Vous êtes sur la page 1sur 56

Which Australian Companies

are Thriving in Thailand?


Could Yours?
James Wise
Australian Ambassador to Thailand

Greg Wallis
Senior Trade Commissioner

Australian Embassy
Bangkok



Australia Unlimited
Roadshow on Thailand: WHY?
Australian companies in Thailand are asking:
How good can it get?
Why are so few Australian companies here?


What is Thailand really like?

Thai market is misunderstood in Australia?
Why?
2
Australia Unlimited
Why Is Thailands Profile Low?
Overshadowed by understandable focus on:
China
India

Indonesia naturally looms large

Other ASEANs more familiar:
Singapore, Malaysia, Vietnam

Flavours of the month
Myanmar
3
Australia Unlimited
Thailand: Common Views
Poor and undeveloped

Good place for a holiday

Language barrier

Natural disasters

Corruption

Political instability

4
Australia Unlimited
ASEAN Ranking

Rank

Country
2011
GDP (PPP)
(Billions)
15 Indonesia 1,125
24 Thailand 602
29 Malaysia 464
32 Philippines 391
39 Singapore 315
41 Vietnam 300
75 Myanmar 83
102 Cambodia 34
122 Brunei 21
130 Lao P.D.R. 17
Source: IMF, World Economic Outlook Database, October 2012

Rank

Country
2011 GDP (PPP)
($Billions)
1 United States 15,076
2 China 11,300
3 Japan 4,444
4 India 4,421
5 Germany 3,114
6 Russia 2,383
7 Brazil 2,294
8 United Kingdom 2,288
9 France 2,214
10 Italy 1,847
11 Mexico 1,667
12 Korea 1,554
13 Spain 1,406
14 Canada 1,395
15 Indonesia 1,125
16 Turkey 1,075
17 Iran 991
18 Australia 915
19 Taiwan, China 876
20 Poland 771
21 Argentina 716
22 Netherlands 701
23 Saudi Arabia 688
24 Thailand 602
25 South Africa 555
Thai Economy: Big
5
Australia Unlimited
Thai Economy: Sophisticated
10
th
biggest car maker
(>2m cars)

Regional hub for auto,
electronics, consumer
goods, processed food.

Middle class: 12 million
- Malaysia (12m)
- Indonesia (2.6m)
- Vietnam (1.6m)

Dynamic retail sector

6
Australia Unlimited
Great Place for a Holiday
7
Australia Unlimited
Great Place for a Holiday

952,000 Australian visitors
one in 25 Australians

Over 99% have a trouble-free stay

8
Australia Unlimited
But I dont speak Thai .
You dont have to

Money and English are the languages of business

English is more widely spoken than before
and its use will continue to spread

Bilingual professional help easy to find

9
Australia Unlimited
Natural Disasters
10
Australia Unlimited
Floods
Floods showed
Thailand is critical to
supply chains

Forced Japan to
reassess Thailand
Verdict: nowhere
better
New Japanese
investment boom
11
Australia Unlimited
Corruption

Corruption risk is in
government sector

Massive private sector
is corruption-free

Country Ranking
Singapore 5
Brunei 46
Malaysia 54
China 80
Thailand 88
India 94
Philippines 105
Indonesia 118
Vietnam 123
Cambodia 157
Laos 160
Myanmar 172
Source: Transparency International
12
Australia Unlimited
Corporate Governance
2007 2010 2012
1. Hong Kong (67) 1. Singapore (67) 1. Singapore (69)
2. Singapore (65) 2. Hong Kong (65) 2. Hong Kong (66)
3. India (56) 3. Japan (57) 3. Thailand (58)
4. Taiwan (54) 4. Thailand (55) 4. Japan (55)
5. Japan (52) 4. Taiwan (55) 4. Malaysia (55)
6. Korea (49) 6. Malaysia (52) 6. Taiwan (53)
6. Malaysia (49) 7. India (49) 7. India (51)
8. Thailand (47) 7. China (49) 8. Korea (49)
9. China (45) 9. Korea (45) 9. China (45)
10. Philippines (41) 10. Indonesia (40) 10. Philippines (41)
11. Indonesia (37) 11. Philippines (37) 11. Indonesia (37)
Source: Asian Corporate Governance Association, September 2012
13
Australia Unlimited
Corporate Governance
154
signatory companies
14
Australia Unlimited
Political Instability
2011 Tsunami
and floods
2008 GFC
1997-98 Asian
Financial Crisis
Source: GDP Data from Thailands National Economic and Social Board
Coup
Attempted coup
Major protests
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
%
15
Australia Unlimited
Meritocracy, Money and Virtue
Uneven government, strong administration

Workplaces are not politicised

All politicians are pro-market, pro-business

Virtue in Thailand to be rich or richer

Thais are pragmatic
16
Australia Unlimited
What colour is this car?
This car
is red.
This car is
green.
This car is black.
This car is blue-red.
17
The Business
Environment for
Australia in Thailand

18
Australia Unlimited
Ease of Doing Business
1. Singapore
1. Singapore
12. Malaysia
18. Thailand
79. Brunei
91. China
99. Vietnam
128. Indonesia
132. India
133. Cambodia
138. Philippines
163. Lao PDR
ASEAN + China/India
Source: The World Banks Doing Business 2013
2. Hong Kong, China
3. New Zealand
4. United States
5. Denmark
6. Norway
7. United Kingdom
8. Korea, Rep
9. Georgia
10. Australia
11. Finland
12. Malaysia
13. Sweden
14. Iceland
15. Ireland
16. Taiwan, China
17. Canada
18. Thailand
19. Mauritius
20. Germany
19
Australia Unlimited
Bloombergs Most-Promising Emerging Markets
for Investors*
Rank Country Overall Score
1 China 80.2
2 Thailand 63.5
3 Peru 60.9
4 Chile 56.5
5 Malaysia 52.4
6 Poland 51.3
7 Turkey 50.9
8 Russia 50.5
9 Indonesia 49.8
10 Czech Republic 47.7
11 Hungary 47.4
12 Colombia 47.1
13 South Africa 44.7
14 Mexico 44.0
15 India 42.3


* March 2012 issue of
Bloomberg Markets
20
Australia Unlimited
Thailand and Australia (1)
Australias 9th biggest trading partner
Bilateral trade (2011-2012) worth A$ 17.7 billion
Bilateral trade (1989-2011) has grown 3.6 times faster
than Australias global trade
Important source of students
20,000 students (6
th
biggest globally)
TAFTA in place since 2005
Strong government links
21
Australia Unlimited
Thailand and Australia (2)
Significant Australian investments in Thailand:

Sectors:





Companies: Bluescope, Worley Parsons, ANCA, Visy, Toll, Linfox,
Kingsgate, Futuris, Grant Thornton, Blackmores, Macquarie,
Brambles, QBE


22
Auto Parts Consumer Marine
Manufacturing Mining Logistics
Infrastructure &
Construction


Professional
Services


Australia Unlimited
23
Australia Unlimited
What are 23 Australian Companies in Thailand
Saying?
We are here because Australia isnt big enough.
It is a good business environment; much easier than
China, Vietnam, India & Indonesia.
think about your ROE
Business is good, with strong growth & profitability.
Our engineering and R&D is still done in Australia.
24
Australia Unlimited
What are 23 Australian Companies in Thailand
Saying?
There is a shortage of skilled labour.
Thailand is no longer a low cost labour market.
Productivity needs to be improved.
25
Australia Unlimited
Reasons for setting up business in Thailand
6.3%
14.1%
59.4%
64.1%
Other
To re-export to Australia
To service Thai market
To service regional or international
market
Source: Online Survey by AustCham Thailand
26
Australia Unlimited
Thailand-Australia Free Trade Agreement
(TAFTA)
94% of Thai tariffs on Australian goods eliminated
Special Agricultural Safeguards (SSGs) limit
import of some products (beef, dairy, some
horticultural) under TAFTA duty rates
Trigger levels increasing yearly
Improved access for investors with Australian
ownership permitted in various sectors
Helps facilitate visa requirements for Australians
working in Thailand
27
Australia Unlimited
Bilateral trade between Australia and Thailand
from 2005-2012
28
9,609
11,336
13,642
16,339
18,707
20,324
19,089
17,708
0
5000
10000
15000
20000
25000
A
$
M

Source:
1) ABS 5368.0 - International Trade in Goods and Services, Australia, Dec 2012
2) ABS 5368055003 table 5.13 and 7.13- International Trade in Services by Country, by State and by Detailed Services Category,
Financial Year, 2011-12
TAFTA
Australia Unlimited
Board of Investment (BOI)
Incentives to Invest in Thailand
Many benefits provided
Current system: 3 zones that have
different levels of incentives
New regulations (2014) will focus
on type of business activity
Aim is to boost knowledge based,
creative, green, alternative
energy, hospitality and logistics
sectors
29
Source: BOI Flyer
Australia Unlimited
Board of Investment (BOI) Incentives to Invest
in Thailand
Future Supported Sectors
Basic infrastructure and logistics
Basic industry (steel, petrochemicals, pulp and paper, machinery)
Medical devices and scientific equipment
Alternative energy and environmental services
Services that support industrials sectors
Advanced core technologies (biotechnology, nanotechnology,
advanced material technology)
Food and agricultural processing
Hospitality & Wellness
Automotive and transport equipment
Electronics and electrical appliances

30
Australian Business
Discovering Thailand:

Export and Investment
Success Stories
31
Australia Unlimited
Futuris Automotive Finds Success in
the 'Detroit of the East'
One of 20+ Australian companies
2011: 7,500 m
2
facility
2013: new 8,000 m
2
facility open
Supply full seat systems and interior
trim to GM, Ford and AAT in Thailand
plus multiple export contracts
Design & Development in Melbourne

32
Success Stories # 1
Images used with permission from Futuris
Australia Unlimited
Visy Captures Food Packaging Market
2009: VisyFood Plastics
decided to be where its
customers are
Supply packaging solutions for
Dole, Coca-Cola and Heinz
Manufacturing in Thailand for
local use and export to Japan,
China and USA

33
Success Stories # 2
Source: www.dole.co.th
Australia Unlimited
Honeycombes Revives Used Cane Harvesters
Good quality machines in
Queensland
Demand growing for
mechanisation in Thailand
40 refurbished machines sold
$8 million business to date

34
Success Stories # 3
Before refurbishment
After refurbishment
Australia Unlimited
Sweet Arrival for Pink Lady Apples
Launched in August 2012 at
Bangkoks major supermarket
chain.
Austrade Bangkok promotion
with the Victorian Government
and Apple and Pear Australia
Success with an initial export
of three containers in the first
two months
35
Success Stories # 4
Australia Unlimited
Ballantynes 60 Years in the Kingdom
Began in Thailand 60 years ago
selling cheese and dairy produce
to the Royal Household
Supply cheese powders to
bakeries, and butter and milk
powder to the Kim Chua Group for
its Imperial biscuit line.

36
Success Stories # 5
Source: http://nla.gov.au/nla.pic-an13031955-4
Australia Unlimited
Blackmores Supplements Global Growth
Blackmores launched into
Thailand in 1997
Already a market leader and
premium supplement brand
Growth rate year on year of
over 20%
Thailand amongst most
profitable markets globally
37
Success Stories # 6
Australia Unlimited
A Precise Springboard for Success
Gibbens Industries - small Central
Coast (NSW) manufacturer of
industrial springs
In Thailand to serve regional
markets and customers
Cash-flow positive 18 months after
arrival in Thailand



38
Success Stories # 7
Australia Unlimited
Where are the Opportunities for
Australian Businesses?
Global Value Chains (GVCs), especially in the automotive, manufacturing,
and food sectors
Education (at all levels)
Skills development & vocational training for industry, especially in the
automotive, manufacturing, and food sectors
Meat, wine, seafood, dairy, grocery, grains & horticultural produce
Consumer & lifestyle products
Energy and energy technologies
Transport infrastructure
Agricultural business
Marine
Green Building Products and Technologies
Deep open-cut lignite (brown coal) mining
Oil & Gas


39
Australia Unlimited
Automotive component supply and aftermarket
Global production base of 1-tonne pick-up trucks
Opportunity to access Global Supply Chains
Vehicle production in 2012 was 2.45 million units
Australia has a reputation as the premier off-road
aftermarket design and innovation centre
40
Source: www.saveprakan.com
Australia Unlimited
Education
Education dominates Australias services exports to
Thailand. An Australian education is highly regarded by
Thais

Opportunities:
English language skills
Teacher training (up to Masters and PhD levels) and
teaching and learning methodologies
University research collaboration, curriculum
development, student and staff exchange, internship
programs, study tours

41
Australia Unlimited
Skills development and vocational training
Traditionally, a higher education prestige oriented
society
Thailand needs to address critical skills shortages in its
manufacturing and services sectors;

1) Automotive
2) Hospitality (food safety and food handling)
3) Aged care


42
Australia Unlimited
Meat, wine, seafood, dairy, grocery, grains &
horticultural produce (1)
BEEF & LAMB
Growing demand for beef as local production is
limited and inferior quality
Australian beef has 90% of the imported beef
market
Beef from Australia has TAFTA tariff of 18.67% in
2013 (normal tariff of 50%)
Lamb can be imported without any TAFTA tariff
(normal rate 30%)

WINE
France used to dominate, but Australian wines now
run a close second (35% vs 28%)
From Penfolds to Berri Estates
43
Image used with permission of
Bangkok Beer & Beverages
Australia Unlimited
Meat, wine, seafood, dairy, grocery, grains &
horticultural produce (2)
SEAFOOD
All seafood without tariff under TAFTA
Growing demand due to higher disposable
income
More higher-value products for supply to the
growing tourism industry

DAIRY
Thailand is not self-sufficient in dairy
production
TAFTA has helped Australia gain market
share (various tariffs apply)
Growing interest in specialty products,
especially cheeses
44
Australia Unlimited
Meat, wine, seafood, dairy, grocery, grains &
horticultural produce (3)
GROCERY
Main competitors are from Europe, USA and Japan, not low cost
suppliers
Increasing interest in gluten-free and healthy snacks, high-fibre, low-
sugar, organic foods
More than 50 brands available - Arnotts, Bickfords, Uncle Tobys,
Beerenberg, Capilano, Olive Grove, Bulla, Coon, Meadow Lea,
Allowrie, Peerless, Sanger, Tassal, San Remo, Cerebos, Berri, True
Organics
GRAINS
All grains under TAFTA are tariff free
Growing demand for grains for food production and feed grade
HORTICULTURE
Thailand is negotiating with Australia on import protocols
Most fruit enjoys lower or zero tariff under TAFTA

45
Australia Unlimited
Consumer & lifestyle products
LIFESTYLE
Australia has credibility and aspirational status
Billabong, Quiksilver, Roxy, Seafolly, Bloch,
Holster, Diva ++

COSMETICS
Niche market opportunities e.g. natural spa
products, natural skin care, cosmetic ingredients
Cancer Council, Jurlique, Skin Doctors, Emu ++

NATURAL HEALTH SUPPLEMENTS
Beauty and appearance create demand for specific
segment e.g. Coenzyme Q10, Glucosamine,
Calcium
Weight management and sports nutrition
Blackmores, Musashi
46
Consumer and lifestyle products that meet Australian country of origin
requirements can enter Thailand duty free
Australia Unlimited
Energy and energy technologies
2012: Thailand starts to import Liquefied Natural Gas
(LNG)
Tender for six new power plants in late 2013, with a
combined capacity of 5400MW and cost of US$10.8bn
Business opportunities from government authorities and
independent power producers:
Power generators, transmission and distribution equipment
Clean coal technology: sulphur calcium oxide reduction
Alternative/renewable energy technology
Smart Grid, Smart Metering, Smart Energy Management and
Energy Storage Technology
47
Australia Unlimited
Transport Infrastructure
THB4trn (US$63bn) to be invested in transport
infrastructure projects over the next 7 years
High-speed railway network
Urban transport Bangkok MRT
Highway networks - ASEAN Highway Network Project (by 2020)
Water transport development of 5 ports in south
Air Transport 2nd phase Suvarnabhumi
48
Source: Business Monitor International, Thailand Infrastructure Report Q1 2013
Pak Bara: www.thealami.com Image source: www.bangkokmetro.co.th
Australia Unlimited
Agricultural Business
Services and technology to increase
productivity and competitiveness, for
sugar, livestock, dairy, grains and
horticulture
Need for increased mechanisation
Thailand still imports 65% of its
processed dairy products requirements
Thailand is Australias third biggest
market for cotton
Co-operation with Thai conglomerates for
supply into their international operations
49
Australia Unlimited
Marine
Phuket - Asias most attractive leisure marine destination
Industry in Thailand has grown with tourism growth (> 22
million arrivals in 2013)
Leisure craft, transfer ferries and related products and
services
Several Australian manufacturers already active
50
Australia Unlimited
Green Building Products and Technologies
Climate change concerns drive
demand
Increasing awareness of building
standards, safety, and
environmentally friendly products
Future growth in areas outside of
Bangkok, especially Phuket, for
high end luxury condos, hotels and
marinas


51
Australia Unlimited
Deep open-cut lignite (brown coal) mining
EGAT has issues with operation of deep open-cut lignite
mining
Opportunities may exist for:
Slope stability: Geotechnical review and consulting of in-house
pit designs
Transportation & communication systems
Environmental management
Production improvement
Drainage/Sludge/Pumping systems
52
Australia Unlimited
Oil & Gas

Equipment Needed for Water and Sand
Management, and Subsea Production
o Enhanced oil recovery
o Marginal field development / innovative
processes for small oil & gas fields including
flare recovery systems
o Water treatment and sand management
o Sub-sea production systems
o Carbon reduction equipment
o Solutions for equipment fatigue, erosion, and
corrosion to prolong equipment life
o Decommissioning of platforms, particularly
fields with high mercury content
53
Australia Unlimited
Summary
A large & sophisticated market with a high ROE
The Teflon Economy
Global manufacturing power
Growing middle class driving demand
Australia a respected partner for supply of
consumer goods, foods, grains, services and
education
Australian businesses have come to Thailand to
grow regionally
TAFTA and BOI facilitate business growth

54
Australia Unlimited
Doing Business in Thailand
Be aware of Thai culture (smile, wai and gifts) and
recognise the cultural and language barriers
Yes doesnt always mean Yes
Understand and respect social status
Respect for the monarchy
Relationship building is critical
Be patient with bureaucracy
Be flexible and accommodating
Be open for technology transfer
Use the BOI for investment

55
Australia Unlimited
Useful contacts
Australian Embassy, Bangkok
www.thailand.embassy.gov.au

Austrade
www.austrade.gov.au

Thailands Board of Investment
www.boi.go.th

Australian-Thai Chamber of Commerce
www.austchamthailand.com

Australia-Thailand Business Council (ATBC)
www.aust-thai.org.au





56