Thailand

Food Processing
Industry
March, 2014
Contents
EXECUTIVE SUMMARY ................................................................................................................. 4
1 Food Processing Industry in Thailand ................................................................................. 5
1.1 Industry Overview......................................................................................................... 5
1.2 Production...................................................................................................................... 7
2 Market for Processed Food Products and Food Processing Machinery............................... 9
2.1 Characters of Domestic Consumers .............................................................................. 9
2.2 Retail Sector and Food Service Sector ........................................................................ 12
2.3 Food Processing Machinery and Equipment .............................................................. 15
2.4 Major Trends in Production, Price and Consumption ................................................ 16
2.5 International Trade ..................................................................................................... 20
2.5.1 Bilateral Trade between Thailand and the world ............................................... 20
2.5.2 Bilateral Trade between Thailand and India ...................................................... 22
2.6 Market Entry Mode ..................................................................................................... 23
2.7 Foreign Trade Barriers ............................................................................................... 25
2.7.1 Import Policies...................................................................................................... 25
2.7.2 Nontariff Barriers ................................................................................................ 28
3 Competitive Analysis-Five Forces Analysis....................................................................... 30
4 Environmental Scanning-PEST Analysis .......................................................................... 34
5 SWOT Analysis................................................................................................................... 40
6 Conclusion and Recommendation ...................................................................................... 43
7 Appendix ............................................................................................................................. 44
7.1 Relevant Organization Contacts ................................................................................. 44
7.2 Production Indices ....................................................................................................... 49
7.3 Production vs Domestic Sales on Selected Food Products.......................................... 54
7.4 Integrated Supply Chain in Thailand ......................................................................... 56
7.5 International Trade Statistics .................................................................................... 57
7.6 A Business Guide to Thailand .................................................................................... 61
7.6.1 Procedures for Establishing a Company.............................................................. 61
7.6.2 Forms of Corporate Structuring........................................................................... 62
7.6.3 Restricted Business Activities under the Foreign Business Act of 1999 ............ 65
7.7 Food Law and Regulatory ........................................................................................... 67
7.8 Food Manufactures and Food Retail Company Profiles ............................................. 72
7.9 National Research Programs ...................................................................................... 81
8 Interview with National Food Institute ............................................................................. 83
9 Bibliography ....................................................................................................................... 84

Table 1 Thailand: Top-10 Sectors Ranked by Value Added ................................................................ 5

Table 2 Thai Food Processing Industry – Development Timeline ...................................................... 6
Table 3 Domestic Sales on Selected Food Products ........................................................................... 10
Table 4 Key Food Retailers in Thailand ............................................................................................. 14
Table 5 Import Value on Selected Food Processing Machinery and Equipment, 2010-2012 ......... 16
Table 6 Production Forecast in Thailand on Selected Food Products, 2014-2022 ........................... 17
Table 7 World Price Forecast on Selected Food Products, 2014-2022 .............................................. 17
Table 8 Best Product Prospects ........................................................................................................... 18
Table 9 Canned Food Market Value Forecast, 2013-2017................................................................. 19
Table 10 Interim Rules of Origin for Early Harvest Scheme (EHS) under the Framework
Agreement for Establishing the Free Trade Area between the Kingdom of Thailand and the
Republic of India ................................................................................................................................... 27
Table 11 Key Macro Economic Indicators and Forecast.................................................................... 37
Table 12 Popular Thai Dishes ............................................................................................................. 39
Table 13 SWOT Analysis ..................................................................................................................... 42

Figure 1 Agro-business Sector ............................................................................................................. 21

Figure 2 Porter's Five Forces adapted to the Competitive analysis ................................................. 31
Figure 3 Supply Chain - Swift Co.,Ltd................................................................................................ 32

Chart 1 Production of Selected Food Products ..................................................................................... 7

Chart 2 Food Processing Companies in Thailand ................................................................................ 8
Chart 3 Market shares of Health Food Products ............................................................................... 12
Chart 4 Sales from modern retail food establishments in 2012........................................................ 13
Chart 5 Number of Foreign Tourists, 2003-2013 ............................................................................... 15
Chart 6 Thailand's Main Food Exports .............................................................................................. 21
Chart 7 Thailand's Food Import 2010-2013 ....................................................................................... 21
Chart 8 Thailand’s Food Export 2010-2013........................................................................................ 21
Chart 10 Thailand Export Processed Food to India........................................................................... 23
Chart 11 Thailand Import Processed Food from India 2010-2013 ................................................... 23

3
EXECUTIVE SUMMARY

The food industry in Thailand has grown rapidly over the years owing to an
increasing demand in consumer market, both domestically and internationally. In
order to meet an escalating trade in processed food products, the Thai Government
has set to transform Thailand into the Asia’s largest food trade and distribution
center. There has also been a greater emphasis on the quality, hygiene, sanitation,
food safety, wholesomeness, lowered production, value-addition and adherence to
environmental regulations in the Kingdom, in response to international competition
and demand.

Although most processed food products are for the international market, the domestic
consumption of processed food continues to grow due to changes in lifestyles that
have brought about increased demand for convenient food options. Those potential
have made Thailand an attractive destination for international investors, including
Indians.

This market research report is developed for Indians investors and exporters who
seek to penetrate the Thai market as well as those who look for the third country
export potentials. The report is divided into 7 sections, including:

1) Industry Overview
2) Market Segment Analysis
3) International Trade
4) Market Entry Mode
5) Competitive Analysis-Five Forces Analysis
6) Environmental Scanning-PEST Analysis
7) SWOT Analysis

The report ends by providing a number of recommendations for Indian firms in

regard to product prospects and business strategies.

Further details on production and trade, relevant regulations and organizations as

well as the profiles of major processors and retailers in Thailand are also provided in
the Appendix.

4
1 Food Processing Industry in Thailand
1.1 Industry Overview

The food processing industry is an important contributor to Thailand’s economy and

it has developed rapidly throughout the past decade thanks to technology
improvement and a combination of perseverance and aggressive determination on
the part of the private sector (see Table 1). The Kingdom has become an important
global source of rice, tapioca, processed, fresh, frozen and canned food and sugar. The
food processing sector in Thailand is heavily export-oriented with more than 50% of
production sold outside the country. Today, Thailand is one of the world’s top ten
producers and exporters of processed food products. The demand for packaging to
ensure food safety, freshness, and easy-to-use products has significantly transformed
the food processing industry in Thailand and has created a new source for the
national account. Processed food export brings in about US$10 billion annually and
comprise up to 28.3% of gross domestic product (GDP).

Table 1 Thailand: Top-10 Sectors Ranked by Value Added

2013 Level Percent 2014 Percent Change Share of GDP

(Bil. US$) (Real terms) (Nominal terms)
1. Agriculture 40.5 2.5 10.1
2. Wholesale trade 33.1 4.6 8.3
3. Retail trade - total 27.0 2.6 6.7
4. Public Admin. & Defense 25.5 5.1 6.4
5. Banking & related financial 18.5 6.6 4.6
6. Education 16.2 3.0 4.0
7. Food products 15.6 5.9 3.9
8. Hotels & restaurants 13.9 5.4 3.5
9. Motor vehicles 12.3 -0.6 3.1
10. Real estate 11.4 5.6 2.9
Source: World Industry Service, IHS Global Insight, Inc.

The country’s natural resources, year-round growing season, and relatively low labor
costs provide Thailand with competitive advantages in the food processing arena. In
addition, Thailand has the ability to produce, process, and develop agricultural
products into foods and beverages which have high quality, are in large amounts, and
meet the needs of consumers around the world. Thailand’s abundant natural
resources, optimized by the introduction of technology and robust implementation of
international standards of food safely and hygiene is keeping Thailand as a world
leader in the food processing industry
The country’s food processing industry is strongly supported by the government in an
effort to promote Thailand as “The Kitchen of the World”. With funds from the
government, many promotion programs have been launched every year, such as
Thailand Food Valley, Thailand International Food Exhibition and Thailand
International Muslim Exhibition. The government has also implemented numerous
measures and initiatives in order to upgrade the industry’s procedures and
technology and thanks to those initiatives processed food exports now exceed primary
agricultural exports.

Table 2 Thai Food Processing Industry – Development Timeline

1960-70 Thailand substituted most of its imported products with its product surpluses.
Technology was imported from Taiwan and Japan.

1970-80 The country started to earn from the processed products exports.
Products were initially targeted for local consumption and surpluses were exported. Lacking in
experience in bulk production and marketing, producers felt the need to improve their technical
know-how to improve product quality to international standards.

1980-90 This stage was characterized by its rapid pace of development with the country’s export
registering a 26% growth rate in 1990s, accounted for mostly by frozen and chilled commodities.

1990 onwards The present stage is towards high competition in the world markets.
Great concern is now placed on hygiene and sanitation of production, food safety,
wholesomeness, production costs, value-added, standards, environment and regulations.

Source: Murry (2007)

“Thailand is a strategic hub of food production for both Asia and the rest of the world due
to its biodiversity and natural agricultural productivity. Entrepreneurs in Thailand’s
agriculture and food processing industries continue to strive to introduce new
technologies. In addition, the Thai Government has introduced policies which support food
production at high standards of safety and quality. Thailand has both the high potential
and the key fundamentals to become a major production base and distribution center for
world food production, as well as an attractive destination for international investor”

Dr. Petch Chinabutr, President of National Food Institute

Source: BOI

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1.2 Production
Food processing is one of the country’s biggest manufacturing sectors. Food products
make up a significant 61% of the food and beverage market in Thailand, dominated
by products including milled rice, tapioca starch, sugar and confectionaries, seafood,
poultry meat, frozen, ready-to-eat foods, and processed fruits and vegetables. The
industry is growing at the rate of 9% per year with annual production of more than
28 million tons. Thailand is among a few countries producing a large amount of high
standard rice. Meanwhile, the Thai sugar and tapioca starch are known for their
high quality at comparable prices. Leading manufactures continue to expand their
production facilities, develop new products and invest in marketing activities.
Between 2010 and 2013, the Kingdom produced an average of 818 thousand tons of
tapioca flour, 714 thousand tons of frozen and chilled chicken meat, and 445
thousand tons of canned fish tuna (see Chart 1). Canned/preserved food and frozen
processed food registered healthy growth in 2012 because of strong demand after the
flood crisis in 2011. However, the production output slightly slowed in 2013 due to
the country’s political turmoil and high oil prices that have forced consumers to cut
down their spending. A decline in purchase orders made by European Union and
United States also influenced the national food manufacturing production.

Chart 1 Production of Selected Food Products

600,000

400,000

200,000

-
2010 2011 2012 2013
Canned fish tuna Canned fruit Pineapple Palm oil Raw

1,000,000
800,000
600,000
400,000
200,000
-
2010 2011 2012 2013

Frozen & chilled meat Chicken Palm oil Pure Tapioca Flour

Source: The Office of Industrial Economics, Thailand

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Thailand is the first country in Southeast Asia to adopt agriculture biotechnology.
The food processing industry covers a diverse range of product segments. The
maturity and technological development of products and markets in each of the
segments vary considerably. There are over 10,000 food and beverage factories
consisting of small, medium and large-scale plants, which employ almost 70,000
persons. Most of the small to medium sized businesses (85%), serve mostly the
domestic market, while medium to large food processors tend to produce higher-
valued products for the domestic and export markets. Food factories in Thailand
comply with food safety standards of GMP, ISO, HACCP and TQM.

Chart 2 Food Processing Companies in Thailand

Cold storage plants

3.2%
4.9% 8.3% Grain and tubers
20.7%
5.9% Fozen meat incl. poultry meat
Starch
7.3% Canned meat & seafood
17.7%
7.4% Canned fruit & Vegetables
Fat & Oil
10.0% 10.9% Sugar & Honey
Coffee & Tea
3.9% Snacks
Others

Source: Murry (2007)

Major Thai and multinational industry leaders include: Nestle, Saha Pathana Inter
Holding, Patum Rice Mill & Granary, Royal Friesland Foods NV, Unilever Group,
Thai Union, Dole Thailand, Charoen Pokphand Group, Betagro, Saha Farms, Thai
Beverage, Kellogg’s, Kraft, PepsiCo, Del Monte, Procter & Gamble, Ajinomoto and
Effem Foods. Among them, Charoen Pokphand Group (CP) has a strong present in
India with three separate companies are operating in different parts of India (see
Appendix 8.8).

With the inauguration of the ASEAN Economic Community scheduled for the 31st of
December 2015, the food processing sector of Thailand will experience undoubtedly
both an infusion of investment capital and a boom in plant construction/expansion
once a more integrated Southeast Asian market emerges.

8
Picture 1 Pork Processing Chain

Retailers, Exporters

Source: Korat Food Cluster

2 Market for Processed Food Products and Food Processing Machinery

2.1 Characters of Domestic Consumers

Although most processed food products are catered for international market, the
domestic consumption on processed food has seen a vigorous growth over the last
decade. The Thai domestic market stands equal in size to the export market and in
terms of purchasing power and quality is as exacting as the export markets. An
increased demand for convenient food, long shelf life food products is fueled by
changes in lifestyles of Thai consumers. While the majority of consumers still prefer
fresh food markets, many of them now shop at supermarkets, and ready-to-eat (RTE)

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food items are replacing traditional wet market shopping and home cooking,
especially those who are living in urban areas (36% of the population). These
processed food products are available in a wide variety of venues, most notably major
Thai hypermarkets and supermarkets such as Tesco, Makro, The Mall Group, Big C,
Foodland and Tops. Approximately 90% of urban Thai shoppers use Big C and Tesco
Lotus at least once a week. In 2012, Thai consumer expenditures on food and
beverages reached US$ 63 billion.

Besides shopping at hypermarkets and supermarkets, the majority of urban Thai

people (over 90%) also uses convenience stores and visits them on an average 13
times a month. It is reported that an average of 8.3 million customers shop at
convenience stores for ready-to-eat food products. Many of them are students and
working professionals, between ages of 15 and 35. This dynamic group of the
population is also eager to try new products and receptive to trends that fit their
westernized lifestyles. They eat out more and move away from traditional open-air
food stands to casual dining restaurants since it is more convenient, entertaining and
provides more free time compared to cooking at home.
Table 3 Domestic Sales on Selected Food Products

PRODUCT UNIT 2010 2011 2012 2013

1 Frozen & chilled meat Chicken ton 560,936 547,466 592,915 481,578
2 Sausage ton 16,195 20,231 21,185 21,651
3 Ham ton 615 945 1,304 1,155
4 Meat ball Pork ton 533 509 505 476
5 Canned fish tuna ton 23,328 31,800 19,463 14,883
6 Canned fish sardine ton 11,806 6,552 7,474 7,938
7 Chilled or frozen seafood ton 18,357 23,082 23,547 23,197
8 Canned Vegetable Com Young ton 1,873 1,812 1,704 1,691
9 Canned fruit Pineapple ton 593 698 875 1,982
10 Fruit juice ton 26,973 21,460 38,394 15,491
11 Dried fruit &vegetable ton 5,606 2,406 3,471 3,288
12 Crop Oil ton 781,378 810,853 769,998 897,226
13 Pasteurized milk ton 155,859 172,803 204,975 235,371
14 Ice-cream ton 66,894 72,247 85,552 78,846
15 Wafer ton 11,429 12,720 11,884 13,733
16 Cake ton 2,872 2,517 2,624 2,708
17 Sugar ton 1,304,781 1,362,048 1,406,687 1,300,524
18 Soy sauce liter 2,569,892 2,637,538 2,537,292 3,006,185

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19 Fish sauce ton 61,208,270 64,818,071 65,848,540 60,182,347

Source: The Office of Industrial Economics

Higher disposable incomes and higher levels of education have also influenced the
food consumption pattern and behaviors of Thai people. Quality and health benefits,
rather than simply price, are becoming key purchasing factors. Thai consumers have
a growing preference for imported food items as they perceive foreign produce as
being of better quality than local produce. About 30 million middle-to-upper income
consumers and overseas-educated Thais are eager to purchase imported food
products and have become relatively brand conscious. A typical Thai family spends
about 35% of their total income on food and beverages, in which the ratio of imported
food to domestic food is 30:70. Both Big C and Tesco Lotus have introduced a new
store format called “Extra” which offers a greater range of premium products
including a wide selection of imported products targeting middle and high income
customers. Imported processed food items that have become increasingly popular
among Thais in the last 10 years include:

• Fruit and vegetables • Jams and spreads

• Smoked salmon, Japanese • Dairy products and milk powder
delicacies and seafood • Spaghetti
• Grain and cereal products • Salted snacks
• Chocolate and confectionary • Ready-to-eat meals
• 100% fruit juice and drinks • Meats and Meat-by-products

Together with demand on quality, Thai consumers are paying more attention to a
healthy diet. There is growing awareness of functional ingredients such as herbs,
fibers, collagen, L-carnitine, minerals, vitamins, omega fatty acids, and probiotic.
Data in 2012 shows that consumer expenditures on health and wellness foods grew to
US$4.7 billion, while US$1.7 billion was spent on consumer health foods including
sports nutrition, vitamins and dietary supplements, weight management,
herbal/traditional products, allergy care and child-specific consumer health products.
Natural food products occupy the largest market share at 38.5%, followed by
fortified/functional food (30.3%) and better-for-you food (25.5%) (see Chart 3).
Capitalizing on this trend, local Thai fruit juice manufacturer, Tipco, started
producing new nutritional innovative products, including concentrated pomegranate
juice, which has increased sales by 120 percent. Malee Sampran launched “Malee
Coco” made of 100 percent coconut water as a super fruit drink. The rising demand

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for health and functional food products have caused Thai food manufacturers to focus
on developing new functional foods and beverage products.

Chart 3 Market shares of Health Food Products

4.30% 1.30%

25.50% 38.50% Natural Food Products

Fortified/Functional Food
Better-for-you Food
Organic Food
30.30%
Food Allergy Products

Source: National Food Institute

Among processed food products, it has noticed a strong demand for sweet and savory
snacks in the local Thai market, including fruit snacks, chips, extruded snacks,
tortilla/corn chips, popcorn and nuts. Fish snacks appear the most popular among the
rising health food snacks. The growing popularity of snacks has been driven by
aggressive advertising and marketing activities among leading players in the
industry. In 2011, sweet and savory snacks grew by 7% year-on-year in current retail
value terms to reached US$840 million. Thailand’s market for sweet and savory
snacks is expected to reach US$1 billion by 2016. In response to a growing
consciousness from consumers for healthy products, many manufactures have
reformulated their products to reduce the amount of salt, sugar and fat or simply
take them out of their products.

2.2 Retail Sector and Food Service Sector

Retail food sector is also a vital component of the Thai economy with food and
beverage expenditures expected to grow up to 30% in the years to come. In 2012,
retail food sales in Thailand were registered at US$77 billion, which was 10% higher
than 2011 and accounted for about 82% of all retail sales in Thailand.

With the robust growth of modern retailers such as hypermarkets, supermarkets,

cash and carry, and convenience stores, Thailand has become the second most

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dynamic retail food market in Asia after China. Modern food retailing accounts for
approximately 70% of total retail sales as the flow of local shoppers has been diverted
from wet markets and grocery stores to hypermarkets and supermarkets.

Chart 4 Sales from modern retail food establishments in 2012

32% Hypermarkets
36%
Cash & Carry
Supermarkets
Convenience stores
17% 15%

Source: USDA Foreign Agricultural Service

As the Chart 4 indicates, the convenience store sector has been the best performing
retailer with 36% share in total sales from modern retail food establishments. There
are over 12,000 convenience stores nationwide with 7-Eleven as the leading player.
Thailand’s 7-Eleven is the world’s third largest 7-Eleven network after Japan and the
United States. It accounts for 53% of total sales and has 6,822 outlets nationwide at
the end of 2012.

The hypermarket segment in Thailand has been also performing well with two major
players, including Big C and Tesco Lotus. Meanwhile, the supermarket business is
dominated by six prime competitors, which are the Central Food Retail (Central Food
hall and Tops Marketplace), The Mall Group (Home Fresh Mart and Gourmet
Market), Foodland Supermarket, Villa Market, MaxValu Supermarket, and UFM
Fuji (see Table 4). The supermarket sector tends to cater to medium and upper
income consumers by offering a wide range of premium products and a broader
assortment of local and imported processed food, fruits and vegetables, meat, seafood,
and beverage products.

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Table 4 Key Food Retailers in Thailand

Company Name Store Format No. of Outlets

Ek-Chai Distribution System Co., Ltd 1,382
Tesco Lotus Hypermarket Hypermarket 108
Tesco Lotus Value Compact Hypermarket 38
Talad Lotus Supermarket 165
Lotus Express Convenience Store 1,071
7-Eleven – CP All Pcl. Convenience Store 6,822
Siam Makro Pcl. 63
Makro Cash and Carry 57
Siam Frozen Stores Cash and Carry 5
(focus only on frozen food items)
Makro Food Service Food Service Operator 1
Big C Supercenter Pcl. 257
Big C Supercenter Hypermarket 96
Big C Extra Hypermarket 16
Big C Market Supermarket 18
Mini Bigc C Convenience Store 126
Big C Jumbo Cash and Carry 1
Centeral Food Retail Co., Ltd 955
Central Food Hall Supermarket 5
Tops Marketplace Supermarket 58
Tops Super Supermarket 33
Tops Daily Supermarket 13
Family Mart Convenience Store 806
The Mall Group 11
Home Fresh Mart Supermarket 7
Gourmet Market Supermarket 4
Foodland Supermarket Supermarket 14
MaxValu-Aeon (Thailand) Co., Ltd
Max Valu Supermarket 18
Max Valu Tanjai Mini-Supermarket 46
Villa Market Supermarket 25
Source: USDA Foreign Agricultural Service – Bangkok, Thailand (as of December 31, 2012)

In Thailand, hotels, resorts, restaurants and institutional contracts are the heavy
users of imported food for food preparation and ready-to-eat meals. Food and
beverages sales in hotels and resorts account for about 30% of total revenues. The
average rate of imported food versus locally produced food in the entire Hotel
Restaurant sector is 30%. Thai Airways International uses 30-40% imported food in
their in-flight catering service. As Thai consumers are moving away from traditional
open-air food to casual dining restaurants, fast food and chain restaurants have
boomed during the last few years and are expected to continue expanding in the near
future. In 2012, the casual dining restaurants accounted for approximately 85% of
total restaurant sales. Besides independently local owned restaurants, the

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establishment of restaurant chains such as Oishi, Fuji, Zen, S&P, Patio, Black
Canyon, Pepper Lunch, and MK Suki Restaurant has resulted in more choices in
Bangkok and major tourist destinations.

The growth of the country’s food service sector has been aggressively driven by the
high tourism levels. Thailand’s political capital and commercial hub of Bangkok has
been ranked third in the latest Euromonitor International’s 100 Top City
Destinations Ranking (2013 edition), covering 100 of the world’s leading cities in
terms of international tourist arrivals. Three other popular Thai cities, Phuket,
Pattaya, and Chiang Mai, were respectively ranked 15, 17 and 70 in the same listing.
In 2013, tourist arrivals to Thailand reached 26.7 million, up 19.6 % despite the
national political turmoil and global economic challenges. Tourists from China, Lao
PDR and Malaysia were the top three fast growing groups. This trend has created an
increasing demand for Chinese cuisine and Halal food. It also records an average of 1
million Indian visitors to Thailand every year, which presents an opportunity to
expand Indian cuisine in Thailand.

Chart 5 Number of Foreign Tourists, 2003-2013

30,000.00

25,000.00

20,000.00

15,000.00

10,000.00

5,000.00

0.00
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Bank of Thailand

2.3 Food Processing Machinery and Equipment

The flourish of packaged and processed food industry has opened a lucrative market
segment for food machinery and packaging equipment in Thailand. Leading
manufactures in the national food processing industry are constantly developing
cutting-edge technologies to meet the increasing demand in the global market. The
introduction of the GMP standard for the food safety equipment in 2003, for instance,
has brought a significant increase in the volume of food processing and packaging
equipment purchased by Thailand-based firms. The market of food processing and

15
packing equipment has grown by an average of 20% every year since 1999. Although
Thailand has been successful in modernizing its national industry, the country
nowadays still depends heavily on the importation of foreign industrial machinery.
The total trade value of food processing and packing equipment worth approximately
US$ 2 billion every year. The majority of machines and equipment is imported from
Japan (26%), Netherlands (11%), Germany (11%), and China (10%). The most
imported food processing and packaging machinery by value was equipment for
filling, closing, sealing, encasing or labeling bottles with over US$ 1 billion between
2010 and 2012, followed by machinery for the preparation of food and drink (US$ 519
million) (see Table 5)

Table 5 Import Value on Selected Food Processing Machinery and Equipment, 2010-2012

Unit: US$ Thousand

HS Code Product Label 2010 2011 2012

8434 Milking machines & dairy machinery & parts $2,500 $4,896 $4,033
8435 Presses etc for wine, cider, fruit juice etc, pts $553 $737 $480
8437 Mach for cleaning seed etc & work cereal etc, pts $52,285 $47,148 $40,873
8438 Mach nesoi, ind prep of food or drink etc, parts $100,630 $164,830 $253,736
8422 Machines, dishwash, clean etc cont & fill, pak etc $245,525 $337,666 $486,627
Total $401,493 $555,277 $785,749

Source: UNcomtrade

2.4 Major Trends in Production, Price and Consumption

Production growth continues to increase. High growth will be seen in products such
as ready meals, oils and fats, chilled, dried and frozen processed food, bakery items,
noodles, canned/preserved food and confectionery (see Table 6). The high growth rate
in canned/preserved food can be attributed to the fact that many manufacturers
continue to diversify their portfolios in order to focus on higher growth segments such
as ready meals and frozen foods. In addition, many companies are focusing more on
export markets in order to diversify domestic risk. Canned/preserved fish/seafood will
continue to dominate canned/preserved food and will lead growth, with demand being
fuelled by on-going product innovation and the marketing activities of leading
players. In addition, the aggressive expansion of retail and foodservice outlets such
as 7-Eleven, CP Freshmart and other leading chained super/hypermarkets, which
are the key distribution channels for frozen processed food, will also help to stimulate
overall growth.

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Rising consumer food prices. In line with the global consumer trends (see Table 7),
prices for processed food products in Thailand are projected to rise over the coming
decade due to stronger demand, driven by growing populations, escalating disposable
incomes, increasing urbanization and diet diversification. Prices of meat and fish
products are predicted to rise more strongly than primary agricultural products.

Table 6 Production Forecast in Thailand on Selected Food Products, 2014-2022

PRODUCTS 2014 2015 2016 2017 2018 2019 2020 2021 2022
Protein Meal 2,037 2,069 2,098 2,124 2,152 2,179 2,209 2,236 2,265
Vegetable Oils 2,455 2,535 2,618 2,702 2,791 2,881 2,976 3,074 3,175
Beef and Veal 427 437 446 455 461 466 469 470 472
Pork 957 966 979 979 989 1,000 1,012 1,017 1,062
Poultry Meat 1,661 1,707 1,754 1,801 1,844 1,882 1,927 1,972 2,016
Fresh Dairy
Products 932 942 951 961 972 982 992 1,001 1,010
Rice 25,710 26,026 26,340 26,653 26,955 27,249 27,531 27,806 28,077
Sugar 10,063 10,468 10,881 11,342 11,852 12,334 12,783 13,294 13,768

Source: OECD.Stat Extracts

Table 7 World Price Forecast on Selected Food Products, 2014-2022

Unit: US$/ton

PRODUCTS 2014 2015 2016 2017 2018 2019 2020 2021 2022
Protein Meal 403.9 389 387 390.2 396.2 401.7 403.6 404.2 406.1
Vegetable Oils 1,038 1,078 1,065 1,098 1,105 1,118 1,136 1,155 1,160
Beef and Veal 4,716 4,731 4640 4,569 4,394 4,415 4,476 4,546 4,570
Pork 2,155 2,147 2061 2,055 2,162 2,285 2,271 2,244 2,285
Poultry Meat 1,355 1,375 1,378 1,407 1,445 1,475 1,500 1,518 1,532
Rice 440.3 423.2 419.3 417.9 426.1 438 451.1 462.5 470.3

Source: OECD.Stat Extracts

Strong demand growth in food consumption. As lifestyle in Thailand changes rapidly

towards the need for more convenience and ease in food preparation, there is a
particular growth potential in the following areas: canning, convenience and fast
food, retail level bakeries, snack foods and confectionery dairy products. These food
products are expected to come with multi-features including ‘healthy, ‘flavor-
intensive’, and ‘palate-pleasing’ as Thai consumers strongly desire to maintain a
healthy lifestyle. Health consciousness and demand for healthy products will fuel the
health food market in Thailand, particularly in products including nuts, fruit snacks,

17
products without MSG or preservatives, low-fat/calorie and sugar free foods, organic
foods, vegetarian foods, functional food products such as products fortified with
vitamins, fiber, iron, calcium or other healthy substances, and food with all natural
ingredients. The increasing number of inbound tourists to Thailand every year also
influences the trends in food consumption.

Table 8 Best Product Prospects

HS Code Product Label

02 Meat and Edible Meat Offal
03 Fish and Crustaceans
Dairy Products (e.g., cheese, cheese spread, cream cheese, whipped cream,
0401-0406
cheese sticks, cheese dip and ice-cream)
07 Edible vegetables
08 Edible fruits and nuts, peel of citrus/melons
16 Edible preparations of meat, fish, crustaceans
19 Preparations of Cereals, flour, starch or milk (e.g., ready-to-mix pancakes,
cookies)
20 Preparations of Vegetables, fruits, nuts (e.g., fruit juice, jam and jelly)
21 Misc. edible preparations

Source: USDA Foreign Agricultural Service-Bangkok, Thailand

Fast growing sector-Halal food. Halal food accounts for 20% of global food exports.
The global Halal food market is now worth an estimated US$ 667 billion annually.
The world’s growing Muslim population is generating a lucrative market segment for
this particular type of food products. Countries with a Muslim majority have average
population growth rate of 1.8% per year, compares with a world population growth
rate of 1.12% per year. By 2030, Muslims are projected to make up more than a
quarter of the global population. The Muslim community also makes up to 10 % of
Thailand's 64 million inhabitants.

Fairly steady growth rate in the regional and global processed food product market
over the medium term. The canned food market, consisting of the retail sales of
canned desserts, canned fish/seafood and meat products, canned fruit, canned pasta
and noodles, canned ready meals and canned vegetables, is forecasted to continue
growing. In 2017, the Asia-Pacific canned food market is expected to have a value of

18
US$ 15.5 billion, an increase of 11.5% since 2013. The compound annual growth rate
of the market in the period 2013-2017 is estimated to be 2.7%. A similar trend is
expected to see in the global canned food market (see Table 9). Canned fish/seafood
and meat products will lead the market as about a quarter of overall value.

Table 9 Canned Food Market Value Forecast, 2013-2017

Asia-Pacific Global Market

Year
Value (US$) %Growth Value (US$) %Growth
2013 13.9 2.2 72.4 2.7
2014 14.2 2.6 74.3 2.7
2015 14.6 2.9 76.3 2.7
2016 15.0 2.7 78.3 2.5
2017 15.5 2.9 80.4 2.7
Source: MarketLine (2013)

Frozen food products is also considered to be the next generation of convenient ready
foods, particularly frozen vegetables and fruits owing to advancement in freezing
technologies which provide products with an extended shelf life. The product segment
covers various frozen food categories such as frozen ready meals, frozen fish/seafood,
frozen potatoes, frozen fruits and vegetables and frozen soup. The frozen ready meal
segment includes wide range of products such as frozen pizza, desserts, entrees and
snacks. The compound annual growth rate of the market in the period 2013-2017 is
predicted to be 3% and the market value is expected to reach a value of US$138
billion by the end of 2017, reported by MarketLine.
Picture 2 RTE meals by Prantalay Marketing Public Company Limited and S&P Syndicate Public
Company Limited.

19
Ample opportunities for food processing machinery. The huge potentials in food
processing are generating a rising demand for food processing and packaging
technologies and equipment in Thailand. The country will continue its
industrialization process but still heavily depends on the importation of high-quality
machinery for the immediate future. In order to meet food safety standards required
by major markets such as the European Union, Japan and the United States (USA),
there is a high demand for drying, cooling and purifying machines; fruit, vegetable
and cereal processing machines. There will also be a soaring need for packaging
machinery, including filling, closing, sealing, wrapping and labeling machines.
Industry experts believe the market segment of food processing machinery has strong
potential to grow at close to 10% annually in the near term.

Table 10 Thailand’s Food Sector Key Indicators-Forecast

2013 2014 2015 2016 2017

Food consumption, US$bn 39 41 45 49 54
Food consumption, US$ per capita 563 593 640 699 763
Confectionery sales, US$mn 580 610 568 718 784
Total mass grocery retail sales, US$bn 38 40 43 48 53
Exports of food and drink, US$mn 24,237 25,891 28,198 31,033 34,201
Imports of food and drink, US$mn 9,364 10,036 10,997 12,189 13,533
Food and drink trade balance US$mn 14,873 15,855 17,202 18,844 20,667

Source: BMI

2.5 International Trade

2.5.1 Bilateral Trade between Thailand and the world

Till the 1970’s, Thailand did not figure as a significant player in the international
trade for consumer food. However, Thai agriculture successfully diversified into high-
value products, livestock and fisheries. Subsequently, today the Kingdom is among
the world’s top food exporters of milled rice, sugar, tapioca, and canned pineapples.
The country is also ranked among the top ten exporters of seafood, canned tuna,
frozen shrimp and frozen chicken. Thai food exports exceed imports by a broad origin.
In 2013, the Kingdom made US$ 26.8 billion from its food exports, mainly to ASEAN
countries, USA, Japan, China, Russia and the European Union.

20
Figure 1 Agro-business Sector Chart 6 Thailand's Main Food Exports

3% Rice
World’s #1 Cassava Exports 11%
Sugar
23%
World’s #2 Sugar Exports 13% Shrimp

14% 20% Cassava

World’s #3 Fishery Exports 16% Canned tuna
Chicken & Poultry
World’s #6 Rice & Grains
Canned pineapple
Source: NFI (2012) Source: NFI, as of March 2013

Thai RTE food is gaining popularity around the world as other countries grow
accustomed to Thai quality, nutrition, and taste. In 2013, Thailand exported 521
thousand tons of RTE food and seasonings valued at US$ 1.3 billion – a 9.2% increase
over the previous year. Sauces including chili sauce, fish sauce and mixed seasonings
are particularly enjoying remarkable success in overseas markets. In 2013, export of
mixed seasonings totaled US$ 298 millions, followed by chili sauce (US$ 55 million,)
and fish sauce (US$ 46 million ) and. Major export markets currently include Japan,
the USA, Philippines and Cambodia. The Thai government has set the national
export to grow around 15% this year with food remaining a major export segment.

Chart 8 Thailand's Food Import 2010-2013 Chart 8 Thailand’s Food Export 2010-2013

7.00 10.00 32.0 35.0

8.00 30.0
6.50 30.0
Tons Million
Tons Million

25.0 US$ Billion

US$ Billion

6.00 20.0
6.00 28.0
4.00 15.0
5.50 26.0 10.0
2.00 5.0
5.00 0.00 24.0 0.0
2010 2011 2012 2013 2010 2011 2012 2013
Quantity Value Quantity Value

Source: The customs department of the kingdom of Thailand

Although the national food processing industry uses some 80% of raw materials
locally, the demand for imported processed food and raw materials, especially better

21
quality ingredients has been growing. Those materials and food items are used for re-
processing and re-exporting. Domestic items such as grains, vegetable oils, and
starches tend to be of lower value and quality. Despite the global economic situation
recently, Thai food manufactures still seek high-value and more technology-produced
ingredients at reasonable prices for developing new products. In 2013, Thailand
imported more than US$ 2.1 billion of food ingredients, an 11% increase from the
previous year. Imported ingredients are mainly dried fruit and nuts, wheat, starches,
dehydrated potatoes, soybeans, food additives, colorings, flavorings, starch, whey,
mild powder, juice concentrates, and other baking ingredients.

2.5.2 Bilateral Trade between Thailand and India

The relationship between Thailand and India has seen a vigorous development since
2001, especially after a State visit in January 2012 by Prime Minister Yingluck
Shinawatra to India as a chief guest of Indian Republic Day. As a result of the visit,
there were 6 bilateral agreements signed to deepen the social-economic cooperation
between the two countries.

The bilateral trade volume in the past five year is recorded to grow by an average of
16% annually. India is ranked 18th among trading partners with Thailand. It is
anticipated the trade volume between the two countries will reach US$ 16 billion by
2015. In 2013, the total trade between Thailand and India on processed food products
toped US$ 470 million. The Thai food products trade surplus with India was US$ 65
million in 2013, a 56% increase from the previous year. Over the last five year, India
has been the largest destination for Thai oil-crop products, including palm oil,
coconut oil and Glycerol (Glycerine). Meanwhile, bovine meats imported from India
have ranked the first by value in the import market of frozen meat products in
Thailand. Natural gums, resins, and spices such as ginger, coriander, peppers and
capsicums are also among popular Indian products imported to Thailand. The
expansion in the food manufacturing industry in Thailand has also created a new
demand for food ingredients import from India to Thailand. The annual growth of
food ingredients import value during the period between 2010 and 2013 was 3.2 %. In
4 years, Thailand imported 66 tons of ingredients, worth US$ 45 million (see Chart
10 & 11). Imported ingredients include malt extract, food supplements, and cocoa.

22
Chart 9 Thailand Export Processed Food to India Chart 10 Thailand Import Processed Food from
2010-2013 India 2010-2013

500 300 600 400

400 250 500

300
Tons Thousands

Ton Thousands
200 400

US$ Millions
US$ Millions
300
150 300 200
200
100 200
100
100 50 100
0 0 0 0
2010 2011 2012 2013 2010 2011 2012 2013
Quantity Value Quantity Value

Source: The customs department of the kingdom of Thailand

2.6 Market Entry Mode

The appropriate entry strategy when venturing in Thailand is highly dependent on
the nature of business, objectives and resources of the Indian investing companies.
Issues such as company size, resources and product types will determine which type
of entry strategy is most appropriate.

In Thailand there are three types of businesses:

• Sole Proprietorships
• Partnerships
• Limited Companies (public and private)

Two types of limited companies are recognized: public companies and private
companies. Public companies are regulated by the Public Company Act and certain
other Acts. Private limited companies are regulated mainly by the Civil and
Commercial Code. The majority of foreign investors form a private limited company.
In this kind of organization there is unlimited capital investment. Foreigners may
fully own a private limited company. Apart from instigating accounting customs,
private limited companies should have at least three promoters to act as
shareholders. However, in business activities reserved for Thai nationals, foreign
shareholders can only have a maximum of 49%. In this form of private limited
company, it also requires the foreign companies employ a minimum number of Thai
staff per foreign employee. Restricted business activities include extracting Thai
herbs, manufacturing of sugar from cane, sale of food and beverages, and rice milling
and flour production from rice and plants.

23
India has recently inked a free trade agreement (FTA) with Thailand for setting up of
a free trade area covering goods, services and investment in 10 years. Under the
Framework Agreement, Thailand has committed to open up seven sectors to Indian
firms, but they would not be able to hold more than 49 % of shares in a company.
This is less than Thailand allows other ASEAN members, who may hold up to a 70%
share. The sectors are services, communications, construction and engineering,
distribution, tourism, entertainment and transportation.

In Thailand, three types of partnerships are recognized. The tax treatment and
degree of liability of the partners are the only differences between the partnerships.
The BOI does not commonly encourage partnerships. Therefore, it's not ordinary for
alien investors to form this type of organization.

The three types of partnerships are:

• Unregistered partnerships - Partners are fully liable for all responsibilities of

the partnership.
• Registered partnerships - The partnership is a legal entity, and, therefore, is
disparate and distinct from the partners.
• Limited partnerships - Capital investment determines the liability of the
partners. This type of business must be registered.

Starting a business in Thailand takes an average of 28 days, compared to the world

average of 38 days. The Thai government is encouraging foreign investors to specific
areas of the Thailand with attractive tax and ownership incentives. There are three
different types of zones, offering varying incentives depending on the location and
nature of the business. Attractions include:

• Land ownership rights for foreign investors

• Permission to bring in foreign experts and technicians
• Work permit & visa facilitation
• One-Stop-Shop: Visas & Work Permits are issued in 3 hours
• No restrictions on foreign currency remittances
• No export requirement
• No foreign equity restrictions in manufacturing sector
• No local content requirement

For Indian exporters, the following market entry strategies are suggested:

24
• Appoint a local importer/agent/distributor. Selecting the right importer is one
of the most important decisions for exporters developing their business in
Thailand. The local importer will be a key partner in helping expand business
opportunities and minimize the need for exporters to establish direct contact
with multiple retail chains. A local importer familiar with market conditions
and the regulatory environment can help exporters successfully market their
products in this competitive market. Indian exporters should be aware that
many multinational retailers in Thailand charge listing fees or a listing
allowance for new products. The fee will be charged in accordance with a
formula based on the number of retail outlets and stock keeping units.

• Build relationships with local operators who have existing distribution

channels. Local operators have better understand local customer’s needs and
can improve or tailor products accordingly (see Appendix 8.8 for Food
Manufactures and Food Retail Company Profiles).

• Establish and manage a cool chain for supply of fresh produce.

• Invest in local (or regionally based) food production facilities to more efficiently
service the market and take advantage of the ASEAN- India program and the
early harvest scheme (EHS) under the framework agreement on Thailand-
India FTA.

• Participate in food exhibitions such as THAIFEX – World of food ASIA and

trade shows such as Food Ingredients Asia, which provide effective exposure
for the company’s products.

2.7 Foreign Trade Barriers

2.7.1 Import Policies

In Thailand, high tariffs are applied to imports competing with locally produced
products, including beef, pork, poultry, fresh fruits (including citrus fruit and table
grapes), vegetables, fresh cheese, and pulses (e.g., dry peas, lentils, and chicpeas).
Most processed food products attract over 30 % tariff on the Cost, Insurance and
Freight (CIF) value, plus 7% Value Added Tax (VAT). High tariffs are sometimes
applied to products even when there is little domestic production. For example, the
type of potato used to produce frozen French fries is not produced in Thailand, yet
imports of these potatoes face a 30% tariff. Products can be imported tariff-free if the

25
final product is for re-exportation. However, the ASEAN-India Free Trade Agreement
(AIFTA) which took into effect from 1 January 2010 and the framework agreement
for establishing free trade zone between Thailand and India which was inked in
2003, have resulted in free-from-tariff access for many Indian food products.

Under the AIFTA framework, the tax reduction scheme was applied to almost all
4,753 items except for the item under the exclusion list that have about 489 items,
including rice, potatoes, sugar. The tariff reduction modes are as below:
India Commitment Thailand Commitment

I. Normal Track - Applied MFN tariff rates will be I. Normal Track - Applied MFN tariff rates will
reduced and subsequently eliminated in be reduced and subsequently eliminated in
accordance with the following schedule: accordance with the following schedule :
(i) Normal Track 1- 70% of the total tariff lines (i) Normal Track 1- 70% of the total tariff lines
of which tariff rates will be reduced/ eliminated by of which tariff rates will be reduced/ eliminated
2014. by 2014.
(ii) Normal Track 2 - 9% of the total tariff lines (ii) Normal Track 2 - 8% of the total tariff
of which tariff rates will be reduced/ eliminated by lines of which tariff rates will be reduced/
2017. eliminated by 2017.
II. Sensitive Track II. Sensitive Track
(i) Sensitive Track 1- 11% of the total tariff lines (i) Sensitive Track 1- 10% of the total tariff
with applied MFN tariff rates above 5 per cent will lines with applied MFN tariff rates above 5 per
be reduced to 5 per cent by 2017. cent will be reduced to 5 per cent by 2017.
(ii) Sensitive Track 2 - 0.5% of the total tariff (ii) Sensitive Track 2 – 1.7% of the total tariff
lines with applied MFN tariff rates at 5 per cent lines with applied MFN tariff rates at 5 per cent
will be maintained; however, applied MFN tariff will be maintained; however, applied MFN tariff
rates which are below 4 per cent, will be rates which are below 4 per cent, will be
eliminated by 2020. eliminated by 2020.
III. Special Products- Applied MFN tariff rates for III. Highly Sensitive List- Applied MFN tariff
special products (including crude and refined palm rates for 14 products (e.g. Sandal, bicycle and its
oil, coffee, black tea and pepper) will be reduced to parts, silver jewelry etc.) will be reduced to 25-30
37.8-50 per cent by 31 Dec. 2019. per cent by 31 Dec. 2019.
IV. Exclusion List – Applied MFN tariff rates for IV. Exclusion List – Applied MFN tariff rates for
489 products remains the same and shall be 463 products remains the same and shall be
subject to an annual tariff review with a view to subject to an annual tariff review with a view to
improving market access. improving market access.

Source: Department of Trade and Industry in Thailand

26
For individual processed food products under AIFTA, further information on
Schedule of Tariff Commitments (Thailand), Schedule of Tariff Commitments (India),
Agreement on Trade in Goods can be obtained at the website of the Department of
Trade and Industry in Thailand: www.dft.go.th).

Since 2004, Thailand and India have already implemented an Early Harvest Scheme,
under the framework agreement on free trade area. The key elements of the
framework agreement encompass FTA in goods, services and investment and areas of
co-operation. It also provides for an EHS under which 82 items at a six-digit level of
harmonized system of common list to both sides have been agreed for complete
elimination of tariffs on a fast-track basis. The items that qualify for zero-day in two
years from both the countries range from fresh mangoes, grapes, apples, crab
(prepared or preserved) (see Table 10).

Table 11 Interim Rules of Origin for Early Harvest Scheme (EHS) under the Framework Agreement for
Establishing the Free Trade Area between the Kingdom of Thailand and the Republic of India

Tariff item
Description of products Applicable Rule
(HS2002)
EDIBLE FRUIT AND NUTS; PEEL OF CITRUS
CHAPTER 8
FRUIT OR MELONS
Dates, figs, pineapples, avocados, guavas, mangoes
804 Wholly obtained
and mangosteens, fresh or dried.
1. ex080450 - Fresh mangoes and fresh mangosteens Wholly obtained
806 Grapes, fresh or dried. Wholly obtained

2. 80610 - Fresh Wholly obtained

808 Apples, pears and quinces, fresh.

3. 80810 -Apples Wholly obtained

810 Other fruit, fresh.

4. 81060 -Durians Wholly obtained

5. ex081090 -Longans, rambutan, and pomegranates Wholly obtained

CHAPTER 10 CEREALS

1001 Wheat and meslin.

1. 100110 -Durum wheat Wholly obtained

2. 100190 -Other Wholly obtained

27
PREPARATIONS OF MEAT, OF FISH OR OF
CHAPTER 16 CRUSTACEANS, MOLLUSCS OR OTHER AQUATIC
INVERTEBRATES
Prepared or preserved fish; caviar and caviar
1604
substitutes prepared from fish eggs.
Local Value Added
1. 160411 -Salmon Content not less than
20%
Local Value Added
2. 160413 -Sardines, sardinella and brishling or sprats Content not less than
30%
Local Value Added
3. 160415 - Mackerel Content not less than
30%

Crustaceans, molluscs and other aquatic

1605
invertebrates, prepared or preserved.

Local Value Added

4. 160510 -Crab Content not less than
30%

Source: Ministry of Foreign Affairs and Trade, Thailand

2.7.2 Nontariff Barriers

Quantitative Restrictions and Import Licensing: Although Thailand has been

relatively open to imports of food ingredients, including corn, soybeans and soybean
meal, the country imposes domestic purchase requirements for several tariff-rate
quota products, including soybeans. Import requirements for food products
containing dairy ingredients are excessively burdensome.

Nontransparent tariff-rate quotas (TRQs) on some products and price controls on

others also impede market access. The Thai government retains authority to control
prices or set de facto price ceilings for 39 goods and 2 services, including processed
food products (sugar, pork, cooking oil, condensed milk, wheat flour, and others).
Delays in finalizing administrative TRQs have led to market uncertainly and
shipping disruptions. There have been serious concerns about the lack of
transparency in the Thai customs regime and the significant discretionary authority
exercised by Customs Department officials. The Customs Department Director
General regains the authority and discretion to arbitrarily increase the customs
value of imports.

28
Product certification, labeling and packaging: For Indian exporters, the following
food safety standards are required when exporting food items to Thailand:

• Good Manufacturing Practice – a general standard

• Hazard Analysis at Critical Control Points – an internationally accredited
standard
• Food products must be approved and registered with the Thai FDA prior to
importation

Registration: The Thai FDA only recognizes documents issued by a government

organization, or a commercial organization that is certified by the International
Accreditation Forum. Furthermore, the FDA requires all documentation to be
certified as true copies by the Indian Embassy. When seeking registration, suppliers
must provide:

• Two samples of each product

• Details of the exact composition by percentage of each ingredient
• A production flowchart
• Six labels

Labeling: Food products must display the following information for consumers:

• Name and brand of the product (both generic and trade)

• Registration number
• Name and address of the manufacturer
• Name and address of the importer
• Manufacturing and expiry dates
• Net weight and volume
• Any additives used
• Health and nutritional claims (if any)

The Thai National Food Institute should be contacted for further information.
Generally, a local agent/importer can help get a product registered and ensure
labeling requirements are met.

Packaging: Packing should be secure and able to stand extreme heat and humidity.
Consideration should also be for possible storage in the open. As merchandise may be
landed in Thai ports from open lighters waterproof packing should be used where
necessary. The use of hay and straw should be avoided.

29
Special certificates: Certain types of seeds, plants and animals require phytosanitary
certificates issued by the approved authority in the country of origin which is the
relevant state department of agriculture.

Meat imports must be accompanied by a veterinary health certificate signed by the

official authority in the country of origin certifying:
• That the country of origin has been free from endemic diseases for the
specified period
• The animal has been processed in an approved establishment in sanitary
conditions under constant veterinary supervision
• The products are fit for human consumption and do not contain preservatives,
additives or other substances in quantities harmful to human health
• They have not been stored for more than three months (the date of processing
or packing must be stated).

3 Competitive Analysis-Five Forces Analysis

The processed food market is analyzed taking food manufacturing companies as

players and retailers as key buyers. Meanwhile, producers of raw materials such as
grains, fruit and vegetables, meat, and fish are considered as the key suppliers.

The processed food market in Thailand is highly fragmented with more than 1,000
medium and large sized players. However, sales continue to grow albeit at a slightly
slower pace due to the continuous tension in the Thai politics and rising oil prices.
Anti-government protests and an increase in the global oil prices have significantly
influenced the volume of production, sales and the level of margins of producers,
retailers and restaurants. Many of them have to temporarily stop production and
start to cut costs, resulting in some of wholesalers being forced out of the market.

Supermarkets, hypermarkets and convenience stores represent the central buyers in

the Thai processed food market with the retail industry highly concentrated. They
can make large purchases and negotiate on price with manufactures, thus boosting
buyer power. Since food retailers have to stock brands preferred by Thai consumers,
their buyer power remains moderate.

The Thai market for food processing materials is growing due to increased local
production. However, the fragmentation of the supplier market eases the supplier

30
power. The threat of new entrants is moderate due to high capital investments and
the presence of well-established brands.

Substitutes to processed food are fresh products. The thread of substitute products is
likely to be low as it reflects changes in lifestyle among Thai people who have less
time for cooking and prefer eating out and patronizing restaurants. Rivalry in the
market is intensified by high fixed costs and exit barriers.

Figure 2 Porter's Five Forces adapted to the Competitive analysis

Potential
entrants
(Threat of new
entrants)
Medium

Suppiers Industry
Buyers
(Thread of Competitors
(Threat of
suppliers' (Threat of
buyrs' growing
growing intense
bargaining
barganing segment
power)
power) rivalry )
Medium High Medium

Substitutes
(Threat of
subsitute
products)
Low

Buyer Power: The main distribution channels in the Thai processed food market are
supermarkets, hypermarkets and convenience stores. Modern food retailing accounts
for approximately 70% of total retail sales. Processed food products are the major

31
source of revenue for consumer goods retailers in Thailand. Consumer preference
remains a crucial factor influencing buyer power. Retailers are unlikely to be swayed
by brand loyalty, but they have to meet the demand in tastes by Thai consumers. For
this reason, major buyers in Thailand tend to build their own distribution and brands
in order to maintain their bargaining power with processors. Their own house brands
include RTE foods, ready-to-cook prepared foods, home-made bakery items, sausages,
water, cooking oil, rice, sauces, dairy products and fruit juice. For example, the
Central Food Retail has three brands of private labels, namely “My Choice” for ready-
to-eat products, “Cooking for Fun” for specialty products such as olive oil, pasta, and
rice, and “Tops” brand for premium consumer products. Big C also has three private
label brands, which are “Happy Baht” for price sensitive customers, “Big C” for
medium-end customers and “Big C Advance” for high-end customers. Overall,
bargaining power of buyers is assessed as medium.

Supplier power: Key inputs for food manufacturing are raw materials such as grains,
spices, fruit and vegetables, and meat and fish. Nowadays, most players in Thailand
have built their own distribution channels and obtained the inputs through building
their own farms. Alternatively, they negotiate supply contracts with growers and
farmers, wherein fixed-term contract with periodically negotiated prices are common.
The increasing demand on food products with high quality requires leading players
exercise measures to maintain product quality. They tend to strengthen suppliers
through providing technologies and production inputs such as seeds, fertilizer and
equipment. Some market players enter into long-term contracts with their suppliers,
which also enhance supplier power. On the other hand, substitutes are available for
raw materials. For example, if the price of one kind of vegetable rises, a
manufacturer could buy less of it and more of a cheaper substitute. In addition, there
is an increasing shift in using imported ingredients for new products, despite the higher
costs. Thai food processors must import large quantities of food ingredients that are
not locally available. For these reasons, supplier power in general remains medium.
Figure 3 Supply Chain - Swift Co.,Ltd

Collection & Pack house Packing,

Farm grading and palletizing,
Operation (Harvesting) Processing pre-cooling

Source: Swift Co., Ltd

32
New entrants: Major food processors in Thailand have contracts with large retail
chains, which aim to maintain a substantial demand for their products. Moreover,
leading retailers have also developed their private label products in order to attract
customers and maintain market share. For example, CP have three food brands: 7-
Eleven, 7 Fresh for convenience stores and CP for hypermarkets and supermarkets,
“Tops” brand for premium consumer products by Central Food Retail. Unlike fresh
food or food without packing, customers cannot examine packaged or canned
products before purchase. Some products differ only in their packing and brands.
Therefore, purchase decisions are often made based on brand credibility. For this
reason, it can be difficult for a new company to be successful in an industry of well-
established local brands.

The need for a large capital to start operating in the market is another barrier for
new entrants, especially small, low-key ventures. In addition, food processing is very
difficult to perform without the knowledge of technical aspects. Economy of scale
benefits current players, who, having established production facilities can quickly
move into mass manufacture and produce additional volume with relatively little
further expense. For example, CP expanded its food processing business from pork
and chicken products to fish and shrimp products. The profitability of this factor
allows processors to accommodate demands from a price-sensitive market. This will
create more difficulties to new players to survive, if they do not have competitive
pricing.

On the other hand, steady market growth in recent years may pursue the new
entrants to enter the processed food market. Currently, the market share in the
packaged food category for private label products by major food retailers in Thailand
is less than 5%. Therefore, there are still significant opportunities for private label
products to grow in this market. Overall, threat of new entrants is rated as medium.

Threat of substitutes: The main substitute for processed food is fresh produce.
However, it has a significant disadvantage in having a shorter shelf-life. Moreover,
changes in lifestyles and income levels have been changing eating habits of Thais.
Especially, Thais living in urban areas have become brand conscious. Their demand
for food products is shifting away from unprocessed foods from traditional open-air
markets to a wider array of processed foods available in supermarkets, hypermarkets
and convenience stores. Therefore, there is a low likelihood of substitutes in the Thai
processed food market.

33
Industry Competitors: The Thai processed market is highly fragmented with over
10,000 food processing companies. Retailers can switch between different
manufactures’ products quite easily. However, this is currently controlled by
consumer loyalty to certain brands, which makes it difficult for retailers to abandon
the more expensive branded products for private-label alternatives. Rivalry is
intensified by the fact that products are largely undifferentiated, making it hard to
retain buyers. Exit barriers are high since leaving the market would require
divestment of substantial and often quite specialized assts. Fixed costs are also likely
to be high, and automated processes mean that production can be ramped up when
necessary. These factors tend to intensify competition within the industry. Some
players have to diversify their businesses in order to ease the degree of rivalry.
Overall, the competition level is assessed as strong in processed food market.

Picture 3 Spaghetti with Chicken Sauce by Hi-Q Picture 4 Spaghetti with Chicken Sauce by
Food Products Company Limited CPF Group

4 Environmental Scanning-PEST Analysis

Political-Legal Factors

Over the years, the Thai government has encouraged higher levels of public
investment in order to foster rapid economic growth. The current coalition
government headed by Prime Minister Yingluck Shinawatra aims to enhance the
competitiveness of Thailand by broadening market access for businesses as part of its
economic policy, promoting trade and investment, engaging in free trade agreements
and co-operation frameworks to expand international economic linkages. Those

34
efforts also include improving the bilateral relations with India. In January 2012,
during her landmark visit to New Delhi as the Indian government's guest of honour
for the country's Republic Day celebrations, Prime Minister Yingluck Shinawatra
urged the Indian side to upgrade their relations to a "strategic partnership". Since
then, both countries have been working very hard to augment the newfound strategic
values.

However, anti–government protests remain an area of concern. The political violence

in late 2013 and early 2014 is causing more government instability with potentially
negative consequences for policy continuity and business-climate competitiveness. To
offset some of these negative factors, the government offered a range of tax incentives
for foreign investors and lowered the corporate tax rate from 30% to 23% in 2012 and
20% in 2013. The BOI offers a wide range of fiscal and non-tax inducements for
investment in the food sector. These incentives include exemption or reduction of
import duties on machinery and raw materials, as well as corporate income tax
exemption and reduction. Corporate income tax can be exempted up to 8 years. Non-
tax incentives include facilitation regarding the entry and travel of expatriates and
the right to own land. Further information on the incentive scheme can be accessed
at www.boi.go.th.

“DITP has formulated measures to increase the competitiveness of Thai food

business operators, as well as to open up new distribution channels in emerging
markets such as ASEAN, China, India, Russia and Africa. This will help offset
any possible decline in orders from some of our key markets that are facing
economic difficulties”

Nuntawan Sakuntanaga, Director-General of Thailand’s Department of

International Trade Promotion (DITP)

Control of the importation, marketing, distribution and sales in the processed food
industry is shared between a number of Thai government bodies including the Food
and Drug Administration (FDA), the Ministry of Finance’s Customs Department and
Revenue Department, the Ministry of Agriculture and Cooperatives and the Ministry
of Commerce. The laws and regulations governing the Thai food industry are
confined to the scope of the Food Act of B.E. 2522 (1979). The Act authorizes the
Ministry of Public Health’s Food and Drug Administration (FDA) to implement and

35
administer the Food Act. Under the Act, all establishments producing food for sale or
importing food for sale must be licensed by the Food Control Division of the FDA. The
application and granting of licenses must be in accordance with the principles,
procedures or conditions prescribed in the Ministerial Regulations, which are
periodically elaborated, handled, and issued by the FDA’s Food Control Division.
Thai regulations prohibit processed food ingredients containing genetically modified
organisms, such as the Cry9C DNA sequence, which potentially includes frozen or
chilled corn, taco shells, corn chips, corn flakes, corn meal or corn flour.

The National Bureau of Agricultural Commodity and Food Standards (ACFS)

certifies the standards applied to agricultural commodities and food products. ACFS
standards include Good Agricultural Practices (GAP), Good Hygienic Practices (GHP)
and Hazard Analysis Critical Control Point (HACCP), as well as other standards
regarding pesticide residues and diagnostic testing for foot and mouth disease and
bovine tuberculosis. Ministry of Public Health’s Manual for Labeling Procedures
regulates processed food containing genetically modified organisms (GMO). The food
manufacture standards adopted in Thailand draws from the international legal
regulations such as Codex, OIE Standards and the International Plant Protection
Convention.

Economic-Demographic Factors

With a GDP worth of US$662 billion (on a purchasing power parity basis), Thailand
is classified as the 2nd largest economy in Southeast Asia, after Indonesia. It is also
the 4th richest nation according to GDP per capita, after Singapore, Brunei and
Malaysia. As an emerging economy depending heavily on export, Thailand has the
most diversified and advanced industrial base in the Greater Mekong Subregion.
Exports account for more than 62% of the national GDP. Thailand remains a strong
competitor in frozen shrimp, canned tuna, canned pineapples, cooked poultry and
tapioca, at least in the medium term.

While the Thai baht and stock market appear to have been affected by the political
crisis, this has been only a temporary reaction to the events and should recover
strongly. The stock market saw a significant rise following the Prime Minister’s
announcement of new elections. In 2014, the Thai economy is forecasted to grow
around 3.2% driven by private consumption, a revival of exports, and substantial
increase in government spending on public works projects. Thailand’s tourism
industry used to bounce back strongly following previous political upheaval. Hence, it

36
is expected to stay healthy in 2014. The newly released World Economic Forum
Global Competitiveness Report 2013-2014 ranked Thailand 37th among 148 assessed
economies. Thailand gains one place within the reporting period and this is the
second year in a row that Thailand has shown improvement.

Table 12 Key Macro Economic Indicators and Forecast

Indicators 2012 2013 2014 2015 2016 2017 2018

Real GDP (% change) 6.5 2.9 3.2 4.4 4.8 4.5 4.3
Nominal GDP (US$ bil.) 366.0 388.5 388.6 429.1 469.5 524.7 562.2
Real Consumer Spending (% change) 6.7 0.5 2.8 3.9 3.6 3.7 5.1
Real Imports of Goods and Services (%
6.2 2.4 3.3 5.1 5.5 5.6 5.5
change)
Real Exports of Goods and Services (%
3.1 4.0 3.6 5.2 5.1 5.0 4.9
change)
Industrial Production Index (% change) 2.1 -3.0 2.9 5.4 5.3 4.7 4.3
Consumer Price Index (% change) 3.0 2.2 1.8 2.3 3.1 3.4 3.5
Wholesale-Producer Price Index (%
1.0 0.3 2.7 3.7 3.9 3.4 3.7
change)
Policy Interest Rate (%) 2.75 2.25 2.75 3.50 3.75 4.61 4.30
Population (mil.) 66.79 67.01 67.22 67.40 67.54 67.65 67.74
Unemployment Rate (%) 0.7 0.8 0.7 0.7 0.7 0.7 0.7
Exchange Rate (LCU/US$, end of
30.63 32.82 32.09 31.49 31.37 30.48 30.71
period)
Source: IHS Global Insight

The size of the Thai workforce almost reaches 40 millions, nearly 60% of the total
population, with a majority of the workforce under 30 years of age. According to the
Thai National Food Institute, there are approximately 800,000 laborers in Thailand’s
food industry.

Over years, the living standards among Thai people have significantly improved
thank to prudent policies by the Thai government such as wage increase and tax
relief. Increasing purchasing power of consumers in Thailand translates into more
discretionary spending on food products. They are more willing to try new products
and show a strong interest in health and functional food.

Social-Cultural Factors

Thai food is known for its balance of three to four fundamental taste senses in each
dish or the overall meal: sour, sweet, salty, and bitter. Almost all Thai food is cooked
with fresh ingredients, including vegetables, poultry, pork, fish and some beef. Lime

37
juice, lemon grass and fresh coriander give the food its characteristic tang, while
liberal helpings of fresh chilies are used to add some fire to many dishes. Other
common seasonings include black pepper, ginger, tamarind, and coconut milk which
are often added to curries. Thai meals typically consist of a single dish if eating
alone, or rice with many complementary dishes served concurrently and shared by
all.

Thai cuisine only became well-known worldwide from the 1960s onwards, when
Thailand became a destination for international tourism and American troops
arrived in large numbers during the Vietnam War period. The Thai government has
launched the "Kitchen of the World" campaign since 2001 in order to promote Thai
cuisine internationally. It provided loans and training for restaurateurs seeking to
establish Thai restaurants overseas; established the "Thai Select" certification
program which encouraged the use of ingredients imported from Thailand; and
promoted integration between Thai investors, Thai Airways, and the Tourism
Authority of Thailand with Thai restaurants overseas.

Picture 4 Thai Cuisine

"Thai food ain't about simplicity. It's about the juggling of disparate elements to create
a harmonious finish. Like a complex musical chord it's got to have a smooth surface but
it doesn't matter what's happening underneath. Simplicity isn't the dictum here, at all.
Some westerners think it's a jumble of flavors, but to a Thai that's important, it's the
complexity they delight in”

Australian Chef David Thompson

38
According to a survey on cuisine perception conducted by the Kellogg School of
Management of the US, Thai food is ranked at number four; after Italian, French,
and Chinese, for the food that first comes to the minds of respondents when asked to
name ethnic cuisines. It is ranked number six behind Italian, French, Japanese,
Chinese, and Indian for the question “what is your favorite cuisine?”. Thai food
attracts a Western audience as a healthy and non-fattening diet.

Table 13 Popular Thai Dishes

Gaengmus-sa-man Rich spicy curry with beef or chicken

Gaeng kari gai Mild yellow curry with chicken
Gaeng khiaw waan Sweet green curry with coconut mild and shrimp, chicken, or beef
Tom yam kung Spicy soup with lime juice, lemon grass, mushroom and shrimp
Tom khaa gai Soup with galangal root, chicken feet and coconut milk
Gaeng jeud Chilly free soup with vegetables and minced pork
Khao phat Fried rice with shrimp, beef, pork or chicken
Khao man gai Sliced boiled chicken over marinated rice
Khao na phet Roast duck over rice.
Kuay-tiaw nam Soup with rice noodles, meat and vegetables.
Laat naa Rice noodles, meat and vegetables in a thick gravy.
Phad siyu Fried rice noodles with meat and vegetables
Sang kha-yaa Coconut custard.
maphraow
Kluay khaek Fried banana.
Mamuang khao niaw Ripe mango with sticky rice in coconut cream.

Source: Murry (2007)

Technological Factors

The Thai government realizes that science and technology are important to maintain
the competitiveness of the Thai food and agricultural industries. Significant
investments in research and development are in place to safeguard the Kingdom’s
leading position in the food processing industry. For example, the government has set
up a number of innovation platforms including:

(1) Functional Food Platform focuses on creating innovative food products and new
business in functional food, medical food, novel food and nutraceuticals;

39
(2) Food Safety Total Solutions Platform creates
innovative solutions for handling, preparation, "Thailand has been the
processing, quality control/certification and storage largest processed foods
of food, to reduce or prevent illness from unsafe exporter in Asia for many
food products. years. The country's
emphasis on research and
Leaders in the Thai food processing industry are technology is driving the
investment we're seeing
constantly developing cutting edge technologies to
today."
keep up with increasing global demand. They are
allocating more resources in areas such as yield Atchaka Sibunruang,
improvement, product diversification and Secretary-General of the
specialized packing, while the Thai government Thailand Board of
Investment.
assists by drafting and implementing policies that
are favourable to the industry. CPF, for example,
has implemented a pro-biotic farming which helps in yielding chemical free shrimps.
The company’s research team works closely with customers to develop a wide variety
of RTE food products. In the R&D field natural genetic selection, the company have
invested to produce quality breed that is healthy and fit for the farming condition in
Thailand.

“Dole Food Company has operated a growing processed fruit business in Thailand for
over 35 years. Dole has invested several million dollars over the past few years to
upgrade and expand our production facilities in Thailand. The policies of the Thai
government and the incentives offered by the BOI have been beneficial to us as
investors and have helped to ensure that we earn a reasonable rate of return on our
investment in the Kingdom”

Mark Mc Kinney, President of Dole

5 SWOT Analysis
Thailand is the only net food exporter in Asia and has the capacity produce far more
than its population consumes. The abundant natural resources of the Kingdom play a
central role in its comparative advantage among its competitors in the food
processing industry. The Thai government have implemented numerous measures to
upgrade the industry’s procedures and technologies so that its products meet
international quality and sanitation standards. In addition, the industry has been
supported by the world-class logistics facilities, including state-of-the-art ports and

40
airports. Suvarnabhumi International Airport and Laem Chabang Deep Seaport offer
manufacturers the transportation foundation investors need for their export
operations. The 225 km of inter-city motorways – currently in expansion – linking
Bangkok to other regions of the country also facilitate overall domestic
transportation. The perfect route through the East-West and North-South corridor
can distribute products to nearby countries including Laos, Cambodia, Vietnam,
Myanmar, Malaysia, Singapore and also southern China from the North and
Northeast of the country. Its strategic location provides access to a greater market of
around 600 million consumers over Southeast Asia and another 1.3 million in South
Asia as soon as AEC is launched in 2015 and ASEAN countries extend its connection
to the North West.

However, the industry is sensitive to the fluctuations in foreign currency exchange

rate. In the recent period, the Thai Bath has gradually appreciated against the US
Dollar due to the tension in the national politics. Strong Bath will lower the export
revenue. Continuation of this trend could adversely impact the competitiveness of
Thai products in the global market.

Disease outbreaks have a major on the consumer confidence leading to decline in

consumption, international trading and exports, particularly frozen food products. In
2011, the Thai poultry industry was affected by the New castle disease. The outbreak
in Thailand had caused the deaths of chickens which were later slaughtered and
illegally sold to consumers, restaurants, and shops in Nakhon Ratchasima. Further,
in July 2013, Shrimp exports from Thailand slumped to 50% because of a disease
called Early Mortality Syndrome. Sales may be affected by such disease outbreaks
due to import bans by various countries and could result in financial losses for the
food processing industry.

The price volatility of major ingredients in the production of processed food has the
potential to affect the production costs. Such volatility can be caused by a range of
domestics and international factors, for example changing weather conditions, the
demand and supply, which reflects consumers’ consumption demand and their
purchasing power, as well as market supply.

41
Table 14 SWOT Analysis

Strengths Weaknesses

Abundant raw materials Increasing dependence on imported

raw materials for new product
Competitive workforce
development and value-added products
Cutting-edge technologies in food
processing -> local production is Labour intensive; therefore the policy
increasingly substituting traditional to increase wage minimum has affected
food imports. the industry competitiveness

Diversified business operations and Excessive dependence on the

well-established brands importation of food processing and
packing equipment
Good reputation for quality, nutrition
and taste

Excellent production and logistics

systems

Attractive investment incentives

Strong government protection on local

agricultural products such as poultry
and livestock products

Opportunities Threats

Increasing demand for processed food, Volatility of commodity process

both in domestic and abroad markets
Strengthening of the Thai Bath against
Consumers are willing to try new the US Dollar
products at higher prices
Disease outbreaks

Lack of raw materials due to over-

exploitation, in the case of marine
products

Higher product costs driven by the

demand in food safety and hygiene.

42
6 Conclusion and Recommendation

Thailand presents one of the most attractive food and drink markets in the Asia
Pacific region. Upper and middle-income groups in Thailand like to spend money on
food, especially during the holidays. Consumption of food products peak during New
Year, Christmas, Chinese New Year and the Thai New Year seasons aided by gifts of
processed food becoming more and more common. In addition to the population of the
Thai citizens, the domestic market comprises millions of tourists and expats who look
for international cuisines while in Thailand, including Indians. There are about
65,000 Indian Thai with full citizenship. However, there are about 400,000 persons of
Indian origin settled in Thailand, mainly in the cities, who still maintain Indian food
traditions. At global level, the market continues experiencing a vigorous demand for
processed food products. The potential and opportunities for Indian investors and
exporters thus are boundless. With the vast natural resources and abundant
agricultural produce, India can be a supplier of raw materials and ingredients for the
food processing industry in Thailand.

Seafood, meats, nuts, baking products, breakfast cereals, canned foods, dairy
products, fruit and vegetables, frozen products, fruit juice are the products with the
largest demand in the Kingdom. Hence, there are vast opportunities for Indian
companies to export their products to Thailand.
Alternatively, Indian investors can cooperate with local operators in technology
transfer, and new product development. Localizing products is crucial to be
successful in the Thai market. Indian investors and exporters have to adjust their
products to local tastes, verify consumers’ preferences, and set a competitive price.
Existing brand loyalties are most likely to be replaced by new products that focus on
good quality, better packing, availability, promotions and competitive prices.

The Kingdom features a growing market which is looking for new and innovative
food products. Therefore Successful Indian companies should emphasize their
strengths in quality, innovation and safety. They must provide reliable product
availability, consistent quality, technical support and respond to inquiries within 24
hours.

----

End of report.

43
7 Appendix
7.1 Relevant Organization Contacts

1. Thai Food Processors’ Association

Address: 170/21-22 Floor 9, Ocean Tower 1, New Ratchadapisek Rd., Klongtei , Klongtei,
Bangkok 10110 Thailand
Tel: 02-261-2684-6, 02-261-2995 Website: www.thaifood.org
Fax: 02-261-2996-7 E-mail: [email protected]
Objectives
• To support and facilitate members’ business activities related to production of food
and processed food.
• To support and facilitate members to solve obstacles including negotiating with
outsiders for mutual benefits in doing related business activities.
• To research and advise, and assist members for doing the related business activities.
• To promote cooperation, harmony, and opinion exchange among members.
• To compromise the dispute between members or between members and outsiders.
• To cooperate with the Government to support member’s business activities.
• To set rules for members to / not to practice related to business activities.

Thai Food Processors’ Association consists of:

• Tuna Processors’ Group • Sweet Corn Processors’ Group

• Seafood Processors’ Group • Food Ingredient and Ready-to-eat
• Pineapple Processors’ Group Processors’ Group
• Fruit & Vegetable Processors’ Group

2. Thai Frozen Foods Association (TFFA)

Address: 92/6 6th Floor, Sathornthani Building 2, North Sathorn Road, Silom, Bangrak,
Bangkok 10500, Thailand
Tel: ( 662 ) 235-5622-4, (662) 636-9001-6 Website: www.thai-frozen.or.th
Fax: ( 662 ) 235-5625 E-mail: [email protected]

Thai Frozen Foods Association (TFFA) is a private non-profit organization founded in 1968
under the Thai Trade Association Act. The original name was Thai Marine Products
Association It later changed to Thai Fishery and Frozen Products Association in 1983 to
cover the frozen products industry. Finally, the present name of Thai Frozen Foods
Association was adopted in 1994. The name clearly reflects the overall scenario of frozen
products as food item, as well as expands the association's supervisory role beyond marine
products to cover many other food categories.

TFFA runs by Directors elected from its members to a 2 year-term. The main business of its
members is processing and exporting frozen foods. TFFA derives its income from annual

44
membership fee, as well as service provided such as sample analysis, arranging seminars,
sales of forms and documents. It now has more than 213 member companies.

3. Thai Broiler Processing Exporters Association

Address: 313 C.P. Tower, 22nd Floor, Silom Road, Bangrak, Bangkok, 10500 Thailand
Tel (66 2) 6382199 Email [email protected]
Fax (66 2) 6382536 Website http://www.thaipoultry.org

Thai Broiler Processing Exporters Association has its aim to promote poultry industry in
particular the export market. All activities are mainly to provide information needed for
production and marketing, and cooperate with Thai government to resolve all problem and
constraints to the industry.

4. The National Food Institute (NFI)

Address: 2008 Soi Arun Ammarin 36, Arun Ammarin Rd, Bangyeekhan, Bangplad,
Bangkok 10700 Thailand

Tel +66 (0) 2 886-8088 Fax +66 (0) 2 886-8088

E-mail [email protected] Website http://www.nfi.or.th

• The Technological Services Department assists processors in the implementation of GMP

or HACCP safety systems in food production.
• The Agricultural Research Development Agency (ARDA) cooperates with the NFI to
develop processed food production and agro-food human resources.

5. The Halal Standard Institute of Thailand

Address: 45 Moo 3 Klongkao Road, Klongsib Sub-District, Bangkok, Thailand 10530

E-mail [email protected] Website http://www.halal.or.th/

The Halal Standard Institute helps ensure that the development and certification of Halal
food standards comply with the provisions of Islam and correspond to international
standards so that it is trusted and accepted by local and international public, food producers
and consumers which will therefore promote and increase the competitiveness of the
country’s Halal food industry and protect Islamic consumers locally.

6. The Halal Science Centre, Chulalongkorn University

Address: Fl. 11-12 Chulalongkorn University , 254 Phayathai Road Wangmai Patumwan
Bangkok 10330

45
Tel +66 (0)-2218-1053-4 Fax +66 (0)-2218-1105
E-mail [email protected] Website http://www.halalscience.org

The Halal Science Centre focuses on the following mission:

• The establishment of Halal laboratories fully equipped with modern and high standard
analytical and preparative scientific devices.
• Provide analytical services for quality control against inconsistencies with Islamic law
(Haram and Najis) in raw materials, and finished products supplied for Halal Food market
• Conduct research and development on new methodologies, product innovation as well as
reagent kits exploitable for Halal food verification.
• Prepare lists of chemicals, raw materials and products as to accommodate Halal food
manufacturers and consumers.

7. Kasetsart University (KU)

Address 50 Ngam Wong Wan Rd, Ladyaow Chatuchak Bangkok 10900

Tel +66 0-2579-0113 Fax +66 0-2942-8998

E-mail [email protected] Website [email protected]

• Institute of Food Research and Product Development (IFRPD) performs research on food
science and technology to assist food industries by providing relevant information to social
and academic organizations and communities.
• KU Food Innovation Research and Services in Thailand (KU-FIRST) focuses on increasing
the competitiveness of the Thai food industry in the world market through the development
of food safety mechanisms
• Cassava and Starch Technology Research Unit aims to support industrial sectors by
conducting R&D on cassava starch properties, starch processing, starch modification and
industrial applications. The Unit also coordinates technology between producers and users
and facilitates the transfer of technology and supporting technical services.

8. The Food Processing Industry Club

Address 4th Floor Zone C Queen Sirikit National Convention Center, 60 New
Rachadapisek Rd. Klongtoey. Bangkok 10110

Tel +66 (0)-2345-1000 # 1167 Fax +66 (0) 2 345 1281-3

E-mail [email protected] Website http://ftiweb.off.fti.or.th

46
The Food Processing Industry Club has 232 members in 12 sub-sectors: beverages; tea,
coffee, cocoa milk and dairy products; spice, seasonings, sugar and deserts; meat, poultry and
feed; flour and flour products; fishery product; fresh and processed vegetables and fruits; oil,
edible fats, and other specialty foods.

9. The Food and Drug Administration:

Address: Food and Drug Administration, Ministry of Public Health Thiwanon

Road Nonthaburi 11000

Website: www.fda.moph.go.th/enginfo.htm

Mission
• Regulate and monitor health products to meet quality and efficacy standards.
• Promote Good Manufacturing Practice in the production and quality control of health
products to ensure consumer safety and to encourage exports.
• Research and develop the effectiveness of the consumer protection system for health
products.
• Promote and support the capability of health product consumers and society to be able to
protect them and be self-reliant.
• Encourage and enable all stakeholders and non-government parties to share in the
consumer protection role.

Drug Control Division

Tel: 66- 2590-7160, 66- 2590-7171 Fax: 66-2591-8390, 66-2591-8489, 66-2590-7170 Email:
[email protected]
Food Control Division
Tel: 66- 2590-7186, 66- 2590-7189 Fax: 66-2591-8460 e-mail: [email protected]

Narcotics Control Division

Tel: 66- 2590-7340, 66- 2590-7341, 66- 2590-7344 Fax: 66-2590-7333 e-mail:
[email protected]
Cosmetic Control Group
Tel: 66- 2590-7169, 66- 2591-8467 Fax: 66-2591-8468 e-mail: [email protected]

Hazardous Control Group

Tel: 66- 2590-7301, 66- 2590-7310 Fax: 66-2591-8483 e-mail: [email protected]

Food Bureau
Tel: (662) 590-7178 Fax: (662) 591-8460 E-mail: [email protected]

Inspection Division
Tel: (662) 590-7323 Fax: (662) 591-8477 E-mail: [email protected]

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10. Royal Thai Customs Department
Address: 1 Sunthornkosa Road, Klong Toey
Bangkok, 10110 THAILAND.
Tel: +66 (0) 2 667 6000, +66 (0) 2 667 7000 Fax: +66 (0) 2 667 7767
E-mail: [email protected] / [email protected]
Website: www.customs.go.th

Mission
• To provide modern, expeditious, and global standard Customs service
• To promote economic development and national competitiveness by implementing
Customs-related measures
• To enhance efficiency in Customs control, targeting at social protection
• To collect revenue in an efficient, fair and transparent manner

11. Thailand Board of Investment

Head Office: 555 Vibhavadi-Rangsit Rd., Chatuchak, Bangkok 10900, Thailand

Tel. (+66) 2553 8111 Fax: (+66) 2553 8222,
Website: http://www.boi.go.th E-Mail: [email protected]

Thailand Board of Investment (BOI):

• Offers an attractive and competitive package of tax incentives.

• Imposes no foreign equity restrictions on manufacturing activities or on some service.
• Provide assistance in the provision of visas and work permits to facilitate entry and
subsequent operation for a foreign-owned business.
• Waives restrictions on land ownership by foreign entities.
• Provides comprehensive information and advice on establishing operations in Thailand.
• Arranges site visits.
• Identifies potential suppliers, subcontractors, joint-venture partners.
• Provides useful contacts with key public and private organizations.
• Coordinates between the foreign business community and other public agencies

12. Food Analysis Division, Department of Medical Sciences

Address: Soi Bumratnaradul Hospital Muang, Nonthaburi 11000
Tel: (662) 951-0000 Ext. 99967
Fax: (662) 951-1023

13. Department of Foreign Trade

Address: Sanam Bin Nam-Nonthaburi Road Nonthaburi 11000
Tel: (662) 547-4791-2 Fax: (662) 5477-4771-86
Website: http://www.dft.go.th/Default.aspx?tabid=329

48
7.2 Production Indices
1. Production of meat 2. Manufacture of starches and starch products

(Annual average Year 2000 is the base month, Not

seasonally adjusted) (*) Preliminary Figure

Production Index Production Index

Production Index Production Index (Value
ISIC : 1511 (Production Value ISIC:1532 (Production Value
(Value added Weight) added Weight)
Weight) Weight)
Year Month Index % Change Index % Change Year Month Index % Change Index % Change
2000 100.00 - 100.00 - 2000 100.00 - 100.00 -
2001 106.05 6.1 106.05 6.1 2001 91.48 ▼ 8.5 91.48 ▼ 8.5
2002 124.34 17.3 124.34 17.3 2002 97.42 6.5 97.42 6.5
2003 148.73 19.6 148.73 19.6 2003 128.58 32.0 128.58 32.0
2004 115.42 ▼ 22.4 115.42 ▼ 22.4 2004 125.23 ▼ 2.6 125.23 ▼ 2.6
2005 114.19 ▼ 1.1 114.19 ▼ 1.1 2005 104.94 ▼ 16.2 104.94 ▼ 16.2
2006 120.77 5.8 120.77 5.8 2006 138.05 31.6 138.05 31.6
2007 116.17 ▼ 3.8 116.17 ▼ 3.8 2007 123.00 ▼ 10.9 123.00 ▼ 10.9
2008 116.87 0.6 116.87 0.6 2008 117.70 ▼ 4.3 117.70 ▼ 4.3
2009 119.31 2.1 119.31 2.1 2009 129.76 10.3 129.76 10.3
2010 127.69 7.0 127.69 7.0 2010 119.92 ▼ 7.6 119.92 ▼ 7.6
2011 127.57 ▼ 0.1 127.57 ▼ 0.1 2011 138.89 15.8 138.89 15.8
2012 138.95 8.9 138.95 8.9 2012 152.40 9.7 152.40 9.7
2013 (Jan.- Dec.*) 115.34 ▼ 17.0 115.34 ▼ 17.0 2013 (Jan.- Dec.*) 144.53 ▼ 5.2 144.53 ▼ 5.2
3. Processing and preserving of fish and fish products 4. Processing of fruit and vegetables

Production Index Production Index Production Index Production Index

ISIC : 1512 (Value added (Production Value ISIC : 1513 (Value added (Production Value
Weight) Weight) Weight) Weight)
% %
Year Month Index Index % Change Year Month Index Index % Change
Change Change
2000 100.00 - 100.00 - 2000 100.00 - 100.00 -
2001 113.05 13.0 113.05 13.0 2001 95.70 ▼ 4.3 95.70 ▼ 4.3
2002 111.75 ▼ 1.1 111.75 ▼ 1.1 2002 103.27 7.9 103.27 7.9
2003 118.84 6.3 118.84 6.3 2003 116.80 13.1 116.80 13.1
2004 110.16 ▼ 7.3 110.16 ▼ 7.3 2004 111.19 ▼ 4.8 111.19 ▼ 4.8
2005 143.85 30.6 143.85 30.6 2005 105.10 ▼ 5.5 105.10 ▼ 5.5
2006 148.46 3.2 148.46 3.2 2006 114.96 9.4 114.96 9.4
2007 142.93 ▼ 3.7 142.93 ▼ 3.7 2007 106.12 ▼ 7.7 106.12 ▼ 7.7
2008 141.47 ▼ 1.0 141.47 ▼ 1.0 2008 119.18 12.3 119.18 12.3
2009 147.32 4.1 147.32 4.1 2009 98.48 ▼ 17.4 98.48 ▼ 17.4
2010 162.56 10.3 162.56 10.3 2010 92.61 ▼ 6.0 92.61 ▼ 6.0
2011 159.90 ▼ 1.6 159.90 ▼ 1.6 2011 118.24 27.7 118.24 27.7
2012 145.25 ▼ 9.2 145.25 ▼ 9.2 2012 103.44 ▼ 12.5 103.44 ▼ 12.5
2013 (Jan.- Dec.*) 108.78 ▼ 25.1 108.78 ▼ 25.1 2013 (Jan.- Dec.*) 85.85 ▼ 17.0 85.85 ▼ 17.0
5. Manufacture of vegetable and animal oils and fats 6. Manufacture of dairy products

Production Index Production Index

Production Index (Value ISIC : 1520 Production Index (Value
ISIC : 1514 (Production Value (Production Value
added Weight) added Weight)
Weight) Weight)
Year Month Index % Change Index % Change Year Month Index % Change Index % Change
2000 100.00 - 100.00 - 2000 100.00 - 100.00 -
2001 115.70 15.7 115.70 15.7 2001 96.34 ▼ 3.7 96.34 ▼ 3.7
2002 110.27 ▼ 4.7 110.27 ▼ 4.7 2002 125.03 29.8 125.03 29.8
2003 121.98 10.6 121.98 10.6 2003 125.89 0.7 125.89 0.7
2004 121.67 ▼ 0.3 121.67 ▼ 0.3 2004 136.18 8.2 136.18 8.2
2005 117.19 ▼ 3.7 117.19 ▼ 3.7 2005 232.74 70.9 232.74 70.9
2006 137.11 17.0 137.11 17.0 2006 197.94 ▼ 15.0 197.94 ▼ 15.0
2007 131.31 ▼ 4.2 131.31 ▼ 4.2 2007 179.09 ▼ 9.5 179.09 ▼ 9.5
2008 145.11 10.5 145.11 10.5 2008 160.28 ▼ 10.5 160.28 ▼ 10.5
2009 130.36 ▼ 10.2 130.36 ▼ 10.2 2009 158.67 ▼ 1.0 158.67 ▼ 1.0
2010 131.47 0.9 131.47 0.9 2010 184.52 16.3 184.52 16.3
2011 161.03 22.5 161.03 22.5 2011 182.47 ▼ 1.1 182.47 ▼ 1.1
2012 162.25 0.8 162.25 0.8 2012 179.12 ▼ 1.8 179.12 ▼ 1.8
2013 (Jan.- Dec.*) 165.12 1.8 165.12 1.8 2013 (Jan.- Dec.*) 232.35 29.7 232.35 29.7
7. Manufacture of bakery products 8. Manufacture of sugar

Production Index Production Index

Production Index (Value ISIC : 1542 Production Index (Value
ISIC : 1541 (Production Value (Production Value
added Weight) added Weight)
Weight) Weight)
Year Month Index % Change Index % Change Year Month Index % Change Index % Change
2000 100.00 - 100.00 - 2000 100.00 - 100.00 -
2001 69.66 ▼ 30.3 69.66 ▼ 30.3 2001 73.60 ▼ 26.4 79.07 ▼ 20.9
2002 62.89 ▼ 9.7 62.89 ▼ 9.7 2002 101.11 37.4 105.41 33.3
2003 66.37 5.5 66.37 5.5 2003 119.19 17.9 124.28 17.9
2004 75.93 14.4 75.93 14.4 2004 122.13 2.5 125.97 1.4
2005 83.54 10.0 83.54 10.0 2005 80.58 ▼ 34.0 81.25 ▼ 35.5
2006 79.22 ▼ 5.2 79.22 ▼ 5.2 2006 92.28 14.5 95.67 17.7
2007 84.01 6.1 84.01 6.1 2007 124.71 35.1 130.89 36.8
2008 62.38 ▼ 25.8 62.38 ▼ 25.8 2008 122.82 ▼ 1.5 134.51 2.8
2009 64.70 3.7 64.70 3.7 2009 134.44 9.5 143.15 6.4
2010 74.99 15.9 74.99 15.9 2010 124.31 ▼ 7.5 128.73 ▼ 10.1
2011 72.43 ▼ 3.4 72.43 ▼ 3.4 2011 152.82 22.9 170.27 32.3
2012 74.21 2.5 74.21 2.5 2012 149.36 ▼ 2.3 168.35 ▼ 1.1
2013 (Jan.- Dec.*) 79.85 7.6 79.85 7.6 2013 (Jan.- Dec.*) 159.57 6.8 172.99 2.8
9. Manufacture of other food products n.e.c.

Production Index (Production Value

ISIC : 1549 Production Index (Value added Weight)
Weight)
Year Month Index % Change Index % Change
2000 100.00 - 100.00 -
2001 101.86 1.9 101.86 1.9
2002 98.87 ▼ 2.9 98.87 ▼ 2.9
2003 101.25 2.4 101.25 2.4
2004 108.80 7.5 108.80 7.5
2005 112.09 3.0 112.09 3.0
2006 110.81 ▼ 1.1 110.81 ▼ 1.1
2007 107.76 ▼ 2.8 107.76 ▼ 2.8
2008 113.84 5.6 113.84 5.6
2009 115.02 1.0 115.02 1.0
2010 123.49 7.4 123.49 7.4
2011 119.81 ▼ 3.0 119.81 ▼ 3.0
2012 131.43 9.7 131.43 9.7
2013 (Jan.- Dec.*) 131.22 ▼ 0.2 131.22 ▼ 0.2
7.3 Production vs Domestic Sales on Selected Food Products

PRODUCTION DOMESTIC SALE

PRODUCT UNIT 2010 2011 2012 2013 2010 2011 2012 2013
1 Frozen & chilled meat Chicken ton 722,108 715,505 781,690 638,404 560,936 547,466 592,915 481,578
2 Sausage ton 16,005 18,952 19,647 20,966 16,195 20,231 21,185 21,651
3 Ham ton 610 653 755 740 615 945 1,304 1,155
4 Meat ball Pork ton 531 508 505 476 533 509 505 476
5 Canned fish tuna ton 438,864 420,165 460,927 462,486 23,328 31,800 19,463 14,883
6 Canned fish sardine ton 36,760 52,473 63,277 49,318 11,806 6,552 7,474 7,938
Chilled or frozen seafood prawn
7 ton 117,936 114,576 92,320 51,379 4,869 5,463 5,307 5,458
&shrimp
8 Chilled or frozen seafood Fish ton 51,527 59,908 60,337 66,335 11,626 16,014 16,509 15,481
9 Chilled or frozen seafood Squid ton 26,488 25,565 23,306 22,045 1,862 1,604 1,730 2,257
10 Canned Vegetable Com Young ton 2,465 1,829 1,910 2,041 1,873 1,812 1,704 1,691
11 Canned fruit Pineapple ton 211,640 344,691 269,818 233,501 593 698 875 1,982
12 Fruit juice ton 123,629 158,539 151,664 98,619 26,973 21,460 38,394 15,491
13 Dried fruit &vegetable ton 26,499 21,981 22,166 21,182 5,606 2,406 3,471 3,288
14 Soy-bean oil Pure ton 76,772 85,882 70,253 55,075 77,545 82,277 70,607 54,316

15 Soy-bean oil Raw ton 71,982 95,305 82,040 63,316 324 285
- -
16 Palm oil Pure ton 587,789 700,995 772,619 824,358 349,685 395,600 377,182 436,881
17 Palm oil Raw ton 379,884 516,103 487,506 517,152 341,365 323,845 312,305 393,723
18 Coconut oil Pure ton 13,578 10,423 11,486 12,641 12,783 9,132 9,905 12,306
19 Rice oil Raw ton 106,679 118,527 114,786 98,020 117,711 131,737 108,612 104,813
20 Pasteurized milk ton 195,109 220,162 250,197 292,215 155,859 172,803 204,975 235,371
21 Ice-cream ton 76,280 79,371 94,429 100,679 66,894 72,247 85,552 78,846
22 Tapioca Flour ton 684,586 824,342 907,097 858,350 546,835 523,296 519,977 535,778
23 Wafer ton 12,976 14,209 13,933 16,672 11,429 12,720 11,884 13,733

24 Cake ton 2,879 2,509 2,639 2,699 2,872 2,517 2,708

2,624
25 Raw sugar ton 2,365,364 3,853,212 3,911,086 3,646,664 343,393 283,559 331,409 273,870

26 White sugar ton 1,339,577 1,443,009 1,354,421 1,307,428 961,388 1,078,489 1,026,655
1,075,278
27 Molasses ton 1,699,053 2,675,485 2,666,483 2,564,744 1,882,919 2,816,411 2,954,847 3,282,082
28 Soy sauce liter 2,623,072 2,595,922 2,563,374 3,031,144 2,569,892 2,637,538
2,537,292 3,006,185
29 Fish sauce ton 67,674,763 67,930,657 69,129,081 66,735,667 61,208,270 64,818,071
65,848,540 60,182,347

Source: The Office of Industrial Economics

55
7.4 Integrated Supply Chain in Thailand

FARMS District/provincial
District/provincial Major wholesalers Wholesales market
Wholesales market Markets in cities

Pack house/food Retailer Pack house/food

Retailer Retailer Pack house/food
Factory/exporter Factory/exporter
Factory/exporter

Importer/ Importer/ Importer/

Consumer wholesaler Consumer Consumer wholesaler
wholesaler

Retailer Retailer Retailer

Consumer Consumer Consumer

Source: Swift Co., Ltd

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7.5 International Trade Statistics
Thailand's export to the world

Unit: Tons – US$ Thousand

HS Code Product Label 2010 2011 2012 2013

Quantity Value Quantity Value Quantity Value Quantity Value
02 Frozen Meat 43,111 81,674 72,034 166,910 149,094 346,743 167,673 416,249
03 Frozen seafood 645,956 2,367,434 586,667 2,487,374 272,945 2,303,948 421,844 1,613,131
04 Dairy, eggs, honey, and ed. Products 114,545 188,752 121,930 223,090 110,147 210,659 136,593 248,744
07 Edible vegetables 4,499,719 1,071,404 4,002,561 1,278,340 4,939,357 1,370,845 6,030,509 1,570,207
08 Ed. Fruits & nuts, pee of citrus/melons 913,390 575,915 1,270,963 998,067 1,428,942 1,228,254 1,430,756 1,071,101
09 Coffee, tea, mate & spices 41,450 49,768 31,231 48,045 35,306 46,731 47,952 56,042
10 Cereals 9,451,139 5,496,742 11,121,223 6,686,702 6,886,372 4,731,753 7,215,262 4,566,190
11 Milling industry products 1,901,301 917,996 2,057,345 1,115,578 2,400,259 1,180,099 2,612,390 1,311,785
13 Lac, gums, resins, etc 12,849 27,177 7,880 23,351 11,286 47,813 10,121 47,601
15 Animal or Vegetables fats, oils & waxes 359,296 343,370 1,032,943 734,138 610,323 675,071 938,125 809,158
16 Ed. Prep. Of meat, fish, crustaceans 1,443,720 5,985,728 1,469,928 7,234,700 1,484,639 7,520,451 1,384,758 7,026,986
17 Sugars & sugar confectionery 4,837,242 2,373,068 7,002,741 3,883,822 7,937,709 4,273,418 6,644,435 3,107,640
18 Cocoa & Cocoa preparations 18,769 84,145 19,354 85,808 20,626 79,365 18,103 64,076
19 Preps. Of cereals, flour, starch, or milk 318,620 792,379 336,381 932,629 344,121 1,021,737 383,231 1,104,869
20 Processed Fruit and Vegetable Products 1,461,592 1,767,437 1,617,776 2,110,301 753,644 1,899,238 1,589,628 1,949,922
21 Misc. edible preparations 743,106 1,325,197 793,390 1,661,008 834,597 1,695,773 900,427 1,862,312
Total 26,805,805 23,448,186 31,544,347 29,669,863 28,219,367 28,631,898 29,931,807 26,826,013

Sources: ITC calculations based on The customs department of the kingdom of Thailand statistics since January, 2013.
ITC calculations based on UN COMTRADE statistics until January, 2013.

57
Thailand's import from the world
Unit: Tons – US$ Thousand

HS 2010 2011 2012 2013

Product Label
Code Quantity Value Quantity Value Quantity Value Quantity Value
02 Frozen Meat 28,440 39,842 52,947 90,823 61,668 130,765 73,957 130,183
03 Frozen Seafood 1,315,399 2,248,371 1,396,745 2,248,371 53,979 2,567,397 1,404,108 2,551,430
04 Dairy, eggs, honey, and ed. Products 182,166 556,452 203,533 728,920 233,965 701,878 196,699 721,153
07 Edible vegetables 508,514 221,953 748,057 297,478 1,280,668 368,125 1,018,015 405,341
Ed. Fruits & nuts, pee of
08
citrus/melons 360,597 365,809 523,989 501,077 557,975 616,715 592,680 681,604
09 Coffee, tea, mate & spices 69,618 84,947 89,414 153,954 102,495 146,843 109,045 168,088
10 Cereals 2,143,830 511,056 1,680,647 558,188 2,840,121 880,108 2,008,245 662,520
11 Milling industry products 433,849 233,545 498,175 311,894 574,603 341,937 520,599 320,137
13 Lac, gums, resins, etc 11,528 77,822 12,276 87,921 16,041 107,571 13,399 103,788
Animal or Vegetables fats, oils &
15
waxes 156,671 225,394 247,027 430,604 270,734 380,222 205,366 280,697
Ed. Prep. Of meat, fish, crustaceans,
16
etc 25,202 74,820 45,842 146,605 40,514 206,574 50,665 212,504
17 Sugars & sugar confectionery 249,346 138,452 177,152 146,735 97,488 147,950 214,621 179,173
18 Cocoa & Cocoa preparations 41,871 173,779 42,169 197,415 52,960 236,739 47,249 204,146
Preps. Of cereals, flour, starch, or
19
milk 120,886 398,396 146,143 500,833 187,421 622,557 145,872 610,923
20 Preps. Of vegs, fruits, nuts, etc 154,492 201,492 156,958 234,677 105,462 288,003 179,025 296,013
21 Misc. edible preparations 69,223 405,433 95,720 569,641 120,092 710,733 124,637 987,488
Total 5,871,632 5,957,563 6,116,794 7,205,136 6,596,186 8,454,117 6,904,182 8,515,188

Sources: ITC calculations based on The customs department of the kingdom of Thailand statistics since January, 2013.
ITC calculations based on UN COMTRADE statistics until January, 2013.

58
Thailand Export to India
Unit: Tons-US$ Thousands

2010 2011 2012 2013

HS Code PRODUCT
Quantity Value Quantity Value Quantity Value Quantity Value
02 Frozen Meat 24 48 26 105 17 97 8 68
03 Frozen Seafood 333 1,812 43 607 86 586 73 712
04 Dairy, eggs, honey, and ed. Products 230 163 5 28 3 20 4 16
07 Edible vegetables 1,652 1,584 2,351 2,770 2,048 1,901 892 842
08 Ed. Fruits & nuts, pee of citrus/melons 12,510 8,550 9,095 8,651 10,208 9,883 7,013 7,080
09 Coffee, tea, mate & spices 97 117 40 134 572 141 1,302 729
10 Cereals 109 195 303 436 233 393 479 494
11 Milling industry products 20,961 8,169 849 488 275 131 7,374 3,261
13 Lac, gums, resins, etc 152 14,271 548 5,372 940 20,266 921 12,844
15 Animal or Vegetables fats, oils & waxes 22,781 17,690 54,247 50,778 42,198 38,305 202,433 148,381
16 Ed. Prep. Of meat, fish, crustaceans, etc 167 528 135 415 222 784 118 517
17 Sugars & sugar confectionery 330,843 170,364 9,783 9,446 8,813 8,932 7,315 4,421
18 Cocoa & Cocoa preparations 259 911 622 1,838 580 1,436 61 384
19 Preps. Of cereals, flour, starch, or milk 1,380 3,867 1,007 4,090 1,101 3,402 1,514 3,894
20 Preps. Of vegs, fruits, nuts, etc 6,320 7,124 5,469 7,375 5,180 8,592 6,555 8,584
21 Misc. edible preparations 6,964 12,018 7,210 15,116 2,616 9,164 3,452 11,476
Total 404,782 247,410 91,733 107,649 75,092 104,033 239,514 203,703

Sources: ITC calculations based on The customs department of the kingdom of Thailand statistics since January, 2013.
ITC calculations based on UN COMTRADE statistics until January, 2013.

59
Thailand Import from India
Unit: Tons-US$ Thousands

2010 2011 2012 2013

HS Code PRODUCT
Quantity Value Quantity Value Quantity Value Quantity Value
2 Frozen Meat 1,716 4,698 12,203 33,233 25,558 67,153 20,285 45,374
3 Frozen Seafood 60,520 65,927 64,113 70,600 48,472 62,753 26,052 73,811
4 Dairy, eggs, honey, and ed. Products 487 2,078 353 1,566 590 2,354 1,433 5,792
7 Edible vegetables 6,386 981 9,041 2,851 28,747 4,994 23,218 4,287
8 Ed. Fruits & nuts, pee of citrus/melons 2,208 8,367 3,203 12,036 3,618 16,194 4,616 15,261
9 Coffee, tea, mate & spices 4,882 4,282 25,486 15,038 40,820 24,088 39,967 22,924
10 Cereals 2,071 3,056 42,190 12,341 269,709 89,035 121,844 43,966
11 Milling industry products 3,660 1,521 5,066 2,209 16,080 6,241 9,486 4,349
13 Lac, gums, resins, etc 1,701 5,166 1,663 10,615 1,430 16,473 1,180 10,395
15 Animal or Vegetables fats, oils & waxes 17,486 24,703 19,806 41,489 23,928 33,457 22,046 29,853
16 Ed. Prep. Of meat, fish, crustaceans, etc 122 410 227 765 513 1,081 2,340 1,798
17 Sugars & sugar confectionery 72,873 10,832 60,633 9,100 120 234 67 111
18 Cocoa & Cocoa preparations 0 1 0 2 0 1 2 38
19 Preps. Of cereals, flour, starch, or milk 18,110 9,306 18,927 9,935 17,359 10,000 7,461 4,809
20 Preps. Of vegs, fruits, nuts, etc 335 368 366 379 758 287 550 540
21 Misc. edible preparations 145 2,147 145 2,278 187 2,680 181 2,341
Total 192,702 143,843 263,422 224,437 477,889 337,025 280,728 265,649

Sources: ITC calculations based on The customs department of the kingdom of Thailand statistics since January, 2013.
ITC calculations based on UN COMTRADE statistics until January, 2013.

60
7.6 A Business Guide to Thailand
7.6.1 Procedures for Establishing a Company

•Obtain permission to use the company name. This takes 2 days

1

•Receive approval from the Department of Business Development of the Ministry of

Commerce for the memorandum of association. This takes 1 day and has an approximate
2 maximum cost of THB 25,000.

•Deposit the registered capital into a bank account. This takes 1 day
3

•Create a corporate seal. This takes 4 days and costs THB 300 to 500
4

•Application for the registration of the company as a legal entity. This takes 1 day and costs
approximately THB 5,200 to 250,000
5

•Register to obtain a taxpayer card from the Revenue Department. This takes 2 days
6

•Register at the social Security Office, which takes 1 day

7

•Submit to the Office of Labour Protection and Welfare details of the company work
regulations. This takes around 21 days.
8

Source: BOI

61
7.6.2 Forms of Corporate Structuring

Sole Proprietorship

Sole proprietorship is an enterprise owned by a single natural person. This type of structure
has unlimited liability for the proprietor. Generally, a sole proprietorship can engage in any
business not prohibited by law. There are some tax advantages to Thai sole proprietorship
because the proprietor can choose to either be taxed as a natural person based upon the gross
receipts of the business. The Thai sole proprietorship is generally restricted to foreign
nationals living in Thailand.
Partnership which can be separated into 2 categories as follows:

(1) Unregistered ordinary partnership

Unregistered ordinary partnership refers to all the partners in the company that are jointly
liable without any limitation on the partnership’s total obligations. If a new partner joins the
unregistered partnership, he immediately becomes liable for all the obligations incurred even
prior to him joining the partnership. A partnership like this is not considered a legal entity
under Thailand investment law and it is subjected to tax as if it were an individual.

(2) A limited partnership

A limited partnership means a partnership where the partners’ individual liabilities are
limited to their respective contributions to the partnership, and one or more partners are
jointly liable without any limitation on all the obligations of the partnership. This type of
partnership is treated as a corporate entity for income tax purpose.

Private Limited Company

In Thailand a plc (private limited company) is the most popular form of company for
businesses. Plcs are regulated by the Civil and Commercial Code. A plc requires three
promoters for registration. The promoters of a private limited company must be 12 years of
age or older; for a public limited company, the promoters must be 20 years of age or older, be
available throughout the registration to sign any documentation, and they must also hold at
least one share each in the company. Once registration is complete, the promoter is
permitted to sell any stock they have. Company registration costs 500 baht per 100,000 baht
of registered capital. The minimum fee is 5,000 baht and the maximum is 250,000 baht.

A Memorandum of Association document also needs to be completed. The process entails the
presentation of company information, such as share value, and involves a charge that is
related to the nature of the business.

A private limited company can be 100% foreign owned (except in specialist activities reserved
for the Thai nationals) and the investors liability is limited to the extent of the investment.

Public Limited Company

62
A minimum of 15 promoters is required to register a public company and the promoters must
own their shares for a minimum of two years before they can be transferred. The company
requires five people for The Board of Directors, three of which must be Thai nationals. The
registration of the business costs 2,000 baht per million baht of registered capital and the
shares are available for members of the public to purchase.

Branch Offices or Parent Company

A branch office can be established to carry out business on behalf of an overseas company in
Thailand. The branch is subject to Thai taxes and a minimum capital of five million baht
must be brought into Thailand within four years of start-up. Approval for a Foreign Business
License is required.

Representative Offices

Similar to a branch office but a representative office is not permitted to conduct business
transactions in Thailand. The office must transfer at least 5 million baht into Thailand as
working capital, of which two million baht must be remitted in the first year, and at least one
million baht per year after that. The office is tax-free.

Licensing

Licensing is the permission for someone else to use your intellectual property rights: either a
patent, trademark, trade secret, or copyright. Different types of license include:

Non-Exclusive License - A non-exclusive license implies that your intellectual property rights
can be awarded to more than one licensee.

Exclusive License - A little more complex because, although the license may not be exclusive
to one licensee, it may be exclusive to a geographic location, a certain product, or limited area
of use. For instance, you may grant a licensee exclusive use of the rights in France, yet grant
another licensee its use in Germany.

Patent License - The allowance of another party to use your patented product, design or
process.

Trademark License - Trademark licensing means permission is awarded to a licensee to sell

a product or service. However, the licensor retains more control in order to ensure that
quality is maintained. Quality control is in place to uphold the image of the brand / product /
service / licensor, and therefore sustain customer confidence and satisfaction.

Franchising

Franchising is the licensing out of a business name, product, technique, philosophy,

trademark, etc, for a percentage of the income. The benefits of franchising a business in
Thailand include: more freedom, as the franchisee takes on major responsibilities; minimal

63
expense; lower cost and higher profits; potential for fast growth; brand building.
Disadvantages of franchising a business in Thailand include: poor quality franchisees;
franchisees not declaring all income; poor performance.

Thailand is open to trade and investment and is a market for several international franchise
concepts. Although there is no franchise specific legislation, brands such as McDonalds and
KFC have established a presence in the country through franchising.

Representative Office

A foreign company (i.e. a company not formed under the laws of the Kingdom of Thailand
and/or not more than 50% owned by a Thai National) may setup a Representative Office in
the Kingdom of Thailand provided its activities remain limited to non-income producing
activities. Thai Representative Offices are designed and useful for a specific purpose and are
usually not valuable to most clients doing business in the Kingdom, email or call Integrity
Legal now for more information about Representative Offices in Thailand.

Regional Offices

According to List 3 section 21 of the Foreign Business Act of Thailand, the activities of Thai
Regional Offices are considered service oriented. Thai Regional Offices may be created by
multi-jurisdictional companies in those nations in which the Corporate

Head Office is not incorporated. The law regarding Thai Regional Offices does not require
that the Non-Thai Corporate Head Office have recognition as a legal entity in the foreign
country in which they are also doing business. Like Thai Representative Offices, Thai
Regional Offices are generally barred from engaging in revenue producing endeavors within
the Kingdom.

Thai Regional Offices are suited to certain clients with special needs and are generally not
meant for those wishing to set up a small to medium sized business in Thailand. Also, Thai
Regional Offices are generally not valuable to those that do not wish to engage in a large
amount of cross-border transactions and international business.

Joint Venture

In the general sense, Joint venture basically covers any task undertaken by two or more
natural or legal entities for the purpose of creating a profit thereby. The law treats most joint
ventures as a contract matter and with the exception of filing for licenses and/or tax
certificates. The parties in the joint venture remain separate entities in the eyes of the law.
Another way of creating a joint venture is to have two companies or individuals engage in
business as either a different legal Thai company or limited partnership respectively.

Source: BOI

64
7.6.3 Restricted Business Activities under the Foreign Business Act of 1999

List 1 – Businesses that foreigners are not permitted to engage in for special reasons:

– Newspaper business, radio-broadcasting station or radio/television business.

– Farming, cultivation or horticulture.
– Animal husbandry.
– Forestry and timber conversion from natural forests.
– Fisheries, especially fishing in Thai territorial waters and in specific economic areas of
Thailand.
– Extracting Thai herbs.
– Trade and auction sale of Thai antiques or objects of historical value.
– Making or casting Buddha images and alms bowls.
– Trading in land.

List 2 – Businesses concerning national security or safety that could have an adverse effect
on art and culture, customs, or native manufacture/handicrafts, or with an impact on natural
resources and the environment:

Group 1 – Businesses concerning national security or safety

– Manufacturing, distribution, repair or maintenance of:

- Firearms, ammunition, gunpowder, and explosive materials.
- Components of firearms, ammunition, and explosive materials.
- Armaments, ships, aircraft, or military vehicles.
- Equipment, or parts of any type of war equipment.
– Domestic land transportation, water transportation, or air transportation, including
domestic aviation.

Group 2 – Businesses that could have an adverse effect on arts and culture, customs, and
native manufacturing/handicrafts

– Trading of antiques or artifacts that are Thai works of art or Thai handicrafts.
– Wood carving.
– Silkworm rearing, manufacture of Thai silk, Thai silk weaving, or Thai silk printing.
– Manufacturing of Thai musical instruments.
– Manufacturing of gold-ware, silverware, nielloware, bronzeware, or lacquerware.
– Making bowls or earthenware which are of Thai art and culture.

Group 3 – Businesses that could have an adverse effect on natural resources or the
environment

65
– Manufacturing of sugar from cane.
– Salt farming, including rock salt farming.
– Mining of rock salt.
– Mining, including stone quarrying or crushing.
– Timber processing for making furniture and utilities.

List 3 – Businesses in which Thais are not ready to compete in undertakings with foreigners:

– Rice milling and flour production from rice and plants.

– Fisheries, specifically breeding of aquatic creatures.
– Forestry from re-planting.
– Production of plywood, veneer, chipboard or hardboard.
– Production of lime.
– Accountancy.
– Legal services.
– Architecture.
– Engineering.
– Construction, except:
- Construction of infrastructure in public utilities or communications requiring tools,
technology or special expertise in such construction, except where the minimum foreign
capital is 500 million baht or more.
- Other construction, as prescribed in regulations.
– Agency or brokerage, except:
- Brokerage or agency of securities or service related to future agricultural commodities
futures or financial instruments or securities.
- Brokerage or agency for the purchase/sale or procurement of goods or services
necessary to production or providing services to affiliated enterprises.
- Brokerage or agency for the purchase or sale, distribution or procurement of markets,
both domestic and overseas for the distribution of products made in Thailand, or imported
from overseas in the category of international business, with minimum foreign capital of not
less than 100 million baht or more.
- Other brokerage or agency activities, as stipulated in ministerial regulations.
– Auctioneering, except:
- Auctioneering in the manner of international bidding, not being auctions of antiques,
ancient objects or artifacts that are Thai works of art, Thai handicrafts or antique objects, or
with Thai historical value.
- Other types of auctioneering, as stipulated in ministerial regulations.
– Domestic trade in local agricultural products not prohibited by law.
– Retailing all categories of goods having of less than 100 million baht capital in total or
having the minimum capital of each shop of less than 20 million baht.
– Wholesaling, all categories of goods having minimum capital of each shop less than 100
million baht.
– Advertising.
– Hotel operation, excluding hotel management.
– Tourism.
– Sale of food and beverages.

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– Planting and culture of plants.
– Other services, except those prescribed in the ministerial regulations.

“Other service businesses” stated in List 3 effectively serves as a “catch-all” service category.
If the foreigners provide a service, not otherwise contained in List 3, the company must still
apply for and obtain a Foreign Business License prior to commencing operation. This
category includes the business activity of leasing both fixed and non-fixed assets.
Additionally, the activities in which representative offices and regional offices are allowed to
engage in are all services that fall under this category.

Also, note that special rules apply if the foreigners plan to engage in the activities of “retail
sale of goods” or “wholesale sale of goods”. Both of these activities are contained in List 3;
therefore, in order for a foreigner to engage in either of these activities the company must
first apply for and obtain a Foreign Business License.

Thai law, however, grants narrow exceptions to the Foreign Business License requirement
for those foreign companies seeking to engage in retail selling and/or wholesale selling.

For foreigners to engage in the activity of retail selling, the exception is that if the company
has a registered capital of 100 million baht (fully paid up) or more, and capital for each
additional retail store of 20 million baht or more, the foreigner is not subjected to the Foreign
Business License.

For a foreign company to engage in wholesale selling, the exception is that if the company
has 100 million baht capital or more for each of its wholesale stores, the foreigner is not
subjected to the Foreign Business License.

There is a catch-all promotional category named “Trade and Investment Support Office”
(TISO) which permits a variety of services, including monitoring/servicing affiliates,
consultancy services, engineering and technical services, and activities related to machinery,
engines, tools and equipment such as training installation, maintenance and repairs,
calibration, and software design and development. There is a condition of sales and
administration expenses of at least 10 million baht per year. TISO is not qualified for tax
benefits.
Source: BOI

7.7 Food Law and Regulatory

Food Act of B.E. 2522 (1979)

(A) Substances that can be eaten, drunk, dissolved in the mouth or induced into the body by
mouth, no matter in what form, but not including medicine, psychotropic and narcotic
substances.
(B) Substances intended for use or to be used as ingredients in the production of food
including food additives, coloring and flavoring materials.
The Act classifies food into four categories as listed below:

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1. Specifically-controlled foods: Under this category registration is required. Legal provisions
are established regarding standard quality, specifications, packaging and labeling
requirements, as well as other aspects of good manufacturing practice. At present, 14 types
of food have been listed in this category.
2. Standardized foods: Food produced under this category must adhere to quality standards
as defined in the regulations. This category was created to standardize the production of
foods that were locally produced food from small-scale or household industries in order to
provide consumers the ability to differentiate such products by qualitative attributes, and
encourage food producers on attaining hygienic quality of their products. Standardized foods
do not require registration and consists of 31 types of food.
3. Food required to bear standardized labels: This category is less-restrictive than the first
two categories, as food under this category exposes a low risk of hazard to consumers’ health
and does not have to follow specific quality standards for its manufacturing. However,
products must bear standardized labels that provide consumer information. There are 13
food items in this category.
4. General foods: Consists of raw, cooked, preserved, non-preserved, processed or non-
processed foods that are not listed in the above categories. Although registrations are not
required, general food products are controlled and monitored based on hygiene, safety,
labeling and advertisements.

Prohibited Food and Substances

1. Substances prohibited in foods:

- Sodium cyclamate and foods containing sodium cyclamate, except for export purposes.
- Brominated vegetable oil
- Salicylic acid
- Boric acid
- Borax
- Calcium iodate or potassium iodate except to be used to adjust the nutrition that related to
iodine deficiency as approved by the Food and Drug Administration
- Nitrofurazone
- Potassium chlorate
- Formaldehyde, formaldehyde solution and paraformaldehyde
- Coumarin, or 1,2-benzopyrone, or 5,6-benzo-alpha-pyrone, or cis-o-coumaric acid anhydride,
or o-hydroxycinnamic acid, lactone
- Dihydrocoumarin, or benzodihydropyrone, or 3,4-dihydrocoumarin, or hydrocoumarin
- Methyl alcohol or methanol except for using as processing aids for export purpose
- Diethyleneglycol, or dihydroxydiethyl ether, or diglycol, or 2,2’-oxybis-ethanol, or 2,2’-
oxydiethanol
- Foods contain melamine and its analogues (cyanuric acid, ammelide and ammeline)

2. Foods prohibited to be manufactured, imported, or sold:

- Corn and corn products with Cry 9C DNA Sequence

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- Ready-to-eat gelatin and jelly, which contain glucomannan or konjac flour packed in small
containers with diameter or diagonal of the widest part not larger than 4.5 cm
- All kinds of puffer fish and foods containing puffer fish meat as ingredients
- Dulcin (para-phenetolcarbamide), which is used as sweetener
- Cyclamic acid and its salts excluded salt of cyclamic acid which is sodiumcyclamate
- AF2 or furylframide as commonly called or 2-(2-furyl)-3-(5-nitro-2-furyl) acrylamide as
chemical name which used as food additive
- Potassium bromate as food additive
- Food containing dulcin, AF2, Potassium bromate or cyclamic acid and its salts as ingredient
excluded salt of cyclamic acid which has sodiumcyclamate as ingredient
- Food containing daminozide or succinic acid 2,2-dimetylhydrazide
- Crude extract which is non-water extraction and its derivatives from steavia or stevia
rebaudiana, bertoni which is not stevioside exempt producing for export or sell to
manufacturer for exporting or sell to producers who extract stevioside from stevia
- Food containing melamine and its analogues (cyanuric acid, ammelide and ammeline)
- Food containing objects other than food packed inside food packages, except for the
purposes of food quality or standard preservation such as desiccator, oxygen absorber, etc., in
separate packages; seasonings; or consuming accessories (such as plastic spoon, chopsticks,
measuring spoon, etc.) Objects other than food may be packed with the food packages, but
only if they do not pose a risk to humans or mislead consumers that those objects can be
eaten.

3. Food prohibited to be imported or sold:

3.1 Foods with expiration dates or suitable periods of consumption, which has lapsed as
stated in the label:
- Infant food and food of continuous formula for infant and children
- Supplementary food for infant and children
- Modified food for infant and modified milk of continuous formula for infant and children
- Cultured milk
- Cow’s milk that has passed pasteurized process, for example, pasteurized fresh milk,
recombined pasteurized milk, flavored pasteurized milk and pasteurized milk products, etc.
- Food with special objectives.

3.2 Beef and beef products from Great Britain, Portugal, France, Ireland, Switzerland,
Belgium, Germany, Netherlands, Denmark, Italy, Liechtenstein, Luxembourg, Spain, Czech
Republic, Greece, Japan, Slovakia, Slovenia, Austria, Finland, Israel, Poland, Canada, and
U.S.A.; except milk and milk products, hides and skins, gelatin and collagen prepared from
hides and skins and bone, protein-free tallow, dicalcium phosphate, deboned skeletal muscle
meat and its products from cattle 30 months of age or less, and blood and blood by-products.

Good Manufacturing Practices (GMP)

Since July 24, 2003 under Ministerial Notification No. 193, B.E. 2543 (2000), Titled "Method
of Food Manufacturing and Equipment for Manufacturing Food and Food Storage” Thailand
requires that domestic manufacturers and foreign suppliers of 56 types of products adhere to
GMP. These include:

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- Infant food and uniform food for infant and - Coconut oil
children - Mineral drink
- Supplementary food for infant and - Soybean milk in sealed containers
children - Chocolate
- Modified milk for infant and uniform - Jam, jelly, marmalade in sealed
modified milk for infant and children containers
- Ice - Food for special purpose
- Beverage in sealed containers - Alkaline-preserved Eggs
- Food in sealed containers - Royal jelly and Royal jelly products
- Cow’s milk - Products from the hydrolysis or
- Cultured milk fermentation of soybean protein
- Ice cream - Honey (except where the place of
- Flavored milk manufacturing does not fall under the
- Milk products description of a factory under the law-
- Food additives governing factory)
- Sodium cyclamate and food containing - Fortified rice
sodium cyclamate - Brown rice flour
- Food for weight control - Salted water for food flavoring
- Tea - Sauce in sealed containers
- Coffee - Bread
- Fish sauce - Gum and candy
- Natural mineral water - Processed agar and jelly
- Vinegar - Food Supplement
- Edible oil and fat derived from animal or - Meat Products
vegetable - Flavoring Agents
- Peanut oil - Prepared and processed frozen food
- Cream - Herbal tea
- Butter oil - Ready to cook food of which ingredients
- Butter have been clearly separated into unit
- Cheese packing in the container
- Ghee - Bakery products
- Margarine - Food of animal origin other than meat
- Semi-processed food products prescribed in MOPH notification
- Some particular sauces No. 243/2544 (2001) Re: Some Meat
- Palm oil Products
- Rice based noodles

Domestic manufacturers of these products must comply with the requirements outlined in
the Ministerial Notification. Meanwhile, importers of the covered products must present an
equivalent certificate of GMP for factories or plants that manufacture those products in line
with the Thai GMP Law. The acceptable GMP can be any of the following: a) GMP by Thai
Law; b) GMP by Codex; c) HACCP; d) ISO 9000; and e) other practice equivalent to (a)-(d).

Source: Ministry of Public Health’s Food and Drug Administration

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Food Registration Form (Orr 17 Form)

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7.8 Food Manufactures and Food Retail Company Profiles
1. Charoen Pokphand Group

Charoen Pokphand Foods Public Company Limited (CPF)

C.P.Tower, 313 Silom Road, Bangrak, Bangkok 10500

Address: Thailand
Telephone: +66 (0) 2625 8000 Fax: +66 (0) 2625 7192
Call Center: +66 (0) 2800 8000
E-mail: Consumer Center [email protected] Recruitment Center [email protected]
Press Center [email protected] Investor Center [email protected]

Website: http://www.cpfworldwide.com
Business Activity: Agro-Industry, Food Manufacturing / Distribution / Retailing/
Telecommunications

The Charoen Pokphand Group (CP) is one of Asia's largest conglomerates. It consists of three
core businesses that operate in the agribusiness and food, retail and distribution, and the
telecommunications industries with investment in over 20 countries. Founded in 1921, the
CP Group currently employs, through its subsidiaries, over 300,000 people with offices and
factories located worldwide. CP comprises Charoen Pokphand Foods, CP Retailing &
Marketing and CP Inter Food (Thailand). The company utilizes its own outlets, 7-Eleven and
CP Freshmart to distribute several brands of its frozen processed foods such as CP, Jade
Dragon and Kitchen Joy. Charoen Pokphand Group continues to dominate frozen processed
poultry and frozen processed red meat as a result of the popularity of its CP brand. In
addition, the company is very active in frozen appetizers where it offers its Jade Dragon
brand. Several types of dim sum products are available such as buns and dumpling.
Currently, the company has four factories which produce frozen processed foods. During
2013, the company aims to expand production capacity for its ready meal, bakery and frozen
processed food products. In addition, the company plans to build five new factories and to
expand its production capacity for its two existing factories via a total investment of US$ 11
million. Within frozen appetizers (Dim Sum), the company will build one new factory at
Chonburi province which will use automatic machines. This will use less labor and will
produce up to 30 tons a day.

The Charoen Pokphand Group in India:

Charoen Pokphand (India) Private Limited

Business Profile prawn/fish feed

Address 130, Opp. Grindwell Norton Ltd., Budigere Cross Road, Virgonagar Post,

72
Bangalore-560049, Karnataka, India

Contact Information Senior Vice President :

Mr. Preeda Chunwong
Tel: +91-80-2847219, 28472195
Fax: +91-80-28472662
Website: www.mycpindia.com

C.P. Aquaculture (India) Private Limited

Business Profile prawn/shrimp feed

Address and contact 47/D4 Gandhi Mandapam Road, Kotturpuram, Chennai 600 085, Tamil
(registered office) Nadu, India
Tel: +91-44-24475948; 24472880
Fax: +91-44-24472880

Address and contact 104, G.N.T. Road, Nallur & Vijayanallur Village, Sholavaram Post, Red
(factory) Hills, Chennai-600067, Tamil Nadu, India
Senior Vice President:
Mr. Boonyarit Yeesarn
Tel: +91-44-26419465/ 67/ 68, +91-44-26419545/ 46/ 47
Fax: +91-44-26419466/ 9544
Email (sales): [email protected], [email protected]
Website: http://aqua.mycpindia.com/

Charoen Pokphand Seeds (India) Private Limited

Business Profile producing hybrid maize seeds

Address 1021/1, Service Road, Geetanjali Layout, H.A.L. 3rd Stage, New
Thippasandra, Bangalore-560075, Karnataka, India

Contact Information Tel: +91-80-25294874

Email: [email protected]

2. Siam Makro

Address: 3498 2nd Fl., Lardprao Rd., Klongchan,

Bangkok 10240 Thailand

Tel.: +66(0)-2723-1000 Fax: +66(0)-2734-2141

Website: http://www.siammakro.co.th
Business activity: Consumer & Electronic Goods, Consumption Goods, Fresh & Frozen Goods

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The first membership-based cash & carry retail store in Thailand was established in 1988
and registered under the name “Makro.” In August 2013, Siam Makro was acquired by the
Thai company “CP All” in order to strengthen its business operations and its subsidiaries,
especially in the area of new product sourcing and catering products to customers’ demand.
As of June 2013, 60 traditional format Makro stores existed in Thailand with 11 stores
located within the greater Bangkok area and 49 stores in the provinces. Makro operates five
different store formats in Thailand, which are:
1) Classic Store: Typical cash & carry structure designed to serve professional customers
with store sizes ranging between 5,500-12,000 sqm. Its customer base consists of small
retailers, hotels, restaurants, and caterers (HoReCa), and other institutional business
operators.
2) Eco Store: These stores are designed to serve HoReCa customers located in tourist areas
like Phuket, Samui, and Krabi. The majority of the selling space is dedicated to food
products.
3) Eco Plus Store: These stores are designed to serve food professionals, both HoReCa and
small food retailers. Most of the selling space is dedicated to food products for the HoReCa
and small food retailers. The format is expected to be the main concept for future expansion.
4) Siam Frozen Shop: These are small stores with approximately 100-150 sqm that are
positioned as frozen food specialty stores selling mostly frozen products to HoReCa
customers. The company now has two outlets in Chiang Mai and Udonthani.
5) Makro Foodservice store: These newly launched specialty stores with approximately 1,000-
5,000 sqm provides specific food service solutions for the full spectrum of HoReCa customers,
ranging from small street vendors, fine dining restaurants, and 5-star hotels. The first store
was launched in Hua Hin in January 2012. These store formats include walk-in fruit and
vegetable cold-rooms; a seafood section with live, fresh, and frozen seafood; and gourmet
section for meats, cheeses, bakery, and wines.

Makro used to be the only major cash and carry retailer in Thailand targeting professional
customers, small retailers, hotels, restaurants, and catering institute customers. However, in
early 2011, Big C launched its “Big C Jumbo” cash and carry store to expand their food
professional customer base. These store formats usually encompasses an area of 10,000 sqm
and carries 12,000 to 15,000 SKUs. It carries approximately 80 % food and 20 % non-food
items.

3. Dole Thailand Ltd.

10th Floor Panjathani Tower

Address: 127/10-11 Nonsee Road
Chongnonsee, Yannawa, Bangkok, 10120 Thailand
Tel: +66 (0) 2686-7676
Fax: +66 (0) 2686-7600
Website: www.dole.com
Business Activity: Food Manufacturing / Distribution / Services

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Dole Thailand is majority owned by Dole Food Company, a US listed company. Dole Thailand
was established in 1972. It operates two facilities based in Hua Hin and in Chumphon and
has a regional head office in Bangkok. Dole is a major employer in those areas and is the
largest pineapple processor in Thailand.

Dole manufactures canned pineapple, mango, tropical and other local fruits, pineapple juice
and other concentrates, tropical fruit purees, pouched products, individual quick frozen IQF
fruits, and a range of deciduous and citrus fruits in plastic cups and jars. Dole is a BOI
promoted company that focuses on developing new value added packaged fruit products.

4. S&P Syndicate Public Company Limited

Address: 2034/100-107, 23rd - 24th Floor, Ital Thai Tower, New

Petchburi Road
Bangkapi, Huaykwang Bangkok 10310

Tel: +66(0) 2785 4000 / +66(0) 2785 4040

Fax: +66 (0)2-785-4040

Email Address:

• Order Food & Bakery: • Joy Card & Joy Kids Membership:
[email protected] [email protected]
• Suggestion/Complain: • Public Relation: [email protected]
[email protected] • Career: [email protected]
• Others: [email protected]

Website: www.snpfood.com
Business activity: Restaurant and bakery shop chain operator; producer of cakes, breads,
baked goods, Thai desserts prepared frozen foods and bakery products; provider of home
delivery and outside catering services; investor and operator of Thai restaurants abroad.

S&P Syndicate Public Company Limited and its group of companies operates a restaurant
and bakery business, which includes the distribution of products under the “S&P” name,
including “S&P”, “Patio”, “Patara”, “Vanilla”, “Golden Dragon”, and “Bluecup” coffee.
Overseas restaurants the operation of Thai restaurants abroad under the names “Patara”,
“Siam Kitchen”, “Thai” and “Patio”.

The company produces and distribute bakery products, frozen prepared foods, sausage and
ham products, pasta, food colorings and essences used in the food industry. These are sold
under the names “S&P”, “Delio”, “Patio”, “Vanilla”, “Bluecup” and “Royallee”. The products

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are distributed through the Company's own restaurants and bakery shops, Other services
include home delivery of foods and outside catering.

2. Thai Union Group

Address: 72/1 Moo 7 ,Sethakit 1 Road, Tambon Tarsrai,
Amphur Muangsamutsakorn, Samutsakorn 74000 Thailand
Tel : 66(0) 3481-6500 (Automatic 7 Lines)
Fax : 66(0) 3481-6886

Website: www.thaiuniongroup.com

Business activity: Tuna Shrimp Salmon Sardine and Mackerel Cephalopod Other Seafood
Ready-to-Eat Bakery Pet Food

Thai Union Group, also known as Thai Union Frozen Products Public Company Limited (or
the acronym TUF), is a Thailand based producer of various fish based food products. As the
Thailand’s largest canned-and frozen-seafood producer, it has processing plants in Thailand,
Indonesia, Vietnam and the United States. Its 2010 purchase of MW Brands of France from
Trilantic Capital Partners added plants in France, Portugal, the Seychelles and Ghana. Its
fishing fleet consists of nine vessels, giving it a capacity of 500,000 metric tons (490,000 long
tons; 550,000 short tons) of whole round fish, making it the world’s largest canned-tuna
producer. Its brands include Chicken of the Sea and John West Foods.

3. Prantalay Marketing Public Company Limited

Address: 1100 Wichianchodok Rd., Mahachai, Samutsakhon 74000

THAILAND

Tel: Local customer line Purchasing

+66(034) 820-700 department
+66(034) 820-820-625-9
HR department
+66(034) 820-820-465 Ext. 79 Marketing department
+66(034) 820-465-6
Fax: +66(034) 821-085 /+66(034) 820-734 Email: [email protected]

Business activity: frozen and fresh food, food services

Prantalay Marketing Public Company Limited was founded in 2003. The Company produces
and markets food products, specializing in frozen seafood products, to suit the changing
consumers’ lifestyle. The Company runs two brands including “Prantalay” and “Pranprai”.

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Pranprai offers a great selection of both frozen and non-frozen ready-to-eat product, for
instance, Pranprai Rice Soup with Chicken or Pork, Hainanese Chicken rice, Five-spice
stewed pork shank, BBQ pork and crispy pork with rice. The Company also offers some
international menus such as Spaghetti carbonara, Spaghetti with chicken sauce and Kimchi.
The latest innovative product under Pranprai brand is Mobile Meal with 3 flavors. The
products are available at Tesco Lotus, Big C & Big C Extra, Tops supermarket, Home Fresh
Mart, Gourmet Market, Golden Place, Foodland, Tang Hua Seng, Rimping and top
department stores throughout the country.

4. Malee Sampran Public Company Limited

Address Abico Tower, Floor 2-4, 401/1 Phaholyothin Road,

Lamlukka Pathum Thani

Telephone +66(0)-2992-5800

Fax +66(0)-2992-5817-9

Website http://www.malee.co.th

Business activity: Food Drink & Tobacco

Malee Sampran Public Company Limited is a Thailand-based company engaged in the

manufacture and distribution of canned fruits, fruit juices and drinks. The Company has two
categories of products: processed fruit, which includes canned pineapples and mixed fruits,
canned pineapple pouch packs, concentrated pineapple juices, canned sweet corns, mixed
fruits and canned seasonal fruits, and drinks, which include ultra-heat treatment (UHT) and
pasteurized milk, fruit juices and veggies, teas, corn milk, coffees and drinking water in the
form of can, UHT containers, plastic bottles and polyethylene terepthalate (PET). It
distributes its beverage products under the trademarks of Malee, First Choice, Malee I-Corn
and Chokchai Farm. The Company has subsidiaries including Malee Enterprise Company
Limited and Agri Sol Company Limited.

5. Big C Supercenter Public Company Limited

Address: 6th Floor, 97/11 Rajdamri Road, Lumpini, Pathumwan, Bangkok

10330
Tel. +66 (0)-2655-0666.

Website: http://www.bigc.co.th

Business activity: Discount Stores, Grocery Stores, Hypermarkets

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Big C, or Big C Supercenter, is a grocery and general merchandising retailer headquartered
in Bangkok, Thailand. It is the leading hypermarket chain in Thailand, managed under the
umbrella of Groupe Casino. It has operations in three countries, namely Thailand, Vietnam
and Laos.
The company was founded by Central Group in 1993 and opened its first store in Wong
Sawang intersection, Bangkok, under the brand of Central Superstore, a Central
Department Store subsidiary.

Big C has three hypermarket formats: Big C Supercenter, Big C Extra, and “wholesale
professional-oriented” format called Big C Jumbo. Big C Supercenter targets low to middle
income customer segments. Big C Extra targets middle to high income customer segments
offering a wider range of premium fresh and dry food items as well as a wide selection of
imported products, including Casino private label products. Big C Supercenter and Big C
Extra offer over 100,000 SKUs of consumer products and food items. Their sizes vary from
4,000 to 12,000 square meters (sqm) and the sales mix is approximately 60 percent food and
40 percent non-food items. Big C Jumbo stores use a wholesale membership format that
target hotels, restaurants, caterers, small and medium size retailers, companies and
institutions, and households that buy in large volumes. Big C Jumbo’s sales mix is
approximately 80% food and 20% non-food items. Big C Market stores utilize supermarket
formats that target low-to-middle income customer segments. These stores have smaller
selling areas ranging between 750 to 2,000 sqm and a smaller number of items ranging from
10,000 to 15,000 SKUs. Mini Big C stores use convenience store formats that target low-to-
middle income customer segment and carries up to 4,300 SKUs with an average size of 160
sqm and a sales mix of 90 percent food and 10 percent non-food items.

6. Tesco Lotus

Address: 629/1 Navamintr Road, Nuanchan

Buengkoom, Bangkok 10230
Tel: +66 2797-9000
Fax: +66 2797-9802

Affiliates
Tesco Stores (Thailand) Limited
Tesco Card Services Co., Ltd.
Retail Property Co., Ltd.
Tesco Global Employment Co., Ltd.

Business activity: Retail / Wholesale / Sourcing

Website: www.tescolotus.com

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Tesco Lotus is a hypermarket chain in Thailand operated by Ek-Chai Distribution System
Co., Ltd.Tesco Lotus started from the Lotus Supercenter chain started in 1994 by the
Charoen Pokphand Group with the first store opening in Seacon Square. In 1998, the British
supermarket chain Tesco took a stake to create "Tesco Lotus". CP Group sold most of its
shares in Tesco Lotus in 2003. CP operates a chain of "Lotus Supercenters" in China which
have a similar logo to the old Tesco Lotus logo, although the companies are not connected.
Tesco Lotus stores currently operate in 5 formats with 1,400 stores: Extra, Hypermarket,
Department Store, Talad and Express. Extra, Hypermarket and Department store formats
have an extensive fresh food, ambient food and grocery offer as well as a non-food offer
including electrical appliances, apparel, toys, stationery and household goods. Talad is a
"supermarket format" selling mainly groceries and Express is a convenience "mini-
supermarket" format with 1,100 stores. Many of the products on the shelf are Tesco house
brand products. Its biggest competitor in the Thai market is BigC.
The bigger stores are often set in Malls and have food courts and many other shops and stalls
available as well as a large car park. Temperatures are kept at a relatively cool 26C. Tesco
Lotus also offers a range of retail and financial services including bill payment, personal
loans (Tesco Premier), a Tesco Visa credit card and as Tesco General Insurance Broker, a
range of insurance products. Most recently, in April 2013, Tesco Lotus introduced online
shopping.
In 2000. Tesco Lotus started producing own brand products as an economical alternative for
customer by selecting qualified producers that have good quality control systems and
standards. With a customer oriented mindset and a commitment to provide products with
safety and quality, “Product Assessment Center” was established in 2002 at Tesco Lotus
Bangkapi store. It was also the very first center in Thailand’s retail business setting. The
purpose of this center is to allow consumers to get involved in product testing and suggest
their comments for product direction and development. Tesco Lotus Bangkapi is also the
center for product testing. In 2007, the name “Product Assessment Center” was changed to
“Tesco Research Centre”. To date, Tesco Lotus owns a total of 3 Tesco Research Centers.

7. Central Food Retail Company Limited (CFR)

Address: CentralPlaza Chaengwattana Office Tower 17/F
99/9 Moo-2, Chaengwattana Road
Bang Talad, Pakret, Nonthaburi 11120
Tel: +66 (0) 2831-7300
Fax: +66 (0) 2831-7357
General Email:[email protected]

Website: www.tops.co.th /
www.centralfoodretail-segafredo.com / www.centralwinecellar.com
Business activity: Retail consumer products, beverages, alcoholic and non alcoholic products,
health/hygiene products & services

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Central Food Retail Company Limited (CFR) is the largest supermarket chain in Thailand
operating since 1996 and is one of the business units under Central Retail Cooperation
Limited (CRC). The company is currently operates 212 branches nationwide with 129 stores
in Bangkok and 83 stores located in upcountry. It supplies an abundance of premium food
products including fresh meat, seafood, a wide selection of cheese, fruit and vegetable, ready-
to-eat food and many other consumer products from top local and international producers.
Cooking tips, recipes, expert advice and a personal chef service are also to be found here.

The company is comprised of several different formats to suit the lifestyle of the variety of
customers, including Central Food Hall, the Best Food Hall in Asia, Tops Market, the best
International supermarket in Thailand, Tops Super, the everyday supermarket for the smart
shopper, Tops Daily, a mini-supermarket for everyday needs, Central Wine Cellar, the best
wine shop in Thailand and Segafredo Zanetti, premium coffee.

Central Food Retail focuses on offering a wide range of quality food and wine, at good value,
with friendly services, in modern and convenient locations, to create the most stylish &
unique shopping experience. The company has grown its loyalty members with more than 3.2
million members registered on SPOT Rewards Card.

8. The Mall Group Co Ltd

Address: 144,Ramkhamhaeng Rd.,Hua Mak, Bang Kapi;

Bangkok 10240

Tel: +66-2-310-1943 Fax: 66 2 310 1562

Website: http://www.gourmetmarketthailand.com/

www.themallgroup.com

Business activity: Retailing

The Mall Group is one of Thailand's largest mall operators. Its main rival is the Central
Group. The Mall's brands include "The Mall", The Emporium, Siam Paragon, The Mall
SkyPORT, The EmQuartier, The EmSphere and BLÚPORT. The company is based in
Bangkok.

The company also has two super market brands Home Fresh Mart and Gourmet Market. The
Mall Group has positioned the Gourmet Market brand as a premium-end supermarket while
Home Fresh Mart targets more budget-minded consumer

The Mall Group Company Limited operates department store chains in Thailand. The first
department store was built in 1981, under the name 'The Mall'. Later, the company expands

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their markets by building high-class department store, under the name 'Paragon' and
'Emporium' in 1997 and 2005, respectively.

7.9 National Research Programs

The Agriculture and Food Cluster consists of 7 research programs:

The Rice Program aims to increase the rice industry’s competitive capability throughout the
production chain while reducing environmental impact. Key operation plans include:

1) Developing technologies to increase rice production efficiency, i.e. breeding rice varieties
that are resistant to pests and can adapt to climate change caused by global warming,
transferring high-quality grain production technology to farmers, developing and
transferring agricultural equipment and machine production technology for higher efficiency
and lower planting and harvesting costs, and developing ICT that to monitor rice disease and
pest outbreaks.
2) Improving milling and drying efficiency, reducing energy use and milling waste for SMEs.
3) Developing production process technology and rice-based products.
4) Improving logistics efficiency.

The Tapioca Program aims to increase the Thai tapioca industry’s competitive capability
throughout the production chain while reducing environmental impact. Key operation plans
include:

1) Developing technology to increase tapioca production efficiency, managing tapioca

varieties, soils, water, doing R&D work in biotechnology for breeding, and developing
agricultural machinery technology to be used in managing, planting and harvesting tapioca.
2) Improving tapioca starch production efficiency in order to reduce energy use during
production processes.
3) Developing technologies/processes involved in the production of modified tapioca starch
and tapioca products, in particular focusing on new technologies for tapioca starch
modification, processing technology that creates new tapioca products and creating new
added values for the industry.

The Rubber Program focuses on R&D that leads to solutions or new opportunities for the
Thai rubber industry. Key operation plans include:

1) Breeding drought-resistant rubber varieties using DNA marker technology.

2) Developing natural rubber production technology innovations in order to increase
efficiency, and reduce energy use and pollution. Examples of such innovations are the block
rubber machine innovation, the block rubber production technology innovation, the new
rubber milk preservation technology innovation and the rubber sheet smoking plant furnace
innovation.
3) Improving the Thailand’s tyre industry competitive capability by increasing the efficiency
of production machinery and upgrading tyre testing to meet international standards and
doing R&D work to improve the quality of Thai-made tyres.

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4) Improving Thai rubber product industries’ competitive capability, i.e. increasing machine
and equipment efficiency in the rubber glove industry, creating a device that uses an electron
beam to vulcanize rubber and creating innovation for safe rubber products.

The Seed Program aims to form a 50:50 research collaboration with the private sector
through the use of biotechnology to breed new varieties. Key operation plans include:

1) Evaluating germplasms and studying important genes in target plants, namely chili,
tomato, maize and cucumber.
2) Developing biotechnology for breeding.
3) Developing diagnostic and disease management technology.
4) Developing greenhouse technology aiming at the creation of a seed greenhouse industry in
Thailand.

The Plants for the Future Program focuses on sugar cane and oil palm and on breeding new
varieties with desired traits, i.e. the ability to adapt to the world’s changing temperatures
and giving higher yields. Key operation plans include:

1) Breeding energy plant varieties and global warming-adaptable plant varieties using
modern technology, creating plant breeders who are knowledgeable in biotechnology and
building an infrastructure conducive to technology development.
2) Increasing yield per area unit by applying suitable technology and agricultural area
management.

The Animal Production and Animal Health Program aims to build animal production
technology strengths by using local resources/raw materials. Key operation plans include:

1) Developing/breeding pig and shrimp varieties that are suitable for local environment.
2) Developing animal feed and using local raw materials to cut costs and reduce substance
accumulation/contamination.
3) Developing technology to control disease control and increase diagnostic efficiency.

The Food Innovation Program aims to develop high quality and safe food products for
consumers and add value to products. Key operation plans include:

1)Building risk assessment capability

2)Developing products and improving production process efficiency to add value to products

Source:

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8 Interview with National Food Institute

1.How do you evaluate the food processing industry in Thailand, e.g., production capacity,
sales volume, technology?

If we compare the country in AEC, Thailand is the best in this industry. Right now,
we have the project “Kitchen of the World” that the Government is also supporting. Thailand
has many comparative advantages such as production capacity and technology, raw material
and labor. Thailand also has the good standard in this industry. However, we have some
trouble in OEM process because it’s depending on importers and traders.

2, What are opportunities and challenges in the food processing industry?

Thailand ranks at the top in the region and the industry’s growth appears significant.
We should increase exporting the products to other countries and add more values to
products.

We do not have the high technology or innovation in this industry, thus it requires a
lot of support from the Government.

3, How do you evaluate the domestic consumption? Do changes in lifestyle influence the
future of the food processing industry?

Health food is in the trends for Thai people and the world.

Health food means using fewer chemicals while processing. Consumers now favor
organic foods. Packing should be improved to be more convenient for customers.

4, How do you predict the future of the Thai food processing industry?

It’s depending on the consumers. Right now health food is very popular while junk
food is less favored.

Packing and canning should be improved in some certain products, for example,
canned fruit should be changed from can to cup. For Ready to eat and ready to cook products,
the package should be easy to open and more convenient.

Thai food processing industry is labor intensive, hence the industry might face labor
shortage as many Thai laborers now prefer working in other industries such as services. In
this circumstance, it predicts that food processors will invest more in automatic machines in
order to cope with labor issues.

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Some leading processors have expanded their factories to others country because
Thailand has FTAs and because AEC will be launched soon. All makes the product
distribution and sales much easier.

5, What are opportunities for Indian companies and investors if they consider investing in
the food processing industry in Thailand?

India has a lot of ingredient and spices. Thai companies can joint venture with Indian
companies by importing raw materials from India, processing them in Thailand and re-
exporting them back to India.

Many Indians are vegetarian, which presents vast opportunities for doing food
business in India.

6, How does the FTA between Thailand and India and AFTA with India affect
bilateral trade between India and Thailand regarding processed food products?

Doing business under the framework of FTA is much easier given tax reduction.
Investors of both countries should concentrate on priority industries of Thailand and India.
All in all, joint venture is a good option for Indian and Thai entrepreneurs.

------

End of the interview

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