TIR_Newsletter_Mar2021_Draft2

Vol. 31 l March 2021 MAKING FUTURE IN THAILAND Farm and Food Innovations

BOI NET APPLICATION Total Foreign Investment January – December 2020 907 Projects US$ 7,371.24 Million Total Investment 1,717 Projects US$ 15,342.76 Million FOREIGN INVESTMENT BY TARGET SECTORS First S-Curve New S-Curve Electronics Biotechnology 127 Projects l 1,356.41 M 6 Projects l 683.26 M Agriculture Digital & Food Processing 105 Projects l 29.59 M 53 Projects l 389.03 M Automotive Aerospace 87 Projects l 1,055.68 M 3 Projects l 7.94 M Petrochemicals Medical & Chemicals 32 Project l 159.31 M 61 Projects l 1,081.60 M Automation Tourism & Robotics 5 Projects l 151.34 M 8 Projects l 18.34 M FOREIGN INVESTMENT BY MAJOR ECONOMIES 57N92e5tPh.9reo2rjelMacG29nt81sed.rP5sm3roaMjencyts Republi2c6o8Pf5rKo.3oje3rceMtas J22a1,4p12aP1n.r7o5jecMts 7U389n3iPtMerodjeScttastes S1w91it4Pz5ero.r6jlea6cnMtds 116,400P3rCo.3jhe5icnMtas 75H62o2nP.g1ro6KjeMocntsg S1521in11g.P8a4rpoT35oMja76eri1cePw.t6srao5njeMcts THAILAND I3nd8Po1ron.0jee5scMitas Unit: US$ (US$ = 31.36 as of 31 March 2021) Note: 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. For more details, please visit www.boi.go.th

04 10 Cover Story Industry Focus Making Future Food in Thailand Exports Remain Resilient in the Midst of the Pandemic 14 15 Highlights Executive Talk Comprehensive Food-Tech Incubation Network Food of Thailand for a Future World 18 21 Company Interview Thai Economy At-A-Glance EnerGaia

COVER STORY MAKING FUTURE FOOD IN THAILAND Thailand’s farm and food industry has been constantly incorporating new innovations in an effort to meet the increasingly sophisticated demands of a global market that is becoming swamped with virtually endless options. Staying ahead of the game in this hugely competitive environment requires access to a wide diversity of raw materials on vast agricultural plantations and a well-developed supply chain. Leveraging advancements in digitalization and utilizing deep technology such as 3D printing, AI and big data, the Thai agri-food industry is also producing foods that align with mainstream intelligence technology as well as addressing environmental concerns. Indeed, the accelerating shift of well in 2020, even when global Thailand has successfully developed consumer demand for innovative demand subsided in light of the its food industry to become the foods such as alternative proteins, pandemic. As consumers looked world’s 11th largest food exporter medical food, functional food and for quality food products with a in 2019, placing it second only to 3D food printing has created an long shelf live during periods of China in Asia. unprecedented change in the restrictive outdoor activity, Thai TheThaigovernmentiscurrently Thai food industry, with the recent frozen and processed fruits and implementing a medium-term plan emergence of aspiring startups. vegetables, beans and soup to develop the Thai food industry Attuned to global trends and powders proved popular, placing extensively with the goal of adding technology, these startups are them among products that held economic value to local food and playing a key role in cementing up in the global market. farm products for local economic top-of-mind awareness of Thailand’s development as well as establishing food brands among consumers. Food for Thailand among the world’s top The Thai food development Future Development ten largest food exporters. Thailand’s industry also places priority on effort will also fulfill its role in progressing with a greater focus The global popularity of Thai helping address food insecurity on safety standards and transparency tourism and culture alongside in some countries as exposed by in each step of production. Notably, the quality of its food and farm the COVID-19 pandemic. the Thai government recently launch products have contributed to Thailand’s vibrant food industry a blockchain system which serves “made-in-Thailand” products accounts for one-fourth of the a portal for consumers to trace resonating uniqueness and quality country’s industrial gross domestic and track each process. in the global market. With a skilled product and uses more than four- In the global market, Thai workforce and an agricultural fifth of the local raw materials for food entrepreneurs have showcased sector derived from a culture deeply production. The people’s strength theirstrengthswithexportsperforming rooted in agricultural wisdoms and and the country’s endowment of the well-established supply chain, 04 Thailand Investment Review

vast agricultural plantations, the by ideas on which-with the in SPACE-F were sesame milk, COVER STORY diversity of agricultural products, right mentors and investment- protein from duckweed, protein a well-established agri-food industry, a plausible business model can from crickets, a biodegradable and a geographic location at the be built, Thailand has seen fruit coating solution and a sensor center of the ASEAN region have the development of many new system for food production quality underscored Thailand’s strong homegrown entrepreneurs rolling control. position in the global food supply out food innovations that utilize Reflecting their interest in chain. the latest food tech and Agri-tech food tech startups, local multinational The Thai government has in startups that cater to multiple food companies have also teamed identified “Future Food” as an consumer demands. up with startup funds to invest in industry that will become a key “SPACE-F”2, Thailand’s first food tech startups worldwide. economic driving engine, as a global food tech startup incubator combination of a passionate new and accelerator, is now running BOI Promoting generation of food producers, Batch-II acceleration. Run by Agri-Food Technology digitalization and food technology the National Innovation Agency, has elevated Thailand’s place to Mahidol University and Thai The Thailand Board of Investment3 a global level in this exciting new multinational food conglomerates, has introduced tax incentives industry. SPACE-F aims to serve as a throughout the supply chain of The government’s food platform on which promising the agri-food businesses, with development plan focuses on four entrepreneurs can receive a special focus on technology areas: building new entrepreneurs, mentorship and guidance from in the form of R&D, productivity scaling innovations, utilizing online corporations, venture capital firms, enhancement, Agri-tech, high- marketing platforms and improving corporate venture capital firms, technology quality testing, plant the ease of doing business. and agencies that will empower factories and sustainability them to scale up their food tech certification. Government agencies are startups to succeed on the global supporting Thai farmers by scale. The incentives offered include: promoting their adoption of Agri- Since the start of the program 8-year CIT exemption for tech, such as automation & in 2019, four food tech startups, the manufacture of medical food robotics, AI, IoT and plant factories, out of a total of 34 participants, and food supplements to increase their productivity and have received funding to scale up 8-year CIT exemption for overcome problems such as their business ventures. Among adoption of advanced technology weather uncertainty and high the local innovations showcased such as fruit ripeness sensor, operating costs. radio frequency pest control and TheThaigovernment’spolicy to streamline its digital databases and the operations of all of its agencies, as directed by an act enacted in 2019, will further enhance Thailand’s standing as one of the most promising locations for investment in the food industry. Mentoring Food Warriors Photo by nrd on Unsplash The Thai government envisages Thailand becoming a key global player in the “Future Food” market- a new genre of food that is both functional and novel, often involving R&D and technology-enabled production processes and services.1 As the food industry can be driven 1 https://www.bangkokpost.com/business/1390222/nfis-direction-for-thailands-future-food-industry 2 https://www.space-f.co 3 https://www.boi.go.th/index.php?page=index 0 5Thailand Investment Review

COVER STORY nuclear magnetic resonance in 5-year CIT exemption for grading, packaging and storage the manufacture of food, beverage of plants, vegetables, fruits or and seasoning ingredients, excluding flowers alcoholic beverages, caffeinated 8-year CIT exemption for drinks, bakery products and the manufacture of biomolecule candies and bioactive substance using 5-year CIT exemption for microorganism, plant cells or the adoption of smart farming animal cells systems such as the use of 8-year CIT exemption for sensors, drones, or greenhouses seed industry and improvement 5-year CIT exemption for of plant, animal or microorganism investment in plant factories breeding using biotechnology 5-year CIT exemption for 5-year CIT exemption for the manufacture of animal feeds manufacture of oil or fat from plants which comply with food safety or animals (except soybean) standards such as ISO 22000 06 Thailand Investment Review

Pandemic-Driven Changes in Food Consumption COVER STORY 01 Proactive Healthcare: Consumers look for foods that boost health and immunity. 02 Switch to Online: Online channels have become more important for retailers and restaurants. 03 Increase of Household Stock: Consumers increase household food stocks. 04 More Prudent Spending: Consumers tend to focus on essential food items to prepare for future crises. Opportunity for the Thai Food Industry 01 BBanePaaHnoneawPmdPrpeoo,rtwe, diner 05 anVHdPSeelIagnoPmnsayrptoen-BtcBSeFeteao-ianeBson,dedassdss,,ed Nutritional Protein Dietary Alternatives Powder 02 HeOCrbai(lCanElnbxPadtorb)aOwicdidltiose,lrs, 06 FoHoPedrusbrapfolorFsoHeosed,aslth Functional Functional Ingredients Foods 03 P“rFePrmreFoeioud-omuFdcrsoFtsma,r”m 07 PCrFohPSrPciurcereoikoatecesdSdeonunsnFcaMsiotcneseokgd,adsts,, Organic Halal Food Food 04 PoaTunuRldtnricyVa,ee,P,SgFiehnrtreuaimaibtpslpep,sle, 08 SeaRsaTeonhandadiinSyFg-aotuPooc-odEewssa,dters Ready-To-Eat/ Authentic Ready-To-Cook Thai Foods Food Source: National Food Institute 0 7Thailand Investment Review

COVER STORY Thailand’s Roadmap for the Food Industry (Effective until 2027) Targets Achieve Be ranked GDP of among the top ten 45.8 billion US$ (50% increase global food from 30 billion US$ exporters in 2020) (up from 13th in 2020) Focus Areas Businesses New Entrepreneurs, Industrial-Scale Farming, Foods Startups, Organic Food Technology Innovations Marketing Platforms Future Food, Functional Food, Big Data Management, Novel Food, Packaging Online Tools, Food Expos Food Standards Traceability, Food Safety Plus, Reduced Environmental Footprints Source: The Ministry of Industry *1US$ = 31THB as of 31 March 2021 08 Thailand Investment Review

BOI’s Incentives for the Agri-food Industry COVER STORY 1 Manufacture of Medical Food 6 Manufacture of Food, Beverage and and Food Supplements Seasoning Ingredients excluding alcoholic beverages, 8-year caffeinated drinks, bakery 5-year CIT products and candies Exemption CIT Exemption 2 rsaudcihoafrsefqruuiet nricpyenpeessst sceonnstoror,l 7 Adoption of Smart Farming Systems 8sainntodgranrguaecdleionafrgpm,laapngatnsce,ktivcaegrgeiesnotganbaalnencsde, dsurocnhesa,sorthgereuensehooufsessensors, fruits or flowers Adoption of Advanced Technology 5-year CIT -year Exemption CIT Exemption 3 Manufacture of Manufacture of 8 Investment in Plant Factories Biomolecule And Bioactive Substance 5-year Using Microorganism, CIT Plant Cells or Animal 8-year Exemption Cells CIT Exemption 4 Seed Industry and Improvement of 9 Manufacture of Animal Feeds Which Plant, Animal or Microorganism Breeding Comply with Food Safety Standards Using Biotechnology such as Iso 22000 8-year 5-year CIT CIT Exemption Exemption 5 Manufacture of Oil or Fat From Plants or Animals (Except Soybean) 5-year CIT Exemption Source: Thailand Board of Investment 0 9Thailand Investment Review

EXPORTS REMAIN RESILIENT IN THE MIDST OF THE PANDEMIC INDUSTRY FOCUS Thailand’s food exporters have found opportunities in the midst of the current crisis brought Photo by Dose Juice on Unsplashon by the COVID-19 pandemic. As consumers worldwide visit supermarkets and dine in restaurants less often, they are buying more processed and canned foods to cook at home as well as more ready-to-eat foods. Thailand recorded a healthy the exports of foods and products beverages by 2%; and pet foods growth in the export of processed that are associated with the new by 19%. Data from the Thai Food foods such as fruits and vegetables normal, such as smart electronics, Processors’ Association showed and canned seafood, which is in furniture and decorative items as that exports of ready-to-eat food part attributed to economic recovery well as medical devices. grew 6% by volume in 2020. in those buying countries. The OfficialdatafromtheMinistryof Asian markets, including China, trend has highlighted the strength Commerce’s show that Thailand’s Malaysia, Hong Kong, Singapore, and diversity of Thailand’s food total export volume contracted by Russia, and the CLMV group of supply chain, which is serving the 6% in 2020, with the market share countries (Cambodia, Laos, Myanmar country’s goal of producing foods in global food export products and Vietnam) were among the key to cater to the growing demand standing at 2.3%. Against the importers of Thai food products among global consumers for backdrop of the pandemic, fresh, in 2020. nutritious and functional foods frozen and dried fruits grew by Thailand’s food export that serve their specific needs. 14%; canned and processed fruits performance in 2020 has been by 2%; soup powder by 30%; in line with the government’s Healthy Food Exports frozen poultry by 15%; processed development plan for the industry, fruits by 8%; seasoning sauces which focuses on high valued While the pandemic has adversely by 8%; canned and processed food products or the so-called affected world trade, Thailand seafood by 5%; non-alcoholic “Food for the Future” due to its has recorded healthy growth in potential for generating higher outputs and broader impacts on the country’s industrial supply chain. The government’s development targets include establishing Thailand among the global top ten food exporters by 2027. Thailand was ranked in 13th place in 2020 and 11th place in 2019, with the US, the Netherlands, Brazil, Germany and China ranked the top five largest food exporters. Two-thirds of the outputs from Thailand’s US$ 100 billion food market are sold locally, while the country’s food exports are fairly evenly divided between processed and raw foods. 10 Thailand Investment Review

Based on the forecast for groups for the blockchain project. among consumers who are INDUSTRY FOCUS world economic growth of 5.5%, Furthermore, the Thai government’s increasingly focusing on health Thailand’s Ministry of Commerce ongoing process of streamlining impacts and solutions to climate projects an increase in Thai food the digital databases of government change. Plant-based meat also exports of 7%, with the export of agencies will better facilitate offers a more affordable protein frozen seafood expected to grow Thailand’s food and farm product alternative. by 2% in 2021. development. This global shift, which is Placing top priority on gaining highlighted by the entry of plant- Transparency Reassured the trust of global consumers based meat in major global food in exported Thai food products, chains, points to a favorable The Thai government has the Thai government has also future for Thailand as not only a applied blockchain technology introduced the “Thailand Delivers major producer of agricultural that enables the traceability of with Safety” campaign to step products such as beans, fruits, locally produced food products. up monitoring of the measures vegetables, herbs, cassava, corn By scanning QR codes and implemented by local food producers and rice but also a promising trace manufacturing lots in the and logistics service providers to producer of future food. government’s database through prevent against COVID-19 virus Tapping into this new trend, the www.TraceThai.com website, contamination of frozen foods food startups and corporations in buyers of Thai food products and other food products. Thailand have rolled out plant- can trace the origin and track With Thai foods having become based meat produced from various the journey of the products from well-recognized globally for their materials such as mushroom, harvesting and manufacturing high safety and quality standards jackfruit, rice, coconut and beetroot, to processing and along the through compliance with GMP, as well as beans, to serve both transportation process as well as HACPP and GAP, the country’s local and global markets. viewing any organic certificates food producers are joining a A study by the National Science that have been issued. This initiative “quality plus” campaign which is Technology and Innovation Policy will further enhance the credibility intended to encourage all food Office (STI) showed that the food and transparency of Thai food producers to improve their quality industry is among the second products among consumers in assurance standards. largest industrial sectors investing terms of safety, environmental in R&D, after the auto industry. and other social issues. Future in Hand The R&D activities in the food Through cooperation with industry cover a wide range agencies at the provincial level The global mainstreaming of of areas including automated and its overseas representative plant-based meat is happening production processes, packaging office, the Thai government expects not only within the vegan and development, consumer behavior to sign in at least 150 agricultural vegetarian communities, but also and new product development, with a value of US$ 530 million Photo by LikeMeat on Unsplash in 2018, Many enterprises are now establishing R&D centers, either on their own premises or in science parks. According to Food Innopolis, approximately 25% of Thai food researchers have expertise in grains, cereals and legumes, folowed by 17% in functional food; 13% in vegetables and mushrooms; 12% each in seafood and meat; 8% each in dairy, herbs, spices and essential oils; and the remainder in juice, sugar and tapioca starch. 1 1Thailand Investment Review

INDUSTRY FOCUS Thailand’s Food Export Forecast Units: million US$ (2020/2021f) 4,000 (+5.7%) 3,500 (2.0%) Rice 2,700 (51.3%) Poultry 2,500 (3.6%) 2,100 (7.4%) Sugar 1,400 (-2.2%) Canned Tuna 890 (+4.1%) Cassava Flour 645 (+4.6%) 630 (+2.3%) Shrimp 530 (+8.0%) Seasoning Ingredients Ready-To-Eat Food Coconut Pineapple Source: The Thai Chamber of Commerce and Board of Trade of Thailand Local Sales of Ready-To-Eat Foods Value: (million US$) (+10.7%) (+10.6%) (+10.5%) (+9.6%) (+9.2%) 2016 2017 2018 2019 2020 12 Thailand Investment Review

Product Share Export of Ready-to-Eat Foods INDUSTRY FOCUS (Qty) Value: (million US$) 0.8%Shelf Stable Ready Meals (+11.7%) Dried Ready Meals 7% (+11.2%) (+10.6%) Frozen Chilled (+6.3%) 44.1%Ready Meals 48%Ready Meals (+1.2%) 2016 2017 2018 2019 2020 Product Share Top 5 Markets for Thai RTE Foods (Nationality) CLMV Thai 45% Oceania Chinese 29% US Italian 11% EU-27 Japanese 6% Hong Kong Others 9% Forecast Top 5 Exporters of RTE Foods of Local Ready-To-Eat 10Ch.i6na% Food Sales 9.U0S% 9I.t5al%y 6.5%South Korea T5h.a8ila%nd 764Value: Million US$ 10%Growth: Source: National Food Institute 1 3Thailand Investment Review

HIGHLIGHTS Valley, an R&D complex located in the Eastern Economic Corridor. COMPREHENSIVE Focusing on application of digital FOOD-TECH technology in the farm and INCUBATION food innovation and production NETWORK processes, the Food Innopolis aims to drive Thailand as a regional As part of the Thai government’s consistent support for R&D center of future food industry and scaling innovation in food technology, the country houses and advanced agriculture and integrated R&D centers linking the public sector’s high-quality biotechnology. facilities with universities and private sector labs. The Future Food Lab zone offers a similar one-stop service Central to the network is Food food standardization and testing. center to the facilities at Thailand Innopolis, an integrated food These facilities include Food and Science Park which provides innovation complex located at the Feed Innovation Center, Bioresource assistance to businesses in R&D Thailand Science Park, Pathum Thani Center, Central Lab, Sensory and scaling innovations, such as Province. Under the supervision of Evaluation Center and the lab access to facilities and experts the National Science and Technology Synchrotron Light Research to help with developing prototypes, Development Agency (NSTDA), Institute which offers molecule- finding raw materials, marketing, the complex offers comprehensive based research analysis, which and applying for regulatory services to R&D and business are also located at Thailand approval. development, ranging from rental Science Park. The EECi compound also space for laboratory facilities, To date, more than 40 local offers an IoT test bed service for sourcing personnel and technical food conglomerates, multinational areas including precision farming, assistance in R&D and business companies and SMEs have smart harvest and packaging, development as well as applying established R&D activities in the robotics for fruit harvesting and for approvals from Food and Drug innovative food cluster for products packaging, automated pilot plants, Administration to entrepreneurs. such as seafood, poultry, dairy, smart logistics, smart warehousing Food Innopolis also offer nutritional and functional foods, and retail distribution, and software networking and knowledge as well as in the areas of food system integration. The facility sharing services to members and safety, automation and robotics. is also a research area for big easy access to the public sector’s Food Innopolis has opened data, AI and machine learning facilities in food technology and a facility at EECi in Wangchan applications to support database development and traceability for the farm and food industry. To strengthen the country’s food tech ecology, the facility also helps develop similar operational concepts in seven well-regarded provincial universities, which have a history of producing skilled human resources in the field of agricultural technology. These universities include Kasetsart University, Chulalongkorn University, Mahidol University, King Mongkut’s University of Technology Thonburi, Chiang Mai University, Kon Kaen University and Prince of Songkla University. 1 https://foodinnopolis.or.th/en/about-us 2 https://www.eeco.or.th/en/food-for-the-future 14 Thailand Investment Review

FOOD OF THAILAND EXECUTIVE TALK FOR A FUTURE WORLD The COVID-19 pandemic has taken a heavy toll on most economies worldwide. Thailand is no exception. However, Thai food exports have become a bright spot, bucking the trend of the country’s overall sliding exports, with the demand for processed and canned foods having held up in these uncertain times. This trend reflects the surge in global demand toward home cooking and ready-to-eat foods in the wake of restrictive measures to contain the pandemic. The resilient export of food and farm products also highlights Thailand’s commitment to R&D and advancements in the application of technology to meet the growing demand of consumers for nutritious and quality food products that serve the specific needs of each individual, while also meeting the expectations of the younger generation for reduced environmental footprints from the manufacturing sector. In line with the “Thailand 4.0” strategic economic development plan, which is aimed at extensively developing the use of technology within Thai industries, the Thai government has designated the agri-food industry as a priority area. The plan aims to strengthen the food technology ecosystem to enhance the economic value and global positioning of Thailand’s farm and food industries. The Thailand Board of Investment (BOI), the key government agency entrusted with promoting investment in the country’s strategic direction, is offering incentives in the form of exemptions on corporate income tax (CIT) and import duty on wcoTbwcforohreohergnenriafacselopdtnchfeoawiiitscodwnsiudtdfeioronseeefonammatfdroooneiesvcdobn.aadhedftlosiascoo.csoounTumpssshs,ueenisofseeomnhigwnoeoltgdodhorbeespicnaaphnolfTeounethrartstetrylauuitnthimnaildoanie,tnndireadssl, raw materials to both Thai and foreign investors, with a focus on enhancing R&D in food technology. The incentives cover a comprehensive range of activities, especially those related to investment in R&D or those adopting biotechnology, digital services, and robotics and automation which can further increase the competitiveness of the industry. Sonklin Ploymee 1 5Thailand Investment Review BOI’s Deputy Secretary-General

The BOI offers 8-year CIT Under the Thai government’s ASEAN countries. Even so, there exemption on the manufacture of development plan for the agri- is still a need to focus on R&D in functional and medical foods and food industry, which is effective order to increase the value added food supplements, with additional until 2028, the country has set to the processed food industry. CIT exemptions for companies the agri-food industry the target Thailand is also among the top that invest in upgrading their of generating 7% of GDP, with ten most competitive countries production through Agri tech, efforts focusing on R&D and in the food processing industry. food tech, digital technology, productivity improvement. According to Oxford Economics, automation and robotics and Thailand’s food processing industry plant factories to improve the What are Thailand’s was ranked 9th worldwide in 2016, efficiency of both production and best competitive with the Thai government aiming quality testing activities. advantages in agri-food to reach 3rd place by 2026. The Responding to the following technology? Thai government’s commitment to questions, Ms. Sonklin Ploymee, promote biotechnology and R&D the BOI’s Deputy Secretary Thailand has a year-round is seen as a key factor in increasing General, explained the direction agricultural season and vibrant confidence in the country’s food taken by Thai policymakers in agri-food industry, producing processing industry. promoting investment in the the largest exports of cassava, Thailand’s food processing agri-food industry and possible canned tuna, canned pineapple, industry will also benefit from additional incentives. rice and sugar as well as a variety large investment in transportation, of other food products to the utilities and modern special How significant is world. economic zone infrastructure, which the agri-food industry’s The country’s food processing will make it the best-connected contribution to industry currently uses as much country in the ASEAN region. the Thai economy? as 80% of local raw materials Thailand also enjoys a strategic in its products. This enables location at the heart of the The food industry has long driven entrepreneurs to operate ASEAN market, whose combined Thailand’s economic development with low costs, enhancing the population of 650 million is through the value it adds to the competitiveness of the food roughly half of China’s, making agricultural sector and industrial processing industry in the global it a significant consumer market. supply chain, covering 128,000 market. Moreover, the China-Thailand Free mainly micro enterprises, employing Thailand’s long history in the Trade Agreement and Thailand’s more than one million people – agri-food industry has enabled membership in the ASEAN Free representing about 3% of the the country to develop its Trade Area have bolstered the country’s workforce – and productivity. Indeed, Thailand has country’s trade and economic generating approximately 6% of the most competitive ecosystem growth. the country’s gross domestic for food technology among the product. As one of the targeted beneficiaries of the “Thailand 4.0” policy, the food industry will receive further incentives and support from the government aimed at enhancing its competitiveness by building on its strengths and potential. The Thai government has long promoted Thailand as the “Kitchen of the World” in recognition of the country’s strengths in the food industry, particularly the abundance of raw materials, large pool of skilled labor and well-established and competitive supply chain. 16 Thailand Investment Review

have promoted a wide range of EXECUTIVE TALK measures to help entrepreneurs In terms of human resources, become more health conscious enhance their efficiency in the Thailand has a highly skilled and focus on the nutritional food supply chain, from upstream workforce, with solid institutional benefits of foods. This global to downstream, and our efforts support and efficient recruiters to trend, which we are also seeing extend beyond manufacturing to meet the workforce demands of in Thailand, creates tremendous the service sector in the agri-food investors. new opportunities for food industry. innovations, food safety and R&D is a target activity of What could emerge organic foods. our promotional incentives. The as Thailand’s most In this regard, innovations and BOI’s additional incentives will also recommended products technology are the areas where be offered to entrepreneurs who in the global market? we are taking serious actions to invest in productivity, even if move the development forward. they do not increase production If we consider the present behavior As a large and growing capacity. The BOI is also considering of consumers worldwide during percentage of the world population new incentives to further strengthen the pandemic, there will be plenty consumes Halal food, for which Thailand’s food positioning in the of opportunities for Thailand’s the “Made-in-Thailand” brand world market. food processing industry. People is well-regarded, the country is are forced to stay at home and well-positioned to harness the How do you foresee cook at home, as they cannot opportunity deriving from this Thailand’s development go to supermarkets as often as consumer group. of the food industry before. As a result, ready-to-eat Overall, Thailand has a in the world market? food has high potential. Thailand diversified food industry with high can further apply technology capability to harness the potential There is huge potential in the and automation to roll out more of medical and functional foods Thai food industry, primarily given innovations and raise productivity. and serve the increasing demand the abundance of raw materials, Moreover, the pandemic has from the aging society. pool of skilled labor, steadfast pushed consumers worldwide to institutional support, and advanced What roles have infrastructure. the government and BOI Government agencies, not played in enhancing only the BOI, have promoted technology in productivity, quality, technology the agri-food industry? and R&D in the food industry. As I mentioned before, the The Thai government and the food industry is at the top of the BOI have steadfastly supported agenda of the Thai government’s technological capacity-building efforts, given its importance to in the future food industry. We our population. The Thai government has ensured strong institutional support is in place to promote capacity building in important areas such as the international standard for foods, innovations, marketing and support for small and medium- sized enterprises. With this direction, I am confident that Thailand is well-positioned to be the largest investment hub in Asia for the food industry and to have a larger share of the world food market. 1 7Thailand Investment Review

COMPANY INTERVIEW SfoIoNfauETunnEmdeReirlGVrSaaIhEniaaWdhC,WEOITH “ gchsiToaaWafpahftAairnnhooekonnnnnhaetretelhrrheittrddsddueaolliheseeaeestlmntpehacreevntpiritnatavmhmldenopeurretscpaenweoairuott’isoefmagrldlysrlfoyneaUrfoesuiberototiogtpreondncainsumcifrordnoxepitrytnusinrnqsutrouoseproritcdeiWdhoucossberaowdtaidaeaenua,stdsiterpgonhesprlasTt.pSupsiarer”lcottlthtoorcotntosyrrpioeeoaoaeytdgieasunsrtdtin.oiwruihnletsdtaeusffaciastrvunEctsto,noeissdeuomftsrnro.ype Founder and CEOSaouf Emniel SrGhaaiha The Simple Protein of the Future and sustainable food options among consumers worldwide. Having On the rooftop of a spacious 3-story shophouse close to downtown been working for General Electric Bangkok lie rows of airlift plastic-wrapped wire mesh columns filled with on energy projects in Thailand, green water. Resembling something out of a seafood farm, they are in US-born former engineer Saumil fact EnerGaia’s proprietary technology used for harvesting spirulina, Shah founded EnerGaia in 2009 single-celled algae that have gradually evolved from being known for out of his desire to offset the many years only as food supplements into part of mainstream plant- impacts of carbon emissions by based diets in response to the growing demand for more eco-friendly the energy industry. In a diverse kind of algae which grows faster tmhaonretreeeffsicainednttlhyu,shaebsfoourbnsdChOis2 solution in spirulina. Aside from the sale of fresh and processed spirulina worldwide, EnerGaia also offers its unique proprietary bioreactor technology as well as engineering and scientific consultation for spirulina farms. Mr. Shah discussed EnerGaia’s business expansion plan in Thailand along with the competitive advantages it offers investment in the food sector. 18 Thailand Investment Review

almost two kilograms of protein per year. This is a good amount because a normal person would need to consume 50 to 100 grams of protein per day. Our system can connect 40 tanks under a central control system. On average, each tank can produce 15 to 20 kilograms of fresh spirulina per year, depending on the weather. Spirulina takes 7 to 10 days for each harvest. What are EnerGaia’s What makes your What are the competitive technological spirulina products and advantages of your innovations and farming solutions investment in Thailand? products? unique? I founded this business from the We offer unique bioreactor technology Our technology produces a very motivation of using microbiology to and solutions for farming spirulina, clean, neutral-tasting and high- reduce carbon dioxide emissions a highly nutritious single-celled quality spirulina that will also have from power plants, industrial plants algae that can grow floating in a very long shelf life. Normally, and other sources by turning algae the water, with high quality and a fresh spirulina that grows upon into something productive so that neutral taste. People around the ponds will have a short shelf life people can have a very good world typically grow spirulina in of less than one week. With our environmental footprint from food. open and shallow ponds. However, technology, including what we Because microalgae like spirulina there’s a problem with that design have done on the processing grow very well in tropical conditions as many things can fall inside side, our fresh spirulina can have where the temperature is around and contaminate it. We have a shelf life of three to four weeks 30-32 degree Celsius, countries adapted a technology from the if stored in a refrigerator. Also, it with tropical environment like oyster industry in Australia and doesn’t have a bad taste or smell. Thailand are the places where other countries and modified it The technology allows us to use spirulina can grow very well. to grow spirulina. We use plastic spirulina either in fresh form or At least for us, Thailand has bags inside of wire mesh cages processed form as we can also an abundance of great talents and turn them into containers for dry it into powder for people to who are skilled microbiologists and growing spirulina outdoors in the add to or mix into their foods. professionals in the agroindustry. sunlight. With our spirulina smart Because of this neutral taste, we The country has an important farming software, we can monitor can process spirulina into finished agroindustry and a very good the parameters of the growth mainstream food products like reputation for the foods it produces. rate and recommend farming energy bars, pasta or noodles When we create new and nutritious methods and ingredients. Our for consumers to receive the products here and export to technology is actually a smart nutritional value from spirulina. It countries in Western Europe and farming solution for spirulina. can be blended into mainstream the United States, people’s With automation for the outdoor food products to give them a perceptions of these products are system and the software system, greener color without changing relatively more positive in terms anybody can produce a very high- the original taste. of quality than similar products quality product. We are offering Spirulina farming also doesn’t from other countries. this technology in Thailand and require a lot of space. Each finding partners to work with us. farming tank occupies just one What is your vision for We also have overseas operations square meter and can generate your operations in to find customers. Thailand? I want to offer a comprehensive solution for spirulina production in Thailand and elsewhere, to 1 9Thailand Investment Review

COMPANY INTERVIEW grow it from a small niche industry What kind of perception use in products they’re already today to become a big industry do consumers have of accustomed to, such as natural producing millions of tons of your products? energy bars, noodles and western spirulina per year, and I want pasta, without changing the original Thailand to be one of the main The generation X and generation taste. places it’s produced. Y around the world are interested Thailand is also the headquarters in sustainable food, healthy food How have the government for us, where we oversee technology, and plant-based food. This trend agencies and the BOI produce foods and try to find is rising to a larger percentage of supported your venture production partners. We work the population and even though in Thailand? with many factories here to create we started this business some finished products for export to the years ago, before this trend started, With the BOI’s investment benefits, West and for local consumption. now it still seems good timing they have made it easier for Our vision is to continue to for us. Given that spirulina is a foreigners to obtain work permits expand by working with different microalga, or a form of plant-based for foreign experts who are partners to grow more spirulina protein, that is rich in protein, with skilled in different areas such as and then use it to make finished actually 65% protein in powder engineering, science, and R&D. food products, some of which can form, and also a good source of The Thai government is also be sold locally, but more, around vitamins and minerals such as iron, trying to promote smart farming 70%, will be exported. We also it resonates well with consumers. technology which will benefit the plan to increase our exports to However, they don’t know how Thai economy. I think there are Asian markets. to use it, either in fresh form or still a lot of opportunities for the powder. That’s why we’re trying Thai government and the BOI to to make it very easy for them to make it easier for foreign experts to start businesses in Thailand. I believe they are working in that direction but there are still opportunities to make more progress. 14 Thailand Investment Review

THAI ECONOMY AT-A-GLANCE Key Economic Figures Unemployment Investment Growth Market Profile Dec 2020* GDP (2020*) -240.82%0 250.27%1*f (2019) US$ 506.4 Billion 1.5% Po6p6u.la5t6ion GDP per Capita (2020*) US$ 7,328.2 / Year Million GDP Growth 22.50-231.5*%f Headline Inflation Export Value of Goods Growth MTiHnBim3u1m3 -W3a3g6e -260.12%0 Average 2020* UUSS$$A9p.p98ro-x1i0m.7a1te -260.62%0 250.28%1*f -0.85% Source: Ministry of Labour Note: *Estimated value l Source: NESDC Source: National Statistical Office, Note: *Estimated value (Data as of March 2021) Ministry of Commerce Source: NESDC Top 10 Export Markets (January-December 2020 ) Export Figures Rank Value Share (US$ million) Export value (USD million) United State 14.83% China 34,343.71 12.85% Jan - Dec 2019 : 246,268.8 Japan 29,754.18 9.88% Jan - Dec 2020 : 231,468.4 Hong Kong 22,876.34 4.88% Jan - Feb 2021 : 39,925.6 Vietnam 11,292.25 4.82% Australia 11,163.82 4.25% Singapore 9,828.83 4.10% Malaysia 9,508.92 3.77% Indonesia 8,734.50 3.30% Switzerland 7,650.26 3.25% 7,525.32 International Top 10 Exports Value Share Competitiveness (US$ million) Goods / Products 9.19% Global Competitiveness 21,266.84 8.07% 1. Vehicles and Parts 18,668.85 7.87% 2018 : 38th 2019 : 40th 2. Computers and Parts 18,207.33 5.23% 3. Jewelry 12,113.82 3.44% Source: World Economic Forum 4. Rubber Products 7,971.54 3.09% 5. Plastic Pellets 7,155.14 2.91 % World Digital Competitiveness 6. Integrated Circuits 6,735.69 2.82% 7. Chemical Products 6,528.00 2.31% 2019 : 40th 2020 : 39th 8. Machinery and Parts 5,354.92 2.27% 9. Refined Fuel 5,251.81 Source: IMD 10. Air Conditioners and Parts Ease of Doing Business Source: Ministry of Commerce 2019 : 27th 2020 : 21st Source: World Bank Exchange Rates Tax Rate Corporate Income Tax: 0 - 20% (As of 31 March 2021) Personal Income Tax: 5 - 35% VAT: 7% THB 31.36 THB 43.49 THB 37.08 (T1H00BY2en8).69 THB 4.84 Witholding Tax: 1 - 15% Source: Bank of Thailand Source: the Revenue Department (As of March 2021) 1 5Thailand Investment Review

ABOUT BOI The Office of the Board of Investment (BOI) is the principle goverment agency that operates under the Prime Minister’s Office for the purpose of encouraging investment in Thailand. We at the BOI serve as the professional contact points for investors, providing them with useful investment information and services. We offer business support and investment incentive to foreign investors in Thailand, including tax and non-tax incentives. A few non-tax incentives include granting land ownership to foreigners and facilitating visas and work permits. Besides serving the needs of overseas investors, we also offer consultation services to Thai investors who are interested in investment opportunities abroad. BOI OVERSEAS OFFICES Hanoi Beijing Shanghai Seoul Tokyo Osaka Taipei Guangzhou Jakarta Head Office, Office Of The Board Of Investment Osaka Shanghai Thailand Board of Investment, Thailand Board of Investment, 555 Vibhavadi-Rangsit Road., Chatuchak, Bangkok 10900, Thailand Osaka Office Shanghai Office Tel: (+66) 2553 8111 Fax: (+66) 2553 8315 Email: [email protected] Royal Thai Consulate-General Royal Thai Consulate General, No. 18, Bangkok Bank Building, 7th Floor Wanshan Road, Changning District, Los Angeles Stockholm 1-9-16 Kyutaro-Machi, Chuo-ku Shanghai 200336, P.R. China Thailand Board of Investment, Thailand Board of Investment, Osaka 541-0056, Japan Tel: +86-21-5260-9876, Los Angeles Office Stockholm Office Tel: (81-6) 6271-1395 +86-21-5260-9877 Royal Thai Consulate-General, Stureplan 4C, 4th Floor Fax: (81-6) 6271-1394 Fax: +86-21-5260-9873 611 North Larchmont Boulevard, 114 35 Stockholm, Sweden E-mail: [email protected] Email: [email protected] 3rd Floor Tel: +46 8 463 1158, +46 8 463 1174 Tokyo Beijing Los Angeles CA 90004, USA Fax: +46 8 463 1160 Thailand Board of Investment, Thailand Board of Investment, Tel: +1 323 960-1199 [email protected] Tokyo Office Beijing Office Fax: +1 323 960-1190 Frankfurt 8th Floor, Fukuda Building West, No.21 Guanghua Road, E-mail : [email protected] Thailand Board of Investment, 2-11-3 Akasaka, Minato-ku, Chaoyang District, Beijing, New York Frankfurt Office Tokyo 107-0052 Japan P.R. China 100600 Thailand Board of Investment, Investment Section, Tel: +81 3 3582 1806 Tel: +86 10 85318755-57, New York Office Royal Thai Consulate-General Fax: 81 3 3589 5176 +86 10 85318753 7 World Trade Center Bethmannstr. 58,5.0G 60311 E-Mail: [email protected] Fax: +86 10 85318758 250 Greenwich Street, Suite 34F Frankfurt am Main Seoul E-mail: [email protected] New York, NY 10007, USA Federal Republic of Germany Thailand Board of Investment, Sydney Tel: +1 212 422 9009 Tel: +49 (069) 92 91 230 Seoul Office Thailand Board of Investment, Fax: +1 212 422 9119 Fax: +49 (069) 92 91 2320 #1804, 18th floor, Koryo Daeyeongak Center, Sydney Office E-mail: [email protected] Email: [email protected] 97 Toegye-ro, Jung-gu, Seoul, 100-706, Suite 101, Level 1, 234 George Street, Paris Republic of Korea Sydney, NSW 2000, Australia www.boi.go.th Thailand Board of Investment, Tel: (+82)2 319 9998 Tel: +61 2 9252 4884 Paris Office Fax: (+82)2 319 9997 E-mail: [email protected] 8 Rue Greuze 75116 Paris, France E-mail: [email protected] Jakarta Tel: 33(0)1 56 90 26 00-01 Taipei Thailand Board of Investment, Fax: 33(0) 1 56 90 26 02 Thailand Board of Investment, Jakarta Office E-mail: [email protected] Taipei Office Royal Thai Embassy, Mumbai Taipei World Trade Center Room:3E40 Jl. DR Ide Anak Agung Gde Agung Thailand Board of Investment, No.5 Xinyi Rd., Sec.5, Taipei110 Kav. E3.3 No.3 (Lot 8.8), Mumbai Office Taiwan R.O.C. Kawasan Mega Kuningan, Royal Thai Consulate-General Tel: (886)-2-2345-6663 Jakarta 12950, Indonesia 12th Floor, Express Towers, FAX: (886) 2-2345-9223 Email: [email protected] Barrister Rajni Patel Marg, Nariman Point E-mail: [email protected] Hanoi Mumbai 400021, India Guangzhou Thailand Board of Investment, Tel: +91-22-2204-1589 Thailand Board of Investment, Hanoi Office +91-22-2204-1590 Guangzhou Office 26 Phan Boi Chau Str., Hoan Kiem, Fax: +91-22-2282-1525 Royal Thai Consulate-General Hanoi, Vietnam Email: [email protected] No.36 Youhe Road, Haizhu District, Tel: (84) 24 3823 5092-4 Guangzhou 510310 P.R. China Email: [email protected] Tel: +86-20-8385-8988 ext. 220-225, +86-20-8387-7770 (Direct Line) Fax: +86-20-8387-2700 E-mail: [email protected]