3. Mr. David R. Nardone - Stock Exchange of Thailand · 2015-03-18 · David R. Nardone President &...

David R. Nardone

President & CEO

Hemaraj Land And Development PLC

Bangkok, Thailand

www.hemaraj.com12 September 2007

Thailand Automotive

Investment Opportunities

““The World Class Developer in ThailandThe World Class Developer in Thailand”” 12 September 200712 September 2007 22

AGENDA

I. Thailand Investment Trends

II. Thailand Position in Asian Automotive Industry

III. The Investment Climate in Thailand

IV. The Decision for Thailand Automotive

V. Opportunities for Thailand to Attract Automotive

OEM’s and Auto Suppliers

VI. Automotive Export Examples (If Time)


BOI Application Approvals BOI Application Approvals (Billion Baht)(Billion Baht)

Source: Board of Investment Source: Board of Investment –– Aug 2007Aug 2007

Applications

Approved1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Jan-Jul

2007

No. of Projects

Total Projects1,205 974 920 647 679 1,111 820 721 839 1,227 1,254 1,222 768

Automot ive 50 78 92 99 112 36

% 7% 9% 7% 8% 9% 5%

Total Investment 585 530 483 288 163 279 266 172 284 601 571 373 402


Investment Levels Equal to Mid 90Investment Levels Equal to Mid 90’’ss


Source: CB Richard Ellis Research Source: CB Richard Ellis Research –– Quarter 2, 2007, 2007 Hemaraj EstimateQuarter 2, 2007, 2007 Hemaraj Estimate

Thailand Industrial PropertyThailand Industrial Property -- DemandDemand(1994 (1994 –– 2007)2007)

Thailand Industrial Property Market

5,585

8,049

8,549

3,501

2,865

675

893

1,509

2,2641,848

2,138

2,695

4,008

4,500

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007F

Total (Rai)

1 1 RaiRai = 1,600 Sq.m.= 1,600 Sq.m.


0

50

100

150

200

250

300

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1H'07

Index

Source: Bank Of Thailand Source: Bank Of Thailand –– June 2007June 2007

Manufacturing Production Index : AUTOMOTIVE & PARTSManufacturing Production Index : AUTOMOTIVE & PARTS

2000 = 1002000 = 100



16 1934

5475

101

123 129

171

232

328

382

218

0

60

120

180

240

300

360

420

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 1H'07

Passenger Cars Parts of Passenger Car Motorcycle Parts Misc. Vehicles, Parts and AccessoriesTotal Vehicles, Parts and Accessories

Total Export Value : Automotive & PartsTotal Export Value : Automotive & Parts

Source: Thailand Customs Department Source: Thailand Customs Department –– Aug 2007Aug 2007

Baht : Billion


Automotive & Parts as % of Total Export

1995 1.16%

2006 7.72%

1H’07 8.68%


ASIAN Vehicle Demand (Sales) 2010 Vs 2006ASIAN Vehicle Demand (Sales) 2010 Vs 2006

Source: Global Insight Automotive, April 2007Source: Global Insight Automotive, April 2007

( ' 000 units)

Country 2002 2006 2010 2017 Growth 2010 Vs 2006

Units %

JAPAN 5,792 5,739 5,921 5,994 182 3%

CHINA 3,386 7,317 11,402 16,042 4,085 56%

SOUTH KOREA 1,641 1,209 1,445 1,590 236 20%

INDIA 898 1,747 3,313 5,507 1,566 90%

AUSTRALIA 824 962 1,088 1,175 126 13%

TAIWAN 399 364 443 513 79 22%

Subtotal Non-ASEAN 12,941 17,338 23,612 30,821 6,274 36%

THAILAND 409 682 788 1,089 106 16%

MALAYSIA 441 489 624 855 135 28%

INDONESIA 318 319 583 1,012 264 83%

PHILIPPINES 86 99 170 309 71 72%

VIETNAM 29 39 61 140 22 56%

Subtotal ASEAN 5 1,283 1,628 2,226 3,405 598 37%

Total 14,223 18,966 25,838 34,226 6,872 36%



ASIAN Vehicle Production 2010 Vs 2006ASIAN Vehicle Production 2010 Vs 2006


( ' 000 units)

Country 2002 2006 2010 2017 Grow th 2010 Vs 2006

Units %

JAPAN 10,257 11,484 11,570 11,438 86 1%

CHINA 3,307 7,268 11,823 16,848 4,555 63%

SOUTH KOREA 3,148 3,839 4,059 4,108 220 6%

INDIA 960 1,976 3,844 6,421 1,868 95%

AUSTRALIA 370 333 459 430 126 38%

TAIWAN 334 303 424 477 121 40%

Subtotal Non-ASEAN 18,376 25,203 32,179 39,722 6,976 28%

THAILAND 585 1,194 1,635 2,079 441 37%

MALAYSIA 462 503 655 909 152 30%

INDONESIA 299 302 611 1,000 309 102%

PHILIPPINES 81 66 101 169 35 53%

Subtotal ASEAN 4 1,426 2,065 3,002 4,157 937 45%

Total 19,803 27,268 35,181 43,879 7,913 29%



ASIAN Vehicle Net Export/(Import) 2006ASIAN Vehicle Net Export/(Import) 2006


Country 2006

Demand Production

Net Export/

(Import)

JAPAN 5,739 11,484 5,745

CHINA 7,317 7,268 (49)

SOUTH KOREA 1,209 3,839 2,630

INDIA 1,747 1,976 229

AUSTRALIA 962 333 (629)

TAIWAN 364 303 (61)

Subtotal Non-ASEAN 17,338 25,203 7,865

THAILAND 682 1,194 512

MALAYSIA 489 503 14

INDONESIA 319 302 (17)

PHILIPPINES 99 66 (33)

Subtotal ASEAN 4 1,589 2,065 476

Total 18,927 27,268 8,341



Thailand Auto Market 1995 Thailand Auto Market 1995 -- 20122012

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Local Demand

Imports

Production

Exports

Vehicles (‘000 units)





Economic Conditions Long Term

� Economic Growth Prospects High in Thailand

and the Region

� Per Capita Consumption of Autos Still Low

� Long Term Political Stability

Favorable Market Demand Long Term

� Encouraging Consumption in Most Markets

� Available Financing at Low Interest Rates

� Expanded Models in Competitive Environment

� Established Auto Industry and Export Volume for

OEM 1 Ton Pickup and Auto Parts


Government Policies Encouraging

Investment Incentives

� Right to Own Land

� BOI Tax Holidays and Duty Exemptions

� No Currency and Dividend Restrictions

Laws Regulations and Open Markets

� Open Market Programs and Non Competition

� Environmental and Safety Regulations

� Success of Various Trading Programs, ie. AFTA and

FTA’s with Australia, Japan, as well as U.S. China

and India in future

� New Promotion of Small “Eco”Car



Infrastructure and Operating Costs Reasonable

� Land and Building Costs

� Utility Conditions and Differential Provision

� Access to Ports and Roadways

� Availability and Costs of Skilled Labor

� Auto Clustering and Supplier Industrial Estates

� In Line Sequence and Just In Time Delivery

� Logistics and Distribution for Local and

Export Markets



� Long Term Strategic Location Placement

� OEMs are moving to High Volume Platforms

� Relocation of Japanese Platforms to ASEAN for

Lower Costs and access to Growth Markets

� Suppliers follow OEM and Customer Locations

� Suppliers choose Integrated Supply Networks

Including Clustering with Competition

� Specialized Component Manufacturing to

Maximize Volume in One Location



� To Maximize Local Content and Value Add

Drives a Multitude of Supplier Expansion

� Thai Suppliers, Given Lower Volumes, Service

Multiple OEM’s and Export outside ASEAN

� Some Balance Recognizing Regional Goals for

Thailand with Production Competency Base

throughout ASEAN

� China Diversification

� Overall Risks in Balance



� Suppliers Produce Both Locally and Export for Multiple

OEM’s Increasing Volumes

� 1 Ton Pickup exports to 130+ Markets Today

� Exports from Auto Suppliers are already well

established but Opportunity is to High Volume Global

Markets ie: Japan, Korea, U.S., Europe, China, and India

� FTA’s will broaden the Auto OEM and Auto Part Exports

� Eco Car could establish Entry Level Passenger Export

Volumes for Thailand

� Thailand ideally placed in High Growth Asia Market with

Lower Production Costs compared to Japan, Others.

V. Opportunities for Thailand to Attract Automotive OEM’s and Auto Suppliers


About HemarajAbout Hemaraj� Hemaraj Land And Development Public Company Limited is

Thailand’s leading developer of Industrial Estates, Utilities,

and Property Customer Solutions.

� Hemaraj has Assets of approximately Baht 13.1 billion or USD

385 million with an appropriate financial structure and a

global customer base.

� 6 Industrial Estates with a combined land area of 32,259 rai

(12,904 acres), 348 customers, including 118 automotive

companies, with estimate of USD 12 Billion of Investment.

� Thailand Industrial Land Sales Market Share #1 in 2006 and the first half of 2007 with 25 % and 37% market share, respectively*.

* Source : CB Richard Ellis


Ford & Mazda – Auto Alliance (Thailand)

• One Ton Pick-Up, Manufacturing Plant

• Ford Ranger

• Mazda Fighter

• Capacity of 155,000 units/year

• 75% Export to Europe, Australia and 130 countries

• 25% Domestic

• 650 Million USD of investment

• 50% US, 45% Mazda Japan, 5% Mazda Sales (Thailand)

VI. Automotive Export Examples


General Motors

• Production capacity of 160,000 vehicles per year

• Chevrolet Colorado 1 ton pickup for local and export

• Chevrolet Optra (Sedan), Aveo, Captiva

• Isuzu for export

• 100% USA Ownership

• 800 Million USD of investment



Cataler (Thailand) Co.,Ltd.

• Automotive Catalyst, Motorcycle Catalyst, Catalytic Slurry

• Ownership Cataler Japan

• Domestic to Toyota, Yamaha

• Auto : 65% Export to Cataler in Japan,

: 35% Domestic to Toyota Group

• Motorcycle: Export to France

: Domestic to Yamaha, Kawasaki, Thai Suzuki



GKN Driveline (Thailand) Ltd.

• Driveshafts

• Ownership 100% UK

• 50% Domestic to GM, Honda, Toyoda

• 50% Export to Proton- Malaysia, GKN - USA



Halla Climate Controls

• Radiator & Aircon System

• Ownership Visteon USA (82%) , Halla Korea (18%)

• 75% domestic to Ford & Mazda (AAT)(80%), GM and after market

• 25% export to Korea



JTEKT Automotive (Thailand) Co.,Ltd.

• Power Steering Pump Condition Equipment, Piping Gear

• Ownership 100% Japanese (JTEKT-Japan)

• 70% Domestic to Toyota, Mitsubishi

• Export to Japan



Li Tai Alloy Co., Ltd.

• Aluminium Alloy Wheel

• Ownership League Alloy Co., Ltd. 100% (Taiwan)

• Export - USA 80% Asia 5% Other 5%

• Domestic 10%



Nakagawa Sangyo (Thailand) Co., Ltd.

• Interior Parts for Automobile Exhaust Components for Automobile

• Ownership Nakagawa Sangyo Japan 100%

• Export Japan 30%

• Domestic 70%



Off Road Accessories Limited

• Four- Wheel Car Accessories

• Ownership: Australia 100%

• Export 100%



Toyoda Boshoku Filtration System (Thailand) Co.,Ltd.

• Oil Filter

• Ownership Toyota Boshoku Asia 100%

• Export 90% to U.S., Europe, and Asia

• Domestic 10%



Thai Kohwa Precision Co., Ltd.

• Precision for Automotive & Electronics

• Ownership Kohwa Precision Industry Co., Ltd. 100%

• Export 40% to Japan

• Domestic 60% JTEKT Automotive, Siam Chuyo, Thai Kayaba Industries



Valeo Compressor Clutch (Thailand) Co., Ltd.

• Magnetic clutch for A/C

• Ownership Zexel Valeo Climate Control Corp. Japan (89.6%), ZVCT (6.2%), Siam Zexel (2.1%), Koyo Techno Japan (2.1%)

• 1 Million units sale (2003)

• 40% Export to Japan, Korea


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