WHO WILL OWN THE FOREST? 8 PORTLAND, OREGAN, USA

1. WHO WILL OWN THE FOREST? 8 PORTLAND, OREGAN
‘‘Investing in Frontier Markets: Risks, Obstacles and
Opportunities - THAILAND’’
ANDREW G. STEEL
Chief Executive Officer
THE TREEDOM GROUP
andrew.steel@treedom.com
Michael Young, CFA. Treedom Investments

2. - Investment Advisor to the Asia Renewable Resources Fund
- Forestry Consultancy & Project Management
- Plantation Management & Luxury Aromatic Oil
Manufacturer
- UK Charity & Thai Foundation: Charitable Objectives;
Reforestation & Environmental Education

3. THAILAND – Overview

4. MACROECONOMICS
Facts about Thailand
Population (2010) 66 million
ASEAN Population 600 million
GDP (2011) US$345.6 billion
GDP Growth (2012, projected) 5.5-6.5%
Export Growth (2011) 16.4%
Corporate Income Tax 10-23%
Value Added Tax 7%
http://www.boi.go.th/index.php?page=macroeconomics

5. Why THAILAND?
Abundant resources: Largest producer of natural rubber.
Strategic location: Asia-Pacific has the world’s highest rubber
consumption growth rate.
R&D: spends more in this area than Malaysia and Indonesia.
Infrastructure: offers an ample water supply, a low incidence
of power outages, and reliable transportation, ensuring
smooth manufacture and exporting.
Free trade agreements: already negotiated reduced tariffs
on rubber products with China, ASEAN countries, Australia
and New Zealand. Launch of the single-market ASEAN
Economic Community in 2015 with 600 million consumers
will open greater trade investment opportunities.
Workforce: labour is more cost-effective than in Malaysia
and Indonesia. There is a wealth of highly skilled personnel.

6. Why THAILAND?
World Bank Ease of Doing Business 2012
Every year, the World Bank conducts a study of
Ease of Doing Business in countries around the
world, which looks at domestic and medium-
sized enterprises and quantitatively measures
regulations affecting them, covers nine
indicators for 183 economies.
Ease of Doing Business 2012 ranked Thailand
#17 in the world, placing in 4th in Asia.
In fact, government approval to invest in Thailand is not even needed unless the special
incentives offered by the Board of Investment are being applied for, and most sectors of the
Thai economy are open to foreign investors.
Source: http://www.doingbusiness.org

7. THAILAND – Risks
 Force Majeure:
 Legal:
 Land Classification:
 Obstacles/Challenges:

8. THAILAND – Floods
2011

9. Legal Status
Board of Investment (BOI):
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.

10. Thailand: Legal
Company Set up:
- without BOI approval: 51% Thai owned
entity: Foreign ownership is limited to
49%
However: If Land ownership required
Foreign ownership is limited to 39%
BOI Company: can own land.... 80% of
sales coming from overseas
“BOI overrides Company set up & Land ownership rules and
can be applied for retrospectively “

11. Land rights and land
documents in Thailand
CLASSIFICATIONS
Land Sor Kor Nung (1) - Notification form of possession of land and has little real rights associated with it
 Nor Sor Song (2) - Entitles the holder to occupy and use the land for a temporary period of time
 Nor Sor Saam (3) - The N.S.3 is a title deed which shows a person's right to possess a certain plot of land, but the land
borders must be confirmed with neighboring plots.
 Nor Sor Saam (3) Gor - boundaries of the land are defined and the land is accurately surveyed in relation to
neighboring land areas
 Nor Sor Saam (3) Khor - surveyed and issued in an area which has no parcel points set by using an aerial survey.
Nor Sor Si (4) Jor (Chanote) - certificate of true ownership for land and the only true ownership land title deed.
Nor Sor Ha (5) - along with a utilization certificate it indicates that the district officer has confirmed the utilization on the land
Documents issued by other Govt Departments
Sor Por Gor. 4-01 - Allotment of land from the land reformative committee
Sor Tor Gor - Land certificate issued only in the zone of national reserved forest. The holder of this document has
the right to reside and live on the S.T.G. land
Por Bor Tor 5 - Evidence showing that the occupier of a plot of land has been issued a tax number and has paid tax
for using and the benefit of the land
Nor Kor 3 - Utilization certificate issued under the Act of Land Allocation for Living B.E. 2511 (Self Help Settlement)
Gor Sor Nor 5 - Utilization certificate issued under the Act of Land Allocation for Living B.E. 2511 (Cooperative)

12. THAILAND –
Obstacles/Challenges
 Culture/Language
 Workforce (Visa issues)
 Border Areas
 Lawyers (Thailand 1st, Clients 2nd)
 Corruption – doesn’t exist!
 Commission culture does – Tax
deductable!

13. Reasons Limiting
Investment in Asia
1. Risks:
- Land title concerns
- Political/bureaucracy
- Due-diligence
- Liquidity
2. Lack of opportunities
3. Lack of expert and proven forestry asset managers
4. Perceived lack of industry infrastructure
5. Wider rejection of illiquid assets due to market concerns
•Developing_of_a_guideline_for_incorporating_the_interests_of_investors_into_National_Forest_Financing_Strategies_in_the_Asian_Region_v1.1.pdf
•Expert Group Meeting, "National Forest Financing Strategy", 28-29 August, 2012, FAO-Bangkok, Thailand

14. THAILAND – Opportunity
RUBBER
Attractive Investment Incentives
The Board of Investment has classified the manufacture of natural rubber and rubberwood products as a priority
activity. As such, projects receive an eight-year corporate income tax holiday and are exempt from import duties on
machinery.

15. THAILAND – Opportunity
AQUILARIA
 Niche Market Product
 Thailand's 2nd Largest Producer of Oud Oil
 7.38 % Market Share (Thailand)
 0.15 % Global Market Share
 Working with 4 Major Global Perfume
Houses

16. Oud Oil:
Wholesale Market

17. 25. Global Imports v Export
World export : Growing demand in Oud oil
Kilograms
2,000 United Arab Emirates
Singapore
Malaysia
1,529
• World export increased by 87.7%
1,500 Thailand 134 from Y2005 to Y2007.
Total
253
1,000 851 371
• Thailand is the worlds top exporter
91
434
189 enjoying the highest market share of
500 114
182
145
11
435
754
51.1% in Y2006 and 49.3%in Y2007.
- 97
World import : Middle East - the major oud oil consumers
Kilograms
2,000
Others
Bahrain
United Arab Emirates
1,571  World import surged by 92.5% from
1,500 96
Saudi Arabia 244 Y2005 to Y2007.
Total
1,000 880 536
 Most of Oudh importers are located
53
112 in Middle East region, namely Saudi
424 287
500 7
11
1 695
Arabia, U.A.E and Bahrain, covering
405 428 more than 90% of world import
-
volume.
Source : www.cites.org

18. Thailand:
Oud Oil Exports
Thailand: No. 1 exporter globally - both quality & volume
Kilograms
1,800
Others
1,627
1,600 U.A.E 51
Source : www.cites.org
Bahrain
1,400
Saudi Arabia 548
1,200
Total
972
1,000 6
754 118
800 419
18 244
600 434 184
2 183
400 36
96 112 604 608
200 2 369
1 284
10
0 83

19. THANK YOU
ANDREW G . STEEL
Chief Executive Officer
The TREEDOM Group
andrew.steel@treedom.biz