(1)

Mr. Sakchai LuangsathitkulSenior Investment Promotion Officer

Thailand Board of Investment23 April, 2008

Investment Opportunities Investment Opportunities in Thailandin Thailand

(2)

Outline of Presentation

ï Current Investment Environment

ï Overview of BOI Policies and Investment

Incentives

ï Investment Opportunities

ï New Investment Strategies

(3)

Strong Net Applications Value

US$17.8

US$8.4

Billion US$

US$17.3

US$15

US$6.9

35 bt / US$

2002 2003 2004 2005 2006

US$ 20

2007

(4)

Major Foreign Investors (2002-2007) (Applications for Investment Privileges)

91(US$2.6 Bn)

Japan EU USA0

200

600

221(US$6.3 Bn)

244 Bht(US$6.4 Bn)

Taiwan

400

Billion Baht with approximate US$ values 35bt/$US

TOP TOP 3 3 : : Japan Japan , , EUEU, , USAUSA

744(US$21.2 Bn)

25(786 mil USD)

South Korea

800

(5)

Chemical

E&EAuto

MetalAgro

Services

Fashion

Number of Projects

Units : Billion USD

0200400600800

100012001400

178105241

235118289

15580245

211151

3221,291 1,318

2549 2550036

125

315

15

24520

2549 2550

1

Projects Investment

Value of Investment Promotion ApplicationsBy Industry year 2006 and year 2007

912151821

(6)

ChemicalE&EAuto

MetalAgro

Services

Fashion

0.20.2

0.30.50.6 0.2

0.51.6

020406080

100120

2.13.2

47 364 9

21 17

42 40

39 34

19 27

49 69

0

50

100

150

200

250 221 232

Jan - Feb2007

Jan - Feb2008

Jan - Feb2007

Jan - Feb2008

Projects Investment

Value of Investment Promotion ApplicationsBy Industry Jan-Feb 2007 and Jan-Feb2008

Units : Billion USD

0.2

(7)

0 Total Japan Eu USA ASEAN

31.5

9

15

4.53.3

2

1

2.6

1.11.31.2

20Billion USD

4.5

10

20062007

Major FDI Investment Year 2006 and Year 2007

SOUTH KOREA

350Mil USD157

Mil USD

(8)

South Korean Promoted Companies in Thailand

Sky Star Airways

P&Z Medical Resort

LG Electronics

Company

Retirement homes and care centers (190 units)

TV :Plasma, cathode ray tube, projection

Activity

Air transportation (3 airplanes)

Samsung Electro-Mechanic

Digital Camera, Electronic Tuner, Radio Frequency Unit (RF-Unit) ,Transformers, Deflection Yoke

Mr.Han Sung Choi CNG cylinder (120,000 units)

(9)

Laos PDR16410

1339

1238

Vietnam91Canada7

China83United Kingdom6

Taiwan50Denmark5

30Hong Kong4

24United States3

Thailand15New Zealand2

Japan12Singapore1

Source: World Bank Study: Doing Business in 2008

Trading across borders

Dealing with licenses

Paying taxes

Criteria

Investor protection

Registering property

Closing a business

Access to credit

Enforcing contracts

Hiring and firing workers

Starting a business

World Bank’s Ease of Doing Business

Australia

Ireland

Iceland

Korea

Malaysia

Philippines

Indonesia

(10)

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

Laem ChabangSeaport

DonmuangInternational

Airport

SuvarnabhumiInternational

AirportKlong Toey :TEU 1.4 mn./yr

Laem Chabang:TEU 3.8 mn. 10 mn.

Map Ta Phut: 21.4 Mn.Tank farms

(11)

qNo restrictions on foreign currency

remittances

qNo export requirement

qNo foreign equity restrictions in

manufacturing sectors

qNo local content requirement

Liberal Investment Policy

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TAX INCENTIVESTAX INCENTIVES

ïï Corporate income tax Corporate income tax holidays up to holidays up to 88 yearsyears

ïï Import duty reductions Import duty reductions or exemptions on or exemptions on machinery and raw machinery and raw materialsmaterials

NONNON--TAX INCENTIVESTAX INCENTIVES

ï Land ownership rights for foreign investors

ï Permission to bring in foreign experts and technicians

ï Work permit/visa facilitation

Basic BOI privileges and incentives

(13)

Zones Sector Matrix:Incentives to strengthen

competitiveness

Strategic or Priority Industries

Maximum incentives regardless of zone or

locationExample : S&T Businesses

SoftwareMould & Die

Zone-Based Incentives:Lower to higher Zone 1 ? Zone 2 ? Zone 3

BOI Zone Based IncentivesBOI Zone Based Incentives

(14)

3 years3% or at least 450 million baht

2 years2% or at least 300 million baht

1 year1% or at least 150 million baht

Add. Income Tax Exemption, No cap

% of First Three Yearsí Sales

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.

(15)

Science & Knowledge Based

Value Chain

1

2Missing Links

(Forward & Backward)

3

High V.A.

4

Ind

ust

ry /

Ser

vice

Strengthening

Value Creation Investment Strategies

Existing

Existing New & Cluster

(16)

Investment Opportunities

• Automotives• Electronics and Electrical• Agro-Industry• Alternative Energy

(17)

Auto & Auto Parts Industries

Thailand: Automotive Hub of Asia

(18)

q2006 production ~ 1.176 million units qExport ~ 539,000 units qLargest in South East Asia qCapacity of 2.0 million units in 2010 qWorld’s second largest production of

one-ton pickup trucks 800,000 units in 2006

Thailand : Automotive Hub of ASEAN

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Thailand : Automotive Hub of ASEAN

q 2007 production ~ 1,301,116 units q One-ton pickup trucks

production ~ 948,370 unitsq Export ~ 690,100 units

(20)

Thailand : Automotive Hub of ASEAN

q17 assemblers from Japan, US, and Europe qOver 700 first-tier suppliers q1,200 second and third-tier suppliers q2007 motorcycle production ~ 1.6 millions

units

(21)

Electronics Electronics & & Electrical ProductsElectrical Products

Integrating Innovation Integrating Innovation & & TechnologyTechnology

(22)

qExported US$42 billion in 2006, 1/3 of total exports(US$129.7 billion)

qExported US$47.2 billion in 2007,1/3 of total exports (US$152.4 billion)

qMajor products: ICs, PCBs, TVs, air conditioners & other white goods

qOne of world’s largest producers of HDDs qStrong supporting industries for electrical

appliances Compressors, motors, plastic and metal parts

Electronics and Electrical Industry

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Investment Opportunity in EInvestment Opportunity in E&&EE

Midstream

HIGH

LOWUpstream Downstream

Ind

ust

rial

Val

ue-

Ad

ded

Industries

IC

PCB

TelecomPCCE

IC Design

Wafer Missing Links

Missing

Link

s

Opportunity in the Missing LinksOpportunity in the Missing Links

Components

Thailand imported E&E parts andproducts US$34 billion in 2007

(24)

Agro-based Industries

Fertile Grounds for InvestmentFertile Grounds for Investment

(25)

Opportunities in Agro-based IndustryWorld’s largest natural rubber producer :

3.1 million metric tons exported in 2006ØOpportunities : Tire, rubber glove & others

Tapioca : 6.8 million metric tons exported in 2006ØOpportunities: Alcohol, biofuel, food additives

Sugar: 2.2 million metric tons exported in 2006ØOpportunities: Lactic acid and alcohol

(26)

Alternative EnergyAlternative EnergyPowering the FuturePowering the Future

Alternative EnergyPowering the Future

(27)

• Biofuels• Solar cells • Energy service companies• Electricity or steam power using alternative energy

sources (e.g. wind, biogas or agricultural materials)

• Energy-saving machinery/equipment or those utilizing alternative energy

• Duty free import of energy-saving machinery/equipment for any promoted project

VSAT station, Thailand

Alternative Energy IndustryPromoted activities

(28)

High Value-Added Services

(29)

Service IndustriesMany opportunities exist in this

growing sector:q IT ServiceqResearch & DevelopmentqScientific LaboratoryqHuman Resource developmentqRegional Operating Headquartersq International Procurement Office (IPO)qLogistics service providers and logistics parksqAircraft maintenance

(30)

Approved Investments in Alternative Energy

qEthanol: 34 Projects 2,873 Million litres/yr

qBiogas: 18 Projects 46.2 Megawatts

qSolar Cells: 3 Projects 101 Megawatts

qWind Power 3 Projects 220 Megawatts

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Investment Promotion Strategies:Thailand Investment Year

(32)

Thailand Investment Year

• Auto parts and supporting industries for Eco-Car and automotive

• HDD & parts, E&E, ICT as well as software and services

• Well-being industry, tourism, healthcare , movie production and entertainment sectors

• Investment in the missing links along the value chain

1. Investment in Current Competitive industries

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• Knowledge-based and high-tech industries, biotech, bio-degradable material, RFID, LED, and LCD panels

• Renewable energy industries, such as ethanol, bio-diesel, bio-gas, solar energy, and wind power

• Encouraging investment in higher technology and high-tech industries

2. S&T and Future Industry Development Thailand Investment Year

(34)

• Southern Seaboard infrastructure development for petrochemical, steel, energy, food, shipyards and Tourism industries

• Developing the logistics system and ports linking the East and West shores

• Promoting investment in the strategic industries especially high quality steel production

3. Industrial Infrastructure Development And Investment For Future Industrial Expansion

Thailand Investment Year

(35)

• To adopt modern technology, improve efficiency, saving energy and be more environmental friendly

• Encouraging investment in R&D, HRD and IT systems

4. Investment Support To Improve Competitiveness

Thailand Investment Year

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1. State of the art steel technology

2. Continuing investment in R&D

3. Environmental friendly with high standard

in pollution control system

4. Good corporate governance, corporate

social and community responsibility

Investment Policy to Promote Upstream of High-Quality Steel Industry

(37)

BOI Support Services:

Sectoral Divisions to guide you through the process

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 Vendors meet customers program

(BUILD Unit)

Investment Matchmaker Program

ASEAN Supporting Industry Database (ASID)

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THAITHAILANDLAND OF INVESTMENTOF INVESTMENTThe perfect opportunity

ThailandóEach Piece Fits Perfectly.

www. boi.go.th