Presentation file on "Thailand: An ASEAN Hub, A World of Opportunities" by Ms. Ajarin Pattanapanchai, Senior Executive Investment Advisor, Thailand Board of Investment, May 21, 2015 at the Royal Thai Consulate, Chicago

1. Thailand: An Asian Hub, a World of
Opportunities
Ms. Ajarin Pattanapanchai
Deputy Secretary General
Thailand Board of Investment

2. Outline
Thailand in Brief
Competitive
BOI Policy & Services
Investment Opportunities

3. Thailand as the ASEAN Hub

4. 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)

5. 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

6. 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

7. Competitive

8. Highly Ranked
UNCTAD
Thailand 8th top prospective host
economy 2014-2016
World Bank
26th easiest place to do business in the
world and 2nd among emerging
economies of East Asia

9. “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

10. 5.81
5.87
5.94
6.17
6.21
6.6
6.64
7.13
7.24
7.57
7.59
7.65
7.84
7.98
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

11. Thailand’s Cost Advantages
Office 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

12. Wage Comparison
92.4
54.8
49.6
42.8
33.3
21.5 20.9
17 14.6
8.5 8 7.9 7.6
0
10
20
30
40
50
60
70
80
90
100
Tokyo
Seoul
Dubai
H
ong
K
ong
Taipei
K
uala
lum
purShanghai
BeijingBangkokM
um
bai
M
anila
Jakarta
Delhi
WageLevels(US$)
Gross
Net
4
Cities ranked according to gross value of index. New York = 100
Source: UBS/Prices & Earnings update September 2012

13. Top Destinations for
Expat Experience 2013
by HSBC
1.Thailand
Source: Expat Explorer Survey 2013, HSBC
Thailand offers Best Expat Experience
and a Low Cost of Living
Thailand has been chosen
as the best country in the
world for
Overall Expat Experience
& Overall Quality of Life

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

15. (15)
Efficient Logistics Network
Seaport - Land Transport – Airport
Laem Chabang
Seaport
Donmuang
International
Airport
Suvarnabhumi
International
Airport
Map Ta Put
Deep Seaport
Bangkok

16. GMS Infrastructure
Development
North-South Corridor
North-Eastern Corridor
East-West Corridor
Southern Corridor
Central Corridor
Southern Coastal Corridor

17. Investment Promotion
Policies and Services

18. 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.

19. 19
Overseas 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. 20
US Investment

21. Success Stories of US Companies

22. 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

23. THAILAND
INNOVATION
HIGH VALUE-ADDED
GREEN TECHNOLOGY
RESEARCH & DEVELOPMENT
Sustainable Development, More Competitive Economy
New Investment Promotion Strategy Direction

24. 24
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

25. Group Example Activities
A1
8-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
A2
8-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 AActivities (1/2)

26. Group Example Activities
A3
5-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
A4
3-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)

27. Sectors of Opportunity
Target
Industries
Agriculture
and food
processing
Automotive
Machinery
Target
Industries
Biotechnology
Alternative
energy
E&E
High Value
Added

28. • 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

29. 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

30. 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 55
Export 143 179 201 288 303 274 364 383 414 419 491 39
BtBillion
Source: Ministry of Commerce, Mar 13, 2015

31. 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

32. 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

33. 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

34. Leading Auto parts makers

35. Thailand Aerospace Industry

36. 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
39

37. Major Companies in Thailand
For parts manufacturing & MRO

38. • 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 appliances
Compressors, motors, plastic and metal parts
Source:*E&E Intelligence Unit, as of Mar 10
Electronics & Electrical Industry
Major Industrial Sector of Thailand

39. Thailand’s E&E Exports 2014
18,163
7,790
3,979
2,620
1,826
1,516
1,424
1,099
707
1,027
1,178
1,226
952
952
945
0 5,000 10,000 15,000 20,000
Wire & Wiring Harness
Motor
Washing Machine
Printed Circuit
Colour TV
Power Supply
TV Part
Compressor
Radio Broadcast Product
Refrigerator
TV Video Camera
Circuit Breaker
Air Conditioner
IC
Computer & HDD
US$
Million
Source : EEI

40. 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

41. Success Electronic Design Companies in Thailand
Name Category Flagship Products Main
Customers
Designe
rs
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

43. Alternative Energy in Thailand
SolarBiogas WindBiomass
Garbage Water Bio Diesel Ethanol
National Policy to Promote Alternative Energy
Target : To increase share to 25% by 2022

44. Fuel # of Project Capacity
(MW)
Biomass 184 2,558
Biogas 188 561
Solar Farm 221 1,303
Solar Rooftop 143 81
Wind 28 1,468
MSW 18 228
Waste Heat 7 172
Total 789 6,371
BOI Promoted Renewable Power Plants
As of December 2014

45. Thailand’s Top 10 Food Exports in 2014
Jan-Dec,
2014
Exports
Bt933,902
million
Fishery
products
22.2%
Rice and cereals
17.9%
Meat and
products
11.0%
Fruits
10.0%
Sugar and
honey
8.2%
Flour and
starch
3.5%
Cassava pellets
and tapioca chip
3.4%
Non-Alcoholic
drinks
3.0%
Pet foods
3.0%
Others
17.7%
Source: National Food Institute (NFI) as of Feb 17, 2015

46. GMP and International Standard
Good Manufacturing Practices is a
mandatory measure for 54 types of food
products
Strengths of Thai Food Industry
Abundant
Raw
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 million
Minimum Daily Wage Bt300
Source: Thailand Food Industry Outlook, Commercial Section, Royal Danish Embassy, Mar 2011

47. (50)
Support for US Investors
BOI Office New York
7 World Trade Center,
34th Fl., Suite F
250 Greenwich St.
New York NY 10007 USA
Tel: (212) 422 9009
Fax: (212) 422 9119
E-mail: nyc@boi.go.th
BOI Office Los Angeles
611 North Larchmont Blv.
3rd Floor
Los Angeles, CA 90004 USA
Tel: (323) 960 1199
Fax: (323) 960 1190
Email: boila@sbcglobal.net
U.S. Desk @ BOI Headquarters
555 Vibhavadi-Rangsit Rd.
Chatuchak, Bangkok 10900 Thailand
Tel: (66 2) 537-8111 Fax: (66 2) 537-8098
E-mail: head@boi.go.th

48. Thank you