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Thailand's defense industry (2016.12)
- 1. THAILAND’S DEFENSE INDUSTRY KOTRA BANGKOK, DECEMBER 2016
- 2. Highlight of today’s presentation Thai Defense Market Thailand Military Strength Cases in Thailand How to approach Thai Armies Key Players in Thai Defense Industry Future Business Plan Promising Defense Items Trade Show
- 3. THAI DEFENSE MARKET Domestic Unrest • Uprising in Southern part of Thailand • Political Turmoil International Conflict • Protection of National Territories and Trade routes Global Invasion • Terrorist
- 4. Ministry of Defense of Thailand 2013 2014 2015 2016 2017 Ministry of Defense 180,491.53 183,819.97 192,949.09 206,461.31 210,777.46 Royal Thai Army 88,558.38 91,516.98 95,485.61 101,426.84 103,909.15 88,558.38 91,516.98 95,485.61 101,426.84 103,909.15 180,491.53 183,819.97 192,949.09 206,461.31 210,777.46 0.00 50,000.00 100,000.00 150,000.00 200,000.00 250,000.00 300,000.00 350,000.00 VALUE(MILLIONTHB) Budget of the Ministry Fiscal Year 2013-2017 (Mil. THB)
- 5. Budget Share 2017 4% 0% 8% 49% 20% 19% 0% YEAR 2017: BUDGET APPROPRIATION Office of Permanent Secretary Royal Aide-De-Camp Department Royal Thai Armed Forces Headquarters Royal Thai Army Royal Thai Navy Royal Thai Air Force Defense Technology Institute 2016 2017 Department Million THB % Million THB % Office of Permanent Secretary 8,675.0 4.20% 9,119.6 4.33% Royal Aide-De-Camp Department 742.3 0.36% 859.8 0.41% Royal Thai Armed Forces Headquarters 15,822.9 7.66% 16,237.8 7.70% Royal Thai Army 101,426.8 49.13% 103,909.2 49.30% Royal Thai Navy 40,395.4 19.57% 41,155.4 19.53% Royal Thai Air Force 38,208.6 18.51% 39,047.2 18.53% Defense Technology Institute 1,190.3 0.58% 448.5 0.21% Total 206,461.3 100.00% 210,777.5 100.00% Note: Fiscal Year 2017 starts from Oct 2016- Sep 2017
- 6. Encouragement of national defense system project plan This is the budget share each departments within Ministry of Defense use to purchase weapon and arms. Budget to increase capability to defense the Kingdom 5,757.31 6,025.29 6,845.42 7,615.06 174.71 13,663.93 14,422.51 14,518.42 15,586.44 3,251.25 80,539.03 90,450.75 94,275.87 100,026.06 2,095.96 32007.74 34,987.22 36,746.00 39,629.87 1,450.57 31760.63 33,153.95 35,375.94 37,886.08 3,201.91 2013 2014 2015 2016 2017 MILLIONTHB FISCAL YEAR Office of Permanent Secretary Royal Thai Armed Forces Headquarters Royal Thai Army Royal Thai Navy Royal Thai Air Force
- 7. THAILAND’S MILITARY STRENGTH Thailand ranked at 20 of 126 nations as of 2016, Global Fire Power. Tank value includes main battle tanks, light tanks and tank destroyers, either wheeled or tracked. AFV value includes Armored Personnel Carriers (APCs) and Infantry Fighting Vehicles (IFVs). Number of the quantity stays the same as previous year. Category Quantity 2015-2016 Main supplier country Tanks 722 U.S.A., Ukraine, China Armored Fighting Vehicles (AFVs) 2,614 U.S.A., UK, Ukraine Self-Propelled Guns (SPGs) 26 U.S.A., France Towed-Artillery 695 U.S.A., Austria, Franc e, Israel Multiple-Launch Rocket Systems (MLRSs) 13 China, Thailand
- 8. THAILAND’S MILITARY STRENGTH Thailand ranked at 20 of 126 nations as of 2016, Global Fire Power. Includes both fixed-wing and rotary-wing aircraft from all branches of service. Category Quantity Main supplier country 2015 2016 Aircraft 573 551 U.S.A., France Fighters/ Intercept ors 76 76 U.S.A., France Fixed-Wing Attack Aircraft 95 95 U.S.A., France Transport Aircraft 272 327 U.S.A., France, Sweden Trainer Aircraft 146 148 U.S.A., Sweden, Czech Republic Switzerland Helicopters 244 282 U.S.A., France Attack Helicopters 7 7 Sweden, U.S.A., Germany
- 9. THAILAND’S MILITARY STRENGTH Thailand ranked at 20 of 126 nations as of 2016, Global Fire Power. Aircraft carrier value includes dedicated “helicopter carrier” vessels. Total naval strength includes all known auxiliaries as well. Category Quantity Main supplier country 2015 2016 Airc raft carrier 1 1 Spain Frigates 12 7 China, U.S.A., Thailand Destroyer 0 0 - Corvettes 5 7 U.S.A., Thailand Submarine 0 0 - Coastal Defense Craft 27 31 Thailand, Italy, Singapore Mine Warfare 7 7 U.S.A., Germany, Italy, Thailand
- 10. “ ” The ultimate and terminal purpose of Thai defense is to have a compact armies with appropriate man force, up- to-date battle technology and equipment to be able to operate various types of missions. “NATIONAL MILITARY STRATEGY B.E. 2560-2579” (DRAFT)
- 11. CASES IN THAILAND KOTRA BANGKOK, DECEMBER 2016
- 12. SUCCESS CASES IN THAILAND Projec t owner Royal Thai Army Model VT-4 main battle tanks Quantity 28 (Quantity in c omplete c ontrac t c ould be 138) Contrac t value USD 150 Million Supplier NORINCO (North Industries Corp) (CHINA) Date of c ontrac t Marc h 2016 (Complete c ontrac t will be done within 2 years) Delivery period First lot within the end of 2016 (unknown amount) Note Thai Armed Forc es (TAF), one of Thailand’s reliable sourc e for defense newsupdate, revealed that if VT- 4 main battle tanks are satisfying, Thai government might sign a c ontrac t for 150 tanks.
- 13. SUCCESS CASES IN THAILAND Projec t owner Royal Thai Army Model Mi-17V5 Transport Helicopter Quantity 12 Contrac t value USD 120 Million Supplier Mil Mosc ow Helic opter Plant (RUSSIA) Date of c ontrac t Proposed to Russian Government on 21 May 2016 Delivery period 3 years delivery (4 helic opters per annum)
- 14. SUCCESS CASES IN THAILAND Projec t owner Royal Thai Air Force Model EC725 Multirole Utility Helicopters (H225M Caracal) Quantity 2 Contrac t value NA (Estimated 70 Million USD in reference with Poland purc hase) Supplier Airbus Helic opters (FRANCE) Date of c ontrac t 2016 Delivery period 2019 Note Phase Contrac t Delivery I in 2012 for 4 vehic les 2015 II in 2014 for 2 vehic les 2016 III in 2016 for 2 vehic les 2019
- 15. SUCCESS CASES IN THAILAND Projec t owner Royal Thai Navy Item CANTO-V Anti-Torpedo Decoy Reason To install on future Frigate made to order by Daewoo Shipbuilding & Marine Engineering (DSME) Quantity 24 Contrac t value USD 4.45 Million Supplier DCNS(FRANCE) Date of proc urement February 2016 Method of proc urement Special Method Sourc e Royal Thai Navy’s Procurement Information Center, February 4, 2016 CANTO-V Anti-Torpedo Decoy
- 16. DIFFICULTIES ENTERING THAI DEFENSE MARKET Complicated budget’s procedure Long decision-making process Each army has its own authority to procure or purchase Hard to find update info and upcoming procurement plan. Concealed purchasing plan, until it’s time; therefore, it can be too late for Korean companies to participate Insight info will easier to gain via local dealers/agents; thereby, having partners in Thailand will definitely be an upper hand Language / Documents are sometimes required in Thai only
- 17. HOW TO APPROACH THAI ARMIES Direct Contact Send letter to make appointment Presentation Consideration Purchase/Procurement Indirect Contact Find local business partners Military Corporation Top-Down (Vertical) Corporation Government-to-Government
- 18. CONTACT THAI ARMIES Royal Thai Army Royal Thai Air Force Royal Thai Navy Department Directorate of Logistics Person Mr. Soontorn Phone (66-2) 241-0404 Ext. 94729 Website www.dlogs.rta.mi.th Department Naval Acquisition Management Office Person Mr. Thanachote Phone (66-2) 475-7500 Website www.namo.navy.mi.th Department Directorate of Operation Person Ms. Supaporn Phone (66-2) 534 1377 Website www.do.rtaf.mi.th
- 19. Company name Business category Royal Defence Co., Ltd. Firearms and ammunition Military aircraft and helicopter armaments Naval weapon systems G.H. International Co., Ltd. Anti-riot and protection products e.g. smoke color grenade, gas grenade, tear gas, EOD, bulletproof vest, etc. Gunno Systems Integration Co., Ltd. Security and Intelligence solutions e.g. X-ray screening vehicle, EOD Robot & Disruptor System integrator and military equipment e.g. Unmanned Aerial Vehicle (UAV), Perimeter Intrusion Detection System (PIDS) Ch. Paisarn Co., Ltd. Ballistic panels for vehicles, ballistic helmets, CVC helmets, bulletproof vests Chaiseri Metal & Rubber Co., Ltd. Armored vehicle Royal Sky Co., Ltd. Aircraft and aviation related products DataGate Co., Ltd. Air Defence Missile System Other high-tech defense products A. & Marine (Thai) Co., Ltd. High technology electronics equipment and various electronics items for use in the marine communications and navigation system KEY PLAYERS IN THAI DEFENSE INDUSTRY
- 20. FUTURE BUSINESS PLAN KOTRA BANGKOK, DECEMBER 2017
- 21. UPCOMING PROCUREMENT Projec t owner Royal Thai Navy Model Type 039BSubmarine Yuan Class SSK Quantity 3 Contrac t value USD 1,100 Million Supplier Wuc hang Shipbuilding, Wuhan (CHINA) Date of c ontrac t On 1 July 2016, the RTN submitted a funding plan for its36 billion baht submarine proc urement projec t to the c abinet for c onsideration with the expenditure to be spread over 11 years. If approved, the 1st submarine would be bought for 13 billion baht (365 Million USD) between fiscal years 2017- 2021. The 2nd and 3rd submarines would be purc hased during the remainder of the 11-year period. Note 14 c ommittees from Royal Thai Navy out of 17 voted for China, 2 for Germany and 1 for Sweden. Main reasons for c hoosing 039B is bec ause of the c heaper price, c an get 3 submarines instead of 2 if purc hase from other c ountries; moreover, Air- Independent Propulsion system allows submarine to dive and stay for 21 days without merge to water surface, unlike German and Korean submarineswhic h don’t have this system and must go to surfac e within 5-6 days. This short time would be caught under enemy’s radar.
- 22. UPCOMING PROCUREMENT Projec t owner Royal Thai Air Force Item KS-1C Anti-Aircraft Missile System of Medium-Range Reason RTAF deploying the new medium-range missile KS-1C proc ured from China. New variant with range inc reased to 70 km. Currently, RTAF rely on QW-2 MANPAD and RBS-70 SHORAD missile. KS-1C will be deployed a system of KS-1C for air-base defense. Quantity 1 Contrac t value NA Supplier The Chinese People's Liberation Army (PLA) (CHINA) *Most likely but not c onfirm Sourc e Thai Armed Forces, April 20, 2016 KS-1C Anti-Aircraft Missile System of Medium-Range
- 23. UPCOMING PROCUREMENT Projec t owner Royal Thai Army Item Armored Personnel Carrier Reason RTA military equipment standard c ommittee draft up the requirement for the new APC prior to the start of c ompetition. The requirement is at least diesel-engine 6x6 APC with all terrain capability. Capable of carrying 11 equipped troops with the minimum protec tion for the 7.62 mm bullet. It must have an automatic turret with remote c ontrol from inside the APC. Radio must be a frequenc y-hopping FM radio c ompatible with the system RTA c urrently operated. The APC must be c ommissioned in the manufac turer's nation with the 15 years spare part guarantee. Quantity NA Contrac t value NA Competitors BTR-82A (Russia) BTR-3 or BTR-4 (Ukraine) VN1(ZBL-09) (China) Sourc e Thai Armed Forces, June, 2016 BTR-82A (Russia) BTR-3 or BTR-4 (Ukraine) VN1(ZBL-09) (China)
- 24. UPCOMING PROCUREMENT Projec t owner Royal Thai Air Force Item Transport Aircraft Reason RTAF c onsider launching the new transport aircraft c ompetition. RTAFCnC said that the 12 C- 130H service life will expire in 5 years and new aircrafts are needed. Quantity To be disclosed Contrac t value To be disclosed Competitors China (Y-9) US(C-130J), Ukraine is interesting in offering (An-70) Sourc e Thai Armed Forces, September 19, 2016 China US
- 25. CYBER ATTACK Thai military is now concerned of cyber attack; therefore, the draft of Cyber Framework to protect the nation, Ministry of Defense, Year 2017-2021 has been approved. 1. Plan to establish Cyber office/organization 2. Ministry of Defense, Royal Thai Armed Forces, RTAF, RTA, RTN are all planning to set up their own Cyber Security Operation Center (CSOC) to prepare for any cyber attacks. 3. Plan to improve cyber offensive strategies and cyber war operation 4. Plan to improve cyborg's Research and Development 5. Plan to support cyber efficiency to prevent cyber domain invasion 6. Cooperation Major General Rittee Intarawut, Director of Military Information Technology Center, Royal Thai Army, announced the resolution from National Military Council on August 23rd 2016.
- 26. PROMISING DEFENSE ITEMS Ammunition, Pistol, Assault rifle (M16), Bullet Anti riot & Protection products: smoke color grenade, gas grenade, bulletproof vest, armored helmet etc. Cyber attack and Securities products Armored wheeled vehicles Unmanned Aerial Vehicle Transport Aircraft Armored Personnel Carrier Defense Technologies
- 27. TRADE SHOW Date 06-09 Nov 2017 Time 10:00 AM-05:00 PM Venue Impact Exhibition & Convention Center, Bangkok, Thailand Exhibitor Profile for exhibit include Land, Air and Sea Defense Technology Equipment & Weapon System; Missiles, Tank, Guided Weapons; Vehic les, Transport, and Vessels; Satellites, Telec om and Elec tronic Defense Equipment; Sec urity Systems, Launc hers; Fire Control Systems and other related Tec hnology and Systems. Website www.asiandefense.com FACT SHEET: DEFENSE & SECURITY 2015 DEFENSE & SECURITY is focused on trade covering private & public sector personnel and decision makers in the defense and internal security industry around the world.
- 28. KOB KHUN KRUB THANK YOU Dec 2016 by KOTRA Bangkok
Editor's Notes
- The overall national budget in 2017 is 2.733 Million Million THB, it has been subtracted by 43,000 Million THB approximately compared to national budget for fiscal year 2016. Out of the whole budget, budget for central government expenditure worths around 350 Thousand Million THB. The rest of the budget goes to ministries, state enterprises, universities, public organizations and other supported bureaus. Top 5 ministries with the biggest national budget shares are Ministry of Education, Ministry of Internal Affair, Ministry of Finance, Ministry of Defense and Ministry of Transportation respectively. As shown above, even the total national budget in 2017 has been reduced, budget for Ministry of Defense and Royal Thai Army are still increased. Remark: 2013-2014 Government PM. Yinglak Chinawatra 2015-2017 Government PM. Prayut Chan O-Cha
- Pie chart on the left shows the proportion of national budget granted to Ministry of Defense. Royal Thai Army gain the biggest share of 49.30 %, followed by Royal Thai Navy (19.53%) and Royal Thai Air Force (18.53%).
- The budget each departments are granted as the budget for the encouragement of national defense system project. This project is to increase capability to defense the Kingdom, meaning these are the budgets relevant to purchasing and procuring weapons and inventories. The amount of the budget for the encouragement of national defense system project had always been increasing for several fiscal years; however, in 2017, this project has received a lot less support. For example, in 2016 Royal Thai Army was granted with 100,026.06 Million THB as the budget for the encouragement of national defense system project, on the contrary, in 2017 the budget for the same category is downed to 2,095.96 Million THB. Mr. Vanvichit Boonprong, Vice Dean of Faculty of Political Science, Rangsit University, mentioned this could mean the large part of national budget for the encouragement of national defense system project are transferred to other projects, the improvement of personnel efficiency, to support the stability in special economic zones and to create a system for cyber stability, instead of weapons and inventories of the armies.
- Major General Kongchief Tantravanich, Spokesperson of Ministry of Defense, announced on 20th June 2016 that the ministry has appointed “National Defense Strategic Committee” to revise strategies in the previous issue and draft the new issue “National Military Strategy B.E. 2560-2579”. The ultimate and terminal purpose of Thai defense is to have a compact armies with appropriate man force, up-to-date battle technology and equipment to be able to operate various types of missions. National Defense Council has already approved the starting of the draft on April 2016. Major General Kongchief also informed that the ministry are amending “Reformation of Management and Structure Roadmap B.E. 2560-2567”and “Development plan to increase defense efficiency B.E.2560-2569”. All detail of these plans are kept secret.
- Direct Contact 1. Make the appointment Thai armies have their own procurement in which the Directorate of Operations of each regime is the first place to contact in order to arrange for products presentation. Korean companies can send letter to Directorate of Operations to arrange date and time of the meeting, attached with copies of passports of the presenters. The request for products presentation must be done by submitting a letter to “Director of Operations” with the product description, country of origin, company or agent service, period of time available to present, and contact number (local) for the department to arrange an appointment. Letter must be in Thai only for Royal Thai Army and Royal Thai Navy while either English or Thai is acceptable for Thai Royal Air Force. The process takes several weeks till the reply from the department. 2.Presentation On the date of presentation, Thai armies will invite representatives from relevant departments to participate. 3.Consideration and Purchase If products are interesting or what the armies need, Thai armies departments will consider the price and the budget then make a purchase. However, there are ways for this purchase to happen. For examples, in case Korean products interest the armies, the armies might directly make contract with Korean companies; or send the request to procurement department within the armies to use procurement methods (bidding, quotation etc.) The purchasing methods depend on each departments. If the armies aren’t interested at the moment, they will keep company profiles and products for future service. Indirect Contact 1. Local Business Partner Local business partner is important for overseas supplier to enter and penetrate in Thai market. Note that, occupying local agent might imply higher chance to win the deal for Royal Thai Army and Royal Thai Navy whereas it is just good to have an agent for contacting Thai Royal Air Force. 2.Military Collaboration E.g. drill, training, defense R&D and technology transfer, etc. 3.Top – Down (vertical) cooperation The most efficient way to approach Thai military e.g. Minister to Minister or Army Chief to Army Chief 4.Government-to-Government Weaponry needs countertrade deals with Thai agricultural products
- Thai military (RTAF) doesn’t have this mid-range.
- Major General Rittee Intarawut, Director of Military Information Technology Center, Royal Thai Army, announced the resolution from National Military Council on August 23rd 2016, the draft of Cyber Framework to protect the nation, Ministry of Defense, Year 2017-2021 has been approved. This draft consists of 6 critical plans: Plan to establish Cyber office/organization to deal directly with cyber issues Plan to develop defense system for fundamental structure. Ministry of Defense, Royal Thai Armed Forces, RTAF, RTA, RTN are all planning to set up their own Cyber Security Operation Center (CSOC) to prepare for any cyber attacks. Moreover, to form Cyber Security Incident Response Team/ Computer Security Incident Response Team (CSIRT) to quickly handle emergency cases relevant to cyber issues. Plan to improve cyber offensive strategies and cyber war operation by improve the efficiency of personnel, tools and technology. Cyber Contest will be held, not aiming to create Cyber Warrior but to challenge the potentials. Plan to improve cyborg's Research and Development to keep Thailand up to date. To prevent cyber domain invasion, plan to support cyber efficiency Cooperation on cyber among Thai armies, organizations, private companies and people. Each army will have authority with responsibility to set up a cyber office, to suggest policy, strategies and operations etc.
- Ministry of Defense of Thailand has dramatically readjusted the amount of national budget in fiscal year 2017. Instead of mainly focus on the encouragement of national defense system project, Ministry of Defense this time focus on the prevention of cyber-attack and security products, this is one of the reasons national budget has been transferred to the development and improvement of personnel. Ammunition, pistol, Anti-riot & protection products e.g. smoke color grenade, gas grenade, bulletproof vest, etc. along with other small supplies are still needed. However, expensive procurement might be on hold for next year. As a conclusion, not only firearms and weapons or vehicles, Korean companies in defense industry can supply the security system since this is now the major share of national budget.