CONTENTS

May 2015 Volume 25 No. 5

Page

OIE Annual Report 1

News Bites / BOI Net Applications 2Thailand Offers Investors Strong Economy, Infrastructure and Political Stability

5

NESDB Economic Outlook 6Next step in Thailand-Russia Investment Promotion Cooperation 7

BOI Road Shows 8Company Interview: KEEEN Limited 9BOI’s Missions and Events 11Thailand Economy-At-A-Glance 12

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OIE Annual ReportThe Office of Industrial Economics, which is under the Ministry of Industry, has compiled its annual report on the Thai economy, offering a good summary of sector by sector economic growth in 2014, and identifying trends for 2015. Additionally, the data presented includes industrial surveys by the Bank of Thailand (categorized into different indices, such as data on employment, trade, and international investment), entrepreneur and consumer opinions, and industrial forecasts. What follows is a brief synopsis of certain key sectors of Thai industry, more specifically their condition and outlook.

According to the International Monetary Fund (IMF), the global economy expanded by an estimated 3.3% when compared with the previous year. Indeed, it has recovered steadily from the previous year. The US economy showed consistent improvement and the country’s unemployment rate declined. The EU economy rebounded but the unemployment rate was still high and the bloc likely will experience deflation. Japan’s economy expanded slightly due to the raising of the value-added tax rate. However, China’s economy slowed down.

Central bank authorities in many countries maintained a low interest rate policy due to minimal inflationary pressures and as a means to stimulate economic growth.

Oil prices in the world market continued decreasing due to an excess supply of oil globally. Crude oil prices (Dubai) for the first 11 months of 2014 averaged

NEWS BITES BOI NET APPLICATIONSThailand Committed to Enhancing Trade and Investment Cooperation with Africa

Thailand is committed to enhancing trade and investment cooperation with Africa, says Prime Minister General Prayut Chan-o-cha.

In his statement at the Asian-African Summit on 22 April 2015 in Jakarta, Indonesia, the Prime Minister said that ASEAN-led frameworks, such as the ASEAN Free Trade Agreement, can help elevate economic cooperation between Asia and Africa. “The vibrant partnership between our two continents will help shape the world as never before. We should not only sustain this momentum; we should take steps to bring our engagement to the next level. That is what we are doing today.”

“Thailand is determined to be a partner in Africa’s success. Already, The Royal Thai Government’s Thai-Afr ica Init iat ive is underway. It demonstrates our commitment in fostering stronger multi-dimensional ties between Thailand and Africa.”

Among the countries listed for BOI investment missions this year are South Africa, Kenya and Ethiopia. BOI has for many years been visiting Africa and continues to work to strengthen African investment in Thailand and to support Thai investment into Africa.

Preparing for Mobility in ASEAN

The Ministry of Tourism and Sports is prepared to register tourism professionals to facilitate the mobility of tourism personnel within the region after the launch of the ASEAN Economic Community (AEC) in late 2015.

ASEAN Member States have signed the ASEAN Mutual Recognition Arrangement (MRA) on Tourism Professionals, which is one of the key ASEAN tourism initiatives to support the establishment of AEC. The MRA comprises six divisions – housekeeping, front office, food production, food and beverage services, travel consultants and tour operators.

In Thailand, about 2,550 personnel in the housekeeping division have attended training and passed the tests on competency standards. They should be ready for the free flow of ASEAN professionals soon. As for national trainers and national assessors in Thailand for the divisions of front office, food production, and food and beverage services, there are now only 20 for each division. The Ministry of Tourism and Sports is accelerating the production of 600 more trainers and assessors this year. With the increasing number, Thailand is likely to produce at least 5,000 tourism personnel in the three divisions in 2015.

As for personnel in the two remaining divisions, namely travel consultants and tour operators, the training of master trainers and master assessors at the ASEAN level will be completed later

2013(US$ = 32.34THB)

2014 (Jan-Mar)(US$ = 32.39 THB)

2015 (Jan-Mar)(US$ = 32.63 THB)

Number of projects Value Number of

projects Value Number of projects Value

Total Investment 1,995 31,122 265 6,748 176 883

Total Foreign Investment 1,132 16,226 197 6,235 79 172

By Sector

Agricultural Products 324 3,602 34 221 22 80

Minerals / Ceramics 35 1,328 7 64 6 54

Light Industries / Textiles 73 457 8 16 5 15

Automotive / Metal Processing 430 7,791 74 4,678 19 40

Electrical / Electronics 281 3,003 36 131 37 27

Chemicals / Paper 171 1,405 26 715 7 31

Services 681 13,532 80 920 80 632

By Economy

Japan 590 8,865 96 1,887 22 56

Europe 161 1,399 33 1,944 19 14

Taiwan 55 228 7 24 6 27

USA 57 1,116 8 1,268 6 3

Hong Kong 41 637 10 67 2 3

Singapore 99 793 14 83 11 10

By Location

Central 771 8,982 92 392 77 369

East 710 10,860 115 5,904 42 201

South 103 2,013 12 86 13 53

Unit: US$ MillionNote: Investment projects with foreign equity participation from more than one country are reported in the figures for both countries / Statistics on net applications are adjusted whenever applications are returned to applicants due to insufficient information.

this year. After that they will further provide training for personnel in these divisions in Thailand.

Developing Eco-Industrial Towns in Thailand

The Ministry of Industry will develop eco-industrial towns in five provinces as models for Thailand’s industries to move toward green manufacturing.

Permanent Secretary for Industry Atchaka Sibunruang said that the five provinces selected for the eco-industrial town prototypes include Samut Prakan, Samut Sakhon, Rayong, Chachoengsao, and Prachin Buri. These provinces have great potential for further industrial growth.

She said that the Ministry of Industry had formed a working group to conduct a study on the establishment of the eco-industrial towns. The study also involves another nine industrial areas, namely the IRPC’s production complex in Rayong; Bangkadi Industrial Park in Pathum Thani; 304 Industrial Park in Prachin Buri; Sahapat Industrial Park; Si Racha in Chon Buri; Sahapat Industrial Park; Kabin Buri in Prachin Buri; Rojana Industrial Park in Ayutthaya; IPP Industrial Community in Rayong; Hemaraj Rayong Industrial Land in Rayong; and Hemaraj Saraburi Industrial Land in Saraburi.

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US$99.90 per barrel, while the New York Mercantile Exchange crude oil price average for January 2015 delivery (as of 7 December 2014) was US$63.05 per barrel.

Concerning the economy of Thailand in 2014, the gross domestic product (GDP) in Q3 2014 expanded 0.6%, higher than in Q2 2014 (+0.4%); the higher GDP figure stemmed mainly by non-agricultural sectors. Consumer demand in the country experienced an increase resulting from household spending on nondurable goods. Likewise, the service sector improved. Income generated by non-agricultural sectors and a declining inflation rate were factors that increased consumer confidence and spending, which reflected in the higher consumer confidence index. Moreover, private investment expanded in machinery and tools. Meanwhile, the net value of imports and exports of goods and services decreased because the import value was larger than the export value.

Thailand’s industrial GDP showed an improvement from Q2 2014, with production of computers and electronics climbing due to higher market demand. Furthermore, according to the Office of the National Economic and Social Development Board (NESDB), the main supporting factors for the Thai economy in 2015 are the following:

• Improving export figures due to the recovery of the global economy and greater world trade volume. It is anticipated that international markets will show signs of improvement and various government agencies forecast global GDP growth of 3.5-4.0%, which is a positive business environment and an impetus for a Thai economic revival.

• Tourism and foreign investment were affected negatively by the political unrest. However, a return to stability and security in the second half of 2014 provided a positive outlook for a recovery of both sectors.

• In 2014, there were many problems with government spending as the uncertainty of the political situation resulted in disbursements not meeting their intended targets, especially the investment budget. Nevertheless, for the 2015 fiscal year, government spending will be much more efficient as it is now under the authority of the National Council for Peace and Order (NCPO) beginning on 2 September 2014. This includes economic stimulation measures according to a Cabinet resolution announced on 1 October 2014.

• Oil price decline in the world market will increase consumer and business purchasing power and decrease inflationary pressures, thereby facilitating expansionary monetary policies.

• The impact of unusually high automobile purchases and manufacturing output will disappear. Purchases and production will return to normal levels in 2015.

The BOI subsequently reported that during 2014 a total of 3,469 projects worth a total of 2,192,700 million baht applied for investment promotion, making it the best year in almost 50 years. This milestone represents a 73% increase over 2013 in terms of the number of projects requesting promotion, and a 117% increase in investment value. Further, the highest number of applications was reported in the service and public utilities industry with 799 applications worth 822,162 million baht, followed by the chemical, paper, and plastics industry with 503 applications worth 430,091 million baht. Automotives sector came in third with 734 applications worth 325,864 million baht.

In 2015, Thailand’s industrial outlook should be positive. Thai industry is forecasted to grow stemming from an improvement of the global economy and trade volume, a recovery in foreign investment figures, production adjustment of the automotive industry in 2014, and a decline of oil prices in the world market. According to the OIE, the GDP is estimated to expand 2-3%, while the manufacturing production index (MPI) should increase 3-4% in 2015.

Industry by Sector

Iron and steel industry: Production by the iron and steel industry should be stable in 2015 with a volume output of 6.19 million tons. The country’s demand is expected to range between 0-3%. Government infrastructure projects are an essential factor to increase demand for iron.

Automotive industry: According to the vehicle production plan for 2015, manufacturing is expected to increase 10% or an estimated output of 2,150,000 units, owing to 3.5-4.5% economic growth in the country and the economic improvement of trading countries. Production is expected to be in the 50-55% range for domestic sales and in the 45-50% range for exports.

Electrical appliances and electronics industry: The E&E industry is expected to expand 1.2% in 2015 when compared to a year earlier. In fact, the electronics sector is predicted to grow 0.5-1%, resulting from greater demand for communication gadgets. Meanwhile, the electrical appliances sector is expected to climb from a year earlier, stemming from the improvement of both the domestic and overseas markets.

Chemical industry: Chemical exports in 2015 are predicted to surge 6.02% from the previous year, owing to the recovery of the global economy, a clear direction of the government’s investment projects, the acceleration in approving investment promotion applications in the second half of 2014, and the approaching formation of the ASEAN Economic Community (AEC).

Plastics industry: The export value of plastic products is expected to rise 10.01% or an estimated 132,577 million baht in 2015, stemming from the improving economies of major trading

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countries, such as Japan and the US, as well as the upcoming inauguration of the AEC.

Petrochemical industry: In 2015, the industry is predicted to develop according to the growth of related industries and the plastics industry.

Pulp paper, paper, and printing material industry: Production and exports of pulp paper, paper, and its products are predicted to escalate according to demand for packages from related industries in 2015. Economic improvement in Thailand, growing exports to the US, the EU, and China, and an expansion of investment in paper and package manufacturing both in the country and overseas are factors driving the industry to expand.

Ceramic industry: Manufacturing and sales in 2015 are likely to increase because of the government’s economic stimulus plans that encourage investment in infrastructure, such as construction of metro lines, establishing special economic zones in five border provinces (Tak, Mukdahan, Trat, Sa Kaeo, and Songkhla), and the establishment of the AEC in 2015. These activities will attract more foreign investment and increase demand in real estate, and eventually promote further growth in the ceramic industry.

Cement industry: The industry is predicted to grow in 2015, due to rising demand for cement in the country, resulting from a clearer picture of the government’s infrastructure investment projects, particularly the new Skytrain lines. The private sector can invest more in real estate as land prices in the greater Bangkok metropolitan area and the provinces are not as high as land in the city or along the existing Skytrain lines.

Textile and garment industry: In 2015, the manufacture of textiles and garments will continue to expand. The production and exports of the textile sector will be directed mainly to the ASEAN market. For the garment sector, the government supports SMEs to relocate their production base to the CLMV countries (Cambodia, Laos, Myanmar, and Vietnam) in order to take advantage of abundant labor, low wages, and the generalized system of preferences (GSP) from the EU and the US. Moreover, economic expansion into other ASEAN countries will influence the domestic consumption volume of those countries.

Wood and wood furnishing industry: Production and sales of wood furnishings in 2015 are expected to climb resulting from an expansion of the real estate sector, leading to higher demand for home decoration products.

Pharmaceutical industry: Production and domestic sales in 2015 are projected to grow from the previous year due to more stringent reimbursement controls regarding social programs for civil servants. This resulted in a surge of output in order to substitute costly imported medicines by local manufacturers.

Rubber and rubber products industry: The rubber and rubber products industry, particularly the inner tubes sector, should expand along with improvements in the automotive industry. Exports will continue growing, especially rubber gloves and latex gloves, which are essential both in the medical and industrial sectors. Although exports to the US and EU markets are forecasted to be weak, ASEAN markets should experience a surge.

Footwear and leather products industry: Production and exports of footwear in 2015 should increase compared with the previous year, stemming from the economic recovery in the US. Exports of travel bags and accessories and products of tanned and synthetic leather are expected to grow owing to more orders for automotive seats and furniture. As tourist numbers are predicted to improve in 2015, the sales volume of bags and shoes should increase accordingly.

Gems and jewelry industry: In 2015, output is predicted to contract when compared with the previous year, as manufacturers will export products already in stock and only produce to restore stock volume.

Food industry: Production is predicted to grow 0-5% in 2015, stemming from an improvement of the country’s economy and greater consumer confidence. Exports are forecasted to increase by as much as 2.5%. The global economy and major trading countries, such as the US, the EU, China, and Japan, have recovered from the international debt crisis and the ensuing recession.

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Thailand Offers Investors Strong Economy, Infrastructure and Political StabilityThe Asian Development Outlook 2015, issued by the Asian Development Bank, continues to see developing Asia as the engine of growth for the world, reporting “…strengthening growth is anticipated in Southeast Asia, and regional economic integration there will gain further traction with the establishment of the ASEAN Economic Community at the end of 2015.

The ADB has forecast increased growth in ASEAN to 4.9% this year from 4.4% in 2014, which is supported by the recovery being experienced in Thailand and Indonesia, ASEAN’s two largest economies. Growth is expected to continue rising to 5.3% in 2016, which is the first year of the AEC.

The report offers some positive forecasts for Thailand that investors should be heartened to read. ADB looks for 3.6% GDP growth in Thailand in 2015 and 4.1% GDP growth next year. This is largely the result of “a relatively calm political environment, the restoration of government investment, better prospects for exports to the major industrial economies, and lower fuel costs for businesses and consumers.”

ADB sees the public debt level in Thailand remaining at a manageable rate during fiscal year 2016, widening to THB390 billion, or 45.8% of GDP. Likewise, private fixed investment is recovering and public fixed investment is rising this year and will accelerate next year…”

Also mentioned by ADB are the Special Economic Zones that the government is currently developing. ADB writes that “Under the plan, migrant workers from neighboring countries can work in the Thai zones and still live at home.”

In a similarly upbeat tone, the International Monetary Fund Executive Board, following its recently completed 2015 Article IV Consultation with Thailand (consultations are generally held with members every year) issued a press release stating that the “Executive Directors were encouraged by the rebound of the Thai economy after recent adverse shocks, and noted that the resilience of the economy has been underpinned by solid economic fundamentals and prudent macroeconomic management.”

“The authorities intend to pursue a wide range of reforms to support the economy. They are already implementing a fuel price reform; have replaced the rice pledging scheme with transfers to small-scale farmers; endorsed a large public infrastructure investment program; started a review of state-owned enterprises; and made a decision to extend the Bank of Thailand’s oversight to the state-owned Specialized Financial Institutions. In addition, five special economic zones have been established in border regions and the Board of Investment has announced a new investment promotion strategy aimed at enhancing Thailand’s competitiveness.”

“Directors agreed that Thailand’s strong policy buffers, including ample reserves and a flexible exchange rate regime, have served the country well and have provided the tools to address potential market turbulence.”

International institutions continue to note the improving economic situation in Thailand, the strength and resiliency of its economy, the second largest in ASEAN, and its potential for continued economic growth. The Government of Thailand is moving forward with its infrastructure development plan that will stimulate the economy even further. A draft constitution has been completed and the country is positioning itself to hold elections in 2016, maintaining stability and economic growth.

TIR would like to note that the government has adopted an eight-year infrastructure plan, 2015 and 2022. This plan includes projects to improve the existing railroad tracks for better cargo transportation, as well as the construction of a medium-speed train, around 160 km/hour. This will reduce logistics cost significantly, as will planned projects for additional deep seaport facilities, expansion of airport facilities, and better road connectivity between major cities in Thailand and with its neighbors.

IMF has welcomed the fact that the infrastructure projects aim to enhance connectivity with neighboring countries and reduce logistic costs. Also, that the projects are now within the budget, which contributes to enhancing transparency and accountability.

With all of this activity and a government committed to stability, growth and investment, investors continue to choose Thailand as their investment destination.

Thailand: selected economic indicators2015 2016

GDP Growth 3.6 4.1Inflations 0.2 2.0Current Account Balance (share of GDP)

4.0 1.5

Source: ADB estimates

Investors should be encouraged by the Final Remarks of the IMF report issued in relation to the Consultation, “Despite economic headwinds, Thailand’s strong fundamentals, political clarity, and unique cultural identity have helped the country to navigate through difficult times and resuscitate confidence from both domestic and international stakeholders. Going forward, preserving the macroeconomic and financial stability amidst global uncertainty remains top priorities. On the back of ample space for short-term policy mix and various structural changes on supply-side underway, combined with close cooperation between public and private sector, promising opportunities remain for Thailand to achieve sustainable long-term growth.”

The World Bank too has released its East Asia and Pacific Economic Update, Adjusting to a Changing World, noting that although there has been moderating growth among the developing EAP countries, the region still accounted for more than one-third of global growth. Global growth, according to

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NESDB Economic OutlookExports to the US and Australia grew by 5.6 and 9.5 percent, although those to the EU, China and Japan declined, signaling continued challenges from the global economy.

Although NESDB has lowered slightly its projection for growth in the world economy to 3.4 percent from 3.5 percent, the Thai economy is seen to experience continued growth for the remainder of the year. The Board reports that public expenditure and investment will continue to support the expansion, while private expenditure and investment has picked up with better confidence. In fact, for the rest of the year the NESDB sees private investment expanding, owing to:

“(i) The acceleration of BOI project approval of 544 billion baht in the second half of 2014 and 217.6 billion baht in the first quarter of 2015 and some of projects will start their investment within this year.

(ii) Higher capacity utilization of some industries of more than 70 percent which will require additional investment to expand production capacity. This is also in line with better Business Sentiment Index soaring above 50 in the first quarter, the first time in seven quarters.

(iii) The progress on public’s infrastructure project which will help further stimulate private investment, and

(iv) The low level of interest rate.”

Manufacturing has started to improve and provide a better contribution to the economy following the recovery of domestic demand and the expansion in automotive production. This sector, which showed expansion in the final quarter of last year, is likely to continue improvement and make a greater contribution to economic growth, as a result of the following sectors:

“(i) Automotive sector which experience higher export and less contraction in domestic sales.

(ii) Petroleum sector which expand production compared to its low base during the annual maintenance closure in the previous year.

World Bank, should show a moderate increase, rising from an average 2.5 percent in 2012–14 to 3.1 percent in 2015–17.

Oil prices, which the World Bank sees as one of two key developments in the world economy, are projected to be lower on average this year and rise moderately through 2017. Thailand is among the countries noted to gain significantly from these lower prices. Also noted is the fact that in December 2014 Thailand ended its subsidy for liquefied petroleum gas and that last August it revised its domestic fuel-pricing mechanism by raising taxes on diesel but reducing them on gasoline. The Update further noted that in 2012 fuel subsidies in Thailand amounted to 0.8% of GDP.

The World Bank projects 3.5 per cent growth for Thailand in 2015, with exports picking up slightly and imports falling due to low oil prices. Tourism receipts are seen to recover in 2015, with arrivals projected to rise by 10 percent. With high income countries seen to continue recovery through 2016 and 2017, the outlook for Thailand becomes even better.

Investors can rest assured that Thailand’s economic growth has returned and the country remains a strong manufacturing location with a bright future.

The National Economic and Social Development Board (NESDB) reported in its Economic Outlook that the economy grew by 3.0 percent in the first quarter of the year, and is expected to grow between 3.0 and 4.0 percent for the full year.

During this period, total investment increased from 3.2 percent growth in Q4/2014 to 10.7 percent in the current quarter. “Public investment expanded by 37.8 percent owing to 40.9 and 31.8 percent growth in investment by government and state-owned enterprises respectively. Construction improved remarkably as the disbursement of government’s capital budget in land and construction grew as high as 74.1 percent, and State-owned enterprise’s construction grew by 30.4 percent. At the same time, investment in machinery by both government and state-owned enterprises continue to grow. Private investment expanded by 3.6 percent. Investment in construction and machinery and equipment grew by 1.8 and 4.1 percent respectively. For the first time in 7 quarters, the Business Sentiment Index (BSI) stood at a level higher than 50 (the level which business expand their investment) at 50.5 compared with 48.8 in the previous quarter.”

The tourism sector is improving with a 23.5 percent growth in inbound tourists and 22.3 percent growth in tourism revenue. NESDB writes that “The tourism sectors which will show a continual and favorable expansion in the latter half of the year.”

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Next step in Thailand-Russia Investment Promotion Cooperation

During 7-8 of April 2015 the Prime Minister of the Russian Federation paid an official visit to Thailand. It is the first official visit of a Russian Prime Minister in the past 25 years and is a part of Russia’s policy of going east. The visit to Thailand aims to strengthen relations and expand cooperation in various fields that are mutually beneficial to each country.

Thailand and Russia have a long relationship, diplomatic as well as economic; in two years, the two countries will celebrate 120 years of diplomatic relations. Leading up to that time, the governments of Thailand and Russia will try to increase their activities and business cooperation.

(iii) The recovery of domestic-oriented manufacturing sector (with less than 30 percent of total production) which started to expand gradually following a pickup in domestic demand and the tourism sector.

(iv) The continual growth of export-oriented production in some sector which is also in line with import volume of raw materials and intermediate products that showed the first

expansion in the third quarter of 2014 before accelerating steadily in the last quarter of 2014 and the first quarter of 2015.”

One thing that is clear from the NESDB report is that the economy of Thailand is improving, displaying the strength of its resiliency and its ability to meet the challenges of the global economy.

On the 8 April 2015 Mrs.Hirunya Suchinai, Acting Secretary General of the BOI, signed a memorandum of understanding (MOU) on investment cooperation with Mr.Alexey Likhahev, First Deputy Minister of the Ministry of Economic Development of the Russian Federation, at Government House. The prime ministers of the two countries were there to witness the ceremony. It is one of ten MOUs signed on that day which cover issues of investment, tourism, energy, combating drug abuse cooperation between government agencies, culture, and also technology and business cooperation between Thai and Russian private companies.

Thailand has a policy to promote investment from Russia into Thailand and Thai investment into Russia. The BOI is aiming to attract more investment from Russia, especially in the field of advanced compound rubber & products, renewable energy, jewelry and accessories, rail transportation, shipbuilding, IT, biotechnology, advanced engineering, and environmentally friendly technologies.

There are also opportunities for Thai investors in many areas where Thailand has strength and the Russian market is welcoming. Those sectors include agro-processing, food production and processing, and automotive parts.

In order to encourage more investment, both parties will need more cooperation and support from respective local agencies. The BOI believes that finding the right local counterpart is a key success factor for investment promotion and will help to organize and facilitate the promotion of investment between countries more effectively. The Memorandum of Understanding on Investment Cooperation was therefore signed.

The MOU strengthens ties between the BOI and the Ministry of Economic Development, the Russian agency responsible for promoting investment, both domestic and international. The investment promotion activities of Thailand and Russia will increase starting this year.

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BOI Road Shows to Promote New Investment Promotion Strategies 2015 – 2021

Since the announcement late last year of its 7-year investment promotion strategy, 2015 – 2021, the Office of the Board of Investment planned a series of investment road shows to explain the changes in the new promotion policy.

The first road show took place during 18 – 20 February 2015, when Deputy Prime Minister M.R. Pridiyathorn Devakula, together with Industry Minister Chakramon Phasukavanich, led a mission to Tokyo, Nagoya and Osaka, Japan, along with high ranking BOI officials.

A seminar on the “New Investment Promotion Strategies: Towards Sustainable Growth” was organized in the three cities, and attended by a total of 1,423 participants. Deputy Prime Minister M.R. Pridiyathorn delivered a keynote address on the “Thai Economy: The Way Forward to Sustainable Growth”, in which he highlighted the situation of the Thai economy and the government’s economic policies for sustainable growth. He also spoke about BOI new investment policy, promotion of Thailand as a regional trading hub through the establishment of international headquarters (IHQ) and international trading centers (ITC), the digital economy, special economic development zones as well as the strengthening of infrastructure among the issues discussed in the speech.

The Industry Minister Chakramon Phasukavanich also gave a speech on “Thailand’s Industrial Sectors: Opportunities and Challenges”, and Acting BOI Secretary General Mrs. Hirunya Suchinai gave detailed information on investment incentives and promotion criteria under the new investment policy.

The delegation also met with representatives of business associations such as Keidanren in Tokyo, Nagoya Chamber of Commerce and Industry in Nagoya, and Kankeiren in Osaka, to exchange views on BOI’s new investment policy as well as the investment environment in Thailand. Japanese investors at both seminars and networking meetings displayed a strong interest in the promotion of IHQ/ITC and sought more details on scope of business and tax incentives provided by the Thai Ministry of Finance, apart from non-tax incentives offered by BOI. Questions were also raised about additional incentives for merit activities under the BOI’s new policy, where investors sought information on the various types of merit activities.

The second road show of the year was organized to Seoul, Korea, from 22 - 24 April 2015, and was led by Industry Minister Chakramon Phasukavanich and BOI executives. An investment seminar on new investment promotion policy was held where the Industry Minister gave a keynote speech on the “Thai Economy: The Way Forward to Sustainable Growth”, in which he explained current economic policies such as the digital economy, promoting Thailand as a trading hub through IHQ/ITC, and new plans to strengthen infrastructure. There were 245 participants from Korean companies, busness associations, and media who joined the seminar. Also, the delegation met and exchanged views with representatives from Korean business associations, including the ASEAN – Korea Centre, Korean Association of Machinery Industry, Korea Electrical Manufacturers Association, and the Korea New & Renewable Energy Association.

During the seminar and meetings with business organizations Korean investors indicated interest in the renewable energy development plan in Thailand, the formation of the ASEAN Economic Community by the end of the year, as well as the infrastructure development plan, such as new railway lines.

The Third road show is being planned for Shanghai and Hong Kong and will take place from 24 – 25 June 2015. The BOI expects to hold seminars to explain its new investment promotion policy, as well as the government’s economic policies that include such items as IHQ/ITC development, the digital economy, and the major infrastructure program.

Promotion campaigns are not only being held overseas, as the BOI plans to organize a special seminar focusing on IHQ/ITC for foreign business community in Thailand on 30 June 2015, “Thailand: a Regional Trading and Modern Industry Hub”, at Centara Grand and Bangkok Convention Center. Seminar details can be found on the BOI website (www.boi.go.th).

Over the course of the year the BOI will continue to travel abroad and also hold meetings with investors within Thailand to publicize the new incentives being offered and support the economic direction of the government.

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COMPANY INTERVIEW

KEEEN Limited

Innovation in Thailand is now a big deal. Company executives are coming under increasing pressure to deliver more innovation from their organizations. But the fact is that innovation is something many Thai companies do not do particularly well. Even though the government of Thailand creates more incentives and sets aside more funds for research and development, and despite many companies spending tens of millions of dollars in targeted recruitment every year, the situation remains the same. A lack of innovation. Yet one sunrise business stands out.

KEEEN Limited, a local manufacturer of products for oil spill clean-up operations, intends to list on the Stock Exchange of Thailand (SET) in the next few years, the first innovation business to be registered on the capital market. The move came after the company was invited by the Securities and Exchange Commission (SEC) to draft a plan for listing on the SET as a way to help raise funds for growth. KEEEN makes industrial cleaning products with microorganisms and enzymes and bioremediation.

The products are a result of joint research with the National Centre for Genetic Engineering and Biotechnology (BIOTEC) over a two-year period. Proceeds from the IPO will be used to develop production facilities in Asia and Europe. The company also is developing a remover of oil stains for household use under the UMI brand. Indeed, the company’s vision is to be the leading company in the bioscience business with expertise in industrial ecology management to minimize waste and energy consumption and hidden industrial costs.

This month, the Thailand Investment Review team was afforded the chance to meet and speak with Dr. Watson Ariyaphuttarat, founder of KEEEN Limited and industry pioneer. The interview took place at the recently inaugurated KEEEN Innovation Center. A number of questions were asked to learn more about the company as a Thai SME, its business activities, and the company’s future plans.

KEEEN was established in 1992 as Hi-Grimm International Co., Ltd. In 2008, the company expanded to focus on environmental products and was registered as Hi-Grimm Environmental and Research Co., Ltd. Later, it was re-named as KEEEN Limited to enhance its brand awareness. For over 20 years, the company has been active in environmental product development in several industries, both in domestic and international markets.

Dr. Watson pointed out that KEEEN recently has broadened its operations in order to support growing market demand and has developed strong links with Thailand’s flagship government research program, the National Science and Technology Development Agency (NSTDA). The company works with NSTDA’s BIOTEC center to strengthen its research program in biotechnology applications for environmental solutions. Since 2012, it has collaborated in biotechnology research and development in a strategic alliance with Mahidol University. For Dr. Watson, environment impact concerns are a global trend that encourages the industrial sector to adapt their production processes to be more environmentally friendly and become ‘Green Industries’.

Furthermore, Dr. Watson highlighted that KEEEN engineers over 10 formulas that are created to suit the specific requirements of different industries at lower prices while offering more effective microbes with degradable biosurfactants. Additionally, production is monitored closely through all the stages of the manufacturing process: from culture and fermentation to product processing at a modern technology operating facility. With a market dominated by chemical-based and biodegradable cleansers, Dr. Watson has sought to push a practical alternative – bioremediation – that has permitted the company to provide a solution to its customers like Toyota car service centers, B-Quick, Esso gas stations, and S&P restaurants.

“KEEEN is a green, environmentally-friendly, innovative technology which adds value to products by reducing waste treatment costs”, declared Dr. Watson. “We can say that KEEEN is a win-win situation for sustainable industry management”. In fact, KEEEN has moved into the global “green market”, enhancing environmental conservation and potentially bringing benefits to every entrepreneur. The company not only uses a method that can help reduce problems at the source and minimize pollution, but also provides the following consulting services:

• Wastewater management• Oil Storage Tank Degassing & Cleaning Remediation• Oil Spill Response & Clean-up• Industrial Applications• Site Contamination & Remediation Service• Sanitary Treatment• Testing, Diagnosis & Research

Dr. Watson explained that public-private partnerships are essential in driving the innovation cycle. In developing countries, like Thailand, where small and medium enterprises comprise a large portion of the economy and a heavy reliance on research conducted in academic and public institutes, public-private partnerships are even more crucial in driving the national economy. When properly managed, the partnership can be extremely rewarding for both parties. KEEEN is a perfect

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example. As Dr. Watson stressed, the company’s products are the result of collaboration between BIOTEC, a government agency, and KEEEN Limited.

In 2009, KEEEN based itself at the Thailand Science Park, home to the National Science and Technology Development Agency (NSTDA) and four NSTDA research centers, which include BIOTEC. Recognizing BIOTEC’s expertise in microbial biotechnology and biological waste treatment, KEEEN initiated a process of collaboration with BIOTEC. The two parties embarked on a joint research project to develop a commercial bioremediation agent in November 2008. Subsequently thereafter, KEEEN’s bioremediation agent was launched in October 2010, offering solutions to wastewater treatment; oil tank degassing and cleaning remediation; oil spill response and clean up; industrial application and site remediation; and sanitary treatment.

It can be said that Dr. Watson and his KEEEN staff are cutting-edge technopreneurs. The company employs around 50 team members, both at the KEEEN Innovation Center and at its research and development center, located at the Thailand Science Park. The educational background of KEEEN personnel ranges from bachelor degrees to PhDs. Dr .Watson has put together a highly skilled team that consists of specialists in marketing, sales, customer service, research, quality control, and logistics. Growth and development of KEEEN staff is high on the list for Dr. Watson as their advancement contributes to the prosperity of the company.

KEEEN joined the NSTDA business incubation program in 2012. Under this program, KEEEN had opportunities to enter a number of innovation competitions and deservedly earned several awards, notably the Golden Medal Award from the 2012 Taiwan International Invention Show and Technomart, the Grand Prize from the Asian Science Park Association in 2012, and the Gold Medal from the 42nd International Exhibition of Inventions at Geneva in 2014.

Dr. Watson mentioned that KEEEN currently has two official representatives in Singapore and Finland, covering the Asia-Pacific region and the European, Russian and the Middle Eastern regions, respectively. Its products have been shipped to South Korea, Malaysia, Singapore, Japan, Indonesia, and India. In July 2014, KEEEN’s European Center will be opened in Lahti, Finland, as a distribution center, training center, and also packaging manufacturer in the near future. KEEEN aims

to move from a local brand to a global brand, or to put it in KEEEN’s terms, from “local ignition into global satisfaction.”

When asked about the relationship between the Thailand Board of Investment (BOI) and KEEEN, Dr. Watson stated that even though it was in its embryonic stages, it was very important to the company. The formation of a partnership with the BOI benefits KEEEN as it raises the profile of the company within

Thailand as well as abroad. Dr. Watson is supportive of the BOI’s new initiative to encourage Thai entrepreneurs to invest and to do business overseas. This kind of activity will result in greater innovation, better product/service quality, heightened operational efficiency, more effective management practices, and enhanced competitiveness. In short, adding significant value to the Thailand brand. Also, Dr. Watson firmly believes that if the BOI and the Thai SME sector strengthened their existing linkages that the country’s economy would surge forward, particularly in light of the upcoming ASEAN Economic Community.

The future looks bright. KEEEN has recently teamed up with BIOTEC to develop a small-scale mobile microbial reactor for on-site bioremediation. This reactor will allow on-site production of microorganisms used in the treatment of oil-contaminated wastewater. It will eliminate the cost of packaging and transportation of bioremediation agents, making it suitable for industrial sites that need to manage on a regular basis oil-contaminated wastewater in high volume. KEEEN biotechnology and Dr. Watson’s business model are all about striking a fine balance between protecting the environment and turning in a profit.

Under the leadership and vision of Dr. Watson, KEEEN has been able to extend its reach beyond the borders of Thailand in a very short time. It is a company that sees opportunity not only within the ASEAN region but also globally. And it has the plans to guide it to another level of operation and business sustainability. In the words of Dr. Watson, “KEEEN has been on a journey that started from inspiration to innovation, then from innovation to greenovation, later from greenovation to satisfaction, and finally from satisfaction to international recognition”. Born on a university campus and developed on the floors of exhibition halls, the KEEEN brand has earned a reputation for quality and that in of itself is an intangible asset. As a pioneering sunrise business, KEEEN aspires to transform Thai industry through example and to assert itself as a leading “green market” multinational.

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BOI Acting Secretary General Hirunya Suchinai gave the opening remarks and keynote address at the seminar on “Opportunities for Thai Automotive Parts Market” which was held at SUBCON Thailand 2015 on 13 May 2015, at BITEC Bangna.

Minister of Industry Chakramon Phasukavanich, BOI Acting Secretary General Hirunya Suchinai and BOI Deputy Secretary General Duangjai Asawachintachit attended the SUBCON Thailand and INTERMACH 2015 Opening Ceremony on 13 May 2015 at Grand hall 202 BITEC Bangna.

Deputy Secretary General Chokedee Kaewsang welcomed a group of US & Canadian journalists covering the automation & machinery sectors on 11 May 2015 at the One Start One Stop Service Center (OSOS), Chamchuri Square, and gave a presentation on BOI investment policy.

Deputy Secretary General Duangjai Asawachintachit, together with (from right) Mr. Andrew Park, Honorary Thai Consul-General in Brisbane, Mr. Chirachai Punkrasin, Ambassador of Thailand to Australia, Mr. Tim Gauci, Counselor and Mr. Wirat Tatsaringkansakul, Director of BOI Sydney Office, at the seminar to promote the new BOI investment policy on 15 April 2015 in Brisbane, Australia.

Senior Executive Advisor Ajarin Pattanapanchai spoke about Thailand’s investment trend and investment between Thailand and East Asia at the East Asia Investment Symposium on 28 April 2015 in Nanning, China.

Executive Director Dr. Bonggot Anuroj welcomed President of Yokohama IDEC Koichi Makino and Yokohama IDEC Officers to the “Business environment and investment opportunities in Thailand” seminar held on 14 May 2015 at BITEC Bangna, Bangkok, and discussed areas for cooperation.

BOI’S MISSIONS AND EVENTS

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THAILAND ECONOMY-AT-A-GLANCE

Source: Stock Exchange of Thailand

Source: Bank of ThailandSET Monthly Closing Values

International Reserves / Short-term Debt (%)

Exchange Rate Trends

Industrial Capacity Utilization (%)

Head Office, Office of the Board of Investment 555 Vibhavadi-Rangsit Road, Chatuchak, Bangkok 10900, ThailandTel: +66 (0) 2553 8111 Fax: +66 (0) 2553 8316 Website: www.boi.go.th E-mail: head@boi.go.thBEIJINGThailand Board of Investment, Beijing Office Royal Thai Embassy No.40 Guang Hua Road, Beijing, 100600, P.R.China Tel: (86-10) 6532-4510 Fax: (86-10) 6532-1620 E-mail: beijing@boi.go.th

FRANKFURTThailand Board of Investment, Frankfurt OfficeBethmannstr. 58, 5.OG60311 Frankfurt am Main Federal Republic of Germany Tel: (49 69) 92 91 230Fax: (49 69) 92 91 2320E-mail: fra@boi.go.th

GUANGZHOUThailand Board of Investment, Guangzhou OfficeRoyal Thai Consulate-General GuangzhouNo.36 Youhe Road, Haizhu District, Guangzhou, P.R.C 510310 Tel: +8620 8385 8988 Ext. 220-225 +8620 8387 7770 (Direct Line)

Fax: +8620 8387 2700 E-mail: guangzhou@boi.go.th

LOS ANGELES Thailand Board of Investment, Los Angeles Office Royal Thai Consulate-General 611 North Larchmont Boulevard, 3rd Floor, Los Angeles, CA 90004 USA Tel: (1-323) 960 1199Fax: (1-323) 960 1190E-mail: boila@boi.go.th

MUMBAIThailand Board of Investment,Mumbai OfficeRoyal Thai Consulate-General,1st Floor, Dalalmal House, Jamnalal Bajaj Marg, Nariman Point, Mumbai400 021 Republic of India Tel: (9122) 2204 1589-90 Fax: (9122) 2282 1071E-mail: mumbai@boi.go.th

NEW YORKThailand Board of Investment, New York Office 7 World Trade Center, 34th Floor, Suite F, 250 Greenwich Street, New York, NY 10007Tel: (1-212) 422 9009Fax: (1-212) 422 9119E-mail: nyc@boi.go.th

OSAKAThailand Board of Investment, Osaka Office Royal Thai Consulate-General, Osaka, Bangkok Bank Bldg. 7th Floor , 1-9-16 Kyutaro-Machi, Chuo-Ku, Osaka 541-0056 Japan Tel: (81-6) 6271-1395 Fax: (81-6) 6271-1394E-mail: osaka@boi.go.th

PARISThailand Board of Investment, Paris Office Ambassade Royale de Thailande, 8, Rue Greuze75116 Paris, FranceTel: (33 1) 5690 2600 (33 1) 5690 2601Fax: (33 1) 5690 2602E-mail: par@boi.go.th

SEOULThailand Board of Investment, Seoul Office#1804, 18th Floor, Koryo Daeyeongak Center,97 Toegye-ro, Jung-gu, Seoul, 100-706, Korea Tel: (822) 319-9998 Fax: (822) 319-9997E-mail: seoul@boi.go.th

SHANGHAIThailand Board of Investment, Shanghai OfficeRoyal Thai Consulate-General15 F., Crystal Century Tower, 567 Weihai Road, Shanghai, 200041, P.R.China Tel: (86-21) 6288-9728, (86-21) 6288-9729 Fax: (86-21) 6288-9730E-mail: shanghai@boi.go.th

STOCKHOLMThailand Board of Investment, Stockholm OfficeStureplan 4C 4th Floor 114 35 Stockholm, Sweden Tel: +46 (0)8 463 1158 +46 (0)8 463 1172 +46 (0)8 463 1174 to 75 Fax: +46 (0)8 463 1160 E-mail: stockholm@boi.go.th

SYDNEYThailand Board of Investment, Sydney Office 234 George Street, Sydney, Suite 101, Level 1,New South Wales 2000, Australia Tel: +61-2-9252-4884 Fax: +61-2-9252-4882E-mail: sydney@boi.go.th

TAIPEIThailand Board of Investment, Taipei Office Taipei World Trade Center 3rd Floor, Room 3E39-40, No.5, Xin-Yi Road, Sec.5Taipei 110, Taiwan, R.O.C. Tel: (886) 2-23456663Fax: (886) 2-23459223 E-mail: taipei@boi.go.th

TOKYOThailand Board of Investment, Tokyo Office Royal Thai Embassy8th Fl., Fukuda Building West,2-11-3 Akasaka, Minato-ku, Tokyo 107-0052 JapanTel: (81 3) 3582 1806Fax: (81 3) 3589 5176E-mail: tyo@boi.go.th

Facts about ThailandPopulation (2014) 65 millionASEAN Population 625 millionLiteracy Rate 96%Minimum Wage 300 Baht/day

GDP (2014) US$ 373.6 billionGDP per Capita (2014) US$5,445 GDP Growth (2014) 0.7%GDP Growth (2015, projected) 3.5-4.5%Export Growth (2014) -0.3%Export Growth (2015, projected) 3.5%

Trade Balance (2014) US$ 24.6 billionCurrent Account Balance (2014) US$ 14.2 billionInternational Reserves (2014) US$ 157.1 billionCapacity Utilization (2014) 60.48%Manufacturing Production Index (2014) 168.2Core Inflation (2015, projected) 1.59Headline Inflation (2015, projected) 1.89Consumer Price Index (Mar 2015) 106.33 (2011=100)

Corporate Income Tax 10-20%Withholding Tax 0-15%Value Added Tax 7%

Mar Average Exchange RatesUS$1 = 32.63 baht€1 = 35.32 baht£1 = 48.86 baht100 ¥ = 27.11 bahtCNY1 = 5.23 baht

Top 10 Exports 2015 (Jan-Mar)

Product Share Value (US$ bn)

1 Motor cars, parts and accessories 12.30 6.56 2 Automatic data processing machines

and parts thereof8.16 4.36

3 Precious stones and jewellery 5.13 2.74 4 Polymers of ethylene, propylene, etc

in primary forms3.88 2.07

5 Refine fuels 3.46 1.85 6 Electronic integrated circuits 3.34 1.78 7 Rubber products 3.25 1.73 8 Chemical products 3.13 1.67 9 Machinery and parts thereof 3.03 1.62

10 Iron and steel and their products 2.68 1.43 Total 53.36

Source: Ministry of Commerce

Source: Bank of Thailand

Source: Bank of Thailand BOI

May 2015

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