THAILAND’S DEFENSE INDUSTRY KOTRA BANGKOK, DECEMBER 2016

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

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

Ministry of Defense of Thailand

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 70.00

50,000.00

100,000.00

150,000.00

200,000.00

250,000.00

300,000.00

350,000.00

88,558.38 91,516.98 95,485.61 101,426.84 103,909.15

180,491.53 183,819.97192,949.09

206,461.31 210,777.46

Valu

e (M

illion

THB

) Budget of the MinistryFiscal Year 2013-2017

(Mil. THB)

Budget Share 2017

4% 0%

8%

49%

20%

19%

0%

Year 2017: Budget Appropriation

Office of Permanent Secretary

Royal Aide-De-Camp De-partment

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

Encouragement of national defense system project planThis is the budget share each departments within Ministry of Defense use to purchase weapon and arms.

Budget to increase capability to defense the Kingdom

2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7

5,75

7.31

6,02

5.29

6,84

5.42

7,61

5.06

174.

71

13,6

63.9

3

14,4

22.5

1

14,5

18.4

2

15,5

86.4

4

3,25

1.25

80,5

39.0

3

90,4

50.7

5

94,2

75.8

7

100,

026.

06

2,09

5.96

32,0

07.7

4

34,9

87.2

2

36,7

46.0

0

39,6

29.8

7

1,45

0.57

31,7

60.6

3

33,1

53.9

5

35,3

75.9

4

37,8

86.0

8

3,20

1.91

Office of Permanent Secretary Royal Thai Armed Forces HeadquartersRoyal Thai Army Royal Thai NavyRoyal Thai Air Force

Fiscal Year

Millio

n TH

B

THAILAND’S MILITARY STRENGTHThailand 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, France, Israel

Multiple-Launch Rocket Systems

(MLRSs)

13 China, Thailand

THAILAND’S MILITARY STRENGTHThailand 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

THAILAND’S MILITARY STRENGTHThailand 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

Aircraft 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

“

”

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)

CASES IN THAILANDKOTRA BANGKOK, DECEMBER 2016

SUCCESS CASES IN THAILAND

Project owner Royal Thai Army

Model

VT-4 main battle tanks

Quantity 28 (Quantity in complete contract could be 138)

Contract value USD 150 Million Supplier NORINCO (North Industries Corp) (CHINA)

Date of contract March 2016 (Complete contract will be done within 2 years)

Delivery period First lot within the end of 2016 (unknown amount)

Note

Thai Armed Forces (TAF), one of Thailand’s reliable source for defense news update, revealed that if VT-4 main battle tanks are satisfying, Thai government might sign a contract for 150 tanks.

SUCCESS CASES IN THAILAND Project owner Royal Thai Army

Model Mi-17V5 Transport Helicopter

Quantity 12 Contract value USD 120 Million

Supplier Mil Moscow Helicopter Plant (RUSSIA) Date of contract Proposed to Russian Government on 21 May 2016

Delivery period 3 years delivery (4 helicopters per annum)

SUCCESS CASES IN THAILAND

Project owner Royal Thai Air Force

Model EC725 Multirole Utility Helicopters (H225M Caracal)

Quantity 2

Contract value NA

(Estimated 70 Million USD in reference with Poland purchase)

Supplier Airbus Helicopters (FRANCE) Date of contract 2016 Delivery period 2019

Note

Phase Contract Delivery I in 2012 for 4 vehicles 2015 II in 2014 for 2 vehicles 2016 III in 2016 for 2 vehicles 2019

SUCCESS CASES IN THAILAND

Project 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

Contract value USD 4.45 Million Supplier DCNS (FRANCE)

Date of procurement February 2016 Method of

procurement Special Method

Source Royal Thai Navy’s Procurement Information Center, February 4, 2016

CANTO-V Anti-Torpedo Decoy

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

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

CONTACT THAI ARMIES

Royal Thai ArmyRoyal Thai Air

Force Royal Thai NavyDepartment

Directorate of Logistics

Person Mr. SoontornPhone (66-2) 241-0404 Ext.

94729Website www.dlogs.rta.mi.th

Department

Naval Acquisition Management Office

Person Mr. ThanachotePhone (66-2) 475-7500Website www.namo.navy.mi.th

Department

Directorate of Operation

Person Ms. SupapornPhone (66-2) 534 1377Website www.do.rtaf.mi.th

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

FUTURE BUSINESS PLAN KOTRA BANGKOK, DECEMBER 2017

UPCOMING PROCUREMEN

T

Project owner Royal Thai Navy

Model Type 039B Submarine Yuan Class SSK

Quantity 3 Contract

value USD 1,100 Million Supplier Wuchang Shipbuilding, Wuhan (CHINA)

Date of contract

On 1 J uly 2016, the RTN submitted a funding plan for its 36 billion baht submarine procurement project to the cabinet for consideration 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 purchased during the remainder of the 11-year period.

Note

14 committees from Royal Thai Navy out of 17 voted for China, 2 for Germany and 1 for Sweden. Main reasons for choosing 039B is because of the cheaper price, can get 3 submarines instead of 2 if purchase from other countries; moreover, Air-Independent Propulsion system allows submarine to dive and stay for 21 days without merge to water surface, unlike German and Korean submarines which don’t have this system and must go to surface within 5-6 days. This short time would be caught under enemy’s radar.

UPCOMING PROCUREMEN

T Project 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 procured from China. New variant with range increased 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 Contract

value NA

Supplier The Chinese People's Liberation Army (PLA) (CHINA) *Most likely but not confirm

Source Thai Armed Forces, April 20, 2016

KS-1C Anti-Aircraft Missile System of Medium-Range

UPCOMING PROCUREMEN

TProject owner Royal Thai Army

Item Armored Personnel Carrier

Reason

RTA military equipment standard committee draft up the requirement for the new APC prior to the start of competition. The requirement is at least diesel-engine 6x6 APC with all terrain capability. Capable of carrying 11 equipped troops with the minimum protection for the 7.62 mm bullet. It must have an automatic turret with remote control from inside the APC. Radio must be a frequency-hopping FM radio compatible with the system RTA currently operated. The APC must be commissioned in the manufacturer's nation with the 15 years spare part guarantee.

Quantity NA Contract value NA

Competitors BTR-82A (Russia)

BTR-3 or BTR-4 (Ukraine) VN1(ZBL-09) (China)

Source Thai Armed Forces, J une, 2016

BTR-82A (Russia)

BTR-3 or BTR-4 (Ukraine)

VN1(ZBL-09) (China)

UPCOMING PROCUREMEN

TProject owner Royal Thai Air Force

Item Transport Aircraft

Reason RTAF consider launching the new transport aircraft competition. RTAF CnC said that the 12 C-130H service life will expire in 5 years and new aircrafts are needed.

Quantity To be disclosed Contract value To be disclosed

Competitors China (Y-9) US (C-130J ),

Ukraine is interesting in offering (An-70) Source Thai Armed Forces, September 19, 2016

China

US

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 invasion6. 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.

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

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; Vehicles, Transport, and Vessels; Satellites, Telecom and Electronic Defense Equipment; Security Systems, Launchers; Fire Control Systems and other related Technology 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.

KOB KHUN KRUB

THANK YOU

Dec 2016 by KOTRA Bangkok