1. Thailand’s Manufacturing strength – what it means for australia
Carey Ramm
Principal Economist
AEC Group Ltd

2. Thailand’s Economy Growth Thai exports
2011 Thailand moved into the upper-middle income category of nations
Thailand Output has grown for 25 years above an average rate of 7% or more
Thailand will move into the World Bank’s high income category by 2020.
Thai exports
mostly machinery, electronic components, agricultural commodities and jewellery

3. Scale of Thailand’s Manufacturing
Highly competitive, characterised by world-leading manufacturers:
Toyota General Motors - Caterpillar
Nissan Ford - Seagate
Mazda - Canon - Sony
Toshiba - Nikon - Hewlett Packard
Michelin - Isuzu
Lenovo - Western Digital
Over 2 million vehicles produced in 2012
Over $US 8 billion in machinery exports
Rapidly expanding into high value industries:
Top hard disk drive and components manufacturing base worldwide
Alternative energy, green automotive, high value electronics and ICT

4. Thailand/Australia Manufacturing Comparison (2011)
Manufacturing Gross Value Added ($US)
$113.6 Billion
$98.3 Billion
Manufacturing % of GDP
35.6%
9.3%
Employment
5.3 million
903,000
% of Total Employment
13.8%
9.2%
Source: World Bank, NSO, AEC Group
Thailand’s manufacturing sector is now 16% larger than Australia and growing fast due to exports

5. Manufactured Product Exports 2000-2011 (USD$Million)
Thailand’s manufactured exports are 400% larger than Australia
Source: Bank of Thailand, ABS, AEC Group

6. BOI Approved FDI ( )
Thailand is now a major manufacturing hub, particularly for Japanese and US companies.
Japan
United States
European Union
Australia
Projects Approved
1,723
197
421 94
Total Investment
(Million Baht)
588,657
150,838
193,739
12,705
Source: BOI

7. BOI Approved Foreign Investment 2007-11 (Million Baht)
Australian companies clearly need further assistance to expand into Thailand/ASEAN
Source: BOI

8. Share of Japanese Manufacturing FDI into ASEAN
Japanese companies get substantial assistance to expand into ASEAN
Source: Hamanaka

9. Thailand… Land of Opportunity
Australian companies already in Thailand see opportunities for expansion in the manufacturing, mining, services, construction and technology sectors.
Business Opportunities for Australian Companies in Thailand
Source: AEC Group

10. Thailand… Land of Opportunity
Industries with Opportunities in Thailand
Source: AEC Group

11. Why Manufacture In Thailand?
64.1% of Australian businesses established in Thailand to service the international market
59.4% to service the Thailand market
14.1% to re-export to Australia
This is not about offshoring Australian jobs
Source: AEC Group

12. Key Considerations
Key factors which support Thailand as a destination for Australian manufacturing investment include:
Centre of the ASEAN Community
Friendly and Manageable Business Environment
Accounting and Regulatory Familiarity
The Thailand-Australia Free Trade Agreement (TAFTA)
Functioning and Secure Legal System
Skilled Labour Force
Attractive Investment Incentives

13. World Bank Ease of Doing Business
2012 Ranking
Singapore 1
Thailand 17
Malaysia 18
Brunei 83
China 91
Vietnam 98
Indonesia
129
Philippines
136
Cambodia
138
Laos
165
Australia is #11
Source: World Bank

14. Australian Domestic Manufacturing Outlook
Manufacturing lost 106,775 jobs in the last four years... another 85,600 jobs may be lost in the next five years...
Prime Minister’s Manufacturing Taskforce – Report of the Non-Government Members August 2012
One out of every ten manufacturing jobs disappeared over the last four years.

15. Australian Domestic Manufacturing Outlook
A small number of Australian firms have demonstrated how Thailand can be used as a base for expansion. They are not only saving manufacturing jobs in Australia - but creating them.
Australian manufacturers need to grow into much larger markets to get economies of scale and to integrate into global supply chains.
So how do we help them do this? The Asian Century Whitepaper raises awareness but it doesn’t have the on-the-ground initiatives to help business grow into Asia….

16. Unlocking The Potential Of Asia
The Incubator will advise on:
Company registration / start up
Identification of partners
Office / factory location and establishment
Market analyses
Practical export sales advice
Production sourcing
Product approvals
Human resources and labour market legislation
Government regulations
Accounting rules and tax legislation

17. Danish Export Incubators
Denmark is a world leader in Export Facilitation Incubators. They:
service 7,500 clients a year
92% satisfaction level
increased exports by AUD$5 billion pa
The Trade Council of Denmark has established export incubator facilities in:
• Atlanta • Washington • Silicon Valley • Montreal • New Delhi • Bangalore • Beijing • Chongqing
• Guangzhou • Tokyo • Sao Paulo

18. In Summary Time is running out to save Australian Manufacturing.
Expanding offshore and linking into global supply chains is the solution.
Australia can no longer ignore the opportunities in the ASEAN region.
Thailand is the logical choice for manufacturers to expand.
Australian manufacturers need an Incubator to make the change from thinking LOCAL to acting GLOBAL.
Thank you…