Thailand: Food Safety Testing Equipment
Thailand: Food Safety Testing Equipment Page 1 of 6
Thailand: Food Safety Testing Equipment
Kornluck Tantisaeree June 09
Summary The total market size for food safety testing equipment in Thailand was estimated at US$377 million in 2008. The market is expected to grow slightly at an average of 3% for the next few years due to the continuing enforcement of stringent food quality control regulations of major importing countries. Slower growth is expected in 2009 due to negative effects from the H1N1 flu outbreak, political uncertainty and the global economic downturn. Imports of food safety equipment account for 85% of the total market. In 2008, total imports of food safety equipment were US$322 million. The US had the largest market share at 31%, valued at US$132 million. Major competitors are Japan (21%) and Germany (14%). However, Japan is in fact not a direct competitor of the US because Japanese equipment is mostly used by Japanese companies. End users consider the US to be the leader in terms of product quality and technology. However, prices are also higher compared to those of the EU and Japan. Products that have the best prospects include diagnostic or lab reagents, protein and fat analyzers, gas analyzers, incubators, freezers, microscopes, physical or chemical analysis instruments, lab sterilizers, and floating meters. Note: Exchange rate of US$1 = Baht 34 is used in this report.
Market Demand Thailand’s food industry is divided into four major categories, including primary agricultural products, livestock and poultry, fisheries, and processed foods. Thailand’s food processing industry has developed rapidly throughout the past decade and is one of the most developed in South East Asia. The main export markets for Thai foods are Japan, the US and the EU. The seafood sector is the third largest in the world, after China and Norway, with 90% of the output being exported. Thailand is the world’s largest supplier of frozen shrimp and is a major exporter of chicken. Thailand processes agricultural produce at all levels: household, small and medium-sized enterprises (SMEs) and large industrial enterprises. The packaged food industry is highly fragmented, with the top ten companies controlling only about one-third of the sales value. Reflecting Thailand’s state of economic development, the average household spending on food and non-alcoholic beverages is about 25%, in-between that of the Philippines (around 40%) and Singapore (around 13%). In 2007, consumer expenditures on food and non-alcoholic beverages reached $33 billion. This is expected to rise by an average of 7% per year and reach $38 billion in 2009. Demand for food products is shifting from unprocessed foods in fresh markets to a wider array of processed foods available in large supermarkets. Urban dwellers, in particular, have less time for food preparation due to longer working hours and a greater presence of women in the workforce.
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Thailand: Food Safety Testing Equipment Page 2 of 6
Thailand’s Exported Food Products 2005-2008 (in US$ Million) Export Items 2005 2006 852 1,022 Livestock & poultry 4,024 5,012 Fisheries: Shrimp 1,742 2,374 Canned and processed tuna 1,107 1,344 Chilled and frozen fish 445 483 Squid 396 441 Other canned/processed fish 333 372 1,579 1,931 Vegetables and fruit: Canned and processed fruit 688 828 Vegetable products 414 523 Fresh and dried fruit 293 337 Vegetable and fruit juice 183 243 Other food products: Rice 2,276 2,672 Sugar 689 760 Palm oil 92 138 Cassava products 311 471 Cassava flour and starch 236 383 Flour and starch 76 99 Rice products 90 107 Seasonings 159 199 Non-alcoholic beverage 110 132 Pet food 328 399 Animal feed 51 96 Other foods 1,774 2,011 Total 12,648 15,433 Source: Department of Trade Negotiations and National Food Institute
The U.S. Commercial Service – Your Global Business Partner.
2007 1,162 5,275 2,489 1,321 539 485 442 2,076 900 542 387 247
2008 1,247 5,578 2,584 1,460 537 514 484 2,358 1,038 584 443 292
3,306 1,330 275 631 404 106 135 233 174 456 283 2,048 17,894
3,379 1,138 289 780 460 124 129 264 205 511 302 2,495 19,262
export.gov 800-USA-TRADE
Thailand: Food Safety Testing Equipment Page 3 of 6
Thailand’s food exports in the first quarter of 2009 decreased by 5% over 2008. The Thai National Food Institute forecasts that Thailand's 2009 food exports will fall due to weak global demand and deteriorating consumer spending in the US, EU and Japan. However, the industry will benefit from strong government support and incentives for export-oriented companies in agriculture and processing ventures. According to the Director-General of the Export Promotion Department, Thailand's food exports are expected to remain in good shape; exports are driven by frozen processed chicken, frozen shrimp, and processed fruits and vegetables. The H1N1 flu outbreak is expected to prompt global consumers to opt for more seafood consumption, which would benefit Thailand's food exports. In fact, it offers a good opportunity for Thailand given that Thai food products are known for their safety and traceability. Major food exporters have expanded their production capacity through new machinery purchases or upgrades to meet demand for a variety of products in the major markets and to satisfy multiple safety standards required by importing countries such as GMP, HACCP, ISO22000, BRC, IFS, etc. We can say that Thai food safety standards are higher than other developing nations due to their heavy reliance on exports to the EU, Japan and the US.
Market Data
Total market size Total local production Total exports Total imports Import from the US Exchange rate US$1=Baht Inflation
2006
2007
2008
352 195 143 300 83 33
361 194 140 307 101 33
377 198 143 322 132 33
4.7
2.3
5.5
Growth rate for the next 3years +3% +2% +2% +5% +10%
Best Prospects The best sales prospects include: • Diagnostic or lab reagents • Lab instruments and accessories for food testing such as protein and fat analyzers, gas analyzers, incubators, freezers, microscopes, physical or chemical analysis instruments, lab sterilizers • Floating meters for liquid testing
Key Suppliers Approximately 85% of food safety equipment is imported. In 2008, Thailand imported US$322 million of food safety equipment. U.S. products led the market with 31% market share and are considered to be of high quality. The other major suppliers of food safety equipment are Japan (21%), Germany (14%), Singapore (6.6%), China (3.9%), UK (2.9%), France (2.4%), Italy (2.2%), Sweden (1.3%) and others (15%). Product quality, brand name and after-sales service are the three most important factors for buyers. Price is not one of the major concerns for buyers. For food processors, reliability of the test results is critical to their production output, and could make or break their reputation. After-sales service is very important as testing equipment is quite sensitive and usually requires regular maintenance. Therefore, availability of spare parts and reliability of maintenance services are considered to be crucial.
The U.S. Commercial Service – Your Global Business Partner.
export.gov 800-USA-TRADE
Thailand: Food Safety Testing Equipment Page 4 of 6
Foreign Supplier Market Share in 2008
1.30% 2.20% 2.90%
USA
15%
Japan
31%
2.40%
Germany
3.90% 6.60%
Singapore
21%
China
14%
Source: Thai Customs Department
Prospective Buyers 1) Food testing laboratory: Thailand has approximately 10 big food testing laboratories: the National Food Institute’s laboratory, SGS (Thailand) Ltd., International Laboratory Co., Ltd., Calibratech Co., Ltd., IQA Laboratory Co., Ltd., Calibration Management Co., Ltd., Chemlab Services (Thailand) Limited, Intertek Testing Services (Thailand) Ltd. and Siam Scales & Engineering Co., Ltd. These food laboratories usually purchase laboratory equipment from either local agents or vendors. 2) Food processors: According to data collected by the National Food Institute, there were about 10,159 food processors registered with the Department of Industrial Work. Potential buyers of food safety testing equipment are large food processors that are export-ready. The majority of the medium-sized food processors are not export-ready. They require some upgrades to meet GMP standards. These upgrades usually include laboratory facilities. They are a strong potential group of new customers for food quality testing equipment. Numbers of Food Manufacturers in Thailand (as of 2007) Type of Food Manufacturers Ice Bread and noodles products Fishery products Fruit and vegetable products Meat products Seasonings and spices Bottled water and non-alcoholic beverages Vegetable and animal oils Ice cream Flour and starch Snacks, chocolate and confectioneries Cereal products Dairy products Tea and coffee Syrups and sugar Alcoholic beverages Tapioca Feedstuff Total
Small 1,446 1,162 551 562 548 441 306
Medium 23 57 81 62 42 32 14
Large 3 14 35 31 45 17 26
Total 1,472 1,233 667 655 635 490 346
193 243 145 148 145 113 121 57 23 2,412 618 9,234
50 3 48 13 5 15 2 16 22 11 71 567
21 3 29 8 3 18 5 46 30 1 23 358
264 249 222 169 153 146 128 119 75 2,424 712 10,159
The U.S. Commercial Service – Your Global Business Partner.
export.gov 800-USA-TRADE
Thailand: Food Safety Testing Equipment Page 5 of 6
Source: National Food Institute
Market Entry Strategies We recommend US exporters appoint local agents/distributors, who can contact end-users directly. They can also manage customs clearance and product registration, both of which are time-consuming. Personal relationships and good after-sales service play a major role in the buying decision of end users. Consequently, selecting the right agent/distributor is the key to successful entry into the market.
Market Access Issues & Obstacles Most food safety testing equipment and devices are laboratory equipment, which requires an import license. The import duty for this type of product is 30-35%.
Trade Events ProPak Asia 2009 Date: June 2010 Venue: Bangkok International Trade and Exhibition Center (BITEC) Website: http://www.propakasia.com Thaifex-World of Food Asia Date: May 2010 Venue: IMPACT Exhibition and Convention Center Website: http://www.worldoffoodthailand.com/
Resources & Contacts For more information about export opportunities in this sector, please contact U.S. Commercial Service Industry Specialist, Kornluck Tantisaeree at e-mail: [email protected] National Food Institute 2008 Charansanitwong Rd. Soi 40, Bangyeekhan, Bangphlad, Bangkok 10700 Thailand Tel: 662-886-8088, Fax: 662-886-8106-7
For More Information The U.S. Commercial Service in Bangkok/Thailand can be contacted via e-mail at [email protected] ; Phone: 662-205-5242; Fax: 662-255-2915; or visit our website: www.buyusa.gov/thailand/en
The U.S. Commercial Service — Your Global Business Partner With its network of offices across the United States and in more than 80 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://www.export.gov/eac. Comments and Suggestions: We welcome your comments and suggestions regarding this market research. You can e-mail us your comments/suggestions to: [email protected]. Please include the name of the applicable market research in your e-mail. We greatly appreciate your feedback.
The U.S. Commercial Service – Your Global Business Partner.
export.gov 800-USA-TRADE
Thailand: Food Safety Testing Equipment Page 6 of 6
Disclaimer: The information provided in this report is intended to be of assistance to U.S. exporters. While we make every effort to ensure its accuracy, neither the United States government nor any of its employees make any representation as to the accuracy or completeness of information in this or any other United States government document. Readers are advised to independently verify any information prior to reliance thereon. The information provided in this report does not constitute legal advice. International copyright, U.S. Department of Commerce, 2009. All rights reserved outside of the United States.
The U.S. Commercial Service – Your Global Business Partner.
export.gov 800-USA-TRADE
Thailand: Food Safety Testing Equipment
Kornluck Tantisaeree June 09
Summary The total market size for food safety testing equipment in Thailand was estimated at US$377 million in 2008. The market is expected to grow slightly at an average of 3% for the next few years due to the continuing enforcement of stringent food quality control regulations of major importing countries. Slower growth is expected in 2009 due to negative effects from the H1N1 flu outbreak, political uncertainty and the global economic downturn. Imports of food safety equipment account for 85% of the total market. In 2008, total imports of food safety equipment were US$322 million. The US had the largest market share at 31%, valued at US$132 million. Major competitors are Japan (21%) and Germany (14%). However, Japan is in fact not a direct competitor of the US because Japanese equipment is mostly used by Japanese companies. End users consider the US to be the leader in terms of product quality and technology. However, prices are also higher compared to those of the EU and Japan. Products that have the best prospects include diagnostic or lab reagents, protein and fat analyzers, gas analyzers, incubators, freezers, microscopes, physical or chemical analysis instruments, lab sterilizers, and floating meters. Note: Exchange rate of US$1 = Baht 34 is used in this report.
Market Demand Thailand’s food industry is divided into four major categories, including primary agricultural products, livestock and poultry, fisheries, and processed foods. Thailand’s food processing industry has developed rapidly throughout the past decade and is one of the most developed in South East Asia. The main export markets for Thai foods are Japan, the US and the EU. The seafood sector is the third largest in the world, after China and Norway, with 90% of the output being exported. Thailand is the world’s largest supplier of frozen shrimp and is a major exporter of chicken. Thailand processes agricultural produce at all levels: household, small and medium-sized enterprises (SMEs) and large industrial enterprises. The packaged food industry is highly fragmented, with the top ten companies controlling only about one-third of the sales value. Reflecting Thailand’s state of economic development, the average household spending on food and non-alcoholic beverages is about 25%, in-between that of the Philippines (around 40%) and Singapore (around 13%). In 2007, consumer expenditures on food and non-alcoholic beverages reached $33 billion. This is expected to rise by an average of 7% per year and reach $38 billion in 2009. Demand for food products is shifting from unprocessed foods in fresh markets to a wider array of processed foods available in large supermarkets. Urban dwellers, in particular, have less time for food preparation due to longer working hours and a greater presence of women in the workforce.
The U.S. Commercial Service – Your Global Business Partner.
export.gov 800-USA-TRADE
Thailand: Food Safety Testing Equipment Page 2 of 6
Thailand’s Exported Food Products 2005-2008 (in US$ Million) Export Items 2005 2006 852 1,022 Livestock & poultry 4,024 5,012 Fisheries: Shrimp 1,742 2,374 Canned and processed tuna 1,107 1,344 Chilled and frozen fish 445 483 Squid 396 441 Other canned/processed fish 333 372 1,579 1,931 Vegetables and fruit: Canned and processed fruit 688 828 Vegetable products 414 523 Fresh and dried fruit 293 337 Vegetable and fruit juice 183 243 Other food products: Rice 2,276 2,672 Sugar 689 760 Palm oil 92 138 Cassava products 311 471 Cassava flour and starch 236 383 Flour and starch 76 99 Rice products 90 107 Seasonings 159 199 Non-alcoholic beverage 110 132 Pet food 328 399 Animal feed 51 96 Other foods 1,774 2,011 Total 12,648 15,433 Source: Department of Trade Negotiations and National Food Institute
The U.S. Commercial Service – Your Global Business Partner.
2007 1,162 5,275 2,489 1,321 539 485 442 2,076 900 542 387 247
2008 1,247 5,578 2,584 1,460 537 514 484 2,358 1,038 584 443 292
3,306 1,330 275 631 404 106 135 233 174 456 283 2,048 17,894
3,379 1,138 289 780 460 124 129 264 205 511 302 2,495 19,262
export.gov 800-USA-TRADE
Thailand: Food Safety Testing Equipment Page 3 of 6
Thailand’s food exports in the first quarter of 2009 decreased by 5% over 2008. The Thai National Food Institute forecasts that Thailand's 2009 food exports will fall due to weak global demand and deteriorating consumer spending in the US, EU and Japan. However, the industry will benefit from strong government support and incentives for export-oriented companies in agriculture and processing ventures. According to the Director-General of the Export Promotion Department, Thailand's food exports are expected to remain in good shape; exports are driven by frozen processed chicken, frozen shrimp, and processed fruits and vegetables. The H1N1 flu outbreak is expected to prompt global consumers to opt for more seafood consumption, which would benefit Thailand's food exports. In fact, it offers a good opportunity for Thailand given that Thai food products are known for their safety and traceability. Major food exporters have expanded their production capacity through new machinery purchases or upgrades to meet demand for a variety of products in the major markets and to satisfy multiple safety standards required by importing countries such as GMP, HACCP, ISO22000, BRC, IFS, etc. We can say that Thai food safety standards are higher than other developing nations due to their heavy reliance on exports to the EU, Japan and the US.
Market Data
Total market size Total local production Total exports Total imports Import from the US Exchange rate US$1=Baht Inflation
2006
2007
2008
352 195 143 300 83 33
361 194 140 307 101 33
377 198 143 322 132 33
4.7
2.3
5.5
Growth rate for the next 3years +3% +2% +2% +5% +10%
Best Prospects The best sales prospects include: • Diagnostic or lab reagents • Lab instruments and accessories for food testing such as protein and fat analyzers, gas analyzers, incubators, freezers, microscopes, physical or chemical analysis instruments, lab sterilizers • Floating meters for liquid testing
Key Suppliers Approximately 85% of food safety equipment is imported. In 2008, Thailand imported US$322 million of food safety equipment. U.S. products led the market with 31% market share and are considered to be of high quality. The other major suppliers of food safety equipment are Japan (21%), Germany (14%), Singapore (6.6%), China (3.9%), UK (2.9%), France (2.4%), Italy (2.2%), Sweden (1.3%) and others (15%). Product quality, brand name and after-sales service are the three most important factors for buyers. Price is not one of the major concerns for buyers. For food processors, reliability of the test results is critical to their production output, and could make or break their reputation. After-sales service is very important as testing equipment is quite sensitive and usually requires regular maintenance. Therefore, availability of spare parts and reliability of maintenance services are considered to be crucial.
The U.S. Commercial Service – Your Global Business Partner.
export.gov 800-USA-TRADE
Thailand: Food Safety Testing Equipment Page 4 of 6
Foreign Supplier Market Share in 2008
1.30% 2.20% 2.90%
USA
15%
Japan
31%
2.40%
Germany
3.90% 6.60%
Singapore
21%
China
14%
Source: Thai Customs Department
Prospective Buyers 1) Food testing laboratory: Thailand has approximately 10 big food testing laboratories: the National Food Institute’s laboratory, SGS (Thailand) Ltd., International Laboratory Co., Ltd., Calibratech Co., Ltd., IQA Laboratory Co., Ltd., Calibration Management Co., Ltd., Chemlab Services (Thailand) Limited, Intertek Testing Services (Thailand) Ltd. and Siam Scales & Engineering Co., Ltd. These food laboratories usually purchase laboratory equipment from either local agents or vendors. 2) Food processors: According to data collected by the National Food Institute, there were about 10,159 food processors registered with the Department of Industrial Work. Potential buyers of food safety testing equipment are large food processors that are export-ready. The majority of the medium-sized food processors are not export-ready. They require some upgrades to meet GMP standards. These upgrades usually include laboratory facilities. They are a strong potential group of new customers for food quality testing equipment. Numbers of Food Manufacturers in Thailand (as of 2007) Type of Food Manufacturers Ice Bread and noodles products Fishery products Fruit and vegetable products Meat products Seasonings and spices Bottled water and non-alcoholic beverages Vegetable and animal oils Ice cream Flour and starch Snacks, chocolate and confectioneries Cereal products Dairy products Tea and coffee Syrups and sugar Alcoholic beverages Tapioca Feedstuff Total
Small 1,446 1,162 551 562 548 441 306
Medium 23 57 81 62 42 32 14
Large 3 14 35 31 45 17 26
Total 1,472 1,233 667 655 635 490 346
193 243 145 148 145 113 121 57 23 2,412 618 9,234
50 3 48 13 5 15 2 16 22 11 71 567
21 3 29 8 3 18 5 46 30 1 23 358
264 249 222 169 153 146 128 119 75 2,424 712 10,159
The U.S. Commercial Service – Your Global Business Partner.
export.gov 800-USA-TRADE
Thailand: Food Safety Testing Equipment Page 5 of 6
Source: National Food Institute
Market Entry Strategies We recommend US exporters appoint local agents/distributors, who can contact end-users directly. They can also manage customs clearance and product registration, both of which are time-consuming. Personal relationships and good after-sales service play a major role in the buying decision of end users. Consequently, selecting the right agent/distributor is the key to successful entry into the market.
Market Access Issues & Obstacles Most food safety testing equipment and devices are laboratory equipment, which requires an import license. The import duty for this type of product is 30-35%.
Trade Events ProPak Asia 2009 Date: June 2010 Venue: Bangkok International Trade and Exhibition Center (BITEC) Website: http://www.propakasia.com Thaifex-World of Food Asia Date: May 2010 Venue: IMPACT Exhibition and Convention Center Website: http://www.worldoffoodthailand.com/
Resources & Contacts For more information about export opportunities in this sector, please contact U.S. Commercial Service Industry Specialist, Kornluck Tantisaeree at e-mail: [email protected] National Food Institute 2008 Charansanitwong Rd. Soi 40, Bangyeekhan, Bangphlad, Bangkok 10700 Thailand Tel: 662-886-8088, Fax: 662-886-8106-7
For More Information The U.S. Commercial Service in Bangkok/Thailand can be contacted via e-mail at [email protected] ; Phone: 662-205-5242; Fax: 662-255-2915; or visit our website: www.buyusa.gov/thailand/en
The U.S. Commercial Service — Your Global Business Partner With its network of offices across the United States and in more than 80 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://www.export.gov/eac. Comments and Suggestions: We welcome your comments and suggestions regarding this market research. You can e-mail us your comments/suggestions to: [email protected]. Please include the name of the applicable market research in your e-mail. We greatly appreciate your feedback.
The U.S. Commercial Service – Your Global Business Partner.
export.gov 800-USA-TRADE
Thailand: Food Safety Testing Equipment Page 6 of 6
Disclaimer: The information provided in this report is intended to be of assistance to U.S. exporters. While we make every effort to ensure its accuracy, neither the United States government nor any of its employees make any representation as to the accuracy or completeness of information in this or any other United States government document. Readers are advised to independently verify any information prior to reliance thereon. The information provided in this report does not constitute legal advice. International copyright, U.S. Department of Commerce, 2009. All rights reserved outside of the United States.
The U.S. Commercial Service – Your Global Business Partner.
export.gov 800-USA-TRADE
