Business Opportunities in Thailand

1
Business Opportunities in Thailand

• Nattinee Netraumpai
• Assistant Director
• Thailand Board of Investment
• Frankfurt Office

2
Various Wonders
3
Todays Topics

• Why Thailand
• Renewable Energy
• Environtment
• Seafood Processing
• Biotechnology
• Furniture Industry

4
Why Thailand
5
Strategic Location at the Heart of Asia
6
Global Competitiveness Index 2007-2008
Source World Economic Forum, October 2007
7
Ease of Doing Business
Source World Bank Study Doing Business 2008
8
Most Attractive Economies for the Location of
FDI2007-2009
Source UNCTAD World investment Prospects Survey,
2007-2009
9
Promising Countries for Overseas Business
Operations
Source JBIC FY 2006 Survey Outlook for Japanese
FDI (18th Annual Survey)
10
Number of Surveyed Companies Looking to
Strengthen or Expand in ASEAN-4
Source JBIC 18th Annual Survey Report on
Overseas Operations by Japanese Manufacturing
Companies
11
Renewable Energy
12
Source Bangkok Post 2007 Economic Review
13
Alternative Energy in Thailand
Solar
Biogas
Wind
Bio Cluster
Garbage
Water
Bio Diesel
Ethanol
14
Target of Power Generation usingRenewable Energy
in 2011
15
RE Power Generation Situation (Mid-2006)
Biomass
Wind
2,800 MW (1,761.29 MW)
43 MW (0.55 MW)
-Sugarcane Industry -Biomass power
plant -Community power plant

• Wind farm in south of Thailand
• Hybrid with diesel

Biogas
Hydro
10 MW (4.60 MW)
200 MW (44.33 MW)
Biogas in livestock farm and Agro-industry

• mini/micro hydro plant

Photovoltaic
MSW
100 MW (4.25 MW)
85 MW (25.48 MW)
- Bangkok - Municipality - Industry estate

• - Remote area
• Roof top
• Industry

16
CDM Projects in ThailandClassified by type of
project
Source DEDE 2006
17
Feed-In Tariff for Renewable Energy
18
Photometry and solar energy capacity of country
Solar power development by DEDE Energy
Installation from 1993-2005
19
Solar Potential (Dispersive surface energy)
Average 18.2 MJ/m2/day or 554,070.6 ktoe

• Sourcehttp//www.egat.co.th/re/egat_heater/heater
  _prince.htm

20
Solar Cell Installation
SourceDepartment of Alternative Energy
Development and Efficiency (DEDE), Ministry of
Energyhttp//www.dede.go.th/dede/index.php?id958
21
Solar Energy Utilization by Type
Telecommunication 1,142, 4
PV Battery Charging System 1,401, 4
Water Pump 328, 1
SPP 3,382, 10
Power Generation 25,997, 81
SourceDepartment of Alternative Energy
Development and Efficiency (DEDE), Ministry of
Energy http//www.dede.go.th/dede/index.php?id49
8
22
Solar Energy by Location
SourceDepartment of Alternative Energy
Development and Efficiency (DEDE), Ministry of
Energy http//www.dede.go.th/dede/index.php?id43
0
23
Solar Potential (Dispersive surface energy)
Average 18.2 MJ/m2/day or 554,070.6 ktoe

• Sourcehttp//www.egat.co.th/re/egat_heater/heater
  _prince.htm

24
Solar Cell Installation
SourceDepartment of Alternative Energy
Development and Efficiency (DEDE), Ministry of
Energyhttp//www.dede.go.th/dede/index.php?id958
25
Wind Potential

• Unit Watt/Sq.m.

Source Electricity Generating Authority of
Thailand http//www.egat.co.th/re/egat_wind/egat_
wind.htm
26
Wind speed and direction in Thailand
The mean wind speed is varies from 2.5 m/s in the
Northern part up to 4.0 m/s in the Southern part
of Thailand. Some specific sites of Phuket
Island have been measured and evaluated by EGAT ,
the result show that the monthly wind speed is
varies from 4.0 to 6.1 m/s
Source Electricity Generating Authority of
Thailand http//www.egat.co.th/re/egat_wind/egat_
wind.htm
27
Monthly mean wind speed (m/s) at 36 m. above
ground
Source Electricity Generating Authority of
Thailand http//www.egat.co.th/re/egat_wind/egat_
wind.htm
28
Background
Wind Power Generation Technology has been
introduced in Thailand since 1983. This is mainly
attributed to field test works by Electricity
Generating Authority of Thailand (EGAT). There
are several institutions that concerning in the
field of assessment wind energy,
developing performance testing and monitoring
of wind turbine for generating electricity.
Source Electricity Generating Authority of
Thailand http//www.egat.co.th/re/egat_wind/egat_
wind.htm
29
Source Electricity Generating Authority of
Thailand http//www.egat.co.th/re/egat_wind/egat_
wind.htm
30
Wind Turbine Generator Components
Specification Type NTK 150/25
31
(No Transcript)
32
(No Transcript)
33
(No Transcript)
34
Promthep Alternative Energy Station Phuket Island
Source Electricity Generating Authority of
Thailand http//www.egat.co.th/re/egat_wind/egat_
wind.htm
35
150 kW Wind Turbine Generation

• 1. Total Investment Cost 13,100,000
  Baht.
• 2. Electrical Energy generated
  197,000 kWh/year
• 3. OM 260,000 Baht/year
• 4. Cost of generation (Discount rate 9.5)
• - Without subsidy 9.45
  Baht/kWh
• 5. FIRR 14.00
  

Source Electricity Generating Authority of
Thailand http//www.egat.co.th/re/egat_wind/egat_
wind.htm
36
EGAT plans to install large wind turbine
generation with capacity 750 kWx3 in 2008

• 1. Total Investment Cost 42,843,000
  Baht./set
• 2. Electrical Energy generated
  985,000 kWh/year
• 3. OM 850,000 Baht/year
• 4. Cost of generation (Discount rate 9.5)
• - Without subsidy 6.18
  Baht/kWh
• 5. FIRR 14.00
  

Source Electricity Generating Authority of
Thailand http//www.egat.co.th/re/egat_wind/egat_
wind.htm
37
Future Installation of 3x750 kW Wind Turbine
Generation
Source Electricity Generating Authority of
Thailand http//www.egat.co.th/re/egat_wind/egat_
wind.htm
38
Seafood Processing
39
Food IndustryProduction Domestic Sales
Source Office of Industrial Economics
40
Food Industry Exports
Source Office of Industrial Economics
41
Exports
Q'TY Tons Value M.Baht
Export Markets by Value in 2007
Source Fisheries Foreign Affairs Division
Department of Fisheries http//www.fisheries.go.t
h/foreign/mainexport.htm
42
JTEPA Thailand-Japan FTA
Source Fisheries Foreign Affairs Division,
Department of Fisheries http//www.fisheries.go.
th/foreign/JTEPA.pdf
43
Biotechnology
44
New Incentives for Biotechnology

• Exemption of import duty on machinery and an
  eight-year corporate income tax break without
  investment cap and zone.
• Projects located in science and technology parks
  will receive a 50 reduction of corporate income
  tax for 5 years after the exemption period.

45
Biotech Infrastructure

• National Center for Biotechnology (BIOTEC)
• Thailand Science Park (TSP)
• Research Services
• Kasetsart University
• (Plant Genetic Engineering Unit, DNA
  Fingerprinting Unit, and the Bioservice Unit,
  which provides biomolecular resources for
  researchers from both the public and private
  sectors)

• Mahidol University
• (Microbial Genetic Engineering Unit and Medical
  Biotechnology Center at Siriraj Hospital)
• Chulalongkorn University
• (Marine Biotechnology Laboratory)
• King Mongkut's University of Technology
• (Biochemical Engineering and Pilot Plant Unit)

46
Science Park

• Thailand Science Park an incubation center for
  science-related investment
• Support includes
• Assistance in finding and acquiring technology
• Analytical and technical services
• Intellectual property services
• Quality management services
• Maximum BOI Incentives

• 80 acre park
• lab space
• greenhouses
• accommodations

47
National Biotechnology Policy Framework 2004
2011 (1 of 2)

• Collaborative plan between the NESDB, National
  Science and Technology Development Agency, and
  National Center for Genetic Engineering and
  Biotechnology
• Promotional activities and tax incentive packages
  expected to bring THB 5 billion investment in RD
  and lead to THB 30 billion of revenue a year in
  the sector
• Increase food production to become The Kitchen
  of the World, along with increased safety and
  quality inspection capacity

48
National Biotechnology Policy Framework 2004
2011 (2 of 2)

• Support expansion of biomedical infrastructure
  and human resources, promote locally produced
  health care products
• Applications for agricultural outputs to be used
  in alternative energy production
• Use of biotechnology to promote a self-sufficient
  economy

49
National Center for Biotechnology (BIOTEC)

• Established in 1983
• Part of the National Science and Technology
  Development Agency (NSTDA)
• Allocates approximately 200 million annually
  for research
• 30 for research infrastructure and services
• 70 for direct grants
• BIOTEC have a total of 490 staff members.
• As of 30 September 2005, BIOTEC had a total of
  490 full time staff, of which 63 were devoted to
  research. The number of Ph.D. researchers is 119
  and this is expected to grow to 220 by 2017, the
  majority of which will come from overseas
  education on government scholarships. BIOTEC is
  publicly funded.

50
Research Services

• BIOTEC, through Thailand Science Park, provides
  basic research services
• Private companies and university research labs
  provide specialized services
• TSP offers support importing products not found
  locally

51

• Biotech Specialties
• Agriculture (Rice, Pest resistant Tomato, Pepper
  and other vegetables, Cassava, Ornamental
  Flowers, Shrimp)
• Animal Testing Alternatives
• Tropical Diseases
• Food Handling

52
Furniture Industry
53
Furniture Industry Overview
Source Department of Export Promotion
Thailand Industrial Standards Institute
54
Exports
Source Department of Export Promotion
55
Export Markets
Source Department of Export Promotion
56
Investment Incentives
57
Thailand Investment Year 2008-2009

• Promote industries for the future
• -To promote investment in and hi-tech industries
  such as life science, biotechnology,
  bio-degradable materials, RFID, LED, LCD panels
  etc.
• -To promote investment in alternative energy such
  as ethanol, bio-fuels, biogas, solar and wind
  energy
• -To gear the entrepreneurs towards higher
  value-added and more advanced technology
  development
• Promote the countrys infrastructure to
  accommodate the future industrial expansion
• Southern Seaboard to accommodate the expansion
  of fundamental industries such as petrochemicals,
  steels, energy crops, shipbuilding and tourism
• To push forward the high-quality upstream steel
  industry to accommodate the rising demand of
  automotive, electronics and electrical products,
  food packaging and other related industries
• Promote industrial competitiveness
• -companies to change or upgrade their machinery
  and to develop technology and IT systems in order
  to improve efficiency and reduce environmental
  impacts
• -To promote RD activities among local industry
  and to upgrade the industrial workforce in
  collaboration with educational institutions and
  research centers
• The RD and human resources development in the
  industrial sector by collaborating with other
  agencies such as National Science and Technology
  Development Agency (NSTDA)
• The establishment of incubation centerfor
  product and process development as well as
  research and development cooperation among
  private sector, research centers and educational
  institutions

58
BOI Net Applications
1 Euro 48 Baht
59
BOI Net Applications from Europe
1 Euro 48 Baht
60
Basic BOI privileges and incentives

• TAX INCENTIVES
• Corporate income tax holidays up to 8 years
• Import duty reductions or exemptions on machinery
  and raw materials

• NON-TAX INCENTIVES
• 100 Ownership
• Land rights for foreign investors
• Permission to bring in foreign experts and
  technicians
• Work permit visa facilitation

61
BOI Basic Promotion Packages

• 3 Investment Promotion Zones to promote
  industrial decentralization

Zone 1 2
3 Incentives Lower Higher
62
Incentives by Location

• For projects in Laem Chabang Industrial Estate
  and industrial estates or promoted industrial
  zones in Rayong Province,
• Applications must be submitted by December 31,
  2009
• Applications must be submitted by December 31,
  2009

More Info http//www.boi.go.th/english/about/elig
ible_activities.asp
63
Tax Incentives for Manufacturing of Solar Cell

• Incentives
• Machinery Import Duty Exemption for 8 years,
  regardless of zone
• Corporate Income Exemption for 8 years,
  regardless of zone
• Condition
• Production process must be approved by BOI

64
BOI Bio-tech incentives granted to

• 1. RD and manufacturing activities using biotech
  in seed industry, and in plant and animal
  improvement industry.
• 2. RD and manufacturing activities of
  biopharmaceutical agents using biotech. (For
  example, drugs, vaccines, and therapeutic
  proteins).
• 3. RD and manufacturing activities of diagnostic
  kits and reagents for health, agriculture, food
  and environment applications. (For example,
  diagnostic kits for pure line breeding,
  diagnostics for disease screening, biosensors and
  gene chips.)
• 4. RD and manufacturing activities of
  biomolecules and bioactive compounds using
  microorganism, plant and animal cells. (For
  example, enzymes, probiotics, flavors, monoclonal
  antibodies and recombinant proteins.)

65
Seafoods

• Deep sea fisheries
• Inspection, analysis of diseases of crops,
  livestock or aquatic animals
• Cold storage and cold storage transportation

• Incentives
• Exemption from import duty on machinery,
  regardless of location
• Maximum 8-year corporate income tax holiday,
  regardless of location
• Additional incentives according to zone in which
  project is located

66
Foods

• Food production, preservation or packaging
• Research and Development
• Cold storage and cold storage transportation
• Crop drying and silo facilities using modern
  technology
• Inspection analysis for diseases
• Production of farm and food-processing machinery
• Grading, packaging and storage of plants,
  vegetables, fruits or flowers
• Trading centers for agricultural goods

• Tax Incentives
• Maximum Incentives regardless of location or zone
  for 8 years
• Corporate Income Tax Exemption
• Machinery Import Duty Exemption
• In addition, projects may receive extra zone-base
  incentives including
• Raw Material Import Duty Exemption for up to 5
  years
• Double Deduction from Taxable Income of Utility
  and Transport Costs for up to 10 years in Zone 3

67
Additional incentives for skills, technology, and
innovation (Optional)

• Investment and Expenditures on
• Research and development or design
• Advanced technology training
• Funding of educational and research institutes

Note Corporate income tax holiday may not exceed
eight years.
68
14-17 MAY 2008 BITEC BANGKOK THAILAND
69
BOI Support Services
Sectoral Divisions to guide you through the
process
70
ThailandEach Piece Fits Perfectly.