thailand

THAILAND
INVESTMENT
REVIEW
by The Thailand Board of Investment
May 2009
•
Volume 19
•
No. 4
Board of Investment Adopts Measures
to Stimulate Investment
Bt24 billion in new projects approved
At
WHAT IS THE PROCESS TO OBTAIN A WORK PERMIT? P. 5
its Board Meeting on 21 April, the Board of
Investment revised the conditions governing promotion
of two activities eligible for promotion and expanded
eligibility for the BOI’s Skills, Technology and Innovation
(STI) program. The Board also approved extension of the
import duty exemption period for molds, dies and parts
until Dec 31, 2012.
INDUSTRY OVERVIEW :
THAILAND’S INDUSTRIES WEATHER THE STORM
P. 6
The two activities for which conditions were relaxed were
ship building and repair and solar cell production.
COMPANY SPOTLIGHT :
CS RUBBER
HANKY PANKY TOYS
P. 8
P. 9
COVER
P. 1
NEWS BITES / BOI NET APPLICATIONS
P. 2
BOI OPENS NEW OVERSEAS OFFICE IN BEIJING
P. 4
BOI INVESTMENT MISSIONS
P. 10
INSIDE THE BOI
P. 11
THAILAND ECONOMY-AT-A-GLANCE
P. 12
Projects engaged in ship building and repair, which
previously were required to be located in Zone 2 or Zone
3, are now permitted to locate in Zone 1, under the proviso
that they obtain ISO 14000 certification within 2 years
after starting operations.
Promotion of solar cell production has been expanded to
include upstream activities such as the manufacture of raw
materials, pure silicon (99.9999%), wafer, and transparent
Continued on P. 3
THAILAND INVESTMENT REVIEW
May 2009
NEWS BITES
BOI NET APPLICATIONS
2008
Printing Exports Set to Jump
Printing and packaging exports are expected to grow 25%
to US$3.47 billion as several Japanese and Singaporean
firms have relocated their regional manufacturing centers to
Thailand. According to Thai Printing Association President
Pornchai Rattanachaikanont, Thailand is in close competition
with Singapore to become the printing hub of Southeast Asia.
Auto Sales on the Road to Recovery
A faster-than-expected recovery of vehicle sales in Thailand
and in overseas markets could help the domestic auto industry
hit its yearly production target. “The recovery has come earlier
than our projection, and it is likely to begin in the latter half
of this year,” said Surapong Phaisitpattanpong, spokesman for
the Federation of Thai Industries’ Automobile Industry Club.
Local car sales topped 107,000 units in the first quarter, and
the sector is on track to roll out 1.08 million units in 2009.
2
BOI Sees 6% Increase in Value for Q1
The Board of Investment reported a 6% increase in the value
of new projects seeking investment privileges in the first
quarter of this year, as a total of 228 projects worth 122 billion
baht applied for BOI promotion. Secretary General Atchaka
Sibunruang Brimble is confident that the BOI can meet their
yearly investment goal of 650 billion baht. “In the quarter to
come, we will especially promote investment in electronics,
food, and textiles to promote employment,” explained Dr.
Brimble.
Successful Roadshow in China
A recent investment roadshow to China generated over five
billion baht worth of trade deals. The “business matching”
in Beijing was successful mostly in industries such as plastic
parts, food processing, medical equipment, construction/
industrial works and alternative energy, said BOI Secretary
General Atchaka Sibunruang Brimble. The BOI hopes to see
more trade deals when Chinese businessmen from China,
Hong Kong and Taiwan meet in Pattaya July 26-29 2009.
Korbsak Sees Rebound in Q4
Thailand’s economy should turn around starting in the fourth
quarter of the year according to Deputy Prime Minister
Korbsak Sabhavasu. Assuming that a new second-round
stimulus program is finalized over the next several months,
contracts will begin to be awarded in November, creating up
(US$ = 34.79 THB)
2008 (Jan-Mar)
(US$ = 31.41 THB)
2009 (Jan-Mar)
(US$ = 35.73 THB)
Number of
projects
Value
Number of
projects
Value
Number of
projects
Value
832
8,550
237
2,077
141
410
Agricultural Products
62
486
16
128
15
75
Minerals / Ceramics
30
561
8
302
1
1
Light Industries / Textiles
73
370
23
108
10
20
Automotive /
Metal Processing
214
2,016
59
326
38
161
Electrical / Electronics
144
1,924
34
585
29
57
Chemicals / Paper
103
1,099
21
202
7
32
Services
206
2,092
76
427
41
178
Japan
324
2,960
90
433
56
246
Europe
157
1,878
44
314
31
110
Taiwan
45
212
16
64
7
14
United States
34
215
13
39
11
31
Hong Kong
20
137
5
15
2
2
Singapore
74
1,052
23
532
12
12
Zone 1
263
1,082
77
89
54
91
Zone 2
412
6,027
109
1,714
59
322
Zone 3
157
1,441
51
274
28
112
Total Foreign
Investment
By Sector
By Country
By Zone
Unit: US$ million
Note: Investment projects with foreign equity participation from more than one country are reported
in the figures for both countries.
to 1.6 million jobs over the next three years. Mr. Korbsak said
new jobs created from the program would account for 85% of
total unemployment projected for this year.
THAILAND INVESTMENT REVIEW
May 2009
Continued from P. 1
conductive oxide (TCO) coating glass, in order to increase
the industry’s long-term competitiveness. These upstream
activities will be eligible for maximum incentives.
Dr. Atchaka Sibunruang Brimble, BOI Secretary-General,
indicated that the BOI Board meeting approved the revised
conditions to better attract investors and reflect the changing
economic environment.
The Board of Investment’s Skills, Technology, and Innovation
(STI) provides incentives such as uncapping the maximum
value of corporate income tax benefits and extending the
duration of the corporate income tax holiday based on the
percentage of the first three years’ revenue invested in one of
three activities — Advanced Technology Training; Research
and Development or Design; or Support for an Educational or
Research Institution. Eligibility had previously been restricted
to promoted activities that had not yet generated income.
The Board approved expanding eligibility to include existing
projects that had been granted corporate income tax exemption
under Section 31 and had already generated income. These
projects can apply for STI anytime prior to the expiration
of their corporate income tax holiday and the additional STI
incentives will be added to the existing project’s rights and
benefits.
The expansion of STI to existing projects was in direct
response to feedback from the Joint Foreign Chambers of
Commerce in Thailand and is part of the Board of Investment’s
efforts to become more responsive to the needs of investors to
help them through the global financial crisis.
In accordance with the second set of government stimulus
measures, the Board approved the extension of the import
duty exemption period for molds, dies and parts until Dec
31, 2012.
BOI Approves 10 Projects Worth Bt24 Billion
In addition to relaxing conditions, the Board approved a total of 10 large projects, with cumulative investment value of more
than Bt24.4 billion, led by a Bt5 billion MSG project from Japanese agro-industry giant Ajinomoto, a Bt3.7 billion project
from Thai Vegetable Oil and a Bt3.5 billion glass bottling plant from Ayutthaya Glass Industry. The projects will create 2,075
jobs.
“These projects indicate that despite the impact of the global financial meltdown and domestic political turmoil, investors
continue to find Thailand a good place to do business,” BOI Secretary General Atchaka Sibunruang Brimble said.
Investor
Ajinomoto Co. (Thailand) Ltd.
Ayutthaya Glass Industry Co., Ltd.
Thai Vegetable Oil PCL
Ms. Siriwan Jiarapongse
Auto Interior Products Co., Ltd.
Khon Kaen Sugar Power Plant Co., Ltd.
Siam City Cement PCL
The Siam Nawaloha Foundry Co., Ltd.
F&N Dairies (Thailand), Ltd.
US Boh Thong International Co., Ltd.
Billion Baht
Product
5.345
Monosodium Glutamate (MSG)
3.520
Glass bottles
3.770
3.430
2.078
1.850
1.840
1.295
1.068
.230
Crude soybean oil and animal feed ingredients
Loading and unloading facilities for sea transport
Synthetic rubber parts/plastic parts for automotive
Electricity or steam power
Electricity production from waste heat
Steel casting parts
Dairy products
Recycling and reuse of unwanted materials
3
THAILAND INVESTMENT REVIEW
May 2009
BOI Opens New Overseas Office in Beijing
4
While formal diplomatic relations between Thailand and
China were established in 1975, the two countries have long
enjoyed a strong relationship. As the countries have developed,
they have forged an even closer business relationship, based
on strong collaboration and a common culture and heritage,
and the two countries have become increasingly important
trade partners.
Over the past decade, the two countries had successfully
cooperated and moved forward in many areas; for example,
education, culture, social, and particularly in trade and
investment, reflecting the countries’ closer and friendly
cooperation since then.
Thailand and China have also worked together to promote
bilateral business and investment opportunities, with the aim
to strengthen both countries’ economies. From 1970 until
2008, the BOI approved 264 Chinese investment projects with
a cumulative value of Bt35 billion (US$977 million). Most
of the investment was for projects in light industry, textiles,
chemicals, plastic, agricultural machinery, and alternative
energy. Chinese investment in Thailand peaked in 2007
when the value of BOI-approved applications totaled Bt15.85
billion (US$442 million), the highest level during the past ten
years.
This year, the total value of net applications from China during
Jan-Mar 2009 is around Bt55 million (US$1.53 million), as
the per project value increased compared to the same period
last year.
Leading Chinese companies have found Thailand’s strategic
location to be a competitive strength as they can expand their
business and export markets in the region. Recently, Haier
Electronics, China’s largest home appliance manufacturer
opened its third factory in Thailand. Another major Chinese
investor expressing interest in investing in Thailand is Tsingtao
Brewery Company Limited (beer manufacturer).
In the meantime, the BOI helps Thai entrepreneurs explore
business opportunities in China, as Thai investors are very
keen to tap into the potential of the world’s most populous
nation, especially in light of the
rapid growth of China’s economy,
which translates into high market
potential. To further support this,
the BOI organizes a business
matching program for both Thai
and Chinese entrepreneurs to
meet and discuss their business
initiatives. Successful Thai
businesses in China include CP
Group, which has heavily invested
and successfully expanded its agro
business and its retail market in
China. Other major Thai investors are East Asia Sugar Group
(Mitrphol), Saha Union, Banpu, S.Khonkaen,Thai President
Food PLC, etc.
It can be said that the BOI mission has proven to be fruitful,
having helped with the establishment of many new ventures
and the creation of business partners, which results in a winwin scenario for both countries.
To further promote investment opportunities in Thailand, the
government designated 2008-2009 as Thailand Investment
Year, moving forward in promoting a favorable investment
climate and offering maximum incentives to attract more
foreign investors, including China. For Chinese investors, the
BOI’s major target sectors include machinery and equipment,
metalworking, pharmaceuticals and alternative energy.
As the long-standing business relationship between Thailand
and China continues to grow, the BOI opened its Beijing office
on April 2, 2009 under the supervision of Director Kanokwan
Suthiranad. The BOI’s second office in China will support the
continued development of that relationship as it will provide
investment information and business matchmaking services to
Chinese investors while working to establish a strong network
between Thai and Chinese enterprises to further business
relations.
Despite the global economic downturn, the BOI is proceeding
with its proactive plan to open more new overseas offices later
this year. The next will be in Sydney, scheduled to open on
April 30, followed by Seoul, Guangzhou and Stockholm by
the third quarter of 2009.
THAILAND INVESTMENT REVIEW
May 2009
What is the Process to
Obtain a Work Permit?
Obtaining a work permit for the first
by Michael Doyle
time in Thailand can be a lengthy, fairly
involved process and the applicant will be
required to locate and prepare an extensive list
of documents.
The application process is actually two
applications being processed simultaneously:
i. An application to receive a work permit
from the Ministry of Labor and Social
Welfare; and
ii. An application for a One-Year Non-Immigrant Visa
Extension (“One-Year Visa Extension”) from the
Immigration Bureau.
The work permit is the permission to work in Thailand. The
visa is the permission to reside in Thailand. The applicant must
obtain both. Foreigners normally focus on the importance of
the work permit, but it is the One-Year Visa Extension that is
normally the more difficult of the two to obtain.
The One-Year Visa Extension and work permit are normally
valid for one year from the date the foreign applicant enters
Thailand with a non-immigrant visa (see Section 1 below)
as indicated by the immigration stamp in the applicant’s
passport. After one year, both the work permit and visa must
be renewed.
1. Non-Immigrant Visa
The first step in initiating the work permit process is to obtain a
non-immigrant visa. There are many types of non-immigrant
visas; however, in most cases the applicant will be required to
obtain a Non-Immigrant Type “B” Visa before applying for
the work permit. This visa is quite important because it allows
the applicant to stay in Thailand for the initial ninety days,
and it will serve as one of the supporting documents when the
applicant’s work permit application is later submitted.
There are two separate methods available to the applicant to
obtain a non-immigrant visa. One method is an application
process, recently introduced by the government, for applicants
who have already entered Thailand on a tourist or transit visa.
The other method is an application process for applicants
who are outside of Thailand. This method is normally not
so difficult for the applicant, although it may
be inconvenient. The applicant submits the
application to the Immigration Section of the
Thai Embassy in any country. This process
can usually be completed within one or two
working days.
In addition to the application form for the nonimmigrant visa, the embassy will require the
applicant to submit a signed invitation letter
from the Thailand employer and supporting
documentation. Each Thai embassy has it
own requirements for supporting documentation to obtain the
visa, and their requirements are not uniform.
Also, the time required to process the application varies
from embassy to embassy. Some Thai embassies require as
much as three days to process an application, some only one
day. The amount of the application fee varies as well. The
applicant should, therefore, check in advance with the Thai
Embassy to be visited to determine its particular requirements.
2. Required Documentation for Work Permit and NonImmigrant One-Year Visa Extension
Once the applicant is in Thailand with a valid non-immigrant
visa, he is ready to begin the work permit application process.
Along with the work permit application, the applicant must
submit a list of supporting documents.
Note that the applicant will be required to later produce
another list of documents associated with the One-Year Visa
Extension.
The receiving government officials (both at the Ministry of
Labor for the work permit application and the Immigration
Bureau for the One-Year Visa Extension application) will
normally take a quick look at the submitted documents to see
if they appear to be in order. If so, they will then forward the
individual applications for processing.
3. Thai Staff Requirements
Note that Thai law requires that employers seeking to obtain
business visas for their foreign staff to maintain a minimum
number of Thai staff as set forth below.
Continued on P. 10
Note that if the employer company is promoted by the Board of Investment (BOI) or otherwise qualifies for BOI’s
One Stop Visa and Work Permit service the process is much simpler, and the normal rules stated above will not apply.
Qualifying foreign employees of BOI promoted companies may submit application and related documents to receive both
work permit and visa’s at One-Stop Center for Visas and Work Permits located at 16th Floor, Rasa Tower 2, Paholyothin
Road, Chatuchak, Bangkok 10900 and normally can receive them on the same day as application received.
5
THAILAND INVESTMENT REVIEW
May 2009
INDUSTRY OVERVIEW
Thailand’s industries weather the storm
6
There should be no surprise that while Thailand’s
economy, in the aftermath of the global economic slowdown,
has experienced a similar amount of stress as other countries
around the world it nevertheless enjoyed growth in a number
of industrial sectors during 2008. In fact, the quarterly Gross
National Product (GDP) estimate released by the Office of the
National Economic and Social Development Board (NESDB)
shows 4.0% growth in the third quarter of 2008 and an
estimate for 4.5% growth for the entire year. In a time when
many countries are struggling to come to grips with severe
recession, Thailand’s modest growth is a tribute to the strong
foundation of its liberal business-friendly economy.
The strength of Thailand’s exports is evident in its
US$305,685.3 million in total trade between January and
October of 2008, representing a 27.7 % increase, year over
year. The country’s export value alone during this period
showed a 21.7 % increase, with a value of US$151,192.1
million. And, while demand from markets in the US, EU
and Japan began to drop-off in the last quarter of the year,
there was a concurrent drop in the global price of oil. The
average crude oil price (Dubai) was at US$100 per barrel for
all but the final month of the year, at which time it dropped to
US$44.13 per barrel. This was a real benefit to the economy
of a country such as Thailand, which is a net oil importing
country, and to several of its industrial sectors that had seen
costs of production increase over the year as oil hit record
prices.
In the face of exogenous economic challenges, Thailand’s
industrial sector managed to achieve a respectable growth.
This is clearly reflected in the Office of Industrial Economics
(OIE) Manufacturing Production Index (MPI), covering 53
industrial categories, which shows a 7.8 % increase (value
added) from January through October, year over year,
increasing from 169.7 to 183. And the estimate for the full
year is for an increase of between 6 – 7 %, with challenges
remaining for the coming 2009 period.
Among the main items contributing to this robust growth was
the manufacture of machinery for offices, accounting and
computing, such as hard disk drive (HDD) manufacturing, as
well as automotives and electronic tubes and parts. It should
be recalled that Thailand is the world’s largest manufacturer
of HDDs, a top-ranked auto and auto parts manufacturer,
and of electronics, and that in 2008 the Board of Investment
approved a Bt.15.26 billion project by Western Digital, one of
the world’s premier manufacturers of HDDs.
Thailand’s production of electrical appliances and electronics
last year is projected to show 20% growth, with the more
solid gains being made in the first two quarters of 2008. The
late year deceleration of exports to traditional markets in the
United States, European Union and Japan was compensated
for with a shift into secondary markets. While it is anticipated
that demand for hard disk drives and semi-conductors will
be challenged from the macroeconomic decline in Thailand’s
primary markets, production growth within the electronics
industry is forecast to remain marginally positive during 2009.
The export value among chemical products has seen mixed
results, with an 11.71% increase of miscellaneous chemical
products, a 32.06% increase of chemical fertilizers and a
0.83% increase of paints. Going forward in this sector, like
the petrochemicals sector, will continue to experience the
challenges posed by the economic situation, and also from
a potential increase in production costs from the Regulation
on Registration, Evaluation, Authorization and Restriction
(REACH), which has been in effect since June 2008 with
the aim to make the chemical industry more environmentally
friendly.
Thailand’s iron and steel production increased by 4.32% in
2008, with its domestic demand rising by 13.16%. At the
end of 2007 the BOI issued guidelines to promote investment
in the manufacturing of high-quality upstream steel, with a
view to supporting the growth of its automotive, electrical
appliances and electronics industries and reducing the nation’s
dependence on imported steel. It was forecast at that time that
the demand for high quality steel would increase by 25 tons
per year over the subsequent 10 years. In 2008, the import
value of iron and steel increased by 59.85 %, with a like
volume increase of 21.18 %. At the same time the value of
exports increased by 10.14 % while export volumes decreased
by 11.12 %.
The automotive industry, one of Thailand’s strongest industrial
sectors employing about 300,000 people, continued to show
strength and saw a 12.88 % increase in production for the first
10 months of 2008. In fact, the annual production is predicted
to hit 1,428,000 vehicles or a 10.93% year over year increase.
Leading the increase at 70 % is the production of 1-ton pick-
THAILAND INVESTMENT REVIEW
May 2009
up trucks, followed by passenger cars at 29 %. The sector has
also seen an increased demand from both its primary markets
and from new markets, although 2009 will likely be more
challenging.
Increased export value in 2008 was also noted in plastic
products, rising 5.5 %, with the top three performers being
films, foils and strips; bags and plastic sacks, and plastic
tableware, increasing by 4.71 %, 8.21 % and 6.59 %,
respectively.
Thailand’s food industry, which enjoys one of the most
advanced processed food sectors in Southeast Asia, continued
to enjoy positive growth in 2008 with overall production
growth expected to be 2.7 % as a consequence of higher world
food prices in the second and third quarters. This sector is also
looking forward to another positive year in 2009, with food
production anticipating 3.6% growth. Thailand’s primary
export markets remain Japan, the United States, European
Union and China, reflecting the global confidence in the
quality and safety of its agriculture products.
With those markets under stress, in a proactive initiative
to respond to the challenges of slowing world economic
growth, the Department of Export Promotion has issued its
Export Promotion Strategy Plan for 2009 to explore expansion
into secondary markets. The aim of this Plan is to promote
agriculture and food exports within the region to Thailand’s
ASEAN neighbors, and throughout the world to countries
such as China and India, as well as to markets in the Mid-East,
Eastern Europe and Africa. The combined value of exports
to these countries and regions reaches a total of 65.3% of
Thailand’s total exports. Additional measures to meet the
challenge include encouraging entrepreneurs to increase their
overseas investments, in coordination with the Export-Import
Bank of Thailand.
Rubber production likewise was on track for a healthy year,
increasing by 7.38%, with particular strength exhibited in the
production of block rubber. Prices for most of the year were at
unprecedented levels, until dropping off in the fourth quarter.
With difficulties in foreign auto industries, it is anticipated that
2009 will see some challenges as demand for the production
of tires may be deferred.
Industries that were not as robust in 2008 include
pharmaceuticals, which saw production down by 2.2% for
the year. Despite the global economic forecasts, however,
production volume and domestic distribution of medication
and pharmaceutical products looks to increase by a slight
margin in 2009. In part, this is due to the fact that basic
necessity drugs are not usually subject to economic swings,
and by the increased demand that was created with Thailand’s
Universal Health Coverage Scheme. Also contributing to
growth forecasts is the anticipated increase in demand in the
generic drug market.
Cement production was also slightly challenged in 2008,
although clinker production is forecast to have been 39.26
million tons and cement production (excluding clinker) at
35.29 million tons. Looking ahead into 2009, guidance will
depend on how rapidly the construction and real estate markets
manage to rebound, along with the delayed government
spending in public utility projects and so-called mega-projects.
Textiles and Wearing Apparel, along with Wood and Home
Furniture, and Paper Fiber, Paper and Printing Materials,
were also among those industries that saw production levels
decrease in 2008. Contributing to the decline experienced for
many of these products was the unusually high price of oil
for much of 2008, which has declined from its peak average
by approximately US$50 per barrel. In 2009, the production
and distribution of textiles looks to rebound by at least 5%.
Contributing to textile and ready-made clothing purchases
is the Japan-Thailand Economic Partnership Agreement
(JTEPA), which should increase exports to Japan by more
than 20%. Likewise, upstream textile production is expected
to increase by at least 8% over 2009.
Despite macro-economic conditions and a slowdown in
the domestic real estate market, the production of ceramic
construction materials increased last year, due largely to
continuing healthy exports. The production of floor and wall
tiles saw an increase of 4.79% and sanitary ware increased by
4.81%. In reaction to the global economic conditions, it is
anticipated that production for the 2009 year will focus mainly
on the domestic market.
Rounding out the industrial sector overview is Gems and
Jewelry, which had an increase in value during 2008 of
38.49%, despite a drop in production. As with the previously
mentioned sectors, Gems and Jewelry production in 2009
is set to benefit from the lower prices of oil, in addition to
expansion into markets in China, India, the Middle East and
Russia.
All in all, the past year was a marked success for Thailand’s
industrial production. The challenges of the strong global
headwind for 2009 will be met with continued government
support and cooperation with the business community, with
the BOI’s new measures to encourage businesses of all sizes
and across all industries to increase their production efficiency
through production technology upgrades being one measure
of that cooperation. The markets for Thailand’s manufactures
continue to expand and strengthen, particularly as its products
have achieved world standards, and the future looks bright for
those investing today.
7
THAILAND INVESTMENT REVIEW
May 2009
COMPANY SPOTLIGHT
CS Rubber
to attend SUBCON Thailand 2009
This month’s upcoming SUBCON
Thailand 2009 Industrial Subcontracting
E x h i b i t i o n i s t h e r e g i o n ’s p r e m i e r
subcontracting event. Put on by the BOI
Unit for Industrial Development (BUILD),
along with CMP Media (Thailand), it has
been one of the Board of Investment’s greatest success stories,
as every year a few hundred subcontractors from several
different industries gather to network and discuss potential
business deals. Just last year the exhibition generated more
than 2.5 billion Baht worth of transactions, a great stimulus to
the Thai economy.
8
One company that will be participating in SUBCON Thailand
2009 is CS Rubber Industry Co., Ltd., a leading supplier of
rubber compounds and products and polyurethane products
for the automotive, electrical appliance, and sporting goods
industries. This will actually be the third consecutive year
that CS Rubber has attended SUBCON Thailand, and they are
optimistic that their participation will once again bear fruit for
their company.
Taiwanese contingency, elaborated on their
decision to invest in Thailand.
“Thailand as a country has extensive
experience in the rubber industry, and it
seemed like a better fit here than in either
China or Taiwan. We actually used to source some of our
raw materials from different members of Charoensin Group,
so when we decided to set-up shop in Thailand, we already
had a well-established relationship with them. Moreover, the
fact that Thailand’s government is so receptive of foreign
investment and that the Thai people are generally easy to work
with were both positive factors.”
While CS Rubber exports a significant number of their products,
their primary focus is on local manufacturing. Approximately
70% of their production is for domestic purposes, though
much of that goes on to eventually be exported. Mr. Chen
cited this as yet another reason why he believes participating
in SUBCON Thailand is so important, as the majority of the
buyers present are Thai.
Explained Mr. Jerry Chen, CS Rubber’s Deputy Managing
Director, “SUBCON Thailand has been great to us. The venue
is excellent, and the exhibition’s attendance is increasing
every year. The past two years have generated significant
business for our company either through deals completed
directly at the event, or through the establishment of business
relationships that resulted in future deals. We expect more of
the same this year.”
This is not to discount CS Rubber’s exports, however. From
their 250 employee factory in Cholburi, the company exports
to China, Japan, the United States, and Europe. They are
currently hoping to expand their level of business in China,
where they see tremendous opportunity for growth. If they are
successful in this goal, CS Rubber will look to expand their
production capacity in Thailand. According to Mr. Chen, the
BOI has been a great help in this regard.
CS Rubber was established in July 2004 as a 70-30 joint
venture between Charoensin Group and a Taiwanese
investment group. Mr. Chen, as a member of CS Rubber’s
“The BOI has helped us to participate in many overseas
tradeshows, including in China. The BOI and BUILD assist
Subcon Thailand 2009
Subcon Thailand 2009 is scheduled to be held at Bangkok
International Trade and Exhibition Center (BITEC), from
13 – 16 May 2009. This industrial subcontracting exhibition
annually features about 300 industrial subcontractors and
provides buyers with the opportunity to view a wide range
of locally manufactured parts and components. In addition to
the subcontracting exhibition, there will be a comprehensive
program of seminars and business matchmaking running
alongside the exhibition. The business matchmaking program
has been specially designed for buyers who are sourcing
for parts and components in Thailand or looking for Thai
business partners. Prescheduled one-on-one meetings will be
arranged for buyers to meet with suppliers who fulfill their
requirements.
Continued on P. 11
THAILAND INVESTMENT REVIEW
May 2009
COMPANY SPOTLIGHT
Hanky Panky Toys
The success of Hanky Panky Toys has
not been due to magic or tricks. Rather,
their rise to the top can largely be attributed
to an unwavering commitment to honesty,
which has allowed them to earn the trust
and loyalty of their customers.
Hanky Panky Toys originated when a
customer requested a magic box from Jack Monshouwer, who
at the time was involved in the wholesale of small toys in
Amsterdam. Seeing the tremendous opportunity in this as of
yet untapped market, Mr. Monshouwer got together with some
friends and a few magicians, and in 1961, the first Hanky
Panky magic boxes appeared in the Benelux and French
markets. With that, magic for the mass market had been
created. Now, 48 years later, Hanky Panky Toys is the largest
and most successful magic company in the world.
Since its founding, Hanky Panky Toys has utilized the
input of some of the world’s foremost magicians and toy
marketing specialists to help them to develop the very best
magic products on the market. They are, without question, the
innovators within the magic industry.
Not only are Hanky Panky Toys’ magic sets the most original,
they are also of the highest quality available. “Quality
Assurance is essential to us. We understand that we provide
products that are going to ultimately be used by children,”
explained Kovit Monshouwer, Managing Director of Hanky
Panky Toys and son of founder Jack Monshouwer.
As their production costs rose and competition began to
increase, Hanky Panky Toys decided to relocate their factory
to Thailand in 1998. The factory, located thirty kilometers
south of Laem Chabang Seaport, is one of the finest production
facilities in Southeast Asia. The facility is equipped with state
of the art machinery, allowing Hanky Panky Toys to control
the production process of all of their products in-house, from
concept design through to the finished product.
Another major benefit of this set-up is the
flexibility it provides Hanky Panky Toys. If
a customer requires a special product, they
can produce a high quality complete sales
sample in less than five days, a significant
reason why Hanky Panky Toys has such a
loyal customer base.
In addition to the lower labor costs available
in Thailand, the country’s extensive industrial
sector allows Hanky Panky Toys to source
nearly 95% of their raw materials locally,
which significantly reduces the company’s
logistics expenses while at the same time
providing them greater assurances over
item quality and on time delivery.
From its strategically chosen location,
Hanky Panky Toys can take advantage of
its proximity to Laem Chabang Seaport
to ship their magic products to over forty countries around
the world. This widespread popularity has led Hanky Panky
Toys’ to make their magic sets available in more than twenty
languages, allowing them to experience sales growth in nearly
every market for several years running now.
When first starting operations here in Thailand, Hanky Panky
Toys was a BOI-promoted company. Although their promotion
benefits have now expired, the company is still working
closely with members of the Board of Investment.
According to Mr. Kovit, Hanky Panky Toys is dealing with
limited space and is looking to expand. They are currently
looking into the BOI’s recently announced package for the
promotion of efficiency improvement in order to both build a
new warehouse and upgrade their manufacturing equipment
to the most efficient and environmentally friendly technology
available, an important aspect of the company’s corporate
social responsibility program.
Hanky Panky Toys places special emphasis on waste
management and energy conservation. Virtually all of the
company’s excess and waste materials are recycled, and
Hanky Panky Toys was recently recognized by the Thai
Ministry of Energy as an outstanding SME for their successes
in creating and maintaining an environmentally friendly and
electricity saving production facility. Moreover, they are
currently exploring the use of solar panels to power different
parts of their factory.
Continued on P. 11
9
THAILAND INVESTMENT REVIEW
May 2009
BOI INVESTMENT MISSIONS
Mrs. Vasana Mututanont, Acting Assistant Secretary General, led a Thai delegation to
Myanmar 17-21 March 2009 to participate in a “Connection Building” activity, where
the group met with senior officials of the Union of Myanmar Federation of Chambers of
Commerce and Industry (UMFCCI). The purpose of the mission was to discuss potential
investment opportunities in both countries.
Deputy Secretary General Ms. Sudjit Inthaiwong led a mission to Valencia, Spain to
participate in an investment seminar hosted by the Valencian Automotive Association. The
seminar was a part of the BOI’s investment promotion mission to Italy, France, and Spain,
which was held from 28 March to 10 April 2009.
On 31 March 2009, Deputy Secretary General Ms. Sudjit Inthaiwong led a mission to Pisa,
Italy to participate in an investment seminar, where she discussed potential investment
opportunities in Thailand with business entrepreneurs and investors from the Italian
machinery industry.
1
0
Work Permit, Continued from
P. 5
Minimum Number of Thai Employees
Company limited:
Four Thai employees for every foreigner
Branch, representative office, regional office:
One Thai employee for every foreigner
4. One-Year Visa Extension
The application for the One-Year Visa Extension may be
processed and approved within one month of submitting the
initial application.
The following is the normal situation. The presiding official
at the Immigration Bureau will accept the initial One-Year
Visa Extension application. He will then take the application
under consideration for a period of approximately thirty days.
During this period the applicant is allowed to reside in the
country.
At the end of the thirty- day period the applicant (either in
person or represented by a third party) will meet with the
official. At that meeting the official will normally either:
i. Grant the One-Year Visa Extension; or
ii. Reject the application and allow the applicant seven days
to leave the country.
Michael Doyle is a US lawyer and partner of the Bangkok
– based law firm of Seri Manop and Doyle. He is the
author of the books Doyle’s Practical Guide to Thailand
Business Law and Doyle’s Practical Guide to Thailand
Intellectual Property Law.
THAILAND INVESTMENT REVIEW
May 2009
INSIDE THE BOI
On 16 March 2009, Industry Minister Mr. Charnchai Chairungruang assigned the BOI to
arrange a meeting regarding the establishment of a “One Start & One Stop Service Center”.
The center will be set up to facilitate business operations and stimulate confidence in
Thailand among investors.
On 30 March 2009, Secretary General Dr. Atchaka Sibunruang Brimble arranged a BOI
Investment seminar at the Dusit Thani Pattaya Hotel in Chonburi. The meeting was
presided over by H.E. Industry Minister Mr. Charnchai Chairungruang. The purpose of the
seminar was to meet investors and stimulate investment along the Eastern Seaboard.
CS Rubber, Continued from
P. 8
us in setting up our booth, finding qualified buyers, and
even arranging factory visits. At one point, the BOI even
accompanied us on a trip to Germany so that we could study
the more efficient production process being utilized by
German manufacturers. The Department of Export Promotion
has also been supportive of our export campaign.”
Though CS Rubber produces high quality rubber and
polyurethane products, their focus is on rubber compounds.
The company would like to integrate more rubber compounds,
as opposed to natural rubber, into their three primary industries:
automotives, electrical appliances, and sporting goods. Mr.
Chen believes that with the assistance of the BOI, CS Rubber
will be able to accomplish this goal, thereby creating more
jobs here in Thailand and increasing the overall value-added
capability of Thailand’s rubber industry.
Hanky Panky Toys, Continued from
P. 9
In addition to being eco-conscious, Hanky Panky Toys goes
to great lengths to assist people directly, particularly their
employees. Hanky Panky Toys is a family run business, and
the Monshouwers and other company executives work hard to
extend to their employees the same consideration and respect
that is reserved for loved ones. As part of this family approach,
housing for both the management team and their 150 yearround employees is located directly around the factory.
“Our employees are happy to work with us. We are
continuously investing in training them, not only on quality
awareness, chemical handling, first aid, firefighting, safety,
and environmental issues, but also in things that improve
their daily life like the 5S Process (Sort, Set in place, Shine,
Standardize, and Sustain) and domestic economics such as
personal finance,” explained Mr. Kovit.
The last tenet of Hanky Panky Toys’ corporate social
responsibility program is education, as the company supports
local schools and provides supplies for schoolchildren in the
area around their factory.
There is no trickery behind Hanky Panky Toys’ business
plan. They simply produce the most innovative high quality
products, they earn the enduring loyalty of their customers,
and they treat their employees with the utmost respect – a sure
recipe for success. After all, this isn’t magic.
1
1
THAILAND INVESTMENT REVIEW
May 2009
THAILAND ECONOMY-AT-A-GLANCE
Exchange Rate Trends
Facts about Thailand
Population (2009)
ASEAN Population
Literacy Rate
Minimum Wage (1 Jun. 08, Bangkok)
66.7 million
584 million
96%
203 Baht/day
GDP (2008)
GDP per Capita (2008)
GDP Growth (2007) GDP Growth (2008) Export Growth (2008)
US $270 billion
US $4,072.5
4.9%
2.6%
16.8%
Source:
Bank of Thailand
SET Monthly Closing Values
Trade Balance (2008)
US $0.2 billion
Current Account Balance (2008) US $-0.2 billion
International Reserves (2008) US $111.01 billion
Capacity Utilization (2008)
67.65%
Manufacturing Production Index (2008)
190.23
Consumer Price Index (Mar 2009)
103.6
(2002 = 100)
1
2
Corporate Income Tax
Withholding Tax
Value Added Tax
10-30%
10-15%
7%
Source:
Stock Exchange of Thailand
Industrial Capacity Utilization (%)
March Average Exchange Rates
US$ 1
€1
£1
100¥
=
=
=
=
35.73 Baht
46.62 Baht
50.75 Baht
36.57 Baht
Top 10 Exports 2008
Product
1.
2.
3.
4.
5.
6.
7.
8.
Automatic data processing
machines and parts thereof
Motor cars, parts and accessories
Precious stones and jewellery
Refined fuels
Electronic integrated circuits
Rubber
Rice
Polymers of ethylene, propylene, etc
in primary forms
9. Iron and steel and their products
10. Rubber products
Proportion%
(y-o-y)
Value
(US$ bn)
10.34
8.76
4.65
4.45
4.07
3.82
3.49
18.38
15.59
8.27
7.91
7.24
6.79
6.20
3.10
3.02
2.56
5.52
5.36
4.55
Source:
Bank of Thailand
International Reserves / Short-term Debt (%)
Source:
Bank of Thailand
Source: Ministry of Commerce
Head Office, Office of the Board of Investment
555 Vibhavadi-Rangsit Road, Chatuchak
Bangkok 10900, Thailand.
Tel: +66 (0) 2537 8111, +66 (0) 2537 8555
Fax: +66 (0) 2537 8177
Website: www.boi.go.th E-mail: head@boi.go.th
OSAKA
Thailand Board of Investment
Osaka Office
Royal Thai Consulate-General
Bangkok Bank Bldg, 7th Floor
1-9-16 Kyutaro Machi,
Chuo-Ku, Osaka 541-0056,
Japan
Tel: +81 (0) 6 6271 1395
Fax:+81 (0) 6 6271 1394
E-mail: osaka@boi.go.th
PARIS
Thailand Board of Investment
Paris Office
Ambassade Royale de
Thaïlande
8, Rue Greuze, 75116 Paris,
France
Tel: +33 (0) 1 5690 2600
Fax:+33 (0) 1 5690 2602
E-mail: par@boi.go.th
SEOUL
Thailand Board of Investment,
Seoul Office
1804, 18th Floor, Daeyungak
Tower, 25-5, 1-Ka, ChungmuRo, Chung-Ku, Seoul 100706, KOREA
Tel: (822) 779-5416-8
Fax: (822) 779-5419
E-Mail: seoul@boi.go.th
BEIJING
Thailand Board of Investment,
Beijing Office
Royal Thai Embassy, No. 40
Guang Hua Road,
Beijing P.R.C. 103600
Tel: +86 10 6532 1749
Fax: +86 10 6532 1748
E-mail: beijing@boi.go.th
FRANKFURT
Thailand Board of Investment
Frankfurt Office
Royal Thai Embassy
Bethmannstr. 58, 5.OG
60311 Frankfurt am Main,
Germany
Tel: +49 (0) 69 9291 230
Fax:+49 (0) 69 9291 2320
E-mail: fra@boi.go.th
LOS ANGELES
Thailand Board of Investment
Los Angeles Office
611 North Larchmont Boulevard,
3rd Floor, Los Angeles CA
90004, U.S.A.
Tel: +1 (0) 323 960 1199
Fax:+1 (0) 323 960 1190
E-mail: boila@sbcglobal.net
NEW YORK
Thailand Board of Investment
New York Office
61 Broadway, Suite 2810
New York, N.Y. 10006, U.S.A.
Tel: +1 (0) 212 422 9009
Fax:+1 (0) 212 422 9119
E-mail: nyc@boi.go.th
SHANGHAI
Thailand Board of Investment
Shanghai Office
Royal Thai Consulate-General
15F, Crystal Century Tower
567 Weihai Road,
Shanghai 200041, P.R.C.
Tel: (86-21) 62889728,
(86-21) 62889729
Fax:(86-21) 62889730
E-mail: shanghai@boi.go.th
SYDNEY
Thailand Board of Investment,
Sydney Office
Royal Thai Consulate-General
Level 8, 131 Macquarie Street
Tel: +6141 129 6195
TAIPEI
Thailand Board of Investment,
Taipei Office
Taipei World Trade Center
3rd Floor, No.5, Sec.5,
Hsin-Yi Road, Taipei 11011,
Taiwan R.O.C.
Tel: 886 2 2345 6663
Fax: 886 2 2345 9223
E-mail: taipei@boi.go.th
TOKYO
Office of Economic and
Investment Affairs
Royal Thai Embassy
8th Floor, Fukuda Building
West, 2-11-3 Akasaka,
Minato-ku, Tokyo 107-0052
Japan
Tel: +81 (0) 3 3582 1806
Fax:+81 (0) 3 3589 5176
E-mail: thaiboitokyo@gol.com,
tyo@boi.go.th