2014 Current Status of Aviation Industry in Thailand COMMERCIAL AIRCRAFT 200 386 PRIVATE AIRCRAFT *The figures as of Mar 2014 Source: www.aviation.go.th as of Mar 2014 26
Incentives for Manufacture, repair or conversion of aircraft, including aircraft parts and equipment or onboard equipment Classified as priority activity of special importance and benefits to the country Eight-year corporate income tax exemption for all zones (NOT subject to the corporate income tax exemption cap) Exemption of import duties on machinery for all zones Exemption of import duties on raw material for export product
Example of Projects for Aircraft Parts Manufacturing in Thailand Company Product & Capacity Weston (SAE) Co., Ltd. Primus International Bangkok Co., Ltd. Ducommun Technologies (Thailand) Co, Led. Drissen Aircraft Interior Systems (Thailand) Co., Ltd. Aircraft Engine Part e.g. blade - Aircraft Parts - - Composite Aircraft Parts -Aircraft Microwave Switch - Aircraft Components Gallery and Air Cargo Equipment MRAS (Asia) Co., Ltd. Aircraft Engine Parts Leistriz (Thailand) Ltd. Blade for Aircraft with Source: Board of Investment, April 10, 2012
Example of Projects for Aircraft Maintenance (1/2) Company Product & Capacity MJETS MAINTENANCE AVIA SATCOM CO., LTD. THAI AVIATION INDUSTRIES CO., LTD. CHROMALLOY (THAILAND) LTD. TURBINE SERVICES (THAILAND) LTD. TRIUMPH AVIATION SERVICES ASIA LTD. Aircraft Maintenance Avionic Maintenance - Aircraft Repairing - Aircraft Engine Repairing - Calibration (aircraft) - Repair of Aircraft Component Repair of Aircraft Component Repair of Aircraft Component: 60,000 pcs. Repair of Generator Component: 10,000 pcs. Repair of Aircraft Component: 320,000 pcs. Source: Board of Investment, April 10, 2012
Company THAI AERODYNAMICS CO., LTD. GE ELANO ASIA LTD. BANGKOK AIRWAYS CO., LTD. Example of Projects for Aircraft Maintenance (2/2) Product & Capacity Repair of Aircraft Component Manufacture & Repair Aircraft Component and Parts - Repair of Aircraft - Repair of Aircraft Component MRAS (ASIA) LTD. GKN AEROSPACE TRANSPARENCY SYSTEMS (THAILAND) LTD. Source: Board of Investment, April 10, 2012 Repair and Produce the Aircraft Engine Parts Manufacture & Repair Aircraft Window Wing Tip Lenses Seal for Aircraft Window Fabric Edge for Aircraft Window
Major Companies in Thailand
Thailand s Automotive Industry Overview in 2012 Thailand: 9th largest automobile producer in the world in 2013 Target: To manufacture 3 million units in 2017 (2013 produced 2.46 mil. units, export 1.13 mil. units to 150 countries) Output: 14 assemblers with a combined production of more than 2,000,000 in 2012 (17 assemblers in 2014) High local content : 80-90% for pick-up and 30-70% for passenger car Source: TAI
World s Automotive Production 2013 (Units of production) World s Production: 87.24 Million (+3.6%) Thailand : 2.46 Million (+0.14%) #9 in Worlds Automotive Production #1 in ASEAN for Automotive Production Source: OICA as of Mars, 2014
Estimate Production Capacity Brand 2012 Add Capacity 2015 Toyota 700,000 200,000 900,000 Ford & Mazda 500,000-500,000 Mitsubishi 400,000 100,000 500,000 Isuzu 220,000 100,000 320,000 Honda 240,000 180,000 420,000 Nissan 220,000 150,000 370,000 Suzuki 135,000-135,000 GM 160,000-160,000 Others 80,000-80,000 TOTAL 2,675,000 730,000 3,405,000 Forecasted by TAI
Strength of Thai Automotive Industry Top 100 Global Suppliers Active in Thai Automotive Industry Japanese Global Suppliers Other Global Suppliers 2. Denso 4. Aisin Seiki 13. Yazaki 15. Sumitomo 16. Toyota Boshoku 18. Calsonic Kansei 19. JTEKT 20. Hitachi 28. Toyoda Gosei 33. NTN 34. NSK 35. Mitsubishi 39. NHK Spring 40. Koito 41. TS Tech 43. Takata 46. Bridgestone 49. Tokai Rika 57. Showa 61. Mitsuba 66. Asahi Glass 72. Stanley 74. Akebono Brake 82. Sanden 84. F-Tech 92. Alpine 94. Pioneer 98. Omron 1. Robert Bosch 3. Continental 6. Faurecia 7. Johnson Control 8. ZF 11. TRW 12. Delphi 14. Lear 17. BASF 21. Valeo 22. Visteon 23. Autoliv 25. Mahle 27. Dana 31. BorgWarner 36. Teneco 44. Federal-Mogul 47. Michelin 50. GKN Driveline 52. Goodyear 56. Grupo Antolin 58. Bayer 59. TI Automotive 65. Draexlmaier 67. American Axle 73. Rieter Auto. 84. F-Tech 86. Hayes Lammerz 93. 3M 28/29 Companies 29/71 Companies 35
BOI s Priority Activities For Automotive Parts Industry Manufacture of the following is classified as priority activity ABS Substrate for catalytic converters Electronic fuel injection systems Automobile transmission Battery for electric-powered vehicles Traction motor for automobile such as hybrid or fuel cell cars Electronic Stability Control(ESC) Regenerative Braking System Electric air conditioning system for automobile Rubber tires for vehicles Aircraft tread tires Machinery and Equipment 8-yr CIT Exemption All Zones Import Duty Exemption on Machinery Source: Guide to BOI 2013, Apr 1, 2014
Alternative Energy in Thailand National Policy to Promote Alternative Energy Target : To increase share to 25% by 2022 Biomass Biogas Wind Solar Garbage Water Bio Diesel Ethanol
Thailand:Top of the Food Processing Country One of 5 net food exporter countries No. 1 producer & export of natural rubber, cassava/tapioca, frozen shrimp, canned pineapple No.2 exporter of sugar, top exporter of rice No.1 producer of ethanol in Asia, leader in renewable energy development in ASEAN Abundant of biomass, agriculture waste
Thailand: Regional Medical Hub World class hospital services, high-quality medical treatment with Thai hospitality Thai doctors study abroad, speak international languages and are among the best in the region Supporting facility: Lab test services Health tourism increased over 200% in last few years, more than 3 millions foreign patients get services in Thailand each year, becoming the largest in Asia Good opportunities for medical device and biotechnology
Thank you