APPENDIX B BEST PROSPECTS FOR U.S. EXPORTS 1. Best Prospects for U.S. Agricultural Exports to Thailand 1993 1994 1995 Temperate Hardwood Lumber (Thousand Cubic Meters) Total market size 475 N/A N/A Total local production 0 N/A N/A Total exports 0 N/A N/A Total imports 475 N/A N/A Total imports from U.S. 429 N/A N/A Thailand's imports of temperate hardwood lumber have more than doubled each year during the last three years. Though most of this wood is sourced from U.S. suppliers, Europe has been able to meet a portion of Thailand's import needs. Tropical hardwoods have traditionally been the wood of preference in Thailand. However, diminished supplies have created tremendous potential for temperate hardwoods. 1993 1994 1995 Wheat (Thousand Metric Tons) Total market size 560 610 660 Total local production 0 0 0 Total exports 0 0 0 Total imports 553 600 660 Total imports from U.S. 215 240 250 * Market Year Jul - Jun Thailand's rapid growth in wheat consumption makes it a promising market for wheat exporters. Though the United States is the major supplier of wheat to Thailand, it faces competition from Canada, Australia, and Saudi Arabia. Price and quality are the main factors determining competitiveness of U.S. wheat in Thailand. 1993 1994 1995 Soybean Meal (Thousand Metric Tons) Total market size 913 943 943 Total local production 343 343 343 Total exports 0 0 0 Total imports 570 600 600 Total imports from U.S. 9 30 60 * Market Year Sept - Aug Growth in shrimp production and other livestock sectors, such as poultry and swine, should cause soybean meal imports to rise during 1994. India replaced China as the largest supplier of soybean meal to Thailand and Brazil is expected to increase sales. Thailand's imports of U.S. soybean meal have been increasing but U.S. soybean meal will continue to face stiff competition from India, Brazil, and China, especially considering transportation costs and cargo sizes. As a result of the Uruguay Round agreement, Thailand will replace its current surcharge on soybean meal with a tariff rate quota. The quota will be 219,580 metric tons in 1995, increasing to 230,559 by 2004. The in-quota tariff will be 20 percent, hile the out-of-quota tariff will be 148 percent in 1995, and reduced to 133 percent over 10 years. 1993 1994 1995 Cotton (Thousand Metric Tons) Total market size 380 390 N/A Total local production 22 19 N/A Total exports 6 5 N/A Total imports 320 340 N/A Total imports from U.S. 34 80 N/A * Market Year Aug - Jul Though U.S. exports of cotton to Thailand declined dramatically in 1993 due to abundant, cheap supplies from competitors, U.S. exports during 1994 are expected to rebound sharply. It is reported that China, Pakistan, and India are all experiencing severe production problems associated with various pests. Consumer-Oriented Foods One of the fastest growing import sectors is consumer-oriented food products. The value of these imports increased over 45 percent between 1992 and 1993. Specific consumer-oriented products with good retail potential include fresh fruit (apples, grapes, pears, cherries, and berries), dried fruit, processed nuts (almonds, pistachios, macadamias, walnuts), bakery mixes, snack foods, chocolate and confectionery, health foods, breakfast cereals, and cheeses. Products with good restaurant/food service potential include frozen french fries, beef, turkey, wine, salmon, condiments, soft drink and soup bases, fruit fillings, processed nuts, specialty produce, dairy products, and beer. 2. Best Prospects for U.S. Industrial Exports to Thailand *Sector Export Prospect (required) (all number in $ millions, unless otherwise noted) 1. Telecommunications Equipment* A. Rank: 1 B. Name of Sector: Telecommunications Equipment C. ITA Code: TEL 1993 1994 1995 D. Total Market Size: 750 820 896 E. Total Local Production: 520 546 573 F. Total Exports: 420 441 463 G. Total Imports: 650 715 786 H. Total Imports from U.S.: 120 132 145 Thailand's total 1993 market for telecommunications equipment was approximately $750 million, with an expected annual growth rate of 10 percent per year over the next three years (1994- 1996). The market growth results from Thailand's continuing economic growth and the increasing demands of telecommunications services among the Thai business community. Best sales prospects include telephone switching equipment, optical fiber cables, mobile telephone equipment, paging systems, private automatic branch exchanges (PABX), facsimile machines, cable TV broadcasting network equipment, and satellite signal receiving equipment. The United States and Japan are and will continue to be the largest suppliers of telecommunications equipment to Thailand. 2. Computer Software* A. Rank: 2 B. Name of Sector: Computer Software C. ITA or PS&D Code: CSF 1993 1994 1995 D. Total Market Size: 120 18 270 E. Total Local Production: 20 30 45 F. Total Exports: 0 0 0 G. Total Imports: 100 150 225 H. Total Imports from U.S.: 80 100 130 Prospects for the U.S. suppliers of computer software and services are very promising. Currently, the growth rate of computer software in Thailand is estimated to be over 80%. Such high growth rate derives mainly from an increase in consumers' demand for more industry-specific software applications which suit their need rather than the cross- industry applications. It is possible that the growth rate of computer software and services could increase up to 100% after the new copyright law which protects software goes into effect later in 1994. Investors/suppliers' confidence will increase as a result. U.S. manufacturers of computer software dominate the market with over 80% market share. Imports from the U.S. should continue to grow as there is currently no substantive competitive threat. 3. Electrical Power Systems* A. Rank: 3 B. Name of Sector: Electrical Power Systems C. ITA Code: ELP 1993 1994 1995 D. Total Market Size: 1,100 1,165 1,230 E. Total Local Production: 200 220 240 F. Total Exports: 500 525 550 G. Total Imports: 1,400 1,470 1,540 H. Total Imports from U.S.: 190 207 217 Demand for electricity increased by about 10.2% per year from 1992-1996 (7th Plan) but will decline to 7.76% and 6.07% in the periods 1997-2001 (8th Plan) and 2002-2006 (9th Plan) respectively. The highest demand recorded in March 1994 was 10,242 MW while the total power supply stood at 11,202 MW with only 9.37% electricity in reserve. The low reserve rate was due to shut-down of some generating units for repairs and maintenance. The Electricity Generating Authority of Thailand (EGAT) projects that demand will increase to 13,075 MW by 1996, 19,000 MW by 2001 and 25,515 MW by 2006. Capital investment in new power plants will reach $10 billion during 1992-1996 (7th Plan) and $22 billion in 1997-2001 (8th Plan). 4. Computers and Peripherals* A. Rank: 4 B. Name of Sector: Computer & Peripherals C. ITA or PS&D Code: CPT 1993 1994 1995 D. Total Market Size: 850 895 945 E. Total Local Production: 1,580 1,710 1,845 F. Total Exports: 2,430 2,600 2,780 G. Total Imports: 1,700 1,785 1,880 H. Total Imports from U.S.: 370 400 430 The computer market has become highly competitive. In recent years, price wars lowered profit margins and slowed the industry's growth rate to about 5% overall. The Association of Thai Computer Industry has estimated a decline of 8% for mainframes, minicomputers, and workstations. Loss of profits, the shift away from mainframes, and down-sizing of systems are responsible. Offsetting this trend is the growing demand for personal computers which is estimated at 20% in 1994. Increasingly users consider software applications first and then select the hardware. Currently, the most promising exports for U.S. companies in the computer sector are networking and multimedia computer systems. 5. Aircraft and Parts* A. Rank: 5 B. Name of Sector: Aircraft & Parts C. ITA Code: AIR 1993 1994 1995 D. Total Market Size: 665 699 735 E. Total Local Production: 0 0 0 F. Total Exports: 20 20 20 G. Total Imports: 685 719 755 H. Total Imports from U.S.: 367 385 404 U.S. firms are the main suppliers for inter-continental aircraft, while the aircraft for routes within the region are purchased from the United States, France and the United Kingdom. For aircraft parts, U.S. firms account for 70-80 percent of total imports. Thai Airways International has a yearly budget of approximately $12 million for spare parts, while the Royal Thai Armed Forces has a combined yearly budget of approximately $ 120 million. The annual growth rate for the aircraft parts in the next three years is estimated at about 5 percent per year. Thai Airways International Limited (THAI), which is the only national airline, has signed contracts for another 20 aircraft with Boeing Commercial Airplane and Airbus. The Royal Thai Navy also plans to purchase 10 Sea Harrier (AV-8) marine patrol aircraft. The Royal Thai Air Force (RTAF) has concluded a contract for one Boeing 737-400 at a cost of $ 51 million and another $ 5.5 million for spare parts. RTAF plans to purchase two oil tankers and four C-130 carriers, while the Royal Thai Army has a plan to purchase one 30-40 seat turbo-prop aircraft. 6. Food Processing and Packaging A. Rank: 6 B. Name of Sector: Food Processing and Packaging Equipment C. ITA or PS&d Code: FPP 1993 1994 1995 D. Total Market Size: 957.5 1,062 1,172 E. Total Local Production: 100 120 138 F. Total Exports: 37.5 43 50 G. Total Imports: 895 984.5 1,083 H. Total Imports from U.S.: 119 148 162 The market continues to grow at a steady 10-15%. Thailand is the largest net-exporter of food in the region and the world leader in exportation of canned pineapple and canned tuna. Also, a large, educated middle-class is creating a stronger local market for processed and packaged food. Local production of equipment is increasing but this is mainly used by small local producers and for export to surrounding countries which have not developed much skill in the industry. Domestically produced equipment is less sophisticated and does not meet the standards of foreign markets. To increase exports to these markets, high-speed and high-tech machinery is required. The demand for this imported equipment is projected to grow as Thailand gains more skill and a larger share of the market. This is particularly true of the packaging industry which is growing at a faster pace than processing. The market for imported machinery is divided among five or six countries but Germany and Taiwan hold the largest share and the U.S. contributes 13.3%. There is good receptivity to U.S. products but European and Asian suppliers are more aggressive and invest more in marketing and servicing the growing demand in the Thai market. The greatest potential lies in canning equipment and machinery followed by the bakery sector, juice processing and packaging and the production of seafood which includes equipment for refrigeration and freezing. 7. Industrial Chemicals A. Rank: 7 B. Name of Sector: Industrial Chemicals C. ITA Code: ICH 1993 1994 1995 D. Total Market Size: 2,336 2,559 2,803 E. Total Local Production: 380 399 419 F. Total Exports: 195 207 220 G. Total Imports: 2,151 2,367 2,604 H. Total Imports from U.S.: 310 326 343 Thailand's demand for chemicals is estimated to grow at 9.5 percent per year over the next three years. Although Thailand can produce ethylene, propylene, styrene, citric acid, and some basic inorganic chemicals, the demand for other chemicals relies heavily on imports. U.S. chemicals are well accepted locally due to their good quality. The United States is the second largest supplier of chemicals to Thailand. The largest supplier is Japan. Opportunities still exist for new-to- market firms for sales of specialty chemicals and chemical additives for textiles, electronics, pulp and paper, rubber and plastics industries. Water treatment chemicals will also have a good market. 8. Process Controls - Industrial A. Rank: 8 B. Name of Sector: Process Controls - Industrial C. ITA Code: PCI 1993 1994 1995 D. Total Market Size: 564 630 704 E. Total Local Production: 114 121 129 F. Total Exports: 80 85 90 G. Total Imports: 530 594 665 H. Total Imports from U.S.: 120 138 159 Since 1979 Thailand's increasingly diversified manufacturing sector has made the largest contribution to the nation's economy. Real output growth in the manufacturing sector, 14% in 1990, slowed to about 10% annually in 1992 and 1993. Strongest growth in 1993 was registered in industries producing primarily for domestic consumption, including vehicles and transportation equipment (up 24.8%), construction materials (up 21.4%), petroleum products (up 14.3%) and beverages (up 11.9%). Thailand's manufacturing base is diversifying into more sophisticated sectors to meet international market standards. Accordingly, requirements for process control instruments and equipment are increasing. The demand is expected to grow at 12% per year. More than 90% of the local demand is satisfied by imports. U.S. instruments are well accepted for their good quality and reliability. 9. Defense Industry Equipment A. Rank: 9 B. Name of Sector: Defense Industry Equipment C. ITA Code: DFN 1993 1994 1995 D. Total Market Size: 229 251 276 E. Total Local Production: 24 25 26 F. Total Exports: 0 0 0 G. Total Imports: 205 226 250 H. Total Imports from U.S.: 27 32 39 The market demand for defense equipment ranges from $220 to $280 million each year. Imports account for 90 per cent of the total market, while the rest is supplied mainly by the Army Weapon Production Center (AWPC). Thailand's own defense industry capabilities are rudimentary and mainly of the assembly type; main parts are based on foreign sources. The defense equipment produced by the AWPC includes: 81mm and 120mm mortars, and 105mm shell. The growth rate for the defense industry is expected to remain at a stable 10% annually over the next three years. The Royal Thai Military's current policy is to downsize personnel and replace them with more sophisticated equipment. Procurement plans and upgrade programs for the aging equipment are moving forward. Future demand will stem from: the establishment of the RTAF pyro-technic and 20 mm production facilities; the RTADS III air defense system; Global Positioning System (GPS); upgrading program for F-5 simulators; the Royal Thai Army's procurement plan for artillery training simulators and unmanned/remotely piloted vehicle (RPV); and the upgrading program for the M113 vehicles. The Royal Thai Navy is also negotiating with the North Industries of China for a $6.3 million upgrade for its existing 40/60 ammunition facility to produce the 37 mm anti-aircraft ammunition. The U.S. traditionally has been Thailand's primary source of defense equipment. In recent years, the People's Republic of China (PRC) has become an important supplier of frigates and wheeled vehicles. Other traditional suppliers of Thai defense equipment include: the UK, Germany, France, Italy, Belgium, the Czech Republic, Republic of Korea, Israel, Russia, Spain, and South Africa. 10. Medical Equipment A. Rank: 10 B. Name of Sector: Medical Equipment C. ITA or PS&D Code: MED 1993 1994 1995 D. Total Market Size: 320 380 450 E. Total Local Production: 120 130 150 F. Total Exports: 140 160 180 G. Total Imports: 280 330 400 H. Total Imports from U.S.: 45 55 64 Prospects for the U.S. suppliers of medical equipment are promising. Growth rate of the medical market is expected to be about 15%-20% over the next three years. Growth rate of imports is likely to continue for at least the next five years for the following reasons. First, government policy and planning stress expanding health care facilities and hospitals throughout the country, particularly in remote areas by allocating 57% of the total health care budget of the Ministry of Public Health for expansion of health care facilities. Second, because there are insufficient government health care facilities, there is an increase in private investment in hospitals in the Bangkok area and other large cities. The growth rate of private hospitals is estimated to be 20% per year. Thirdly, the higher level of education and better international communication has created a need for better quality of life and better health care for the Thai population. Thai people are much more aware of their health and are demanding better health care facilities and services. The best sales prospect for the U.S. manufacturers are Bedside Monitor, CT Scanner, MRI, Electrocardiogram, Electro Cardio monitor, Electrical Defibrillator. 11. Plastics, Materials and Resins A. Rank: 11 B. Name of Sector: Plastics Materials & Resins C. ITA Code: PMR 1993 1994 1995 D. Total Market Size: 2,282 2,597 2,987 E. Total Local Production: 1,600 2,080 2,704 F. Total Exports: 800 1,040 1,352 G. Total Imports: 1,482 1,557 1,635 H. Total Imports from U.S.: 180 189 199 The demand for plastics materials and resins in Thailand is expected to grow at an average annual rate of 15%. The demand growth results from the rapid expansion of the electronics, electrical, and automobile industries in Thailand. The increased demand for consumer products and packaging materials also jack up the requirements for plastics materials and resins. Since 1989, Thailand has been producing basic ethylene, propylene, polyethylene, polypropylene, polystyrene and polyvinyl chloride resins. A new olefin plant and several intermediate and downstream facilities are under construction. However, the local demand still exceeds the domestic supply. More than half of the requirements are met by imports and this situation will remain the same during the next few years. 12. Construction Equipment A. Rank: 12 B. Name of Sector: Construction Equipment C. ITA Code: CON 1993 1994 1995 D. Total Market Size: 1,824 1,989 2,239 E. Total Local Production: 170 187 224 F. Total Exports: 40 44 53 G. Total Imports: 1,694 1,846 2,068 H. Total Imports from U.S.: 90 98 110 The construction sector increased 5% in 1992, 9% in 1993 and is expected to rise to 13% in 1994. This is because of the strong expansion in housing for lower and medium income earners and continued construction of commercial complexes and office buildings, as well as the implementation of several mass transit projects in the Bangkok Metropolitan area. Government construction is also on a high growth rate trend. Several major infrastructure projects have been started. The projects include: Widening of 1,991 kilometers national highways to four lanes at a cost of $ 1.8 billion; SRT double tracking projects; Second Bangkok International Airport project; and the $ 400 million Sixth water supply improvement project. Around 90 percent of market demand for construction equipment is met by imported products, while the remaining demand is satisfied locally. The locally produced equipment includes: simple type concrete mixers, stone crushing plants, conveyors, and compactors. In addition to new construction equipment, Thailand also imported remanufactured (used) construction equipment from Japan. Used equipment accounts for about 40 percent of the total market of construction equipment in Thailand. Annual growth rate for construction equipment is projected at 12 percent per year in the next three years. 13. Building Products* A. Rank: 13 B. Name of Sector: Building Products C. ITA Code: BLD 1993 1994 1995 D. Total Market Size: 3,116 3.396 3,837 E. Total Local Production: 2,681 2,927 3,334 F. Total Exports: 205 236 271 G. Total Imports: 640 704 774 H. Total Imports from U.S.: 69 76 83 The construction sector grew 9 percent in 1993, and should reach 13 percent in 1994. This is because of the strong expansion in housing for low and medium income earners and the continuation of construction of commercial complexes and office buildings. Building construction in the metropolitan area, in 1993, expanded 10.5 percent over 1992. The permits for residential construction have increased by 20 percent. According to a survey conducted by an international property consultant, there are 23,278 first class residential units under construction and due to be completed in the next four years. The total market demand for building products is estimated at $ 3,116 million, with an increase of about 10 to 15 percent per year in the next three years. Around 80 percent of building products are locally produced, while the rest are imported. Japan and Taiwan are the major suppliers controlling about 70 percent of the total imports, while the U.S. made building products have a share of around 10 percent. U.S. made tinted sheet glass, heat insulation materials, automatic door closers, roofing and water sealing compounds are well accepted by local end-users. 14. Pumps, Valves, and Compressors A. Rank: 14 B. Name of Sector: Pumps, Valves & Compressors C. ITA Code: PVC 1993 1994 1995 D. Total Market Size: 648 740 845 E. Total Local Production: 120 126 132 F. Total Exports: 66 69 72 G. Total Imports: 594 683 785 H. Total Imports from U.S.: 114 133 155 The market for pumps, valves and compressors in Thailand is expected to grow at an average annual rate of 14% with imports fulfilling most of demand. The construction of new refineries (Shell and Caltex), the laying of undersea and inland oil/gas pipelines, and the construction of petrochemical plants in the Eastern Seaboard of Thailand offer good opportunities for sales of pumps, valves and compressors in Thailand. The liberalization of the establishment of new retail gas stations, the increasing exploration of oil/gas fields, the development of tap water facilities, the construction of waste water treatment plants, and the future development of petrochemical industry in the Southern Seaboard Development areas (1995-2005) will create even more sales opportunities. U.S. products are highly rated for their quality and dependability. Centrifugal pumps, compressors for refrigerating equipment, gas compressors, and fuel dispensing pumps are most saleable products for U.S. firms in Thailand. 15. Laboratory Scientific Instruments* A. Rank: 15 B. Name of Sector: Laboratory, Scientific Instruments C. ITA Code: LAB 1993 1994 1995 D. Total Market Size: 435 541 674 E. Total Local Production: 136 149 163 F. Total Exports: 95 104 114 G. Total Imports: 394 496 625 H. Total Imports from U.S.: 45 49 54 Manufacturing accounts for nearly a third of GNP. The manufacturing sector grew 10% in 1993. The Thai Government encourages foreign investments and thus provides more incentives to export-oriented industries. The Government also encourages investors in Thailand to put more emphasis on research and development. Consequently, requirements for laboratory and scientific instruments are increasing rapidly. The demand is projected to grow at a rate of 24% per year. About 90% of the demand is satisfied by imports. The United States and Japan are two major suppliers to end-users in Thailand. U.S. laboratory and scientific instruments are well accepted for their good quality. Opportunities exist for sales of speed indicators; instruments and apparatus for measuring or checking quantities of heat, sound or light; lenses, prisms, mirrors and other optical elements, and spare parts of machinery, plant or laboratory equipment for treatment of materials by a process involving a change of temperature. 16. Machine Tools and Metalworking A. Rank: 16 B. Name of Sector: Machine Tools & Metalworking Equipment C. ITA Code: MTL 1993 1994 1995 D. Total Market Size: 564 626 701 E. Total Local Production: 108 119 132 F. Total Exports: 40 44 48 G. Total Imports: 501 551 617 H. Total Imports from U.S.: 55 66 80 The manufacturing sector grew at 10% in 1993 and is expected to grow at 11 percent in 1994. The fastest growing industries are vehicles and parts, consumer goods, household electrical appliances, construction materials and plastic products. The growth rate for machine tools and metalworking equipment is projected at about 10 percent per year over the next three years. Imports account for 80 percent of machine tools and metalworking equipment used in Thailand. In addition to new machine tools and metalworking equipment, Thailand also imported used machine tools from Europe, Taiwan, Japan and the United States. Grinding machine, Electrical Discharge Machine (EDM) and CNC metal cutting machine tools offer the greatest export opportunities for U.S. firms. 17. Pollution Control Equipment* A. Rank: 17 B. Name of Sector: Pollution Control Equipment C. ITA Code: POL 1993 1994 1995 D. Total Market Size: 38.4 46.1 55.3 E. Total Local Production: 5.4 6.2 7.1 F. Total Exports: 0 0 0 G. Total Imports: 34.1 42.7 53.3 H. Total Imports from U.S.: 10.2 12.8 15.9 Although a relatively small market according to recent years' statistics, pollution control as an industry is projected to grow at approximately 50% over the next three years. Three key factors are contributing to the pollution control equipment and services market: 1. Favorable investment climate - more industries, more pollution. 2. Rapid urbanization. 3. Newly established environmental laws as of 1992. Since Thailand is in the early stage of environmental development and pollution control, large marketing opportunities for pollution control mainly focus on engineering services for large scale industries and infrastructure projects, rather than imported machinery. Most conventional treatment equipment currently employed in small- to medium-scale industries is locally made. However, demand is rapidly growing for imported control and monitoring instruments. The best opportunities for U.S. technologies appear to be in the following market sectors: 1. Food processing industries. 2. Industries which generate heavy metal wasters, i.e. steel and metal processing, automobile assembly, electronics, electroplating. 3. Petrochemical/chemical industries. 4. Hotels/ highrise buildings. 5. Hospitals. 18. Architecture/Construction/Engineering Services A. Rank: 18 B. Name of Sector: Architecture/Construction/Engineering Services C. ITA Code: ACE 1993 1994 1995 D. Total Market Size: 320 352 394 E. Total Local Sales: 256 281 315 F. Total Export Sales: N/A N/A N/A G. Total Foreign Sales: 64 71 79 H. Total U.S. Sales: 13 16 20 The services market is estimated at $320 million a year, 80% of which is handled by local architectural and engineering firms and 20% by international designers and contractors. The market will grow at 10% a year. U.S. design/engineering firms hold 15-20% of the total services performed by international firms. U.S. firms will find good opportunities in the following sectors: electric power, petroleum, transportation, environment, commercial buildings. The construction sector remains strong, growing at 11% in 1993 and expected to increase to 13% in 1994. Contributing factors are continued private construction of high rise commercial buildings, private residential real estate developments, and government infrastructure investments. The Seventh National Economic Development Plan (1992-96) set investments at $51.2 billion. Major government construction projects include: electric power plants ($30 billion to year 2000); refining/petrochemical plants ($4-6 billion); Second Bangkok International Airports ($4 billion); rail double tracking; mass transit projects in Bangkok and provinces; new highway development. 19. Automotive Parts and Service Equipment* A. Rank: 19 B. Name of Sector: Automotive Parts & Service Equipment C. ITA Code: APS 1993 1994 1995 D. Total Market Size: 4,975 5,635 6,384 E. Total Local Production: 3,544 4,076 4,687 F. Total Exports: 302 347 400 G. Total Imports: 1,733 1,906 2,097 H. Total Imports from U.S.: 61 67 74 Thailand is the world's 17th largest automobile and truck market and the second largest pickup truck market. There are 12 automotive assembly plants in Thailand producing passenger cars and commercial vehicles. Sales of vehicles continue to increase at over 20% a year and are expected to rise to 1 million units in the year 2000. Vehicle sales in 1994 should reach 500,000 units. The total vehicle fleet is about 7.5 million units. The tremendous growth in auto sales and enforcement of new auto emissions standards in mid-1994 will create growth opportunities for parts and service equipment. The Japanese auto makers dominate both the car and parts market with over 90% of the market share. They also control 53% of the service/diagnostic equipment market. U.S. automotive parts and service equipment exports and investments in Thailand are limited, but are expected to increase significantly. The Thai Government's automotive industry policy favors assemblers over importers, therefore, U.S. auto parts manufacturers seeking joint ventures or direct investments will realize the greatest returns. Chrysler (Jeep Cherokee), Dana (prop shafts and axles), and TRW (piston Rings) are all successful investors. U.S. suppliers of service equipment have a good opportunity to supply the independent service stations market segment. 20. Oil and Gas Field Machinery A. Rank: 20 B. Name of Sector: Oil & Gas Field Machinery C. ITA Code: OGM 1993 1994 1995 D. Total Market Size: 450 517 594 E. Total Local Production: 40 44 48 F. Total Exports: 20 22 24 G. Total Imports: 430 495 570 H. Total Imports from U.S.: 57 65 75 The market for oil and gas equipment in 1994 and 1995 is estimated to grow at 15% per year. After negotiations for over a decade, Thailand and Malaysia signed the Production Sharing Contracts for the rights to explore and exploit petroleum resources in the Joint Development Area (JDA) in the Gulf of Thailand. Seismic surveys are expected to begin soon. The PTT Exploration & Production Company (PTTEP) plans to invest 160 million U.S. dollars in 1994. The Petroleum Authority of Thailand (PTT) has opened bids for the laying of a parallel natural gas pipeline in the Gulf of Thailand. PTT has recently awarded contracts to Samsung of Korea and Toyo Engineering Corporation of Japan for construction of two natural gas separation plants in the South and the Eastern Seaboard of Thailand separately. More retail gas stations will be constructed due to the Thai government's liberalization policy. All the above projects create opportunities for sales of oil and gas equipment. 21. Cosmetics and Toiletries A. Rank: 21 B. Name of Sector: Cosmetics and Toiletries C. ITA or PS&D Code: COS 1993 1994 1995 D. Total Market Size: 100 120 150 E. Total Local Production: 60 70 87 F. Total Exports: 35 40 45 G. Total Imports: 75 90 108 H. Total Imports from U.S.: 22 24 26 Growth rate of cosmetics and toiletries is estimated at 20% in 1994 and 1995. The local market value of cosmetics has been estimated at $340 million in 1994. The market for cosmetics alone can be divided into three categories: The United States and Japan are the major suppliers of high end import products. Import license products are produced locally under the license brands, for which the price is lower than the first group and the market is much larger. Finally, local cosmetic brands target low-end consumers, but are not popular because of the belief that the quality is not as good as the other two groups. The market for cosmetics in Thailand is fairly competitive. Newcomers may enter the market fairly easily because the sales of the products depend largely on each company's marketing and promotion strategy to create demand. 22. Plastics Production Machinery A. Rank: 22 B. Name of Sector: Plastics Production Machinery C. ITA Code: PME 1993 1994 1995 D. Total Market Size: 333 365 399 E. Total Local Production: 55 58 61 F. Total Exports: 22 23 25 G. Total Imports: 300 330 363 H. Total Imports from U.S.: 20 22 24 The plastics industry is one of the fastest growing industries in Thailand. Although Thailand can produce blow molding machines, the demand for plastics production machinery is mainly met by imports and is projected to grow at about 9% per year during the 1994-1996 period. The number of plastic processing plants registered with the Ministry of Industry increased from 639 in 1974 to 1,575 in 1984 and to 3,000 now. Due to the lower labor costs and the increasing incentives offered by the Thai Government, more and more foreign investors are relocating to Thailand. These facilities manufacture plastics products for household use and for the automotive, electronics and electric household appliance industries. Exports of plastics products from Thailand to the world markets exceeded one billion U.S. dollars in 1993. 23. Household Consumer Goods A. Rank: 23 B. Names of Sector: Household Consumer Goods C. ITA or PS&D Code: HCG 1993 1994 1995 D. Total Market Size: 1454 1744.8 2093.7 E. Total Local Production: 1870 2000 2400 F. Total Exports: 530.2 656.4 814.6 G. Total Imports: 314.9 367.4 428.3 H. Total Imports from U.S.: 32.2 34.2 40.2 Thailand's recent economic boom has rapidly increased per capita income and the demand for household consumer goods. The household consumer market especially electrical appliances, is dominated by Japanese and Korean brands which are locally made. The market shares for electrical appliance of these two countries are approximately 40% and 20% respectively. Most of their market share occurs in the medium/low level market. Due to the superior quality of U.S. products, the high level market is suitable for U.S. products. The size of the kitchenware segment is approximately $50 million. The lower end of the market is dominated by Thai, Chinese (PRC), Indonesian,and in the not too distant future, Vietnamese products. U.S. products will find a place at the upper end of the market, but will face competition from German and U.K. products already being marketed in Thailand. 24. Dental Equipment A. Rank: 24 B. Name of Sector: Dental Equipment C. ITA or PS&D Code: DNT 1993 1994 1995 D. Total Market Size: 100 115 125 E. Total Local Production: 0 0 0 F. Total Exports: 0.5 0.6 0.7 G. Total Imports: 100.5 115.6 125.7 H. Total Imports from U.S.: 18 19 20 The market for dental equipment is expected to grow about 5%- 10% each year for the next three years. The main reasons for the growth of dental industry are the increase in number of dentists graduated about (500 each year), and the rapid increase in private hospitals and clinics around the Bangkok area. Due to fear of AIDS infection through dental treatment, people are increasingly seeking care at private hospitals with dental care facilities and at medium-to high-end dental clinics. Currently, there are about 2,300 dental clinics, 1,400 hospitals that have dental units, and 4,000 outlets of dental equipment altogether in the market. The products that are best selling are autoclaves and infection control equipment. Japanese manufacturers are the leading suppliers with about 35% of the total market for dental equipment. German manufacturers are second with 25% while U.S. manufacturers account for about 12% of sales. 25. Travel and Tourism Services A. Rank: 25 B. Name of Sector: Travel & Tourism Services C. ITA or PS&D Code: TRA 1993 1994 1995 D. Total Market Size: 1,880 2,068 2,775 E. Total Local Production: N/A N/A N/A (Total expenditures by Thai travelers locally) F. Total Exports: 1,880 2,068 2,775 (Total expenditures by Thai travelers overseas) G. Total Imports: N/A N/A N/A H. Total Imports from U.S.: 85 94 104 (Total expenditures by Thai travelers in the U.S.) Thailand outbound travel market to the U.S. is steadily increasing and will continue to do so over the foreseeable future. Thailand is now a fast-growing, rapidly emerging market that should not be ignored by U.S. travel and tourism services suppliers. Thailand outbound travel has continued to see a steady rise of the United States as a preferred destination. Increasingly affluent Thai travelers are seeking more for their tourist dollar and consider the U.S. an affordable and accessible market for a 7 to 10 day vacation. Thai arrivals to the U.S. increased 10.3% in 1993, totaling 70,000 persons. The total number of Thais leaving the country increased to 1.52 million in 1993 from 1.28 million in 1992, an 18% increase. 65% or approximately 1 million are tourists, with the remainder businessman, workers, students, etc. Traditionally a magnet for educated and wealthy Thais, the U.S. is a top destination for the growing numbers of upwardly mobile professionals. Thai business people combine essential business trips with personal or family vacations. Students also are travelling to U.S. in increasing numbers.