AEC 2015 Impact to Thai Food Industry

byNational Food Institute, Thailand

Outline1. Overview of Thai Food Sector2. Importance ASEAN to Thai Food Sector3. Potential of Thai Food Sector4. ASEAN Economic Community (AEC) 5. Market Opportunity & Challenge6. Conclusion

1. Overview of Thai Food Industry

1. Fish & other seafoods, prev.

2. Rice milling

3. Sugar

4. Slaughtering

5. Dairy products

6. Fruit & vegetables, prev.

7. Coffee and tea

8. Preserving of meat

9. Animal feed

10. Bakery products

Top 10: Food Sector Value Added***

No. Food Factory*

(2010)

No. PersonsEngaged**

(2007)

Total 9,130 870,000

- Small 91% 37%

- Medium 6% 12%

- Large 3% 51%

Food Factory & Employment

Source: * Department of Industrial Works (DIW)** National Statistical Office (NSO) *** Office of the National Economic &

Social Development Board (NESDB)

1. Overview of Thai Food Industry

0

50

100

150

200

250

300

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Billion Baht

0

5

10

15

20

25

30

percent

% to Total Industry Value Added (RHS) Value added of Food & Beverage (LHS)*

12.8%

9.6%

8.6%

6.8%

5.9%

5.8%

5.0%

4.5%

4.3%

15.3%Food &BeveragesOffice,

Accounting &Computing

Motor Vehicles

Radio,Television &

CommunicationFuniture;

ManufacturingRefined

PetroleumProducts

Machinery &Equipment

Chemicals &Products

WearingApparel

Textiles

GDP Composition by Industry Sector, 2009

GDP Food Industry, 1993-2009

Source: NESDB Note: * Constant 1998 price

1. Overview of Thai Food Industry

-505

1015202530354045

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Precent

0

500

1,000

1,500

2,000

2,500

3,000Baht/Month

Per Capital Food & Beverage Consumption (RHS)* % Per Income (LHS) % Real Growth (LHS)% Per Expenditure (LHS)

Source: Calculated from NESDB & IMF Data Note: * Current price

Per Capita Consumption of Food & Beverage, 1994-2009

2. Important ASEAN to Thai Food Sector

1,492 1,563 1,865 2,094 2,115 2,3083,455

4,3343,670

5,126

348 427494

689 752 786

984

1,278

1,135

1,395

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Mill

ion

US$

ImportExport

Thailand’s Food Trade with ASEAN, 2000-2010

Source: Global Trade Atlas

2. Important ASEAN to Thai Food Sector

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2005 2006 2007 2008 2009 2010

Million US$

ASEAN

US

Japan

EU-27

China

Middle East

South Asia

Others

Thailand’s Food Export by Destination, 2005-2010

Source: Global Trade Atlas

Japan14%

ASEAN20%

Middle East4%

South Asia3%

China7%

US15%

Others25%

EU-2712%

Thailand’s Food Export Share, 2010

2. Important ASEAN to Thai Food Sector

Source: Global Trade Atlas

Thailand’s Food Export to ASEAN Country, 2000-2010

0%

20%

40%

60%

80%

100%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

BruneiLaosSingaporeMyanmarCambodiaVietnamMalaysiaPhilippinesIndonesia

2. Important ASEAN to Thai Food Sector

16.4%

11.1%

9.6%

7.0%

5.6%

4.7%

4.0%

2.8%

2.7%

9.7%

26.3%Sugars

Cereals

Miscellaneous Food*

Beverages

Baking Related

Milling; Malt; Starch

Food Waste

Fats & Oils

Fish & Seafood, fresh

Dairy, Eggs, Honey

Others

Source: Global Trade Atlas

Note: * Miscellaneous Food including Sauce & Condiment, Soup, Extracts Of Coffee,

Tea or Mate & Other food preparation

Top 10 Thailand’s Food Export to ASEANby Product Group, 2010

0%

20%

40%

60%

80%

100%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Processed Food* Fresh & Commodity Food**Source: Global Trade Atlas

Note: * including HS 04, 16, 18, 19, 20, 21, 22 ** including HS 02, 03, 07, 08, 09, 10, 11, 12, 15, 17, 23

Thailand’s Food Export to ASEAN, 2000-2010

3. Potential of Thai Food Sector

01 Variety of Raw Material

Potential of Thailand

Food Sector 02 Quality & Food Safety

04 Government Priority

03 Taste Delicious

Global Standards

Thailand Food ForwardKitchen of the WorldValue Creation

01 Variety of Raw Material

02 Quality & Food Safety

Food nameDelicious

Rank Country

Massaman curry 1 ThailandPenang assam laksa 7 MalaysiaTom yum goong 8 ThailandRendang 11 IndonesiaNam tok moo 19 ThailandPho 28 VietnamGoi cuon (summer roll) 30 VietnamChili crab 35 SingaporeStinky tofu 41 Southeast AsiaChicken rice 45 SingaporeSom tam 46 Thailand

ASEAN Food the Most Delicious Food 2011

Source: CNNGO, July 2011

1

19

46

8

03 Taste Delicious

Sustainable & Environment

Value Creation

Cluster Development

Quality & Safety11

22

33

44

04 Government Priority

Consumer, Safety & Trust

4. ASEAN Economic Community (AEC) Blueprint

A Single Market & Production Base

A Highly Competitive Economic Region

A Region of Equitable Economic Development

A Region Fully Integrated into the Global Economy

- Free flow of Goods, Services, Investment, Capital & Skilled Labor- Priority Integration Sectors- Food, Agriculture & Forestry

- Competition policy- Consumer Protection- Intellectual Property Rights- Infrastructure Development- Taxation- e-Commerce

- SMEs Development- Initiative for ASEAN Integration (IAI)

- Coherent Approach towards External Economic Relations- Enhanced participation in global supply networks

AEC 2015

5. Market Opportunity & Challenge

AEC Blueprint Opportunity Challenge

• 10 Country, Single market

• Food demand of 600 million consumers, Economies of scale

• We are well know enough, Our target consumers

• Zero tariffs & removal of NTBs

• Trade expansion

• Free flow of investment

• Relocation, regional cluster

• Elimination of NTBs • Law, regulation &

standard of difference country is challenge to Harmonize

• Production base

• Specialization & the Division of Labor

• To improve the transportation and logistic capacity to efficiently link

• Trade Facilitation • Reduce transaction cost & time, customs clearance

• Ability to integrating customs procedures

5. Opportunity & Challenge…Free flow of Goods (Export)

Source: National Food Institute, Thailand

Note: BN = BruneiKH = Cambodia ID = Indonesia LA = Lao, PDR MY = Malaysia M = Myanmar PH = Philippines SG = Singapore VN = Vietnam

BN KH ID LA MY MM PH SG VN

Condiment

Crispbread01

Export to ASEAN >1,000 Mn.฿ Beer

Coffee

Soy milk

Petfood

02Export to ASEAN

Between 500-1,000 Mn.฿

Instant noodle

Sweet corn

Fish sauce

Biscuit

Oyster sauce

Yam

03Export to ASEAN

Between 100-500 Mn.฿

Yogurt

Bakery flour

Pasta

04Export to ASEAN

Between 50-100 Mn.฿ Salt leaf mustard

Rice bran oil

Potato crisp

Maize flour

05Export to ASEAN

<50 Mn.฿Mineral water

Product Market

Average ranking on the ease of doing business 2011 (1–183)

Source: World Bank, 2011Note: M=MEAN, OM=Over Mean, UM=Under Mean

ASEAN Country Rank 2011 Rank 2010

USA 5 ⇔ 0/OM

JAPAN 18 ⇑ 1/OM

CHINA 79 ⇓ 1/OM

INDIA 134 ⇑ 1/UM

ASEAN COUNTRY

SINGAPORE 1 ⇔ 0/OM

THAILAND 19 ⇓ 3/OM

MALAYSIA 21 ⇑ 2/OM

VIETNAM 78 ⇑ 10/OM

BRUNEI 112 ⇑ 5/UM

INDONESIA 121 ⇓ 6/UM

CAMBODIA 147 ⇓ 2/UM

PHILIPPINES 149 ⇓ 2/UM

LAO, PDR 171 ⇓ 2/UM

5. Opportunity & Challenge…Free flow of investment

6. Conclusion

T MH L YA M A L A Y S I AI O NL P M S

C A M B O D I A IN R R R ND U G

I N D O N E S I AE P

V I E T N A M OR

P H I L I P P I N E S

National Food Institute Ministry of Industry, Thailand

www.nfi.or.th