ID :
136067
Wed, 08/04/2010 - 10:29
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http://m.oananews.org//node/136067
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Thailand eyes market access in lucrative Latin American countries
As the global economic crisis has highly affected North America and Europe, yet to fully recover, Thailand has begun looking for new markets, and those Latin American countries are one of the must enticing potential targets, thanks to their high purchasing power.
Brazil is the largest economy on the continent and is the world's eighth largest market. The vivid ambience of Sao Paulo, the country's biggest city, in the southeast, demonstrates well its fast-growing economy.
According to the Royal Thai Consulate's honorary consul in Sao Paulo, Thassanee Wanderley Wanick de Souza, the world is eager to trade with Brazil due to its high and rising purchasing power and its huge population of 190 million, and this is a good opportunity for Thai entrepreneurs to try this new market.
"The middle-class community here is very large. The locals didn't really get to buy anything before [because the country was just open], and now they want to buy so much like consumer electronic items; for example, refrigerators, fans, house and home decor items, as well as food," said Ms Thassanee.
However, when it comes to Thai food, she said, its style of Asian cuisine is still very exotic to Brazilians, who have just started to be interested in eastern dishes with distinctive herbs and spices.
As Rio de Janeiro, Brazil's second largest city, also in the southeast, will host the 2014 World Cup and the Rio 2016 Olympics, the Thailand Trade Representative Office is trying to penetrate this Latin market through trade negotiations at both government-to-government level and among private sector companies.
"Hosting both games, Brazil needs more construction on basic infrastructure, buildings, offices, and residences as well as sports arenas, hospitals, and hotels. As a result, Thai entrepreneurs, representatives from the Thai Chamber of Commerce, the Federation of Thai Industries, and other investment groups wanted to offer themselves to join Brazilian projects," said Dr Vachara Phanchet, Thailand Trade Representative.
Despite opportunities, obstacles await foreign businessmen, for the Brazilian government has set tariff barriers to protect local enterpreneurs. Also, due to fears of inflation, interest for loans was set at a very high rate.
"The interest rate in Brazil is around 20 per cent for loans to entrepreneurs, which I think may be an obstacle for Thais to enter and do business in this country," said vice chairman, Somkiat Anuras, of the Thai Chamber of Commerce.
However, Brazil is Thailand's first trading partner in the continent. The Land of Smiles is known to Brazilians for pick-up truck exports, which means Thailand's auto parts industry has a chance to compete in this market.
"In terms of auto parts, Japan, China and Taiwan are our competitors. We entered this market quite late. But we're not too late, and exports for this business are still all right for us, as they have a huge market here. So, basically, we got some part of the market share," said Worachak Auto Parts Trader Club president, Punika Kitaphanich.
The current value of Thai exports to Brazil is Bt39.4 billion (US$1.22 billion) for auto parts, rubber and machinery. Nonetheless, Thailand experienced a Bt2.8-billion deficit (US$88 million) with Brazil owing to imports totalling Bt67.2 billion (US$2.1 billion) for plants, jewellery, steel, and other metals.
Meanwhile, Thailand will use the 77-km Panama Canal in Panama, a country northwest of Brazil which connects to Colombia and Costa Rica, to distribute Thai goods to the rest of the Latin American region and the United States, thanks to the canal's location as a perfect spot to serve as a food distribution centre.
As Latin America faces food security issues, Thailand plans to provide food supplies to the region. Last year, the value of Thai food exports to Panama was around Bt173 million (US$5.4 million), up from Bt124 million (US$3.8 million) in 2008.
Food-related endeavours would raise the demand for Thai cuisine, starting from authentic ingredients to restaurants.
After recent trade negotiations and proof that Thai food products are now on shelves in a Panamanian supermarket, Thai entrepreneurs were certain they would gain profits from food channelling.
"The minimum value of goods in a container should be at least Bt5 million (over US$150,000), let's say for seasoning items, while another container, let's say for fruits, should be around Bt5 million. Therefore, the first lot of goods to be imported to Panama could be worth around Bt10 million (over US$300,000)," said Visit Limprana, vice chairman of the Federation of Thai Industry's Food Processing Industry Club.
Having a small population of only around 3 million, Panama earns about 15 per cent of its gross domestic product (GDP) from fees received from ships passing through the Panama Canal. Goods passing along the canal automatically gain tax incentives when sold in Latin America.
Apart from Panama's Colon Free Trade Zone (CFZ), an institution administered autonomously at the Atlantic doorway to the Panama Canal, the government is now developing its Howard Air Force Base (a former United States Air Force base) as its new town, which needs massive infrastructure and which prompted the Thai private sector to agree to invest Bt400 million (US$12.5 million) in a warehouse in Panama.
The two countries' Chamber of Commerce recently signed four agreements leading to the pairing of their private sector's businesses such as herbs, food, agricultural products, auto parts and construction-related matter.
The total exports of Thailand to Panama was up from Bt5.61 billion (US$175 million) in 2008 to Bt6.33 billion (US$197 million) last year, mainly auto parts, television sets and components. The imports from Panama vice versa was steel and related products, accounting about Bt512 million (US$16 million) last year, up from Bt108 million (US$3.3 million) in 2008.
Thailand's business outlook with Brazil and Panama seems promising, but challenges remain when Thai entrepreneurs have, the most importantly, to compete with themselves on how to keep up with and maintain their goods and services of high quality so as to fully gain trust and continuous orders by trading partners when it comes to Thai exports. (MCOT online news)
Brazil is the largest economy on the continent and is the world's eighth largest market. The vivid ambience of Sao Paulo, the country's biggest city, in the southeast, demonstrates well its fast-growing economy.
According to the Royal Thai Consulate's honorary consul in Sao Paulo, Thassanee Wanderley Wanick de Souza, the world is eager to trade with Brazil due to its high and rising purchasing power and its huge population of 190 million, and this is a good opportunity for Thai entrepreneurs to try this new market.
"The middle-class community here is very large. The locals didn't really get to buy anything before [because the country was just open], and now they want to buy so much like consumer electronic items; for example, refrigerators, fans, house and home decor items, as well as food," said Ms Thassanee.
However, when it comes to Thai food, she said, its style of Asian cuisine is still very exotic to Brazilians, who have just started to be interested in eastern dishes with distinctive herbs and spices.
As Rio de Janeiro, Brazil's second largest city, also in the southeast, will host the 2014 World Cup and the Rio 2016 Olympics, the Thailand Trade Representative Office is trying to penetrate this Latin market through trade negotiations at both government-to-government level and among private sector companies.
"Hosting both games, Brazil needs more construction on basic infrastructure, buildings, offices, and residences as well as sports arenas, hospitals, and hotels. As a result, Thai entrepreneurs, representatives from the Thai Chamber of Commerce, the Federation of Thai Industries, and other investment groups wanted to offer themselves to join Brazilian projects," said Dr Vachara Phanchet, Thailand Trade Representative.
Despite opportunities, obstacles await foreign businessmen, for the Brazilian government has set tariff barriers to protect local enterpreneurs. Also, due to fears of inflation, interest for loans was set at a very high rate.
"The interest rate in Brazil is around 20 per cent for loans to entrepreneurs, which I think may be an obstacle for Thais to enter and do business in this country," said vice chairman, Somkiat Anuras, of the Thai Chamber of Commerce.
However, Brazil is Thailand's first trading partner in the continent. The Land of Smiles is known to Brazilians for pick-up truck exports, which means Thailand's auto parts industry has a chance to compete in this market.
"In terms of auto parts, Japan, China and Taiwan are our competitors. We entered this market quite late. But we're not too late, and exports for this business are still all right for us, as they have a huge market here. So, basically, we got some part of the market share," said Worachak Auto Parts Trader Club president, Punika Kitaphanich.
The current value of Thai exports to Brazil is Bt39.4 billion (US$1.22 billion) for auto parts, rubber and machinery. Nonetheless, Thailand experienced a Bt2.8-billion deficit (US$88 million) with Brazil owing to imports totalling Bt67.2 billion (US$2.1 billion) for plants, jewellery, steel, and other metals.
Meanwhile, Thailand will use the 77-km Panama Canal in Panama, a country northwest of Brazil which connects to Colombia and Costa Rica, to distribute Thai goods to the rest of the Latin American region and the United States, thanks to the canal's location as a perfect spot to serve as a food distribution centre.
As Latin America faces food security issues, Thailand plans to provide food supplies to the region. Last year, the value of Thai food exports to Panama was around Bt173 million (US$5.4 million), up from Bt124 million (US$3.8 million) in 2008.
Food-related endeavours would raise the demand for Thai cuisine, starting from authentic ingredients to restaurants.
After recent trade negotiations and proof that Thai food products are now on shelves in a Panamanian supermarket, Thai entrepreneurs were certain they would gain profits from food channelling.
"The minimum value of goods in a container should be at least Bt5 million (over US$150,000), let's say for seasoning items, while another container, let's say for fruits, should be around Bt5 million. Therefore, the first lot of goods to be imported to Panama could be worth around Bt10 million (over US$300,000)," said Visit Limprana, vice chairman of the Federation of Thai Industry's Food Processing Industry Club.
Having a small population of only around 3 million, Panama earns about 15 per cent of its gross domestic product (GDP) from fees received from ships passing through the Panama Canal. Goods passing along the canal automatically gain tax incentives when sold in Latin America.
Apart from Panama's Colon Free Trade Zone (CFZ), an institution administered autonomously at the Atlantic doorway to the Panama Canal, the government is now developing its Howard Air Force Base (a former United States Air Force base) as its new town, which needs massive infrastructure and which prompted the Thai private sector to agree to invest Bt400 million (US$12.5 million) in a warehouse in Panama.
The two countries' Chamber of Commerce recently signed four agreements leading to the pairing of their private sector's businesses such as herbs, food, agricultural products, auto parts and construction-related matter.
The total exports of Thailand to Panama was up from Bt5.61 billion (US$175 million) in 2008 to Bt6.33 billion (US$197 million) last year, mainly auto parts, television sets and components. The imports from Panama vice versa was steel and related products, accounting about Bt512 million (US$16 million) last year, up from Bt108 million (US$3.3 million) in 2008.
Thailand's business outlook with Brazil and Panama seems promising, but challenges remain when Thai entrepreneurs have, the most importantly, to compete with themselves on how to keep up with and maintain their goods and services of high quality so as to fully gain trust and continuous orders by trading partners when it comes to Thai exports. (MCOT online news)
