11

THAILAND OF INVESTMENTWhere success stories begin

WWW.BOI.GO.THWWW.BOI.GO.TH

22

Ms. Pannee ChengsutthaDirector

Thailand Board of Investment Paris Office

March 22, 2006Milan, Italy

Thailand: Where Success Stories BeginThailand: Where Success Stories Begin

33

•Why Thailand

• FDI Status in Thailand

• Potential Sectors for Italian Investment

• BOI Role and Services

Thailand: Where Success Stories BeginThailand: Where Success Stories BeginThailand: Where Success Stories Begin

44

Strategic Location to World MarketsStrategic Location to World Markets

AFTA

China

Australia

JapanUSIndia

New Zealand

Peru

Bahrain

1/Jan/05

1/Oct/03

29/Dec/021/Sep/04

Double Taxation Agreement with 51 countries including Italy (31 May 1980)

55

ThailandThailand2020LithuaniaJapan10Norway5 15

19

18

17

16

9

8

7

6

United Kingdom

Denmark

Hong Kong

Australia

14

13

12

11

Sweden

Finland

Iceland

Ireland

GermanyCanada4

BelgiumUnited States3

SwitzerlandSingapore2

EstoniaNew Zealand1

Top 20 Ease of Doing BusinessTop 20 Ease of Doing Business

66

UNCTAD survey of world’s over 300 largest transnational corporations, FDI Experts and IPAAsia region has most FDI prospectsSouth KoreaTop 4

MalaysiaTop 5

THAILANDTHAILANDTop 3Top 3

IndiaTop 2

ChinaTop 1

RANK OF FDI PROSPECTS IN ASIA

Thailand #3 Most Attractive Business Thailand #3 Most Attractive Business Location in AsiaLocation in Asia--Pacific 2005Pacific 2005--20062006

Source: UNCTAD 2005: Global Investment Prospects Assessment Report

77

No restrictions on foreign currency remittances

No export requirement

No foreign equity restrictions in manufacturing sectors

No local content requirement

Liberal Investment PolicyLiberal Investment Policy

88

ElectronicsElectronics

AutomotiveAutomotive

Energy & Energy & PetrochemicalPetrochemical

FoodFood

RubberRubber

Excellent Excellent Industrial LocationIndustrial Location

99

Efficient Logistics NetworkEfficient Logistics NetworkSeaport Seaport -- Land Transport Land Transport –– AirportAirport

Laem Chabang Seaport

DonmuangInternational

Airport

SuvarnabhumiInternational

Airport

1010

SuvarnabhumiSuvarnabhumi International AirportInternational AirportThe Biggest and Newest International Airport in South East Asia

Located 30 Km East of Bangkok, 45 minutes from

Eastern Seaboard and Laem Chabang Port

Annual cargo capacity of 1.46 million tons

1st Phase: 76 flights/hour, 45 million passengers/year

Scheduled to open in 2006Scheduled to open in 2006

1111

Investment Applications forInvestment Applications for BOI BOI Promotion Promotion 20012001--20020055

€13.12 bn

2001 2002 2003

3.8

€3.69

€6.09€4.98

2004 2005

€14.51bn

35% 22%

115%Continued Continued

Growth in 2005Growth in 2005

Ex Rate: €1 = 48.56 THB

+11%

1212

Major Sources of Foreign Investment Major Sources of Foreign Investment Applying for BOI PromotionApplying for BOI Promotion (2001(2001--2005) 2005)

Japan USAEU0

100

300

142.9(€2.94 Bn.) 117.7

(€2.42 Bn.)

400

200

Billion Baht with approximate Euro values

TOP 3 : Japan , EU, USATOP 3 : Japan , EU, USA

500 514.6(€10.59 Bn.)

1313

Major Sources of EU Investment in ThailandMajor Sources of EU Investment in ThailandApplying for BOI PromotionApplying for BOI Promotion in in 20052005

Total InvestmentUNIT MILLION €

TOP 3 : NL, UK, GERTOP 3 : NL, UK, GER

No. of Projects

13,9

69,27

6,15

417,66

109,88

0

50

100

150

200

250

300

350

400

450

Fran

ce

Ger

man

y

Italy

Neth

erla

nds UK

14

20

7

32

26

0

5

10

15

20

25

30

35

Fran

ce

Ger

man

y

Italy

Neth

erla

nds UK

Ex Rate: €1 = 48.56 THB

Italy Italy

1414

Warp KnittingWegal Tricotel

Trade and Investment Support Office

NOVAC

Master alloy, metals and solders for gold and silver jewelry industry

LegorProductsProductsCompanyCompany

Italian Companies in ThailandItalian Companies in Thailand

1515“Thailand is a strategic position to access other regional market”

LegorLegor to Set Up First Master Alloyto Set Up First Master AlloyProduction Base in AsiaProduction Base in Asia

1616

Fashion and Jewelry

Auto Parts

Machinery and Equipment

High-value Added Services

Agro-based Products

Potential Sectors for InvestmentPotential Sectors for Investmentfrom Italyfrom Italy

1717

Fashion IndustryFashion IndustryDesigning the FutureDesigning the Future

Leather, Gems & Jewelry, Textiles & GarmentsLeather, Gems & Jewelry, Textiles & Garments

1818

Fashion IndustryFashion IndustryFashion IndustrySoutheast AsiaSoutheast Asia’’s Fashion Centers Fashion Center

Fashion is 1 of 5 Thai Governmentpriority sectors

Many renowned - branded garments, produced in Thailand for USA & EU Markets i.e. Brunet, Triumph, Victoria’s Secret, Marks & Spencer

Many high-end branded jewelry & accessories such as Cartier and Christian Dior are produced in Thailand

Support Industries – 2500 garment firms,450 dyeing, printing and finishing firms,1300 weaving and knitting firms, 150 spinning companies, 18 synthetic fibre manufacturers

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Fashion IndustryGem and Jewelry Gem and Jewelry Capital of Southeast AsiaCapital of Southeast Asia

• Exports reach US$4.75 billion by 2008• Leading exporter of colored gems • No. 2 exporter of fine jewelry after Italy• 50%-80% of World’s Rubies and Sapphires• Renowned expertise in Diamond cutting• Renowned for design and precision

assembly

2020

Garments and TextilesGarments and TextilesInvestment Opportunities in ThailandInvestment Opportunities in Thailand

• Advanced Dyeing and Finishing Technology• State-of-Art Printing Technology• R&D and Technology for innovative and Functional

fibre textile• Commercial fashion designers• Supply chain management technology and

software• Expertise in Fashion Branding and Marketing

for International Markets

2121

Gems and JewelryGems and JewelryInvestment Opportunities in ThailandInvestment Opportunities in Thailand

• Jewelry design and marketing

• International Trading Companies

•Diamond cutting

•Gem and Jewelry products

2222

Auto & Auto & AutopartsAutoparts IndustryIndustryGeared for ExcellenceGeared for Excellence

2323

Strengths of Thai Automotive IndustryStrengths of Thai Automotive IndustryDetroit of AsiaDetroit of Asia

Competitive Manufacturing costs, good and low cost skill laborsClose relationship between 2/3 tier to first tier manufacturers

Capacity to manufacture a wide range of parts Geographical advantage – manufacturing base of major assemblersMarket opportunities: continuous growth, 1 Ton pick up truck, higher local content - World’s Second Largest Production

760,000 units in 2005

2424

AutoAuto--Parts Manufacturers in ThailandParts Manufacturers in Thailand

• Total auto-parts manufacturers: 1,637- Large sized: 15 firms

- Medium sized: 738 firms

- Small sized: 903 firms

• Total employment: 90,000

• Source of raw materials- Domestic: 80%

- Import 20%

2525

Investment Opportunities in Automotive IndustriesInvestment Opportunities in Automotive IndustriesInvestment Opportunities in Automotive Industries

Passenger car enginesFuel injection pumpsTransmissionDifferential gearsAluminum castingInjection nozzlesElectronic systemsProduct testing centers

Mold and die productionAnti-lock braking systemsInstrument clustersR&D and designTurbo chargersCatalytic converters

2626

Machinery and EquipmentMachinery and EquipmentTowards Regional Manufacturing and

Distribution Hub in the Region

2727

Thailand provides:Skilled manpower for R&D and engineering design activitiesMature engineering supporting industry for outsourcing of parts and componentsStrategic gateway to the ASEAN MarketExcellent infrastructure for conducting business

Machinery and Equipment IndustryMachinery and Equipment Industry

33

2828

Machinery and Equipment IndustryMachinery and Equipment IndustryInvestment Opportunities in ThailandInvestment Opportunities in ThailandMachine ToolsPlastic injection machineryPlastic extrusion machineryPackaging machineryMaterial handling equipmentRobotics and factory automation equipmentSpecialized/process machinery or equipment for specific industries

2929

High ValueHigh Value--Added ServicesAdded ServicesThe Land of Smiles at Your ServiceThe Land of Smiles at Your Service

High ValueHigh Value--Added ServicesAdded ServicesThe Land of SmilesThe Land of Smiles

3030

Services Industry

Investment opportunities include:- Testing and Certification Centers- Regional Operating Headquarters*- Trade and Investment Support

Offices*- International Procurement Offices- Human Resource Development

*Only non-tax incentives granted

Services IndustryServices Industry

3131

ThailandThailandKitchen of the WorldKitchen of the World

3232

Thailand: World’s Leader in Agro-Based Products

Top five net food exporter in the world Total Export Value : €6 Billion per year

Leading exporter of natural rubber, rice, cassava, sugar, seafood, canned tuna & canned pineapplesWorld’s largest natural rubber producer#2 Exporter of SugarTapioca production: 5 million tons/year

Thailand: WorldThailand: World’’s Leader in Agros Leader in Agro--Based ProductsBased Products

3333

Investment Opportunities in Agro-based Industry

Food Packaging MaterialsCold storage and cold storage transportationProduction of ready-to-eat foodProducts manufactured from Natural Rubber/TapiocaTrading Centers for Agricultural goodsProduction of farmQuality Standard and Inspection

Investment Opportunities in AgroInvestment Opportunities in Agro--Based IndustryBased Industry

3434

Tax Incentives based on the location of factoryCorporate Tax Holiday up to 8 yearsExemption of import duty on Machinery and Raw MaterialsAdditional incentives for Zone 3 : double deduction from Tax Income on utility and transport costs for up to 10 years

Non-Tax IncentivesLand Owernership rights for foreign investorsPermission to bring in foreign experts and techniciansWork Permit and Visa FacilitationTake or remit foreign currency abroad

What Thailand can offer : Privileges & IncentivesWhat Thailand can offer : Privileges & Incentives

3535

Roles - Attract FDI into Thailand

- Provide incentives to stimulate such investment

Services - Facilitate entry and operations of

investment in Thailand

- Reduce initial investment costs

- Provide business support services

The Office of Board of Investment (BOI) The Office of Board of Investment (BOI) Government Agency under Ministry of IndustryGovernment Agency under Ministry of Industry

3636

Board of Investment (BOI)• Provide information about subcontracting opportunities in

Thailand

• Provide assistance for foreign buyers wishing to buy from Thai

suppliers.

• Preparing investment manual containing technical details and

marketing information, for prospective subcontractors

• Linking sellers and buyers in related businesses

• Maintain website : www.asidnet.org

Thailand: Thailand Thailand

Regional Center for Outsourcing BusinessesRegional Center for Outsourcing Businesses

3737

3838

BOI on the Internet : www.boi.go.th

How to contact us* Royal Thai Embassy, Rome* Honorary Consul General, Milan* BOI Office in Paris

Address: Ambassade Royale de Thaïlande8, Rue Greuze, 75116 Paris, France

Tel: +33 1 5690 2600Fax: +33 1 5690 2602E-mail: par@boi.go.th

* Mr. T. Furlan, MDA, Milan – BOI consultantAddress: Viale Monza 1, 20125 Milano – Tel: +39 2 48194724E-mail: mda@mda.it - tfurlan@mda.it

3939

THAILAND OF INVESTMENTWhere success stories begin

WWW.BOI.GO.THWWW.BOI.GO.TH