“Thailand” Gujarat Technological University

GLOBAL / COUNTRY STUDY AND REPORT

Submitted to Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF Prof. Mital Thakor Assistant Professor

Submitted by:

Batch: 2011-13 MBA SEMESTER IV S.V.Institute of Management,Kadi MBA PROGRAMME Affiliated to Gujarat Technological University Ahmedabad May, 2013

PREFACE

In this changing Environment, business and market is not limited for nation. It spread over world and known as a Global Market. To survive in the competitive market, we should have a global knowledge. We need to be good learner in order to sharpen the edge of our knowledge to achieve desired heights in the specialized field.

A project work is a scientific and systematic study intended to catch the global (Thailand) information and find out the business opportunities over there. We were assigned the work for the same. Global Country Report is very help to us for study of the Thailand country for their demographic, economic, political, legal factors and how they work in Thailand.

We are fortunate enough to grab the opportunity given by our institute as a part of our curriculum in the Masters of Business Administration Programme, Gujarat Technological University (GTU). We have tried our best to prepare and present this report to the respective people.

i Acknowledgement

We are indebted to a multitude of persons who have provided us with valuable help during our endeavor of Global Country Report. The project would not have seen the illumination of the day without the efforts of many who managed to show in the wings. We are thankful to all people who have put in great efforts and given us guidance for the successful completion of the project.

Firstly we convey our gratitude to Prof. Mital Thakor, Assistant Professor, S.V.institute of Management, Kadi for giving us the necessary information required to make this Global Country Report. We wish to record our deepest sense of gratitude and thanks to all the above mentioned persons for their valuable guidance, constant support and useful suggestion for completing and carrying out this project at large.

We take this opportunity to thank our head of the MBA department Dr. Bhavin Pandya for providing the direction and advising constructive suggestions and having faith in our abilities which inspired us to undertake and involve ourselves in this real life project.

Preparing a project of this nature is a strenuous task and we are fortunate enough to get support from a large number of people in the way of their direct or indirect support, to whom we will always remain grateful. Last but not least we thank our family members and friends for their emotional support during this project. Very special thanks to all of them who have directly and indirectly contributed to this project.

Place: Kadi

Batch: 2011-13

ii TABLE OF CONTENTS

Chapter Particulars Page Number Number Preface i Acknowledgement ii Part I 1 1 Demographic overview 2 2 Economic overview 8 3 Overview of economic trade & commerce 17 4 Overview of different economic sectors 22 5 Overview of business & trade at international level 27 6 Present Trade Relations & Business Volume of Different 61 Products With India/Gujarat

7 PESTEL Analysis 65 Political Analysis 66 Economic Analysis 67 Socio culture Analysis 69 Legal Analysis 78 Technological analysis 82 Environmental Analysis 86 Part II 1 Alcohol Industry 90 2 Apparel Industry 99 3 Food Industry 107 4 Rubber Industry 118 5 Automobile Industry 129 6 Petrochemical Industry 136 7 Tourism Industry 143 8 Pharmaceutical Industry 151 9 Bibliography 160

Part I

DEMOGRAPHIC PROFILE

1. DEMOGRAPHIC PROFILE

Formal Name: Kingdom of Thailand

Short Form: Thailand

Term for Citizen(s): Thai

Capital: Bangkok

Major Cities:

The biggest metropolitan region is the capital, Bangkok, with an expected 9.6 million tenants. Reliable with Thai enumeration, 6.3 million individuals were existing in the metropolitan range (joining together Bangkok and Thon Buri). Other major urban areas might be SamutPrakan, Nanthaburi, UdonThani, and NakhonRatchasima. Fifteen different urban communities had populaces of more than 100,000.

Autonomy:

The accepted starting date is 1238. Unlike different countries in Southeast Asia, Thailand was never populated.

National Public Holidays

• New Year's Day (January 1),

• MakhaBucha Day (Buddhist All Saints Day, Portable Date In Late January To Right On Time March),

• Chakri Day (Festival Of The Present Tradition, April 6),

• Songkran Day (New Year's As Per Thai Lunar Schedule, Versatile Date In April),

• National Labor Day (May 1),

• Coronation Day (May 5),

• VisakhaBucha Day (Triple Anniversary Day—HonorsThe Life's Commencement, Demise, And Illumination Of Buddha, Versatile Date In May),

• AsanhaBucha Day (Buddhist Monkhood Day, Portable Date In July),

• KhaoPhansa(Starting Of Buddhist Lent, Portable Date In July),

• Queen's Birthday (August 12),

• ChulalongkornDay (Special Day Of King Rama V, October 23),

• King's Birthday—Thailand's National Day (December 5),

• Constitution Day (December 10),

• New Year's Eve (December 31).

The Thai schedule has been adjusts to the Western logbook of days, weeks, and months. A long time are numbered as per the Buddhist period, which started 543 years scheduled the Christian period. Along these lines, 2011 is the year 2554 in the Buddhist time.

1.1 Academic Background

Ancient times: The soonest known inhabitation of present-day Thailand dates to the Palaeolithic period, in the vicinity of 20,000 years prior. Archaic exploration has uncovered confirmation in the Khorat Plateau in the northeast of ancient occupants who might have fashioned bronze executes as right on time as 3000 B.C. what's more grow rice throughout the fourth thousand years B.C.

Early History: In the ninth century B.C., Mon and Khmer individuals created kingdoms that incorporated huge ranges of what is currently Thailand. Much of what the aforesaid individuals osmoses from contacts with South Asian individuals religious, social, political, and social plans and organizations later affected the advancement of Thailand's society and national character.

Thailand During World War Ii (1941–44): The war for Thailand started decisively on December 8, 1941, when Thai and Japanese troops crashed on the Isthmus of Kra. Bangkok acquiesced to Japan's requests that its troops be allowed to cross the isthmus to dose Burma and Malaya. In January 1942, Phibun marked a shared safeguard settlement with Japan and pronounced war against Britain and the United States. SeniPramoj, the opposition to Japanese Thai minister to Washington, rejected his legislature's requests to convey the assertion of war, and the United States shunned pronouncing war on Thailand. Seni ordered a Free Thai development, and, with U.s. government underpin, Thai work force were prepared for against Japanese underground exercises. 4

Society of Thailand

The society of Thailand fuses social opinions and qualities indigenous to the range regarded as current Thailand coupled with much impact from aged India, China, Cambodia, as well as the neighbouring ancient societies of Southeast Asia. It is impacted principally by Animism, Hinduism, Buddhism, and in addition by later relocations from China and southern India.

Relationships

Thailand frequently is depicted as a socially homogeneous nation, yet there are more or less 75 different ethno etymological assemblies. The Central Tai is the prevailing ethnic assembly and explains 36% of the populace. The Thai-Lao and Lanna Tai, who together explain about 40% of the populace, were not absorbed into the national society until the 20th century.

Conspicuous Religion in the Country

Buddhists is the conspicuous religion in Thailand with practically 95% of the populace taking after the religion, second biggest accompanied religion is Islam, there are around the range of 4 to 5% muslims in Thailand. Rest populace takes after Hinduism, jewish, sikism, and Christianity.

 POPULATION: 67091089 (July 2012est.)

 AGE Age structure: 0-14 years: 19.9% (Male 6779723 / Female 6466625) 15-64years: Male 2778012/ Female 3372203) (2011 the distribution of population according to age)  MEDIAN AGE Total Median age Male: 33.3 years Female 35.2 years

 POPULATION GROWTH RATE: 0.543% (2011estimated.)  BIRTH RATE 12.81 births population

 DEATH RATIO 7.38 deaths per 1000 population

 URBANIZATION Total: 34% of total population Rate of urbanization: 1.8% annual rate of change estimated as per 2011-2015.

 NET MIGRATION RATE 0 migrant(s)/1,000 population (2011 est.)

 URBANIZATION: URBAN POPULATION 34% of total population (2010)

 RATE OF URBANIZATION 1.8% annual rate of change (2010-15 est.)

 MAJOR CITIES Total: 6.902 (as per est. 2009)

 SEX RATIO Total: 1.05 males per females Under 15: 1.05 males per females Between the age of 15-64: .98 males per females Age of 65 or above: .82 males per females.

 INFANT MORTALITY Total: 15.9 deaths per 1000 live births.(2011 est.) Male: 16.88 deaths per 1000 live births Female: 14.86 deaths per 1000 live births.

 LITERACY RATE Total: 92.6% Male: 94.9% Female: 90.5%

 LIFE EXPECTANCY AT BIRTH Life expectancy at birth: total population 73.83 years Male: 71.45 years Female: 76.33 years (2011 est.)

 LIFE EXPECTANCY Total: 73.83 years Male: 71.45 years Female: 76.33 years (2011 est.)

 TOTAL FERTILITY RATE 1.66 children born/ woman (2011estimates)

 HIV/AIDS - ADULT PREVALENCE RATE 1.3% (2009 est.)  HIV/AIDS – DEATHS 28,000 (2009 est.)

 Major infectious diseases Major infectious diseases: degree of risk : high Food or waterborne diseases : Bacterial Diarrhea Vectorborne diseases : Dengue Fever, Encephalitis and Malaria Animal contact disease : Rabies Water contact disease : Leptospirosis

ECONOMIC OVERVIEW

2. ECONOMIC OVERVIEW

Capital : Bangkok Government type : Constitutional monarchy Currency : Baht (THB) Population : 63.9 million Status : Lower middle income country (GDP/capita: US$ 5,043 in 2011)

2.1 Thailand Ranking For doing business

Overall ranking: 19 out of 183 countries (2009) (2010) Subcategories: Starting a business: 95 out of 183 countries (2009) Registering property: 19 out of 183 countries Paying Taxes: 91 out of 183 countries Getting credit: 72 out of 183 countries Protecting investors: 12 out of 183 countries Trading across border: 12 out of 183 countries Enforcing Contracts: 25 out of 183 countries (2010)

Global competitiveness ranking (Ranking by country on a basis of 142, the first is the best) 39 (2011/2012)

Index of Economic Freedom WSJ and Heritage Foundation Ranking: 62 Score: 64.7 (Moderately Free) (2009) (100=totally free 0=totally repressed) Source: (Thailand GDP Data and Country Report)

 Thailand Credit rating

Standard & Poor’s BBB+/negative, Moody’s Baa1/negative, Fitch BBB+/negative.

(Atradius Country Report Thailand, 2011)

Inflation Rate of Thailand

 Inflation rate is wary with the GDP rate  Inflation rate high is 5.40% in 2008 and minimum is -0.85% in 2009 n GDP is minimum is - 2.33% when inflation is minimum  Thailand inflation rate are never in double digit, which is show the strong economy of the Thailand.  Inflation Around 5% is best for the economy

Unemployment rate of Thailand

 Highest Unemployment rate is 3.90% in 2001 and 0% in 2002, this is show the capacity of Thailand of to produce the jobs for the unemployed population  Thailand unemployment rate is always low near to 3 to 0%  In the last year 2011 unemployment rate is 0.70% which is near to zero.  High employment lead to low population below the poverty line, high purchasing power of the population, which is improve the standard of leaving.

International Reserves

 Its showing upward trend from 2008 to 2012,  This reserve help to maintain the value of country currency, and help full for import export business.  International reserve also help to country to protect from dominance of other country

2.2 Current Account Balance (US $ in Millions)

 Current account balance show the balance of Physical Goods transfer between the country  Thailand Current account balance of payment is positive, it means Goods import is less compare to export of goods.

Fiscal Balance (in %) of GDP

 Fiscal balance shows the balance of a government's tax revenues, plus any proceeds from asset sales, minus government spending. If the balance is positive the government has a fiscal surplus, if negative a fiscal deficit.  Thailand balance is minus in each years, which is call fiscal deficit  Due to this deficit Government take the loans and increase the foreign debt

FDI inflows & Out Flows ( In US $ Millions)

 Foreign investment in country and outflow means FDI pull back their funds  In Thailand 2008 to 2010 FDI inflow is more than the Outflows.  Which is show the good sign for the economy of the country  Surplus means country get the Foreign fund no need to take a foreign loan from outside.

Foreign Debt (%) of GDP

 Thailand foreign debt increase from 2008 to 2011 by 20% to 24%, and decrease in 2012 but its half years detail because of the 2012 yet not complete  Thailand foreign debt is 23% in 2012 and around of this in past few years, its very high because it almost 1/5 of GDP  Foreign debt creates interest burden, and dominance of countries who provide the funds.

Balance of Payment % of GDP

 BOP shows the difference over a given time between total payments to foreign nations, arising from imports of goods and services and transfers abroad of capital, interest, grants, etc., and total receipts from foreign nations, arising from exports of goods and services and transfers from abroad of capital, interest, grants, etc.  Thailand BOP is minus in 2005 and then it is positive in each years, which means country total export is higher than total import.

Currency Rate

 Currency value of Thailand as on March 31, 2013 17:54 UTC  Thailand Baht comparison with The Indian currency and The US currency  We can analysis that 1 Baht =1.854646 Rs of India (1Rs = 0.5858944 Baht).  1 Baht = 0.034165 $ US (1 $ US = 30.6946 Baht)  With the Thailand is Export is good for our Country, reason is in place of 1 baht get the 1.706792 Rs, in export we have to pay 1.706792 Rs for 1 baht  Thailand currency is more stronger that Indian currency.

Infrastructures

 Thailand points in Quality of overall Infrastructure is 4.9 out of 10 points1  Thailand Points is 4.9 is near to 5 means average points, we can conclude that country infrastructure Quality is not good, not Bad but moderate.  Thailand Infrastructures following2 1. Rail Line (total route-KM) (2010) was 4,429 km 2. Road total Network (2006) was 1,80,053 km 3. Secure internet servers (2011) was 1,151 4. Telephone lines (2010) was 6.9248 million 5. Mobile cellular subscription (2010) was 71.6242 million 6. Hospital Beds (2010) was only 2.1 per 1000 people

1 CIA fact book 2012 2http://www.worldbank.org/ 12

Disposable personal income

 Disposable income increase every years, only 2008 and 2009 it was stable.  But in 2010 increase of 89% compare to 2009 disposable Income.  High disposable income means high spending power of the people and they are spend more on their life, so it ultimately Good for the Country.

Thailand GDP showing high fluctuation highest is 7.81% than lowest is -2.33%. In 2009 GDP growth rate is minus there are many reason is behind that like, Political uncertainty face by Thailand, the global financial crisis in 2008 weakened Thailand’s economic growth by reducing domestic and international demand for both its goods and services (including tourism). Tourism is highest contributor for Service sectors, due to minimum exposure to toxic assets, Thai banks experienced limited direct impact from the global financial crisis and Nonetheless, Thai economic growth slowed to 2.5% in 2008, with fourth-quarter growth dropping below zero. In 2009, the contraction continued, with an average year-on-year economic growth of minus 2.3% in 2009. An GDP again highest in 2010 is at peak 7.81% from last many years. In 2011 Thai land GDP is 0.05% which is very negligible due to the economy achieved 3.1% growth over the first three quarters of 2011 despite supply chain disruptions caused by Japan's tsunami and an overall slowdown in the global economy, October and November flooding in Thailand's central region, due to, inundated several key industrial estates on Bangkok’s periphery and halted economic activity in affected areas and Industrial production tires the impact of flood damages, with manufacturing output declining 36% year-on-year for October.

Thailand export and import. Maximum import of Thailand from Chaina, EU (15), Asian (exclude Chaina) and import products are Non-durables, Durables, Fuel, Minerals, Agricultural and agro- manufacturing products, Non-agro manufacturing products, Live animal, Tools and utensils, Machinery, equipment, and supplies, Aircrafts, ships, floating structures, and locomotive, Non- monetary gold (excl. articles of goldsmiths), Automotive, Munitions (incl. explosives and small arms) and Other manufacturing products etc. Major Export of Thailand with Chaina, Asian (exclude Chaina), other country and export products are Horticultural products, Zinc, Animal products Other, mineral products, Live fish & crustaceans, Agro-manufacturing Products, Cuttlefish, squid, octopus, Apparels and Textile Materials, Fish, Foot ware and parts, Crustaceans, Electronics, Other fishery

13 products, Electrical Appliances, Wood charcoal Metal & Steel, Wood, simply worked, Automotive, Other forestry products Aircrafts, ships, floating structures, and locomotive, Coal, coke, peat Machinery & Equipment, Crude oil, Jewellery, Natural gas, Chemicals, Aluminium, Petro- chemical Products, Copper, Petroleum products, Iron ore, Photographic & cinematographic instruments & supplies, Lead, Optical appliance and instruments, Nickel, Toiletries and cosmetics, Precious metal (other than gold), Furniture and parts, Tin, Other Manufacturing products and Non- monetary gold (excl. articles of goldsmiths) etc.

Taxation in Thailand, Corporate Income Tax is paid in Thailand by companies and partnerships established under Thai laws are subject to income tax on income earned from sources within and outside of Thailand. The juristic companies and partnerships for income tax purposes include. Corporate Income Tax is imposed on the net profits as per the generally accepted and Pay 50 percent of the estimated annual income tax by the end of the eighth month. And Failure to pay the estimated tax the taxpayer is fined the amount of 20 % of the deficit. About Custom duty, Personal effects which accompany passengers in an amount not exceeding their needs for personal or professional use and with the total value of all goods taken together not exceeding 10,000 baht, will be exempted from Customs duties. Duties for goods brought into Thailand will be assessed according to Customs Acts, Customs Tariff Decree, and other associated laws. The good subject to duty charge are Goods which are brought into the country in a limited quantity as personal effects and are not for a commercial purpose, Goods not exceeding 80,000 baht in value and Duties shall be paid in cash on the date of arrival. And personal income tax income slab 150000 baht income is exempted and then 10%, 20%. 30% and 37%.

Thailand inflation, Inflation rate is wary with the GDP rate. Inflation rate high is 5.40% in 2008 and minimum is -0.85% in 2009 n GDP is minimum is -2.33% when inflation is minimum. Thailand inflation rate are never in double digit, which is show the strong economy of the Thailand.

Labor force of Thailand, There is showing upward means increasing trend in labor force only in 2005 labor force decrease. Labor forces are booster for the economy, which is help to increase the domestic 14 production of the country. 2011 labor force distribution, In Thailand maximum labor force use by the service sector which is 46.10%, strangeness of the service sector, in service sector major part hold by truism and traveling industry. Second one is agriculture 40.70% which is little less than the service industry, agriculture have less share in GDP but higher labor force use by this sector. And in each country maximum labor force use by agriculture because of agriculture is labor intensive business. Industry has second share in GDP but third number in labor force use. So it is higher production per labor.

Unemployment rate of the Thailand, Highest rate is 3.90% in 2001 and 0% in 2002, this is show the capacity of Thailand of to produce the jobs for the unemployed population. Thailand unemployment rate is always low near to 3 to 0%. In the last year 2011 unemployment rate is 0.70% which is near to zero. High employment lead to low population below the poverty line, high purchasing power of the population, which is improve the standard of leaving.

The international reserve of Thailand. Its showing upward trend from 2008 to 2012, This reserve help to maintain the value of country currency, and help full for import export business.International reserve also help to country to protect from dominance of other country.

The current account balance of Thailand, Current account balance show the balance of Physical Goods transfer between the country. Thailand Current account balance of payment is positive, it means Goods import is less compare to export of goods. Import transactions require Exchange Control approval. The procedure differs according to the method of payment. Most payments for imports may be approved by authorized banks upon submission of documents such as invoices, collection bills and import permits. And Export there is few exchange control restrictions on export transactions. Any controls which do exist seek to ensure that the proceeds are sold to an authorized bank. With certain exceptions, exporters are required to obtain a certificate of Exportation from an authorized bank, in order to authorize the Customs Department to clear the goods for export, by submission of such documents as invoices, sales contracts or evidence of sales negotiations, export permits, copies of letters of credit received, and other relevant documents.

The fiscal balance of Thailand, Fiscal balance shows the balance of a government's tax revenues, plus any proceeds from asset sales, minus government spending. If the balance is positive the government has a fiscal surplus, if negative a fiscal deficit.Thailand balance is minus in each years, which is call fiscal deficit. FDI inflow and outflow of the Thailand, Foreign investment in country and outflow means FDI pull back their funds. In Thailand 2008 to 2010 FDI inflow is more than the Outflows.

Foreign debt percentage of the GDP, Thailand foreign debt increase from 2008 to 2011 by 20% to 24%, and decrease in 2012 but its half years detail because of the 2012 yet not complete. Thailand foreign debt is 23% in 2012 and around of this in past few years, its very high because it almost 1/5 of GDP.

The balance of payment of Thailand country in percentage of GDP, Thailand BOP is minus in 2005 and then it is positive in each years, which means country total export is higher than total import.

Thailand point in Quality of overall Infrastructure is 4.9 out of 10 points. Thailand Points is 4.9 is near to 5 means average points, we can conclude that country infrastructure Quality is not good, not Bad but moderate. Thailand Infrastructures are Rail Line (total route-KM) (2010) was 4,429 km, Road total Network (2006) was 1,80,053 km, Secure internet servers (2011) was 1,151, Telephone lines (2010) was 6.9248 million, Mobile cellular subscription (2010) was 71.6242 million, Hospital Beds (2010) was only 2.1 per 1000 people.

Thailand Disposable personal income, Disposable income increase every years, only 2008 and 2009 it was stable. But in 2010 increase of 89% compare to 2009 disposable Income. High disposable income means high spending power of the people and they are spend more on their life, so it ultimately Good for the Country.

OVERVIEW OF ECONOMIC TRADE & COMMERCE

3.OVERVIEW OF ECONOMIC TRADE & COMMERCE

3.1Major Industries in Thailand

1) Tourism Industry3: Thailand is very famous in attracting the tourists from all over the world to visit the wonderful and stunning destinations and it is because of this Tourism Industry has highly flourished since past years. Thailand and Thai Airways International, its flag carrier, have been awarded the best tourist destination and airline for Norwegians. Thailand’s Mandarin Oriental Hotel ranks 25th among the top luxury hotels in the world.

2) Food Industry4: Thailand is well known as the “Kitchen of the World” due to its abundance of the natural resources combined with significant investments in technology, food safety R &D and following to International quality standards. The largest sole net food exporter in Asia, Thailand is one of the world’s largest producers of food products such as rice, canned tuna, chicken, frozen sea food and canned pineapple. In 2011, Thai food exports value increased 20% than previous year.

3) Electrical and Electronics Industry: In the manufacturing sector, Thailand is declared to be the largest manufacturer in the Electronics Industry having the worth of nearly US$ 30 billion and has accounted more than 30% of its export revenues in 2007.Thailand’s main electronic exports are hard disk drives (HDD)(54%) and Integrated circuits(IC)(29%) of the total electronics exports. It is considered to be an ideal location for electronics industry investment.

4) Automotive Industry: The Automotive industry is the third largest sector in country making it a vital sector for the Thai economy (12% of GDP). With government led support, automotive has evolved into an industry with vibrant foreign OEM competition, and an extensive network of related and supporting industries contributing greatly to international export and trade inflows. The country’s manufacturing base is strong enough to supply all necessary parts from engine parts to interior and body parts.

5) Machinery and Metal Working Industry: Thailand’s demand for more sophisticated machinery is growing especially among the domestic downstream industries which create attractive opportunities for investors. The exports of these products of this country have grown by 90% since

3 http://thailand.prd.go.th/view_news.php?id=6122&a=4 9/9/2012 5:44pm 4http://www.boi.go.th/index.php?page=opp_food 9/9/2012 5:50 18

2004 to nearly US$ 8 billion. Trade relations by signing of the ASEAN Free Trade Agreement (AFTA) is also favoring by adding fuel to Thai machinery and parts exports. The growth continues as demand from developing nations like Vietnam, Malaysia and Indonesia strengthens.

6) Gems and Jewelry: Thailand has become one of the world’s top exporters of gems and jewelry because of its century-old reputation for superb craftsmanship and strong manufacturing base having the exports totaled US$ 12.3 billion, ranking it among the most important export products. Its production plays a crucial role in the kingdom’s economy as it creates jobs and development of related industries like gem cutting, gem cutting equipment, mining and packaging, jewelry design.

7) Medicinal Industry: Thailand is the world leader in medicinal services with world class medical infrastructure and best affordable quality of health care services. There is an apparent growth in medicinal industry because of the health care facilities expanding there is huge investment in high- technology equipment, medicinal device and pharmaceutical and medical food sectors.

8) Petrochemicals Industry: Thailand is placed at sixth in Business Monitor International’s 2008 Asia Petrochemical Business Environment Rankings ahead of India, Malaysia and Australia. It is the net exporter in intermediate and downstream petrochemicals, polymers and plastic products. The global market demand-from pharmaceuticals to fashion to automotive-continues to be met by Thailand’s ever growing petrochemical industry.

9) Printing Industry: The Thai printing industry, comprised of more than 5,000 companies, is fully integrated, with paper manufacturing, graphic arts design, pre-press houses, various printing systems and post-press houses. Thailand’s printing establishments as a whole offer four major printed products – books, general printed materials, packaging, and newspaper to both local and export markets. The market size of the industry is valued in excess of US$ 20 billion. Total income for the paper packaging industry alone exceeds US$ 1.8 billion per annum.

10) Rubber Industry: Thailand during the early 1900’s has grown to become the world’s largest producer and exporter of natural rubber. It is the leading exporter and processor of high quality rubber. The goal is to develop sophisticated technology and generate added value, enhancing its competitiveness. It is required in the manufacturing of many industrial and consumer products from hoses and vehicle tires, belts, condoms and gloves. The first experimental planting area was located in Trang Province at the southern part of Thailand. 19

3.2 Most Preffered distribution Channels

Entry Strategy - General stores, Hypermarkets and Cash and Carry

The best technique for U.s. exporters to push to stores, hypermarkets or money and convey is to straight contact these outlets, which commonly import straight, and additionally might as well contact merchants and wholesalers. U.s. exporters ought to be cognizant that numerous multinational retailers in Thailand charge posting expenses or a posting recompense for new items. The expense will be accused in understanding of a recipe dependent upon the amount of retail outlets and Sku (stock keeping unit).

Distribution Channels - Grocery stores, Hypermarkets and Cash and Carry

The circulation channel for general stores, money and convey, and hypermarkets in Thailand regularly starts with shippers and heads off to merchants, then to a centermost warehouse or regulate to retail outlets. The foodstuffs will be kept either in the importers‟ warehouse, distributors‟ warehouse, or a centermost warehouse before conveyance. A few markets, superstores and hypermarkets worked by multinational drivers import nourishment items straightforwardly and keep them at their own particular dissemination focuses when conveyance to every outlet.

Entry Strategy- Comfort Stores, Gas Marts & Kiosks

The best technique for U.s. exporters to enter this business portion is to contact the head office of comfort stores, gas stores and booths. U.s. exporters ought to be familiar with the posting expense or posting stipend that may be charged by hefty comfort store networks. The charge will be charged in agreement with an equation dependent upon the amount of outlets and Sku. U.s. marked nourishments sold in these stores are for the most part transformed in Thailand or neighbouring Southeast Asian nations. These items incorporate nibble nourishments, chocolates, treats, confections, gums and breakfast grain. Merchants regularly import U.s. marked sustenances from neighbouring nations instead of from the United States due to the minimal effort and Afta particular tariffs. Bargains patterns of transported in nourishment in C-stores versus provincially handled products will diminish progressively from five to zero percent, in accordance with the acquiring force of the target assembly. U.S. items will be generally appropriated by Thai customers in C-stores if cost and quality is comparative to what neighbourhood suppliers offer.

Conveyance Channels Comfort Stores, Gas Marts & Kiosks

A regular dissemination channel for accommodation stores, gas shops and booths begins from U.s. exporters to U.s. consolidators and traders to Thai merchants to stores, gas bazaars and booth dissemination focuses. Some Thai wholesalers disperse foodstuffs straightforwardly to stores, gas stores and booth outlets.The majority of the foodstuffs that are circulated straightforwardly to the outlets are crisp, incorporating heated products and dairy items. The stream example of diverse retailers fluctuates relying on the bargains volume and number of outlets. A nexus part in the triumph of the bigger retailers is control of their own dispersion centres.

Entry Strategy - Customary Markets

For U.s. exporters, Thai conventional wet markets are more challenging to enter recognizing the normal buy cost of items, level shopper obtaining power, the size and universal circulation channels of the outlets, and shopper inclination for customary Thai and Chinese sustenance.

Dispersion Channels - Customary Markets

Ordinarily nearby makers will have their own particular wholesalers to appropriate their items. Some nearby makers are under supervision of a Royal Project in which alloted merchants administer the dispersion.

OVERVIEW OF DIFFERENT ECONOMIC SECTORS

4. OVERVIEW OF DIFFERENT ECONOMIC SECTORS

4.1 Contribution in GDP:

GDP Contribution by Each Sector 400 350 300 250 200

In$ US 150 100 50 0 2011 2010 2009 2008 2007 Years

Total GDP In USD Agriculture Manufacturing Service

The best contribution is of service sector having 52.7% in total GDP, following by manufacturing sector with 34% and because the technology is increasing and advancement in service and manufacturing sector, agriculture sector additionally contributed only 13.3%.

4.2. Growth rate of sectors:GDP - composition by sector The agricultural sector gave its contribution by having constantly slow growth. The manufacturing sector was also growing with stagnant pace but the contribution declined after 2010 with 27.96 US $ difference. But the service sector grows continuously by having great contribution in Gross Domestic Product in last 2 years.

4.3 Future prediction of sectors

Thailand has a free developed economy, one with well-developed facilities and infrastructure. Countries good investment policies helped to develop the sectors in a fast pace. The countries development remains stable and then started declining. The primary reason was an ongoing political crisis and consumer also lost confidence

It's GDP (PPP) stood at US$586.877 billion in 2010. This figure is 8.83% higher than its 2009 value, and this does signifies a positive recovery from the 2008 global financial crisis. Forecasters expect positive growth in 2011, but slightly lower than that in 2010, with a 5.10% increase to US$616.78 billion. Thailand will see a GDP (PPP) growth of 5.9 to 6.2 percent from 2012 to 2016. By 2016, its GDP (PPP) will be US$839.64 billion.

In 2010, Thailand's GDP (PPP) per capita is US$9,187.43. This figure is 8.23 percent higher than its 2009 value of US$8448.70. GDP (PPP) per capita is expected to increase by 4.47 per cents to US$9,598.01 in 2011. From 2012 to 2016, Thailand will see a growth of between 5.3 percent to 6.2 percent in GDP (PPP). By 2016, GDP (PPP) will hit US$12,681.

4.4Favourable and unfavourable factors of each sector:

 Agriculture sector

 In agriculture sector, cheap food supply, environment and infrastructure facility it’s related to farming land, Technology using in the contact farming and to opportunity to gain knowledge to farmer and to produce quality of crops and rapidly growing horticulture sector.  In 2008 agriculture, forestry, and fishing contributed only 8.4% percent to GDP and even in rural areas farm jobs represent only half of employment. Thailand has an agricultural sector which shares only 8.6 percent of the GDP – lower than the trading sector and the logistics & communication sector which account for 13.5 percent and 9.6 percent of the GDP respectively. However, its per capita GDP in 2011 remains very low at THB155, 926(USD5, 394)

 Manufacturing sector

 On the favourable part, In 2010 industry contribute 45.6 percent to the country and employ 19.7 percent of the total workforce. And An increasing global demand for high-technology consumer electronics such as wireless devices, mobile phones and computers, Thailand has become the favourable place for electronics industry investment. 24

 While on the negative part, The Direct Investment for current economic conditions in November fell 0.9 points from the previous month to 45.0, for the first drop in two months. The household activity-related DI dropped, due mainly to slower sales of winter goods amid relatively high temperatures in the first half of the month, as well as a reactionary decline in demand for such products as televisions after a last-minute demand increase.

 The corporate activity-related Direct Investment decreased, due mainly to the spreading impact of the yen’s rapid appreciation and parts-supply delays caused by flooding in Thailand, although a recovery from the plunge due to the Great East Japan trembling was seen along with additional domestic production to cover delays in Thai output caused by the flooding.

 Moreover, as unfavourable factors we can consider the yen’s appreciation as, the impact of the flood in Thailand was likely to decline, and reconstruction demand is expected after the Great East Japan Earthquake. Under such situation, the corporate activity related Direct Investment for future economic conditions rose, and the house hold activity- and employment-related Direct Investments dropped.

 Service sector  Strong trend toward globalization of trade in goods and services, which was made possible. Tourism large contribution the Thailand economy mostly for the breaches and relaxation  One of the favourable point is there is good availability of tourism, banking and finance, restaurants, and hospital services through the evolution of the international trading system as well as advances in information technology and transportation systems.

 While on the negative side, there was a fragment more play in the service sector than in developing the readings had a greater impact on the overall index. As with manufacturing, sales numbers were down, falling from 61.5 to 58.4. This is the first time sales have fallen below 60 in over a year. while the wholesale and retail trade sector slightly slowed down by 3.9%.However, with analysis of macro-level data from IMD does not yet show a productive growth of the Thai service industry by ranking 48 from 55 countries, partly as a result of recently recognized by the government and business segments. 25

 Skill shortages are a main obstacle to operations and growth of this industry. Most of available staffs have received little formal services training and lead to high turnover rate of qualified staffs. The service sector has had the lowest rate of growth in labor productivity. Labor productivity fell sharply after 1996, and the 2004 value is still 20 percent below the 1996 peak. Infrastructure is a severe business constraint for the service industry. According to the FTPI and World Bank (2006) indicated that Thailand performs particularly weakly on electricity- and phone-related indicators such as the frequency of power outages and telephone interruptions and the delay in obtaining electricity or phone connections.

Strongest and weakest sector:

As per above mention criteria, Service is the highest contributing sector to GDP with 52.7% while Manufacturing and Agriculture sectors will contribute to GDP with 34 % and 13.3 % respectively.

Contrast and compare of sectors:

In 2007 industry contributed 43.9% of gross domestic product (GDP) but employed only 14% of the labour force. This proportion is the opposite of the one apply to agriculture.

Overall Thailand’s service industry is relatively small in scale and weak in strength compared with the manufacturing sector. The industry is pre-dominated by traditional services and has yet to be diversified sector-wise due to the pressure from other developed countries, which have reward in innovative ideas, strength and scale.

 In 2010, agriculture contributes 10.4 percent to the overall GDP, but employs 42.4 percent of the overall workforce. Although agriculture’s contribution to the nation’s GDP decreases over the years.

. OVERVIEW OF BUSINESS & TRADE AT INTERNATIONAL LEVEL

5. OVERVIEW OF BUSINESS & TRADE AT INTERNATIONAL LEVEL

5.1 Thailand’s export and import at a glance

Export

Exports have been the prime mover in Thailand’s drive towards prosperity. In 1972, the first year the government shifted toward export promotion as a core policy, they accounted for only 13% of the country’s GDP. By 1987, the ratio had risen to 23% and by 1998, it was 50%. Thailand has long been famous as an exporter of food and tradition commodities. The government’s initiatives to promote foreign investments, improved business infrastructures and emerging local entrepreneurs have helped Thailand to expand beyond its traditional export patterns. Large investments from multi-nationals have helped Thailand to become an important Southeast Asian production center for many manufacture of computers, electronic integrated circuits, automobiles, auto-parts, air conditioners etc. Thailand is the No 1 rice exporter in the world and the only, net food exporter in Asia. Thailand leads the world in exports of tapioca, rubber, canned pineapples and frozen shrimp while being a major player in sugar, corn and poultry.

In 1996-97, exports are decreasing due to lower cost competitors such as India, China, and Vietnam in low-end labor intensive manufacturing. It increased in 1999, showing a 4% gain over the previous year with strong gains made in automobiles and parts, electrical circuits and plastic industries. Agriculture based products did not fare as well with low commodity prices affecting exports of rice, rubber, seafood and tapioca.5

 Total value of Exports of Thailand is US$191.3 billion in 2010.  Primary exports are textiles and footwear, fishery products, rice, rubber, Jewellery, automobiles, computers and parts, electrical appliances etc.  Mainly exports partners are US (10.9%), China (10.6%), Japan (10.3%) out of total exports.

5http://www.thailand.com/exports/html/country_export_overview.htm 28

Imports

 Total value of imports is US$156.9billion.  Primary imports are capital goods, raw-materials, consumer’s goods, fuels etc.  Primary imports partners are Japan (18.7%), China (12.7%), Malaysia (6.4%).

5.1.1 Import by economic classification Imports by Economic Classification (Non-seasonally adjusted)(In terms of US$)

Sep Aug Jul Jun May 2012 Apr 2012 2012 2012 2012 2012

1 Consumer Goods 2 Price 119.50 119.30 119.60 119.30 119.50 119.20 3 Value 197.10 210.22 202.25 186.86 212.45 173.65 4 Volume 164.94 176.21 169.11 156.63 177.78 145.68 5 Raw materials 6 Price 139.40 138.80 138.90 138.90 142.70 143.50 7 Value 146.40 156.77 163.41 157.67 168.88 149.62 8 Volume 105.02 112.94 117.65 113.51 118.35 104.27 9 Capital Goods 10 Price 114.70 114.70 114.80 114.60 114.70 114.70 11 Value 210.05 220.13 214.55 208.01 219.80 204.65 12 Volume 183.13 191.92 186.89 181.51 191.63 178.42 13 Total 14 Price 132.20 131.70 131.70 131.60 133.90 134.50 15 Value 168.46 173.47 180.68 172.01 192.34 167.20 16 Volume 127.43 131.72 137.19 130.71 143.65 124.31

Last updated: November, 2012 Sources: Ministry of Commerce and Bank of Thailand6

Foreign Trade in Figures

Foreign trade in USD

Foreign trade indicators 2007 2008 2009 2010 2011 Imports of goods 139966 179225 133668 182400 228498 Exports of goods 153867 177778 152422 195319 228822 Imports of services 38173 46033 37541 44592 50490 Export of services 30124 33056 29677 34058 40484

Source: WTO - World Trade Organization - Last Available Data.7

Foreign trade in percentage

2007 2008 2009 2010 2011 Imports of Goods 100 128.049 95.50034 130.3174 163.2525 Exports of goods 100 115.54 99.06088 126.9401 148.7141 Imports of services 100 120.5905 98.34438 116.8156 132.2663 exports of services 100 109.7331 98.51613 113.0594 134.3912

6http://www.boi.go.th/index.php?page=imports_by_economic_classification 7http://www.fita.org/countries/thailand.html 30

250000

200000

150000 Imports of goods Exports of goods

100000 Imports of services Export of services

50000

0 2007 2008 2009 2010 2011

CONCLUSION

From the above table, we can say that Thailand country is more imported services than export of services. Country is imported raw-material for the further production and final product is exported to the other countries.

5.1.2 Export by product classification

Exports Indices by Product Group (Non-Seasonally Adjusted)

(In terms of US$)

Sept Jul Jun 2012 Aug 2012 2012 2012 May 2012 Apr 2012

1 Agricultural products

2 Price 171.90 170.60 173.40 177.30 182.20 184.50

3 Value 133.34 159.73 174.57 131.51 174.04 150.63

4 Volume 77.56 93.62 100.67 74.17 95.52 81.64

5 Fishery products

6 Price 149.40 148.00 147.50 147.40 147.20 148.60

7 Value 120.44 111.96 128.12 125.55 133.01 103.99

8 Volume 80.61 75.65 86.86 85.17 90.36 69.98

9 Manufactured products

10 Price 121.20 121.10 120.80 120.40 121.00 121.20

11 Value 154.31 147.51 149.08 153.89 165.32 130.92

12 Volume 127.32 121.81 123.41 127.81 136.63 108.02

13 Total

14 Price 128.40 128.10 128.00 128.00 128.90 129.30

15 Value 162.45 155.14 152.68 154.76 163.02 131.93

16 Volume 126.52 121.11 119.28 120.90 126.47 102.03

Last updated: November, 2012 Sources: Ministry of Commerce and Bank of Thailand8

5.2 Foreign Investment

Thailand’s government keeps an open market-oriented economy and inspires foreign direct investment as a mean of promoting financial expansion, occupation and technology transfer. In Thailand, Foreign investment significantly effects the bounty financial growth of the last 15 years, encouraging Thailand’s alteration from an agriculture-based economy to equilibrium with industry and manufacturing.

In 1977, Thai Government encourages foreign investment by establishing the board of investment. The BOI lists seven categories of economic actives covering hundreds of types of business that are eligible for investment benefits.

Any people who meet any or all following criteria are eligible for BOI benefits.

8http://www.boi.go.th/index.php?page=exports_by_product_classification 32

 Thai significantly support balance of payments position by increasing production for Export  To helps development of resources which are scarce in nature  To Increase in employment  To find jobs outside the Bangkok urban area  To save energy or replace imported energy supplies  To establish or develop industries which helpful for technological supplies are measured important and necessary by the government

Many aspects such as foreign investment in Thailand’s economy have reduced significantly since the economic breakdown. The value of projects accepted by the BOI in 1997 was US$ 9.2 billion and decreasing 6.4 billion in 1998 and decreases further the next year to 4.2 billion. Top overseas financiers in Thailand contain Japan, the USA, the Singapore, the UK and Netherlands.

Industrial area effort

Thailand has formed a network of industrial areas which run as permitted trade Sectors in order to promote export, overseas stock and financial decentralization from Bangkok. The industrial Area Authority of Thailand is involved to ensure orderly planned progress and controls the numerous lands in the kingdom.

Primarily two classes of land, one is general industrial zone is the area which reserved for the place of industries profession for local and / or export consumption. The other is export processing zone is the area which reserved for place of businesses manufacturing.

Firm located in an EPZ or GIZ received benefit that include

 To exempt corporate tax  To Reduce or exempted of import duties on machinery or materials used in factory manufacturing.  Authorization to personal property  Approval to use foreign consultants, expert technician and experts  Export Processing Zones will usually cover a customs clearance house for firm sanction of good

The extent of the benefits irritated to a company operating in an Export Processing Zones or General Industrial Zone depend upon located area in Thailand. Thailand Board of investment formed three different investment zones in the Thailand with new innovative projects. Each zone is delivery extra incentives, tax benefits and duty reduction as well as allowances for infrastructure investment.

Zone 1 – includes Bangkok, Samut Prakan, Samut sahon, Nakhon patham, Nothaburi and Pathum thami.

Zone 2- includes Samut Sangkhra, Ratchaburi, Kanchanabari, Suphanburi Anghong, Ayutthaya and Saraburi. Saraburi, Nakhon Nayok, Chachoengsao and Chonburi (10 cities)

Zone 3- covers the outstanding 61 cities and laem chabang industrial area.

 For project in zone1

NO TAX Allowance or tax reduction on machinery but project which export is more than 80% of total trades or localize their factories in industrial land or helped industrial zones. Such project will receive a 50% import duty discount on machinery which is concept include in the tariff reduction announcement of the ministry of finance and which is to import duty greater than 10%.

No corporate income tax freedom but for project which export is more than 80% of total trades and positioned their factories in industrial land and sponsored industrial areas in which three year concession will be awarded.

Exclusion from import duties on raw material used in export products for a dated of one year.

 Plans in zone 2

50% import duty decline on machinery which is not counting in the tariff reduction statement of the ministry of finance and which is subject to import duty greater than or equal to 10%. Exemption from import duties paid on raw material used in export products for a passé of one year.

 Plans in zone 3  To Excepted from import duties paid on machinery  To excluded corporate income tax for 8 year.  Release from impart duties on raw material used in products for a era of 5 years  75% decrease of import duty on raw materials used in production for national trades.

Renewable on an annual basis is provided that raw material similar in quality are not being produced or do not create within Thailand in sufficient size to be obtain for used in such activity for the 5 years.

Different rights are allowed

 A saving in corporate income taxes is paid by 50% offered for 5 years after the release era.  Dual deduction from the taxable revenue of water, energy & transportation expenses for 10 years from the date of first deals.  Deduction from net profit of 25% of the costs of installation or construction of the project's infrastructure facilities is given.

Controlled business for foreign person

 Employment  Labor in farming. Animal breeding , forestry, fishery or general farm supervision  Stonework, Woodworking or other building work  Wood carving  Dynamic motor vehicle or non-motorized carrier except for directing international aircraft  Selling  Jewel wounding and practicing  Hair cutting and hair dressing and beautician work  Hand weaving  Mat weaving or making from reed rattan kenaf straw or baboon pulp  Manufacture of manual rubbery paper  Manufacture of lacquer ware  Thai musical instrument production

 Goldsmith , silversmith and other precious metal work  The doll making  Hat making  Manufacture of mattresses and padded blankets  Alms bowl making  Physical talent product  Shoemaking  Paper and cloth umbrella fabrication  Hawking business  Tourist director or tour organizing agency  Architectural work and Civil engineering effort

5.3 Trade Restriction

Import Regulation by Thailand custom

Free import

For over 20 year olds:

 200 cigarettes or 250gm cigars 250gm of tobacco  1L of alcohol  Non-profitable total of gifts and other items for private usage of equal to 10,000 Baht

Forbidden

 Narcotics and other controlled substances  Pornography  Counterfeit items  Goods with Thai flag on them  Fake Royal or other Official seals  Copyright infringing items  Local currency Restricted

 Live animals – health license required with complete and valid injections. Contact nearest embassy to obtain permission.  Plants, foodstuff and seeds– health license need. Check with the nearest group.  Weaponry and ammunition – approval available from Ministry of Interior. Check with the nearest group.  Medication  Foreign currency – any amounts need to be declared.9

Export Regulations by Thailand customs

Prohibited

 Narcotics  Pornography  Counterfeit items  Goods with Thai flag  Fake Royal or other Official seals

Restricted

 Foreign currency – up to the amount declared upon arrival.10

5.4 Transportation and Telecommunications

Transportation

Thailand has wide system of roads and railroads. Rapid transit is growing in an otherwise gridlocked Bangkok. Tourism and better economic development run Bangkok to become a major regional air hub. New technology development has transported some developments to the Thai telecommunications system.

9http://thailand.visahq.in/customs/

10http://thailand.visahq.in/customs/ - 27/09/2012 , 9:37 37

Roads:

Estimations vary on the length of roads in Thailand. According to a U.S. government approximation in 2000, Thailand had 57,403 kilometers of roads of which 56,542 kilometers were covered and 861 kilometers are unpaved. Other sources indicate a lower total of fewer than 45,000 kilometers. Streets in Bangkok are frequently gridlocked with an overabundance of motor vehicles flowing into the central city via expressways.

Railroads:

Railroads are worked under the auspices of the State Railway of Thailand. In 2003, the system equaled an expected 4,071 kilometers of narrow-gauge (1.000-meter gauge) track. The system currently has some 270 diesel locomotives and nearly 250 diesel railcars or multiple-unit cars. According to data providing for 2002, 55.7 million passenger journeys followed and the rail system pulled 9.9 million tons of freight. Freight traffic is considered an important part of Thailand’s national vessel carriage to and from seaport and inland terminals.

Thailand’s Rail Statistics 2007 2008 2009 2010 2011P

No. of locomotives ready for operation 276 274 274 272 265 No. of passenger coaches 1265 1263 1260 1238 1238 No. of freight wagons 6692 6690 6797 6069 6069 Total passengers (m) 45 48 48 45 44 Passenger-km (m) 8051 8570 8578 8083 7504 Freight (000 tones) 11055 12807 11133 11399 10864 Freight-km (m tone/km) 2688 2857 2533 2582 2455 Total domestic freight volume (000 tones) 11055 12807 11133 11399 10864 Total domestic freight movement (m tone/km) 2688 2857 2533 2582 2455 Total import cargo (000 tones) 77 70 24 14 13 Total export cargo (000 tones) 685 296 164 158 133

Source: ASEAN-Japan Transport Partnership11

11http://www.boi.go.th/index.php?page=Railways 38

Rapid Transit:

The Mass Rapid Transit Authority of Thailand operates a full metro service on a 21-kilometer-long with 18-station line that released in Bangkok in July 2004. The opening line will be extended in stages adding 27 kilometers and two future lines are adding 67 kilometers are scheduled.

Ports:

Thailand’s ports are Bangkok, Laem Chabang, Pattani, Phuket, Sattahip, Si Racha, and Songkhla. The Thai merchant navy includes 386 ships of 1,000 gross listed tons or more, with 142 cargo carriers, 89 petroleum tankers, 57 bulk carriers, 30 refrigerated cargo ships, 25 liquid gas ships, 21 container ships, 12 chemical tankers, 4 passenger/cargo ships, 3 passenger ships, 1 combination ore/oil ship, 1 roll on/roll off ship, and 1 specific tanker.

Inland and Coastal Waterways:

Thailand has some 4,000 kilometers of controllable inland canals from which 93 percent are controllable by boats with drafts equal to 0.9 meters. Thailand’s long coastlines lend themselves to inter sea trade.

Civil Aviation and Airports:

Thailand had projected 109 airports and three heliports in 2004. 65 of the airports had covered runways with seven of more than 3,047 meters in length. Bangkok International Airport at Don Muang, 24 kilometers north of the capital is an important regional hub for pass-through flights and as a destination. About 80 airlines offer service to the Bangkok International Airport and carry a stated 25 million passengers and 700,000 tons of cargo a year. Ground was broken for a new Bangkok international airport at Suwannabhumi, 30 kilometers east of Bangkok, in January 2002, with a new projected opening in 2006. When Suwannabhumi opens, Don Muang will be used for domestic flights only. Other major airports are at Chiangmai, Hat Yai, and Pattani. There are two Thai flag transporters. Domestic Airways International is founded in 1960 and offers domestic and worldwide coverage with a fleet of 81 passenger and cargo aircraft. Since 1977, Thai Airways has been fully kept by the Thai government. Bangkok Airways is a privately owned company founded in 1968 as an air taxi company. 39

Since 1986, it has served primarily as a domestic carrier. It also flies to Phnom Penh, Cambodia, and offers charter flights to Burma; it has a fleet of 11 aircraft.

The Airports of Thailand, Public Company limited, formerly known as Airports Authority of Thailand (AAT), is a state enterprise under the supervision of the Ministry of Transportation. It oversees all airports in Thailand.

Thailand has 109 airports, including six international airports. The international airports are located in Bangkok, Chiang Mai, Chiang Rai, Phuket, Hat Yai, and U Tapao, and are under the supervision of the Airports of Thailand, Public Company Limited.

International services are provided by many carriers, including Thai Airways International Public Co., Ltd. Thai Airways flies to 76 cities in 35 countries throughout the world. Thai Airways is highly regarded because of the quality of food and the efficiency of the flight attendants, and is one of the most popular airlines. It is part of the Star Alliance Network, which is composed of fifteen airlines, providing a network of airlines that covers the whole world.

In addition domestic services are available to all regions of Thailand.

Suvarnabhumi Airport: A Regional Aviation Hub The new international airport covers an area of 20,000 rai. It is able to accommodate 100 million passengers per year and 112 flights per hour. Is has excellent service efficiency and Thailand is expected to become the center for aviation in the Southeast Asian region. The airport boasts the world's longest runway, 60 meters wide by 4,000 meters long. Suvarnabhumi Airport was officially opened to serve full commercial services on 28 September 2006.

AOT projects the airport will have handled around 52 million passengers by the end of 2012, an average of more than 19,000 a day more than its design capacity of 45 million. Expansion plans for Suvarnabhumi and Phuket airports are finally to be put into effect to solve the chronic congestion experienced year-round at Suvarnabhumi and during the November-to-April period at Phuket.

In 2012, SKYTRAX declared that Bangkok Suvarnabhumi Airport is voted among top ten for the World’s Best Airport for the year 2012 by "size of Airport" - handling 30 to 50 million passengers annually.

“Bangkok is one of the main aviation hubs in the region-alongside Hong Kong, Incheon and Singapore. It is also well placed to be a hub to Cambodia, Myanmar, Laos, Vietnam-as their economies develop.”

Tony Tyler, Director General and CEO of IATA (February 2012) OBG The Report, Thailand 2012

Suvarnabhumi Airport has planned the development phase 2 in order to support the expected increase in the number of passengers. This second phase incorporates a new satellite terminal that can handle 20 million passengers. Completion of next expansion phase at Suvarnabhumi Airport is expected in 2017, will be able to lift the airport’s capacity to 64 million.

Suvarnabhumi Airport accommodated 100 scheduled airlines, 88 of which were mixed passenger- cargo airlines, and 12 of which were pure cargo airlines. Suvarnabhumi Airport offers many more services than were available at the old Bangkok International Airport  130 passport control checkpoints for arrivals, 72 for departures.  26 customs control checkpoints for arrivals, 8 for departures.  22 baggage conveyor belts.  360 check-in counters. There are 100 additional counters for passengers with no luggage to check-in to minimize queuing time.  107 moving walkways.  102 elevators.  83 escalators.  18 slanted moving sideways The baggage handling system at Suvarnabhumi airport has the capability to serve 45 million passengers per year.

The baggage handling system at Suvarnabhumi Airport uses the in-line screening method, which scans luggage while on the conveyor belts.

Hours of Operation: 24 hours.

Accommodation capacity: at the initial phase of service provision, the north section of the airport will be able to accommodate 45 million passengers per year, 76 flights per hour and 3 million tons of cargo handling per year.

Public transportation center provides a variety of services such as Limousine, Car rental, Shuttle bus, Airport Express Bus, Intercity Bus, BMTA public bus and BMTA Air-conditioned Van.

Aircraft parking space: 120, of which 8 are for Airbus A380 (5 of them are contact gates)

The control tower is 132.2 meters high. It is the world’s tallest control tower, fully-equipped with the best technologies that will facilitate smooth air traffic control. It has the ability to manage approximately 76 flights per hour.

Car parking buildings: There are 2 car park buildings in front of the Passenger Terminal, which can accommodate approx. 5,000 cars and there is also a 30,000 m2 car park area that can accommodate 1,000 cars.

The Technological and Airport Information Building: The Technological and Airport Information Building consists of 4 main control centers, Airport Operation Center, Security Control Center, Emergency State Control Center and Network Management Center.

Duty-Free Zone (Cargo Warehouses): The government has a policy to promote Suvarnabhumi Airport as a Center of Aviation, Passenger and Cargo Transportation. Therefore, the Duty-Free Zone was created in order to facilitate the handling of inbound, outbound cargo and transit cargo with minimum customs procedure. The Duty Free Zone is located in the northwest end of the Airport, and has a total area of 549,416 m2 or about

345 Rai, as a well as public area of 111,156 m2 .The main buildings consist ofThai Airways International Public Company Limited and WFSPG Cargo Company Limited Cargo handling building. - 4 Warehouse - 4 Freight Forwarding Agency Buildings - Office Building for Customs Office and related government agencies - Free Trade Zone Administrator Building

Phuket International Airport

Phuket International Airport ranks second in the country in terms of passenger and cargo volume. Thanks to the fascinating tourist attractions, including the world famous beaches in Phuket and the nearby provinces coupled with a complete range of tourist services, Phuket International Airport welcomes millions of passengers each year.

36 airlines used Phuket Airport and the routes covered 60 cities in 23 countries. To respond to the increasing passengers, government has approved a US$180 million airport expansion, including a new international terminal, which the project is scheduled to be completed in 2015.

Chiang Mai International Airport Chiang Mai International Airport is the gateway to Northern Thailand which is renowned for its breathtaking natural attractions and deep-rooted cultural traditions. The airport has contributed greatly to tourism in the North over the years. Plans are being made to improve and expand the airport.

The planning and administration of the country's air transport infrastructure is under the shared responsibility of the Airports of Thailand and the Civil Aviation Department (CAD) under the Ministry of Transport and Communications. Sources: Airports of Thailand Public Company Limited, Royal Government of Thailand Public Relations Department

Thailand’s Flights and Passenger Growth at AOT airports, H1 2011-H1 2012

Airport International Domestic Flights Change Passengers Change Flights Change Passengers Change Suvarnabhumi 115,269 7.93% 20.21m 7.56% 51,509 34.48% 7.20m 38.31% Phuket 15,788 11.26% 2.50m 12.77% 14,206 0.05% 2.25m 9.05% Chiang Mai 2396 22.56% 246,904 35.63% 15,894 11.88% 1.93m 17.17% Don Muang* 16,214 - 1.16m - - - - - 27.56% 42.95% Hat Yai** - - - - 6361 3.63% 943,494 11.99% Chiang Rai - - - - 3521 12.82% 476,560 16.58%

Source: Airports of Thailand, * Flights after post-flood reopening. ** Mostly domestic flights.

2011 Thailand’s Air Transport Movement

Volume/Year 2010 2011

Total passengers (in Thousands) 57,425 66,300

Total cargo & postal parcels (in Thousands Tons) 1,342 1,408

Total aircraft movements (in Thousands Flights) 386 441

Source: Airports of Thailand Updated as of September 25, 2012.

Northern airports

Lampang Airport, Lomsak Airport, Mae Hong Son Airport, Maesai Airport, Nakhon Sawan Airport, Nan Airport, Phitsanulok Airport, Phrae Airport, Tak Airport, Uttaradit Airport

Northeastern airports Buri Ram Airport, Chaiyaphum Airport, Khon Kaen Airport, Loei Airport, Nakhon Phanom Airport, Nakhon Ratchasima Airport, Roi Et Airport, Sakon Nakhon Airport, Ubon Ratchatani Airport, Udon Thani Airport

Central western & eastern airports Lop Buri Airport, Nakhon Pathom Airport, Prachuap Khiri Khan Airport, Sattahip Airport

Southern airports Chumphon Airport, Krabi Airport, Nakhon Si Thammarat Airport, Narathiwat Airport, Pattani Airport, Ranong Airport, Songkhla Airport, Surat Thani Airport, Trang Airport

INTERNATIONAL AIRPORTS Suvarnabhumi Airport, Don Mueang International Airport, Chiang Mai International Airport, Mae Fah Luang-Chiang Rai International Airport, Hat Yai International Airport, Phuket International Airport, U-Taphao International Airport (under construction)12

Source: Airports of Thailand Public Company Limited Updated 26 September 2012

Pipelines:

Thailand had 3,112 kilometers of gas pipelines and 265 kilometers of developed products pipelines in 2004.

Telecommunications

12http://www.boi.go.th/index.php?page=airports 45

In October 2002, the Thai government formed a new Ministry of Information and Communications to oversee all aspects of telecommunications. The ministry is responsible for liberalizing the provision of telecommunications services under World Trade Organization guidelines by 2006. However, the proposed privatization of the state-owned Telephone Organization of Thailand and Communications Authority of Thailand remains controversial. The ministry also will be responsible for implementing the country’s information technology policy, called IT 2010, which is designed to strengthen Thailand’s telecommunications infrastructure as a means of promoting overall economic development.

Thailand’s telecommunications network suffers from delays and other shortfalls in the provision of telephone services as a result of inadequate investment. The quality and availability of telephone service are much better in Bangkok and other cities than in rural areas. Mobile telephones (26.5 million in 2005) are much more prevalent than landline phones (6.6 million in 2003). As of November 2004, Thailand had almost 7 million Internet users, representing less than 11 percent of the population, and 18 commercial Internet service providers.

The government owns most television and radio stations and plays an important role in determining programming content. The government’s Public Relations Department requires that all Thai radio stations carry 30 minutes of official news prepared by Radio Thailand, the national radio network, twice daily. Radio Thailand has seven networks that specialize in such areas as news and information, public affairs, social issues, education, and foreign-language broadcasts. Thailand has five television channels, of which two are run by the central government, two by the army, and one by a private enterprise. Altogether, Thailand has 204 AM radio stations, 334 FM radio stations, 6 shortwave stations, and 5 television broadcast stations. Additionally, there are more than 2,000 community radio stations, some of which are being investivgated by the Public Relations Department for violating the requirement that they limit their transmission range to 15 kilometers. Thailand has about 14 million radios and 15 million television sets.13

Thailand's telecommunications services are at an international standard, especially in urban areas such as Bangkok. There is an abundance of fixed lines for offices and residences. Thailand is rapidly

13http://www.mongabay.com/reference/new_profiles/378.html

46 developing an IT industry. Fixed telephone lines, mobile telephones, dial-up Internet and ADSL broadband are all available.

The Bangkok metro area is served by two fixed-line operators: the Telephone Organization of Thailand (TOT), a state enterprise, and True Corporation Plc. (True), a private company. Both can install phones in a timely fashion; usually a matter of days. Local calls are not timed and carry a fixed charge of 3 baht per call. Areas outside Bangkok are served by the TOT and the private company TT&T Public Co., Ltd. The fixed line network has a total capacity of over 8 million lines, of which about 7 million are in use. In addition, public telephones are available nationwide. Communications Authority of Thailand (CAT) and Telephone Organization of Thailand (TOT)

CAT Telecom Public Company Limited is the Thai state-owned telecommunications company that owns Thailand’s international telecommunications infrastructure including its international gateways, satellite and submarine cable networks connections. International calls are handled by the Communications Authority of Thailand (CAT), which provides direct access to just about any country.

TOT has a network of over 2 million telephone lines composed of up-to-date digital switching and long distance telephone equipment. Its nation-wide services cover basic telephone as well as many other value-added services such as telefax, paging, cellular, on-line data, public telephone with coin or card, common based radio telephone, videotext and ISDN. The government and TOT have been providing more telecommunication facilities to the general public in urban and provincial communities; Thailand's rural areas have not been forgotten. Service, including internet, is rapidly improving in rural areas.

Fixed Line Telephones Fixed line service remains an important component of the nation’s telecoms infrastructure, with 38% of households connected to one of the three fixed-line operators. State-owned TOT has 6.6 million subscribers nationwide, but two private sector firms also offer this service. True Online, a subsidiary of True, operates in the greater Bangkok region, with its roughly 2 million subscribers making it the second-largest fixed-line operator. TT&T, part of the Loxley Group linked to Kasikorn Bank, provides coverage for all areas beyond the capital, reaching 1.2 million clients. In general, service is very high in quality. Service is being expanded even into very rural areas. 47

Mobile and Cellular Phones During recent years, mobile cellular telephone ownership has grown at a much faster rate than landline ownership. There are approximately five times as many mobile cellular telephones than landlines in use. The 98% of the Thai population owns a mobile cellular telephone. Mobile operation is done by AIS, DTAC, True Move, Hutch, DPC and THAI Mobile.

Interconnection Charges CAT Telecom Public Company Limited (CAT), Advance Info Service Public Limited Company (AIS) and Total Access Communication Public Company Limited (DTAC) have jointly signed an Interconnection Charge agreement. The IC agreements between the three mobile phone operators will guarantee that users can make a cross-network call easier and more smoothly.

Internet Internet service is available in most areas of Thailand, with the exception of villages that are a long distance from telephone lines. Even here, satellite service is possible. Broadband service is expanding throughout the country. Some companies that provide service in selected areas are:  CS Loxinfo

 INET

 ISSP

 Ji-Net

 KSC

 3BB Broadband

 Pacific Internet

 Smarts Internet

 TOT

 True

Thailand Telecommunications Portfolio

 20 Internet providers (Feb, 2011)

 9 International internet gateway service providers and national internet exchange (Feb, 2011)

 18.3 million internet users (Dec 2011)

 14.2 million Facebook users (Mar 2012) 450,000 Twitter users of whom 100,000 are active.(2010)

 1 million messages tweeted in Thai language each day.(2010)

 Internet international bandwidth: 158,680 Mbps (Sept, 2010)

 Mobile penetration rate: 107.86 % (Dec 2011)

 E-Commerce usage: approx..67% (2011-2012)

 Computer users: 29.3 per 100 inhabitants (2009)

 IPhone users: 200,000 (2010)

 iPad users: 45,000 (2010)

 Nokia users: 57,402 (2010)

 BlackBerry users: 22,000 (2010)

Sources: Telephone Organization of Thailand, CAT TELECOM PUBLIC COMPANY LIMITED, Telecommunications Research and Industrial Development

Institute, http://www.speedtest.or.th/news_detail.php?id=20

Updated September 25, 201214

COMMUNICATION COSTS

14http://www.boi.go.th/index.php?page=telephone_services 49

Cost of Mobile Phone Handset*

Baht US$ Acer Liquid mini E310 6,990 231.84 Acer Iconia Smart 15,900 527.36 BlackBerry Bold 9780 12,500 414.59 BlackBerry Storm 9500 6,500 215.59 Dell Streak 9,900 328.36 Dell Venue Pro 15,900 527.36 HTC Desire S 9,900 328.36 HTC Incredible S 12,900 427.86 HTC 7 Mozart 8,900 295.19 HTC HD7 13,500 447.76 LG Optimus 3D P920 11,900 394.69 LG Optimus 2X 14,850 492.54 Motorola DEFY 9,900 328.36 Motorola Mildstone 8,900 295.19 Nokia C5-03 4,400 145.94 Nokia C6-01 7,100 235.49 Nokia E7 16,900 560.53 Nokia N8 10,890 361.19 Nokia X7 12,150 402.99 Samsung Galaxy Gio S5660 6,290 208.62 Samsung Galaxy S II i9100 15,250 505.80 Samsung Galaxy SL 4GB 9,200 305.14 Samsung Wave II S8530 8,900 295.19 Samsung Wave 723 S7233E 4,990 165.51 Sony Ericsson Vivaz Pro 8,900 295.19 Sony Ericsson XPERIA X10 mini pro 8,900 295.19 Sony Ericsson Xperia Neo 10,500 348.26 Note: *Price is averaged from shops.

Source: www.thaimobilecenter.com, as of August 2012 International Telephone Rates (ISD 001/ 009/ CAT Phone Net) CAT Phone Country CAT 001 CAT 009 Net Country Code Standard Economy Reduced Fixed Mobile Fixed Mobile Argentina 54 40 36 32 26 26 26 26 Australia 61 14 14 14 6 7 2 6 Austria 43 24 24 24 19 20 2.5 11 Bangladesh 880 20 20 20 15 15 2.5 2.5 Belgium 32 20 20 20 5 12 2.5 11 Brazil 55 40 36 32 7 7 7 7 Brunei 673 22 22 22 5 5 5 5 Cambodia 855 20 20 20 14 14 3.5 3.5 Canada 1 9 9 9 3 3 1 1 Chile 56 40 36 32 28 28 28 28 China 86 9 9 9 3 3 1 1 Denmark 45 20 20 20 5 12 2.5 11 Egypt 20 40 36 32 30 30 30 30 France 33 20 20 20 5 9 2 8 Germany 49 20 20 20 6 7 2 7 Greece 30 24 24 24 5 10 2.5 9 Hong Kong 852 9 9 9 3 3 1 1 India 91 20 20 20 15 15 3 3 Indonesia 62 18 18 18 5 8 4 7 Israel 972 25 25 25 4 6 2.5 5 Italy 39 20 20 20 5 12 3 12 Japan 81 18 18 18 5 6 2.5 6 Kenya 254 40 36 32 17 17 17 17 Korea 82 18 18 18 4 7 2.5 5 Kuwait 965 32 29 25 4 5 4 5

Laos 856 14 14 14 4 4 4 4 Macau 853 22 22 22 5 5 4 4 Malaysia 60 9 9 9 4 4 2.5 3 Mexico 52 40 36 32 7 7 7 7 Myanmar 95 22 22 22 14 14 13 13 Nepal 977 24 24 24 20 20 9 9 Netherlands 31 20 20 20 15 15 2.5 14 New Zealand 64 20 20 20 14 14 2 10 Norway 47 20 20 20 5 10 2.5 9 Pakistan 92 32 29 25 24 24 6 6 Peru 51 40 36 32 22 22 22 22 Philippines 63 20 20 20 15 15 7 8 Poland 48 28 24 24 19 19 19 19 Portugal 351 28 24 24 19 19 2.5 14 Russia 7 20 20 20 5 5 3 4 Singapore 65 9 9 9 3 3 1 1 South Africa 27 40 36 32 5 11 4 11 Spain 34 24 24 24 19 19 2.5 10 Sri Lanka 94 24 24 24 20 20 6 6 Sweden 46 20 20 20 15 15 2.5 11 Switzerland 41 20 20 20 15 15 2.5 12 Taiwan 886 18 18 18 4 6 2.5 4 Turkey 90 28 24 24 23 23 23 23 UAE 971 25 25 25 20 20 9 9 United Kingdom 44 14 14 14 6 7 2 6 USA 1 9 9 9 3 3 1 1 Venezuela 58 40 36 32 28 28 28 28 Vietnam 84 20 20 20 14 14 3.5 3.5 Notes: CAT 001 52

- Minimum rate charge is at 1 minute. Thereafter the call is charged for every 6 seconds Call charge is divided into 3 rates: - Standard Rate: 7am-9pm (On Sunday, the economy rate is applied instead) - Economy Rate: 9pm-12pm and 5am-7am - Reduced Rate: 12pm-5am Call that spans from one rate to another rate will be charged by the rate of call starts. All rates are not included 7% VAT. CAT 009 - Minimum rate charge is at 1 minute. The next minutes are charged for every 6 seconds. - All rates are exclusive of 7% VAT and one rate is applied for 24 hours a day. - Rates depend on the receiving phone service; fixed line and mobile are different. - For more information please call CAT Contact Center 1322 or visit www.cattelecom.com - This promotion is valid until December 31, 2011. CAT Phone Net - CAT Phone Net is a prepaid international calling card which users can call from Thailand to 153 destinations. - All rates are exclusive of 7% VAT and one rate is applied for 24 hours a day. - Call is charged for every 6 seconds. - Rate for fixed line and mobile phone are different. - For more information please contact CAT Call Center 1322 or visit www.cattelecom.com - Promotion rates for 47 destinations valid form January 1, 2011 to June 30, 2011. * Call rate may be changed without prior notice Source Communications Authority of Thailand, as of June 2, 2011 Website: www.cattelecom.com

Fixed Line Service

Program 1 Program 2 Baht US$ Baht US$ 3,350- 110- Installation fee 3,350-3,700 110.16-121.67 3,700 122 Subscription fee (baht/month/line) 100 3.29 200 6.58 Local call (baht/call) 3 0.10 3 0.10

07:00 - 18:00- 22:00- Long Distance Call (Baht/Min) 17:59 21:59 06:59 All day 1. Fixed line to fixed line Baht US$ Baht US$ Baht US$ Baht US$ 0-50 km 3 0.10 1.5 0.05 1 0.03 2 0.07 51-100 km 6 0.20 3 0.10 2 0.07 2 0.07 101 km up 9 0.30 4.5 0.15 3 0.10 2 0.07 All Day All Day 2. Fixed line to cellular mobile Baht US$ Baht US$ - Call in cellular mobile telephone area 3 0.10 2 0.07 - Call between adjacent cellular mobile telephone areas 6 0.20 2 0.07 - Call between non-adjacent cellular mobile telephone areas 6 0.20 2 0.07

Y-tel 1234 Rates (Press 1234 + phone number)

Call to Fixed Line 07:00-17:59 18:00-21:59 22:00-06:59 Baht US$ Baht US$ Baht US$ Weekday Rate 1.50 0.05 1.00 0.03 0.50 0.02 Weekend and/or Holiday 1.50 0.05 0.75 0.02 0.50 0.02

Call to Cellular Mobile 1.50 baht/minute 0.05 US$/minute

International Telephone Rates (ISD 007/ 008)

Country TOT No. Country Code 007 TOT 008 DTAC, TT&T, TOT TOT AIS 3G

1 Argentina 54 32 29 30 30 2 Australia 61 9 7 7 7 3 Austria 43 24 20 24 24 4 Bangladesh 880 25 14 20 20 5 Belgium 32 22 7 7 7 6 Brazil 55 32 7 7 7 7 Brunei Darussalam 673 14 5 5 7 8 Cambodia 855 24 14 24 24 9 Canada 1 9 3 5 7 10 Chile 56 32 32 32 32 11 China 86 9 3 5 7 12 Denmark 45 22 7 7 7 13 Egypt 20 32 30 32 32 14 France 33 22 7 7 7 15 Germany 49 9 7 7 7 16 Greece 30 24 7 7 7 17 Hong Kong 852 9 3 5 7 18 India 91 28 14 26 26 19 Indonesia 62 20 7 7 7 20 Israel 972 25 7 7 7 21 Italy 39 7 7 7 7 22 Japan 81 9 5 7 7 23 Kenya 254 32 18 18 18 24 Korea, South 82 21 5 5 7 25 Kuwait 965 25 5 5 7 26 Laos 856 9 5 6 6 27 Macau 853 24 5 5 7 28 Malaysia 60 9 4 5 7 29 Mexico 52 32 7 7 7 30 Myanmar 95 24 14 20 20

31 Nepal 977 25 20 25 25 32 Netherlands 31 22 15 18 18 33 New Zealand 64 17 14 15 15 34 Norway 47 22 7 7 7 35 Pakistan 92 25 24 25 25 36 Peru 51 32 23 23 23 37 Philippines 63 20 15 18 18 38 Poland 48 24 22 24 24 39 Portugal 351 24 22 24 24 40 Russia 7 24 5 7 7 41 Singapore 65 9 4 7 7 42 South Africa 27 32 7 7 7 43 Spain 34 24 17 24 24 44 Sri Lanka 94 25 21 24 24 45 Sweden 46 21 14 18 18 46 Switzerland 41 21 15 18 18 47 Taiwan 886 9 5 7 7 48 Turkey 90 24 23 24 24 United Arab 49 Emirates 971 25 20 22 22 50 UK 44 9 7 7 7 51 USA 1 9 3 5 7 52 Venezuela 58 32 32 32 32 53 Vietnam 84 28 14 26 26 Notes: TOT 007 - TOT 007 is a premium International Call Service which provides the clearest voice quality and smoothest fax transmission. Cover 213 destination countries worldwide. - TOT 007 promotional rates is starting from 9 Baht per minute, depending on the destination and exclusive of 7% VAT. TOT 008 56

* TOT 008 promotional rates is applied for a call made from a TOT number only. If made from another operator, the call shall be charged according to that operator and the destination. - TOT 008 is an economic international call which enables you to make a low-cost and long call to over 153 destinations worldwide, with good quality signal up to international standard at the same price 24 hours a day either to a fixed or mobile phone. - TOT 008 tariff rate can be changed with no prior notice.

Source: TOT Public Company Limited, as of August 20, 2012 Website: www.tot.co.th or 1100 TOT contact center

International Private Leased Circuit (Half Circuit) Baht US$ IP VPN (MPLS) 8,200-1,958,000* 271.97-64,941.96* Digital leased circuit charges per month 2,800-2,415,000* 92.87-80,099.50* * The price is subject to transmission speed and destinations Source: International Business Development, TOT Public Company Limited Tel: 0-2574-8027, 0-2505-1284 Website: www.tot.co.th

TOT Satellite Package

Monthly Charges Package Speed Baht US$ Sat One 200 256/128 1,500 49.75 Sat One 500 Special 512/256 2,200 72.97 Sat One 1M 1024/512 2,600 86.24 Sat Corporate 200 256/128 2,500 82.92 Sat Corporate 500 Special 512/256 3,300 109.45 Sat Corporate 1M 1024/512 4,900 162.52

Sat Corporate Extra 2048/1024 7,700 255.39 Sat Corporate Extra Plus 2048/2048 8,900 295.19 Source: www.totsatellite.com, as of August 20, 2012 Note: Please contact TOT for further information or promotion at www.totsatellite.com or tel: (02) 575-5585 Monthly Internet Rates* (Unlimited Access Hours)

Cost/month ADSL Provider Speed Baht US$ 3 Broadband (3BB) (http://www.3bb.co.th) 3BB ADSL 7Mbps/512 590 19.57 10Mbps/1024 900 29.85 13Mbps/1024 1,490 49.42 16Mbps/1024 2,290 75.95 20Mbps/4Mbps 3,390 112.44 3BB Premier - Dynamic IP 5Mbps/1024 2,500 82.92 - 1 IP 5Mbps/1024 2,900 96.19 - 4 IP 5Mbps/1024 3,500 116.09 - 8 IP 5Mbps/1024 4,300 142.62

Ji-Net (TOT Line) (http://www.ji-net.com) Ji-Compax2 2Mbps/512 690 22.89 Ji-Compax4 4Mbps/512 990 32.84

TOT hi-speed 1 (http://www.tothispeed.com) Up to 4Mbps/512 490 16.25 Up to 7Mbps/512 590 19.57 Up to 10Mbps/1024 890 29.52 Up to 12Mbps/1024 1,290 42.79 Up to 15Mbps/1024 1,890 62.69 Up to 20Mbps/1024 2,290 75.95

True Hi-Speed 2 (http://www.trueonline.com) Ultra hi-speed Internet (via xDSL) 7Mbps/512 599 19.87 9Mbps/1024 899 29.82 12Mbps/1024 1,399 46.40 16Mbps/1024 2,299 76.25 50Mbps/2048 3,599 119.37 Ultra hi-speed internet (via Docsis) 7Mbps/512 599 19.87 10Mbps/1024 699 23.18 20Mbps/2048 1,299 43.08 50Mbps/5Mbps 2,799 92.84 100Mbps/10Mbps 4,999 165.80 200Mbps/15Mbps 9,999 331.64 * 7% VAT is not included. 1 Offer valid until January 31, 2013 2 Offer valid until August 31, 2012 Source: Internet Survey, as of August 2012

Internet – IPStar

CS Loxinfo Type of Services Speed Baht US$ Home 128 128/64 1,500 49.75 Home 256 256/128 2,500 82.92 Home 512 512/256 4,500 149.25 Home 1024 1024/512 8,500 281.92

IPStar SMEs 256 256/128 4,000 132.67 IPStar SMEs 512 512/256 6,000 199.00 IPStar SMEs 1024 1024/512 10,000 331.67

IPStar Corporate 256 256/128 15,000 497.51 IPStar Corporate 512 512/256 28,000 928.69 IPStar Corporate 1024 1024/512 45,000 1,492.54 IPStar Corporate 2048 2048/512 85,000 2,819.24 Note: Installation fee and 7% VAT are excluded. Source: www.csloxhispeed.com, as of August 2012Last Updated: September 201215

15http://www.boi.go.th/index.php?page=communication_costs 60

PRESENT TRADE RELATIONS & BUSINESS VOLUME OF DIFFERENT PRODUCTS WITH INDIA/GUJARAT

6. PRESENT TRADE RELATIONS & BUSINESS VOLUME OF DIFFERENT PRODUCTS WITH INDIA/GUJARAT The Indian export basket to Thailand mostly comprises gem and jewelry, metal ores, chemicals, machinery, vegetables, electrical household appliances and pharmaceutical products. Major imports include chemicals, polymers of ethylene, auto components, rubber, iron and steel. For Thailand Tourism is major revenue grosser with a projected 10 lakh Indian tourist footfall scheduled for 2012. Amount of Foreign Direct Investment Inflows into India from Thailand from April 2000 to January 2012 was Rscrore 426.99 or USD Million 94.76, which as a percentage of total FDI Inflows was 0.06.

6.1 India‐Thailand Bilateral Trade 2007‐2011 (USD Million)

Year Export Import Total Trade

2007‐08 1,810.87 2,300.93 4,111.80

2008‐09 1,938.31 2,703.82 4,642.14

2009‐10 1,740.16 2,931.52 4,671.68

2010‐11 2,792.80 4,272.09 7,064.90

Source: Ministry of Commerce & Industry, GoI

Investments and joint ventures

India is the thirteenth largest investor in Thailand and of late has been extensively dispersed in the areas of chemicals, pharmaceuticals, textiles, nylon, tyre cord, real estate, rayon fiber, steel wires and rods, paper-grade pulp and so on.

However, the manufacturing and IT services sector are the main focus areas of Indian investments in Thailand. The Aditya Birla Group was the first Indian company to set up a joint venture in Thailand and there are now 33 Indian joint ventures that are involved in various projects. These include the Rayon Group, Usha Martin Industries, Ranbaxy Laboratries and Lupin Chemicals. Indian investments in Thailand touched a landmark when Tata Steel of India acquired Millennium Steel from Siam Cement Group for US$175 million. 62

Tata Steel had earlier acquired the Siam Industrial Wire Co. Ltd. Meanwhile, the Tata Motors joint venture with Thonburi Automotive Assembly Plant, with a startup capital of 500 million Baht (US$13.8 million), will manufacture approximately 40,000 pickup trucks a year.

Indian IT giants are also looking at available opportunities in Thailand. Indian companies such as NIIT and APTECH already have their operational bases in Thailand in software development and computer education. Satyam Computer Services Limited established a subsidiary in Thailand in 2004 and 3I- infotech (Thailand) Ltd. has also been functioning since 2006. Though the political situation in Thailand does not seem stable after the bloodless military coup on 19 September 2006, its Prime Minister, during his recent visit to India, has assured that political uncertainty would be resolved soon and democracy would be restored by the end of 2007. Despite the proposed change in Thailand’s Foreign Business Act and the rise of the Thai Baht against the US dollar, Thailand, as Southeast Asia’s second largest economy, has succeeded in attracting FDI worth US$7.9 billion in 2006. The United Nations Conference on Trade and Development (UNCTAD) places Thailand as East Asia’s leading alternative to China.

6.2 Trade relations

Total trade between India and Thailand increased from US$1.05 billion in 2001-02 to US$2.28 billion in 2005-06 and grew to US$3.4 billion in 2006. Both countries are hopeful of achieving the target of US$4 billion by 2007 since bilateral trade has crossed the mark ofUS$1.3 billion during the first four months of this year. Such encouraging trade figures indicates that there is ample scope for further growth in bilateral trade relationsbut the delays in the conclusion of the proposed Indo-Thai FTA reveal another story. India and Thailand had signed a framework agreement for establishing an FTA in 2003. Both sides had agreed that tariffs on a select list of 82 "early harvest" items would be reduced by 50 per cent in 200405, by 75 per cent in 2005-06 and completely eliminated thereafter in the hope of putting in place a comprehensive FTA by 2010, covering all items.

Bilateral Trade

S.No. \Year 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011

1. EXPORT 1,445.54 1,810.87 1,938.31 1,740.16 2,792.80

2. %Growth 25.27 7.04 -10.22 60.49

3. IMPORT 1,747.75 2,300.93 2,703.82 2,931.52 4,272.09

4. %Growth 31.65 17.51 8.42 45.73

5. TOTAL TRADE 3,193.28 4,111.80 4,642.14 4,671.68 7,064.90

6. %Growth 28.76 12.9 0.64 51.23

7. India's Total 312,149.29 414,786.19 488,991.67 467,124.31 620,905.02 Trade

Source: Ministry of Commerce, Government of India, October, 2011

Ficci initiatives with Thailand

 Meeting with Thai Media Delegation, September, 2011  Meeting with Board of Investment of Thailand, September 7, 2011  Courtesy Call by Mr. MaitriInthusut, Governor of Trang Province alongwith Department of Foreign Trade and Thai Parawood Association Members, July 14, 2011, FICCI, New Delhi  Meeting with Prime Minister of Thailand, H E MrAbhisitVejajjiva, April 5, 2011,TajMahal, New Delhi  H E MsPorntivaNakasai, Thai Minister of Commerce, inaugurated the India-ASEAN Business Fair & Business Conclave 2-6 March, 2011.  H.E. Mr. KasitPiromya, Minister of Foreign Affairs, Thailand, delivered the keynote address at the Delhi Dialogue III, March 3, 2011.  Mr Kavi Chongkittavorn, Assistant Group Editor, Nation Media Group, 64

PESTAL ANANLYSIS

7. PESTAL ANANLYSIS 7.1. Political Analysis 7.1.1. Number of political parties in Thailand

There are more than 50 political parties in Thailand. The most prominent of them are Pheu Thai Party and Democrat Party.

7.1.2. There are following political parties in Thailand.

Pheu Thai Party

Chartthaipattana Party

Key Political Chart Pattana Puea Pandin Party

Party Phalang Chon Party Independent Party

7.1.3. Composition of the House of Representatives of Thailand (July 2011)

Parties Previous Changes Current Leader seats seats Pheu Thai Party Yingluck Shinawatra 189 + 265 7 Democrat Party Abhisit Vejjajiva 172 6- 159 1 Bhumjaithai Party Chaovarat 32 3+ 34 2 Chartthaipattana Party Chumpol Silpa-archa 25 - 19 6 Chart Pattana Puea Wannarat Channukul 9 - 7 2 Pandin Party Phalang Chon Party Chao Maneewong - + 7 7 Rak Thailand Party Chuwit Kamolvisit - + 4 4 Matubhum Party Sonthi Boonyaratglin 3 - 2 1 Mahachon Party Apirat Sirinawin - + 1 1 Rak Santi Party Thawil Surachejpong - + 1 1 New Democracy Party Wimon Saramano - + 1 1 Total 500

7.1.4. Tax System of Thailand

Thailand is adapting the codifying system for collecting taxes from the different sources. The Ministry of Finance of Thailand collects the taxes from the different sources. Various sources of collection of taxes in Thailand are:  Personal Income Tax  Corporate Income Tax  Value Added Taxes  Stamp duty

7.1.5. Personal Income Tax

The Tax structure for personal income in Thailand is as follow:

Taxable income Tax Rate 0 – 150000 Exempt 150001 – 500000 10 % 500001 - 1000000 20 % 1000001 - 4000000 30 % Above 400000 37

7.1.6. Deduction from Personal Income Tax

There are following benefits or allowances are provided to the taxpayer. The standard deduction from salary income is 40 % up to 60000 Baht the other allowances are as under:  there is exemption of 30000 Baht for a tax payer.

 there is exemption of 30000 Baht for a wife.

 15000 Baht is exempted for a child.

 there is exemption of 17000 Bhat for a school child.

7.1.7. Corporate Income Tax

The corporate taxes are generated from the all types of companies, ventures, association and partnership. The branch office of other countries company is also liable for corporate income tax. 67

7.1.8. Deduction for Corporate Income Tax

There are following deduction available from corporation tax:

 Depreciation of assets

 Employers contribution from Employees Provident funds

 Severance pays  Gifts and donation to charities (up to 2%)

 Entertainment expenses (up to 2%)

7.1.9. Government Philosophy

The government of Thailand divided the development of the country into stages. They are mostly focus on infrastructure. The government gives most priority to provide the basic necessities and food for the people by economic, cautious and conforming way. After establishing the foundation the progress can be continually and economically promoted. This will prevent mistakes and failures and lead to complete achievement and objectives.

7.1.10. Level of Political Risk

 The People Power Party facing pressure to step down the disobedience and unrest led by the people’s alliance for democracy.  The people power party supported the amendment but anti- government protesters oppose the party.  In 2009, The Red Shirts protesters began its demonstration for resignation of the P.M and making the new election.

7.1.11. Stability of Government

According to the survey of Economist Intelligence Unit; the rating of Thailand is

7.00 point out of 10 point where the higher point shows the greater stability. The overall ranking is 38 among the 165 nation. So there is very stable government in Thailand.

According to IHS GLOBAL INSIGHT COUNTRY RISK RATING. The political risk in Thailand is 3.25from the rating of 1 to 5 where nearer to 1 shows low risk and nearer to 5 shows high risk. So there is moderate political risk involved in business with Thailand.

7.2.1. Socio Culture

The Kingdom of Thailand is situated in the centre of Southeast Asia, bordering Burma, Laos, Cambodia and Malaysia. The country is shaped like the head of an elephant with the trunk pointing south. Covering a total area of 514,000 sq km (198,445 sq mi), Thailand is rich in agricultural and mineral resources, making it more prosperous than many other nations in the Far East. Thailand has a population of 64 million (2003), of which 75 percent are Thai – a Mongoloid subgroup with a light complexion. The largest minority is the Chinese (14%) and other minority groups include Malay, Khmer and Vietnamese inhabitants. The official national language, spoken by a large majority of the population, is Thai. Lao, Chinese, Malay and Khmer are also spoken in Thailand. English, a mandatory subject in secondary schools, is widely used in commerce and government, particularly in Bangkok and other major cities.

Thais highly value friendship and tend to seek friendships of a permanent nature.

They distinguish between ‘eating friends’ who only appear when in good times and

‘Friends to death’ who are always there in good or bad times. Good friends for Thais are reliable and tried-and-true friends. To perpetuate friendship, Thais use kinship terms (e.g., older brother, younger sister depending on age) to address each other, as if they were blood siblings. Specifically, Thai friends of mine are gracious, sensitive and considerate of others’ feelings while still respecting each other’s privacy.

Thai full names have the same order as Western names: given name + surname, with no middle name. Two typical names, for example, are Male Amatayakul andSomchai Sookmahk. In addressing, Thai people use the given name or, more politely, a title plus the given name. In this case khun, meaning Mr., Mrs. or Miss, is put before the given name, e.g., Khun Sochi or Kuhn Male. A kinship term (e.g., older brother or uncle) or professional term (e.g., Dr.) may also be placed before the given name in addressing when the relationship is clear. As a traditional practice, Thai wives take their husbands’ surnames, as do their children.

7.2.2. People

Demography:

According to estimates, 22 percent of populations are less than 15 years of age of Thailand’s age structure in 2006, 70 percent are 15–64 years of age, and 8 percent are 65 and older. In 2006 life expectancy 74.6 years for women and 69.9 years for men, or nearly 72.2 years total .The infant mortality rate was estimated at nearly 19.4 per 1,000 live births in 2006. Fertility rate is 1.6 children per woman. Estimates made in 2006 indicate a birth-rate of 13.8 births per 1,000 population and a death rate of 7 deaths per 1,000.

Family

As the cornerstone of Thai society, family is given great value and importance. Family structure is close and all live together in one house, with the main authority kept by oldest male in house. In family elders were given respect and youngers obey sincerely them.

Education

Education has been a priority area since Thailand shifted to a constitutional monarchy in 1932. National Education Development Schemes (NEDSs) have guided major education reform strategies and identified targets and priority areas at the national level. Most recently, the 1999 National Education Act (NEA) and the 2002 - 2016 National Education Plan have respectively raised compulsory education from 6 to 9 years and introduced a balanced focus on both human-cantered and economic development. Decentralization of educational management has been implemented through the creation of Education Service Areas (ESAs) that are meant to increase community-level participation.

But despite important gains, much work remains to be done. While 98.6 percent of children were estimated to complete primary school in 2002, only 88 percent transferred to lower secondary and 69 percent continued to upper secondary. Understanding both demand and supply side factors to educational attainment is vital in order to address access and equality gaps in Thailand. The opportunity costs of forgone income are compounded for these families as well. In addition, while the RTG committed to provide 12 years of free 70 education, non-tuition costs such as library fees, exam levies, meals and transportation serve as substantial financial obstacles for many poor families. Despite high rates of return to education in Thailand, many poor families are still unable to meet the direct or opportunity costs of sending their children to secondary school.

Ethnicity, Language and Religion

The society of Thailand boasts a rich heritage in terms of ethnicity, language and religion. Yet despite this heritage, there remains a sense of cultural homogeneity that has been a significant contributing factor to unitary Thai identity.

In terms of ethnicity, about 75 percent of the total population is Thai. Among the Thai there are sub- sets known as Central Thai, Thai-Lao, Northern Thai and Southern Thai. The predominant minority group in Thailand is Chinese, who make up close to 14 percent of the population. There are also smaller ethnic groups of Lao, Khmer, Malays, Indians and Vietnamese. There are also numerous hill tribes. Yet despite this ethnic

Thai is the official national language, spoken by overwhelming majority of the people.

The Thai language alphabet was developed back in the 14th century, based on Indian and Khmer scripts. As the mandatory subject for public schools, English is widely spoken and understood, particularly in large cities. Chinese is the other principal Language spoken by that ethnic group in Thailand. Karen, Khmer, Malay and Tai are also spoken languages in Thailand among certain ethnic groups.

Buddhism as the dominant religion of the country, the Thai government has also emphasized the importance of religious freedom. Under this policy, religious minorities of Muslims among the Malay, Hindus and Sikhs among those with ethnic Indian influences, and Christians (typically from among the hill tribes and Vietnamese) enjoy the freedom to profess their religions. Sikhs, Baha’i Faith, and others, 0.6 percent. Christians, 0.7 percent; Hindus, 0.1 and Muslims represent 4.6 percent; percent.

Food Hobbits In Thailand food and celebration are vice versa for any of social occasion. Food itself is reason of occasion because of friendly nature of Thai people.

Normally Thai people are so friendly and this thing is been also reflected in there eating behavior, Alone eating is bad luck as they share and eat all dishes individually have. Dishes are as number of people but they share among as one tradition.

After completion of meal there they take care that no waste of food is done because they believe food as good and female is taking care of all family that everybody has eaten well. Thai meal includes main four taste as salty, sweet, sour and spicy. Up till all four taste are been not covered it is not good dish. As meat and fishes variety plus vegetables and soup are included in dish. Dessert consist fruit or colourful rice cakes. Popular snakes are spring rolls, chicken or beef satay, salad and sweets. Thai food as taste delicious but presentation of food is as important. As in hotel especially chef serve Thai food with beautiful decorative with in dish. Thai Cutlery & Eating Style As new western culture influenced with old Chinese chopstick it is now a day somewhat hybrid pattern is developed.

Historical Background & Types of Dishes

Thai cuisine had very old history, In early 13th century Thai people established combination of Siamese and local meat and seafood with vegetables, herbs and spices such as garlic and pepper as some of Indian flavour can observe with this spices. it still manages to maintain its own unique taste with the addition of native spices and ingredients, such as Thai holy basil, lemongrass, plus galangal (Thai ginger). Surrounding Thailand, such as Cambodia, Indonesia, Laos, Vietnam, Burma, and Malaysia had major effect on Thai cooking and other practices regarding that. One of most famous cuisines in world is Thai as serve whole world wide.

Health:

As per available data on 1995 very low health care professions are available as 0.3 Physicians and 1.9 Hospital beds as 1000 population after noticeable spending on health US $321 per person in health department in 2002 as per purchasing power parity, as it is 4.4 percent of total GDP. Thai government had launched a well-funded in corporation with United Nations Programmed on HIV/AIDS (UNAIDS) told in November 2004. Governmentally reinforced and pragmatic rejoinder to the epidemic (HIV/AIDS) Human immunodeficiency virus / acquired immune deficiency syndrome is a serious problem in Thailand. As in first 1984 number of people died from AIDS was 58000 adults and child. The government had tried a lot in awareness regarding that and 80,000 HIV/AIDS patients had received such drugs in 2006.

Human Development:

The population of Thailand has a healthy life expectancy at birth of 72.83 years of age (70.51 years for males and 75.27 years for females), according to recent estimates. The infant mortality rate of Thai- land is 18.23 deaths/1,000 live births. HIV infection and AIDs has increasingly become the most predominant health concern in Thailand. The rate of HIV/AIDs prevalence was 1.8 percent in recent. In terms of literacy, 96 percent of the population, age 15 and over, can read and write.

In terms of the health infrastructure of Thailand, access to modern medical care and trained physicians is chiefly in Bangkok and provincial towns, although the government has been developing rural health centres over the last decade. That said, the unavailability of drinkable water is one of most common source of disease.

In terms of education, most children attend school several years at least, and the populace is mostly literate. Cause is the government supports universal free primary education.

Human Development Index:

Human Development Index (Ranked Numerically)

The HDI is a composite of several indicators, which measure a country's accomplishments in three main arenas of human development: longevity, education, and economic standard of living. The Human Development Index (HDI) is used to measure quality of life in countries across the world. The HDI has been amassed since 1990 by the United Nations Development Programme (UNDP) on a regular basis.

Life Satisfaction Index

Created by Adrian G. White, an Analytic Social Psychologist at the University of Leicester, the "Satisfaction with Life Index" measures subjective life satisfaction across various countries. Subjective happiness or life satisfaction with qualitative parameters such as health, wealth, and access to basic education, The data was occupied from a met study (see below for source) and associates the notion of. This valuation serves as an alternative to other measures of happiness that incline to rely on traditional and quantitative measures of policy on quality of life, such as GNP and GDP. The methodology elaborates the responses of 80,000 people across the globe. Thailand rank 7th in this index globally.

Happy Planet Index The Happy Planet Index (HPI) is used to measure human well-being in combination with environmental impact. The HPI has been amassed since 2006 by the New Economics Foundation. The index is a composite of several pointers including subjective life satisfaction, life expectation at birth, and eco- logical footprint per capita. Thailand rank 41th in this index.

7.2.3. Global Gender Gap Index Editor's Note: The Global Gender Gap Index by the World Economic Forum levels most of the world's countries in terms of the separation of resources and opportunities among males and females. Exactly, the ranking assesses the gender inequality gap in these four arenas:

1. Economic participation and opportunity (salaries and high skilled employment participation levels)

2. Educational attainment (access to basic and higher level education)

3. Political empowerment (representation in decision-making structures)

4. Health and survival (life expectancy and sex ratio)

Thailand rank 57th in this index.

7.2.4. Etiquette

Cultural Dos and Taboos

1. Thais will shake hands in Western fashion, especially in business circles, but they will be especially pleased if you make the effort to greet them using the traditional greeting.

2. Stick to formal forms of address, complete with titles, unless invited to do otherwise; such formality will demonstrate respect.

3. When introduced to a monk, never touch him; simply give a verbal greeting without shaking hands.

4. When visiting a temple or holy site, one should not walk in front of Thais praying.

5. Be restrained in temperament; one should avoid losing control of one's emotions and refrain from being overly assertive as such expressiveness is considered to be in poor taste. 6. In many Asian cultures, including Thailand, avoiding confrontation is the norm. Rather than answering negatively in an outright manner, Thais will more likely make excuses.

7. In many Asian cultures, including Thailand, laughter and smiling frequently denote emotions other than pleasure and happiness. Smiles may hide embarrassment, shyness, bitterness, discord, and/or loss of face. Learning to interpret smiles and laughter may be 75 difficult but a necessary process in the East nonetheless.

8. When eating, expect to eat with Western style forks and spoons. Keep the fork in the left hand and the spoon in the right. Cut with the side of the spoon, not the fork and use the fork to push food onto the spoon.

9. One should not finish the last helping of food from a serving dish. It is preferable to wait until it is offered and then refuse politely the first time. If it is offered again, one may then accept as it is an honor to have the last helping of food.

10. Although Thais often smoke after dinner, one should not freely light up a cigarette or cigar. Always ask permission first and once it is given, be sure to pass cigarettes around to the men at the table. Note that traditional Thai women do not smoke or drink in public; it is, however, acceptable for Western women to do so.

11. If you are invited for a meal to someone's home, one can take flowers, cakes or fruit as a gift. One should avoid marigolds or carnations, as they are associated with funerals.

7.2.5. Business Culture: Information for Business Travellers

Business relationship are not as formal in other nearby country as japan or china having but not also relax and impersonal as in west. Business circle is often family and friend, although Thailand is friendly and open culture. First preference for business is their own circle.

The Thai cultural values of patience, respect for status (age, authority, etc.) and not losing face, are significant factors in business relationships as well. Thais feel great pride for their country and have deep respect for tradition. Sometimes, however, observance of traditional formalities may seem inconsistent to the tolerant, relaxed nature of living in Thailand. This can be confusing or frustrating to Westerners who are more informal and more time conscious.

Respect for, and consideration of, one's elders, superiors and patrons is deeply rooted in the Thai cultural and social environments. Thais are very reluctant to hurt the feelings of others or to cause them any dissatisfaction. Losing one's composure is losing face and losing

76 respect in Thailand. Therefore, it can be difficult for Westerners to be sure they have received accurate and complete answers to ques- tions, or that they have solicited frank and open opinions. (Source: Thailand Business Basics, Standard Chartered Bank.)

The revelation of what Westerners regard as rampant graft, corruption, and favouritism as an integral part of Thai business and political practice, and the recognition of the great cost to society these actions have caused in the wake of the financial crisis, is causing many Thais to openly criticize, for the first time, the behaviour of the privileged and powerful. Previously referred to euphemistically as "the Thai way," such favouritism was not necessarily tolerated, but not directly challenged. The new economic and social era in the making holds promise of also being fairer and more transparent. "Khun" is the Thai form of address for Mr., Mrs., and Ms. the "wai" is a traditional gesture of greeting and respect in Thailand. Practice by placing your palms together in a prayer-like position.

7.3. Legal analysis Thailand as a democratic nation's Constitution bases its judicial and legal systems on the, which identifies four courts: 1. The Constitutional Court,

2. The Courts of Justice,

3. The Administrative Court, and

4. The Military Court.

The responsibilities of each court are different from each other. The Constitutional Court gives judgment or decision on the constitutionality of the provisions of law and other powers as delivered for in the Constitution and other laws. The Administrative Court attempts and decides administrative disputes between the private sector and State organs regarding the issue of abuse of power by such State organs. The Military Court attempts and decides cases involving persons within its jurisdiction as prescribed by the Act for the Organization of the Military Court B.E. 2498 (AD 1955). The Courts of Justice try and decide all cases except those stated by the Constitution or other laws to be within the jurisdiction of other courts. The Courts of Justice are categorized into three different levels:

1. the Courts of First Instance,

2. the Courts of Appeal, and

3. the Dika Court (Thailand's Supreme Court).

The Courts of First Instance are trial courts that comprise of general courts. Juvenile and family courts and specialized courts. All cases begin at a Court of First Instance. Petitions against Court of First Instance judgments will be filed with the Court of Appeals, subject to certain limitations. The Supreme (Dika) Court has authority over cases appealed from the Court of Appeals, subject to certain limitations delivered by the Civil Procedure Code, Criminal Procedure Code, and other procedural laws/codes applicable for proceedings carried out in the specialized courts, namely in the Labor Court, the Tax Court, the Intellectual Property and International Trade Court, and the Bankruptcy Court.

Thailand usually follows the civil law system. Still, one must understand that Thailand belongs to the civil law system only by the fact of its codification. The contents of the codes are as different as the major legal systems of the world. This article is distributed into three sections:

(1) a brief summary of Thailand's courts and legal system,

(2) the Practice of Law in Thailand, which looks at the basics a person must achieve before applying to be licensed and registered as a lawyer, judge or public prosecutor in Thailand, and (3) Legal Education: The Institute of Legal Education of Thai Bar Association, which reviews the requirements and the roles of the Institute of Legal Education of the Thai Bar Association.

7.3.1. Thailand Legal System

Thailand’s basic laws are preserved in codes, the four most vital of which are: the Civil and Commercial Code; the Criminal Code; the Civil Procedure Code; and the Criminal Procedure Code. There are some other codes also which deals with specific areas, for example, the Revenue Code and the Land Code. In addition to the Codes, some individual Acts also have been passed to effect improved in particular areas of law, for instance, the Labor Act, Intellectual Property Act. The applicable section of any Code and any Act should be read together with any appropriate regulations, decrees, notifications issued by government ministries to achieve complete picture of legislation and regulations affecting any particular area.

Practice is of influential authority only, though if there is a relevant decision of the Thai Supreme Court then it will carry a great weight and influence when an inferior court is ruling on a similar issue. Thailand has a established and advanced court system. In Bangkok, there are some of the courts of the First Instance, such as Bangkok Civil Court, the Bangkok Criminal Court, and the Central Labour Court. Outside Bangkok, there is at least one court of the first instance in every single of 75 provinces in the country. A provincial court generally has authority over both civil and criminal matters in the province.

 Constitution of Thailand - overcomes over other laws.

 Acts and statutes - Many of which categorised and revised the 4 basic codes: Civil and Commercial Code (CCC), Penal Code (PC), Civil Procedure Code and the Criminal Procedure 79

Code. Other codes contain the Land Code and Revenue Code. The year on statutes in Thailand is specified in the Buddhist Era (BE) based on the Thai solar calendar.

 Emergency Decree or Royal Proclamation - this is prepared by the King, by the advice of the Cabinet, where an urgent law is obligatory for national security, public safety, national economic stability or avert a public calamity. An illustration is the Emergency Decree on Public Administration in Emergency Situation BE 2548 (AD 2005).  Subordinate Legislation - contains Regulations (Ministerial), Orders, Notifications, Royal Decrees and Rules.

 Supreme Court Opinions and other Judicial Decisions - Judicial practice in Thailand are not mandatory. Courts are not destined to follow their own decisions and lower courts are not destined to follow precedents set by higher courts. Though, Thai law has been prejudiced by common law pattern. Because of this Courts are significantly influenced by previous decisions or decisions of higher courts. The Supreme Court of Justice circulates it decisions, known as the Supreme Court Opinions. These are often used as secondary authority and are numbered by the year issued. Other judicial decisions or rulings are circulated by the Administrative Court and the Constitutional Court.

7.3.2. Government Support

According to ICT (Information & Communication technology) the government support to technology in Thailand are fair. Government does not provide too much facility to developing technology in Thailand that’s why Thailand is very late adopter in social media & sites like Facebook, Twitter, You tube etc.

Thailand government runs one agency National Science and Technology Development Agency for developing technology in Thailand. Thai government’s deep commitment to apply scientific and technological capabilities to promote and sustain the nation’s economic, social development and growth through the promotion of linkage and collaboration between the public and private sectors. Since its inception in 1991, NSTDA has grown into an active organization with a diverse program focusing on cutting-edge S&T research, design, development and engineering. NSTDA offers a full potential and opportunity for cooperative challenges and investment.

NSTDA affiliated with many institutions which support technology development in industry this are as follow. 80

 National Center for Genetic Engineering and Biotechnology (BIOTEC)  National Metal and Materials Technology Center (MTEC)  National Nanotechnology Center (NANOTEC)  National Electronics and Computer Technology Center (NECTEC)

Thailand Government also runs other department for developing a technology in Thailand industrial institutions & people.

 Thailand Science Park  Software Park Thailand  Thailand Advanced Institute of Science and Technology(TAIST) with Tokyo Institute of Technology and Thai universities  Thailand Graduate Institute of Science and Technology (TGIST)

7.4. Technological Analysis  Technological trends in Thailand In recent years, Thailand's economic growth has been impressive, with Gross Domestic Product (GDP) rising from 3.5 per cent and 4.5 percent in 1985 and 1986 respectively, to 8.4 per cent and 11 percent in 1987 and 1988.

That technology is an increasingly important element in international competitiveness, necessary to sustain a nation's economic growth, is well understood and widely accepted. It is, however, not merely a question of having the right technology alone. There is also the problem of being able to effectively absorb and deploy technology, and to make efficient use of available resources to produce better quality and lower cost products and services or, where demands arise, new types of products and services.

The technological capability of a nation and its industry, and the strategies for enhancement of its technological capability to meet new demands, are of vital importance to maintain international competitiveness and to sustain healthy economic growth.

 An Assessment of the Technological Capability of the Firms Surveyed

A sample of 119 firms across three industrial sectors, which use the key technologies in biotechnology, materials, and electronics technology, was employed in this study. The technological capability (TC) of these firms was assessed by categorizing some 20 components into four types of TC: acquisitive, operative, adaptive and innovative, and by rating each with a score of between 0 and 5.

Acquisitive capability rated a firm's ability to search, assess, negotiate and procure needed technologies, and to install and start-up production facilities.

 Firm Attributes and Technological Capability

Large firms tend to possess higher overall TC than small- to medium-sized firms. In particular, large size appears to have significant associations with higher operative and adaptive capabilities, but only a marginal effect on acquisitive and innovative capabilities. Many foreign subsidiaries and joint- venture firms rely on their parent firms to carry out the various innovative and acquisitive activities abroad.

They tend to perform somewhat poorly in innovative and acquisitive capabilities compared with the average Thai firm, particularly in the electronics sector and to a lesser extent in the materials sector.

 Major Problems Identified

A number of problems and limitations became apparent, which may directly or indirectly have a bearing on the technological capabilities of the industries under study. They are:

 Inadequate Supply of Technical Human Resources

There appears to be a general shortage of S&T personnel, in particular of engineers, while the ability of S&T personnel is questionable, as newer technologies proliferate and push many existing technologies into obsolescence.

 Attitude of Entrepreneurs

There seems to be a widespread absence of a proper perception of the benefits of human-resource development, preventive maintenance practices, R&D activities, and modern management techniques. Also, protected industries tend to be complacent because of the lack of competition.

 Measures to Enhance Efforts to Acquire and Improve Technology S&T Manpower Development

Apart from finance and infrastructure, human resources are another critical component of developing technological capability, as technological capability is, after all, essentially embodied in people and not in machines. To reduce current shortages and increase future supplies of S&T manpower, several measures, both immediate and long term, were put forward.

Long-term measures involve recommendations for substantial investment to train more and better science and engineering graduates, initiation of an on-going upgrading of the curricula in science and engineering; and encouraging management to accord better recognition and remuneration to deserving scientists, engineers, and skilled technicians.

 Creating Competitive Pressure

Allowing free market competition is a most effective means of forcing firms to develop much-needed technological strategies to increase efficiency and lower production costs, enhance quality and improve reliability and develop new designs, so as to be competitive both domestically and internationally. It is important that tariff protection be removed, or reduced to the minimum possible.

 Conditions for Direct Foreign Investment

Foreign investment has not proven to be a sufficiently effective means of technology transfer. A more selective approach is required to ensure that new investments truly create jobs, and yield genuine technology transfer and net income to Thailand.

 Assistance to Small- and Medium-sized Firms

The less resourceful small- and medium-sized firms need to be given assistance, without creating adverse effects in the way. Those protection barriers do. These may include: soft loans for process and technology upgrading, dissemination of vital technical and business information, technology transfer through the provision of appropriate consultancy services, training in quality control and productivity improvement, as well as special skills upgrading.

 Creation of an Environment Conducive to Subcontracting

The multiple taxation system has severe drawbacks, making subcontracting work less attractive. Such a system is seen to favour vertical integration manufacturing, and deter the subcontracting that is particularly suitable for small- and medium-sized firms. Thus, the government's implementation of a value-added tax (VAT) system should be fully supported, while incentives should be considered to encourage collaboration between large firms and subcontractors.

 Firm-level Human Resource Development

The government should be instrumental in arranging for experts from universities, government agencies, and private organizations to conduct training programs specializing in technical and general human resource development for the private sector, in particular for the neediest small- and medium-sized firms. Furthermore, incentives should be considered to encourage such human resource development efforts.

 Support for Firm-level RD&E Efforts

The pending legislation for the promotion of technology development and RD&E efforts should be fully supported and speedily introduced. RD&E funding to state universities and research institutes should be re-examined with a view to achieving a balance between basic and applied/industrial research, with the latter specifically aimed at tackling the needs of industries.

 Current Status of 3R Technology Applications 3R technologies may range from basic tools and equipment, such as a well- designed trashcan, to advance recycling technology or sophisticated waste recovery systems. As 3R strategies are being promoted, technologies to support 3R practices are widely used in public and private sectors. Private sector, many businesses are getting to know and accept the advantages of introducing 3R technologies into their works such as cleaner technology besides benefits derived from the 3R technology.  Measures for strengthening technological infrastructure and support

If an environment conducive to encouraging the production sector toward much greater technological efforts is created, then an adequate basic S&T infrastructure and support system becomes necessary to enable producing firms' technological efforts to be more fully developed and realized. Major infrastructure which needs to be strengthened or established is as follows:

 Information centre with extension services

 Science and technology park

 Centres of excellence

 Systems of metrology and industrial standards

 Dissemination of technology

 Intellectual property protection

7.5. Environmental Analysis

Geographic Analysis

Thailand also known as Siam. Language of Thailand is China. River of Thailand mae nam, gulf of Thailand and the Andaman sea are foreign ports of trade.

Location

Thailand share Boundaries with Burma, Malaysia, laos, and Cambodia, so they easily import and export with other countries, and transportation cost is reduce. That’s why the location of Thailand is good for business.

Weather

Season are divided into three parts

 November to February – Cool Season  March to June – Hot Season  July to October – Rainy Season

Weather is similar to Indian weather so we can start any Indian business in Thailand.

Coastline

Total coastline of Thailand is 3219 sq km, so we can easily transfer goods with other countries.

Time

The time in Thailand is seven hour ahead of Greenwich Mean Time (+7 hours GMT)

 Topographic Analysis

Thailand is divided into four topographic regions

 North  Central Plain or Chao Phraya  Northeast or the korat Plateau  South or southern isthmus

Migration

Indian, westerners, Japanese, Chinese and neighbouring countries people come to Thailand for various reasons.

The Indian merchants came here to trade and to spread Buddhist teachings.

Ethnic Groups

Thailand is a county with many distinct ethnic groups, just like other countries, include the majority Thai and numerous hill tribes living primarily in the mountains of the north.

Thailand’s population is relatively homogeneous, with more than 98% speaking a Thai language and sharing a common culture. This population is divided in three part 1.ethnic Thai (50%)

2. Chinese or partly Chinese (40%)

3. Malay (5%)

4. Other (5%)

Climate

There are three seasons in Thailand

1. The cool season

This season starts in November and end in February. During this season does not much rain and temperatures are lowest. This is most popular time for visit

2. The hot season

The country is the hottest between the month of March and may and the heat is really scorching. Temperatures range from 32 degrees to 35 degrees.

3. The rainy season

The rainy season is also very hot and very humid. Continuous rainfall is rare and the north differs to a great extent from the central and southern parts of Thailand.

So tourist are come in Thailand in cool season because this period Christmas and New Year also in this season

Natural Resources

The natural resources are divided in three part

1. Thailand agriculture: - The most important crop of Thailand is rice. And Thailand is leading producer of rice in the world. The farmer of Thailand also produces rubber, sugarcane, maize, pineapples, coconuts and kenaf.

2. Forestry and Fishing:- the forest is covered above 28% land of Thailand. The most important product is hardwood. The fishing is rapidly growing up economy of Thailand. The ocean product of Thailand are prawns, fish and shellfish.

3. Plants and Animals of Thailand:- the plants of Thailand is covered with different types of tree like mangrove, rattan, ironwood, sap pan wood, ebony and rosewood. The most useful animal is elephant. Other larger animal are rhinoceros, tiger, leopard, gaur, water buffalo and gibbon. Thailand has more than 50 species of snakes and a various species of fishes and birds.

The following resources are available in Thailand

Tin, Rubber, Natural gas, Tungsten, Tantalum, Timber, Lead, Fish, Gypsum, Lignite, Fluorite, Arable land. So we can do many businesses related with these resources. Business likes automobiles and automotive parts, electric appliances and components, tourism, tire, cement, plastics, textiles and garments, beverages, tobacco etc.

PART II

ALCOHOL INDUSTRY

ALCOHOL INDUSTRY  Thailand has a population of 67 million and as estimated 10 per cent of the population drinks wine. This accounts for 3 per cent of the alcohol beverage market. In Thailand, this Industry is contributing 44.65% of overall GDP of Thailand. Hence, Alcohol Industry in Thailand is a huge market and also very growing year after year. Pricing of alcohol in Thailand is lower than the India. WHO reported that the relative beverage price in Thailand was low compared to regional and global averages.

 Thailand is ranked 18, with its market value of 72 million Euros or more than 3,000 million baht of Alcohol Market.

 This Industry corresponds to ISIC divisions 10-45 and includes manufacturing (ISIC divisions 15-37). It comprises value added in mining, manufacturing (also reported as a separate subgroup), construction, electricity, water, and gas. Value added is the net output of a sector after adding up all outputs and subtracting intermediate inputs.

 It is calculated without making deductions for depreciation of fabricated assets or depletion and degradation of natural resources. The economy of Thailand is an emerging economy which is heavily export-dependent, with exports accounting for more than two thirds of gross domestic product (GDP). Well-developed infrastructure, a free-enterprise economy, and generally pro-investment policies, made Thailand one of East Asia's best 61 performers. However, overall economic growth has fallen sharply in 2008 and 2009 as global downturn and persistent political crisis stalled infrastructure mega-projects, eroded investor and consumer confidence.

 Foreign direct investment is the net inflows of investment to acquire a lasting management interest (10 percent or more of the voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. This series shows net outflows of investment from the reporting economy to the rest of the world and is divided by GDP. Foreign direct investment, net outflows (% of GDP) in Thailand was 1.73 as of 2010. 91

 There are different types of business structure which can also be done in Thailand.There are many types of business structure to choose from if you would like to set up your own business. These include sole proprietorships, cooperatives, partnerships, limited liability companies, corporations and other forms of organization. However, these types often vary on each country based on its legal systems of setting up business. Thus, here in Thailand, the following are the common types of business structures:  Partnership  Joint Venture  Company Limited  There are many ways of Transportation available in Thailand-Waterways, River and canal transport, Road transport. Hence it will be easy for us to do cross border business transactions from Thailand.  Thailand lies within the Indochinese Peninsula, except for the southern extremity, which occupies a portion of the Malay Peninsula. The country's extreme dimensions are about 1770 km (about 1100 mi) from north to south and about 800 km (about 500 mi) from east to west. The physiography is highly diversified, but the mountain systems are the predominant feature of the terrain. A series of parallel ranges, with a north-south trend, occupy the northern and western portions of the country.  Thailand is rich in natural resources. Among the known mineral deposits are coal, gold, lead, tin, tungsten, manganese, zinc, and precious stones. The rich alluvial soil along the Chao Phraya and other rivers constitutes another important resource. Natural gas deposits were discovered offshore in the 1970s, reducing Thailand's reliance on imported petroleum.  Jungles and swamps, scattered through the coastal areas of Thailand, have extensive tracts of tropical trees, including mangrove, rattan, ironwood, sappanwood, ebony, and rosewood. The upland areas are also heavily wooded, the most valuable species being teak, agalloch, and oak. In addition, a wide variety of tropical plants and fruit trees, including orchid, gardenia, hibiscus, banana, mango, and coconut, occur in Thailand. Many species of animal inhabit the jungles and forests.  Thailand is one of the world's leading producers of rice, despite the fact that the yield per hectare is low. In the early 1990s Thailand annually produced approximately 18.5 million metric tons of rice, up from about 11.3 million metric tons per year in the 1960s. The second 92

most important crop in value is rubber, which is raised mainly on plantations on the Malay Peninsula. In the early 1990s approximately 1.4 million metric tons of rubber were produced each year. Other important crops included cassava (21.1 million metric tons), sugarcane (46.8 million), maize (3.6 million), pineapples (1.9 million), coconuts (1.4 million), and kenaf (161,000), a fiber used in making canvas. Livestock totaled about 6.8 million cattle, 4.8 million buffalo, 5.1 million pigs, and 153 million poultry.  About 28 percent of the total land area of Thailand is forested. The most valuable forest product is hardwood. The annual timber harvest in the early 1990s totaled about 37.6 million Cu m (about 1.3 billion Cu ft), of which all but 7 percent was burned for fuel. Thailand was a major exporter of teak until a ban on uncontrolled logging was instituted in 1989, following severe flooding as a result of deforestation.  Thailand's increasingly diversified manufacturing sector is a central component of the nation's economic expansion, growing by 9.4 per cent annually during the 1980s and early 1990s. Manufacturing employs about 15 per cent of the labour force. Food-processing industries, especially rice milling and sugar refining; textile and clothing manufacture and the electronics industry predominate. Other important manufactured goods included cement (18 million metric tons), motor vehicles (318,000 units), cigarettes (38.3 billion units), and various chemicals and petroleum products.  In the early 1990s Thailand annually produced about 43.8 billion kilowatt-hours of electricity, up from about 3 billion kilowatt-hours in 1968. The installed generating capacity is about 10 million kilowatts, most of it at generating plants fueled by hydrocarbons.  The below mentioned data concludes that there is having great opportunity in doing Alcohol Business between India and Thailand.  India potable alcohol market can be classified into country-made liquor and Indian-Made Foreign Liquor (IMFL) which account for the bulk of alcohol utilization in the country. The potable alcohol industry is estimated at a market value of approximately Rs. 300 billion and has been growing at the rate of 7–10 per cent per annum over the past few years.  However, the exact shares of country liquor and IMFL manufacturing are unknown since production of the former category still thrives illegal in many areas, making it difficult to arrive at a correct estimate. The potable alcohol produced in India is primarily made from sugar cane molasses and not from grain as in many other countries. Due to the increasing uncertainties involved in molasses availability (and the resultant increase in its prices) the 93

industry is gradually accepting the option of grain-based alcohol. However, molasses still accounts for most domestically produced potable alcohol in the country.  The process of manufacturing IMFL (such as whisky, rum, and brandy) includes a secondary distillation of the fermented mixture of grains and molasses that yields extra neutral alcohol (ENA) with 94.6 per cent alcohol content which is reduced in strength, blended with other products (including water) and flavored to obtain IMFL. The IMFLs are usually of 42.8 per cent v/v ethanol content.  In the past few years, significant growth has been achieved in the production of quality spirits and the industry is now exporting these products. In terms of market players, the IMFL industry is highly consolidated with a few companies holding significant shares in the market. The production centres for IMFL are mostly located in the sugar-producing states of Maharashtra, UP, Karnataka, and Tamil Nadu and some in Haryana and Punjab. Regulation and taxation of the sector is under the jurisdiction of the state governments and is the large source of revenue for the states.  With the implementation of the ethanol-blending programmed of the government, ethanol availability to the potable alcohol industry is likely to get affected unless its supply is increased. Increased demand for ethanol has also resulted in the increased price of molasses in the past few years.  The below mentioned data is showing Import/Export regulations for Alcohol Industry in Thailand:- Government regulations at every level have affected the Indian liquor industry, introducing structural rigidities. Apart from the high level of taxes and levies (that account for up to 65% of the consumer price), regulations pertaining to licensing, creation or expansion of brewing/distilling and bottling capacities, manufacturing processes (grain-based or molasses-based), distribution and advertising impinge on the industry. Further, liquor being a state subject, every state has different regulations (including those on distribution) and tax rates for the industry apart from restrictions as well as levies on the inter-state movement of liquor. The government's excise policy is subject to a lot of sudden changes. The manufacturer’s sometimes just need to get their L-1 licenses renewed and at times they need to apply afresh, like in the year 2001. The L-1 license holders were allowed to set up 5 'dedicated' shops in Delhi in which they could sell their approved brands in addition to having them sold in the 94

government retail shops. On being questioned about the effects of this policy, an official in one of the country's leading breweries said that the introduction of this policy had led to an increase in their revenue by almost 30% which they have lost out on since the policy got crushed. Recently, the government's policy to open up 45 private liquor shops was quashed by the cabinet, because it meant that the MLA's power in the issue of a no-objection certificate for the setting up of a retail outlet would be questioned. The government would have earned Rs. 7.5 lakhs on each vend as license fees annually.  Some tariff barriers are likely to always remain in place, even in nations which are very open to free trade. Nations may also use trade barriers to make political statements which are designed to pressure other countries into modifying their behavior. For example, Country A might refuse to import beer from Country B until Country B can demonstrate that its meat supply is free of bovine spongiform encephalitis (BSE), also known as mad cow disease.  Tariff barriers are duties imposed on goods which effectively create an obstacle to trade, although this is not necessarily the purpose of putting tariffs in place. Tariff barriers are also sometimes known as import restraints, because they limit the amount of goods which can be imported into a country.  Non-tariff barriers to trade (NTBs) are trade barriers that restrict imports but are not in the usual form of a tariff. Some common examples of NTB's are anti-dumping measures and countervailing duties, which, although they are called "non-tariff" barriers, have the effect of tariffs once they are enacted.  Dumping is said to occur when the goods are exported by a country to another country at a price lower than its normal value. This is an unfair trade practice which can have a distortive effect on international trade. Thus, the purpose of anti dumping duty is to rectify the trade distortive effect of dumping and re-establish fair trade. The use of anti dumping measure as an instrument of fair competition is permitted by the WTO. In fact, anti dumping is an instrument for ensuring fair trade and is not a measure of protection per se for the domestic industry. It provides relief to the domestic industry against the injury caused by dumping.  High taxes on alcoholic beverages and weak monitoring of the market are factors making smuggling attractive. Import duties and taxes levied on an ad valorem basis with potential rates close to 500% of landed cost are amongst the highest in the world. As a result 90% of the so called Category B and Category C products (i.e. wines and spirits) are estimated 95

by the industry to be imported illegally. Consequent losses of potential government revenue may exceed Rp330 billion.  Taxing on Alcoholic Beverages in Thailand is as follows:-  Excise Taxis an indirect and consumption based tax on alcoholic beverages and other policy designate commodities and services. This excise tax can be broken into 2 main categories: distilled Spirits and fermented spirits. The distilled spirits are consist of 5 types of products, which are special spirit, absolute alcohol, the product other of special spirit and absolute alcohol, white spirit, and blended spirit. And fermented liquors consist of 3 types of products: beer, wine, and others. alcohol tax structure that is designed during alcohol concession period more than 50 years ago indicates different tax rates for different types of alcoholic beverages. In short, there are at least 11 different excise tax rates for more than 11 different alcoholic beverages.  In essence, there are two types of excise tax – Ad Valorem and Specific Tax. The former is based a percentage of the value of the product, while the later is uniform rate based on the volume of alcohol content. In theory, to maximize the tax collection, the law requires the tax liability of each classification is either the beverages value or alcoholic content that renders the higher amount of tax revenue. But in practice, alcohol content-based tax for fermented spirit or beer has been useless from the date of enactment (on Dec. 25, 1991) because of deficient, ill conceived and unrealistic low ceiling allowance (bath/liter). The only true effective rate then is Ad Valorem or based on price mechanism. These give way to the huge tax collection leakages and an enormous loss in policy flexibility to optimize public interest and social.

 Trade barriers for import or export of alcohol in Thailand is as follows:-  For Spirits- (1) Up to 10 labels per authorized licensee - Rs.10, 000/- for each label per annum (2) In excess of 10 label - Rs.5000/- for each label per annum. (B) For Wine and Beer (1) Up to 10 labels per authorized license - Rs.5000/- for each label per annum (2) In excess of 10 label - Rs.2500/- for each label per annum.  Rates of Special Fee‖ are as follows (i) ―200% of Assessable value or Rs. 160/- per proof litre of alcohol contents whichever is higher for spirits. (ii) 150% of Assessable value for wine (iii) (a) 100% of Assessable value or Rs.15/- P.B.L whichever is higher for mild beer. (b) 125% of Assessable value 0r Rs.20/- P.B.L whichever is higher for fermented beer. 96

 By Analysing and studying above data we can summarize our plans for business in Thailand as:-  We, Indi Thai spirits pvt.Ltd. are engaged in producing and distributing Spirits,i.e. Gin and Vodka. We will distribute our product to big companies on contractual basis or as per demand.  On the other side, we also planned to make Joint venture with existing firm in Alcohol business in Thailand.i.e.Thai Asia Pacific Brewery Company.  Our 1st product gin in there is two types 1st is English gin and 2nd is Dutch gin.  In English gin main ingredient is grain and other combination of barley, corn or ray, with juniper berries and other botanicals and normally juniper berries are small, bluish berries with piney flavor and aroma and this is predominant flavoring for gin. Other botanicals that are used to flavor gin include coriander seed, anise, caraway seed, cinnamon, cardamom, citrus peel, ginger, and licorice. The combination of botanicals along with the production method so it can be differs from other brand also. In gin we can also do the re- distilling the grain alcohol with the flavorings is considered the finest method of producing gin. This is original method of producing gin but it is most expensive. So the cheapest mass produced gins made using the cold compound process, by which the extracted flavors are added to the alcohol. While in Dutch gin it made from equal part s malted barley, corn and rye. This gin is not used for the mixer.  Vodka is ethyl alcohol liquor from the fermentation of grain, potato or rice. It contains ethyl alcohol up to a volume percent of 95.5, water and traces of flavoring (sometimes) and fuel oils (1-propanol, 2-propanol, butanol (various isomers), amyl alcohol, furfural).  We have decided to distribute our product in 20liters barrel or as per any client. Our manufacturing facility includes automatic production and packaging criteria whereby we can reduce time as well as cost.  We will give customized option in front of our clients as they can have what they need. We will have machineries to support this kind of innovative manufacturing.  NaknomPathom is the place where we open our production plant because most of the alcoholic companies’ plants are there that we can get easily raw materials and Labour so it reduces the cost of our product. Minimum cost in near this area is almost 40000 baht per square ft. 97

 As we will supply our product directly to our clients, there will be no agency other than transporters that will help us to deliver our product.  At the end, we can summarize that Thailand is the market which growing at a fast pace specifically for Alcohol Beverages as people are consuming it in a large quantity and also accepting large variety of the said product. So, we can make successful business there by supplying to the companies and also by making Joint Venture with existing successful firm.

APPAREL INDUSTRY

APPAREL INDUSTRY  Thailand have ability to supply the complete textile industry series, from upstream, through midstream, to downstream, from petrochemical and natural fiber production, to fabric and textiles, all the way to design, production, and sale of apparel, home textiles, and technical textiles, textiles which is used largely producing the apparel product. Current global fiber mix is 41% natural and 59% man-made fiber(MMF). Demand for MMF yarns will grow faster than demand for natural fiber yarns.

 Asian countries like China, India, Pakistan, Bangladesh, Thailand, Indonesia are among the leading countries in terms of installed machinery capacity. China alone has a share of around 45% of world’s total installed capacity for spinning and weaving machinery. The Indian textile and apparel market size was estimated to be Rs 2,73,000 crores (USD 58 billion) in 2011 and is projected to grow at 9% CAGR to Rs 6,64,000 crores (USD 141 billion) by 2021.

 As per 2010 data, the apparel sector of Thailand as contributed 12.3% of country’s GDP accounting for US$ 34.5. The apparel industry of Thailand contributes more than 12% of its gross national product.

 In apparel industry there is a 55% structure is unorganized and 45% structure is organized sectors. Thailand recognizes three types of business organizations: partnerships, limited companies and joint ventures. According to the Civil and Commercial Code (CCC), partnerships can be divided into 2 types:(1) Ordinary Partnerships (2) Limited Partnerships. There are two types of limited companies: private limited companies and public limited companies. The first is governed by the Civil and Commercial Code and the second is governed by the Public Limited Company Act. In company Registration that to provide a documents of promoter , timing and filing of the company. In apparel industry used a Hierarchy & Departments. In Thailand that to used a Transportation & Communication System for easy working.In Thailand Railroads: Main lines (4,000 kilometers of track) originating in Bangkok run to national borders with Malaysia in south, Cambodia in east, and Laos in northeast; a northern line goes to Chiang Mai. Roads: Primary network of national highways (20,000 kilometers), more than 90 percent paved. Secondary system of provincial roads (more than 24,000 kilometers) Village roads, tracks, and footpaths totaled between 100

40,000 and 60,000 kilometers. Inland Waterways: Thailand has 122 ports, wharves, and jetties able to accommodate sea-going vessels engaging in international trade, including eight international deep-sea ports. Civil Aviation: Domestic air service to about twenty cities and towns through out country. About forty international airlines also served Thailand.In telecommunication About 560,000 telephones (70 percent located in Bangkok), 275 radio stations,nearly 8 million radio receivers,9 television stations (all color),more than 3 million television sets.20 Internet providers (Feb,2011), 9 International internet gateway service providers and national internet exchange (Feb, 2011), 20 million internet users (2010), 6.7 million Facebook users (2010)450,000 Twitter users of whom 100,000 are active.(2010) 1 million messages tweeted in Thai language each day.(2010),Internet international bandwidth: 158,680 Mbps (Sept, 2010), Mobile phone subscribers: 98.65 per 100 inhabitants (2009), Computer users: 29.3 per 100 inhabitants (2009), iPhone users: 200,000 (2010), iPad users: 45,000 (2010), Nokia users: 57,402 (2010), BlackBerry users: 22,000 (2010). Apparel industry provides more employment to Thai people. It provides more employment as compare to other industry. More than peoples 50,000 of Thailand is dependent upon apparel industry.

 Thailand and India have forward technology while in communication they Have Fixe Line Services, Mobile Handsets, Internet, Calling Facilities, Postal Services and Courier Services. But Thailand have relatively high price while India have relatively low price. Both have same transportation manufacturer to user distribution channel. Usage also on festival basis but in Thailand they have to import cotton for Raw-material though Thailand and india have same in many condition but labour rate is very low in india compare to Thailand. Thailand have minimum wage rate is THB 300(9.80$) while in India it is Rs.120(2.3$).

 India accounts for 61 per cent of global looms capacity, 22 per cent of global spindle capacity. India has the second largest yarn-spinning capacity in the world after China, accounting for roughly 20 per cent of world's spindle capacity, and approximately 35- 40 per cent of India's spindles are less than ten years old. India is more competitive in technology needed in apparel industry, compared to that of Thailand. India have adopted Backward and Forward Integration in Apparel sector, where as Thailand is better in only Forward Integration.  A major constraint in the growth of Indian apparel export sector is low labour productivity due to low technology and modernization levels. Average productivity of the Indian apparel 101

manufacturer-exporters lags far behind not only that of the international benchmarks but also the Asian productivity levels. In comparison with manufacturers from South Korea, Taiwan, Hong Kong, and Thailand, it is almost 50 per cent or even less. A studied that due to small- scale operations of Indian apparel sector, labour productivity is very low. With improvement in labour productivity, India can increase its market share significantly in the world trade.

 Prices in India are lower than Thailand. The cost of labor and machines used are much lower compared. Also, much part consists of labor intensive technologies. Whereas, Thailand have high labor cost and as a result high prices of products.

 Mainly, apparels are consumed on festivals in both the countries. In India it is mainly consumed during Diwali, Idd, and other important festivals of Christians and Sikh. While in Thailand it is mainly consumed at new year, Asalha puja, Bosang, Satthai, vassa, Kathina.

 Generally apparel is a product which is being consumed by everyone in every country. So the Target Market for this industry is Kids, Youngsters, Men and Women. People of all ages need apparel and so there is Full Market Coverage and no different segmentation.

 As per the ministry of textiles apparel sector contributes 14% to industrial production, 4% to GDP and 17% towards export earnings. As per estimation it is said that the Indian apparel and textile share would be increased in the world to 8% from present level of 4.5% and by 2020 will reach to US$80billion. As per 2010 data, the apparel sector of Thailand as contributed 12.3% of country’s GDP accounting for US$ 34.5.

 Thailand has strength of experienced entrepreneur in a fully integrated industry with an appealing geographic location. Where they have weakness of importing cotton, fabric, and chemical. While they have low research and development. While India have benefit of low labour cost. Large market, high Demand, Enough supply of cotton but India also have problem like low labour productivity lake of skill labour and low research.

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 Thailand has 25th rank for import, and they have 26th rank for export in the world. Thailand has more export then import so it is good for economy. In the year 2008 have negative balance of payment of $-1,049,000,000 and in the year 2009 have highest positive balance of payment. Last two year they has positive balance of payment. Tariff Barrier is one of the traditional import tax Imposed by importing countries.

 The Cabinet’s resolution on 6 June 1995 stipulated that all procurement of foreign goods and services by government agencies and state enterprises over Baht 500* million must have a related counter trade transaction. The current value for Counter purchase is set at between 20% to 50%* of the imported price.

 An employee is entitled to 13 paid public holidays each year. An employee is entitled to a 30 days sick leave per annum with pay. The minimum age in order to employ a child is 15 years old in Thailand. Furthermore, no child under the age of 18 can be engaged to work without informing the labor inspector within 15 days from the date the child starts working. Labor Union Must be 20 years of age and over Labor Union must have at least 10 promoters.Corporate tax for Ordinary Company is 20% on net profit 2013 onwards.

 Small and Medium Enterprise have three bases. 0 - 150,000 net profit is exempted, 150000 - 1000000, 1000000 – 3000000, 3000000 - not over 30 million all have 20% tax.

 Personal Income Tax Rates for 2013 – Effective 1 January 2013,  Tax Rate  Level of taxable income (baht)  Old  New  1 - 150,000  0%  0%  150,001 - 300,000  10%  5%  300,001 - 500,000  10%  10%  500,001 - 750,000  20%  15%  750,001 - 1,000,000  20%  20%  1,000,001 - 2,000,000  30%  25%  2,000,001 - 4,000,000  30%  30%  4,000,001 – above  37%  35%

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 Textile and Apparel (T/A) industry plays a major role in Thai economy. The export value of this industry is approximately 6,000 million US$ per year, and account for approximately 4% of the total GDP of Thailand. There are more than 4,000 establishments in this industry that employ over a million workers. There are several factors found to justify the buying behavior of consumers. The main factors influencing the buying behavior of consumers are the Physical, Identity, Lifestyle, Store Environment. Thailand has a good transportation and communication channel. There are a 9 television stations (all color) and more than 3 million television sets.TV home shopping had been moderately accepted and its popularity is growing. More international operators of home shopping have entered the Thai market. It is estimated to generate an annual turnover of over US$50 million. Quality of the product is a major concern of most buyers. The Thai consumers’ buying pattern of seeing and touching products still holds true, which could limit the growth of TV home shopping. Sales promotions customarily used( sampling, coupons, etc)

 Moreover the large factories that have a lot of experience and money can still develop the management to cut cost by developing management techniques and production processes including the Supply Chain concept. Moreover the country in general has a competitive edge over neighboring countries since Thailand has a lot of tourist and cultural attractions as well as a prospering jewelry and leather industries therefore a support and further development of these industries together with the focus on fashion is a way forward to increase the demand of Thai garment goods in the international market. Additionally the population in the Thai countryside and nearby countries still have very low income therefore the development of a network of sub contracting in garment industry in provinces that have small local garment industries and provinces on the Thai border and the expansion into nearby countries is one of the ways that the cost of production can be decreased especially in larger factories.

 For the apparel business Thailand is a prefer country for India. We can set our industry in Thailand. Out of all points most of points are in favor of India. So market is totally open for Indian garment industry.

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 Our company name “Fashion Street”. Marketing objective is become a leading brand in fashion industry. Segmentation For our company we will divide Thailand in City and Rural. We target cities which are most promising in Thailand. And further classification age from 15 to 64 years. And gender Males only. Targeting SEC A, B & C Age: 15 to 44, College Students, Youth and New Generation people (Male only), will target five city of Thailand in next five years. Entry in Thailand, For, apparel industries we will start our business in five major city of Thailand, coming next five years. First year we start business at BANGKOK (Silom and Victory Monument Shopping) then PHUKET, CHIANG MAI,KHON KAEN and PHITSANULOK city. Fashion Street has its core competence in the designing and the outlook. As the brand is targeting the youth of male. The brand has its unique features. The entire product will have some spark that attracts the youth. Products will be western clothes. Our advertisement objective is the advertising in the apparel is to launch the product of Fashion Street successfully in the country. To generate the good brand image and cover the maximum market area. It also helps us to recall the brand and product of the firm. For Media Mix 1. Print ads we will go for Hoardings (For the 12 months in the different location of the city 10 hoardings will be there in the city), newspaper (Like Bangkok Post, Chiangmai Mail, Student Weekly) and Magazine (Like Bangkok Recorder, Chiang Mai Citylife). And message of our advertisement will As the all the products are targeting the youth of nation and the tag line of brand is “A fashion Groom Your Personality”. And sales promotion distribute in three phase launching, initial and growth phase and for sales promotion discount, merchandise, gift and voucher. Company use direct distribution channel, company direct reach to customer by their own retail outlets. Company follows the zero level distribution channel. Locations of warehouses in Thailand will be Bangkok, Nonthaburi, NakhonRatchasima, Chiang Mai, Hat Yai, UdonThani, Pak Kret, phuket, khon kaen, phitsanulok.

 Human resource planning, There will be one C. E.O., three managers – one finance manager, one marketing manager, HR & Production manager. In admin staff there will be three accountants (one senior accountant and two junior accountants). Labour staff will be of 63 members. Labour force includes supervisor, worker, plant sweeper, cleaner, security. Salary of Director and MD & Chairman will be Rs 6,10,000 and 6,10,000 p.a., salary of Managers

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will be Rs. 10,00,000 p.a., salary of Admin staff will be Rs. 6,80,000 p.a., salary of labor force will be 43,50,000.

 And price discrimination transportation cost for the next five year 2013-15 (Rs. In Millions) 1.50, 2.00, 3.00, 3.00, 3.00 respectively, Handling cost for the next five year 0.30, 0.32, 0.34, 0.36, 0.38 respectively, The import and export tariff of garments products are tax exempted and GST is charged on the domestic product and services, GST charged on the importer, supplier and the services provider. After all cost deducting net profit 14.00, 27, 41, 40, 39 Rs. In Millions for the next five year respectively and the retail price per unit is Rs.2500 (this is average price of our product).

 Financial projection, The total cost of the project will be 388 Million. Cost for land and site development, building, plant and machinery and other fixed assets will be 150, 80, 100, 4 respectively. Preliminary expense and pre-operative expense will be 4 and 15 respectively. Contingency margin and working capital margin will be 10 and 25 respectively. The proposed means of finance is in Millions. The owner Fund is 280.The term loan is 100 and State government's special incentive loan is 38. Installed Capacity of the factory is 80000 tones. Utilization for the three years will be 50%,70%, 90% and production will 40000, 56000 and 72000 respectively. Sales revenue (in Millions) for next five years will be 75, 105, 135, 135, 135 respectively. Working capital requirement is in Millions for next 3 years. raw material is 24.00, 33.60, 43.20 for three years respectively, the stock in process and finished goods is 1.44, 2.02, 2.59 respectively for three years. Total current assets is 24.00, 33.60, 43.20 and net working capital for three years is 2.88, 4.03, 5.18 respectively. This is projected estimates of Apparel for five years. The profit after tax is increasing. Net cash accruals are also increasing for 5 years26, 12, 23, 17 and 16 respectively which shows that the company will grow. And balance sheet of Apparel for five years. In the initial year reserves and surplus is high and year by year is increasing because Apparel is getting profit. Here for Apparel trade creditors are increasing. From the total assets net fixed assets are increasing and Apparel there are no debtors. Cash & bank balance is increasing year by year. So overall assets, loans and advances are in upward trend.

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FOOD INDUSTRY

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FOOD INDUSTRY

 This report which contains in depth study of food industry is made with the intention to get through all aspects related to topics and become able to make some suggestion in the industry. From our combined study related to the industry we found that More than 10,000 food processing companies are comprised in Thailand.

 Thailand also is an important global source of other types of fruit, vegetables, condiments, coffee, vegetable oil, nuts, pineapple, canned food, juice and concentrates. The Thai people are very interested to eat food which has Indian flavours as they use it in there Red, Yellow, Green curries. In our study we found that Thai people are very fond of the Indian flavours. So, there are great chances of exporting our spices and flavours to their country.

 There is 28% contribution of food industry of Thailand so, we can envision that how huge industry it is. As Thai food is becoming famous in the world and famous country’s food are available there. There is no gap in this food market but it has potential for food business. So we think that Thailand is the best country for establish and developed food industry.

 We also found that the food industry is an important contributor to Thailand’s economy. Thailand is one of the world’s top 10 producers and exporters of food, including processed food products. Its food industry accounts for as much as 28% of gross domestic product (GDP).

 The study shows us that there is lot of future opportunities related to the food industry as the people are very foody. Thailand citizens are very foodie in nature, people love to eat junk food like chips, noodles, and other Chinese items, and gradually population is also increasing, so the market of the food industry is also increasing because of which, every food company would like to penetrate in the food market.

 The proportion of organized sector is less compared to unorganized sector in Thailand. Compare to Organized Restaurant’s, unorganized restaurant’s are found more in Thailand as it requires very less investment. Anyone can start restaurant on the street side with very negligible amount of money.

 There are different types of hierarchy and departments in the food industry such as Basic, department, full service, limited service, Employee hierarchy. 108

 We studied from our combined efforts that a hotel's organizational structure depends largely on the quality, competence and hierarchy of its staff. At the top of the hotel pyramid is the hotel's Chief Executive Officer (CEO). Underneath the CEO is the management staff, headed by the hotel general manager. The general manager, who oversees all hotel operations on a daily basis, may hire an assistant manager to help with his myriad duties and supervision. Underneath the general manager, a hotel may have a catering director, restaurant manager, wine manager, human resources director, administrative director, front office manager, etc. Underneath the managerial staff are the employees who work in food and beverage services, marketing and sales, room service, housekeeping and maintenance. The size of the hotel and the type of services it offers determines the complexity of its organizational employee structure. The customs and business practices are also been known to us by our study related to the specific industry.

 The wai is the common form of greeting and adheres to strict rules of protocol. Raising both hands, palms joined with the fingers pointing upwards as if in prayer, lightly touching the body somewhere between the chest and the forehead, is the standard form. The wai is both a sign of respect as well as a greeting. Respect and courtesy are demonstrated by the height at which the hands are held and how low the head comes down to meet the thumbs of both hands. The wai may be made while sitting, walking, or standing. The person who is junior in age or status is the first one to offer the wai. The senior person returns the wai, generally with their hands raised to somewhere around their chest. If a junior person is standing and wants to wai a senior person who is seated, the junior person will stoop or bow their head while making the wai. If there is a great social distance between two people, the wai will not be returned.

 Thai’s prefer doing business with people they respect. Relationships develop slowly and do not flourish after one meeting; it may take several meetings. Always be respectful and courteous when dealing with others as this leads to the harmonious relationships necessary within business.Thai communication is formal and non-verbal communication is often more important than verbal communication. Rank is always respected. The eldest person in the group is revered. It is difficult for most Thais to say no, so you must be cognizant of their non- verbal communication. Watch your body language and facial expressions, as these will be believed over your words.

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 From our study we also found that Transportation and Communication system are mainly of 4 types :-

 Canal & Inland Waterways  Road Transport  Rail Transport  Air transport if the goods are of perishable nature.

 The total labor force in the country is Approx. 39.62 Million. The labor force in the food industry is 1.4 Million.  We came to know about different business functions such as accounting method, record keeping, HR practices which are used in the industry.  Managing cash flow means tracking all the cash that is coming in and leaving your restaurant. With sales and expenses always playing a balancing act, estimating future cash flow can be a guessing game until you get the feel for your restaurant's business patterns, or when the money comes in versus when it goes out. Essentially, restaurants strive for more income than expenses. When a restaurant is able to bring in more money than it spends, it maximizes its net income, and the overall profits grow.  Recording your cash flow, including income and expenses, is critical to your restaurant's accounting procedures. Your income includes all cash, credit card and check sales received. Outgoing expenses should be recorded with the help of receipts and invoices. Your Point of Sale (POS) system typically keeps track of all credit card and cash sales, and all receipts should be filed and recorded in a Profit and Loss document (P&L). It is also essential to keep a close eye on your inventory counts.  Your restaurant's inventory includes the supplies, products and ingredients you have on hand to prepare and serve food and beverages. Inventory is an important factor in managing restaurant accounting, because it represents an investment in food and supplies that are needed to make a profit. You should always consider your inventory as cash in a different form, and count it consistently and thoroughly.  A restaurant's profit and loss statement, or P&L, is much like an income statement for the restaurant. This document serves as a report to summarize income, expenses and inventory, illustrating a restaurant's total profits and losses over a period of time. It is best to prepare a

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P&L each week if possible. This makes it easier to track numbers and comparing reports from month to month and even year to year.1 A P&L statement includes information relevant to your cash flow, including sales and labor expenses.  Although large chain restaurants may have an in-house staff of accountants available to do the leg-work, many restaurants use computer programs to help record their financial information. The best software includes a Point of Sale (POS) system, financial software, and the software to integrate the two. Fully-integrated systems like these can take the burden off operators and help them fully analyze their financials by running comprehensive reports.  Our study found that there are many government disclosures also related to the industry, Thailand’s food industry is governed by the Food Act of B.E. 2522 (1979) and subsequent laws stipulated by the Ministry of Public Health. In general, imports of food for sale in the Kingdom require an import license and standard labeling according to domestic regulations. Product registration is required only for specifically-controlled food. Some agencies of the Ministry of Agriculture and Cooperatives monitor the importation of certain food products such as meat, fruits and vegetables, through import permits and sanitary certificates. Thailand government has introduced policies which support food production at high standards of safety and quality. Issuing manufacture licenses, labeling food product, conducting pre and post marketing control, and enforcing adherence to good manufacturing practices.  We also came to know about resource availability of raw materials in Thailand. Thailand is very rich in natural resources and it is central to its comparative advantage in the food processing industry, as more than 80% of raw materials used by the country’s food industry are sourced locally at low prices. But the demand for raw materials for the food processing is rising. In 2010, Thailand imported approx. US$ 1.4 billion food ingredients, around 35% increase from last year. The imported food ingredients are high priced and are further processed by the domestic producer but still they are dominating the market by supplying low-valued, high volume raw material and half processed food.  Trade among countries has existed for a long period now. The trade between Asia and Europe marks this fact as examined that these two continents have affianced in Trade since a long period. He also suggests that with time, international trade has come a long way as far as volume and patterns of trade between nations is concerned. Tariffs rendering to taxes compulsory on goods entering a country from another country. They suggest that tariff revenues are paid to the government of the country that permits the goods to enter its nation 111

and this revenue is used to finance government services. Therefore Tariffs are among the oldest form of government interference and are executed for the purpose of providing revenue to the government and they also provide economic returns to firms and suppliers of resources of the domestic industry that face competition from imported products. In the quota system, there is a lot more establishments involved and in this case, the government is not the source from where the revenue is produced.  Under the quota system as recommended the prices increase in the home market and this allows domestic producers to increase production and consumers to decrease consumption. It further state that the quota makes a revenue gain to the owner of import licenses. The Non- tariff barriers can be classified further as the regulatory barriers, subsidies and exchange controls. Subsidizing domestic producers is one way to restrict terms under which foreigners can compete in the home market as suggested by Coughlin. They also state that restricting access to foreign money to buy foreign goods is known as Exchange Control. Policies like the Tariff-Rate Quota help contrivance trade practice between countries in a healthy manner as it not only gears low tariff prices but also keeps a check on the quantity of products being imported.  The various tariff and nontariff barriers by foreign governments that need to be talked are highlighted in the report - difficulty in testing and supplies of certification on thousands of consumer goods, inspection and registration of a wide range of import products by new means, unsuccessful implementation against forging and copyright piracy; subsidies being exported illegally was another issue of concern, onerous import requirements or bans not based in science and also said to not be competitive internationally; approval processes for biotech products were said to be awkward and ineffective; imported products are made to pay rates 10 to 43 times higher than before as according to biased excise taxes; foreign participation in the telecom market is very limited, and many other such issues were elevated.  Agencies that can help us Food Standards Agencies: The Act was introduced in the House of Commons on 10 June 1999 and received Royal Assent on 11 November 1999. Food Alerts, Products withdrawals and recalls: The FSA issues information about product withdrawals and recalls to let consumers and local authorities know about problems associated with food. Regulatory approach: The Food Standards Agency has a statutory objective to protect public health and consumers' other interests in relation to food and drink. However, we are aware that excessive or unclear regulations can place a burden on business, the public sector and 112

civil society groups (such voluntary groups, charities and not for profit organisations) and so hinder effective delivery of the intended benefits. European legislation: Much of the detailed legislation on food standards originates in the European Union. This section includes details on how food hygiene legislation was consolidated and simplified as well as details of other European legislation. Codex: Codex Alimentarius is a series of international standards for food and agricultural products. They help ensure fair trade and consumer protection internationally. Food information regulation: The EU Food Information for Consumers Regulation has been published in the Official Journal of the European Union. This means that the transition process has begun to replace the current food labelling regulations.  If we do not have a Thai business partner, then forming a Thai Limited Company with 51% Thai ownership is certainly an option, you will need a number of Thai shareholders (6 if you are the only foreign shareholder). If you are an American Citizen, then there are different rules for you under the Treaty of Amity. Obtaining a local partner, such as an agent or distributor, is still the preferred means of entering the Thailand market for the first time as it is one of the most efficient and effective ways to reach Thai buyers. The agent or distributor can facilitate and expedite market entry with their extensive market knowledge and 3 established networks. Within the business culture of Thailand, interpersonal relationships are a vital factor for successful business transactions.  The report, as USTR suggests, states what events could be taken by the United States Trade Representative to embark upon these barriers. After reading this article, I have tried to pull together the matter in brief. The article advises that the USTR is reviewing the operative of the existing trade agreements, including implementation of labor and environment provisions. The USTR is going to prioritize the trade barriers put forward by the report, in order of importance and hence, deal with each barrier according to relevance tackling the most vital barrier at first. They are planning on handling these cases by multilateral and bilateral dispute resolution. The USTR is also working with the Congress to improve the trading system in the country. The US Trade Representative Ron Kirk proposed the opening of new markets around the world. The USTR suggests that manufacturers and service providers and the American workers should make use of the benefits of previous trade agreements through strong enforcement. It suggests that the proposals made will also help in the economic recovery procedure and incremental gains in market access and in reduction of trade barriers and thus, will help Americans attain good salary jobs. 113

 It states that European exporters have faced many new trade barriers since the global economic crisis however, measures to prevent protectionism have been taken by the EU. He adds that global trade volumes in August 2009 were 18 per cent below its peak in 2008 due to the economic crisis. It states that classical tariff increases, import and export bans or ceilings, non-tariff barriers and government procurement and investment measures are the major trade barriers faced in the EU with classical barriers alone affecting about 5 per cent of the EU exports. Another trade restricting measure according to the Foreign Manufacturers Legal Accountability Act of 2009 in the US that states that it aims to protect US customers and businesses from defective products manufactured abroad, is, another barrier between EU and US trade as Castle has mentioned. Castle further cites, one of the bills state that it is unsafe to grant unfair tax disadvantages to subsidiaries of the EU companies in the US in the insurance sector.  The EU and U.S. are each other's most important trading and investment partners and hence it is important for these two sides to work towards the reduction of these barriers. As cited by Palmer the two sides have agreed on meeting for identification of labeling, energy efficiency and nanotechnology for increased cooperation on regulation; and that these two sides have plans for a new US-EU Energy Council and also to set up a dialogue dealing in creating jobs in various sectors such as IT and energy.  Many people dream that someday they will open their own restaurants. The attempt to translate the dreams into reality because we think that opening a new restaurant is an easy task. Unfortunately, managing a new restaurant is not an easy task. Being able to cook very well to perfection doesn’t mean that possession of all the talent needed to translate their dreams into reality. But dreams can become reality only for those who are willing to acknowledge that along with reality comes hard work because planning, opening and running a successful restaurant requires determination, skill and hard work. In order to increase their odds of success, they need to take a close look at some of the myths associated with the restaurant business. Clearly, the highly competitive nature of the industry makes success difficult and the failure rate for restaurants is higher than for most other businesses.  Food is something that people always like to experiment. They are always in look out of new recipes, anything new in the market that will entertain their taste buds as bound to get some decent exposure. Concept of bus is something new and very innovative which will be liked by everyone as restaurant in bus is found very unique and new. As our hotel is a moving hotel 114

we can get many advantages. Our main focus will be on tourists and to serve them with varieties of popular Thai as well as Indian dishes. The restaurants we will explore may all have different menus based on different cuisines, but they all have some things in common, too. Many restaurants use prepared food products. There is a huge industry built around supplying restaurants with pre-prepared food elements. That's why it's always a good idea to get your sauce on the side, no matter what your waitperson tells you. There will arise some complexity while starting up a new moving hotel, as the concept is new and mainly tourists will adopt it soon because we are generally targeting them, along with that Thai people are very fond of street food ,so some minor complexity might come across. We will be using to sell new product into the existing market which is having moderate risk. As we know the customers very well we can sell our product accordingly.  We will provide our facility in five major cities, where people like tourists are coming in very large proportion. Major cities are Phuket, Pattaya, Hua Hin and Chiang Mai. So these are the major cities where tourists want to go. In these cities we would also be renting land for the preparation of the food which would be then loaded in the bus and served to the customers. It would be in the name of the Thai restaurant “Pum” with 20% profit sharing so that we don’t face any legal issues being a foreign Investor. People in Thailand are very bound of street food. They mainly prefer to have street food. Our moving hotel is totally a new start up over there. We will be providing breakfast, lunch and dinner in our moving hotel. We are mainly targeting the tourists who are coming there in Thailand and to provide them best dishes with minimum time. Mainly the tourists who are coming them have to see many places, but for their meal they have to go elsewhere and it is something which disturb their schedule too. Therefore our moving hotel is mainly very beneficial, as we provide breakfast, lunch and dinner in bus which will be mainly time saving for them.  Thai cultural habits markedly differ from those accepted in the West. Shopping habits in Thailand are also intensely different from the western world. Negotiating aren't only customary in Thailand, it is rather in the nature of Thais. In most shops and at hawker stands there are no price tags. So, one must request "How much?” which everyone comprehends and waits for. Buying habits is generally different of Thai people.  As we are going to open a moving restaurant it is very important for us that basically we have idea of the bus lay outs and how it should be looking externally as well as internally. As it is a restaurant on wheels exhibiting the Thai culture and providing exotic Thai specialties the 115

target audience would majorly be the tourists. The Thai people would also be the target audience. As Thailand experienced a 20 per cent rise in the number of foreign visitors from 2010 to 2011.We will be selling new product into the existing market which is having moderate risk. As we will be tying up with a Thai restaurant, we would be able to know the customers well n effectively penetrate in the Thai market with their expertized knowledge.  To penetrate in the market we will take help of advertisements in the local newspapers and other mediums of advertising. As we are going to start the business for the first time we will be keeping the prices reasonable in order to expand the business and to acquire customer base. The market which we will be covering is site seeing places at Thailand as the tourists come to Thailand to rejoice the exotic places of Thailand with all the specialities of Thai food. We can use the concentrated marketing strategy.  Our core component is time, the tourist which are coming in Thailand, they want to see more places as many as possible, but because lunch and dinner they have to stay in restaurant or in hotel, so we will provide the tourist bus which include foods, which ever they want. Main components are the ambience in the bus along with the exotic food. Main focus is to provide the rejoicing experience with the delicious food with the essence of the Thai culture. As it is a restaurant on wheels exhibiting the Thai culture and providing exotic Thai specialties the target audience would majorly be the tourists. The service blueprint below describes the whole process of the services step wise that would be followed in our moving restaurant.  There are many buses in Thailand who provides foods but they are not moving restaurants and there are also lot many site seeing buses n tourist guides but we are providing a combo pack of both the exotic food with pleasant ambience and also the open upper deck to enjoy the site seeing in Thailand with pleasing music. Moreover we also have the membership cards for our loyal customers which means once they come to our restaurant points would be added to it and next time when they visit it would be redeemed.  The combo packaging of food and site seeing makes our bus worth visiting. The exotic food and the ambience in the bus with an open deck on the upper side make the bus full of excitements and pleasant to visit. There will be good background music been played with Television in which they would be exposed to the Thai culture. There would be a kind of interactive zone where they can also dedicate the songs to their dear ones. Customers would be provided with the membership cards where the points would be added on every visit n can redeem on every next visit. 116

 To create awareness among the people about our services and build the brand in the minds of customers. To be considered as the cultural ambassador of Thailand as exhibiting the Thai culture and its exotic food. To be perceived as the delicious and exotic dishes provider. To tempt our customers to have the experience of our services, these would be advertising objectives  We know you all might feel enthusiast about having your lunch/dinner on a moving bus which travels through all the best sight scenes in the cities of Thailand. Gourmet on wheels is a bus service which will provide you lunch/dinner on "moving bus" and to add to more fun the bus has an open roof so as to create a natural type of environment. It is a double decker bus with the kitchen at the first deck and the sittings on the second deck. The ambience is quite very alluring. It uses most fresh and hygienic foods. The first deck contains an air conditioned duct so that the food remains fresh throughout the day. For offline, we will have mixtures of national and local media initiatives like TV, print, radio, out-of-home and direct mail.  There will media planning data for the national buys that will help us. For print, out of home, and direct mail they will have the ad weeks, days that drops happened, and the period of time ads are in play in different markets. Marketing departments may employ different tactics to try and capture the audience as much as possible by using the online media like URLs, websites; social networking websites etc. so we will use this media for our advertising purpose.  In our advertising the message is that “Rejoicing experience of the delicious food with the essence of the Thai culture within the beauty of Thailand. In our message our target audience will be that they’ll get the delicious food with the entertaining journey knowing the Thai culture.

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RUBBER INDUSTRY

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RUBBER INDUSTRY

Thailand is blessed with natural and man-made benefits; Thailand has established into the world’s major manufacturer and exporter of natural rubber. The country turns out more than 3 million metric tons of natural rubber per annum, and development in the commerce remainders enthusiastic.

Thai rubber businesses are successful because of solid government policies supporting the industry. This comprises the lower prices subsequent from the country’s free trade agreements with interchange associates such as China, Australia, New Zealand, and ASEAN states. In addition, Thailand is a member of the Association of Natural Rubber Producing Countries, which also contains of Indonesia, Malaysia, Vietnam, China and Sri Lanka. All of this is helpful to enlarged professional in the region, with Indonesia being the world’s second-biggest rubber manufacturer, followed by Malaysia, India and China.

Many considerable developments enriched the Thai rubber industry in 2010. Of major importance was the Thai governments announced plans to launch the next phase of its initiative to expand rubber plantations nationwide. An initial budget of 11.42 billion baht will create new plantations of rubber saplings in the northern, eastern and central regions, with the southern area long well-established. More than 100,000 planters are expected to benefit from this expansion, which aims to increase Thailand’s natural rubber supply by an additional 250,000 metric tons per year from 2017.

The first part of 2010 also saw several new projects in the country’s growing tire sector, a vital cog in the Thai rubber machine. In other major industry developments, condom manufacturer Thai Nippon Rubber Co. is spending 600 million baht to build a large production facility in Chonburi Province. The plant will increase the company’s capacity by 75% from the current 800 million pieces. Moreover, the Sri Trang Group said it will double its annual capacity within five years to 20 billion gloves and 160,000 metric tons of other products such as block rubber and technically specified rubber.

Major rubber products manufactured in Thailand include gloves at 10.93 billion units in 2009, inner tubes at 58.76 million, motorcycle tires at 19.95 million, passenger car tires at 19.58 million, bicycle tires at 18.29 million and rubber bars at 800,759 units.

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Based on statistics from the Rubber Research Institute of Thailand (RRIT), in 2009 the country’s rubber exports reached 2.72 million metric tons and domestic consumption totaled 399,415. By material type that year, standard Thai rubber output was 1.06 million, ribbed smoked sheet was 837,294, concentrated latex was 703,817 and crepe was 487,160 metric tons.

The country now exports about 90% of production, or US$4.26 billion worth in 2009. The Thai rubber industry is clearly on a growth path, and the Office of Industrial Economics projects export value hitting US$6.6 billion in 2012.

Thailand is also a significant importer. In 2009, inbound shipments of rubber products, scrap, and rubber materials were worth US$1.12 million.

Thailand had GDP growth of 6.3% during year 2010. The Thai Rubber Association expects stagnant position in the rubber scenario in 2012 amid the global economic recession, from the following data which we have taken from International Monetary Fund which forecasts global GDP growth of 4% in 2012 and 3.2% in 2020 respectively due to the Eurozone debt crisis, economic prospect of USA and China, volatility of stock markets, financial markets and oil price as well as natural calamities across the globe.

These factors are the main cause of the reduction in the global GDP. Data which we have taken from International Rubber Study Group suggests that NR output in 2020 will get increase by 13.77 million tonnes, including 12.46 million tonnes in Asia, accounting 90.5%, 855,000 tonnes in Africa, accounting for 6.2% and 449,000 tonnes in Latin America, accounting for 3.2% respectively. Thailand has remained the largest NR producer, producing 3.82 million tonnes, followed by Indonesia (2.54 million tonnes), Vietnam (1.31 million tonnes), China (1.29 million tonnes) and India (1.18 million tonnes).

According to demand for NR in the world market in 2020, the quantity demanded will rise to 15.36 million tonnes in which 11.8 million tonnes are demanded by Asian market, approximately for 76.8%. NR is highly demanded in China, India and Japan, as well as Latin America. In 2020, NR will get highly consumed in China (6.39 million tonnes), India (1.94 million tonnes), USA (946,000 tonnes) and Japan (795,000 tonnes).

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Conclusion: - according to 2010 report by IMF rubber industries contribution in total GDP of Thailand is 6.3%. Having very good production in rubber production.

Organized Structure

Organized Structure Type Rubber Industry Unorganized √ Organized √

Organization structure in Thailand is in both ways in organized and unorganized manner which means international players as well as local player are also involved in the business and both the structure work as positive manner.

Type of an Organization Structure16:

Type of Structure Rubber Industry Centralized Decentralized √

For the rubber industry the pacific company using the decentralized structure. In Decentralization the decision making authority is on the hand of top level to the lower levels in an organization.

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Forms of Business

Forms of Business Thailand Rubber Industry Sole Proprietorship √ Partner ship √ HUF √ Co-operative √

In Thailand, all types of business firms are there. Major companies are international player in the rubber industry. Ex. Shamini Rubber Industry, Gateway Logistic etc. with that Sole Proprietorship and Hindu Undivided family also are in commenced and continue the business.

Business Customs & Practices:

There are various types of Industries based on the types of raw materials used by the industries:

1) First includes those industries which have the processing of rubber and include mostly the centrifugal factories, the crumb rubber industries and industries engaged with creaming of rubber. Such kinds of Industries are known as the capital intensive industries and are produce tubes and tyres, erasers, automobile parts and molded goods.

2) Another group of industries which are related to the manufacturing of rubber. These industries based themselves on dry rubber or latex.

One another thing is that the manufacturing based industries are also divided into two different categories established on the different type of raw materials used by them. First section based on latex, for the production of gloves, balloons, latex foam, and rubber band. In another section that uses dry rubber sheets for the production of automobile parts, tubes and tyres, erasers, and molded goods.

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Transportation & Communication System needed for Rubber Industry

Modes of Transportation Thailand Rubber Industry Railway √ Road √ Sea √

For the transportation mainly there are three categories Ship, truck and railroad. There are used standard containers, which have suitable for water content of goods and packaging. Majorly sea ways are more preferred for the international transport and water transport is the cheapest mode of transport in the world. But for the internal transport road transport is more preferred than air transport. Modes of Communication Thailand Rubber Industry Telephonic √ E-Mail √ Post √

Comparative Position of Rubber Industry with India Particulars Thailand Rubber Industry Indian Rubber Industry

High Technology Low Technology Technology Advancement Advancement

Agriculture: 13% Agriculture: 17% GDP - composition by Industry: 43% Industry: 18% sector Services: 44.1% (2012 est.) Services: 65% (2012 est.)

Roadways, Railways, Roadways, Railways,

Transportation waterways waterways

Comparatively low Comparatively high

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Fixe Line Services, Mobile Fixe Line Services, Mobile Handsets, Internet, Calling Handsets, Internet, Calling Communication System Facilities, Postal Services and Facilities, Postal Services and Courier Services, Television Courier Services, Television Broad cast Broad cast

Distribution System By Intermediaries By Intermediaries

Pricing Low High

Purchase Pattern Direct Direct

Target market Latex Manufacturers Latex Manufacturers

Raw Material Availability Easily Available Comparatively Less

Natural Resources Favorable Favorable

GDP Contribution

Attribute Thailand India

Agriculture 13% 17%

Industry 43% 18%

Services 44% 65%

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India‐Thailand Mutual Trade 2007‐2011 (USD Million)

Year Export Import Total Trade

2007-08 1,810.87 2,300.93 4,111.80

2008‐09 1,938.31 2,703.82 4,642.14

2009-10 1,740.16 2,931.52 4,671.68

2010-11 2,792.80 4,272.09 7,064.90

MARKETING PLAN

(A)Marketing Objectives

 To get the highest awareness of the product in consumer  To maintain our strategic objectives to our target markets efficiently.  To attract highest number of consumer to purchase the product.  To increase sales and contribute more to the profit To expand our markets and identify new markets for our product and services

SEGMENTATION:

Market segment for our cement brand is based on GEOGRAFHICAL and DEMOGRAPHIC segmentation.

Company wants to reach at all the geographical areas in Thailand from metro city to rural area, and also based on demographic who have the age above 18 year old, because this people are intensely or un intensely influence the people at time of purchasing condom product.

TARGETING:

We are targeting those people who generally visit Sin City. And also people who are adult and wanted to have safe sex. (include point of view of disease and avoiding pregnancy).

POSITIONING: 125

 Brand Tagline: The company brand Tagline “Don’t Condemn Use Condom.” Company positioning the brand in the consumers mind on the basis of emotional touch.

Core component

Our core component is to provide protection against sexually transmitting diseases. And for that we will provide the best quality of condom to the customers. The only problem is that the low quality product gets damage while sexual intercourse so taking that into consideration we will provide the best quality product with affordable prices. Entry Mode in Country We will purchase land an establish a production unit in Thailand. There is no strong rules from Thailand government which can act as entry barriers to the country. And in the same way government of Thailand has implied rule for the Commercial sex worker (Prostitute) that it is compulsory for them to use condom during sexual intercourse so we will purchase the land in Pattaya which is very near to the market and we can supply our products to the market fast.

MEDIA MIX

We will majorly focus on.

I. Television Commercials II. Print Adds We will use integrated marketing communication. With that free samples will also been provided to the commercial sex workers so that they can get the purchasing habits of the product. We will go for aggressive marketing where the product will be promoted very heavily so that our brand can remain at the top of the mind of the consumers.

PATTAYA PEOPLE TELEVISION This television channel is publishing television in English and in local language so we will hire this company as they have their channels and so we will advertise the product in Sophone Cabel T.V and banglamung Cable T.V and the rates are mentioned below. We will use silver rates as the

126 advertisement will be in local language. Advertising shown 6 times per day. Based on 12 months agreement, but payment monthly in advance

Silver Gold* 15 sec. advertising: 15,000 baht + Production rate: 15,000 baht 22,500 baht 30 sec. advertising: 25,000 baht + Production rate: 25,000 baht 32,500 baht PATTAYA PEOPLE WEEKLY NEWSPAPER

Is the reputed and bestselling newspaper in Thailand and it has highest reach to the Thai people which is required following is the cost sheet of the Pattaya people weekly newspaper. We will select 2 col. X13 cm width 24.6 cm. high 6 cm color costing 6,912 baht

We can establish condom manufacturing company in Thailand. As Thailand is also known for its SIN CITY where it is an open market of prostitute and generally people visiting in Thailand once visit this city. Government is not openly supporting this in internet and other Thailand government sights but government gives all the facilities for this industries. Good opportunity can be seen in tyre manufacturing industry. We can produce tyre for automobile sector in Thailand. As Automobile sector is also good in Thailand business can be done but the major threat is that of competition Thailand has many home companies engaged in the business. There 8 companies enjoying the benefit of being the native companies of Thailand and other international firms too. Other Opportunity is the tyre tube (Inner tyre) for automobile the condition as the same as mentioned above because this companies is also involved in the business of the tyre tube.

India offers tariff preferences under its regional trade agreements. These preferences are not significant. The use of import restrictions has declined, with around 3.5 per cent of tariff lines. India continues to be a frequent user of antidumping measures. In recent years, the number of investigations and measures in force have shown a declining trend. The majority of such measures were targeted at chemicals, plastics, rubber products, base metals and textiles and clothing14. India is not a member of the WTO agreement on Government procurement. The procurement policies have undergone reform at the Central Government level, however, preferences for small-scale industry and state owned enterprises continue.

Best option according to us is of condom manufacturing company as the sin city is the main backup as well as the tourism industry. And the product characteristics are the main benefit. Once condom is used it is not used for the second time.

Thailand is one of the largest tourism country and as the tourist once visit this place as it is Asia’s largest market for sex so condom manufacturing company will be the best option available there and

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further chances of diversification is also available in the market because the automobile industry in also flourishing industry in Thailand

We can find a gap in condom manufacturing industry and there is a good chance of success in the Thai market as condom has become the basic product of life as sex is also considered as the basic need of humans. And it the best option to be prevented from AIDS and it has a good future also in the Thai country.

 Performa Financial Statements (Financial Plan)  Cost of Project (Rs. In million) Land and site development 350 Building 150 Plant and machinery 54.25 Miscellaneous fixed assets 4 Preliminary expenses 4 Pre-operative expenses ( including interest during construction) 25 Contingency margin 10 Working capital margin 145.65 TOTAL 742.9

The proposed means of finance

The proposed means of finance (Rs. In millions) Owners capital 500 Term loans 200 State government's special incentive loan ( Repayable in 6 installments after 12 years) 0

700

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AUTOMOBILE INDUSTRY

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AUTOMOBILE INDUSTRY

 Thailand automotive industry has been established over 50 years ago with import substitution policy to becoming an export-oriented production base. In 2011, Thailand graded the 15th largest automobile manufacturer in the world with yearly production was 1.5 million. Export involved of over 50% of the volume.

 Toyota, Isuzu, Nissan, Mitsubishi, Chevrolet, Mazda, Ford, Hino, Honda, Suzuki, Hyundai, Proton, Tata, Mercedes, BMW, Volvo, DFM, Mitsufuso, Kia, Volkswagen, General Motors.

 The initial objective was to decrease import by develop the developing automotive industry of Thailand. During 1977 – 1997, Thailand encouraged investment to make value added and grow export capacity by applying free trade policy, joining World Trade Organization (WTO) and taking part in ASEAN Free Trade Area (AFTA). Presently, Thailand is fully involved in free trade agreements.

 Due to consistent economic and industrial growth in Thailand and Asia by 2014, Thailand automotive manufacture capability is estimated to exceed 3 million vehicles each for automobile and motorcycles.

 There are automobile and motorcycle manufacturers from 3 continents. From Asia, Japan is a leader; Kawasaki, Suzuki, Toyota, Nissan, Mazda, Mitsubishi, Yamaha, Isuzu, Honda and Hino. From North America, United States is leader; General Motor and Ford and from Europe, companies are BMW, Mercedes, Triumph and Volvo.

 The manufacture ability of Thailand automotive industry in 2012 is 2.75 million cars and 2.8 million motorcycles (Complete Knock Down or CKD). Total national and export sales accounts for 10% of gross domestic product (GDP) making from manufacturing and creates over 500,000 jobs.

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 The percentage of local parts used in invention is 80% for pick-up truck, 45% for passenger cars and 90% for motorcycle. Total national to export ratio is 50:50.

 The increasingly rigorous pollution and safety standards imposed will impact automotive technology development as well as rise in price of fossil fuel, automobile assemblers decided to grow automotive technology using fuel replacement energy and substitute energy, such as ethanol, biodiesel and hydrogen, and motor driven automotive technology, e.g. hybrid car and electronic car. Thailand is in a strong position as a world class automotive production base and a major automobile exporter, not relying only on domestic market.

 During the past 10 years, the worldwide manufacture development has been on the rise. In 2006, the total worldwide manufacture was 69.2 million units, 23% rise from 2001. In 2011, the overall international manufacture was 80.1 million units, 16% rise from 2006.

 China ranked the 1st largest automobile manufacturers in the world with 18.4 vehicles, the United States and Japan ranked 2nd and 3rd with 8.6 million and 8.4 million respectively. Thailand ranked the 15th with 1.5 million manufacture capacity. 7 out of 20 top producers are in Asia with overall manufacture over 50% of the worldwide production.

 China rated the 1st place in automobile sales with 8.5 million units USA and Japan ranked 2nd and 3rd with 13.0 million and 4.2 million units respectively. Thailand graded the 19th with 0.79 million units

 FIA Foundation expected motor vehicle in use international will rise by 3 times by 2050 as well as a shift in the structure of motor vehicle usage ratio; the ratio for matured economies such as USA, Europe and Japan will drop whereas the ratio for developing economies such as China and India will rise which has greater area for growth.

 The Gross Domestic Product (GDP) in Thailand was worth 345.65 billion US dollars in 2011. The GDP value of Thailand signifies 0.56% of the world economy. GDP of Thailand is stated by the World Bank Group.

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 The automobile industry is the 3rd largest industry in Thailand and contribution of automobile industry is 12% in GDP of Thailand in 2011

 Thailand’s government possesses an open market-oriented economy and motivates foreign direct investment as a mean of encouraging financial expansion, occupation and technology transfer.

 The value of projects accepted by the BOI in 1997 was US$ 9.2 billion and declining 6.4 billion in 1998 and drops further the next year to 4.2 billion. Top foreign financiers in Thailand contain Japan, the USA, the Singapore, the UK and Netherlands.

 Primarily two classes of land, one is general industrial zone is the zone which kept for the place of industries profession for local and / or export consumption. The other is export processing zone is the zone which reserved for place of businesses manufacturing.

 Thailand has approximately 690 Tier 1 auto parts suppliers and 1,700 Tier 2 and 3 suppliers. More than half of the Tier 1 suppliers are overseas-majority companies. Of the top 100 auto parts producers in the world, 50% have plants in Thailand. The country’s industrial base is strong enough to supply all of the necessary parts from engine parts to interior and body parts.

 Transportation facilities are provided to help the automobile industry. For increasing in the export, Thailand is set up new commercial airports and ports. The cost of transportation is low than others. Thailand’s ports are Bangkok, Laem Chabang, Pattani, Phuket, Sattahip, Si Racha, and Songkhla.

 The Thai merchant navy includes 386 ships of 1,000 gross listed tons or more, with 142 cargo carriers, 89 petroleum tankers, 57 bulk carriers, 30 refrigerated cargo ships, 25 liquid gas ships, 21 container ships, 12 chemical tankers, 4 passenger/cargo ships, 3 passenger ships, 1 combination ore/oil ship, 1 roll on/roll off ship, and 1 specific tanker.

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 Thailand’s telecommunications network suffers from delays and other shortfalls in the provision of telephone services as a result of inadequate investment. The quality and availability of telephone service are much better in Bangkok and other cities than in rural areas.

 Mobile telephones (26.5 million in 2005) are much more prevalent than landline phones (6.6 million in 2003). As of November 2004, Thailand had almost 7 million Internet users, representing less than 11 percent of the population, and 18 commercial Internet service providers.

 The local auto industry employs 520,000 workers elaborate in everything from parts manufacture to final assembly. Thailand has quite low unemployment rate (lower than 2%) for 6 consecutive years. Labor available for industry is 13.2%.

 In April 2012, the new minimum wage rate at 300 baht per day will be forced in 7 provinces in Thailand, namely Bangkok, Phuket, Nakornpatom, Nonthaburi, Patumthani, Samutprakarn, and Samutsakorn.

 As per exchange rate, 1$= 28.857584 baht and 1 Rs.= 0.532440 baht.

 Thailand has established a sizeable, auto parts and accessories industry. Exports of auto parts were raised by 386% and valued more USD 4 billion. The Japan Automobile Manufacturers Association (JAMA) says that the quality of automotive parts is superior among ASEAN countries.

 Thailand has formed or assembled parts include engines, suspension control and spring, axles, hubs, propeller shaft, brakes, clutches, steering systems, body parts, electronic parts, air conditioning systems, tires, wheels, internal and external trim components and glass. There are more than 3,000 parts and modules in a representative vehicle.

 Imported parts and accessories comprise fuel injection pumps, transmissions, aluminum casting, injection nozzles and anti-lock braking systems, are all introduced. Local part 133

manufacturers supply about 100% of parts used in the assembly of motorcycles, 80-90% of parts used in the assembly of pickup trucks, and 30-70% of parts used in the assembly of passenger cars.

 In 2008, the automotive sector hired around 350,000 workers. The 189 MNCs and their associates employed 136,339 workers. Around 50,000 of the 350,000 workers in the sector were sub-contracted, other outsourcing contract or were hired on a fixed-term contract.

 Thailand spends 28.3% of its yearly expenditures on education which is a higher percentage than most countries (Visual Economics, 2010). Yet, a major impediment in the Factor (Input) Conditions remains the pool of skills needed to upgrade the country’s business environment quality. Due to shortages of quality teachers, curriculum and pedagogy, and lack of policy coherence, secondary education is weak is Thailand (MOE, 2011).  Thailand is ranked at 50th out of 65 countries surveyed in mathematics and sciences and 48th in reading abilities (OECD PISA, 2010). As can be seen in Table 2, the top universities in Asia do not include a single university from Thailand, and the countries. Top universities are not globally competitive

 Since 2000, FDI in automotive sector has enlarged over time. In 2009, the value of FDI in the sector was US$1,443.97 million, the first of all industries. It improved from US$1,407.78 million in 2008 and US$1,248.81 million in 2007.

 During the period, others sectors such as petroleum products, financial institutions and mining sectors experienced a decline. Within the manufacturing industries, FDI in automotive sector had a share of 38.6% of the total invested in manufacturing and 26.1% of the total FDI invested in all sectors including services, construction, real estate, agriculture sectors and others.

 Thailand has a history of investing in specialized skills. Yet, the issue rests the insufficiency between their supply and demand. In 1956, the National Research Council was created as one of the first institutions to lead science and technology (S&T) policies in Thailand (Memariani, 2011). In March 1979, the Ministry of Science and Technology and Environment (MOSTE) 134

was recognized. Currently, fifteen (15) different S&T agencies report to MOSTE. In 1991, the National Science and Technology Agency (NSTDA) came to operation (MOSTE, 2011).

 In 2002, The Thailand Science Park (TSP) came into operation as the country's leading combined R&D hub. The Thailand Science Park is a critical component in Thailand's efforts to strengthen its capabilities in research and innovation. TSP supports to encourage cooperation between universities, public agencies and Industries in term of joint-research, contract research, and technology transfer (TSP, 2011).

 Thailand is a universal player in the world’s automotive industry. It is trading automotive products to 130 countries. Thailand is the world’s leading manufacturer of pick-up trucks and the 7th major automotive exporter and the 14th biggest automotive producer in 2007. Thai had produced 1.3 million vehicles.

 The top 10 destinations of Thai automotive exports accounted for 63% of exports worldwide. Australia and Indonesia are the major destinations of Thai manufactured automotive products.

 Total export is increased where import of raw-material also increased but export is excess of imports. Australia is major country to export automobile vehicles.

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PETROCHEMICAL INDUSTRY

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PETROCHEMICAL INDUSTRY  According to the World Bank, 2012 the petrochemical industry in Thailand is ranked among the regions top five and it does achieve 8 to 12% annual growth rate. Thailand is home to a strong downstream industrial sector, exporting more than 40% of major polymers to international markets.  Thai petrochemical industry is around 20 billion USD contributing 5% to the GDP. Out of which almost 8 billion USD (5.5%) is from exports of petrochemical products. The government allows 100% foreign investment in any commercial, trading, or industrial activity other than a few specified sectors. In Petrochemical Industry 7.4% of total FDI invested in 2001. Total labor force involved in petrochemical industry is 3.2% of whole working population.

 The Petrochemical Industry in Thailand is totally Organized Structure. It means international players as well as local players are also involved in the business and both the structure work as positive manner. The Petrochemical Industry in Thailand is having Centralized organization structure. The Centralized structure is one where organization is having one point for control and policy. It benefits the organization by improving efficiency, reducing cost and giving constant policies and procedures. In Thailand Petrochemical industry has two forms of business can be seen. That is sole proprietorship and partnership. For the transportation mainly there are two categories Road and Railway. The mode of communication in Thailand is good all the medium of communication facilities is been provided by government and is used by the industry people. The manufacturing sector in Thailand employed 5.2 million workers, making it the third largest employer sector, accounting for 13.8 per cent of total employment by economic activity. An average annual rate of 0.6 percent, compared to 1.7 percent nationally. Total labor force involved in petrochemical industry is 3.2% of whole working population. This is very good in Thailand compare to other industry.

 Development strategies include improving the properties of plastics from commodity plastics to intermediate and engineering plastics, and establishing a design center to provide products and mold and die design. The method of accounting a company uses not only involves the taxpayer’s overall method of accounting but also the accounting treatment of each item of income and expense.

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 HR Practices: The HR function can be a crucial player in a small business' strategy. This usually means that HR's top experts are part of the senior leadership team. They will use their professional development and research to identify new HR initiatives which will contribute to employee satisfaction and optimal performance.

 Technology factor effect: The India petrochemical industry in technology is high compare to the Thailand country. Thailand Petrochemical industry is advances technology user especially in Pipes Business. In India, the Technical Consultancy unit (TC) under the Petro Technology Division under the Research Department of the Petro Board renders technical consultancy services for the development of the Indian Petrochemical Industry. The technology, knowledge, innovations, applied research & development and the entrepreneurs and industrialists in the Petrochemical industrial sector.  Transportation Comparison: While comparing the transportation facility of both the country, in Thailand they use road, rail and the ship for transporting the PVC Pipes. But there is a lack of an efficient rail transportation system for moving Petrochemical Products from the fields to the factories. The Petrochemical states have inadequate and aging transport vehicles that are a major problem for Petrochemical Products transportation. And for the export they use ship facility and for that they use standard and tank containers.  Distribution System: Distribution system of Pipes Business in Petrochemical industry is one level. Manufacturers are selling the product to the Dealer and Dealer sell to the Customers. Only Dealer is between Manufacturer and Customers. India and Thailand both country’s Petrochemical industry following the same distribution system.  Prices in India are lower than Thailand. The cost of labor and machines used are much lower compared to Thailand. Also, much part consists of labor intensive technologies. Whereas, Thailand have high labor cost and as a result high prices of products.

 Purchase Pattern : Purchase pattern for both the country India and Thailand are Different. In India Farmers and other Buyers are purchase pipes products directly from company as well as from mediator also and in Thailand Buyers are purchase pipes products from Mediator only like Dealer.

 Raw Material Availability: Thailand is blessed with easy availability of raw material like polymers and other chemicals that is required in Pipes Business sector as a result it is affects less pricing pattern. India is naturally blessed with easy availability of raw materials required 138

in Pipes Business sector but specialized and high technological materials are not manufactured sufficiently.

 Present Position and Trend of Business: Thailand export in the 10th Five Year Plan when growth was 14.24%. The industry recorded the highest growth in exports during 2004-05, when it exported around 10 million Miters of Pipes. Colgon Carbon Corp IPEX TPC Ltd. Thailand imports the pipe with India Japan Indonesia Pakistan and in including the product Electrical Pipes & Fitting PVC Pipes.

 In Thailand the tariff rate has been 14.7% and MFN tariff rate was 12% in 2005. Increased duty free import of commercial plastic of US$ 2232.1. Duty free re-import right for rejected chemicals up to 2% of Freight on Board (FOB) value of exports.  Prohibited Goods and Restricted Goods are goods for which either the import into or export out of Thailand are prohibited. Any person imports or exports prohibited goods is considered as committing offences and subject to penalties indicated in the relevant national legislation. In addition, such activity is also considered as an offence under Articles 27 and 27 bis of the Customs Act B.E. 2469.

 Petrochemical industry in Thailand is ranked among the region’s top five and it does achieve 8 to 12% annual growth rate in 2012. Thailand is home to a strong downstream industrial sector, exporting more than 40% of major polymers to international markets. Thai petrochemical industry is around 20 billion USD contributing 5% to the GDP. Out of which almost 8 billion USD (5.5%) is from exports of petrochemical products. The government allows 100% foreign investment in any commercial, trading, or industrial activity other than a few specified sectors. In Petrochemical Industry 7.4% of total FDI invested in 2001. Total labor force involved in petrochemical industry is 3.2% of whole working population.

 Geographical Region:We are survey on secondary source and take a decision base on generating data which is a uses the selection of the preferable region like Bangkok, Chiang Mai, Songhua, Udon Thani and Nonthaburi these are region nearness to market and available transportation services and other benefit.

 Product Use Pattern: The ubiquitous blue PVC water pipe can be seen along most streets here and appears to be one of Thailand's most abundant un-natural resources. That can be used to make everything from clothes dryers to wheel chair and crutches flagpoles and shop

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signs. PVC pipe including: Halloween costumes like Ben Hallert's, Hallert's Matrix Apu and Aliens Exo-skeleton Power Loader.

 Advertising media usually used to reach your target market: Any industry first stage haw to aware customer about product when started a new company and uses Media and non media marketing communication are then, limited time to increase consumer demand, stimulate market demand to improve availability. Sales promotions customarily used by Pipe Company: The sales promotion schemes used by Thailand pipe companies are coupons, sweepstakes, contests, product as a samples, rebates, tie-ins, self-liquidation premiums, trade shows, exhibitions etc. Customary Markups: Standard mark-up for all products is normally 10-15%. Hence even in the market we will attempt to manage a Mark-up value of 10-15% for each.

 Competitor’s Promotion & Advertising Methods Asia Pipe Co Ltd advertising method: Thai Asia Co ltd uses integrated communication when advertising its products. It uses media such as TV, Print, and Hoardings for advertising. The company’s promotional strategies are focused on creating awareness among all its stakeholders. Due to increasing competition. Thai Asia needs to campaign vigorously in the local market. Seminars and technical sessions are also organized for Farmers and contractors to make them aware of the attributes of Thai Asia’s newest range of Pipes products. Focused advertising including above the line and below the line helps to cut through the clutter.

 TPC (Thailand Plasto Co) ltd: TPC use Hoardings and TV advertisement for promoting their products and they also give discounts on Purchase of products for promoting a Brand Copa, they provide free Gifts on purchasing of their products to the farmers. Training, after sales service, reliable customer support, and the availability of Polymers are the most important factors cited by Thai customers in evaluating quality of products related to their purchasing decisions.  Thai customers generally have greater confidence in U.S. suppliers’ service and support, due to their well-trained service and support teams, availability of concisely written manuals, and willingness to modify product offerings.  Guidance after sales service, reliable customer support, and the availability of Polymers are the most important factors cited by Thai customers in evaluating quality of products related to their purchasing decisions. 140

 Their requests for technical assistance and perceive such service as being provided by reliable suppliers. In case a local branch cannot provide the service, suppliers should be able to acquire support from overseas branches. Pipes Products should also be available in a timely manner.

 Thailand participates in the WTO Working Group on Transparency in Government Procurement; it is not a member of the Government Procurement Agreement.

 The core procurement rules for the Central Government are the Regulations of the Office of the Prime Minister on Procurement B.E. 2535 (1992), as amended in 2002. The 2002 amendment involved, inter alia, changing of membership of the Procurement Committees and the implementation of electronic auction (e-Auction). According to the authorities, all government agencies (central and provincial administration) must comply strictly with the Regulations for procuring activities; local administration and state enterprises are not under direct control of the Regulations. A Cabinet resolution of 1 October 2002 required that all government agencies maintain their own websites containing procurement information, and implement the electronic auction (e-Auction) for at least one item of simple merchandise purchasing by 14 February 2003. To this end, the regulations of the Office of the Prime Minister on procurement 1992 were amended to allow e-auction procedures.

 Future opportunity in Thailand's petrochemical industry, the producers of polymers and plastics as well as paper manufacturers as especially attractive opportunities.The petrochemical industry covering investments of about 30 billion Baht for the first quarter of 2011. The pipeline projects and alternative energies performed well. The petrochemical industry currently contributes about five percent of the country's economic performance and is expected to profit from current projects like the Ma Ta Phut industrial zone. Types of ware house Public ware house, Private ware house, Bonded ware house, Govt. ware house. Location is a place that it used to store, retrieve (Pick), and replenish (refill) items that it stock in the warehouse. It might consist of many locations, each with its own characteristics, such as: Length,Width, Height , Weight capacity.

 Market segment for our Pipes products is based on Geographical and Demographic segmentation.Geographical: Company wants to reach at all the geographical areas in Thailand from metro city to rural area. Demographic: We are segmenting our products on the

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basis of Demographic segment where we selecting above 25 years age old people who are in Farming business and other Construction business.  We are targeting those people who are linked with the work of Farming and construction in the country and who able to influence or suggest the product towards the customer.Like; Farmers, Builders and Contractor as well as People.  At the end, we can summarize that Thailand is the market which growing at a fast pace specifically for Petrochemical Industry as farmers are consuming it in a large quantity and also accepting large variety of the said product. So, we can make successful business with existing successful firm.

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TOURISM INDUSTRY

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TOURISM INDUSTRY

Tourism plays an increasing and crucial role in the growth of the Thai economy. Tourism is Thailand's largest source of foreign-exchange earnings, with receipts accounting for about 5 percent of the country's GDP. It stimulated the nation's economy, created jobs, encouraged investments, and raised the country's standard of living. Through strong marketing efforts the number of international visitors increased on an average annual growth rate of 15 percent. Domestic tourism has also grown significantly in the past decade.

Tourism development and promotion in Thailand attracted the attention of the Thai government beginning in 1999 when tourism was included in the Fourth National Economic and Social Development Plan as an integral part of its national economic development policy.

According to the Tourism Authority of Thailand, 55% of the tourists in 2007 came from the Asia Pacific region, Japanese and Malaysians forming the two biggest groups. The largest groups of Western tourists come from the United Kingdom, Australia, Germany, the United States and Scandinavia. The number of tourists arriving from Russia is on the rise. Around 55% of Thailand's tourists are return visitors. The peak period is during the Christmas and

New Year holidays when Western tourists flee the cold conditions.

The government has also perceived the potential contribution of tourism. A diversity of tourist experiences in national parks and at historical sites was provided. Government policy to push Thailand to be Tourism “Capital of Asia” is opposed to master plan of the Ministry of Tourism and Sports which stipulate Thailand to be “Cultural Tourism of Southeast Asia” This situation affects to unity of Thailand’s tourism image positioning as well as work directions of related tourism organizations contrasting in practice.

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Thailand become one of the only two countries, another country is China, has enjoyed a positive growth of 7% in the number of foreign tourist arrivals despite a slump in Asian tourism in general resulting from the regional economic doldrums. During the Amazing Thailand 1998 and 1999 campaigns, total arrivals to Thailand are 6,230,000 between January and October 1998, up 7.34 % from the same period in 1997. Another campaign, "Thailand as a shopping paradise”, is also introduced by refunding the value added tax (VAT) to international tourists.

In order for the government to make effective decisions on a range of important policy issues (i.e. economic development, strategic planning, balance of payments, employment, and the marketing programs of national tourism offices), it should have an appreciation of factors influencing international tourism demand. There are 3 important factors generating revenue for the industry, which are number of tourists, length of stay and tourist receipts.

Tourism service can be divided as follow:

1. Transportation

2. Accommodation

3. Food Shop & Restaurant

4. Take around service and guide

5. Souvenir shop and local product

6. Security

7. Tourism activities

The development of the tourism industry in Thailand and the comparative advantages which have been created through it are mostly a result of private sector investment and efforts. The public sector has been active in upgrading infrastructure e.g., roads, telecommunications, water facilities to keep abreast with the industry's growth and to assure the industry's long-term stability. The Thai tourism market mainly consists of tourists from Malaysia, Korea, China, Japan, Russia, Eastern Europe, the United Kingdom, Scandinavia, India, New Zealand, and the United Arab Emirates (Tourism Authority of Thailand 2008)

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Undoubtedly, there is fierce competition in the tourism industry among Southeast Asian countries. Despite this competition, Thailand still holds comparative advantage in a number of realms.

As in Thailand there are very few Industry in Ayurvedic Spa Industry, So there is huge scope in Hotel Chain that provide this Services and having Multi Location Services with selected most famous area of Thailand. This type of Ayurvedic Spa Hotel will give better choice to Tourist for staying in Hotel with spending some of leisure time in some of Ayurvedic traditional serene relaxation methods. Tourists have choice of different portfolio with reasonable comparative price to other Hotel and giving Thai touch too with additional Indian base. For tourism industry hotel and accommodation industry is must, so there is huge scope in this accommodation and tourism hotel industry with having unique service proportion of Ayurvedic spa industry in country like Thailand where tourist spend huge time in Entertainment and Enjoyment as with particular Cultural tourism.

There are many types of accommodation but this study focuses primarily on hotels given that they are undoubtedly the most significant sub sector within accommodation. Hotels in Thailand dominate the accommodation industry as they are better established and maintained compared to other types of accommodation, with approximately 87% share of the total accommodation market in 2004, 86% in 2005, and 91% in 2006.

Thailand is a cheap location where the exchange rate is USD 1 to THB 34.74 or GBP 1 to THB 51.90(Tourism Authority of Thailand2008). Exchange rates are important not only in terms of evaluating the cost of accommodation but also the cost of several other aspects of tourism. In Thailand, domestic travellers generally tend to use three-star and four-star hotels while international travellers prefer more luxurious four and five-star hotels. However, in 2006, despite intense competition in the Thai tourism market, individually owned hotels enjoyed almost a twofold increase in sales compared to 2005 which reached 49.2 billion Baht.

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The direct contribution of Travel & Tourism to GDP in 2011 was THB760.1bn (7.1% of GDP). This is forecast to rise by 1.4% to THB770.8bn in 2012. The total contribution of Travel & Tourism to employment (including wider effects from investment, the supply chain and induced income impacts) was 4,468,500 jobs in 2011 (11.4% of total employment). This is forecast to raise by 4.3% in 2012 to 4,660,000 jobs (11.9% of total employment). By 2022, Travel & Tourism is forecast to support 6,805,000 jobs (15.9% of total employment), an increase of 3.9% pa over the period.

Visitor exports are a key component of the direct contribution of Travel & Tourism. In

2011, Thailand generated THB950.4bn in visitor exports. In 2012, this is expected to grow by 0.7% and the country is expected to attract 18,737,000 international tourist arrivals. By 2022, international tourist arrivals are forecast to total 32,933,000, generating expenditure of THB1, 845.3bn, an increase of 6.8% pa.

Travel & Tourism is expected to have attracted capital investment of THB185.8bn in 2011. This is expected to rise by 13.7% in 2012, and rise by 9.7% pa over the next ten years to THB531.6bn in 2022. Travel & Tourism’s share of total national investment will rise from 7.4% in 2012 to 10.5% in 2022. Travel & Tourism generated 1,833,000 jobs directly in

2011 (4.7% of total employment) and this is forecast to grow by 6.6% in 2012 to 1,954,500.

Thailand’s primary tourism factors are plentiful and competitive. Thanks to the diverse topographical characteristics of the country that consist of mountains, forests, plateaus, valleys, islands as well as lowlands on major rivers and lakes, Thailand is blessed in the eco-tourism trend.

In Tourism industry Hotel industry is one of essential and prominent Industry in Thailand. So to start any kind of Business Hotel is one of most attractive start up in Thailand, But there are so many hotels and restaurant are there to compete. There are some hotel which are five star hotel and providing premium services at single location, some of hotel chain are there but at one or two locations, and only four other spa are there which provide Ayurvedic Spa and other services as both combine context of Indian and Thailand origin.

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Ayurveda and other traditional Indian herbal therapy are now a day’s world famous for reducing stress and known for serine relaxation, so to giving this treatment will give us particular competitive edge as our service is our “USP”. To provide combine service as Hotel and Restaurant chain at main four major locations in Thailand is giving us competitive edge on other present Hotels and Restaurant. All main four locations of hotel are Bangkok, Chiang Mai, Pattaya, and Phuket.

Tourism is more than ever an information sensitive industry which is greatly impacted by modern technological innovations such as the Internet, worldwide web and electronic commerce. The development and interlinking of tourism and e-commerce is resulting in the slow demise of travel agents; an increasing resort to proprietary web pages; on-line one-stop shopping; and a more complex tourism product which involves the consumer being able to customize her/his itinerary. Travel agents have been bypassed by GDS operators who make systems directly available to consumers.

Travelocity, the internet travel site is very concerned with the gap existent between internet travel shoppers and buyers. Although accumulating US $500 million from bookings within the last quarter, only a meager 5% of the travel site’s users actually utilize the services provided. The remaining 95% tend to use conventional means of travel planning such as travel agencies. To counteract this trend, Travelocity plan an increased concentration on customer service and to provide attractive, unique services not found in conventional travel planners.

Phuket was identified as a major tourism resort destination in the National Plan of Tourism Development. As in recent time, trends are proving instrumental in shaping the future of tourism development in Phuket and the surrounding area. Phuket is Thailand's largest island and one of the most popular tourist destinations in Southeast Asia. This island is rich in natural resources and has the perfect weather for agriculture while providing colourful tropical vistas.

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Chiang Mai is Thailand's second city, but in terms of quality of living, tourist attractions and development potential, it's second to none in Southeast-Asia large part (69.31 %) of Chiang Mai's land is covered by mountains and forests. Chiang Mai has a distinct international atmosphere with many foreign businesses and organizations (NGOs) locating in the city over the past decade due to her excellent infrastructure with international direct flight connections to all countries in the region including China, Singapore, Malaysia, Burma, Cambodia and Taiwan.

Pattaya is Asia's premier beach resort, and caters with equal appeal to families, couples and single visitors. Pattaya offers all the allure and magic of a truly vibrant nightlife with a spectacular variety of restaurants, nightclubs, bars, discotheques, cocktail lounges and cabarets. Pattaya can be brash, bold, beautiful and bucolic, and offers everything an authentic international beach resort can.

Bangkok is the capital, largest urban area and primary city of Thailand. Bangkok has grown to become the political, social and economic centre of Thailand, Indochina and one of Southeast Asia. The city's wealth of cultural landmarks and attractions in addition to its notorious entertainment venues has made it synonymous with exoticism.

In our hotel we are providing the Basic Hotel Services like Accommodation (Villas, Natural location rooms) Food and Restaurant, Swimming pool and garden, Travel and other Facilities, Spa Programmers like Stress & Burnout, Yoga, Optimal Fitness, Sleep Enhancement, Treatment as per body part and Panchkarma treatment.

Ayurveda or the ancient science of healthy living, views each individual as a unique combination of elements and energy levels called Doshas. External factors such as stress, improper diet, lifestlye, allergies, environment and weather can cause one's Doshas to become imbalanced, resulting in a variety of health problems.

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The target market of hotel is: International Tourists Domestic Tourists. Segments for promotion that we cover include: Corporate companies directly, Travel Management Companies (TMC's), 2nd tier / or non-aligned corporate travel agencies, Professional Conference Organizers (PCO's), Conference / Meetings market, Associations, Attendance at key trade events (i.e. AIME, ABEE, etc).

On-line marketing of our property is a critical point in the distribution of our hotels information globally and by allowing users from all over the world to select our hotel over a competitor’s property. The best approach to online marketing is two-fold: use search engine optimisation along with some strategic pay-per-click search advertising. Not only does pay-per- click help you learn about our online target market as you go, but it can help you to attract more qualified leads online.

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PHARMACEUTICAL INDUSTRY

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PHARMACEUTICAL INDUSTRY The global pharmaceutical market in 2010 is ordinary to grow by 8.3 percent and will reach a level of $875 billion USD, driven by solider near-term growth in the US market1. In 2009, the Global Pharmaceutical Market Estimate pharmaceutical market grew only 3.5 percent with market size of $808 billion USD.

At present, the global pharmaceutical market is dominated by the US, which accounts for about 28 percent of global sales in2009, followed by the EU, accounting for nearly 15 percent, and Japan for 12 percent. Together, these three markets represent nearly 55 percent of the global market.

While the performance of the global pharmaceutical market is more positive in 2010 than in 2009, the fundamental dynamics of the innovation cycle and funding pressures will result in mid- single- digit growth over the next 10 years. Notwithstanding the improved prospects in the US market, the pressure on pharma companies to adjust to the longer-term marketplace trends and evolving patient needs remains undiminished.

Due to much patent expiration, the generic drug industry has experienced great growth in the past few years. The global market for generic drugs was worth $107.8 billion USD in 2009 and is projected to reach $129.3 billion USD by 2014 with a CAGR of 9 percent. Rising cost pressure on healthcare has resulted in an increase in generic pharmaceutical usage — generic drugs cost 30 to 80 percent less than their original equivalents.

Thailand pharmaceutical industry

Thailand’s pharmaceutical market is value around $2 billion and it is growing very fast in next years. That’s why the foreign organization will enter in the pharmaceutical market of Thailand.

The world health organization says that Thailand’s pharmaceutical market has than 170 manufacturing facility. Thailand have nearly 500 drug importer. Most of Thailand drug production is for the domestic market. The pharmaceutical exports are growing and developing their business with a limited budget. The Thai government also imports generic and other type of drug which are not available in Thailand. This import are mainly in India. The most prevalent chronic illnesses in Thailand are diabetes hypertension which leading reason of deaths are cancer

152 stroke and circulatory disease. thats why international pharmaceutical company will think about enter in Thailand .

Role in the Economy of Thailand Country

The pharmaceutical market is projected to grow at a double-digit CAGR in US dollar terms between 2012 and 2017. In 2012, there are 169 pharmaceutical manufacturers of modern drugs, a figure that has remained largely unchanged, bar some mild fluctuations since 2007. Of the total, 156 manufacturers are GMP certified; there are also 42 manufacturers of traditional medicines. In 2010, pharmaceutical production rose by 25.0% in local terms compared to the previous year. In US dollar terms, the annual rise was more pronounced, by 35.2% Pharmaceutical production.

The Thai economy grew only one percent in 2011, as the devastation caused by Thailand’s most severe flooding in 70 years curtailed economic expansion. In the third quarter of 2011, hundreds of thousands of homes were inundated with water, seven large industrial parks flooded, and many business operations ground to a halt, displacing approximately 650,000 Thai workers. However, full recovery is expected by the third quarter of 2012, and the country’s economy is expected to grow 5 percent in 2012 and 6-8 percent in 2013. Economic growth will be directly impacted by government spending and private investment in flood recovery and rebuilding efforts, particularly in water management projects.

An export-dependent economy, Thailand exported a total of $ 223 billion worth of goods in 2011, accounting for 69 percent of its GDP. Exports in 2011 grew 14 percent as compared to 29 percent in previous years. This is partly due to the flooding, which disrupted production in the automotive and electronics industries, the top two export revenues earners for Thailand. Together, China, Japan, the U.S, accounted for 32 percent of the market for Thai exports in 2011.

National income in 2011 registered with the value of Baht 7,938,731 million, a 5.3% increase lower than a 10.3% rise in previous year. This consists of a return to labor with the value of Baht 3,386,816 million or a 6.9% expansion, and a return to capital, land and operation with the value of Baht 4,551,915 million or a rise of 4.1% lower than a 12.2% growth in 2010. Measured in per capita, national income per capita in 2011 was 117,442 Baht, higher than 112,017 Baht in previous year.

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Disposable income per capita was 94,939 Baht compared to consumption expenditure per capita of 87,621 Baht. After incorporating household income from social security plan entitlements, per capita personal saving increased to 8,704 Baht from 8,684 Baht in 2010.

For overall economic stability in 2011, gross savings and investment expanded at lower rates with a 7.6% growth in investment and a 2.5% growth in savings. As a result, savings-investment gap or current account posted a surplus of Baht 180,637 million—accounted for 1.6% of GDP. This figure was lower than a surplus of Baht 312,942 million in previous year.

For price stability, GDP implicit price deflator increased by 3.5% decelerating from 4.0% in previous year. Agricultural price index rose by 6.4%, a slowdown from 21.0% in 2010 due to slowdowns in prices of major crops e.g. rubber and cassava. Moreover, prices of sugarcane, maize, pineapples and vegetables dropped. Meanwhile, non-agricultural price index grew by 3.1%. Consumer prices index (CPI) and producer prices index (PPI) rose by 3.8% and 5.5%, respectively.

 17GDP (purchasing power parity): $645.7 billion (2012 est)

 Country comparisons to world $612 billion

 GDP (official exchange rate) $377 billion (2012 est.)

 GDP real growth rate 5.5% (2012 est.)

 Country comparison to the world: 0.1% (2011 est.)

7.8% (2010 est.)

17 http://www.indexmundi.com/thailand/gdp_%28purchasing_power_parity%29.html

154

 GDP - per capita (PPP): $10,000 (2012 est.)

 Country comparison to the world: $9,600 (2011 est.)

$9,600 (2010 est.)

Note: data are in 2012 US dollars

 GDP - composition by sector: Agriculture: 8.6%

Industry: 39%

Services: 52.4% (2011 est.)

 Industry Structure Generally, drug manufacturers in Thailand can be classified into four groups:

1. Multi-national corporations (MNCs) that produce active ingredients and create pharmaceutical formulations.

2. Thai-owned companies that primarily focus on producing pharmaceutical formulations and, to a lesser extent, on manufacturing active ingredients.

3. Government agencies, the Government Pharmaceutical Organization (GPO) and the Defense Pharmaceutical Factory (DPF), which primarily prepare pharmaceutical formulations for the public medical establishment.

4. Pharmaceutical market and continues to hold a near monopoly over supplies to the public sector. According to regulation, public hospitals are legally obliged to purchase 80 percent of their pharmaceuticals from the GPO and only 20 percent from the private organizations.

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Policies and Norms of Thailand for Pharmaceuticals Industry

Pharmaceuticals Industry

For pharmaceuticals there are various laboratories in India that conduct tests. The National Accreditation Board For Testing and Calibration is a Recognized laboratory whose certificate is accepted by over 57 countries. However, for Exports to Thailand the exporters need to conduct a bio-equivalent study. This is a very time consuming process and it takes around 6-12 months to obtain the report. The entire study costs about Rs. 5 - 10 lakhs. This makes export to Thailand almost impossible and many of the Indian exporters refrain from exporting to Thailand and look for other markets.

1 Trade Restrictions

 Quotas

Thailand, as a member country of WTO, is required to liberalize markets such that import licenses will no longer be in use. Importers must, however, possess a certificate which indicates quota amount to be approved by Customs Department in order to obtain low tariff rate. However, the above- mentioned measure is applied among WTO members only.

 Licensing

Importers of food and drug products need a license which requires a premises inspection. All drugs imported into Thailand must be also being registered. Beforehand, barring imported pharmaceutical raw materials which require only an import license. Registration is also required for certain kinds of food, including beverages in sealed containers, coffee, food additives, infant food, milk and tea. Importations of food raw materials to manufacture finished food products are exempt from registration requirements. Products that are registered must abide by what is specified in the registration form such as labeling, manufacturing process, product appearance, specifications and standards. Imported food that does not require registration must only adhere to

156 labeling requirements for domestic sales in accordance with related notifications.

Customs duties and tariff From 1985 to 1995, import customs duty rates have been changed several times in line with economic considerations and government policy. Before 1 January 1995, the tariff for imported goods was relatively high using up to 39 rates from 0-100 percent with an average percentage of 30.24.

The average import tariff rate is currently 17.01 per cent.

Most duties are ad valorem, based on the cost, insurance and freight (CIF) price. When a specific duty is applied, the calculation is based on weight, volume or units. Duties based on weight refer to net weight, not including packaging materials, unless expressly stated otherwise. Some items have both specific and ad valorem rates. Where an item has both types, the rate yielding the higher revenue is applied.

Counter trades The Cabinet’s resolve on 6 June 1995 stipulated that all procurement of foreign goods and services by government agencies and state enterprises over Baht 500* million must have a related counter trade transaction. The current value for Counter purchase is set at between 20% to 50%* of the imported price.

The Counter trades policy objectives

1.1 To enhance Thai overseas trade

1.2 To alleviate the problem of imbalance of trade

1.3 To help in case when there is a fall in prices of products

1.4 To increase the bargaining/negotiation power

1.5 To diversify types of exports and create new export markets Labor Laws In Thailand, all the rights and duties pertaining to employers and employees are generally governed by a series of laws and regulations. The Ministry of Labor and Social Welfare is charged with implementing Labor Laws and performing Labor inspections throughout the country to provide a

157 reasonable work environment and protects workers against labor exploitation and preserve their rights..

Taxation According to the Export and Import Act, B.E. 2522 (1979), the Minister of Commerce, with the approval of the Council of Ministers has the power to fix, revise or cancel rates of special fees for import and export. Both the Minister of Commerce and the Minister of Finance control execution of the Export and Import Act by appointing competent officers and issuing ministerial regulations and notifications.

The Customs Department has authority to collect a business tax which is levied on almost all imports. Assessment of the business tax is based on cost plus duty and a standard profit. The business tax on most imports in usually 1.5 per cent or 9 per cent. For some import items, such as motor vehicles, the business tax can range up to 40 or 50 per cent. A 2 per cent reduction of the business tax is allowed if paid in cash or made as a cash deposit at the time of submitting the import declaration.

In addition to the business tax, there is a municipal tax which is equivalent to 10 per cent of the business tax. The BOI is given the power to levy surcharges on imports, if necessary, to protect local or promoted industries. Such surcharges are levied on specific items. The regulation imposing the surcharge is effective for one year and may be renewed for subsequent one year periods. Recently, the BOI has been placing less reliance on imposition of surcharges. As of August 1998, the BOI repealed surcharges on bars and rods, and hydrogen peroxide. Potential for Import/ Export in India and Thailand

India and Thailand share age-old bonds of cultural affinity, commercial interests and common perceptions on various issues. These geographically proximate neighbors need to take advantages of the conducive setting or the context that is provided by the history and geography between them for mutually beneficial economic cooperation.

158

Whether it is the economics of neighborhood or the importance of cooperation in the competitive global environment the economic logic suggests that both the countries must strengthen their economic ties in the realms of trade, investment, technology and human resources. The complementarities on different dimensions need to be exploited so as to jointly take advantage of the globalization process in a more effective and WTO- consistent manner.

In an effort to promote trade and investment cooperation between the two countries, a Joint Working Group (JWG) was set up at the behest of the Prime Ministers of both the countries for getting a Feasibility Study conducted on India-Thailand FTA. The First JWG Meeting was held in New Delhi, India during April 2002. At this meeting, the JWG adopted its Terms of Reference and finalized the broad structure of the feasibility study. The meeting also agreed on a work Programme. The present study is the outcome of this process, which has been deliberated upon extensively in subsequent three JWG meetings, including the fourth and final one held at Bangkok on 22-24 December 2002.

The study probes into the following central question: Is a Free Trade Agreement between India and Thailand feasible? On the basis of a number of analytical criteria an answer to this question has been sought. An FTA would be feasible if:

159

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