Opportunity Thailand - Thailand Board of Investment

1 Opportunity Thailand Presented by Duangjai Asawachintachit Deputy Secretary General Thailand Board of Investment April 2017. Melbourne, Australia Thailand 's Economic overview in 2016. China GDP 2016: AUD billion 1 GDP per capita: AUD 7,812. Growth: Vietnam Myanmar Population : 68 million Laos Philippines 2. Export Value AUD billion Thailand Growth: Thailand Cambodia ASEAN's World Bank ranks 2nd Largest 3 Thailand 5th for its ease of doing Economy business among East Asia &. Malaysia Pacific countries for 2016. Brunei Singapore IMD World Competitiveness 4 ranks Thailand 28th out of indonesia 61 economies in its global competitiveness index for 2016. Source: NESDB, Ministry of Commerce of Thailand , World Bank, IMD. Note: Exchange rate (BOT, Mar 1 2017): 1 AUD = THB. 2. Thailand : the Thailand : theCrossroads Crossroads of ASEAN. of ASEAN. ASEAN. Strategic Location Gateway to ASEAN Economic We are surrounded by Community the world's economic powerhouses 633 million population (9% of world population).

2 GDP: AUD trillion (2% of world's GDP). Regional Comprehensive Asia & Economic Partnership Oceania *(RCEP). AEC. billion population (50% of world population). GDP: AUD 27 trillion (28% of world's GDP). Vital Role in Global Supply Chains 6th Rubber Tire 2nd in HDD Exports Exports 7th Computer Device 12th Automotive Exports Production 5. 2016 Global Manufacturing Competitiveness Index Index Score [10=high, 1=low]. China 10. USA Germany Japan South Korea United Kingdom Taiwan Mexico Canada Singapore India Switzerland Sweden Thailand Poland Malaysia Turkey Vietnam indonesia Netherlands Source: 2016 Global Manufacturing Competitiveness Index by Deloitte Touche Tohmatsu Ltd. & Council on Competitiveness (as of December 2015). 6. Thailand 's Competitiveness 20%. CIT. Low Cost Low Cost of Office Space Living Industrial Great Expat Estates Lifestyle 7. Thailand 's Infrastructure Development Strategy (2015-2022). 5 Key Programs: to reduce logistics and transportation costs and Improve the competitiveness of the economy Infrastructure development programs for 2015-2022 (AUD billion*).

3 3. Development of 1. Expansion of the 4. Air transport 5. Development of 2. Highway capacity mass transit systems inter-city rail capacity the maritime enhancement in Bangkok network enhancement transport network (AUD billion) Metropolitan Region (AUD billion) (AUD billion) (AUD billion). (AUD billion). Upgrade railway networks Extend mass transit railway system Increase double-track railways Acquire 3,183 NGV buses Build standard gauge Railway Mass Transit Expand highways to 4 or more traffic Enhance sea ports capacity lanes Enhance airport capacity Develop facilities along the main Establish aviation industrial estates roads such as container yards Road Water & Air Source: Office of Transport and Traffic Policy and Planning, Ministry of Transport, as of 21 December 2015. 8 Note: *1 AUD = THB. **Maintenance Repair and Overhaul BOI Investment Promotion Policies BOI's Core Functions Enhancing Competitiveness and Business Support Services Investment Facilitation Offers an attractive and Provides comprehensive competitive package of information and advice on tax incentives.

4 Establishing operations in Thailand . Imposes no foreign equity restrictions on manufacturing Arranges site visits. activities or most services. Identifies potential suppliers, Provide assistance in the subcontractors, joint-venture provision of visas and work partners. permits to facilitate entry and subsequent operation for a Provides useful contacts with foreign-owned business. key public and private organizations. Waives restrictions on land ownership by foreign Coordinates between the entities. foreign business community and other public agencies 10. Who can apply for BOI promotion? Manufacturing and service activities (those in the list of eligible activities). Thai or foreign companies 11. BOI Tax Incentives Corporate income tax exemption for up to 13. years Reduction of corporate income tax Investment tax allowance (Deduction up to 70% of the invested capital on net profit). Exemption of import duties on machinery Duty exemption on materials imported for R&D purposes and related testing Thailand 's Eastern Economic Corridor New Growth Hub of Thailand and AEC.

5 1 Strategic Location Chachoengsao 2 Infrastructure Linkage 3 Excellent Atmosphere Chonburi South Korea Japan China To US. India CLMV. ASEAN. Rayong To EU. To Oceania Source: Ministry of Industry 18. Why Eastern Economic Corridor Combined Public and Private Investments at least Target Trillion baht (AUD 55 Billion) in the first 5 years U-Tapao international airport New Cities / Hospitals 200,000 million baht (AUD billion) 400,000 million baht (AUD billion). Tourism 200,000 million baht (AUD billion). Map Ta Phut port 10,150 million baht (AUD billion). Industry EEC 500,000 million baht (AUD billion). Laem Chabang port 88,000 million baht (AUD billion) Motorway High-speed train 35,300 million baht (AUD billion). 158,000 million baht (AUD billion). Dual-track railway 64,300 million baht (AUD billion). Source: Ministry of Industry of Thailand Note: Estimated Investment amount shown 19. Eastern Economic Corridor - ASEAN's New Growth Hub FIRST S-CURVE.

6 Bangkok Next-Gen Automotive Logistics Hub Smart Electronics Chachoengsao Food Processing New Chachoengsao City Agricultural Food Processing Technology Agricultural Technology Tourism Next-Generation Automotive Chonburi Robotics Rayong Aviation Smart electronics Logistics Food Processing Medical hub Agricultural Technology Bioeconomy New Pattaya City Robotics Medical hub New Rayong City Bioeconomy Digital Aviation industry Source: Ministry of Industry 20. Australian Net Application Submitted by Sector in 2012-2016. Total Application by Sector: 2012-2016. [Million AUD]. 5 6. 4. 1. Agricultural Products (AUD 792 m). 2. Light Industries/Textiles (AUD 441 m). 3 1 3. Services (AUD 391m). 4. Metal Products and Machinery (AUD 129 m). 5. Services ($122 m). 6. Agricultural Products ($82 m). 7. Chemicals and Paper (AUD 17 m). 2. Source: BOI; Exchange rate (BOT, Mar 1 2017): 1 AUD = THB. 24. Sectors of Opportunity 27. Automotive Industry Thailand Automotive Industry overview Target: Thailand To manufacture Export Value Contribution to 3,500,000 units GDP.

7 In 2020. 18 Auto 6th largest 2016 exports were Contribute to Assemblers with commercial vehicle million 12% of country's combined production producer in the world units with value of GDP. of million in 2016 AUD. units Source: Thailand Automotive Institute. 2016 , Exchange rate (BOT, March 1 2017): 1 AUD = THB. 29. Thailand Automotive Industrial overview Thailand Car Production Thailand Automotive Structure (2010-2016). [In Million Units]. Foreign %. Assembler JV. Auto (Total 18 companies). Assemblers Tier 1 Suppliers JV. (Total 462 Foreign 3% Thai companies) majority majority 58% 39%. Tier2,3 Suppliers (Total 1,237 companies). Source: The Thai Automotive Industry Association (TAIA), Thailand Automotive Institute (TAI) as of December 2016. 30 XX% CAGR 2014-2016. Thailand Automotive Industry Value Thailand 's Production Category Thailand 's Export (2012-2016). in 2016. [Unit: Units] [Unit: Billion AUD]. 40. % 35 30 25 1,944,417 20.

8 Units 15. 10 5. 0. 2012 2013 2014 2015 2016. Motorcycle Automotive Automotive parts Source: Thailand Automotive Institute Note: Exchange rate (BOT, March 1 2017): 1 AUD = THB. 31 XX% CAGR 2012-2016. Existing Automotive Hubs in Thailand Examples of BMW Manufacturing ( Thailand ). Major Players in Toyota Motor Thailand Thailand Production Honda Automobile Hub Nissan Motor Isuzu Motor Tri Retch Isuzu Sales &. Isuzu Operation Mitsubishi Motor ( Thailand ). Toyota Motor Asia Pacific Engineering &. Manufacturing Honda R&D Asia Pacific R&D. Hub Nissan Technical Center Southeast Asia ISUZU Technical Center of Asia Toyota Motor Asia Pacific Engineering &. Manufacturing Regional Asian Honda Motor Head Office Nissan Motor ( Thailand ). Source: Board of Investment 32. Industrial Opportunities Of Thailand Automotive Industry Automotive Opportunities Competitive Skilled-Labor Supply Thailand has more than Hi-Tech Vehicle Parts and 550,000 high skilled Eco-Car Parts NGV Vehicles Components and well-trained workers compared with other ASEAN countries More Research E85 Passenger Cars Big-Bike, 4-Stroke Engine and Development, Motorcycles Design and (Over 500cc) Testing Centers are also needed Source: The Thai Automotive Industry Association 33.

9 Electric Vehicle Policy HEV, PHEV, BEV, Battery Electric Bus Incentives Exemption of import duties on machinery CIT exemption (0-10 years, depending on types of vehicles). Requirement: localization of at least one of the identified key parts within 3 years after the certificate issuance Charging Station Incentives: 5 years of CIT exemption Requirement Equipment and part sourcing plan to be submitted EV smart charging system at least 1 quick charger ISO certification within 3 years after certificate issuance Application Submission Deadline: December 2018. Investment Promotion of EV Parts Manufacturing Additional 50% CIT. Front/Back Shaft of 8 Years CIT reduction for 5 years if Exemption35. (A2) located in EEC. Commercial Car BMS. Battery Inverter Air- Conditioning DC/DC System/Parts Converter Electrical Circuit Socket/ Breaker Inlet Connector Portable EV. Charger Charging On- Board DCU. Station Charger Traction Motor Source: Delta HEV/EV Passenger Car Powertrain Solution Other Measures Supporting EVs Reduced excise tax rates for different types of Evs Reduced import duties for BEVs during the first two years Government budget for building EV infrastructure Thailand 's Automation Industry overview Machinery and Parts for Thailand Industrial Robot AUTOMATION: Market Imports vs Exports, 2010-2014.

10 [In units]. Billion Baht 7500. 133%. 2010 2011 2012 2013 2014. Import 194 216 292 265 266. Export 103 106 112 117 134. 3221. 2013 2018. Why Thailand ? High demand driven by well-established and growing user-base Supply Chain of Thai Automation & Robotics Industry Automation & Robotics System integrator users2. Automotive Mechanical brain &. manufacturers Software developer Electrical & Electronic manufacturers Parts & Components Food manufacturers manufacturers Etc. Source: 1 Machinery Intelligence Unit, Iron and Steel Institute of Thailand ; 2 Thai-German Institute Note: * The spike in 2012 is due to extra machine replacements after Thailand mega-flood Agriculture & Food Industry Thailand 's Agricultural Products Abundant Resources and Biodiversity Sugarcane Domestic Production1. [In 000 Tons]. Thailand 's rich natural resources have solidified the *. country's reputation as the leading global supplier of 108,000 106,333.