Mechanical, electrical & process engineering in Thailand

An Expert's View about Electrical, Measuring and Testing Equipment in Thailand

Posted on: 6 Sep 2010

Latest overview of market potential for the engineering sector in Thailand.

Mechanical, Electrical and Process Engineering Sector ? Thailand Sector Report Mechanical, Electrical and Process Engineering Sector in Thailand Produced by: Attakorn Saropala, Trade and Investment Manager, British Embassy, Bangkok, Thailand Last revised 6 April 2009 Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Mechanical, Electrical and Process Engineering Sector ? Thailand Table of Contents OVERVIEW 3 OPPORTUNITIES CHARACTERISTICS OF MARKET 4 KEY METHODS OF DOING BUSINESS MORE DETAILED SECTOR REPORTS 5 PUBLICATIONS 5 EVENTS 6 CONTACT LISTS Page 2 of 7 Mechanical, Electrical and Process Engineering Sector ? Thailand OVERVIEW Economy Amid the global economic downturn and the domestic political crisis, Thailand's economy continue to decline towards the end of quarter 4 in 2008. In quarter 4 the GDP grew by 4.0% compared to 6.0% of the same period in 2007. For the whole year of 2008, the Thai economy is expected to grow by 2.6% compared to 4.9% in the previous year. With the continue uncertainty regarding the global economic condition and the domestic political crisis in 2009, the Thai economy is projected to contract at a rate of - 2.5%. The Thai government has introduced a number of stimulus packages to shore up the economy. They expect the effect of these packages to be seen in the fourth quarter of 2009 with a positive growth for the quarter. 2006 2007 2008 (e) 2009 (f) GDP at current prices (US$ bil) 206 245.8 270 252 GDP Growth (%) 5.2 4.9 2.6 -2.5 Ave Exchange Rate (US$) 37.93 34.68 33.56 - Inflation rate (%) 4.7 2.3 5.6 2.5-3.5 Manufacturing Growth (%) 5.9 6.2 3.9 - Source: National Economic and Social Development Board and Bank of Thailand In terms of trade with the EU and the UK, the EU is Thailand's third largest trading partner and UK exports to Thailand have averaged around £600 million for the last five years. In tandem, the UK continues to be an increasingly important market for Thailand. In 2008 UK-Thailand's bilateral trade broke the £3 billion for the first time. Thailand's exports to the UK during 2008 was around £2.3 billion, an increase of 8.5% while UK exports to Thailand was around £713 million, an increase of 8.8%, compared to 2007. The overall trade position remains strongly in Thailand's favour (3.2:1). However, the recent depreciation of the British Pound against the Thai currency should increase the competitiveness of UK exports and help to address this trade balance. OPPORTUNITIES The manufacturing sector, which accounts for 36% of GDP, grew by 3.9% in 2008 compared to 6.2% in 2007. This is due to the impact of the global financial crisis had on Thailand's exports, which accounts for 60% of GDP. The manufacturing production growth in food and beverages, electronics and electrical appliances had seen a slow down in the fourth quarter of 2008. The automotive sector still posted a significant 14.8% growth for 2008, despite the global crisis, which were offset by a 24.8% growth in the first half of 2008. In 2008, production capacity utilisation rate was 67.6%, a decrease from 72.6% from the previous year. The investment in manufacturing machinery also increased by 2.7% in 2008. According to Thai Customs Department figures, Thailand imported machines and machine tools worth around £827 million in 2008 compared to £692 million in 2007. British exports to Thailand in this sector, however, declined slightly to £3.28 million in 2008 from £3.53 million in 2007. The full impact of the global financial crisis is likely to be felt throughout 2009. With the expected decline in exports, as demands from Thailand's traditional export markets decline following the financial crisis, the manufacturing sector will be particularly hard hit. However, the various stimulus packages that the Thai government has put in place should help Thailand see a positive growth towards the fourth quarter of 2009. Page 3 of 7 Mechanical, Electrical and Process Engineering Sector ? Thailand With the world's economy expects to start its recovery 2010, Thailand's exports will continue to grow. The demands for higher manufacturing and processing technology will continue to grow as Thailand seeks to upgrade its production capability and remain globally competitive. Food processing, electrical appliances, electronics, automobiles and automotive parts continue to be the major industries with strong growth potential. The Thai market will therefore continue to offer significant opportunities for UK suppliers in food processing and packaging equipment, machine tools and metrology. UKTI publishes international business opportunities gathered by our network of British Embassies, High Commissions and Consulates worldwide. These opportunities appear in the Opportunities portlet on the relevant sector and country pages on the UKTI website. By setting up a profile you can be alerted by email when relevant new opportunities are published. New or updated alert profiles can be set in My Account on the website. CHARACTERISTICS OF MARKET In terms of trade for engineering products, Thailand only represents just over 1% of UK engineering exports. However, trade potential with Thailand lies in the strength of economic growth and the relative inefficiency of production offers scope for the development of higher technology. As the Thai market becomes more liberalised, Thailand will need to seek higher manufacturing technology in order to be competitive in the world market. The marketing of engineering products is normally conducted through a network of local distributors/representatives. The main competition for UK engineering companies comes from Japan, Korea, China, Taiwan and Germany. Thailand remains price sensitive, though leading firms are interested in cutting- edge technology to enhance their competitiveness. KEY METHODS OF DOING BUSINESS Although Thailand offers good business opportunities, this does not mean that Thailand is the right market for every company. Initial research is crucial to assessing your prospects. Thais like to build relationships with potential business partners, so it is not a market where you are likely to send a few brochures and wait for the orders to roll in. But for those ready to do the initial research and develop relationships with Thai companies, the opportunities are clearly there. It is very important that British companies appear to have a local presence in Thailand, either through local representatives, a representative office, or joint venture companies. Such a presence shows that British companies are serious about the market and are willing to provide local technical support to their partners and customers. The Thai market is still price-oriented. Technical support is the second most important issue after pricing. How to Do Business When visiting Thailand, research the market and the companies you intend to contact. ? Many Thai companies have websites - some in English. Much information is therefore readily available on both government and corporate websites. ? Plan your visit - organise appointments before you depart the UK. Follow up with telephone calls on arrival to confirm availability. Meetings can be arranged over breakfast, lunch or dinner. Page 4 of 7 Mechanical, Electrical and Process Engineering Sector ? Thailand ? Arrange a market discussion with the relevant Commercial Officer at the British Embassy in Bangkok. ? Take plenty of business cards and corporate literature. ? Follow up meetings by letter/e-mail on return to the UK. If possible, keep the Embassy informed of progress. ? Do not expect to do business immediately or necessarily on the first visit to Thailand. ? Think about intellectual property rights issues. ? Get professional legal advice on setting up a local company and research business partners thoroughly. Due diligence investigations are strongly recommended. These websites also offer useful guidelines to doing business in Thailand: The Board of Investment - The Ministry of Foreign Affairs - Other background information on doing business in Thailand can be found on UKTI?s website. Simply go to the Thailand country page where you will find information on: ? Economic background and geography ? Customs & regulations ? Selling & communications ? Contacts & setting up ? Visiting and social hints and tips MORE DETAILED SECTOR REPORTS When considering doing business in Thailand, it is essential to obtain legal, financial and taxation advice. A useful contact list of lawyers and other relevant professional bodies as well as further information on the ports sector in the country are available from the Embassy. Research is critical when considering new markets. UKTI provides market research services which can help UK companies doing business overseas including: ? Overseas Market Introduction Service (OMIS). Bespoke research into potential markets, contacts and support during your visits overseas. ? Export Marketing Research Scheme. Advice on market research and help to contact subsidised market research administered by the British Chambers of Commerce on behalf of UKTI. Contact your local International Trade Advisor if you are interested in accessing these services, or for general advice in developing your export strategy. PUBLICATIONS Some relevant publications in the engineering sector in Thailand are: Industry Mag - Publisher: Tradex Publishing Co Ltd, tel: 66 (0) 2 712 7262-5, fax: 66 (0) 2 712 7266 Industrial Technology - Publisher: Se-Education Public Co Ltd, tel: 66 (0) 2 751 4175, fax: 66 (0) 2 751 5460-1, email: Modern Manufacturing - Publisher: Greenworld Publication Co Ltd, tel: 66 (0) 2 246 1801-2, fax: 66 (0) 2 246 1800 email: Page 5 of 7 Mechanical, Electrical and Process Engineering Sector ? Thailand Thailand Engineering Journal - Publisher: Direction Plan Co Ltd, tel: 66 (0) 2 642 6088, fax: 66 (0) 2 642 6090, email: Metalworking Equipment News Thailand - Publisher: Thai Trade & Industry Media Co Ltd, tel: 66 (0) 2 714 2954 fax: 66 (0) 2 714 2944 email: EVENTS Intermach 2009 - International metalworking automation and industrial machinery exhibition Date: 13 - 17 May 2009 Venue: Bangkok International Trade and Exhibition Centre Organiser: CMP Media (Thailand) Co Ltd Propak Asia 2009 - International Food & Drink Processing & Packaging Technology Exhibition & Conference for the Asian Region Date: 17 - 20 June 2009 Venue: Bangkok International Trade and Exhibition Centre Organiser: Bangkok Exhibition Services Intermould Thailand 2009 - International exposition and conference for mould & die manufacturing Date: 25 - 28 June 2009 Venue: Bangkok International Trade and Exhibition Centre Organiser: Reed Tradex Co Ltd Thai Metalex 2009 - Southeast Asia's largest international machine tools and metalworking machinery trade exhibition and conference Date: 19 - 22 November 2009 Venue: Bangkok International Trade and Exhibition Centre Organiser: Reed Tradex Co Ltd UK Trade & Investment?s Tradeshow Access Programme (TAP) can help eligible UK businesses take part in overseas exhibitions. Attendance at TAP events offers significant benefits: ? possibilities for business opportunities both at the show and in the future ? a chance to assess new markets and develop useful contacts ? grants are available if you meet the criteria ? UKTI staff overseas will be available to assist delegates Find out if you are eligible to apply to attend this event, and more about the support UKTI can offer. Details of TAP events can be found in the Events portlet on the Thailand page. Other Market Visit Support may be available via your local International Trade Advisor. CONTACT LISTS In Thailand Mr Attakorn Saropala Trade and Investment Manager Commercial Section Page 6 of 7 Mechanical, Electrical and Process Engineering Sector ? Thailand British Embassy 14 Wireless Road Bangkok 10330 Tel: +66 (0) 2 305 8237 Fax: +66 (0) 2 255 8619 Email: Website: In the UK Liz McAlpine Trade Development Manager - Engineering Advanced Engineering Sector Team UK Trade & Investment Tay House Glasgow, G2 4DX Tel: +44 (0)141 228 3696 Fax: +44 (0)141 228 3698 Mobile: 07967 732388 Email: Mrs Karen Finegold Engineering Industries Association 62 Bayswater Road London W2 3PS Tel: +44 (0)1923 828 991 Fax: +44 (0)207 298 6456 Email: or John Cowdrey Technical Events & Export Manager PPMA Ltd New Progress House 34 Stafford Road Wallington Surrey SM6 9AA Tel: +44 (0)20 8773 8111 Fax: +44 (0)20 8773 0022 Email: Website: Christel Moustacas Senior Marketing Executive The Manufacturing Technologies Association 62 Bayswater Road London W2 3PS Tel: +44 (0)20 7298 6416 Fax: +44 (0)20 7298 6430 Website: UKTI?s International Trade Advisers can provide you with essential and impartial advice on all aspects of international trade. Every UK region also has dedicated sector specialists who can provide advice tailored to your industry. You can trace your nearest advisor by entering your postcode into the Local Office Database on the homepage of our website. Page 7 of 7 Mechanical, Electrical and Process Engineering Sector ? Thailand For new and inexperienced exporters, our Passport to Export process will take you through the mechanics of exporting. An International Trade Adviser will provide professional advice on a range of services, including financial subsidies, export documentation, contacts in overseas markets, overseas visits, translating marketing material, e-commerce, subsidised export training and market research. Page 8 of 7
Posted: 06 September 2010

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