New challenge for Trade Promotion: Internationalization

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New challenge for Trade Promotion
Internationalization

• by Mr. Rachane Potjanasuntorn
• Director-General

ATPF, Sydney, April, 12, 2007
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Geographical Location of Thailand
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Thailand Economic Overview
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• Thai economy grew 6.9 in 2003 and 6.1 in 2004
• Growth slowed down to 4.4 in 2005 caused by a
  major tsunami in December 2004
• In 2006, growth maintain at 4.5 attributed to
  negative and positive factors
• In 2007, Factors continue including high oil
  prices, weaken demand from Western markets,
  fierce competition, political in transition,
  lower consumer confidence, appreciation of Thai
  baht,

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Thailand International Trade Performance
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THAILAND
Trade surplus in 2006 US million 2,914
2007 (Jan) Thailand export US million 10,488
Import US
million 9,608
trade surplus US 880
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Thailands Export Structure 2006By Product
Agricultural products (10) Agro-industrial
products (6) Principle manufacturing products
(78) Mineral and fuel (5) Others (1)
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Thailands Export Structure 2006By Region
ASEAN (21) EU (13) JAPAN (13) USA
(15) OTHERS (38)
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Thailands Import Structure 2006By Product
Fuel lubricants (20) Capital goods (28) Raw
materials and intermediate products (41)
Consumer goods (7) Vehicles and transport
accessories (3) Arms, munitions used in
official services and other goods (1)
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Thailands Import Structure 2006By Region
ASEAN (18) EU (8) JAPAN (20) USA (7)
OTHERS (47)
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Global Competitiveness Rankings
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Table 1 2006 Global Competitiveness Index
Rankings and 2005 Comparison
Source The Global Competitiveness Report,
published by the World Economic Forum (WEF) in
Geneva http//en.wikipedia.org/wiki/global_competi
tiveness_report
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• Is Thailand still competitive as it used to be ?
  
• The report gave us warning that comparative
  advantage of Thailand in the global market is on
  the downward trend
• To counter the situation, the DEP has introduced
  a so-called Internationalization plan to
  increase competitiveness of Thai exports by move
  up the value chain

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Why Internationalization?
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• 95 Thai exports are sold FOB prices
• Retail prices in the main markets (USA, EU,
  Japan) could be as high as 5 times of the FOB
  prices
• Liberalization regime (FTA, WTO, ASEAN
  integration)
• Fierce competition for every products in every
  markets

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What and how the DEP is doing to overcome these
deficiency and improve Thailand competitive edge
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Internationalization in our Concept

• Set up Agent
• Partnership
• Branch Office
• Factory relocation
• Franchising

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DEP action plan (1) To propose a new National
Board to synchronize all related International
Business Policy in all areas

• - FINANCE
• - MARKETING
  
• - PRODUCTION
• - etc.

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DEP action plan Capacity Building
Programs

• Brand Marketing
• Global Sourcing
• Value Creation/ Value Innovation
• Technical Assistance (with the cooperation of
  more advance TPOs in industrialized countries)

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DEP action plan Trade Information
Service

• Trade Opportunities
• Market information
• Law and regulations
• Etc.

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DEP action plan Business Matching/
Networking

• Introduction of potential partners
• Matching the qualified partners
• Incubate international partnership both in trade
  and investment
• Both sides should feel comfortable to start doing
  business with each other

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DEP action plan Promotion Activity
and Events

• - International Trade Fairs in Thailand
• - Overseas Trade Fair Activities
• - Thailand Exhibition/ Thailand Outlet
  
• - Trade Missions (Out-going, In-coming)
• - In-Store Promotion

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Present Status of Internationalization

• According to the DEP survey, at the present there
  are a total of 1,332 Thai entities/ enterprises
  engaging in Internationalization such as
  contract-farming, agro-business, department
  store, Thai restaurant, Thai Spa, Food
  wholesaler, Food distributor, Auto-parts,
  Furniture retailing, others

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• Since the introduction of Internationalization
  Scheme 5 months ago, the DEP has registered
  171 Thai brand companies into Internationalizatio
  n program, as shown on the next table

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TPO Role in supporting
Internationalization
Branded Goods Services
Products
Destination
Entrepreneur
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Challenges

• Convince private sector
• Tailor-Made program for each product group and
  each company
• Find the right partner for each individual
  company
• Capacity Building of private sectors in
  particular on branding and franchising

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Thank You