Wesgro 2014 08 thailand briefing

Jodie Posen, Economist

20 August 2014 An inspiring place to do business

Presentation Overview

• Thailand: A Snapshot

• Western Cape Trade with Thailand

• An analysis of sub-sectors

• Wine• Confectionaries• Sauces and condiments

• Questions and Answers

An inspiring place to do business

Thailand: A snapshot

An inspiring place to do businessSource: IMF, 2014; BMI, 2014, Deloitte, 2014

ECONOMIC INFORMATION

Population (July 2013) 67,448,120 (20th)

Capital Bangkok

Government Constitutional monarchy administered by military junta

Urban Population (2011) 34.1% of total population

Life expectancy 74.05 years

Literacy rate 93.5%

Unemployment rate 0.7% with 14% population below poverty line

InfrastructureKey Ports: Bangkok, Laem Chabang, Map Ta Phut, Prachuap Port, Si Racha



Source: IMF, 2014; BMI,, 204

ECONOMIC INFORMATION

VAT 7% (rise to 9% in 2015 Oct)

Company Tax 20%

GDP Growth (2013e) 2.9%

GDP (2013 est.) USD387.3bn

Inflation (2013 est.) 1.7%

Interest rate 2.75%

Labour Force (2013est) 39.210 million

Doing Business in...(2013 ranking) 18

Main Industries

Automobiles and automotive parts (11%), financial services (9%), electric appliances and components (8%), tourism (6%), cement, auto manufacturing, heavy and light industries, appliances, computers and parts, furniture, plastics, textiles and garments, agricultural processing, beverages, tobacco



Source: SeaRates, 2014

WORLD BANK DOING BUSINESS RANKING, 2013

TOPIC RANKINGS THAILAND 2013 RANK

Starting a Business 85

Dealing with Construction Permits 16

Getting Electricity 10

Registering Property 26

Getting Credit 70

Protecting Investors 13

Paying Taxes 96

Trading Across Borders 20

Enforcing Contracts 23

Resolving Insolvency 58

OVERALL RANKING 18

PORT-TO-PORT TRANSIT TIMES FROM CAPE TOWN

TERMINAL DISTANCE TRANSIT TIME

Bangkok Terminal 11874 km 19 days 1 hour

• Ease of doing business: Indicate better, usually simpler, regulations for businesses

• Thailand is the 2nd largest economy in Southeast Asia, after Indonesia

• Thailand ranks midway in the wealth spread in Southeast Asia as it is the 4th richest nation according to GDP per capita.

Western Cape Trade with Thailand, 2004-2013

An inspiring place to do businessSource: Quantec, 2014

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Exports (ZARm)

99.022769

176.89383

4

94.2839

135.61288

6

109.64715

5

87.425165

79.110485

76.371372

160.19041

4

136.68670

7

Imports (ZARm)

449.06325

5

500.23863

8

1208.5966

99

1294.0551

98

2296.4827

84

2088.8873

63

1727.9551

98

1571.2906

15

4299.5396

78

2929.5968

Trade Balance (ZARm)

-350.04048

6

-323.34480

4

-1114.3127

99

-1158.4423

12

-2186.8356

29

-2001.4621

98

-1648.8447

13

-1494.9192

43

-4139.3492

64

-2792.9100

93

-4500

-2500

-500

1500

3500

Va

lue

(Z

AR

m)

RANK TOP 10 EXPORTSVALUE 2013

(ZARm)

% SHARE

1 Waste or scrap of paper or board of mechanical pulp 22.87 16.73%

2 Grape wines alcoholic grape must nes 17.43 12.75%

3 Oranges fresh or dried 10.19 7.45%

4 Grape wines nes fortified wine or must pack < 2l 8.35 6.11%

5 Organic composite solvents paint varnish remover etc 7.71 5.64%

6 Ferrous waste or scrap nes 6.72 4.92%

7 Beauty makeup and suntan preparations nes 6.51 4.76%

8 Poultry-keeping machinery nes 4.98 3.64%

9 Tuna skipjack bonito prepared/preserved not minced 4.41 3.23%

10 Manganese ores concentrates iron ores >20% Manganese 4.33 3.17%

TOTAL EXPORTS 136.69 100%

Western Cape Trade with Thailand, 2013


RANK TOP 10 IMPORTSVALUE 2012

(ZARm)

% SHARE

1 Sardine, brisling, sprat prepared/preserved,not minced 1 090.72 37.23%

2 Tuna, skipjack, bonito, prepared/preserved, not minced 387.26 13.22%

3 Rice, semi-milled or wholly milled 364.09 12.43%

4 Blends of complex petroleum hydrocarbons 294.71 10.06%

5 Aluminium casks, drums, boxes etc, capacity <300 litre 77.32 2.64%

6 Crustaceans, molluscs, etc, prepared or preserved 43.29 1.48%

7 Plastic table and kitchen ware 31.35 1.07%

8 Sheath contraceptives 30.39 1.04%

9 Polystyrene, except expansible in primary forms 24.39 0.83%

10 Refined sugar, in solid form, nes, pure sucrose 24.14 0.82%

TOTAL IMPORTS 2 929.60 100%

Source: Quantec, 2013


SUB-SECTOR REVIEW

• Beverages/Wine• Confectionaries• Sauces and Condiments• Beauty products• Other Food Preparations• Meat

Thailand Beverage Sales, 2010-2017

An inspiring place to do businessSource: BMI, 2014

2010 2011 2012 2013 2014 2015 2016 2017

Spirits (USdm) 21363.1 23198.1 23778 24763.8 25462.9 26850 28645.3 30598.4

Beer (USDm) 6265 6947.9 7205.9 7995.8 8642.2 9554.6 10668.6 11907.8

Soft drinks (USDm) 3404.5 3860.2 4187 4491 4790.4 5259.2 5862.5 6543.4

Wine (USDm) 2344.9 2783.6 3358.4 3888.2 4331.7 4917.3 5622.2 6410

Carbonated soft drink (USDm)

1383.7 1552 1586.4 1689.6 1777.5 1916.8 2089.3 2278.3

Bottled water (USDm) 464.4 522.8 588.6 632.3 676.8 748.4 842 946.2

Coffee (USDm) 384.9 409.8 410.8 428.1 442.6 466.6 497.7 532.7

Fruit/Vegetable juice (USDm) 229.53 264.83 303.41 326.58 347.87 383.57 430.92 484.12

Tea (USDm) 24.7 26.5 27.6 28.8 29.6 31.3 33.6 36.1

2,500

7,500

12,500

17,500

22,500

27,500

32,500

Valu

e (U

SDm

)

Thailand Global Wine Trade, 2005-2012


Source: Trademap, 2014

• Thailand’s global wine imports increased by 10% from 2011 to 2012• SA was Thailand’s 6th largest import market for wine.

2009 2010 2011 2012 2013 2009 2010 2011 2012 2013

Imports (ZARm)

272.9924 232.07147

318.78673

387.84213

499.78241

Exports (ZARm)

109.42089

114.26111

154.53254

209.53829

270.53262

Trade Balance (ZARm)

-163.5715

1

-117.8103

6

-164.2541

9

-178.3038

4

-229.2497

9

-250

-50

150

350

550V

alu

e (Z

AR

m)

South Africa’s Exports of Wine to Thailand, 2013

An inspiring place to do businessSource: SAWIS, 2014

• 90% of exported wine to Thailand from SA is bulk wine, not packaged wine

• Red wine is the largest wine category, making up 53% of exports

• Bulk White wine was the fastest growing wine category, growing at 34% from 2012 to 2013

Packaged Bulk Packaged&Bulk

Packaged Bulk Packaged&Bulk

TOTALS WHITE WINE (L) TOTALS RED WINE TOTAL

0

500 000

1 000 000

1 500 000

2 000 000

2 500 000

3 000 000Q

uant

ity (L

)

Thailand Wine Sector Highlights


• As estimated 10% of the population drinks wine. Wine drinkers in Thailand are between 25-55 years of age. Red wine dominates and holds a 70% market share in the retail market.

• Thai consumers favour red wine; however, both red and white wine are popular among foreign tourists and expatriates.

• The most popular varietals for red wines are Cabernet Sauvignon, Shiraz, Merlot, and Pinot Noir respectively. Chardonnay and Sauvignon Blanc are well known in the white wine category.

• In 2013, Siam Winery maintained the most significant share of 34% in terms of total volume sales of wine, with it’s popular South African brand Mont Clair remaining a star import. Pernod Ricard (Thailand) Ltd was 2nd biggest player with a share of 19%, followed by Ambrose Wine with a share of 19%.

• A significant number of wine drinkers in Thailand lack a thorough knowledge of wines, so low to medium-priced level wines (below US$40) retail hold the biggest market share of about 70%.

• Factors driving wine sales: lower percentage of alcohol content (compared to spirits),health benefits of moderate wine consumption, Changed generational preferences, Increased tourism.

South Africa’s Global Exports of Selected Products, 2011-2013


Value in 2011 Value in 2012 Value in 2013

Wine of fresh grapes 5407.25831 5973.23994 8342.61632

Beauty, make-up & skin-care preparations; sunscreens, manicure or pedi

959.55999 1274.53589 2313.60508

Food preparations, nes 1162.21902 1236.2514 1753.60295

Sauces mixed condiments & mixed seasonings 449.32434 533.23488 1098.34015

Sugar confectionery (incl white choc), not containing cocoa

226.09309 245.64725 746.23098

Chocolate and other food preparations containing co-coa

249.75007 321.41473 529.24408

Meat of bovine animals, fresh or chilled 83.87081 119.53988 351.96512

50015002500350045005500650075008500

Value

(ZAR

m)


South Africa’s Exports to Thailand of Selected Products,2011-2013




Beauty, make-up & skin-care preparations; sunscreens, manicure or pedi

0.02157 1.1123 6.53957

Meat of bovine animals, fresh or chilled 0 0 1.77653


Sauces mixed condiments & mixed seasonings 0 0 0.11523

Sugar confectionery (incl white choc), not containing cocoa

0 0 0

Chocolate and other food preparations containing co-coa

0 0 0

3

8

13

18

23

28

Value

(ZAR

m)


Thailand’s Imports of Selected Products,2011-2013




Beauty, make-up & skin-care preparations; sunscreens, mani-cure or pedi

2350.79148 3356.1459 5008.31046

Chocolate and other food preparations containing cocoa 602.99401 997.01624 1157.9933

Sugar confectionery (incl white choc), not containing cocoa 431.38387 560.02013 654.79226

Sauces mixed condiments & mixed seasonings 445.96634 523.8212 613.46142


Meat of bovine animals, fresh or chilled 69.3099 92.76282 124.36703

5001500250035004500550065007500

Value

(ZAR

m)


Summary of Selected Products

An inspiring place to do businessSource: Trademap, 2014

• Annual growth in the value of beauty products exported from South Africa to Thailand was 286%p.a. between 2009 and 2013

• Annual growth in the value of sauces and condiments exported from South Africa to Thailand was 107%p.a. between 2009 and 2013

• Annual growth in the value of Wine exported from South Africa to Thailand was 68%p.a. between 2009 and 2013

• This is mainly due to the low base of exports for most of these products, excluding wine.

• Thailand’s global imports of all of these products grew above 14%p.a. between 2009 and 2013- indicating growing export opportunities.

Thank you | Dankie | Enkosi

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