Project Feasibility Study

Thai-North Rubber Industry Co., Ltd.

Lee La Wa Dee Group

Mae Fah Luang University, Thailand

THAI-NORTH RUBBER INDUSTRY CO., LTD

 To Lecturers: Mr. Chaiyawat Thongintr

Module: 1203302 – Project Feasibility Study Evaluation 2010

Semester: 2, 2010/2011

Department: Business Administration

Class Roster – 1203302_Sec 01

By: Lee La Wa Dee Group

1. Miss Jaruwan Muangpang ID: 5031203014

2. Miss Chanida Ploddee ID: 5031203019

3. Miss Chutinard Kunmaneelert ID: 5031203021

4. Miss Ponphan Kong-iam ID: 5031203047

5. Miss Rattanaporn Mekthrong ID: 5031203057

Credits and acknowledgments borrowed from other sources,

with permission, in this project appear on appropriate page within text.

THAI-NORTH RUBBER INDUSTRY CO., LTD

PREFACE

The Purpose of this project is to explain how to

make the business plan of Thai-North Rubber
Industry Company Limited to be feasibility for
study and evaluation in subject of Project Feasibility
Study Evaluation 2010 (1203302).

By Lee La Wa Dee Group we are students of Mae

Fah Luang University, We study and operation this
business plan to be close possibility. The
information that we use to support this project can
practically.

This Project is organized into 7 Chapters.

Chapter 1 Introduction, Chapter 2 Industry Profile
Chapter 3 Market Feasibility Study, Chapter 4
Technical Operation Feasibility Study, Chapter 5
Financial Analysis, Chapter 6 Risk Management
and Final Chapter Summary

Student or entrepreneur who interest about rubber

business or rubber industry in Thailand and have the
group of customers in China should read this project
We hope the reader will get the benefit from this
project.

This project will not happen if we don’t have

supported by Mr. Chaiyawat Thongintr the
Lecturers of Project Feasibility Study Evaluation,
Business Administration department, Mae Fah
Lunag University, Thailand
 TABLE OF CONTENTS

Chapter 1 Introduction 1

1.1 Background and significant of the project 2

1.2 Objective 3
1.3 Benefits of this Study 3
1.4 Brand of our company 4
1.5 Activities and Gantt chart 4

Chapter 2 Industry Profile 5

2.1 Nature of Industry 6

2.1.1 History of rubber in Europe 6
2.1.2 History of rubber in Asian 8
2.1.3 History of rubber in Thailand 9
2.1.4 History of rubber in China 10
2.2 Situation of Industry 11
2.2.1 Rubber Industry in the World 11
2.2.2 Rubber Industry in Asia 16
2.2.3 Rubber Industry in Thailand 18
2.2.4 Rubber Industry in China 25
2.3 Summary of Market value 27
2.3.1 Industry and rubber products 27
2.3.2 Vision of our organization 28
2.3.3 Mission of our organization 28
2.3.4 Strategy 29

Chapter 3 Market Feasibility Study 31

3.1 Market Analysis 32

3.1.1 General Environment Analysis 32
3.1.2 PES Analysis 36
3.1.3 Competition Analysis 44
3.2 STP analysis 49
3.2.1 Market segment 49
3.2.2 Market Target 49
3.2.3Positioning 51
3.3 Marketing Mix Strategy 53
3.3.1 Product 53
3.3.2 Price 54
3.3.3 Place 54
3.3.4 Promotion 60
3.4 Sale Forecast/Profit estimate 62
3.5 Marketing Expend Budget 73
 Table of Contents v

Chapter 4 Technical Operation Feasibility Study 78

4.1 Product Characteristic 79

4.1.1 Rubber Smoked Sheets (RSS) 79
4.1.2 Block Rubber 83
4.2 Cost of good 86
4.3 Pricing product 87
4.4 Preopening cost 89
4.4.1 Cost of request Electric and Water 89
4.4.2 Prepare to be company limited 91
4.4.3 Fees for the establishment of the factory 92
4.4.4 Land Tax 92
4.4.5 Tax labels (per 500 square centimeters) 93
4.4.6 Trademark registration fee. 94
4.4.7 Total Cost of Pre Opening Cost 94
4.5 Operating investment cost /Operating expense 95
4.5.1 Land 95
4.5.2 Building 95
4.5.3 Features and Dimension 96
4.5.4 Operating investment cost 98
4.5.5 Production cost 100
4.6 Logistics and Transportation cost 107
4.6.1 Logistic Management 107
4.6.2 Inventory management 109
4.6.3 Total Logistic 111
4.7 Administration cost 117
4.7.1 Organizational structure 117
4.7.2 Administration Expense 118
4.7.3 Administration Zone 118
4.8 Depreciation 129
4.9 Conclusion 139

Chapter 5 Financial Analysis 141

5.1 Financial Statement 142

5.1.1 Total requirement and the source fund 142
5.1.2 Income statement 147
5.1.3 Balance Sheet 150
5.1.4 Cash Flow Statements 155
5.1.5 Loan 159
5.1.6 Total Sale 160
5.2 Investment Criteria 161
5.3.1 NPV (net present value) 161
5.3.2 IRR 161
5.3.3 Payback period 162
5.3.4 Break-event point 163
vii Table of Contents

Chapter 6 Risk Management 164

6.1 Internal Analysis 165

6.1.1 Human resource 165
6.1.2 The limits of the employee 166
6.1.3 Changing operating environment 166
6.1.4 Health and Safety 166
6.2 External Analysis 167
6.2.1 Political Factor 167
6.2.2 Economic Factor 167
6.2.3 Technological Factor 170

Chapter 7 Conclusion 173

Reference

Appendix
 Exclusive summary
Rubber Industry is an issue of Business concern to most Asia, and has been in the
public conversation nearly every day for years. According to rubberword.com- show the
positive growth rates in world rubber consumption of 8.8 percent and 5.1 percent are
expected for 2010 and 2011, respectively. And the total combined NR and SR consumption
and production, has and will be increasingly dominated by Asian countries. In China, the
number increasing in demand of rubber from 2007 there are 2.754 million tons to be 3.353
million tons in 2010. Increase 10% within 4 years. Thailand's largest rubber exports to China,
most with 54 % of the export value of rubber. Rubber Research Institute of Thailand, Said
that rubber is one of the crops that are important to the economy of Thailand. Today Thailand
has rubber plantation area by about 15 million hectares of rubber growing areas to support the
demand that increasing.

Lee La Wa Dee group saw this opportunity and we establish Thai-North Rubber
Industry co., ltd. to study in subject of Project Feasibility study and Evaluation 2010, Mae
Fah Luang University. The Purpose of this project is to explain how to make the business
plan of Thai-North Rubber Industry Company Limited to be feasibility for study and
evaluation, in term of processing rubber industry.

Our group we study and evaluated this project start with Introduction, Industry
Profile, Market Feasibility Study, Technical Operation Feasibility Study, Financial Analysis,
Risk Management and Final Summary.

Thai-North Rubber has a strong in the financial status that also represent in the ratio
analysis, although we have the many risk which is the economical risk, political risk,
operating risk and etc., it can be acceptable because we also cope with this risk from using
the risk management.
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Chapter 1

Introduction
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Overview of Project Feasibility

This chapter explains about overall of project. There are background and significant,
objective, benefit, activity and timework, and brand of our company. You will see why we do
this project from this chapter.

1.1 Background and significant of the project

Our project is a rubber industry which has processing rubber which Rubber Smoked
Sheet (RSS) and Block Rubber to respond the higher demand in market. Chiang Rai is a
possible for our business to make high profit and easy to growth in the North of Thailand.

For the Northern of Thailand especially in Chiang Rai, Rubber plantation is just the
beginning and trends to increased as well. Although with some privates to processing rubber
are only a few cases to invest, the number of rubber plantations growing a huge leap. Chiang
Rai has rubber-largest cities deputy from Songkhla, Surat Thani, Nakhon Si Thammarat, and
Trang, the total of rubber plantation with 18 districts in Chiang Rai up to 347,857 rai and are
likely to increase much more. For the market is not worry because in Thailand is most
focusing and government support on exports to China reached 39%. Chiang Rai also has the
ability to export to South of China via R3A Road, Chiang Khong - Huai Sai, Bo Kaew
Kwang, Luang Namtha and Lao PDR - Yun Nan province distance just only 250 km and
office of the Rubber Replanting Aid Fund is planning to set additional offices at the port’s
Chiang Khong to facilitate for export rubber to the South of China. And now, Chiang Rai
doesn’t have enough of factory to processing plant and we believe that it has both a large
source of latex and the major export. That is why; we decide to take this advantage of rubber
in Chiang Rai to study the feasibility of this project.

(Source: http://www.manager.co.th/Local/ViewNews.aspx?NewsID=9530000131252 )
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1.2 Objective

1.2.1 To enhance knowledge and understanding about analyzing the market feasibility
of Rubber industry in Chiang Rai province, Thailand.

1.2.2 To study operation and the distribution channel of Rubber industry for export
products to China.

1.2.3 To study about consumer behavior of Rubber industry in China.

1.2.4To education approaches and management strategies of Rubber industry

business.

1.2.5 To study the feasibility of investment Rubber industry business in Thailand.

1.3 Benefits of this Study

1.3.1 Know more about the market of Rubber industry business in Thailand.

1.3.2 Know more about consumer behavior of Rubber industry in China.

1.3.3 Get experience from doing this project (management strategies, team work,
solving problem, etc)

1.3.4 Can be applied to real investment.

1.3.5 Know more about operation and distribution channel of Rubber industry for
export products to China.
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1.4 Brand of our company

1.4.1 Our company name is “Thai-North Rubber”

1.4.2 Logo is

Logo of Thai-North Rubber

Company

1.5 Activities and Gantt chart

EXHIBIT 1-1
Activities and Gantt chart

16-22/12/2011
23-29/12/2011
18-24/12/2011
25-1/12/2011

9-15/12/2011

13-19/1/2011
20-26/1/2011

10-16/2/2011
17-23/2/2011
2-8/12/2011

30-5/1/2011
6-12/1/2011

27-2/2/2011
3-9/2/2011
Activities

Prepare for topic submission

Introduction path
Nature of industry
Situation of industry
Summary of market value
Marketing analysis PEST,3C,
STP
Marketing mix strategy
Sale forecast
Marketing expense
Technical Feasibility study
Finance statement
Finance analysis
Risk analysis
Summary all of them
Prepare draft final report
Prepare final report
Prepare group presentation
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Chapter 2

Industry Profile
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Industry Profile

2.1 Nature of Industry

Name: A rubber.
Common name in English: Para rubber.
Scientific name: Hevea Braslilensis.
Family name: EUPHORBICEAE.
Code HS (Harmonized System): 4001.10.0000 Natural
rubber latex, 4001.21.0000 Smoked sheets, 4001.22.0000
technically specified natural rubber (TSNR), 4001.29.0000
other.

Rubber is one of the crops that are important to the economy of Thailand for long
time. In 2001 November, rubber is high of economic value with 162,955 million Baht.
Consists of the export value of raw materials are 58,703 million baht, value of rubber
products 48,495 million baht and wood products worth 55,757 million baht. Today, Thailand
has rubber plantation area by about 15 million hectares of rubber growing areas of southern
most Followed by the East Central region included. Northeast and North have a total of 60
provinces. A province the most rubber growing areas is Surat Thani.

2.1.1 History of rubber in Europe

Where does rubber come from?

The hevea tree - hevea brasiliensis - is originating from Brazil. It was exploited in the
wild state there till the beginning of the XXth century. When a tree matures at the age of 6 or
7 years, the latex is collected from a diagonal incision in the tree trunk i.e. the tapping
process. This action does not affect the health of the tree and the tree wound later heals itself.
On the other hand, the hévéaculture developed from the end of the XIXth century in
Southeast Asia: in 1876, seedlings of hevea were shipped to India, Ceylon, Singapore and
Java and the year after in Malaysia.Today, the production in Thailand, Indonesia and
Malaysia represents about 70 % of the world production of natural rubber.
 P age |7

Who were the first users of rubber?

The Indians of Central and South America (Incas, Mayas, Olmecs, Aztecs, etc) are
known to have used the unique properties of rubber for religious or magical ceremonies e.g.
numerous figurines and balls made from rubber moulded were found in the heart of the
sacred wells. Indians also found the incredible propriety of waterproofing and used it for their
clothes and shoes. At the end of XVth century, Christopher Columbus was certainly the first
European assisting to the famous Aztec game with rubber balls representing the Sun, most
important Aztec god.

When was rubber first imported into Europe?

The first scientific study on rubber was realized by the French academician Charles de
la Condamine in the XVIIIth century within the framework of a mission on the South
American continent and by François Fresneau, engineer in Cayenne. In spite of the
enthusiasm of the authors for the extraordinary properties of the rubber, they will not succeed
in interesting their contemporaries in the use of this “new” substance

What are the origins of the French and English terms?

The French rubber term comes from the Indian " ca-o-tchu " word or " wood which
cries ".In England during the XVIIIth century, Joseph Priestley, best known for his discovery
of oxygen, noted that pencil marks could be "rubbed out" by the substance. From this early
use, rubber derived its name.

What were first rubber applications in Europe?

The first rubber applications date from the end of the XVIIIth century and were
mainly erasers and medical probes. Then, the rubber was used to waterproof some textiles.
The first full bandages appeared in 1834, and the first tyres not before the end of the XIXth
century.

Why 1839 is an essential date for rubber manufacturing?

Prior to 1839, the properties of rubber were dictated by the surrounding temperature.
During the hot summer, rubber was sticky and malleable, while it became hard and brittle in
 P age |8

the winter. This was finally remedied by the unexpected discovery of the process of
vulcanisation. A 1839 winter evening, C. Goodyear dropped accidentally a mixture of rubber,
white lead and sulphur upon a hot stove. When it was removed, the material was no longer
affected by temperature. Despite stretching, it always returned to its original shape. This
phenomenon was further called: “vulcanisation” in reference of the Roman god of fire and
metallurgy. Thanks to this discovery, it became possible to use rubber in raincoats,
overshoes, and many other products, including tyres.

(Source: http://www.etrma.org/public/activitiesrubberh.asp )

2.1.2 History of rubber in Asian

Manufacture of rubber in the world the past

year. 2443 (1900) is mostly a rubber plantation in South
American countries are Brazil, Colombia and Panama,
mostly. There are also rubber from Russia and Africa,
partly during the time before.

Rubber start is important to human life and more. World

demand for rubber has a lot of hands-stall; it has no idea if the
world (meaning Europe) still has to rely on rubber that comes from
various sources them alone. In the future, may be caused by a
shortage of rubber are likely to find that New in other parts of the
world to remove the tires planted sometime in the year 2398 (1855)
brings this idea to consult Sir Joseph Hung markers, but did not
receive much attention should the Europeans. that period.

No one knows that much rubber. What looks like rubber or even
how the tires came from the leaf until BE 0.2414 (1871) has led to
painting from Sir Joseph Yang Hung markers see, you have an
interest in planting more rubber has consulted with Sir Cliean
Siemens Markham House. Assistant Secretary-General regularly
Governor Annual India Efforts to bring rubber planting in Asia for the first time it
happened. While Tire situation in countries America quite badly with the world due to the
 P age |9

high demand of rubber. Rubber growers in Colombia and Panama are hard rubber tapping
exert finally rubber in that country has been hurt a lot and killed and no rubber left on the bar
again Sir Clean Siemens. Rubber was used to test varieties grown in India for the first time
but without success. Has rubber been planted in the territories. A British colony, Finally, he
found that Peninsular territory is where the rubber will grow best, and found the best varieties
of rubber tires or rubber, Hevea Brasiliensis species so since the year 2425 (1882) is a rubber.
Grow extensively in the Cape Malays in the very early stages. Rubber is grown widely in the
colonial territories of Britain and Holland are also mostly German rubber is grown on some of
Africa and some rubber in Russia because rubber is growing very popular in Asia. May be
due to Asia has the right elements to grow. The weather, soil and terrain conditions, including
rainfall labor readily available. Combine with agricultural and commercial properties of the
rubber itself as.
(Source: http://www.reothai.co.th/Para1.htm)

2.1.3 History of rubber in Thailand

Since that is also called "Siam" Estimated after the 1882.Which has expanded the
rubber from 22 tree species to in the country of Asia. In Year 1899,"Phraya
Ratsadanupraditmahitsornprakdee" is the same one “Father of rubber" is the leader to bring
the rubber tree at Amphor Kantrang, Trang province is the first. Then Phraya
Ratsadanupraditmahitsornprakdee was sent to learn how to teach people to plant rubber.
Students who are all sent to a district Chief Officer, sub district headman, village headman.
He was ordered and tires to the species distribution. Promote to the people planting. Which at
that time the people bring to plant and have expanding the rubber plant area into the south in
14 province. Since Chumporn province was border province. Thailand has a planted area of
rubber and the country about 12 million rai. Disperse in the South East and Northeast. Which
is a growing source of new and industrial rubber country? Thailand is a manufacturer and
exporter of rubber most of the world. Every time the government has focused on the
development of rubber has always been. There are set up more responsibility in the research,
development and technology transfer. Including funding assistance instead planted with
rubber.
 P a g e | 10

2.1.4 History of rubber in China

For over a century, rubber production has been one of China's most profitable
industries. In spite of ups and downs over the last hundred years, China is currently one of the
world's leading rubber distributors.

The Rubber Boom

In the early 1900s, a new process for rubber extraction in China allowed for a higher
yield over an extended time, marking the beginning of the rubber industry in China. (Ref 1
section 3 paragraph 2 and 3) By 1910, with the popularization of bicycles and the emerging
automobile industry, increasing demand for rubber tires led to China's "Rubber Boom."

A Struggling Economy

In the 1930s, the Great Depression caused the global economy to stagnate. For the
next several decades, China's economy struggled as the country faced civil war, famine and
unstable government. During the 1970s and 1980s, however, industry reform, foreign
investment and relaxed industrial restrictions allowed the economy to grow rapidly. The
rubber industry was on its way to thriving once again.

Into the 21st Century

Since 1990, rubber consumption has risen steadily. By 2004, China was the largest
producer of shoes and a leading exporter of tires. China's rubber industry boomed,
domestically and abroad, producing over 50,000 rubber products. China's economy was
ranked second worldwide in 2010, and is expected to rise to first place by 2030, as its rubber
industry continues to thrive.

(Source: http://www.ehow.com/facts_6920005_history-rubber-manufacturing-industry-
china.html )
Read more: History of the Rubber Manufacturing Industry in China | eHow.com
http://www.ehow.com/facts_6920005_history-rubber-manufacturing-industry-
china.html#ixzz179k8k7AY
 P a g e | 11

2.2 Situation of Industry

2.2.1 Rubber Industry in the World

2.2.1.1 Overview of the Rubber Market, 1870-1930

Natural rubber was first used by the indigenous peoples of the Amazon basin for a
variety of purposes. By the middle of the eighteenth century, Europeans had begun to
experiment with rubber as a waterproofing agent. In the early nineteenth century, rubber was
used to make waterproof shoes (Dean, 1987). The best source of latex, the milky flui1d from
which natural rubber products were made, was hevea brasiliensis, which grew predominantly
in the Brazilian Amazon (but also in the Amazonian regions of Bolivia and Peru). Thus, by
geographical accident, the first period of rubber’s commercial history, from the late 1700s
through 1900, was centered in Brazil; the second period, from roughly 1910 on, was
increasingly centered in East Asia as the result of plantation development. The first century
of rubber was typified by relatively low levels of production, high wages, and very high
prices; the period following 1910 was one of rapidly increasing production, low wages, and
falling prices.

Uses of Rubber

The early uses of the material were quite limited. Initially the problem of natural
rubber was its sensitivity to temperature changes, which altered its shape and consistency. In
1839 Charles Goodyear improved the process called vulcanization, which modified rubber so
that it would support extreme temperatures. It was then that natural rubber became suitable
for producing hoses, tires, industrial bands, sheets, shoes, shoe soles, and other products.
What initially caused the beginning of the “Rubber Boom,” however, was the popularization
of the bicycle. The boom would then be accentuated after 1900 by the development of the
automobile industry and the expansion of the tire industry to produce car tires (Weinstein,
1983; Dean 1987).
 P a g e | 12

Exporting Rubber

From the ports, rubber was in the hands of mainly Brazilian, British and American
exporters. Contrary to what Weinstein (1983) argued, Brazilian producers or local merchants
from the interior could choose whether to send the rubber on consignment to a New York
commission house, rather than selling it to a exporter in the Amazon (Shelley, 1918). Rubber
was taken, like other commodities, to ports in Europe and the US to be distributed to the
industries that bought large amounts of the product in the London or New York commodities
exchanges. A large part of rubber produced was traded at these exchanges, but tire
manufacturers and other large consumers also made direct purchases from the distributors in
the country of origin.

Figure 2-1
Production and Prices 1900-1935
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Figure 2-2
World Rubber Production and Consumption, 1900-1930

Figure 2-3
Rubber production and imports, 1870-1899

Conclusion

The natural rubber trade underwent several radical transformations over the period
1870 to 1930. First, prior to 1910, it was associated with high costs of production and high
prices for final goods; most rubber was produced, during this period, by tapping rubber trees
in the Amazon region of Brazil. After 1900, and especially after 1910, rubber was
increasingly produced on low-cost plantations in Southeast Asia. The price of rubber fell
with plantation development and, at the same time, the volume of rubber demanded by car
tire manufacturers expanded dramatically. Uncertainty, in terms of both supply and demand,
 P a g e | 14

(often driven by changing tire technology) meant that natural rubber producers and tire
manufacturers both experienced great volatility in returns. The overall evolution of the
natural rubber trade and the related tire manufacture industry was toward large volume, low-
cost production in an internationally competitive environment marked by commodity price
volatility and declining levels of profit as the industry matured.

(Source: http://eh.net/encyclopedia/article/frank.international.rubber.market)

2.2.1.2 Natural Rubber Supply And Demand Forecast and Price Outlook

The Rubber Economist Ltd. expects that the trough of total world rubber consumption
may not hit bottom until the end of 2009. This means the decline this year, which is forecast
at -9.6 percent, will be even worse than last year and the worst since 1942. Rubber forecasts
have been scaled down steadily since the second half of last year. A fall off in 2009 is
expected for most countries. However, the sharp decline globally depends significantly on the
performance of China, which is expected to show a recovery in the second half of this year to
show a positive growth by the end of the year. However, positive growth rates in world
rubber consumption of 8.8 percent and 5.1 percent are expected for 2010 and 2011,
respectively. Despite a return of a sharp growth rate, the average annual growth rate for 2009-
2011 will only reach 1.0 percent, and much of the growth will mainly be in Asia/Pacific. This
means rubber consumption may only rise to 22.97 million metric tons in 2011, which is lower
than that of 23.04 million metric tons in 2007. Consumption of natural rubber (NR) is
expected to show a sharper increase than for synthetic rubber (SR), i.e., an annual growth rate
of 1.1 percent and 0.9 percent, respectively. The relatively lower price of NR when compared
with SR helped to increase NR shares last year and is expected to do so again this year before
the trend reverses in 2010 and 2011. Hence the world percentage of SR is forecast to decline
only marginally to 56.2 percent by 2011 as compared to 56.3 percent in 2008. The increasing
SR shares in Europe will balance out the decline in North America, leaving the world share
relatively stable. Despite a slowdown in demand, NR output is expected to continue to
increase by an average of 1.1 percent over the next three year period. The growth rate,
particularly in major producing countries, may be a lot lower than during recent years;
however, the relatively fast increase in production in Indonesia means it will move to a closer
position to overtake Thailand as the number one producing country. The continued increase
 P a g e | 15

in production in India will also mean it may overtake Malaysia to become the third largest
NR producer by 2011. Despite weaker prices than the first half of 2008, many smaller
producing countries may find the price levels profitable enough with their lower cost of
production. The steady rise in rubber prices since 2002 has resulted in an increase in new
planting during this period in many smaller producing countries, which have lower price
elasticity than the major producing countries. Unlike NR, many SR consumers are also
producers, allowing them some flexibility. Hence, SR output is forecast to show a marginal
decline by only -0.2 percent/year. Furthermore, there may be an increase of SR output in Asia
in relation to other regions. The continued increase in rubber output in China means it may
overtake Thailand as the largest rubber, NR plus SR, supplier. The world rubber economy,
i.e., the total combined NR and SR consumption and production, has and will be increasingly
dominated by Asian countries. In 2008, Asian countries comprised 7 of the 10 largest rubber
economies. Furthermore, by 2011 Indonesia will overtake Japan for fourth place behind
China, the USA and Thailand. A sharp slowdown in demand in relation to supply means NR
stocks may continue to increase during the next few years. Compared to NR, SR stocks have
and will continue to rise steadily, but not so sharply. Our forecasts indicate that the SR stocks
to consumption ratio, which may increase relatively sharply in 2009 before a fall, will leave
only a slight increase for the following three year period. This is in contrast to the global
consumption to stock ratio for NR, which is expected to increase from less than three months
to four months, a return to the level reached in 2000. Despite the rising stocks both in
absolute terms and relative to consumption, NR prices may increase during 2009-2011. The
important assumption is that the exchange rate of US$ to SDR will gradually weaken during
this period. The change in the value of the U.S. dollar can influence both consumers and
producers. In general, a weaker U.S. dollar results in higher commodity prices and vice versa.
This certainly is true for NR, and in particular in 2008 when the U.S. dollar weakened in July,
whereas previously it had been appreciating sharply against many currencies. So far in 2009,
US$ has been fluctuating around a gradual depreciation trend, hence prices have been
relatively stable, but show a gradual rise from the trough reached last December. In
conclusion, after six years of growth, rubber consumption declined in 2008 and is expected to
fall further this year. Even though a rise is expected in 2010 and 2011, growth may only
reach 1 percent a year. Despite a slowdown in demand, NR output is expected to continue to
increase. SR suppliers can simply turn off the tap as demand slows and hence there will be a
gradual rise in stocks. Despite declining sharply in the second half, NR prices rose to a record
 P a g e | 16

high in 2008. Rising stocks will have a negative impact on NR prices, but they may not
decline as much if the U.S. dollar is weakened.

(Source: http://www.rubberworld.com/RWmarket_report.asp?id=287)

2.2.2 Rubber Industry in Asia

2.2.2.1 Rubber trends

Worldwide synthetic rubber consumption reached 10.4 million metric tons in 1998,
according to the International Institute for Synthetic Rubber Producers (IISRP). In the
aftermath of the Asian financial crisis and as a result of sluggish demand in the automotive
sector, world synthetic rubber consumption remained flat at best and by some industry
estimates decreased 1.4 percent in 1998 after 3 consecutive years of gains. Asia continued to
experience the aftermath of the economic crisis that hit in 1997. In 1998, Asia decreased
synthetic rubber consumption 8.3 percent to 3.2 million metric tons. China experienced a
decrease in consumption of 0.8 percent, a substantial drop for a country that has consistently
enjoyed growth between 7 and 10 percent.

Figure 2-4
Rubber production – U.S. Imports from Asia

So
urce: Trade Stats Express, 2008
 P a g e | 17

With regard to growth by elastomeric type in 1998, ethylene propylene rubber [EPR,
both ethylene-propylene copolymer (EPM) and ethylene-propylene terpolymer (EPDM)]
experienced the largest consumption increases, growing 3.2 percent to reach 814 kt,
according to data released by the IISRP. SBR consumption remained stable at 0.8 percent, or
3.3 million metric tons. BR consumption was down 3.4 percent to 1.9 million metric tons,
mainly because of significant decreases in Asia and Oceania, China, and Latin America.
Acrylonitrile butadiene 0.2 percent, dropping to(NBR) consumption remained relatively flat
at 320 kt. According to data collected by the International Rubber Study Group (IRSG),
world synthetic rubber output fell by nearly 2 percent to 9.9 million metric tons in 1998 after
3 consecutive years of growth. During that period, the world experienced a relatively higher
increase in the consumption of synthetic rubber, resulting in declining stocks in the second
half of 1998.

Most Asian producers, still suffering from the 1997 financial crisis and overcapacity
in that region, experienced declines in production in 1998. China’s production declined 2
percent to 589 kt after 8.4 percent growth in 1997–1998. Japan’s production declined 4
percent in 1998 to 1.5 million metric tons, Korea’s dropped 2 percent to 530 kt, and India’s
plummeted 12 percent to 66 kt in that period. Only Taiwan weathered the Asian storm with
an increase in production, up 5 percent to 428 kt in 1998.

Exports from the U.S. of synthetic rubber are expected to remain relatively flat in
1999 due to the recovering state of Asian and Latin American economies, tempered with
unexpected pockets of demand in places like Korea and Venezuela. Slower growth for U.S.
exports over imports will persist through 2000, particularly if Asian markets fail to grow
faster than capacity. Asia’s capacity has continued to grow, reaching a level of 3.1 million
metric tons in 1998.

(Source: http://researchwikis.com/Rubber_Marketing_Research_-_Asia)
 P a g e | 18

2.2.2.2 Southeast Asian Plantations Develop a Low-Cost, Labor-Intensive

Alternative

In Asia, the British and Dutch drew upon their superior stocks of capital and vast
pools of cheap colonial labor to transform rubber collection into a low-cost, labor-intensive
industry. Investment per tapper in Brazil was reportedly 337 pounds sterling circa 1910; in
the low-cost Asian plantations, investment was estimated at just 210 pounds per worker
(Dean, 1987). Not only were Southeast Asian tappers cheaper, they were potentially eighty
percent more productive (Dean, 1987).

Ironically, the new plantation system proved equally susceptible to uncertainty and
competition. Unexpected sources of uncertainty arose in the technological development of
automobile tires. In spite of colonialism, the British and Dutch were unable to collude to
control production and prices plummeted after 1910. When the British did attempt to restrict
production in the 1920s, the United States attempted to set up plantations in Brazil and the
Dutch were happy to take market share. Yet it was too late for Brazil: the cost structure of
Southeast Asian plantations could not be matched. In a sense, then, the game was no longer
worth the candle: in order to compete in rubber production, Brazil would have to have had
significantly lower wages -- which would only have been possible with a vastly expanded
transport network and domestic agriculture sector in the hinterland of the Amazon
basin. Such an expensive solution made no economic sense in the 1910s and 20s when
coffee and nascent industrialization in São Paulo offered much more promising prospects.

2.2.3 Rubber Industry in Thailand

2.2.3.1 Growing Rubber Trees in Thailand

Rubber trees grow best on flat low land, these areas, if left uncultivated, would have
been mostly rainforest. Fifty years ago, 60% of Thailand was covered with forests, now it is
less than 20%. The dramatic change has meant that Thailand’s forests have been swapped for
cash, with rubber tree plantations now prevalent in Thailand.
 P a g e | 19

Putting a value on a rubber plantation is easy, but putting a value on rainforest is more
difficult. Never the less modern day culture seems to put a higher value on material items,
rather than life-giving rainforests.

Land that is used for rubber cultivation quickly suffers a rapid decline in the fertility
of the soil. This is because growing one crop removes the same nutrients again and again
from the earth. Until they are totally depleted and that crop can no longer be grown until, the
nutrients are replaced. After areas are cleared of forest ready for planting of rubber trees, but
before they can be planted, soil erosion can often wipe out the life-giving topsoil.

In some extreme cases lives have been lost, as happened at a site that had been cleared
for rubber trees in Thailand in 1988. In a village named Kireewong; landslides caused by a
tropical downpour killed over 300 people and devastated the town of Nakhorn Si Thammara,
Simply because there were no trees to hold the ground together to prevent the landslides.

Tropical rainforests in Thailand offer great value in the area of tourism, where
obviously rubber plantations offer no interest to visiting foreign tourists.

If you were to calculate the value of the rainforest to tourism in Thailand, it would
work out as many millions of dollars every year. Probably significantly more than is
produced from the sale of products produced from the rubber plantations.

Ecotourism is the fastest-growing tourism sector in Thailand, and destroying

rainforest to make way for rubber production produces little reward. Compared to the huge
amount of tourist dollars flowing in Thailand every year from people who wish to visit the
natural wonders the Thais have to offer their visitors.

2.2.3.2 Thailand: World Supplier of Natural Rubber

The southern part of Thailand has a monsoon climate, which is highly conducive to
rubber tree cultivation. This climate helps Thailand’s rubber farmers achieve high yields -
roughly 1.76 tons of rubber per hectare – and has allowed Thailand to lead the world in
natural rubber production since 1991. In 2006 alone, over 3 million tons of natural rubber
was sourced from Thailand. These already sizeable production levels are projected to
increase 2.2% per annum between 2007 and 2009.
 P a g e | 20

In fact, nearly 90% of Thailand’s natural rubber production is for export. Over
2,771,673 tons, or an estimated US$5.41 billion, of natural rubber was exported in 2006. The
top five recipients of Thailand’s rubber products, in terms of export values for 2006, were:
China, Japan, Malaysia, the United States, and South Korea.

Furthermore, the International Rubber Study Group (IRSG) has forecast a 4.4%
annual growth rate for global rubber consumption for the period of 2007 to 2009. This rise in
demand will predominantly originate in the Asia and Pacific region. This region, which
accounted for 54% of the total rubber consumption in 2006, is expected to experience an
annual growth of demand for rubber of 5.9% between 2007 and 2009.

Thailand is optimally located to supply the natural rubber demands of the Asia Pacific
region. The proximity of its production sites to its destination sites allows for the ‘just-in-
time’ delivery essential for complex rubber products.

Ten percent of all the rubber produced in Thailand is used for domestic consumption.
Of this portion, 65% is processed into value-added goods, such as tires and tubes for
motorcycles, airplanes, cars and bicycles (46-51%), gloves (13-15%), rubber bands (8-10%),
and elastic (8-9%). Rubber wood, a renewable resource that presents an attractive alternative
to hardwoods timber, is an increasingly important product in the domestic market as this
market raises its environmental awareness.

Major opportunities for investment exist in the production of value-added rubber

products, many of which are used by the growing domestic automotive industry. The
following products present strong investment opportunities:

 Tires and tubes for automobile

 Piping and tubing tires
 Gaskets / Seals
 Gloves
 Elastic
 Hoses
 Condoms
 Furniture from rubber wood
 P a g e | 21

Another growth market is the developing market and cultivation for organic rubber. There is
a growing demand for organic rubber and Thailand is already a leader in the development of
sustainable and environmentally sustainable methods for rubber processing.

Why Thailand?

 Abundant resources: Thailand is the largest producer of natural rubber.

 Location in a high demand region: The Asia and Pacific region has the highest rubber
consumption growth rate.
 Research and development: Thailand has higher R&D spending than either Malaysia
or Indonesia.
 Enhanced Infrastructure: Thailand has ample water supply and low incidence of
power outages to insure the availability of the resources essential to manufacturing
ventures. Solid transportation and communications infrastructure combine to promote
ease of export.
 Free Trade Agreements: Thailand has already negotiated reduced tariffs on rubber
products with China, ASEAN countries, Australia, and New Zealand.
 Availability of workforce: Thailand’s labor is cost-effective relative to that of
Malaysia and Indonesia, but quality is never sacrificed to quantity. Thailand is home
to a wealth of highly skilled personnel, and graduates 80,000 science and engineering
students annually.

2.2.3.3 Thailand: World’s Top Supplier of Natural Rubber

Rubber is an indispensable resource. It is required in the manufacture of many

industrial and consumer products, from hoses and vehicle tires to belts, condoms and gloves.
Since its introduction in Thailand during the early 1900s, the country has grown to become
the world’s largest producer and exporter of natural rubber. The first experimental planting
area was located in Trang Province at the southern part of Thailand. By 2009, more than 2.72
million hectares were being cultivated throughout the country.
In addition to being the leading exporter and processor of high-quality rubber, Thailand is
also a top R&D center for the material. The goal through 2012 is for the Thai rubber industry
to develop sophisticated technology and generate added value, enhancing its competitiveness.
 P a g e | 22

Figure 2-5
World’s Top 5 Produces of Natural Rubber in 2009

(Source: Thai Rubber Association)

The southern part of Thailand has a monsoon climate, which is highly conducive to
rubber tree cultivation. This helps Thai rubber farmers achieve high yields – roughly 1.76
tons of rubber per hectare – and has allowed Thailand to lead the world in natural rubber
production since 1991. In2009 alone, nearly 3.1 million tons of natural rubber was produced
in the country. The already sizeable production yield is projected to increase at least 2% per
annum. Small landholders, 90% of which are located in southern Thailand, dominate the
rubber plantation landscape, holding 95% of the planting area. However, the rubber sector
itself is controlled by large processing plants that purchase the material via local dealers.

2.2.3.4 Lively Export Sector

Nearly 90% of Thailand’s natural rubber production is for export. More than 2.7
million tons or US$4.26 billion worth of natural rubber was exported in 2009. The top five
destinations for Thailand’s rubber products in terms of export value that year were China,
Malaysia, Japan, the European Union and the United States. According to projections by the
Office of Industrial Economics, the country’s rubber product exports could reach US$6.6
billion in 2012.
 P a g e | 23

Figure 2-6
Thailand’s Natural Rubber Export Market 2009

(Source: Rubber Research Institute of Thailand)

2.2.3.5 Thailand: Strategic High-Demand Region

The International Rubber Study Group has forecast 5.1% and 5.8% growth for global
rubber consumption in 2010 and 2011, respectively. Growth is being fueled largely by rising
demand in the Asia-Pacific region.
Thailand is optimally located to supply the Asia-Pacific’s natural rubber requirement. The
proximity of the country’s production sites to regional markets allows for the just-in-time
delivery essential for complex rubber products.

2.3.3.6 Value-Added Rubber Products

Ten percent of all rubber produced in Thailand is used in domestic consumption. Of

this portion, 65% is processed into value-added goods such as tires and tubes for motorcycles,
airplanes, cars and bicycles (46-51%), gloves (13-15%), rubber bands (8-10%) and elastic (8-
9%). Rubber wood, a renewable resource that presents an attractive alternative to hardwood
timber, is an increasingly important product in the domestic market amid greater
environmental awareness.
 P a g e | 24

2.3.3.7 Thailand’s Major Rubber Product Companies

Tire products: Goodyear, Thai-Bridgestone, Michelin-Siam, Dunlop

Other rubber products: Top Glove, Ansell

2.3.3.8 Thailand’s Growing Tire Industry

 Thai Bridgestone Co., Ltd. in February 2010 hosted the opening ceremony of its
newly established Bridgestone Retread Center.

 Goodyear (Thailand) Public Co., Ltd. has invested US$25 million in its
radicalization project to raise the plant’s daily production capacity for airplane tires
from 130 to 160 units and for automobile tires from 4,900 to 7,200 units.

 Dunlop Tire (Thailand) Co., Ltd. opened its factory with a new production system,
boasting high investment efficiency and manufacture of high-quality radial tires at the
Amata City Industrial Estate in Rayong Province. Already, expansion of production
capacity is in the works.

2.3.3.9 Supporting Organizations

 Thailand’s government, trade associations and R&D institutions are actively

promoting the growth and competitiveness of the rubber industry. Supporters include:
 Rubber Research Institute of Thailand
 National Science and Technology Development Agency
 National Metal and Materials Research Center (MTEC)
 National Center for Genetic Engineering and Biotechnology (BIOTEC)
 Research and Development Institute of Industrial Production Technology, Kasetsart
University
 Prince of Songkhla University
 Department of Industrial Promotion
 Thai-German Institute
 Rubber Estate Organization
 Polymer Society (Thailand)
 P a g e | 25

2.3.3.10 Attractive Investment Incentives

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

2.2.4 Rubber Industry in China

2.2.4.1 Chinese Rubber Industry and Market

China consumed a quarter of the rubber in the world. The consumption keeps
increasing due to the booming automotive industry.

China consumed 5.50 million metric tons of rubber in 2008,

accounting for 24.8% of the world’s total consumption (22.18
million metric tons).
China Rubber Industry -
Chen Nanyang The 2008 consumption increased 6% from the 2007 level mainly
due to the booming automotive industry. Driven by the automotive industry, China's output
of tires, the main rubber finished products, increased 10% in 2008.

Rubber consumption in the Chinese market in 2008 by industries:

1. Tire (sans cycle tire): 3.85 million metric tons.

2. Cycle tire: 420 thousand metric tons.
3. Pipe and Belt: 450 thousand metric tons.
4. Footwear: 400 thousand metric tons.
5. Emulsion: 200 thousand metric tons.
6. Others: 180 thousand metric tons.

Total: 5.50 million metric tons.

 P a g e | 26

2.2.4.2 China Nature Rubber Industry and Market

In 2008 China consumed 2.53 million metric tons of nature rubber, accounting for
26.8% of the world’s total consumption (9.45 million metric tons).

Nature rubber consumption in the Chinese market in 2008 by industries:

1. Tire (sans cycle tire): 2.16 million metric tons.

2. Cycle tire: 120 thousand metric tons.
3. Pipe and Belt: 90 thousand metric tons.
4. Footwear: 30 thousand metric tons.
5. Emulsion: 60 thousand metric tons.
6. Others: 70 thousand metric tons.

Total: 2.53 million metric tons.

China’s output of nature rubber reached 600 thousand metric tons in 2008. The import
was around 1.9 million metric tons. But 0.4 metric tons of smuggling rubber from Vietnam
impacted the market a lot due to the low price, which went down to 8,000 yuan ($1,170) per
metric ton in late 2008.

Sources: China Rubber Industry Association, National Bureau of Statistics of China, and
China National Petroleum Corporation.

(Source: http://www.suite101.com/content/china-rubber-a163348 ,Read more at Suite101:

China Rubber: Chinese Rubber Industry and Market http://www.suite101.com/content/china-
rubber-a163348#ixzz17L8svrz8)
 P a g e | 27

2.3 Summary of Market value

2.3.1 Industry and rubber products.

Thailand is the world first of natural rubber producer and can generate revenue from
exports of rubber products in most of the world as well. We can see that the rubber industry is
important to the nation with both of employment and exports. Since Thailand is well
equipped in terms of the material that is an advantage to competitors. Thailand will need to
accelerate the value creation of a more natural rubber.

Block Rubber

Description: The production of block rubbers involves

relatively sophisticated machineries and
heavy power consumption. The basic
layout of block rubber production from
latex.

Material Composition: Latex

RSS (Rubber Smoked Sheet)

Description: Our rubber smoked sheet (RSS) is

available in standard strengths, colors,
sizes, and compounds. It is used as a raw
material for industrial production. Smoked
sheets are classified into 4 grades varying
from RSS2, RSS3, RSS4 and RSS5.
Material Raw rubber sheet
(Source: http://www.ksgroup.co.th/office/import-export/rubber-rss.html )
(Source: http://www.unctad.org/infocomm/anglais/rubber/technology.htm )
 P a g e | 28

2.3.1.1 Production

In 2010, Thailand will have more rubber tapping area are about 11.9 million hectares
from 11.5 million hectares of 2009 or 4.22 percent. Rubber yields approximately 3.3 tons, up
6.7 percent from the year 2009. Because in many areas that can be opened gradually cut
rubber tapping more open. And rubber trees in the high yield more. In 2010, Thailand will be
use rubber about 0.4 million tons, up from 0.37 million tons of year 2009 or 8.11 percent
because of government's policy is support more.

2.3.1.2 Export

Thailand is expected to export about 2.85 million tons up from 2.7 million tons of
2009 or 5.5 percent because China has been importing rubber from Thailand increase
especially in the form of the compound, which in the last three years, Thailand can export up
to 64 per cent per year to China, Japan, Korea, Malaysia, the United States and the EU.
Meanwhile, the trend of the growth of the tire industry in China, Japan and the United States
and Russia, resulting in natural rubber in the world market will tend to increase continuously.
And are confident that Thailand also holds a leading manufacturer and exporter of rubber in
the world market amid competition is increases. The important competitions are Indonesia,
Malaysia and Vietnam.

(Source:
http://www.farmkaset.org/contents/defaultToLocalDetails.aspx?id=1034&content=00262 )

2.3.2 Vision of our organization

To be, and be recognized as, the leader complex rubber industry in the North of
Thailand and group of neighbor country, as well as provide best of service for customer.

2.3.3 Mission of our organization

Thai-North Rubber tries to be the central of rubber industries in Indochina to

accommodate the higher amount of rubber including support neighboring countries. We will
develop standards of raw rubber sheets and rubber smoked sheets of now a day to be high
quality form level 3 to level 2 and level 1 that will have to acceptable of markets both
 P a g e | 29

domestic and international markets especially with China. For rubber trade, by buying from
local farmers will be use the local price, for exports will be use the overseas market as a
futures market and just at time which a criterion. And we will management marketing and
international contacts to find loyal customers by planning to retain satisfaction by using CRM
(customer relationship management) include of grower and farmer.

2.3.4 Strategy

2.3.4.1 Corporate Level

According to China’s demand for rubber, rubber, higher than that produced quite a
lot. Since the current investors in foreign investment into manufacturing base tire vehicles in
China in 2543 increased, the Chinese demand for rubber, up to 970,000 tons / year, which is
No. 2 in the world after the United States. While China can produce about 500,000 tons of
rubber per year only makes rubber Chinese imports from abroad reached 470,000 tons per
year.
The cost of rubber production in China is quite high. Because the climate is not suitable
The Chinese can only rubber plantation area in the southern provinces only. To Coupled with
China’s rubber farmers lack the expertise in rubber cultivation. The cost of rubber production
in China is quite high. To Compared with another countries including Thailand. In additional
any countries like Korea, Japan, Malaysia, US. and EU. to export the rubber.

So we focus on the market to provide the rubber and we would to be the center north
of Thailand to be export the rubber for neighbor countries.

2.3.4.2 Business Level

According to the status of our company we would to be the central North of Thailand
to export the rubber to the neighbor countries like China, Japan, Korea, Malaysia, the United
States and EU. So, We chosen the market development to organized the company to export
the rubber.

So we should to concentrated for our competitors like Indonesia and We are the ones
who collect the latex yield from the tag to leave the factory to produce our company for
processing rubber sheets and rubber pieces, because we will use Time to send out a very long
 P a g e | 30

time. We can assume that the processing and export of rubber. In Chiang Rai province so no
one company to export business of this type and rubber in the form as required by the market
in China is extremely.

2.3.4.3 Functional Level

We will observe and analyze more sales from countries that we export and less
profitable. We will cut the country that we get the less profit or return loss, and we will bring
the budget from that country to increased investment in the success or profitability of the
business country. So, we had chosen retrenchment strategy to organize our company.
 P a g e | 31

Chapter 3

Market Feasibility
Study
 P a g e | 32
Industry Profile

3.1 Market Analysis

3.1.1 General Environment Analysis

3.1.1.1 General information of the People's Republic of China (PRC)

The People's Republic of China (PRC), 中华人民共和国, commonly known as

China, is the most populous state in the world with over 1.3 billion people. Located in East
Asia, China is a single-party state governed by the Communist Party of China (CPC). The
PRC exercises jurisdiction over 22 provinces, five autonomous regions, four directly
administered municipalities (Beijing, Tianjin, Shanghai, and Chongqing), and two highly
autonomous special administrative regions (SARs) – Hong Kong and Macau. Its capital city
is Beijing.

3.1.1.2 Geography

The PRC is the world's third- or fourth-largest country by total area (depending on the
definition of what is included in that total) and the second largest by land area. Its landscape
is diverse, with forest steppes and deserts (the Gobi and Taklamakan) in the dry north near
Mongolia and Russia's Siberia, and subtropical forests in the wet south close to Vietnam,
Laos, and Burma. The terrain in the west is rugged and at high altitude, with the Himalayas
and the Tian Shan mountain ranges forming China's natural borders with India and Central
Asia. In contrast, mainland China's eastern seaboard is low-lying and has a 14,500-kilometre
(9,000 mi) long coastline bounded on the southeast by the South China Sea and on the east by
the East China Sea beyond which lie Taiwan, Korea, and Japan.
 P a g e | 33

Area

- Total 9,640,821 km2 [c] or

9,671,018 km²[c](3rd/4th) 3,704,427 sq mi

- Water (%) 2.8[d]

- China borders 14 nations

- Counted clockwise from south: Vietnam, Laos, Burma, India, Bhutan, Nepal, Pakistan,
Afghanistan, Tajikistan, Kyrgyzstan, Kazakhstan, Russia, Mongolia and North Korea.

- The border between PRC and ROC is located in territorial waters.

- China has a land border of 22,117 km(13,743 mi) , The largest in the world.

3.1.1.3 Demographics

As of July 2010, there are 1,338,612,968 people in the PRC. About 21% (male
145,461,833; female 128,445,739) are 14 years old or younger, 71% (male 482,439,115;
female 455,960,489) are between 15 and 64 years old, and 8% (male 48,562,635; female
53,103,902) are over 65 years old. The population growth rate for 2006 was 0.6%.

The PRC officially

recognizes 56 distinct ethnic
groups, the largest of which are
the Han Chinese, who constitute
about 91.9% of the total
population. Large ethnic
minorities include the Zhuang
(16 million), Manchu
(10 million), Hui (9 million),
Miao (8 million), Uyghur
(7 million), Yi (7 million), Tujia
(5.75 million), Mongols (5 million), Tibetans (5 million), Buyei (3 million), and Koreans
(2 million).
 P a g e | 34

In the past decade, China's cities expanded at an average rate of 10% annually. The
country's urbanization rate increased from 17.4% to 46.8% between 1978 and 2009, a scale
unprecedented in human history. Between 150 and 200 million migrant workers work part-
time in the major cities and return home to the countryside periodically with their earnings.

Today, the People's Republic of China has dozens of major cities with one million or more
long-term residents, including the three global cities of Beijing, Hong Kong, and Shanghai.

Figure 3-1
Major cities in China play key roles in national and regional identity, culture and economics
.

GDP 2010 estimate

- Total $10.084 trillion (2nd)

- Per capita $7,518(99th)

GDP (nominal) 2010 estimate

- Total $5.745 trillion (2nd[5])

- Per capita $4,283 (98th)

 P a g e | 35

3.1.1.4 Education

In 1986, China set the long-term goal of providing compulsory nine-year basic
education to every child. As of 2007, there were 396,567 primary schools, 94,116 secondary
schools, and 2,236 higher education institutions in the PRC. In February 2006, the
government advanced its basic education goal by pledging to provide completely free nine-
year education, including textbooks and fees. Free compulsory education in China consists of
elementary school and middle school, which lasts for 9 years (age 6-15); almost all children
in urban areas continue with 3 years of high school.

As of 2007, 93.3% of the populations over age 15 are literate. China's youth (age 15
to 24) literacy rate was 98.9% (99.2% for males and 98.5% for females) in 2000. In March
2007, China announced the decision of making education a national "strategic priority", the
central budget of the national scholarships will be tripled in two years and 223.5 billion Yuan
(28.65 billion US dollars) of extra funding will be allocated from the central government in
the next 5 years to improve the compulsory education in rural areas.

Many parents are highly committed to their children's education, often investing large
portions of the family's income on education. Private lessons and recreational activities, such
as in foreign languages or music, are popular among the middle-class families who can afford
them.

3.1.1.5 Transportation

Transportation in the mainland of the People's

Republic of China has improved significantly since the
late 1990s as part of a government effort to link the entire
nation through a series of expressways known as the
National Trunk Highway System (NTHS). The total
length of expressway is 65,000 km (40,000 mi) at the end
of 2009, second only to the United States. China has also
the world’s longest high-speed rail network with over
7,050 km (4,380 mi) of service routes.
 P a g e | 36

Private car ownership is increasing at an annual rate more than 15%. The sale of
automobiles had been increasing rapidly after the financial crisis in 2009, and China
surpassed the United States became the largest automobile market in the world with total
sales of more than 13.6 million Domestic air travel has increased significantly, but remains
too expensive for most. Long distance transportation is dominated by railways and charter
bus systems. Railways are the vital carrier in China; they are monopolized by the state,
divided into various railway bureaus in different regions. At the rates of demand it
experiences, the system has historically been subject to overcrowding during travel seasons
such as Chunyun during the Chinese New Year.

The major cities have rapidly expanding networks of underground or light rail
systems. Numerous cities are also constructing subways. Hong Kong has one of the most
developed transport systems in the world. Shanghai has a Maglev rail line connecting its
urban area to its main international airport, Pudong International Airport.

(Source: http://en.wikipedia.org/wiki/People's_Republic_of_China#Education)

3.1.2 PES Analysis

3.1.2.1 Political

The PRC is regarded by several political scientists as one of the last five Communist
states (along with Vietnam, North Korea, Laos, and Cuba), but simple characterizations of
PRC's political structure since the 1980s are no longer possible. The PRC government has
been variously described as communist and socialist, but also as authoritarian, with heavy
restrictions remaining in many areas, most notably on the Internet, the press, freedom of
assembly, reproductive rights, and freedom of religion.

Compared to its closed-door policies until the mid-1970s, the liberalization of the
PRC is such that the administrative climate is less restrictive than before, however the PRC is
still far from the liberal democracy practiced in most of Europe or North America, and the
National People's Congress has been described as a "rubber stamp" body. The PRC's
incumbent president is Hu Jintao and its premier is Wen Jiabao.
 P a g e | 37

The country is ruled by the Communist Party of China (CPC), whose power is
enshrined in China's constitution. The political system is very decentralized with limited
democratic processes internal to the party and at local village levels, although these
experiments have been marred by corruption. There are other political parties in the PRC,
referred to in China as democratic parties, which participate in the People's Political
Consultative Conference and the National People's Congress.

There have been some moves toward political liberalization, in that open contested
elections are now held at the village and town levels, and that legislatures have shown some
assertiveness from time to time. However, the Party retains effective control over government
appointments: in the absence of meaningful opposition, the CPC wins by default most of the
time. Political concerns in the PRC include lessening the growing gap between rich and poor
and fighting corruption within the government leadership.

The level of support to the government action and the management of the nation is
among the highest in the world, with 86% of people who express satisfaction with the way
things are going in their country and with their nation's economy according to a 2008 Pew
Research Center survey

3.1.2.2 Economic

From its founding in 1949 to late 1978, the People's Republic of China was a Soviet-
style centrally planned economy. Private businesses and capitalism did not exist. To propel
the country towards a modern, industrialized communist society, Mao Zedong instituted the
Great Leap Forward. Following Mao's death and the end of the Cultural Revolution, Deng
Xiaoping and the new Chinese leadership began to reform the economy and move to a
market-oriented mixed economy under one-party rule. In 1978, China and Japan had
normalized diplomatic relations and China had decided to borrow money from Japan in soft
loans. Since 1978, Japan has been No.1 foreign donor for China. China's economy is mainly
characterized as a market economy based on private property ownership. Collectivization of
the agriculture was dismantled and farmlands were privatized to increase productivity.

A wide variety of small-scale enterprises were encouraged while the government

relaxed price controls and promoted foreign investment. Foreign trade was focused upon as a
 P a g e | 38

major vehicle of growth, which led to the creation of Special Economic Zones (SEZs) first in
Shenzhen (near Hong Kong) and then in other Chinese cities. Inefficient state-owned
enterprises (SOEs) were restructured by introducing western-style management system and
the unprofitable ones were closed, resulting in massive job losses.

Since economic liberalization began in 1978, the PRC's investment- and export-led
economy has grown 90 times bigger and is the fastest growing major economy in the world. It
now has the world's second largest nominal GDP at 34.06 trillion Yuan (US$4.99 trillion),
although its per capita income of US$3,700 is still low and puts the PRC behind roughly a
hundred countries he primary, secondary, and tertiary industries contributed 10.6%, 46.8%,
and 42.6% respectively to the total economy in 2009. If PPP is taken into account, the PRC's
economy is second only to the US at US$9.05 trillion corresponding to US$6,800 per capita.

The inaugural Global Wealth Report by Credit Suisse Research Institute collects data
across more than 200 countries in mid-2010 stated China is expected to overtake Japan as the
second wealthiest country in the world by 2015 ($35 trillion) on the back of rapid economic
growth and strong domestic consumption. Ten years ago, China was the seventh largest
country in global wealth and China currently holds $ 16.5trillion, 35 percent ahead of the
wealthiest European country, France.

The PRC is the fourth most visited country in the world with 50.9 million inbound
international visitors in 2009. It is a member of the WTO and is the world's second largest
trading power behind the US with a total international trade of US$2.21 trillion –
US$1.20 trillion in export and US$1.01 trillion in imports. Its foreign exchange reserves have
reached US$2.4 trillion, making it by far the world largest. The PRC owns an estimated
$1.6 trillion of US securities. The PRC, holding US$801.5 billion in Treasury bonds, is the
largest foreign holder of US public debt. It is the world's third largest recipient of inward FDI
by attracting US$92.4 billion in 2008 alone, while the country itself increasingly invests
abroad with a total outward FDI of US$52.2 billion in 2008 alone becoming the world's sixth
largest outward investor.

The PRC's success has been primarily due to manufacturing as a low-cost producer.
This is attributed to a combination of cheap labor, good infrastructure, medium level of
technology and skill, relatively high productivity, favorable government policy, and some
say, an undervalued exchange rate. The latter has been sometimes blamed for the PRC's
 P a g e | 39

bulging trade surplus (US$262.7 billion in 2007) and has become a major source of dispute
between the PRC and its major trading partners – the US, EU, and Japan – despite the yuan
having been de-pegged and risen in value by 20% against the US$ since 2005.

The state still dominates in strategic "pillar" industries (such as energy and heavy
industries), but private enterprise (30 million private businesses) now accounts for anywhere
between 33% (People's Daily 2005) to 70% (Business Week, 2005) of GDP in 2005, while
the OECD estimate is over 50% of China's national output, up from 1% in 1978. Its stock
market in Shanghai (SSE) is raising record amounts of IPOs and its benchmark Shanghai
Composite index has doubled since 2005. SSE's market capitalization reached US$3 trillion
in 2007 and is the world's fifth largest exchange.

China now ranks 29th in the Global Competitiveness Index. 46 Chinese companies
made the list in the 2010 Fortune Global 500 (Beijing alone with 30). Measured using market
capitalization, four of the world's top ten most valuable companies are Chinese. Some of
these include first-ranked Petro China (world's most valuable oil company), third-ranked
Industrial and Commercial Bank of China (world's most valuable bank), fifth-ranked China
Mobile (world's most valuable telecommunications company) and seventh-ranked China
Construction Bank.

Although a middle income country by the world's standard, the PRC's rapid growth
managed to pull hundreds of millions of its people out of poverty since 1978. Today, about
10% of the Chinese population (down from 64% in 1978) live below the poverty line of
US$1 per day (PPP) while life expectancy has dramatically increased to 73 years. More than
93% of the population is literate, compared to 20% in 1950. Urban unemployment declined to
4 percent in China by the end of 2007 (true overall unemployment might be higher at around
10%).

Its middle class population (defined as those with annual income of at least
US$17,000) has now reached more than 100 million, while the number of super-rich
individuals worth more than 10 million Yuan (US$1.5 million) is estimated to be 825,000
according to Huron Report. China's retail market is worth RMB 8.9 trillion (US$1.302
trillion) in 2007 and growing at 16.8% annually. It is also now the world's second biggest
consumer of luxury goods behind Japan with 27.5% of the global share.
 P a g e | 40

The PRC's growth has been uneven when comparing different geographic regions and
rural and urban areas. The urban-rural income gap is getting wider in the PRC with a Gini
coefficient of 46.9%. Development has also been mainly concentrated in the eastern coastal
regions while the remainders of the country are left behind. To counter this, the government
has promoted development in the western, northeastern, and central regions of China.

The economy is also highly energy-intensive and inefficient – it uses 20%–100%

more energy than OECD countries for many industrial processes. It has now become the
world's largest energy consumer but relies on coal to supply about 70% of its energy needs.
Coupled with a lax environmental regulation, this has led to a massive water and air pollution
(China has 20 of the world's 30 most polluted cities).Consequently, the government has
promised to use more renewable energy with a target of 10% of total energy use by 2010 and
30% by 2050.

3.1.2.3 Public health and Environment

The Ministry of Health, together with its counterparts in the provincial health bureau,
oversees the health needs of the Chinese population. An emphasis on public health and
preventive medicine characterized health policy since the early 1950s. At that time, the
Communist Party started the Patriotic Health Campaign, which was aimed at improving
sanitation and hygiene, as well as attacking several diseases. This has shown major results as
diseases like cholera, typhoid, and scarlet fever were nearly eradicated.

With economic reform after 1978, the health of the Chinese public improved rapidly
because of better nutrition despite the disappearance, along with the People's Communes, of
much of the free public health services provided in the countryside. Health care in China
became largely private fee-for-service. The country's life expectancy at birth jumped from
about 35 years in 1949 to 73.18 years in 2008, and infant mortality went down from 300 per
thousand in the 1950s to about 23 per thousand in 2006. Malnutrition as of 2002 stood at 12%
of the population according to United Nations FAO sources.

Despite significant improvements in health and the introduction of western style

medical facilities, China has several emerging public health problems, which include
 P a g e | 41

respiratory problems as a result of widespread air pollution and hundreds of millions of

cigarette smokers, a possible future HIV/AIDS epidemic, and an increase in obesity among
urban youths. China's large population and close living quarters has led to some serious
disease outbreaks in recent years, such as the 2003 outbreak of SARS (a pneumonia-like
disease) which has since been largely contained.

Estimates of excess deaths in China from environmental pollution (apart from

smoking) are placed at 760,000 people per annum from air and water pollution (including
indoor air pollution). In 2007, China has overtaken the United States as the world's biggest
producer of carbon dioxide. Some 90% of China's cities suffer from some degree of water
pollution, and nearly 500 million people lack access to safe drinking water. Reports by the
World Bank and the New York Times have claimed industrial pollution, particularly of the
air, to be significant health hazards in China.

China has some relevant environmental regulations: the 1979 Environmental

Protection Law, which was largely modeled on US legislation. But the environment continues
to deteriorate. While the regulations are fairly stringent, they are frequently disregarded by
local communities while seeking economic development. Twelve years after the law, only
one Chinese city was making an effort to clean up its water discharges.

Part of the price China is paying for increased prosperity is damage to the
environment. Leading Chinese environmental campaigner Ma Jun has warned that water
pollution is one of the most serious threats facing China. According to the Ministry of Water
Resources, roughly 300 million Chinese are drinking unsafe water. This makes the crisis of
water shortages more pressing, with 400 out of 600 cities short of water.

With $34.6 billion invested in clean technology in 2009, China is the world's leading
investor in renewable energy technologies. China produces more wind turbines and solar
panels each year than any other country.

3.1.2.4 Science and Technology

After the Sino-Soviet split, China started to develop its own nuclear weapons and
delivery systems, successfully detonating its first surface nuclear test in 1964 at Lop Nur. A
 P a g e | 42

natural outgrowth of this was a satellite launching program, which culminated in 1970 with
the launching of Dong Fang Hong I, the first Chinese satellite. This made the PRC the fifth
nation to independently launch a satellite.

In 1992, the Shenzhou manned spaceflight program was authorized. After four
unmanned tests, Shenzhou 5 was launched on 15 October 2003, using a Long March 2F
launch vehicle and carrying Chinese astronaut Yang Liwei, making the PRC the third country
to put a human being into space through its own endeavors. China completed its second
manned mission with a crew of two, Shenzhou 6 in October 2005. In 2008, China
successfully completed the Shenzhou 7 mission, making it the third country to have the
capability to conduct a spacewalk. In 2007, the PRC successfully sent the Chang'e spacecraft,
named after the ancient Chinese moon goddess, to orbit and explore the moon as part of their
Chinese Lunar Exploration Program. China has plans to build a space station in the near
future and to achieve a lunar landing in the next decade. There are also plans for a manned
mission to planet Mars.

China has the world's second largest research and development budget, and is
expected to invest over $136 billion in 2006 after growing more than 20% in 2005. The
Chinese government continues to place heavy emphasis on research and development by
creating greater public awareness of innovation, and reforming financial and tax systems to
promote growth in cutting-edge industries.

In 2006, President Hu Jintao called for China to make the transition from a
manufacturing-based economy to an innovation-based one and the National People's
Congress has approved large increases in research funding. Stem cell research and gene
therapy, which some in the Western world see as controversial, face minimal regulation in
China. China has an estimated 926,000 researchers, second only to the 1.3 million in the
United States.

China is also actively developing its software, semiconductor and energy industries,
including renewable energies such as hydro, wind and solar power. In an effort to reduce
pollution from coal-burning power plants, China has been pioneering the deployment of
pebble bed nuclear reactors, which run cooler and safer, and have potential applications for
the hydrogen economy.
 P a g e | 43

In 2010, China developed Tianhe-IA, the world's fastest supercomputer, currently

stored in the National Supercomputing Center of Tianjin. The system is expected to process
seismic data for oil exploration, conduct bio-medical computing and help design aerospace
vehicles. Besides China's National SuperComputer Center's Tianhe-1A above, China also has
Nebulae. It is two publicy (for military or something secret usually is not announced)
available supercomputers among world's top 10.

3.1.2.5 Culture

For centuries, opportunity for economic and social advancement in China could be
provided by high performance on Imperial examinations. The literary emphasis of the exams
affected the general perception of cultural refinement in China, such as the belief that
calligraphy and literati painting were higher forms of art than dancing or drama. China's
traditional values were derived from various versions of Confucianism and conservatism.

A number of more authoritarian and rational strains of thought have also been
influential, such as Legalism. There was often conflict between the philosophies, such as the
individualistic Song Dynasty neo-Confucians, who believed Legalism departed from the
original spirit of Confucianism. Examinations and a culture of merit remain greatly valued in
China today. In recent years, a number of New Confucians have advocated that democratic
ideals and human rights are quite compatible with traditional Confucian "Asian values."

The first leaders of the People's Republic of China were born in the old society but
were influenced by the May Fourth Movement and reformist ideals. They sought to change
some traditional aspects of Chinese culture, such as rural land tenure, sexism, and a
Confucian education, while preserving others, such as the family structure and obedience to
the state.

Many observers believe that the period following 1949 is a continuation of traditional
Chinese dynastic history, while others say that the CPC's rule has damaged the foundations of
Chinese culture, especially through political movements such as the Cultural Revolution,
where many aspects of traditional culture were labeled 'regressive and harmful' or 'vestiges of
feudalism' by the regime and thus, were destroyed. They further argue that many important
aspects of traditional Chinese morals and culture, such as Confucianism, Chinese art,
 P a g e | 44

literature, and performing arts like Beijing opera, were altered to conform to government
policies and propaganda at the time.

Today, the Chinese government has accepted a great deal of traditional Chinese
culture as an integral part of Chinese society, lauding it as an important achievement of the
Chinese civilization and emphasizing it as vital to a Chinese national identity. Since the
Cultural Revolution ended, various forms of traditional Chinese art, literature, music, film,
fashion and architecture have seen a vigorous revival, and folk and variety art in particular
have gained a new found respectability, and sparked interest nationally and even worldwide.

Chinese culture and the West were linked by the Silk Road. Artifacts from the history
of the silk route, as well as from the natural history of the Gobi desert, are displayed in the
Silk Route Museum.

(Source: http://en.wikipedia.org/wiki/People's_Republic_of_China#Education)

3.1.3 Competition Analysis

3.1.3.1 Competitor Analysis

Now Chaing Rai province is the area of rubber plantation and processing factory rubber
export demand growth from China, India, and Thailand did not stop the production and
Exports of rubber behind demand. We need more foreign and rubber non-stop, as
manufacturer and exporter behind Thailand. Current output is used in only 4% and sent to
China, India, and 39% most 17% by the Indian market. In the future, is expected to grow at
least equal to China for this reason, it is currently involved with private business, Thailand's
largest rubber.

The Company has many competitors. Therefore, we inflicted a direct competitor. Most of
them are targeting the same product. And similar in some for our major competitors such as

 Chalong Latex Industry Co.,Ltd. (Source: http://www.chalonglatex.com/e_index.php)

 Southland Holding Co., Ltd (Source: http://southlandholding.com/)
 Sri Trang Agro-Industry Public Company Limited

(Source: http://www.sritranggroup.com/en/page/10_corporate.php)
 P a g e | 45

The big competitors such as

 Thai Hua Rubber Public Co.,Ltd

Planting para rubber was the first job that Mr. Luckchai's grandfather held when he
emigrated from China to Nakhon Si Thammarat 80 years ago. The family together with some
neighbors moved to Rayong in 1957 and brought some rubber seedlings. The company
started producing smoked rubber in 1978 with Bridgestone as its first customer.

Thai Hua Rubber Public Co., Ltd head office is situated in Bangkok. The company
has 11 production plants in different region of Thailand and 1 branch office in Shanghai,
China. In total the company employs about 1900-2000 workforce. The company has business
joint ventures with foreign investors to produce Medical Rubber Glove, rubber wood
Kitchenware, auto Tyre, raw and roasted Coffee Bean.

Original formed in 1985 under the name of THAI HUA RUBBER COMPANY
LIMITED by the family KITTIPOL together with some close relatives. In 1996, the company
changed its name to THAI HUA RUBBER PUBLIC COMPANY LIMITED, since 1991, the
company was rank as one of the largest rubber producer and exporter in Thailand.

(Source: http://www.thaihua.com/)

 Thai rubber latex corporation (Thailand) Public company limited.

Thai Rubber Latex Corporation is a leading manufacturer and exporter of latex

concentrate, disposable rubber glove, extruded rubber thread, talcum coated rubber thread,
and various rubber products. Our core competitiveness is derived from consistency of supply,
high-quality products, and spontaneous customer services. That is contributable to our
success. For more than three decades, Thai Rubber Latex Corporation has stably become one
of the most recognized concentrated latex producers in Thailand and gained numerous
reputations within rubber industry worldwide.

(Source: http://www.thaitexgroup.com/)
 P a g e | 46

3.1.3.2 Customer Analysis

Customer Analysis is determined by target customer or we have to offer sales and

services to customers where that the analysis of target groups (Occupants) allows to know the
behavior in the purchase and use of the actual target group. A clear target groups and
analyzed the characteristics of the possibilities. The target customers that will lead to success
in direct sales in the analysis, and the prospects salesman match has to be divided clear
market that can be measured quantitatively and easy access because consumers all potential
customers may not always and if there is no market segmentation is difficult to analyze the
needs of actual customers until they are not able to offer in the form of satisfaction to their
customers.

China is the country of the world's largest rubber volume of use is 25 per cent of the
amount of rubber in the world in the last 5 years, the demand for rubber in China is rapidly
increasing average 10 percent per year until the top importing countries rubber largest one of
the world in 2007 China imported rubber worth U.S. $ 3,260 million. Increased 8 percent
compared with the year 2006 with a market share of Thailand is also number one export
market, Thailand's largest rubber exports to China, most with 54 % of the export value of
rubber, all of Thailand, followed by rubber smoked sheets (26%) and latex (19%) for the
information. Interest of the rubber market in China is as follows. In Yunnan province is one
of the 10 major industrial facility of the county by the year 2004 the company Yunnan Nong
Ken Group Co., Ltd in association with Yuntian Hua Group Co., Ltd established Yunnan
Natural Rubber Production Co., Ltd was at Kun Ming City. This is the largest rubber
company in China. Of capital than 2.7 billion Yuan registered capital of 800 million Yuan,
the area planted in rubber production to 1.5 million square meters per year, 130,000 tones per
cent. Therefore, we see that China is to be a good customer in the export business, our rubber
processing.
 P a g e | 47

3.1.3.3 Competitive Analysis

The Five - forces model for the competitive Rubber in Chiangrai.

 The Rivalry among Existing competitor

Now in Chiangrai has private investors from the South of Thailand the major buy a lot
of rubber cultivation and the Chiang Rung, Khun Tan,Chiang Khong Wiang Chai
entertainment section has a factory finish. The Phaya Meng Rai has big capitalists to buy
about 1 thousand farm to plant rubber. Resulted in land price increase from 3000-3500 baht
per rai per rai is almost ten thousand Baht and if thinking about buying a rubber plantation
grown then. I need to add more to the old rubber thousand baht per rai per year. We have
been promoting and expanding rubber cultivation area to the north. Especially in Chiang Rai,
Considered a source of rubber cultivation is important. The rubber farmers of more than
15,000 families are planting more than 350,000 acres and rubber tapping rubber to open no
less than 5,000 acres and is about to open another cut hundreds of thousands of farm This will
generate revenue to rubber farmers in the future. Make money flow into the economy of
Chiang Rai, about 10 million Baht.

 Threats of new entry

Rubber is currently increasing need in the market. Rubber demand exceeds capacity.
Therefore, the company turned to new interests and rubber production increased because of
the importance of rubber and to demand more. The use of rubber processed and used in many
benefits and its growing cluster what are our company’s major competitors ago.

 Bargaining power of buyer

Aggregation of rubber sales not only benefit from the purchase was also the
bargaining power of customers further reduced by this method uses the price of goods up
within the group is treated the same price. This can be done very easily because the supply of
goods, production and cost the same. Customers will not be able to negotiate a trade because
the price out of each stores the same. If not satisfied with the price I have to buy it because
the other stores selling the same price. The profitability of other it's the technique that can
each store from which some without prejudice to the agreed price.

 Bargaining power of supplier

Crisis, the decline in rubber prices during the year 2534 to year 2535 continued to
rubber farmers have suffered and demanding the government come. The help given the
 P a g e | 48

structure of the Thai rubber market appeared to look like a buyer's market or a few buyers
market the rubber farmers. The market is vulnerable lack of bargaining power and do not get
their fair due from the sale of tire dealers be purchased including assessment quality rubber
than the reality because most poor farmers have to sell products to the market as well as the
immediate livelihood Rubber multi-level dealers. Result in charges pay market prices and
margins in each level resulted in farmers selling at a low price for rubber tire market in
Thailand is having problems as well, because the sender used the method of direct trade
between producers and users. The rubber has important role in determining the price of
rubber. Yang lack of markets to free competition, these are all things affecting the basic
rubber. The majority of small rubber planters established central rubber market. It is one way
the government aims to develop a system of rubber market, both domestic and foreign
countries to be effective.

 Threats of substitute product and service

Threat of substitute products and services for business expansion plans are to the
relatively high. Rubber products have quite a vehicle and industrial rubber products. Since
replacement of the rubber product is a synthetic rubber by-product is distilled from crude oil.
The price of rubber has a close relationship with the oil price in world market simply means
"to oil the tires up," There are also issues about the relationship between the price of rubber in
the market AFET and the price of rubber in the international market is likely to become
possible in the same direction.
 P a g e | 49

3.2 STP analysis

3.2.1 Market segment

Our company planned to export products; we segment market by using the country
that wants to import the rubber to be the base for segmenting market. We want to kwon what
country suitable for exports our products.

So we have many countries in the international rubber market to export such as USA, China,
Japan, India, Korea, German etc

Figure 3-2
Rubber consumption in the world

USA
China

Japan

India
Korea

German
Malaysia

Thailand
Turkey

Other
(Source: Geojit Comtrade Research Desk.(2010). Natural Rubber: Will the Rally
Contnue?.Geojit Comtrade Ltd.)

3.2.2 Market Target

Thai-North is having only main one target focus. Our target is a China-market
specialization following in the table.
 P a g e | 50

EXHIBIT 3-1
Market Specialization

US CN JP IN KR DE MY TH TR

Rubber Smoked Sheet (RSS)

Block Rubber

China is a country that import rubber largest of the world, while today China cannot
produce rubber to enough their demand. Thailand export block rubber to China most, with 54
percent of the total export value and followed with Smoked Rubber Sheets (RSS) to
responding growth of automobile industry in China. The rapid economic development in recent
years in China, demand for rubber is increased continuously and become a product shortage that
make demand of smoked rubber sheets(RSS) and Block Rubber are continuous. Moreover,
we have policy to production with higher quality and try to develop standards and quality of
basic processing rubber to meet the needs of Chinese industry.

(Source: Export-Import Bank of Thailand)

Figure 3-2
Increasing in demand of rubber in China annually

4000
3353
3500 3043
3000
2754 2743
2500
2000
1500 :1000Tons
1000
500
0
・・#" ・・ "# ・・#" ・・ "#

(Source: Association of Natural Rubber Producing Countries, Monthly Bulletin of Natural

Rubber Trends & Statistics, Vol.2 No.7 July 2010)
 P a g e | 51

3.2.3Positioning
Our production is for export quality, allow to product line we can rank with many
grade to serve the variance of demand.
 Smoked Rubber Sheets (RSS)
The split into 5 categories: Rubber Smoked Sheet
1, 2, 3, 4 and 5 classes by grading the quality of rubber is
used as the basis for each disc as a raw material to
production of goods such as water wheels, tires,
automotive parts, shoes, etc.. The products are divided
into grades by using the ground base eye (Visually Grade) is divided into rubber smoked
sheet. Thai-North Rubber position is the export quality.

EXHIBIT 3-2
Thai-North Rubber Position
Export Quality

Standard Domestic’s quality Export’s quality

Rubber Smoked Sheets 1( Extra

- 
light color )

Rubber Smoked Sheets 1

- 

Rubber Smoked Sheets 2

- 

Rubber Smoked Sheets 3  -

Rubber Smoked Sheets 4  -

Rubber Smoked Sheets 5  -

 Block Rubber
Divided into 4 categories are STR XL, STR5L, STR 5 and
STR 5CV**. It is a product used as raw materials in
manufacturing and other products like the Rubber Smoked Sheet
(RSS) on the tire industry.
 P a g e | 52

Block Rubber is begins with the selection of raw materials and strict control before
entering the manufacturing process until it is completed and tested with lab standard quality.
The test results with high accuracy include of the transport process that ensures of all
products delivered to customer’s needs, conditions and standards required. Our positioning is

EXHIBIT 3-3
Positioning of Our Company

Standard Domestic’s quality Export’s quality

Standard Thai Rubber XL

- 

Standard Thai Rubber 5L

- 

Standard Thai Rubber 5 - 

Standard Thai Rubber 5 CV** - 

Standard Thai Rubber 10  -

Standard Thai Rubber 10 CV **  -

Standard Thai Rubber 20  -

Standard Thai Rubber 20CV**  -

(Source: http://www.sritranggroup.com/th/page/20_products2.php )
 P a g e | 53

3.3 Marketing Mix Strategy

3.3.1 Product

Since Thailand is well equipped in terms of the raw material advantage with
Competitors. There are opportunities and possibilities in developing countries as a
manufacturing center, and send the basic process for quality products to meet the needs of
users. However, processing of raw rubber sheet at the present the farmers have production
low quality, when the plants purchased raw rubber sheets of these farmers to be rubber smoke
with low quality. However, the raw rubber sheet, rubber farmers who produce poor quality. Is
there a way to make prices higher by introducing the steam or smoke. The raw rubber sheet
becomes rubber at higher prices immediately. So that a primary processing plant of rubber
latex rubber sheet Raw and smoked sheets will create added value for the rubber to meet
processing products in China.

3.3.1.1 Variety Branding

There are 2 type of product of rubber processing such a Rubber Smoked sheet (RSS)
and Block Rubber to export in China. China has a very high market demand in terms of
rubber. We see that if the export rubber in latex, it is difficult to transport. We think that
exporting rubber processing. That it would be easier and more convenient in transportation.

3.3.1.2 Quality Packaging

Rubber production is a standard selection of quality raw materials, through the
manufacturing process to reduce the size of a modern, clean as determined by it. Rubber
process into the cooked temperature through the process of briquette weight to be prescribed
through rubber packaging will be processed by the laboratory test standard. The test results
with high accuracy. The processing plant was established to help develop basic rubber tires
standard. Sheet farmers as raw rubber sheets and rubber at higher quality level 3 to level 2
and level 1.To produce sheet rubber and rubber smoked for higher quality. Would achieve
higher sales prices and increased profits.
 P a g e | 54

3.3.2 Price

The pricing of the companies will be priced based on the purchase price of domestic.
On Export the company will focus on the world market. According fact the amount of rubber
agriculturist organizations or vendors to sell products and there are a lot of volume. And will
comply with the demand of rubber in the industry and are buying that. We will push the price
of rubber to raise to the level of agriculturist tires a profit worth the investment and maintain
the rubber price to be stable, as appropriate to the situation and possible price to buy and
prices. It is a major exporter. Of course, now that the company will be based on a range of
rubber products to market but that price will be adjusted up or down. We are separated by
price segment in which we will split the purchase price and export volume of purchase and
the demand of consumers by period time.

The Company is divided into save cost price which price to purchase directly from
agriculturist, is sold with partners and using the global export prices.

- Save cost is the price to purchase directly from agriculturist. The company offers a low cost.
We use each day pricing. This has variance and based on the quality of rubber parts for each
class of agriculturist.

- Price is sold with partners. Using the global export prices overall rising trend. Due to market
products based on low. Right now is extremely competitive. Companies are using strategies
is pricing conjunction with the world market price.

3.3.3 Place

3.3.3.1 Factory

Our company choose Chiang Rai province to set up factory because it is the suitable
for processing rubber. We have many factors to choose this province. The major factor that
made we choose that are raw material. Chaing Rai have trend to rubber plant across the 18
districts, 347,857 Rai. Expected in the coming years Chaing Rai will be the top of rubber
plant in the country subordinate of Songkhla, Surat Thani, Nakhkon Si Thammarat, Trang
etc. The concern the market should not worry because the information was reviewed
currently Thailand’s rubber emphasis on export to China 39%. Based economic growth also
 P a g e | 55

growth continued until we produce left behind to rest 4% of the country. At the same time
Chaing Rai also has the ability to export to China via South Road R3A. Currently Office of
the Rubber Replanting Aid Fund is pushing to have more offices at the port of Chiang Khong
to facilitate the export of rubber to China and South of China. Other factor is about employee
Chiang Rai have the border near with Myanmar and Laos. So we can employee from those
countries. We expect that it will lower wage and save cost. Chiang Rai is the suitable that we
will set up factory.

(Source: http://www.manager.co.th/Local/ViewNews.aspx?NewsID=9530000131252)

3.3.3.1.1 General Information of Chiang Rai province.

Chiang Rai is the northernmost province of Thailand. Neighboring provinces are

Phayao, Lampang and Chiang Mai. In the north it borders Shan State of Myanmar and Bokeo
of Laos.

 Geography

The average elevation of the province is 580 m. The north of the province belongs to
the so-called Golden Triangle, at which the borders of Thailand, Laos and Myanmar
converge - an area which was very unsafe because of the drug smuggling across the borders.
The Mekong river forms the boundary with Laos, the Mae Sai and Ruak River to Myanmar.
Through the town of Chiang Rai itself flows the Kok River.

While the eastern part of the province is relatively flat river plains, the western part
consists of the mountainous terrain of the Hills of Northern Thailand. While not the highest
elevation of the province, the 1389 m high Doi Tung (Flag hill) is the most important hill.
The Wat Phra That Doi Tung temple on top of the hill according to the chronicles dates back
to the year 911. Nearby is the Doi Tung royal villa, former residence of the Late Princess
mother (mother of the present king) Somdej Phra Srinagarindra. Thanks to her activities the
hills were reforested, and the hill tribes changed from growing poppy to other crops.
 P a g e | 56

 Demographics

The majority of the population is generally ethnic Thai, but 12.5% of the population
belongs to the hill tribes, a minority in the North of Thailand. A minority are of Chinese
descent, mainly descendants of the Kuomintang soldiers who settled in the region, notably
Santikhiri.

 Medical Health Care

The popular Chiang Rai hospitals are:

- Chiang Rai Regional Hospital

- Kasemrad Sriburin General Hospital
- Overbrooke Hospital

 Local Culture

The north of Thailand's culture is Lanna in origin and the people are very proud of
their northern roots. The region is home to distinctly different food, music, arts, way of life
and even language. Chiang Rai is also a melting pot of hill tribes and their own unique
cultures.

(Source: http://en.wikipedia.org/wiki/Chiang_Rai_Province)

3.3.3.1.2 Inventories and Warehousing

We will locate Inventories and Warehousing near the Factory because it will better to
save cost of transport. The Inventories up on the demand of products we will management
inventory to be value with space that we have. And we will do the same with warehousing. It
will be close to the factory and not far to the port that we will ship the product. We have plan
to expanse to be located near the port for save cost of logistic but it up on the production and
the profit that we will get. If we have high of return this project will follow.
 P a g e | 57

3.3.3.2 Location Logistic

In the present there are three ways to shipments from Thailand to The People’s
Republic of China.

 Ocean

Now transport by ship is major transportation routes. There are two routes that Thai
can shipment to China. The First routes, Transport by the Mekong River by start from port of
Chiang Saen district or Chiang Khong district in Chiang Rai province. Shipping to port of
City Xishuangbanna in Yunnan Province or port of Nanning city, Free area, Guangxi. Then
distribute the goods to the following cities. The Second routes, Most of the freight route is
start from Laem Chabang through the South China Sea to Hong Kong. Four days for
shipment. Then change to freight ship small for transport to Nan Hai Pier. Go to central
wholesale market of fruit imported Lee Sui, Guangzhou City. And distribute the goods to the
following cities of Guangdong and other provinces such as Shanghai, Beijing and Xiamen
Min.

 Air

All most shipping in early season of production that have a few products and high
price to Airports in various major cities of China such as Airport City Kun Ming, Shanghai,
Chengdu, Beijing etc. In 2001Thailand has exported vegetables and fruits to amount of 100
tons or value of 3.7 billion Baht.

 Motor

There are five routes but in present not widely used because of poor road conditions
and construction was not completed.

The First route(R 12, R8 and R13, R9) is start from Nong
Khai Province, Kakhon Phanom Province and Muk Da Han
to Vientiane, Laos to Vietnam and enters to China, Nanning
City, Free area, Guangxi.
 P a g e | 58

The Second route (R3B,R3W) is start

from Mae Sai district of Chiang Rai province to
Myanmar side to Checkpoint of Tha Khi Lek
through Young City and enters to Xiamen Song
City of China to Xishuangbanna, Yunnan
province with a distance of 240 kilometers.

The Third route (R3B, R3W) is start

from Mae Sai district of Chiang Rai province to
Myanmar side to Dan Tha Khi Lek through
Chiang Tung City to Xishuangbanna in China
with a distance of 253 kilometers.

The Forth route (R3A) is start from Chiang

Khong district of Chiang Rai province to Laos
through Huai Sai in Luang Nam Tha, Boten
and Bohan and enters to Xishuangbanna in
China with a distance of 254 kilometers.

The Last route (R3A) is start from Honor

district of Nan province to Laos through
Checkpoint of Huaikorn, Namnegrn, Boten,
Bohan and enters to Xishuangbanna in China
with a distance of 300 kilometers.
 P a g e | 59

 Rail

Kunming-Singapore Railway

Kunming-Singapore rail link

by 2015?

The Associated Press reports

that the Association of
Southeast Asian Nations
(ASEAN) is expecting a
US$15 billion railway
connecting Singapore with
Kunming to be completed by
2015, which is several years
later than had been previously
hoped.

The 5,000 kilometer (3,000

mile) rail line's development
has been hampered by a lack of
funds, technical issues and varying levels of enthusiasm among countries involved.

There is already an existing rail link from Singapore to Bangkok, passing through Malaysia;
it is the two branches extending north from Bangkok that have proven more difficult. The
western branch will travel through Myanmar and the line's eastern branch will cut through
Cambodia and Vietnam, with an additional section of track connecting it to Laos.

ASEAN secretary-general Ong Keng Yong told the AP that the Asian Development Bank has
recently given Cambodia US$40 million in soft loans, with an additional US$5.4 million in
grants also being secured for the rail line, which is expected to dramatically increase the flow
of people and cargo throughout the region.

(Source:http://www.gokunming.com/en/blog/item/27/kunmingsingapore_rail_link_by_2015 )
 P a g e | 60

EXHIBIT 3-4
Trans-Asian Railway network

(Source: http://www.mof.or.th/fruit-olympic/freetrade-thaichina.htmand
http://www.econ.tu.ac.th/ertc/php/)

3.3.4 Promotion

3.3.4.1 The exhibitions show

The exhibitions show will also introduce Thai-
North Rubber and is still regarded as temporary sales
channels with a low cost to deliver and demonstrate
products to consumers directly.

The show had to be coordinated on several

issues. The important, we will work with
government agencies of Thailand and China that
help us to promote and support like The Oversea
Trade Fair, Department of Export Promotion (DEP)
and Foreign Market Development Office in line of
China. The trade show will be arrange meeting
 P a g e | 61

between entrepreneurs and those interested, in the critical locations in economy throughout
the year such as Bangkok, Shanghai and Zhejiang, etc. We can track any information from
such cooperation.

3.3.4.2 Website

Marketing strategy is effective and cost-effective results to our most other one is.
Marketing online and one of the key elements of online marketing strategies for our business
is web site. The web site also increase the revenue for us, is will helps take the good image of
Thai-North-Rubber to modern, cope, and up-market of rubber. Promote by website will
enhance the opportunity of our company from buyers all over the world. And the price of
goods down by reduce middleman which will increase competitiveness in the global market.

Thai-North
Rubber ©

(Source: http://www.sritranggroup.com/th/page/index.php )
 P a g e | 62

3.4 Sale Forecast/Profit estimate

Quantity Production

Thailand has produced rubber high as number one in the world. It has space for
planting more than 2 million hectares and harvest more than 70 percent per year.

Thailand has rubber cultivation in regions of the country. Most of the country will be
planted in the southern hemisphere and the second was the Northeast.

Table 3-1
Quantity Production

Zone Quantity

South 11,339,698
Central and East 1,978,660
Northeast 2,799,209
North 600,578
1: Rai

Figure 3-3
Quantity Production in Thailand

(Source: http://www.rubberthai.com/statistic/stat_index.htm )

In the North area of Thailand has project plant 1 million of rubber. In Chiang Rai has
just 10% tapping rubber. In the future North also increase produce of rubber follow age of
rubber trees. Growth rate will increase too.
 P a g e | 63

Table 3-2
The export value of Thailand rubber in 2003 – 2009

Quantity
Month
2003 2004 2005 2006 2007 2008 2009
JAN 317,725 253,536 272,991 254,474 264,835 285,172 225,413
FAB 326,993 269,172 259,370 264,470 247,871 231,867 258,492
MAR 319,282 264,763 263,417 263,341 249,423 245,239 235,272
APR 212,220 209,323 207,522 203,481 199,795 210,967 176,168
MAY 218,882 219,634 216,099 214,925 197,907 210,299 169,162
JUN 231,656 220,291 201,729 212,509 220,283 214,381 204,317
JUL 251,020 250,270 240,418 236,044 244,750 257,850 234,608
AUG 220,323 251,418 271,397 268,569 278,119 256,397 225,921
SEP 265,523 175,208 264,357 264,393 250,647 277,473 214,341
OCT 245,494 338,214 242,525 276,871 268,473 267,253 236,068
NOV 218,593 278,223 269,061 299,763 264,179 188,070 257,754
DEC 280,055 291,566 243,305 297,930 279,846 187,113 304,508
Per: Ton
 P a g e | 64
Table 3-3
Category of rubber export

Year 2003 2004 2005 2006 2007 2008 2009

RSS 1,003,309 920,972 938,984 861,326 796,549 694,510 322,470

STR 993,504 1,109,327 1,069,345 1,103,848 1,132,135 950,574 524,588

Latex 488,559 488,675 555,905 510,489 509,375 595,550 245,152

Mix 82,443 36,700 129,564 105,151 165,164 417,499 197,524

other 60,236 76,724 77,875 77,948 72,060 68,060 26,503

Total 2,628,051 2,632,398 2,771,673 2,658,762 2,675,283 2,726,193 1,316,237

Per: Ton

Table 3-4
Compare plant, trap and produce in 2008-2009

Plan of rubber(Rai) Trapping of rubber(Rai) Produce(Ton)

2008 2009 2008 2009 2008 2009

North 600,578 693,812 14,841 24,218 3,710 6,166
Northeast 2,799,209 2,984,097 569,668 690,410 154,917 198,436
Central 1,977,460 2,063,418 1,273,204 1,295,560 364,167 349,297
South 11,339,698 11,512,990 9,514,176 9,590,259 2,644,116 2,536,381
 P a g e | 65

Figure 3-4
Compare plant, trap and produce in 2008-2009

(Source: http://www.manager.co.th/Local/ViewNews.aspx?NewsID=9530000131252 and

http://www.thainr.com/th/index.php?detail=stat-thai )

Tendency rubber price per year

Traded domestic rubber price will base on auction price and quantity. Export rubber
price base on foreign market both cash and future market.

Table 3-5
Rubber smoked sheet

Price (Baht/KG.)
Quantity Filed
Rubber market
RSS 1- RSS RSS (KG.) Latex
RSS 4 RSS 5
3 bubble Cutting
Songkhia 138.62 137.62 134.5 133.5 127.5 70,500 132

Suratthani - - - - - - -
Nakorn-
138.62 137.62 135.49 134.5 130.16 120,000 -
Srithammarat
 P a g e | 66

Table 3-6
Cash market on offer price

US CENT /
Country Type Shipment
KG
RSS 3 JAN 485
Thailand STR
JAN 485
20
SIR
Indonesia JAN 479.6
20
SMR
Malaysia JAN 480
20

Table 3-7
Future Market on AFET

Month RSS 3

Jan-11 139.70

Feb-11 142.00
Mar-11 141.10

(Source: http://www.rubberthai.com/price/eng/price_eng.htm )

North of Thailand has 4% area all of plant rubber but has around 10% can trapping
rubber. Our company assumes 0.8% of north rubber export to increase total sale every year.
In rainy season is decrease sale volume because it has affected to keep latex. Price of RSS 3
is 142 and STR 138 Baht per Kg. We have account receive 30% from sale forecast.

Table 3-7
Volume

2011 2012 2013 2014 2015

RSS 3 125 137 151 166 183

STR 203 223 246 270 297

Per: Ton
 P a g e | 67

Table 3-8
Sale Forecast/Profit estimate, 2011

Year 2011(Quantity)

Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

RSS (Ton) 5.44 5.44 6.67 6.67 4.57 4.57 4.57 4.57 6.85 6.85 7.02 7.02 70.23
STR (Ton) 8.85 8.85 10.85 10.85 7.43 7.43 7.43 7.43 11.14 11.14 11.43 11.43 114.26
Total 14.30 14.30 17.53 17.53 11.99 11.99 11.99 11.99 17.99 17.99 18.45 18.45 184.49
Year 2011(Price)

Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

RSS (Baht) 772,925 772,925 947,456 947,456 648,260 648,260 648,260 648,260 972,389 972,389 997,322 997,322 9,973,223

STR (Baht) 1,221,960 1,221,960 1,497,887 1,497,887 1,024,870 1,024,870 1,024,870 1,024,870 1,537,305 1,537,305 1,576,723 1,576,723 15,767,227

Total 1,994,885 1,994,885 2,445,343 2,445,343 1,673,129 1,673,129 1,673,129 1,673,129 2,509,694 2,509,694 2,574,045 2,574,045 25,740,450

Year 2011(Account Receivable)

Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

RSS (Baht) 231,877 231,877 284,237 284,237 194,478 194,478 194,478 194,478 291,717 291,717 299,197 299,197 2,991,967
STR (Baht) 366,588 366,588 449,366 449,366 307,461 307,461 307,461 307,461 461,191 461,191 473,017 473,017 4,730,168
Total 598,465 598,465 733,603 733,603 501,939 501,939 501,939 501,939 752,908 752,908 772,213 772,213 7,722,135
 P a g e | 68

Table 3-9
Sale Forecast/Profit estimate, 2012

Year 2012(Quantity)

Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

RSS (Ton) 7.73 7.73 7.73 7.73 3.86 3.86 3.86 3.86 7.73 7.73 7.73 7.73 77.26

STR (Ton) 12.57 12.57 12.57 12.57 6.28 6.28 6.28 6.28 12.57 12.57 12.57 12.57 125.68

Total 20.29 20.29 20.29 20.29 10.15 10.15 10.15 10.15 20.29 20.29 20.29 20.29 202.94

Year 2012(Price)

Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

RSS (Baht) 1,097,055 1,097,055 1,097,055 1,097,055 548,527 548,527 548,527 548,527 1,097,055 1,097,055 1,097,055 1,097,055 10,970,545

STR (Baht) 1,734,395 1,734,395 1,734,395 1,734,395 867,197 867,197 867,197 867,197 1,734,395 1,734,395 1,734,395 1,734,395 17,343,949

Total 2,831,449 2,831,449 2,831,449 2,831,449 1,415,725 1,415,725 1,415,725 1,415,725 2,831,449 2,831,449 2,831,449 2,831,449 28,314,495

Year 2012(Account Receivable)

Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

RSS (Baht) 329,116 329,116 329,116 329,116 164,558 164,558 164,558 164,558 329,116 329,116 329,116 329,116 3,291,164
STR (Baht) 520,318 520,318 520,318 520,318 260,159 260,159 260,159 260,159 520,318 520,318 520,318 520,318 5,203,185
Total 849,435 849,435 849,435 849,435 424,717 424,717 424,717 424,717 849,435 849,435 849,435 849,435 8,494,348
 P a g e | 69

Table 3-10
Sale Forecast/Profit estimate, 2013

Year 2013(Quantity)
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

RSS (Ton) 8.50 8.50 8.50 8.50 4.25 4.25 4.25 4.25 8.50 8.50 8.50 8.50 84.98

STR (Ton) 13.82 13.82 13.82 13.82 6.91 6.91 6.91 6.91 13.82 13.82 13.82 13.82 138.25

Total 22.32 22.32 22.32 22.32 11.16 11.16 11.16 11.16 22.32 22.32 22.32 22.32 223.23

Year 2013(Price)
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

RSS (Baht) 1,206,760 1,206,760 1,206,760 1,206,760 603,380 603,380 603,380 603,380 1,206,760 1,206,760 1,206,760 1,206,760 12,067,600

STR (Baht) 1,907,834 1,907,834 1,907,834 1,907,834 953,917 953,917 953,917 953,917 1,907,834 1,907,834 1,907,834 1,907,834 19,078,344

Total 3,114,594 3,114,594 3,114,594 3,114,594 1,557,297 1,557,297 1,557,297 1,557,297 3,114,594 3,114,594 3,114,594 3,114,594 31,145,944

Year 2013(Account Receivable)

Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

RSS (Baht) 362,028 362,028 362,028 362,028 181,014 181,014 181,014 181,014 362,028 362,028 362,028 362,028 3,620,280

STR (Baht) 572,350 572,350 572,350 572,350 286,175 286,175 286,175 286,175 572,350 572,350 572,350 572,350 5,723,503

Total 934,378 934,378 934,378 934,378 467,189 467,189 467,189 467,189 934,378 934,378 934,378 934,378 9,343,783
 P a g e | 70

Table 3-11
Sale Forecast/Profit estimate, 2014

Year 2014(Quantity)
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
RSS (Ton) 9.35 9.35 9.35 9.35 4.67 4.67 4.67 4.67 9.35 9.35 9.35 9.35 93.48
STR (Ton) 15.21 15.21 15.21 15.21 7.60 7.60 7.60 7.60 15.21 15.21 15.21 15.21 152.07

Total 24.56 24.56 24.56 24.56 12.28 12.28 12.28 12.28 24.56 24.56 24.56 24.56 245.56

Year 2014(Price)
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
RSS (Baht) 1,327,436 1,327,436 1,327,436 1,327,436 663,718 663,718 663,718 663,718 1,327,436 1,327,436 1,327,436 1,327,436 13,274,360
STR (Baht) 2,098,618 2,098,618 2,098,618 2,098,618 1,049,309 1,049,309 1,049,309 1,049,309 2,098,618 2,098,618 2,098,618 2,098,618 20,986,179
Total 3,426,054 3,426,054 3,426,054 3,426,054 1,713,027 1,713,027 1,713,027 1,713,027 3,426,054 3,426,054 3,426,054 3,426,054 34,260,539
Year 2014(Account Receivable)
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
RSS (Baht) 398,231 398,231 398,231 398,231 199,115 199,115 199,115 199,115 398,231 398,231 398,231 398,231 3,982,308
STR (Baht) 629,585 629,585 629,585 629,585 314,793 314,793 314,793 314,793 629,585 629,585 629,585 629,585 6,295,854

Total 1,027,816 1,027,816 1,027,816 1,027,816 513,908 513,908 513,908 513,908 1,027,816 1,027,816 1,027,816 1,027,816 10,278,162
 P a g e | 71

Table 3-12
Sale Forecast/Profit estimate, 2015

Year 2015(Quantity)
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
RSS (Ton) 10.28 10.28 10.28 10.28 5.14 5.14 5.14 5.14 10.28 10.28 10.28 10.28 102.83
STR (Ton) 16.73 16.73 16.73 16.73 8.36 8.36 8.36 8.36 16.73 16.73 16.73 16.73 167.28
Total 27.01 27.01 27.01 27.01 13.51 13.51 13.51 13.51 27.01 27.01 27.01 27.01 270.11
Year 2015(Price)
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
RSS (Baht) 1,460,180 1,460,180 1,460,180 1,460,180 730,090 730,090 730,090 730,090 1,460,180 1,460,180 1,460,180 1,460,180 14,601,796
STR (Baht) 2,308,480 2,308,480 2,308,480 2,308,480 1,154,240 1,154,240 1,154,240 1,154,240 2,308,480 2,308,480 2,308,480 2,308,480 23,084,797
Total 3,768,659 3,768,659 3,768,659 3,768,659 1,884,330 1,884,330 1,884,330 1,884,330 3,768,659 3,768,659 3,768,659 3,768,659 37,686,593
Year 2015(Account Receivable)
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
RSS (Baht) 438,054 438,054 438,054 438,054 219,027 219,027 219,027 219,027 438,054 438,054 438,054 438,054 4,380,539
STR (Baht) 692,544 692,544 692,544 692,544 346,272 346,272 346,272 346,272 692,544 692,544 692,544 692,544 6,925,439
Total 1,130,598 1,130,598 1,130,598 1,130,598 565,299 565,299 565,299 565,299 1,130,598 1,130,598 1,130,598 1,130,598 11,305,978
 P a g e | 72

Table 3-13
Sale Forecast/Profit estimate, 2016

Year 2016(Account Receivable)

Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

RSS (Baht) 1,460,180 1,460,180 1,460,180 0 0 0 0 0 0 0 0 0 4,380,539

STR (Baht) 2,308,480 2,308,480 2,308,480 0 0 0 0 0 0 0 0 0 6,925,439

Total 3,768,659 3,768,659 3,768,659 0 0 0 0 0 0 0 0 0 11,305,978

 P a g e | 73

3.5 Marketing Expend Budget

We anticipate the activity expenses mostly for covering the cost of additional staff to help facilitate the additional requirements for
marketing activities.

Table 3-14
Marketing Expense Budget, 2011

For year 2011

Marketing Expense Budget :

Item Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Advertising
Web marketing 1,000 1,000 1,000 1,000 1,000 1,000 1,000 7,000

Production
Web development 500 500
Web ads/e-newsletters 200 200 400

PR/Events/Promotion
Trade show/Events 3,000 3,000 3,000 9000

Total 0 0 0 3000 0 1000 1000 4000 1200 1000 1200 4500 16,900
 P a g e | 74

Table 3-15
Marketing Expense Budget, 2012

For year 2012

Marketing Expense Budget :

Item Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Advertising
Web marketing 500 500 500 1500

Production
Web development 500 500 500 1500
Web ads/e-newsletters 200 200 200 200 200 200 1200

PR/Events/Promotion
Trade show/Events 3,000 3,000 3,000 9000

Total 200 0 200 4000 200 0 200 4000 200 0 200 4000 13,200
 P a g e | 75

Table 3-16
Marketing Expense Budget, 2013

For year 2013

Marketing Expense Budget :

Item Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Advertising
Web marketing 500 500 500
1,500
Production
Web development 500 500 500
Web ads/e-newsletters 200 200 200 200 200 200
2,700
PR/Events/Promotion
Trade show/Events 3,000 3,000 3,000
9,000
Total 200 0 200 3500 200 0 200 3500 200 0 200 3500 13,200
 P a g e | 76

Table 3-17
Marketing Expense Budget, 2014

For year 2014

Marketing Expense Budget :

Item Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Advertising
Web marketing 500 500 500
1,500
Production
Web development 500 500 500
Web ads/e-newsletters 200 200 200 200 200 200
2,700
PR/Events/Promotion
Trade show/Events 3,000 3,000 3,000
9,000
Total 200 0 200 3500 200 0 200 3500 200 0 200 3500 13,200
 P a g e | 77

Table 3-18
Marketing Expense Budget, 2015

For year 2015

Marketing Expense Budget :

Item Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Advertising
Web marketing 500 500 500
1,500
Production
Web development 500 500 500
Web ads/e-newsletters 200 200 200 200 200 200
2,700
PR/Events/Promotion
Trade show/Events 3,000 3,000 3,000
9,000
Total 200 0 200 3500 200 0 200 3500 200 0 200 3500 13,200
 P a g e | 78

Chapter 4

Technical Operation
Feasibility Study
 P a g e | 79
Technical Operation Feasibility Study

4.1 Product Characteristic

Rubber industry, rubber processing industry is initially brought tapping latex from
rubber trees that are preserved in reasonable condition and ease of its use as a raw material in
the manufacture of rubber products. These rubber used in the manufacture of finished
products such as vehicle tires include tire bicycle tire motorcycle tire rubber gloves, condoms
and rubber band rubber tubing, etc..So, There are 2 mainly type of product to export in our
company.

4.1.1 Rubber Smoked Sheets (RSS)

The rubber sheet made by applying more latex split second to capture the dirt and
then with Ford Mick acid or acetic c. They were made with massage and rolling machine
rolling tire and rubber, 2-3 mm thick, and then to dry in the shade will be raw rubber sheets
(Unsmoked sheet, USS), which can be processed to a 2-way.

 A rubber sheet dry. The drying air temperature 45-65 ° C takes about 3-5days waiting
for distribution packaging.
 Rubber Smoked Sheet. By accessing hospital smoked Temperature of 50-60 degrees
Celsius takes 4-10 days and then classified visually Packaging.

Screening layer of rubber and screening rubber floor that day. The screening must be
highly skilled. It will be your eyes and help to predict layer of rubber which will be standard,
because the quality of rubber smoked sheets will be compared to the bar in the rubber. Class
that make rubber smoked a 5-layer rubber layer is considered low.

Rubber Smoked Sheet 1

Rubber Smoked Sheet 2
Rubber Smoked Sheet 3.
Rubber Smoked Sheet 4.
Rubber Smoked Sheet 5.
 P a g e | 80

Standard rubber smoked sheets of Thailand Remove the rubber layer 3 on the criteria
for judging. The rubber smoked this class is a quality equal Rubber TTR 20 quality rubber
smoke better is considered a rubber on floor 1 or 2, but if the quality worse than I consider it
to be rubber.
1. Bubbles and dirt. The language of the selected layer of rubber called a point and points.
2. The color and consistency of the color red does not mold.
3. No impurities.
4. The use of water and sulfuric acid is part

Considerations by separation of the rubber on its export standards following the

Association of Traders rubber, between countries are as follows. Rubber Smoked Sheet
rubber layer 3 is dried, smoked cooked consistently good cohesive flexible points and no
points other contaminants blamed as much as undesirable is a total of not more than 10
percent of the pages (like quality TTR 20).
 P a g e | 81

There are 3 types of Rubber Smoked Sheets (RSS) which are:

4.1.1.1 Rubber Smoked Sheets 1 (RSS1)

1. Do not have mold or mold a little dry only the surface of the rubber sheet wrapping.

2. The properties of rubber.

- Dry, hard.
- There is no point inflation - no gravel
- No contamination - without any blame.
- Clean - no rust.

3. Blamed acceptable.
- A pin head size bubbles scattered around the plate.
- The spot of a small bark.

Price: 142 baht/kg

4.1.1.2 Rubber Smoked Sheets 2 (RSS2)

1. Have a little rust mold or dry wrapping a sheet of rubber, but not more than 5% of the
sample detected.

2. The properties of rubber.

- Dry - hard.
- There is no point inflation - no gravel
- No contamination - without any blame.
- Clean
3. Blamed acceptable
- A small bubble.
- The spot of a small bark.
 P a g e | 82

Price: 142 baht/kg

4.1.1.3 Rubber Smoked Sheets 3 (RSS3)

1. Have a little rust. Mold or dry wrapping a sheet of rubber, but not more than 10%
of the sample detected.

2. The properties of rubber.

- Dry - hard.

- There is no point inflation - no gravel

- No contaminants - blamed acceptable.

- Have little spots - a spot of little bark.

- A small bubble.

Price: 142 baht/kg

 P a g e | 83

4.1.2 Block Rubber

Materials was use in the production of block rubber and latex is required to build up
before and the rubber handle, such as the waste of raw rubber sheet rubber bottom cup The
production process is different.

- Use latex done by applying latex poured in the tank, including the Tire and Rubber
coagulation and cut into cubes. The food took over crepe. Then small sub-rubber granules
Rubber, then dried and pressed into bar size 33.3 kg
- Use a rubber handle and then. For raw rubber sheets can be cut and pressed into ingots and
then bake it. The waste tires must be included in the Tire and cut tank cleaning Honor and
total iron bucket again into the machine through a crepe. Small rubber into be small pieces. Is
dried and then pressed into rectangular bar size 33.3 kg.

Rubber Trade of Thailand, including three STR 5L STR XL and STR CV60 is
divided into three parts outside the central part in the three rubber samples revealed that the
variance of STR 5L with the properties of processing most Examples of such properties of
the process index oxidation, index of solid rubber, viscosity etc. of the rubber layer was
different. Amount of gel rubber outer layer of rubber STR 5L and STR XL stored for one
year, were lower than in other parts of rubber, and expected due to the oxidation of the rubber
outer layer of rubber pieces. Because the outer layer of rubber is easy to abuse by oxygen and
 P a g e | 84

ozone. In contrast, STR CV60 rubber gel content is quite constant in all parts of rubber from
spinning tires and rubber separation of water through the removal of protein coagulation
index of the rubber during storage increased significantly. While made of rubber and rubber
to eliminate fat, protein and fat removed and the coagulation index during storage is almost
constant, Rubber from latex, Tire spins separation. Rubber was removed from the protein
structure of the resulting gels boosted after a stronger reaction. Temperature change of the
molecular motion (glass transition temperature) of the gel is higher than the soluble or the
soul (sol fraction) of the structure and the structure branches of natural rubber during
storage. Assumed that due to chemical bonding. Between functional groups active among the
fatty chain length of phospholipid at the end of four lipid molecules of the rubber. Under
conditions is low humidity. Phil K New reaction sponsor of NRL action was done by
changing variables as follows. The temperature of the reaction, the concentration of sodium
hydroxide and reaction time to get optimum conditions for preparing high-purity
rubber.Nitrogen content of the rubber is reduced as much as 0.02% after the reaction sponsor
Phil K New Nation that the concentration of base was 7%, the reaction temperature of 70 ° C,
1-7 hours, the reaction of nitrogen rubber decreased significantly during the start of the
reaction and gradually Decreased slowly. After reaction for three to seven hours for
every The concentration of base. The results do try to express that possibly due to the slow
sample degradation. Of protein on the surface of rubber particles or May be due to the
difficulty in removing the protein degradation and a very low volume. From the rubber by
centrifugation:

4.1.2.1 STR 5L

Price: 138 baht/kg

 P a g e | 85

4.1.2.2 STR XL

Price: 138 baht/kg

4.1.2.3 STR CV60

Price: 138 baht/kg

(Source http://www.rubber.co.th , http://www.yangpara.com )

 P a g e | 86

4.2 Cost of good

Table 4-1
Cost of goods Sold
Cost of goods sold
Year 2011
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
cost of latex (Ton ) 25 25 31 31 21 21 21 21 32 32 33 33 328
Price (Baht/Ton) 75 75 75 75 98.2 105 101 108 75 75 75 75
Total 1,875,000 1,875,000 2,325,000 2,325,000 2,062,200 2,205,000 2,121,000 2,268,000 2,400,000 2,400,000 2,475,000 2,475,000 26,806,200
Year 2012
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cost of latex(Ton) 36 36 36 36 18 18 18 18 36 36 36 36 361
Price (Baht/Ton) 75 75 75 75 98.2 105 101 108 75 75 75 75
Total 2,700,000 2,700,000 2,700,000 2,700,000 1,767,600 1,890,000 1,818,000 1,944,000 2,700,000 2,700,000 2,700,000 2,700,000 29,019,600
Year 2013
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cost of latex(Ton) 40 40 40 40 20 20 20 20 40 40 40 40 397
Price (Baht/Ton) 75 75 75 75 98.2 105 101 108 75 75 75 75
Total 3,000,000 3,000,000 3,000,000 3,000,000 1,964,000 2,100,000 2,020,000 2,160,000 3,000,000 3,000,000 3,000,000 3,000,000 32,244,000
Year 2014
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cost of latex(Ton) 44 44 44 44 22 22 22 22 44 44 44 44 440
Price (Baht/Ton) 75 75 75 75 98.2 105 101 108 75 75 75 75
Total 3,300,000 3,300,000 3,300,000 3,300,000 2,160,400 2,310,000 2,222,000 2,376,000 3,300,000 3,300,000 3,300,000 3,300,000 35,468,400
Year 2015
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cost of latex(Ton) 48 48 48 48 24 24 24 24 48 48 48 48 480
Price (Baht/Ton) 75 75 75 75 98.2 105 101 108 75 75 75 75
Total 3,600,000 3,600,000 3,600,000 3,600,000 2,356,800 2,520,000 2,424,000 2,592,000 3,600,000 3,600,000 3,600,000 3,600,000 38,692,800

* This month (May-August) have the high price because this time is the rainy season. Then result to the quality has high demand. The price that following the
demand.
 P a g e | 87

4.3 Pricing product

At office of central rubber market

Table 4-2
Songkhla Suratthani Nakhorn- sritammarat
Pricing Product
Field Field Field
Latex Latex Latex
Year Local Rubber scraps (factory) Local (factory) Local (factory)
2010
January 91.34 89.93 87.93 91.1 90.56 90.93 88.18
February 94.15 96.44 93.8 93.77 95 93.71 93.88
March 99.44 98.08 100.5 98.87 101.85 98.99 99.68
April 110.01 101.04 107.53 110.19 106.78 109.87 103.33
May 104.1 81.21 96.88 103.59 98.08 102.89 98.5
June 107.87 85.3 100.8 107.08 102.4 107.35 102.36
July 98.34 87 97.88 97.83 98.01 97.33 98.93
August 97.63 94.38 97.77 97.04 96.93 96.75 97.51
September 100.85 101.22 98.07 100.44 98.8 99.68 99.02
October 104.82 104.95 101.5 104.13 101.45 104.2 102.43
November 116.58 116.47 115.42 115.08 114.95 114.58 115.4
December 86.27 82.76 83.98 85.75 92.17 80.91 84.09
Our price cost, we use the local price. Which this price medium Using the cost of local price to changing up and down
constantly. Which we use the price to stability with the real price. The company cannot fixed the price in the future
because have change on every time. Our price is 93 Baht.

****The reason of the company brings a data office of Songkhla Central Rubber the stability of price.Rubber Market
because the Southern rubber market is the big market. In Chiang rai it not has the stability of price.

(Source: http://www.rubber.co.th/menu5.php, http://www.rubberthai.com/price/price_index.htm,)

 P a g e | 88

Table 4-3
Pricing Product
Year 2011
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cost of material (ton) 14.30 14.30 17.53 17.53 11.99 11.99 11.99 11.99 17.99 17.99 18.45 18.45 184.49
Price (Baht) 75 75 75 75 80 80 80 80 75 75 75 75
1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Total 1,072,344 1,072,344 1,314,486 1,314,486 959,344 959,344 959,344 959,344 1,349,078 1,349,078 1,383,669 1,383,669 14,076,528
Year 2012
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cost of material (ton) 20.29 20.29 20.29 20.29 10.15 10.15 10.15 10.15 20.29 20.29 20.29 20.29 202.94
Price (Baht) 75 75 75 75 80 80 80 80 75 75 75 75
1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Total 1,522,036 1,522,036 1,522,036 1,522,036 811,753 811,753 811,753 811,753 1,522,036 1,522,036 1,522,036 1,522,036 15,423,300
Year 2013
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cost of material (ton) 22.32 22.32 22.32 22.32 11.16 11.16 11.16 11.16 22.32 22.32 22.32 22.32 223.23
Price (Baht) 75 75 75 75 80 80 80 80 75 75 75 75
1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Total 1,674,240 1,674,240 1,674,240 1,674,240 892,928 892,928 892,928 892,928 1,674,240 1,674,240 1,674,240 1,674,240 16,965,630
Year 2014
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cost of material (ton) 24.56 24.56 24.56 24.56 12.28 12.28 12.28 12.28 24.56 24.56 24.56 24.56 245.56
Price (Baht) 75 75 75 75 80 80 80 80 75 75 75 75
1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Total 1,841,664 1,841,664 1,841,664 1,841,664 982,221 982,221 982,221 982,221 1,841,664 1,841,664 1,841,664 1,841,664 18,662,193
Year 2015
Product/Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Cost of material (ton) 27.01 27.01 27.01 27.01 13.51 13.51 13.51 13.51 27.01 27.01 27.01 27.01 270.11
Price (Baht) 75 75 75 75 80 80 80 80 75 75 75 75
1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Total 2,025,830 2,025,830 2,025,830 2,025,830 1,080,443 1,080,443 1,080,443 1,080,443 2,025,830 2,025,830 2,025,830 2,025,830 20,528,412
 P a g e | 89

4.4 Preopening cost

4.4.1 Cost of request Electric and Water

 Electric
Request the power from Provincial electricity authority. We estimate electric power in the
factory, and officer, Request 2 transformers (1 KVA -1 MVA). EXHIBIT 4-1
The Free rate for electricity

Configuration Inspection Average Insurance

Cost (Baht) Cost (Baht) Cost(Baht) Cost (Baht)
Under 30 A
Under 200 A
equal to
equal to
System 15,000 Baht
30,000 Baht
under 69 More than
More than 200 Individual Individual
High KVA 30 A equal
A equal to transformer. transformer
voltage to 20,000
40,000 Baht Do not think think 4 Baht
meter. Baht
the average. per KVA
4 Baht per
System
KVA but
more than 69 10,000 Baht
Under
KVA
50,000 Baht

Insurance Cost = Guarantee for debt power.

Configuration Cost = The cost of providing meter installation and operation.
Inspection Cost = The cost of send someone to check the wiring already in ther user’s
files.
Average Cost = The cost of investment in the power transformer to provide power
user that Light.

****2 Transformers (1 KVA -1 MVA). We use system under 69 KVA****

Configuration Cost (Under 200 A) 30,000 Baht
Inspection Cost (More than 30 A) 20,000 Baht
Insurance Cost (assume 10 KVA) 4,000 Baht
Total Cost per transformers 54,000 Baht
Total Cost of fees for electricity 108,000 Baht

(Source: http://www.pea.co.th/th/services/services_fee_rates.htm)
 P a g e | 90

 Water

Request the water from the Provincial Waterworks Authority. We estimate electric power in
the factory, and officer, Request 1 water meters.
EXHIBIT 4-2
The Free rate for using water

Labor and
Water Meter Deposit Cost Insurance Cost
Equipment Total
Size(Inch) (Baht) (Baht)
Cost (Baht)
½ Not collected 500 3,600 4,100
¾ Not collected 1,000 4,700 5,700
1 1,000 1,500
1½ 1,500 3,000
2 2,500 4,000
2½ 4,000 4,000
Expense estimates.
3 5,000 10,000
4 10,000 15,000
6 20,000 21,000
8 20,000 30,000

Deposit Cost = the applicant must pay for PWA on request install to be use in the survey
location and estimating the cost of installation. When the PWA receives labor and equipment
supply cost for installation already. PWA will return the deposit cost immediately. Deducted
by estimate cost that user paid already.
Insurance = PWA charged according to size water meters to secure the payment of water
bill each month. User will receive a full deposit returned upon termination of water and no
debt outstanding water bill.
Labor and Equipment Cost = There are labor cost; water meters cost, plumbing and other
devices that use to installing. From water meters to connection the pipe. This doesn’t include
pipe and equipment after the water meters that applicant must be due by them self. About
installing water meters is not over Diameter ¾ inches and the distance from the main water
distribution pipes less than 10 meters will pay the price including VAT already.
 P a g e | 91

****1 Water Meters size 3 inch****

Deposit Cost 5,000 Baht

Insurance Cost 10,000 Baht
Labor and Equipment Cost 9,500 Baht
Total Cost of frees for using water 24,500 Baht

******* Total Cost of request Electric and Water 132,500 Baht ********
(Source: http://www.pwa.co.th/service/newuser.html)

4.4.2 Prepare to be company limited

For our business the first step we need to have a Memorandum. The rate is following
Registration Rate from Department of Business Development.

EXHIBIT 4-3
The company limited registration Fee rate

Description Baht
Registered prospectus:
Capital not exceeding 1,000,000 Baht 500
Registered capital of 100,000 Baht each set. 50
(Fraction of the 100,000 Baht to 100,000 Baht equivalent).
Capital more than 50,000,000 Baht 25,000
Incorporated company:
Capital not exceeding 1,000,000 Baht 5,000
Registered capital of 100,000 Baht each set. 500
(Fraction of the 100,000 Baht to 100,000 baht equivalent).
Capital more than 50,000,000 Baht 250,000
: According to No.3 and No.4 of ministerial regulations

The capital of all partners combined approximately 20,000,000 Baht.

Registered prospectus 10,000 Baht

Incorporated company 100,000 Baht
Total 110,000 Baht

(Source: http://www.dbd.go.th/mainsite/index.php?id=1638 )
 P a g e | 92

4.4.3 Fees for the establishment of the factory

Following the factory act, 1992

Application for permit 100 Baht

Permit 100,000 Baht
Substitutes permit 1,000 Baht
Fees factory operation (per year) 30,000 Baht
Total 131,100 Baht
(Source:
http://www.thailandlawyercenter.com/index.php?lay=show&ac=article&Id=538974919&Nty
pe=19)

4.4.4 Land Tax EXHIBIT 4-4

Charge at the Land Office if
the Registrar

Charges at the Land Office if the Registrar.

1% of price (no less than at market prices

Corporate income tax (withholding)
commerce)
2% of market prices commerce or price of
Fee legal action (transfer fee).
sell up on what price is higher
The mortgage (If mortgages from financial
1% of value of the mortgages
institutions)
200 Baht for 1 Baht of Stamp Duty(0.50%)
Stamp Duty (Pay one between stamp duty or
following selling price but not less than
specific business)
market prices commerce)
Specific business Duty (Don’t pay if holding 3.3% of selling price but not less than market
more than five years) prices commerce)
***The cost of land is 6,450,000 Baht***

Corporate income tax 64,500 Baht

Fee legal action 129,000 Baht
The mortgage 64,500 Baht
Stamp Duty 32,250 Baht
Total Cost of Land Tax 290,250 Baht
(Source: http://www.land.co.th/land-info-top-3.asp)
 P a g e | 93

4.4.5 Tax labels (per 500 square centimeters)

EXHIBIT 4-5
Rate of Tax labels

Style Baht
Thai characters are. 3 Baht
Thai characters mixed with the foreign language/images/other
20 Baht
marks.
Signs following
- No Thai characters
40 Baht
- Have some Thai characters or All of Thai Character below
or under foreign language.
Label changes to the label area of an image or mark some of the
signs. Already paid interest tax, which cause the signs and banners
to increase the tax rate by 1,2,3 The case may be and pay especially
the amount increased.
Label is under 200 Baht to pay 200 Baht instead 200 Baht

Size 4*3 M. of Factory label

120,000 square centimeters (120,000/500)*20 = 4,800 Baht

(Source: www.thailocaladmin.go.th/work/e_book/eb5/eb5_2/tax1.pdf)
 P a g e | 94

4.4.6 Trademark registration fee.

Following Ministerial on fees and fee waiver for a patent or petty patent Act, 2004

Patent inventions 500 Baht

Patent or petty patent 500 Baht
Total 1,000 Baht

(Source:http://www.ipthailand.go.th/ipthailand/index.php?option=com_content&task=view&
id=817&Itemid=303)

4.4.7 Total Cost of Pre Opening Cost

Table 4-4
Total Cost of Pre Opening Cost

Pre Opening Cost Baht

Cost of request Electric and Water
Electric 108,000
Water 24,500
Prepare to be the Company limited 110,000
Fees for the establishment of the factory 131,100
Fees for requesting permission of the foreign business for investor 32,000
Land Tax 290,250
Tax labels 4,800
Trademark registration fee 1,000
Total 701,650
 P a g e | 95

4.5 Operating investment cost /Operating expense

4.5.1 Land

We decision to buy the land all of 4.3 Acers. This land is located near the
Chianhkhong’s friendship bridge 4th only 1-2 kilometers. And we contract with Mr. Sainatee
who is the owner by phone number 085-6664996. He sell for 600,000 Baht per Rai that all of
we buy equal to 4.3 Acers (10Rai 3Ngan).We will pay for land 6,450,000 Baht.

(Source: http://www.baanok.com/component/option,com_fireboard
/Itemid,56/func,view/id,68072/catid,30261/)

4.5.2 Building

Thai-North Rubber will hire the constructer to design and advice us to build the
factory. We choose to contract with Mr. Suvin who is the professional. He calculates for our
investment 7,000,000 baht. By refer the information from Department of Industrial
Promotion.
 P a g e | 96

4.5.3 Features and Dimension

All of our areas are divided into two zones; there are the zone of manufacture and
administrative zone. We allocate to each zone because of comfortable for easy to service,
contact with customer, control and operation in production.

EXHIBIT 4-6
Total Areas of Company

4.5.3.1 Manufacturer zone

Our production is provided into three parts which are Rubber Smoked Sheet (RSS)
products, Block Rubber (STR) products and Rubber Testing Lab. In all of Rubber Smoked
Sheet (RSS) Product and Block rubber (STR) product are related in production together
which makes we have production in the same area into this zone and one part for Lab testing.
 P a g e | 97

EXHIBIT 4-7
Manufacturer Zone

1. Latex tank 7. Vinyl rubber

2. Latex bin 10. Bin to clean rubber

3. Cutting machine 11. Rubber rolling machine

4. Rubber bin 12. Gutter cleaning rubber

5. Bar presses 13. Water tank

6. Crepe rubber machine 14. Eauong mortar

 P a g e | 98

4.5.4 Operating investment cost

In the production, we use many of merchandise to take products. All of this we can
calculate the number of money with is 446,800 Baht.

EXHIBIT 4-8
Merchandise Cost

Price Total
No. Item Picture Amount
(Baht) (Baht)

1 Eauong mortar as 50 pieces 14,200 4 56,800

2 Rubber rolling machine 8,500 8 68,000

3 Crepe rubber machine 30,000 2 60,000

4 Vinyl rubber 18,500 2 37,000

5 Bar presses 200,000 1 200,000

6 Cutting machine 25,000 1 25,000

Total 446,800

(Source: http://machine.yongfongthai.com/index.php?langtype=th&pageid=th_40

http://www2.diw.go.th/I_Standard/Web/pane_files/Industry12.asp)

Within the Lab room and production process are have many of equipment to concern.
And we have 3 people are lab staff and 2 people are maintenances. So, we take money for
their about 1,068,060 Baht.
 P a g e | 99

EXHIBIT 4-9
Equipments within Lab room

Price Total
No. Item Picture Amount
(Baht) (Baht)

Set of test substance solution TMTD

1 100 1,560* 156,000 *
Easy Kit

Set of test substance solution ZnO

2 100 1,560** 156,000**
Easy Kit.

3 Laboratory state 20,300 1 20,300

4 Desk set 3 seats(Lab staff 3) 25,000 1 25,000

5 Desk 3,345 2 6,690

6 Desktop PC(Lab staff 3) 27,900 3 83,700

7 Air condition 13,900 1 13,900

8 Printer 1,670 1 1,670

9. Firewood per month 2 10,080*** 604,800***

Total 1,068,060

*we take 26 days for working in month. In 5 years we will take for the set of
test substance solution ZnO Easy Kit 1,560 sets, we will use 156,000 Baht to pay for

**we take 26 days for working in month. In 5 years we will take for the set of
test substance solution TMTD Easy Kit 1,560 sets, we will use 156,000 Baht to pay for

(Source: http://www.psu.ac.th/node/947 , www.infinity-office.com , www.kssfurniture.com ,

www.techno.com)
 P a g e | 100

4.5.5 Production cost

 Lab Staff and Maintenance Staff Salary

In the Lab room, we have Lab staff 3 people and 2 of Maintenance staff. We will pay
money for them with 26 days working per months for 5 years. So, we will take money for all
of salary in 5 years about 4,140,000 Baht

1. Lab staff salary 15,000 Baht×3 or 45,000 per Month

2. Maintenance staff salary 12,000 Baht×2 or 24,000 per Month

(Source: Department of Industrial Promotion)

 Worker Salary

Our manufactory has workers with 30 people in every line of production. They are
working 8 hours in one day and take with 26 day per months. So, in 5 years we will pay for
them which 7,768,800 Baht

1. Minimum wage in Chiangrai 166 Baht/Day or 4,316 Baht/Month

(Source: http://www.ch7.com/news/news_thailand_detail.aspx?c=2&d=117291&p=4)

 Electricity Fee, Water Fee and

From the information in Department of Industrial Promotion, we can estimate the cost
of electricity free around 120,000Bah per year and Water free around 60,000Baht per year.

(Source: Department of Industrial Promotion)

 P a g e | 101

 Expense of maintenance building and machine

From the information in Department of Industrial Promotion, we can estimate the cost
of maintenance building around 540,000 Baht per year and cost of maintenance machine
around 168,052Baht per year.

(Source: Department of Industrial Promotion)

 Lubricant expense

From the information in Department of Industrial Promotion, we can estimate the cost
of maintenance building around 60,000 Baht per year.
 P a g e | 102

Table 4-5
Operating expense in year 2011

Operating cost : Baht

Expense Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Lab staff salary 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 540,000

Maintenance salary 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 288,000

Firewood 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 18,000 216,000

Worker salary 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 1,553,760

Electricity fee 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000

Water fee 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Maintenance building 540,000 540,000

Maintenance machine 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 168,048

Lubricant 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Total 250,484 250,484 250,484 250,484 250,484 250,484 250,484 250,484 250,484 250,484 250,484 790,484 3,545,808
 P a g e | 103

Table 4-6
Operating expense in year 2012

Operating cost : Baht

Expense Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Lab staff salary 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 540,000

Maintenance salary 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 288,000

Firewood 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 120,960

Worker salary 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 1,553,760

Electricity fee 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000

Water fee 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Maintenance building 540,000 540,000

Maintenance machine 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 168,048

Lubricant 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Total 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 782,564 3,450,768
 P a g e | 104

Table 4-7
Operating expense in year 2013

Operating cost : Baht

Expense Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Lab staff salary 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 540,000

Maintenance salary 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 288,000

Firewood 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 120,960

Worker salary 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 1,553,760

Electricity fee 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000

Water fee 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Maintenance building 540,000 540,000

Maintenance machine 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 168,048

Lubricant 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Total 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 782,564 3,450,768
 P a g e | 105

Table 4-8
Operating expense in year 2014

Operating cost : Baht

Expense Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Lab staff salary 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 540,000

Maintenance salary 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 288,000

Firewood 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 120,960

Worker salary 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 1,553,760

Electricity fee 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000

Water fee 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Maintenance building 540,000 540,000

Maintenance machine 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 168,048

Lubricant 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Total 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 782,564 3,450,768
 P a g e | 106

Table 4-9
Operating expense in year 2015

Operating cost : Baht

Expense Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Lab staff salary 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 540,000

Maintenance salary 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 288,000

Firewood 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 10,080 120,960

Worker salary 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 129,480 1,553,760

Electricity fee 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 120,000

Water fee 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Maintenance building 540,000 540,000

Maintenance machine 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 14,004 168,048

Lubricant 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Total 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 782,564 3,450,768
 P a g e | 107

4.6 Logistics and Transportation cost

4.6.1 Logistic Management

We are also divided over the transport into two periods are inbound logistic and out
bound logistics

1. Inbound: In domestic, start from the supplier around Chiang Rai send the raw
material to us. It is including Latex. It up on the agreement between the supplier and
manufacture, which party will pay on the transportation cost.
 P a g e | 108

2. Out bound: Our Company sends finished goods to customers in China. Start from
transportation Rubber (Bale) from truck to store goods in storage. Goods will
transport from the storage in a boat by using Fork Lift. There are 3 group each group
have 15 people for packing product in to container frame roof (CNTR). When the full
amount and then close. After that the Agent will inform to port know. And loading on
vessel.

Our company has the condition with customer that international shipments typically use
FOB or Free on Board. Our company delivers when the goods pass the ship’s rail at the
named port of shipment. This means that the customer has to bear all costs and risks of
loss or damage to the goods from that point and responsible for all the costs incurred after
the cargo has been loaded on board.

We transport from manufacture

(A) to Chiang Khong Port (B).

Distance is 1-2 km.

Transport by truck Diesel Ten-

wheel.

Loading: 21 tons.

Fuel oil: Biodiesel.

Chiang Khong Port is situated on the bank of Mekong River, Chiang Khong District,
Chiang Rai Province. The berth is width 24 meters and length 180 meters. The front of
the port is adjacent to the Mekong River opposite of Moueng Houy Sai, Bor Kaew
District, People's Democratic Republic of Laos. On the back is the road linking Chiang
Saen and Chiang Kong Districts.

(Source: http://www1.port.co.th/ckp/eng/dataset1/data2.html)
 P a g e | 109

4.6.2 Inventory management

Taxes: VAT 7% and withholding of 3 % per Year.

Table 4-10
Total Taxes

Year 2011 2012 2013 2014 2015

Sale Forecast (price) 25,740,450 28,314,495 31,145,944 34,260,539 37,686,593

VAT 7% 1,801,831 1,982,015 2,180,216 2,398,238 2,638,061

Withholding 3% 772,213 849,435 934,378 1,027,816 1,130,598

Total 2,574,045 2,831,449 3,114,594 3,426,054 3,768,659
Per: Baht

Insurance: Our Company chooses deal business with Mittare Insurance Co., Ltd.
Cost: 17,500 Baht/Year
Detail: Cargo insurance in the country. Capital 1,500,000 per year.
Trainer protected container.
The case of an accident condition:
-10,000 Baht or 10% of damage.
- Unlimited number of flight.
- Do not notify every run.
- Protection of the full year.
-Do not notify the cabinet product.
- Consumer protection online.
- Does not cover products that are illegal or high risk.
- Suitable for car truck tractor that runs offshore shipping.

(Source: http://www.perfect-broker.co.th/product-th-353965-1647870 )
 P a g e | 110

Table 4-11
Inventory Service Costs

Year 2011 2012 2013 2014 2015

Taxes 2,574,045 2,831,449 3,114,594 3,426,054 3,768,659

Insurance 17,500 17,500 17,500 17,500 17,500

Total 2,591,545 2,848,949 3,132,094 3,443,554 3,786,159

Per: Baht

Table 4-12
Warehousing Cost

Description Cost/Baht
Capital Costs
-13,450,000-
(opportunity cost of capital)
Inventory Risk Costs
Obsolescence 0
Damage Cost 10,000
Shrinkage Cost 2,084
Relocation Cost 0

Total Cost 12,084

Per: Month
Note:
Capital Cost or Opportunity cost of capital is not including in accounting because it is
not the real cost that we expense.
Our products are Block rubber and rubber smoked sheet don’t have any cost of
obsolescence.
We don’t have Relocation Cost because our company has only one warehouse near
manufactory. So we don’t have any cost of relocation.

(Source: http://logistics.arch56.com/?tag=public-warehouse-cost)
 P a g e | 111

4.6.3 Total Logistic

Table 4-13
Total Logistic Cost, 2011

Description Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Inventory Carrying Cost

Taxes and insurance 215,962 215,962 215,962 215,962 215,962 215,962 215,962 215,962 215,962 215,962 215,962 215,962

Warehousing 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084

Subtotal 228,046 228,046 228,046 228,046 228,046 228,046 228,046 228,046 228,046 228,046 228,046 228,046

Transportation Costs

Motor Carriers :

Truck-Local (Diesel Ten-wheel) 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800

Tariff of Chiang Khong Port 468 468 500 500 445 445 445 445 505 505 509 509

Subtotal 2,268 2,268 2,300 2,300 2,245 2,245 2,245 2,245 2,305 2,305 2,309 2,309

Logistics Administration Not Including

Total logistics 230,314 230,314 230,346 230,346 230,291 230,291 230,291 230,291 230,351 230,351 230,356 230,356

Per: Baht
 P a g e | 112

Table 4-14
Total Logistic Cost, 2012

Description Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Inventory Carrying Cost

Taxes and insurance 237,412 237,412 237,412 237,412 237,412 237,412 237,412 237,412 237,412 237,412 237,412 237,412

Warehousing 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084

Subtotal 249,496 249,496 249,496 249,496 249,496 249,496 249,496 249,496 249,496 249,496 249,496 249,496

Transportation Costs

Motor Carriers :

Truck-Local (Diesel Ten-wheel) 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800

Tariff of Chiang Khong Port 528 528 528 528 426 426 426 426 528 528 528 528

Subtotal 2,328 2,328 2,328 2,328 2,226 2,226 2,226 2,226 2,328 2,328 2,328 2,328

Logistics Administration
Not Including
Total logistics 251,824 251,824 251,824 251,824 251,723 251,723 251,723 251,723 251,824 251,824 251,824 251,824

Per: Baht
 P a g e | 113

Table 4-15
Total Logistic Cost, 2013

Description Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Inventory Carrying Cost

Taxes and insurance 261,008 261,008 261,008 261,008 261,008 261,008 261,008 261,008 261,008 261,008 261,008 261,008

Warehousing 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084

Subtotal 273,092 273,092 273,092 273,092 273,092 273,092 273,092 273,092 273,092 273,092 273,092 273,092

Transportation Costs

Motor Carriers:

Truck-Local (Diesel Ten-wheel) 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800 1,800

Tariff of Chiang Khong Port 548 548 548 548 437 437 437 437 548 548 548 548

Subtotal 2,348 2,348 2,348 2,348 2,237 2,237 2,237 2,237 2,348 2,348 2,348 2,348

Logistics Administration Not Including

Total logistics 275,440 275,440 275,440 275,440 275,328 275,328 275,328 275,328 275,440 275,440 275,440 275,440

Per: Baht
 P a g e | 114

Table 4-16
Total Logistic Cost, 2014

Description Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Inventory Carrying Cost

Taxes and insurance 286,963 286,963 286,963 286,963 286,963 286,963 286,963 286,963 286,963 286,963 286,963 286,963

Warehousing 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084

Subtotal 299,047 299,047 299,047 299,047 299,047 299,047 299,047 299,047 299,047 299,047 299,047 299,047

Transportation Costs

Motor Carriers:

Truck-Local (Diesel Ten-wheel) 3,600 3,600 3,600 3,600 1,800 1,800 1,800 1,800 3,600 3,600 3,600 3,600

Tariff of Chiang Khong Port 596 596 596 596 448 448 448 448 596 596 596 596

Subtotal 4,196 4,196 4,196 4,196 2,248 2,248 2,248 2,248 4,196 4,196 4,196 4,196

Logistics Administration Not Including

Total logistics 303,242 303,242 303,242 303,242 301,295 301,295 301,295 301,295 303,242 303,242 303,242 303,242

Per: Baht
 P a g e | 115

Table 4-17
Total Logistic Cost, 2015

Description Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Inventory Carrying Cost

Taxes and insurance 315,513 315,513 315,513 315,513 315,513 315,513 315,513 315,513 315,513 315,513 315,513 315,513

Warehousing 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084 12,084

Subtotal 327,597 327,597 327,597 327,597 327,597 327,597 327,597 327,597 327,597 327,597 327,597 327,597

Transportation Costs

Motor Carriers:
Truck-Local (Diesel Ten-wheel) 3,600 3,600 3,600 3,600 1,800 1,800 1,800 1,800 3,600 3,600 3,600 3,600
Tariff of Chiang Khong Port 620 620 620 620 460 460 460 460 620 620 620 620

Subtotal 4,220 4,220 4,220 4,220 2,260 2,260 2,260 2,260 4,220 4,220 4,220 4,220

Logistics Administration Not Including

Total logistics 331,817 331,817 331,817 331,817 329,857 329,857 329,857 329,857 331,817 331,817 331,817 331,817

Per: Baht
 P a g e | 116

4.6.3.1 Transportation Costs of Truck-Local (Diesel Ten-wheel)

For transportation, each month we separate to two times on second week and last
week of month for transport the product to the Chiang Khong Port. Our company deal with
Golden lake Co., Ltd. The rates that we agree are Diesel Ten-wheel capacity 22 tons per
times to be cost 1,800 Baht.

Our company transportation goods by pass Chiang Khong Port (Port Authority of Thailand)
We have cost of Tariff for transportation:

1. Charges Against Shipowners, Ship’s Agents or Applicants

Vessel of over 100 GT 300.- Baht
2. Charges Against Consignees, Consignors or Applicants
- Cargo Loading or Discharging Free
Conventional cargo 10.- Baht/Tonne/m3
3. Vechicles Adminission Fee
- Fee for vehicle loading or discharging within Chiang Khong Port
8-10 Wheel Truck 25.- Baht/Unit

(Source: http://www1.port.co.th/ckp/eng/dataset5/data1.html)

4.6.3.2 Logistics Administration

Cost of Logistics Administration is including with Administration Cost.
 P a g e | 117

4.7 Administration cost

4.7.1 Organizational structure

Figure 3-4
Organization Structure
 P a g e | 118

4.7.2 Administration Expense

EXHIBIT 4-10
 Employee salary Wage rate for our organization

General Manager 1 person 30,000

Office Manager 1 person 20,000

Plant Manager 1 person 20,000

Logistic manager 1 person 20,000

Sale and Marketing department 2 person (2*12,000) 24,000

IT support department 1 person 12,000

Logistic department 2 person (2*12,000) 24,000

Export department 2 person (2*12,000) 24,000

Accountant department 1 person 12,000

Housekeeper 1 person 8,000

Driver 2 person (2*8,500) 17,000

Security guard 4 person (2*5,000) 20,000

Total 231,000

(Resource: http://www.adecco.co.th/uploads/Knowledge-Center-Thought-
Leadership/Thailand-Salary-Guide/Adecco-Thailand-Salary-Guide-2011.pdf)

4.7.3 Administration Zone

This is Administration zone there are 7 employees (there are 3 private rooms for
executive included 4 employees).There are 1 housekeeper and 1 diver. The administration
zones have 1 small meeting room, living room, Toilet, and canteen

In outside area there are 2 sentry boxes in front of entrance door and exit door.
 P a g e | 119

EXHIBIT 4-11
Administration Zone

Storeroom
Storeroom

Toilet

 Office equipments

In the office, we use many of equipment to operation. All of this we can calculate the
number of money with is 2,520,976 Baht.

EXHIBIT 4-12
Office Equipments Cost

Price Total
No. Item Picture Amount
(Baht) (Baht)

1 Desk 29,500 7 206,500

2 Desktop PC 10,165 7 71,155

 P a g e | 120

Price Total
No. Item Picture Amount
(Baht) (Baht)

3 Telephone 3,100 4 12,400

4 Stationery 1,250 7 8,750

5 A4 paper 10 550 5,500

6 Ink 10 75 750

7 Receipt paper 105 12 1,260

8 Printer 1,670 2 3,340

9 Air condition 13,900 2 27,800

10 Set up cost(Air) 2,500 2 5,000

11 Table 15,000 1 15,000

12 Projector 89,900 1 89,900

13 Loudspeaker 12,900 1 12,900

14 Microphone 6,600 10 66,000

15 Sofa 12,200 1 12,200

16 Table 3,789 1 3,789

17 Flower 120 4 480

 P a g e | 121

Price Total
No. Item Picture Amount
(Baht) (Baht)

18 Carpet 440 1 440

19 Disk rack 1,279 2 2,558

20 Disk 225 5 1,125

21 Glasses 15 12 180

22 Table 5,800 2 11,600

23 Refrigerator 8,190 1 8,190

24 Sink 3,990 1 3,990

25 Lavatory 1,689 1 1,689

26 Mirror 680 1 680

27 Box 320 1 320

28 Sink 750 1 750

29 Douche 180 1 180

30 Shelf 650 1 650

31 Broom 250 1 250

32 Mop 650 1 650

 P a g e | 122

Price Total
No. Item Picture Amount
(Baht) (Baht)

33 Vigo car 607,000 1 607,000

34 Van 1,338,000 1 1,338,000

Total 2,520,976

Guardhouse equipment

In the part of Administration zone are include with guardhouse in enter and exit way.
We choose to take the guard ready-made. We will pay 103,800 Baht for.

EXHIBIT 4-13
Guardhouse Equipment Cost

Price Total
No. Item Picture Amount
(Baht) (Baht)

1 Guard ready-made 50,000 2 100,000

2 Traffic cone 380 10 3,800

Total 103,800

(Source: http://www.cetechgroup.co.th/products.php,
,http://www.topvictorystar.com/index.php?lay=show&ac=article&Id=573945&Ntype=2)
 P a g e | 123

4.7.3.1 Administration Expense

EXHIBIT 4-14
Administration Expense

Description Base

Employee Salary

Telephone and Internet expense 17,550/month

Electricity expense 7,571.89/month

Water expense 500/month

Stationary expense 8,750/ 3 month

Gasoline Expense 5,000/month

Car insurance 7,545/y

Fire insurance 2,525/y

Machine insurance 5,000/y

Social security insurance 33,600/y

(Source: Telephone and Internet expense: http://www.3bb.co.th/

: Electricity expense: http://www.dpu.ac.th

: Water expense: http://www.mwa.co.th/water_calculation.html

: Car insurance: www.viriyah.co.th/

: Fire insurance: http://www.dhipaya.co.th

: Machine insurance: http://www.tninsure.com

: Social security insurance: http://www.sso.go.th)

 P a g e | 124

Table 4-18
Administration cost 2011

Administration cost

Base Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Employee Salary 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 2,772,000

Telephone and
17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 210,600
Internet expense

Electricity expense 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 90,863

Water expense 500 500 500 500 500 500 500 500 500 500 500 500 500 6,000

Set up air-condition
5,000 5,000 - - - - - - - - - - - 5,000
expense

Stationary expense 8,750 8,750 - - 8,750 - - 8,750 - - 8,750 - - 35,000

Gasoline Expense 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Car insurance 7,545 7,545 - - - - - - - - - - - 7,545

Fire insurance 2,525 2,525 - - - - - - - - - - - 2,525

Machine insurance 5,000 5,000 - - - - - - - - - - - 5,000

Social security
33,600 33,600 - - - - - - - - - - - 33,600
insurance

Total 324,042 324,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 3,228,133
 P a g e | 125

Table 4-19
Administration cost 2012

Administration cost

Base Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Employee Salary 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 2,772,000

Telephone and Internet

17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 210,600
expense

Electricity expense 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 90,863

Water expense 500 500 500 500 500 500 500 500 500 500 500 500 500 6,000

Set up air-condition
5,000 - - - - - - - - - - - - 0
expense

Stationary expense 8,750 8,750 - - 8,750 - - 8,750 - - 8,750 - - 35,000

Gasoline Expense 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Car insurance 7,545 7,545 - - - - - - - - - - - 7,545

Fire insurance 2,525 2,525 - - - - - - - - - - - 2,525

Machine insurance 5,000 5,000 - - - - - - - - - - - 5,000

Social security insurance 33,600 33,600 - - - - - - - - - - - 33,600

Total 324,042 319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 3,223,133
 P a g e | 126

Table 4-20
Administration cost 2013

Administration cost
Base Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 2,772,000
Employee Salary
Telephone and 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 210,600
Internet expense
7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 90,863
Electricity expense
500 500 500 500 500 500 500 500 500 500 500 500 500 6,000
Water expense
Set up air-condition 8,750 8,750 - - 8,750 - - 8,750 - - 8,750 - - 35,000
expense
5,000 - - - - - - - - - - - - 0
Stationary expense
5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000
Gasoline Expense
7,545 7,545 - - - - - - - - - - - 7,545
Car insurance
2,525 2,525 - - - - - - - - - - - 2,525
Fire insurance
5,000 5,000 - - - - - - - - - - - 5,000
Machine insurance
Social security 33,600 33,600 - - - - - - - - - - - 33,600
insurance
Total 324,042 319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 3,223,133
 P a g e | 127

Table 4-21
Administration cost 2014

Administration cost

Base Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Employee Salary 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 2,772,000

Telephone and
17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 210,600
Internet expense

Electricity expense 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 90,863

Water expense 500 500 500 500 500 500 500 500 500 500 500 500 500 6,000

Set up air-condition
5,000 - - - - - - - - - - - - 0
expense

Stationary expense 8,750 8,750 - - 8,750 - - 8,750 - - 8,750 - - 35,000

Gasoline Expense 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Car insurance 7,545 7,545 - - - - - - - - - - - 7,545

Fire insurance 2,525 2,525 - - - - - - - - - - - 2,525

Machine insurance 5,000 5,000 - - - - - - - - - - - 5,000

Social security
33,600 33,600 - - - - - - - - - - - 33,600
insurance

Total 324,042 319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 3,223,133
 P a g e | 128

Table 4-22
Administration cost 2015

Administration cost

Base Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Employee Salary 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 231,000 2,772,000

Telephone and Internet

17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 17,550 210,600
expense

Electricity expense 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 7,572 90,863

Water expense 500 500 500 500 500 500 500 500 500 500 500 500 500 6,000

Set up air-condition
5,000 - - - - - - - - - - - - 0
expense

Stationary expense 8,750 8,750 - - 8,750 - - 8,750 - - 8,750 - - 35,000

Gasoline Expense 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000

Car insurance 7,545 7,545 - - - - - - - - - - - 7,545

Fire insurance 2,525 2,525 - - - - - - - - - - - 2,525

Machine insurance 5,000 5,000 - - - - - - - - - - - 5,000

Social security
33,600 33,600 - - - - - - - - - - - 33,600
insurance

Total 324,042 319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 3,223,133
 P a g e | 129

4.8 Depreciation cost

Table 4-23
Depreciation cost 2011

Administration Amount Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Office room
Table 206,500 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 41,300
Computer 71,155 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 14,231
Telephone 21,700 904 904 904 904 904 904 904 904 904 904 904 904 10,850
Printer 3,340 56 56 56 56 56 56 56 56 56 56 56 56 668
Air Condition 27,800 463 463 463 463 463 463 463 463 463 463 463 463 5,560
Meeting room
Table 15,000 250 250 250 250 250 250 250 250 250 250 250 250 3,000
Projector 89,000 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 17,800
Loudspeaker 12,900 215 215 215 215 215 215 215 215 215 215 215 215 2,580
Microphone 66,000 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 33,000
Living room
Sofa 12,200 203 203 203 203 203 203 203 203 203 203 203 203 2,440
Table 3,789 63 63 63 63 63 63 63 63 63 63 63 63 758
Canteen
Refrigerator 8,190 137 137 137 137 137 137 137 137 137 137 137 137 1,638
Disk rack 2,558 107 107 107 107 107 107 107 107 107 107 107 107 1,279
Table 11,600 193 193 193 193 193 193 193 193 193 193 193 193 2,320
Sink 3,990 67 67 67 67 67 67 67 67 67 67 67 67 798
 P a g e | 130

Administration Amount Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Toilet
Lavatory 1,680 28 28 28 28 28 28 28 28 28 28 28 28 336
Mirror 680 11 11 11 11 11 11 11 11 11 11 11 11 136
Box 320 5 5 5 5 5 5 5 5 5 5 5 5 64
Sink 750 13 13 13 13 13 13 13 13 13 13 13 13 150
Douche 180 8 8 8 8 8 8 8 8 8 8 8 8 90
Storeroom
Shelf 650 11 11 11 11 11 11 11 11 11 11 11 11 130
Office
Transportation
Vigo car 607,000 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 121,400
VAN 1,338,000 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 26,760
Guard ready- made 100,000 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,000
Total 2,604,982 23,941 23,941 23,941 23,941 23,941 23,941 23,941 23,941 23,941 23,941 23,941 23,941 287,288
 P a g e | 131

Table 4-24
Depreciation cost 2012

Administration Amount Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Office room
Table 206,500 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 41,300
Computer 71,155 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 14,231
Telephone 21,700 904 904 904 904 904 904 904 904 904 904 904 904 10,850
Printer 3,340 56 56 56 56 56 56 56 56 56 56 56 56 668
Air Condition 27,800 463 463 463 463 463 463 463 463 463 463 463 463 5,560
Meeting room
Table 15,000 250 250 250 250 250 250 250 250 250 250 250 250 3,000
Projector 89,000 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 17,800
Loudspeaker 12,900 215 215 215 215 215 215 215 215 215 215 215 215 2,580
Microphone 66,000 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 2,750 33,000
Living room
Sofa 12,200 203 203 203 203 203 203 203 203 203 203 203 203 2,440
Table 3,789 63 63 63 63 63 63 63 63 63 63 63 63 758
Canteen
Refrigerator 8,190 137 137 137 137 137 137 137 137 137 137 137 137 1,638
Disk rack 2,558 107 107 107 107 107 107 107 107 107 107 107 107 1,279
Table 11,600 193 193 193 193 193 193 193 193 193 193 193 193 2,320
Sink 3,990 67 67 67 67 67 67 67 67 67 67 67 67 798
 P a g e | 132

Administration Amount Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Toilet
Lavatory 1,680 28 28 28 28 28 28 28 28 28 28 28 28 336
Mirror 680 11 11 11 11 11 11 11 11 11 11 11 11 136
Box 320 5 5 5 5 5 5 5 5 5 5 5 5 64
Sink 750 13 13 13 13 13 13 13 13 13 13 13 13 150
Douche 180 8 8 8 8 8 8 8 8 8 8 8 8 90
Storeroom
Shelf 650 11 11 11 11 11 11 11 11 11 11 11 11 130
Office
Transportation
Vigo car 607,000 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 121,400
VAN 1,338,000 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 26,760
Guard ready-
100,000 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,000
made
Total 2,604,982 23,941 23,941 23,941 23,941 23,941 23,941 23,941 23,941 23,941 23,941 23,941 23,941 287,288
 P a g e | 133

Table 4-25
Depreciation cost 2013

Administration Amount Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Office room
Table 206,500 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 41,300
Computer 71,155 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 14,231
Telephone 21,700 0 0 0 0 0 0 0 0 0 0 0 0 0
Printer 3,340 56 56 56 56 56 56 56 56 56 56 56 56 668
Air Condition 27,800 463 463 463 463 463 463 463 463 463 463 463 463 5,560
Meeting room
Table 15,000 250 250 250 250 250 250 250 250 250 250 250 250 3,000
Projector 89,000 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 17,800
Loudspeaker 12,900 215 215 215 215 215 215 215 215 215 215 215 215 2,580
Microphone 66,000 0 0 0 0 0 0 0 0 0 0 0 0 0
Living room
Sofa 12,200 203 203 203 203 203 203 203 203 203 203 203 203 2,440
Table 3,789 63 63 63 63 63 63 63 63 63 63 63 63 758
Canteen
Refrigerator 8,190 137 137 137 137 137 137 137 137 137 137 137 137 1,638
Disk rack 2,558 0 0 0 0 0 0 0 0 0 0 0 0 0
Table 11,600 193 193 193 193 193 193 193 193 193 193 193 193 2,320
Sink 3,990 67 67 67 67 67 67 67 67 67 67 67 67 798
 P a g e | 134

Administration Amount Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Toilet
Lavatory 1,680 28 28 28 28 28 28 28 28 28 28 28 28 336
Mirror 680 11 11 11 11 11 11 11 11 11 11 11 11 136
Box 320 5 5 5 5 5 5 5 5 5 5 5 5 64
Sink 750 13 13 13 13 13 13 13 13 13 13 13 13 150
Douche 180 0 0 0 0 0 0 0 0 0 0 0 0 0
Storeroom
Shelf 650 11 11 11 11 11 11 11 11 11 11 11 11 130
Office
Transportation
Vigo car 607,000 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 121,400
VAN 1,338,000 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 26,760
Guard ready-
100,000 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,000
made
Total 2,604,982 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 242,069
 P a g e | 135

Table 4-26
Depreciation cost 2014

Administration Amount Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Office room
Table 206,500 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 41,300
Computer 71,155 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 14,231
Telephone 21,700 0 0 0 0 0 0 0 0 0 0 0 0 0
Printer 3,340 56 56 56 56 56 56 56 56 56 56 56 56 668
Air Condition 27,800 463 463 463 463 463 463 463 463 463 463 463 463 5,560
Meeting room
Table 15,000 250 250 250 250 250 250 250 250 250 250 250 250 3,000
Projector 89,000 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 17,800
Loudspeaker 12,900 215 215 215 215 215 215 215 215 215 215 215 215 2,580
Microphone 66,000 0 0 0 0 0 0 0 0 0 0 0 0 0
Living room
Sofa 12,200 203 203 203 203 203 203 203 203 203 203 203 203 2,440
Table 3,789 63 63 63 63 63 63 63 63 63 63 63 63 758
Canteen
Refrigerator 8,190 137 137 137 137 137 137 137 137 137 137 137 137 1,638
Disk rack 2,558 0 0 0 0 0 0 0 0 0 0 0 0 0
Table 11,600 193 193 193 193 193 193 193 193 193 193 193 193 2,320
Sink 3,990 67 67 67 67 67 67 67 67 67 67 67 67 798
 P a g e | 136

Administration Amount Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Toilet
Lavatory 1,680 28 28 28 28 28 28 28 28 28 28 28 28 336
Mirror 680 11 11 11 11 11 11 11 11 11 11 11 11 136
Box 320 5 5 5 5 5 5 5 5 5 5 5 5 64
Sink 750 13 13 13 13 13 13 13 13 13 13 13 13 150
Douche 180 0 0 0 0 0 0 0 0 0 0 0 0 0
Storeroom
Shelf 650 11 11 11 11 11 11 11 11 11 11 11 11 130
Office
Transportation
Vigo car 607,000 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 121,400
VAN 1,338,000 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 26,760
Guard ready-
100,000 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,000
made
Total 2,604,982 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 242,069
 P a g e | 137

Table 4-27
Depreciation cost 2015

Administration Amount Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Office room
Table 206,500 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 3,442 41,300
Computer 71,155 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 1,186 14,231
Telephone 21,700 0 0 0 0 0 0 0 0 0 0 0 0 0
Printer 3,340 56 56 56 56 56 56 56 56 56 56 56 56 668
Air Condition 27,800 463 463 463 463 463 463 463 463 463 463 463 463 5,560
Meeting room
Table 15,000 250 250 250 250 250 250 250 250 250 250 250 250 3,000
Projector 89,000 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 1,483 17,800
Loudspeaker 12,900 215 215 215 215 215 215 215 215 215 215 215 215 2,580
Microphone 66,000 0 0 0 0 0 0 0 0 0 0 0 0 0
Living room
Sofa 12,200 203 203 203 203 203 203 203 203 203 203 203 203 2,440
Table 3,789 63 63 63 63 63 63 63 63 63 63 63 63 758
Canteen
Refrigerator 8,190 137 137 137 137 137 137 137 137 137 137 137 137 1,638
Disk rack 2,558 0 0 0 0 0 0 0 0 0 0 0 0 0
Table 11,600 193 193 193 193 193 193 193 193 193 193 193 193 2,320
Sink 3,990 67 67 67 67 67 67 67 67 67 67 67 67 798
 P a g e | 138

Administration Amount Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Toilet
Lavatory 1,680 28 28 28 28 28 28 28 28 28 28 28 28 336
Mirror 680 11 11 11 11 11 11 11 11 11 11 11 11 136
Box 320 5 5 5 5 5 5 5 5 5 5 5 5 64
Sink 750 13 13 13 13 13 13 13 13 13 13 13 13 150
Douche 180 0 0 0 0 0 0 0 0 0 0 0 0 0
Storeroom
Shelf 650 11 11 11 11 11 11 11 11 11 11 11 11 130
Office
Transportation
Vigo car 607,000 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 10,117 121,400
VAN 1,338,000 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 2,230 26,760
Guard ready-
100,000 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,000
made

Total 2,604,982 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 20,172 242,069
 P a g e | 139

4.9 Conclusion

Technical Feasibility Conclusion

In now the rubber are the most popular. Which was beginning plant in the various
areas on Chiang Rai province? Our company’s “Thai North Rubber Industry” has interesting
to rubber process for export. Our divides the categories of product bring to process are rubber
process is the Rib Smoked Sheet or RSS and STR block rubber. This is following the data of
company. We emphasize the high export the STR block rubber are 40% and Rib Smoked
Sheet are 30% .The trade route of company to using is emphasize save a time and save cost
.Including seek the location to export near the production located. We think is the trade route
will can to be able to have the high possibility in export the rubber process to the best
outcome.

The company fixed price follows the purchase price and sale price. Domestic
purchase price hold the price of central rubber market is purchase from the agriculturist and
sale price for export. We using the predict price of before market follow the world price.
Which using price from the appropriate of production and the capability of purchase for bring
the process.

In the process for our step, first is the direct purchase the field latex from the
agriculturist and purchase the middleman to purchase from the agriculturist. Second lead to
the factory for process in the step such as measure the quality of the latex it have the level
quality to how the difference, Third, process in production of the Rib Smoked Sheet or RSS
and STR block rubber.

In the export department, first we seek the location can to support and ready to
purchase our product, contact the export data and testing the possibility for export. We think
the rubber process is interesting. The companies have the data for ready to export. For the
located or stand the factory. We have the location near with the ChiangKhong district in
Chiang Rai province. Far the Chiang Khong district in the distance is 2 kilometer.

In the part of management the company have the operation from the step is the seek
the location, seek the data for setting the factory, equipment for purchasing. For the expense
 P a g e | 140

of all operation, which separate is operation cost, preoperational cost, logistic. Which have
the detail to differences for our customer we emphasize to the employee have the high skill.
Ready to cooperation with the product export company and increase the responsibility to
work. The employee has the high effectiveness in the future.
 P a g e | 141

Chapter 5

Financial Analysis
 P a g e | 142
Financial Analysis

5.1 Financial Statement

5.1.1 Total requirement and the source fund

5.1.1.1 Total requirement

Table 5-1
Total requirement
Total requirement
Description Baht
Preopening Cost 596,650
Operating Investment 8,514,860
Administrative Investment 2,624,776
Land Cost 6,450,000
Inventory purchasing 6,435,112
Operating Expense 101,553
Administrative Expense 71,822
Total funding requirement 24,794,774

The table shows above represents the total funding requirement of the beginning of
this project. There are 24,794,774 Baht of Total requirement

Table 5-2
Operating Investment

Operating Investment Baht

Production machine 7,000,000
Testing Lab Equipment 446,800
Building 1,068,060
Total 8,514,860
 P a g e | 143

Table 5-3
Administrative investment

Administrative investment Baht

Office equipments 2,520,976
Supply 103,800
Total 2,624,776

Inventory purchasing, Operating Expense and Administrative Expense, we use

first 3 months of 2011 because we have the condition about Account Receivable for
customers must to pay money within 3 months. So we want the money to operation within
these 3 months.

Table 5-4
Inventory purchasing

Inventory purchasing Baht

January 1,875,000
February 1,875,000
March 2,325,000
Total 6,075,000

Table 5-5
Operating Expense

Operating Expense Baht

January 1,994,885
February 1,994,885
March 2,445,343
Total 6,435,112
 P a g e | 144

Table 5-6
Administrative Expense

Administrative Expense Baht

January 23,941
February 23,941
March 23,941
Total 71,822

5.1.1.2 The source of fund

Our company will borrowing fund from investor who interest this project and want to
invest with us. Total requirement is 25,000,000 Baht. So, a loan amounts of 25,000,000 Baht
within 10 years of repayment. Interest will be 12% per annum.

The condition that the investor will be following: The interest not more than 15% per year of
the loan amount following the law of Thailand.

The reasons that make investor invest with us:

1. According to the Daily interest rate of commercial banks from Bank of

Thailand. The interest rate of our company more than average interest rate of
commercial banks. Minimum loan rate of Daily interest rate of commercial banks
have Average of Commercial Banks registered in Thailand is 6.7791% and Average
of Foreign Bank Branches is 7.5417%.
So, the interest loan rate that we have 12% more than 3-4% of commercial banks.

2. The length that we have pay loan are only 10 years. The investor will get
refund faster.

3. The investor not have risk with net income of our business if the business
loss the investor not responsible with us. We will continue pay the money that we
loan and the interest too.
 P a g e | 145

5.1.2 Income statement Table 5-7

Income Statement, 2011
Thai-North Rubber Industry Company
Income Statement
For Year Ended December 31, 2011(Baht)
Period Starting: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Sales
Sales 1,994,885 1,994,885 2,445,343 2,445,343 1,673,129 1,673,129 1,673,129 1,673,129 2,509,694 2,509,694 2,574,045 2,574,045 25,740,450
Total Sales 1,994,885 1,994,885 2,445,343 2,445,343 1,673,129 1,673,129 1,673,129 1,673,129 2,509,694 2,509,694 2,574,045 2,574,045 25,740,450
Less Cost of Goods Sold
Materials 1,072,344 1,072,344 1,314,486 1,314,486 959,344 959,344 959,344 959,344 1,349,078 1,349,078 1,383,669 1,383,669 14,076,528
Operation expense 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 782,564 3,450,768
Logistic 230,314 230,314 230,346 230,346 230,291 230,291 230,291 230,291 230,351 230,351 230,356 230,356 2,763,898
Total Cost of Goods Sold 1,545,222 1,545,222 1,787,396 1,787,396 1,432,199 1,432,199 1,432,199 1,432,199 1,821,992 1,821,992 1,856,589 2,396,589 20,291,194

Gross Profit 449,663 449,663 657,947 657,947 240,930 240,930 240,930 240,930 687,701 687,701 717,456 177,456 5,449,256
Operating Expenses
Selling 0 0 0 3,000 0 1,000 1,000 4,000 1,200 1,000 1,200 4,500 16,900
administration expense 324,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 3,228,133
Pre opening expense 701,650 - - - - - - - - - - - 701,650
Supplies expense 13,760 - - - - - - - - - - - 13,760
Depreciation 57,791 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 693,505
Total Operating Expenses 1,097,243 319,414 319,414 331,164 319,414 320,414 329,164 323,414 320,614 329,164 320,614 323,914 4,653,947

Operating Income -647,580 130,249 338,533 326,783 -78,484 -79,484 -88,234 -82,484 367,087 358,537 396,842 -146,458 795,308
Interest income (expense) 250,000 248,913 247,816 246,707 245,587 244,456 243,314 242,161 240,995 239,819 238,630 237,429 2,925,827

Income (Loss) Before

-897,580 -118,664 90,717 80,076 -324,071 -323,940 -331,548 -324,644 126,092 118,719 158,212 -383,887 -2,130,519
Taxes
Income Taxes 0 0 0 0 0 0 0 0 0 0 0 0 0

Net Income (Loss) -897,580 -118,664 90,717 80,076 -324,071 -323,940 -331,548 -324,644 126,092 118,719 158,212 -383,887 -2,130,519

Cumulative Net Income

-897,580 -1,016,244 -925,527 -845,451 -1,169,522 -1,493,462 -1,825,010 -2,149,655 -2,023,563 -1,904,844 -1,746,632 -2,130,519 0
(Loss)

Note: Tax: According to our company is company limited. So, we must to pay the tax in rate of 30% per annual equal to 2.5% each month following the Revenue Department.
 P a g e | 146
Table 5-8
Income Statement, 2012

Thai-North Rubber Industry Company

Income Statement
For Year Ended December 31, 2012(Baht)
Period Starting: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Sales
Sales 2,831,449 2,831,449 2,831,449 2,831,449 1,415,725 1,415,725 1,415,725 1,415,725 2,831,449 2,831,449 2,831,449 2,831,449 28,314,495
Total Sales 2,831,449 2,831,449 2,831,449 2,831,449 1,415,725 1,415,725 1,415,725 1,415,725 2,831,449 2,831,449 2,831,449 2,831,449 28,314,495
Less Cost of Goods Sold
Materials 1,522,036 1,522,036 1,522,036 1,522,036 811,753 811,753 811,753 811,753 1,522,036 1,522,036 1,522,036 1,522,036 15,423,300
Operation expense 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 782,564 3,450,768
Logistic 251,824 251,824 251,824 251,824 251,723 251,723 251,723 251,723 251,824 251,824 251,824 251,824 3,021,487
Total Cost of goods sold 2,016,425 2,016,425 2,016,425 2,016,425 1,306,040 1,306,040 1,306,040 1,306,040 2,016,425 2,016,425 2,016,425 2,556,425 21,895,555

Gross Profit 815,025 815,025 815,025 815,025 109,685 109,685 109,685 109,685 815,025 815,025 815,025 275,025 6,418,940
Operating Expenses
Selling 200 0 200 4000 200 0 200 4000 200 0 200 4000 13,200
administration expense 319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 3,223,133
Pre opening expense 0 0 0 0 0 0 0 0 0 0 0 0 0
Supplies expense 13,760 - - - - - - - - - - - 13,760
Depreciation 57,791 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 693,505
Total Operating Expenses 390,793 319,414 319,614 332,164 319,614 319,414 328,364 323,414 319,614 328,164 319,614 323,414 3,943,597

Operating Income 424,232 495,611 495,411 482,861 -209,929 -209,729 -218,679 -213,729 495,411 486,861 495,411 -48,389 2,475,343
Interest income (expense) 236,217 234,992 233,756 232,506 231,245 229,970 228,683 227,383 226,070 224,744 223,405 222,052 2,751,024

Income (Loss) Before Taxes 188,015 260,619 261,655 250,355 -441,173 -439,699 -447,362 -441,112 269,341 262,117 272,006 -270,441 -275,681
Income Taxes -6,892 -6,892 -6,892 -6,892 -6,892 -6,892 -6,892 -6,892 -6,892 -6,892 -6,892 -6,892 -82,704

Net Income (Loss) 194,907 267,511 268,547 257,247 -434,281 -432,807 -440,470 -434,220 276,233 269,009 278,898 -263,549 -192,977

Cumulative Net Income -

-1,935,612 -1,668,101 -1,399,554 -1,142,307 -1,576,589 -2,009,396 -2,449,866 -2,884,086 -2,607,853 -2,338,845 -2,059,947 -2,323,496 0
(Loss) 2,130,519

Note: Tax: According to our company is company limited. So, we must to pay the tax in rate of 30% per annual equal to 2.5% each month following the Revenue Department.
 P a g e | 147
Table 5-9
Income Statement, 2013
Thai-North Rubber Industry Company
Income Statement
For Year Ended December 31, 2013 (Baht)
Period Starting: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Sales
Sales 3,114,594 3,114,594 3,114,594 3,114,594 1,557,297 1,557,297 1,557,297 1,557,297 3,114,594 3,114,594 3,114,594 3,114,594 31,145,944
Total Sales 3,114,594 3,114,594 3,114,594 3,114,594 1,557,297 1,557,297 1,557,297 1,557,297 3,114,594 3,114,594 3,114,594 3,114,594 31,145,944
Less Cost of Goods
Sold
Materials 1,674,240 1,674,240 1,674,240 1,674,240 892,928 892,928 892,928 892,928 1,674,240 1,674,240 1,674,240 1,674,240 34,288,431
Operation expense 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 782,564 3,450,768
Logistic 275,440 275,440 275,440 275,440 275,328 275,328 275,328 275,328 275,440 275,440 275,440 275,440 3,304,835
Total Cost of goods
2,192,244 2,192,244 2,192,244 2,192,244 1,410,820 1,410,820 1,410,820 1,410,820 2,192,244 2,192,244 2,192,244 2,732,244 23,721,233
sold

Gross Profit 922,351 922,351 922,351 922,351 146,477 146,477 146,477 146,477 922,351 922,351 922,351 382,351 7,424,712
Operating Expenses
Selling 200 0 200 3500 200 0 200 3500 200 0 200 3500 11,700
administration
319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 3,223,133
expense
Pre opening expense 0 0 0 0 0 0 0 0 0 0 0 0 0
Supplies expense 13,760 0 - - - - - - - - - - 13,760
Depreciation 53,107 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 637,294
Total Operating
386,109 314,730 314,930 326,980 314,930 314,730 323,680 318,230 314,930 323,480 314,930 318,230 3,885,887
Expenses

Operating Income 536,241 607,621 607,421 595,371 -168,453 -168,253 -177,203 -171,753 607,421 598,871 607,421 64,121 3,538,825
Interest income
220,686 219,306 217,912 216,505 215,083 213,647 212,197 210,732 209,252 207,758 206,249 204,725 2,554,052
(expense)

Income (Loss) Before

315,555 388,315 389,508 378,866 -383,536 -381,900 -389,400 -382,485 398,168 391,113 401,172 -140,604 984,773
Taxes
Income Taxes 24,619 24,619 24,619 24,619 24,619 24,619 24,619 24,619 24,619 24,619 24,619 24,619 295,432

Net Income (Loss) 290,936 363,695 364,889 354,247 -408,155 -406,519 -414,019 -407,104 373,549 366,493 376,552 -165,223 689,341

Cumulative Net - -
-1,668,864 -1,303,975 -949,728 -1,357,884 -1,764,403 -2,178,422 -2,585,526 -2,211,977 -1,845,484 -1,468,931 -1,634,155 0
Income (Loss) 2,323,496 2,032,560

Note: Tax: According to our company is company limited. So, we must to pay the tax in rate of 30% per annual equal to 2.5% each month following the Revenue Department.
 P a g e | 148
Table 5-10
Thai-North Rubber Industry Company Income Statement, 2014
Income Statement
For Year Ended December 31, 2014 (Baht)
Period Starting: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Sales
Sales 3,426,054 3,426,054 3,426,054 3,426,054 1,713,027 1,713,027 1,713,027 1,713,027 3,426,054 3,426,054 3,426,054 3,426,054 34,260,539
Total Sales 3,426,054 3,426,054 3,426,054 3,426,054 1,713,027 1,713,027 1,713,027 1,713,027 3,426,054 3,426,054 3,426,054 3,426,054 34,260,539
Less Cost of Goods Sold
Materials 1,841,664 1,841,664 1,841,664 1,841,664 982,221 982,221 982,221 982,221 1,841,664 1,841,664 1,841,664 1,841,664 18,662,193
Operation expense 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 782,564 3,450,768
Logistic 303,242 303,242 303,242 303,242 301,295 301,295 301,295 301,295 303,242 303,242 303,242 303,242 3,631,117
Total Cost of goods sold 2,387,470 2,387,470 2,387,470 2,387,470 1,526,079 1,526,079 1,526,079 1,526,079 2,387,470 2,387,470 2,387,470 2,927,470 25,744,078

Gross Profit 1,038,584 1,038,584 1,038,584 1,038,584 186,948 186,948 186,948 186,948 1,038,584 1,038,584 1,038,584 498,584 8,516,461
Operating Expenses
Selling 200 0 200 3500 200 0 200 3500 200 0 200 3500 11,700
administration expense 319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 3,223,133
Pre opening expense 0 0 0 0 0 0 0 0 0 0 0 0 0
Supplies expense 13,760 0 0 - - - - - - - - - 13,760
Depreciation 53,107 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 637,294
Total Operating
386,109 314,730 314,930 326,980 314,930 314,730 323,680 318,230 314,930 323,480 314,930 318,230 3,885,887
Expenses

Operating Income 652,475 723,854 723,654 711,604 -127,982 -127,782 -136,732 -131,282 723,654 715,104 723,654 180,354 4,630,574
Interest income
203,185 201,630 200,060 198,474 196,872 195,254 193,619 191,969 190,302 188,618 186,917 185,200 2,332,098
(expense)

Income (Loss) Before

449,289 522,224 523,594 513,130 -324,854 -323,036 -330,351 -323,251 533,352 526,486 536,737 -4,846 2,298,476
Taxes
Income Taxes 57,462 57,462 57,462 57,462 57,462 57,462 57,462 57,462 57,462 57,462 57,462 57,462 689,543

Net Income (Loss) 391,828 464,762 466,132 455,668 -382,316 -380,498 -387,813 -380,713 475,890 469,024 479,275 -62,308 1,608,933

Cumulative Net Income - -

-777,565 -311,433 144,235 -238,080 -618,578 -1,006,391 -1,387,104 -911,213 -442,189 37,086 -25,222 0
(Loss) 1,634,155 1,242,327

Note: Tax: According to our company is company limited. So, we must to pay the tax in rate of 30% per annual equal to 2.5% each month following the Revenue Department.
 P a g e | 149

Table 5-11
Income Statement, 2015
Thai-North Rubber Industry Company
Income Statement
For Year Ended December 31, 2015 (Baht)
Period Starting: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals
Sales
Sales 3,768,659 3,768,659 3,768,659 3,768,659 1,884,330 1,884,330 1,884,330 1,884,330 3,768,659 3,768,659 3,768,659 3,768,659 37,686,593
Total Sales 3,768,659 3,768,659 3,768,659 3,768,659 1,884,330 1,884,330 1,884,330 1,884,330 3,768,659 3,768,659 3,768,659 3,768,659 37,686,593
Less Cost of Goods
Sold
Materials 2,025,830 2,025,830 2,025,830 2,025,830 1,080,443 1,080,443 1,080,443 1,080,443 2,025,830 2,025,830 2,025,830 2,025,830 20,528,412
Operation expense 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 242,564 782,564 3,450,768
Logistic 331,817 331,817 331,817 331,817 329,857 329,857 329,857 329,857 331,817 331,817 331,817 331,817 3,973,968
Total Cost of goods
2,600,212 2,600,212 2,600,212 2,600,212 1,652,864 1,652,864 1,652,864 1,652,864 2,600,212 2,600,212 2,600,212 3,140,212 27,953,148
sold

Gross Profit 1,168,448 1,168,448 1,168,448 1,168,448 231,466 231,466 231,466 231,466 1,168,448 1,168,448 1,168,448 628,448 9,733,444
Operating Expenses
Selling 200 0 200 3500 200 0 200 3500 200 0 200 3500 11,700
administration
319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 3,223,133
expense
Pre opening expense 0 0 0 0 0 0 0 0 0 0 0 0 0
Supplies expense 13,760 0 0 0 - - - - - - - - 13,760
Depreciation 53,107 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 637,294
Total Operating
386,109 314,730 314,930 326,980 314,930 314,730 323,680 318,230 314,930 323,480 314,930 318,230 3,885,887
Expenses

Operating Income 782,339 853,718 853,518 841,468 -83,464 -83,264 -92,214 -86,764 853,518 844,968 853,518 310,218 5,847,557
Interest income
183,465 181,713 179,943 178,156 176,351 174,527 172,686 170,826 168,947 167,050 165,134 163,198 2,081,995
(expense)

Income (Loss) Before

598,874 672,005 673,575 663,312 -259,815 -257,792 -264,900 -257,590 684,571 677,918 688,384 147,020 3,765,562
Taxes
Income Taxes 94,139 94,139 94,139 94,139 94,139 94,139 94,139 94,139 94,139 94,139 94,139 94,139 1,129,669

Net Income (Loss) 504,735 577,866 579,436 569,173 -353,954 -351,931 -359,039 -351,729 590,432 583,779 594,245 52,881 2,635,893

Cumulative Net
-25,222 479,513 1,057,379 1,636,815 2,205,988 1,852,034 1,500,104 1,141,065 789,335 1,379,767 1,963,546 2,557,791 2,610,672 0
Income (Loss)

Note: Tax: According to our company is company limited. So, we must to pay the tax in rate of 30% per annual equal to 2.5% each month following the Revenue Department.
 P a g e | 150

5.1.3 Balance Sheet

Table 5-12
Balance Sheet, 2011

Thai-North Rubber Industry Company

Balance Sheet
December 31, 2011 (Baht)
Beginning JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
ASSETS
Current Assets
Cash 8,346,958 6,800,026 6,030,925 5,334,969 5,225,729 4,942,887 4,794,182 4,636,727 4,253,358 4,068,591 3,875,274 3,700,956 3,234,307
Accounts Receivable 598,465 1,196,931 1,930,534 2,065,671 1,969,144 1,737,480 1,505,816 1,505,816 1,756,786 2,007,755 2,278,030 2,297,335
Total Current Assets 8,346,958 7,398,492 7,227,856 7,265,503 7,291,400 6,912,031 6,531,662 6,142,543 5,759,174 5,825,377 5,883,029 5,978,986 5,531,642
Non-current Assets
Land 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000
Operations asset 7,598,060 7,564,210 7,530,358 7,496,507 7,462,655 7,428,804 7,394,952 7,361,101 7,327,249 7,293,398 7,259,546 7,225,695 7,191,843
Administration asset 2,604,982 2,581,041 2,557,101 2,533,160 2,509,219 2,485,279 2,461,338 2,437,397 2,413,457 2,389,516 2,365,576 2,341,635 2,317,694
Total non-current
16,653,042 16,595,251 16,537,459 16,479,667 16,421,875 16,364,083 16,306,290 16,248,498 16,190,706 16,132,914 16,075,122 16,017,330 15,959,537
assets
Total Assets 25,000,000 23,993,743 23,765,315 23,745,170 23,713,275 23,276,114 22,837,953 22,391,042 21,949,880 21,958,290 21,958,150 21,996,315 21,491,180

LIABILITIES
Long Term Liabilities
Long Term Debt 25,000,000 24,891,323 24,781,558 24,670,697 24,558,726 24,445,636 24,331,415 24,216,052 24,099,535 23,981,853 23,862,994 23,742,947 23,621,699
Income Tax Payable 0 0 0 0 0 0 0 0 0 0 0 0
Total liabilities 25,000,000 24,891,323 24,781,558 24,670,697 24,558,726 24,445,636 24,331,415 24,216,052 24,099,535 23,981,853 23,862,994 23,742,947 23,621,699

EQUITY
Retained Earnings - -897,580 -1,016,244 -925,527 -845,451 -1,169,522 -1,493,462 -1,825,010 -2,149,655 -2,023,563 -1,904,844 -1,746,632 -2,130,519
Total Equity 0 -897,580 -1,016,244 -925,527 -845,451 -1,169,522 -1,493,462 -1,825,010 -2,149,655 -2,023,563 -1,904,844 -1,746,632 -2,130,519
Total Liabilities
25,000,000 23,993,743 23,765,315 23,745,170 23,713,275 23,276,114 22,837,953 22,391,042 21,949,880 21,958,290 21,958,150 21,996,315 21,491,180
Equity
 P a g e | 151

Table 5-13
Balance Sheet, 2012

Thai-North Rubber Industry Company

Balance Sheet
December 31, 2012 (Baht)
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
ASSETS
Current Assets
Cash 3,261,126 3,378,631 3,495,935 3,677,911 3,591,814 3,505,917 3,411,071 2,896,457 2,666,265 2,427,523 2,197,331 1,930,761
Accounts Receivable 2,393,862 2,471,083 2,548,305 2,548,305 2,123,587 1,698,870 1,274,152 1,274,152 1,698,870 2,123,587 2,548,305 2,548,305
Total Current Assets 5,654,988 5,849,714 6,044,239 6,226,215 5,715,401 5,204,787 4,685,223 4,170,609 4,365,135 4,551,110 4,745,636 4,479,066
Non-current Assets
Land 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000
Operations asset 7,157,993 7,124,142 7,090,290 7,056,439 7,022,587 6,988,736 6,954,884 6,921,033 6,887,181 6,853,330 6,819,478 6,785,627
Administration asset 2,293,754 2,269,813 2,245,872 2,221,932 2,197,991 2,174,050 2,150,110 2,126,169 2,102,228 2,078,288 2,054,347 2,030,406
Total non-current
15,901,747 15,843,954 15,786,162 15,728,370 15,670,578 15,612,786 15,554,994 15,497,202 15,439,409 15,381,617 15,323,825 15,266,033
assets
Total Assets 21,556,735 21,693,668 21,830,402 21,954,585 21,385,979 20,817,573 20,240,217 19,667,810 19,804,544 19,932,727 20,069,461 19,745,099

LIABILITIES
Long Term Liabilities
Long Term Debt 23,499,239 23,375,554 23,250,632 23,124,461 22,997,028 22,868,321 22,738,327 22,607,033 22,474,425 22,340,492 22,205,220 22,068,595
Income Tax Payable -6,892 -13,784 -20,676 -27,568 -34,460 -41,352 -48,244 -55,136 -62,028 -68,920 -75,812 0
Total liabilities 23,492,347 23,361,769 23,229,956 23,096,893 22,962,568 22,826,969 22,690,082 22,551,896 22,412,397 22,271,572 22,129,408 22,068,595

EQUITY
Retained Earnings -1,935,612 -1,668,101 -1,399,554 -1,142,307 -1,576,589 -2,009,396 -2,449,866 -2,884,086 -2,607,853 -2,338,845 -2,059,947 -2,323,496
Total Equity -1,935,612 -1,668,101 -1,399,554 -1,142,307 -1,576,589 -2,009,396 -2,449,866 -2,884,086 -2,607,853 -2,338,845 -2,059,947 -2,323,496
Total Liabilities
21,556,735 21,693,668 21,830,402 21,954,585 21,385,979 20,817,573 20,240,217 19,667,810 19,804,544 19,932,727 20,069,461 19,745,099
Equity
 P a g e | 152

Table 5-14
Balance Sheet, 2013

Thai-North Rubber Industry Company

Balance Sheet
December 31, 2013 (Baht)
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

ASSETS
Current Assets
Cash 2,076,489 2,293,597 2,510,505 2,800,306 2,793,473 2,786,840 2,771,256 2,293,934 2,128,596 1,954,708 1,789,370 1,252,490
Accounts Receivable 2,633,248 2,718,192 2,803,135 2,803,135 2,335,946 1,868,757 1,401,567 1,401,567 1,868,757 2,335,946 2,803,135 2,803,135
Total Current Assets 4,709,737 5,011,789 5,313,640 5,603,441 5,129,419 4,655,596 4,172,824 3,695,502 3,997,353 4,290,654 4,592,505 4,055,625
Non-current Assets
Land 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000
Operations asset 6,752,692 6,719,756 6,686,821 6,653,885 6,620,950 6,588,014 6,555,079 6,522,143 6,489,208 6,456,272 6,423,337 6,390,401
Administration asset 2,010,234 1,990,062 1,969,889 1,949,717 1,929,544 1,909,372 1,889,200 1,869,027 1,848,855 1,828,682 1,808,510 1,788,338
Total non-current
15,212,926 15,159,818 15,106,710 15,053,602 15,000,494 14,947,386 14,894,278 14,841,170 14,788,062 14,734,955 14,681,847 14,628,739
assets
Total Assets 19,922,663 20,171,606 20,420,350 20,657,043 20,129,913 19,602,982 19,067,102 18,536,672 18,785,415 19,025,609 19,274,352 18,684,363

LIABILITIES
Long Term Liabilities
Long Term Debt 21,930,603 21,791,232 21,650,467 21,508,294 21,364,700 21,219,669 21,073,189 20,925,243 20,775,818 20,624,899 20,472,471 20,318,518
Income Tax Payable 24,619 49,239 73,858 98,477 123,097 147,716 172,335 196,955 221,574 246,193 270,813 0
Total liabilities 21,955,223 21,840,471 21,724,325 21,606,772 21,487,796 21,367,385 21,245,524 21,122,198 20,997,392 20,871,092 20,743,283 20,318,518

EQUITY
Retained Earnings -2,032,560 -1,668,864 -1,303,975 -949,728 -1,357,884 -1,764,403 -2,178,422 -2,585,526 -2,211,977 -1,845,484 -1,468,931 -1,634,155
Total Equity -2,032,560 -1,668,864 -1,303,975 -949,728 -1,357,884 -1,764,403 -2,178,422 -2,585,526 -2,211,977 -1,845,484 -1,468,931 -1,634,155
Total Liabilities
19,922,663 20,171,606 20,420,350 20,657,043 20,129,913 19,602,982 19,067,102 18,536,672 18,785,415 19,025,609 19,274,352 18,684,363
Equity
 P a g e | 153

Table 5-15
Balance Sheet, 2014
Thai-North Rubber Industry Company
Balance Sheet
December 31, 2014 (Baht)
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
ASSETS
Current Assets
Cash 1,505,956 1,830,803 2,155,450 2,561,484 2,641,841 2,722,397 2,794,004 2,357,152 2,261,328 2,156,955 2,061,131 1,246,373
Accounts Receivable 2,896,573 2,990,011 3,083,448 3,083,448 2,569,540 2,055,632 1,541,724 1,541,724 2,055,632 2,569,540 3,083,448 3,083,448
Total Current Assets 4,402,529 4,820,814 5,238,898 5,644,933 5,211,381 4,778,029 4,335,728 3,898,876 4,316,961 4,726,495 5,144,580 4,329,822
Non-current Assets
Land 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000
Operations asset 6,357,466 6,324,531 6,291,595 6,258,660 6,225,724 6,192,789 6,159,853 6,126,918 6,093,982 6,061,047 6,028,111 5,995,176
Administration asset 1,768,165 1,747,993 1,727,820 1,707,648 1,687,476 1,667,303 1,647,131 1,626,958 1,606,786 1,586,614 1,566,441 1,546,269
Total non-current
14,575,632 14,522,524 14,469,416 14,416,308 14,363,200 14,310,092 14,256,984 14,203,876 14,150,768 14,097,660 14,044,553 13,991,445
assets
Total Assets 18,978,161 19,343,337 19,708,314 20,061,240 19,574,581 19,088,121 18,592,712 18,102,753 18,467,729 18,824,156 19,189,132 18,321,266

LIABILITIES
Long Term Liabilities
Long Term Debt 20,163,026 20,005,979 19,847,361 19,687,157 19,525,352 19,361,928 19,196,870 19,030,161 18,861,785 18,691,726 18,519,966 18,346,488
Income Tax Payable 57,462 114,924 172,386 229,848 287,309 344,771 402,233 459,695 517,157 574,619 632,081 0
Total liabilities 20,220,488 20,120,903 20,019,747 19,917,005 19,812,661 19,706,699 19,599,103 19,489,856 19,378,942 19,266,345 19,152,046 18,346,488

EQUITY
Retained Earnings -1,242,327 -777,565 -311,433 144,235 -238,080 -618,578 -1,006,391 -1,387,104 -911,213 -442,189 37,086 -25,222
Total Equity -1,242,327 -777,565 -311,433 144,235 -238,080 -618,578 -1,006,391 -1,387,104 -911,213 -442,189 37,086 -25,222
Total Liabilities
18,978,161 19,343,337 19,708,314 20,061,240 19,574,581 19,088,121 18,592,712 18,102,753 18,467,729 18,824,156 19,189,132 18,321,266
Equity
 P a g e | 154

Table 5-16
Balance Sheet, 2015

Thai-North Rubber Industry Company

Balance Sheet
December 31, 2015 (Baht)
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
ASSETS
Current Assets
Cash 1,620,360 2,065,727 2,510,894 3,046,792 3,223,057 3,399,523 3,567,038 3,174,704 3,157,354 3,131,453 3,114,103 1,989,083
Accounts Receivable 3,186,230 3,289,012 3,391,793 3,391,793 2,826,494 2,261,196 1,695,897 1,695,897 2,261,196 2,826,494 3,391,793 3,391,793
Total Current Assets 4,806,590 5,354,739 5,902,687 6,438,586 6,049,552 5,660,718 5,262,934 4,870,601 5,418,549 5,957,948 6,505,896 5,380,876
Non-current Assets
Land 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000 6,450,000
Operations asset 5,962,241 5,929,306 5,896,370 5,863,435 5,830,499 5,797,564 5,764,628 5,731,693 5,698,757 5,665,822 5,632,886 5,599,951
Administration asset 1,526,096 1,505,924 1,485,752 1,465,579 1,445,407 1,425,234 1,405,062 1,384,890 1,364,717 1,344,545 1,324,372 1,304,200
Total non-current
13,938,337 13,885,230 13,832,122 13,779,014 13,725,906 13,672,798 13,619,690 13,566,582 13,513,474 13,460,366 13,407,258 13,354,151
assets
Total Assets 18,744,927 19,239,968 19,734,809 20,217,599 19,775,458 19,333,516 18,882,624 18,437,183 18,932,023 19,418,314 19,913,155 18,735,027

LIABILITIES
Long Term Liabilities
Long Term Debt 18,171,275 17,994,311 17,815,577 17,635,055 17,452,728 17,268,578 17,082,586 16,894,735 16,705,005 16,513,378 16,319,834 16,124,355
Income Tax Payable 94,139 188,278 282,417 376,556 470,695 564,834 658,973 753,112 847,251 941,390 1,035,530 0
Total liabilities 18,265,414 18,182,589 18,097,994 18,011,611 17,923,423 17,833,412 17,741,560 17,647,847 17,552,256 17,454,768 17,355,364 16,124,355

EQUITY
Retained Earnings 479,513 1,057,379 1,636,815 2,205,988 1,852,034 1,500,104 1,141,065 789,335 1,379,767 1,963,546 2,557,791 2,610,672
Total Equity 479,513 1,057,379 1,636,815 2,205,988 1,852,034 1,500,104 1,141,065 789,335 1,379,767 1,963,546 2,557,791 2,610,672
Total Liabilities
18,744,927 19,239,968 19,734,809 20,217,599 19,775,458 19,333,516 18,882,624 18,437,183 18,932,023 19,418,314 19,913,155 18,735,027
Equity
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5.1.4 Cash Flow Statements

Table 5-17
Cash Flow Statement, 2011

Thai-North Rubber Industry Company

Cash Flow Statement
December 31, 2011 (Baht)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash flow from operating activities
- - - - - - -
90,717 80,076 126,092 118,719 158,212
Net Income 897,580 118,664 324,071 323,940 331,548 324,644 383,887
Adjustment to reconcile net income to net
Cash provided by operating activities
- - - - - -
- 733,603 96,527 231,664 231,664 - - 250,969
Decrease (Increase) in account receivable 598,465 598,465 135,137 250,969 270,275 19,305
Increase (Decrease) in income taxes payable - - - - - - - - - - - -
Depreciation expense 57,791 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792
- - - - - - - - -
- 585,094 2,730 - 67,085
Net cash provided by operating activities 1,438,254 659,337 169,752 34,484 42,092 266,852 74,458 54,270 345,401
Cash flows from investing activities
Net cash used in investing activities
Cash flows from financing activities
Cash paid for interest expense 250,000 248,913 247,816 246,707 245,587 244,456 243,314 242,161 240,995 239,819 238,630 237,429
Net cash used in financing activities 250,000 248,913 247,816 246,707 245,587 244,456 243,314 242,161 240,995 239,819 238,630 237,429
- - - -
- 337,278 249,437 75,835 209,972 201,222 173,910 165,360 184,360
Net increase (decrease) in cash 1,188,254 410,424 24,692 107,971

Cash balance at beginning of the month 8,346,958 6,800,026 6,030,925 5,334,969 5,225,729 4,942,887 4,794,182 4,636,727 4,253,358 4,068,591 3,875,274 3,700,956
Cash balance at ended of month 7,158,704 6,389,602 5,693,647 5,584,407 5,301,564 5,152,859 4,995,404 4,612,035 4,427,268 4,233,951 4,059,633 3,592,985
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Table 5-18
Cash Flow Statement, 2012

Thai-North Rubber Industry Company

Cash Flow Statement
December 31, 2012 (Baht)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash flow from operating activities
Net Income 194,907 267,511 268,547 257,247 - 434,281 - 432,807 - 440,470 - 434,220 276,233 269,009 278,898 - 263,549
Adjustment to reconcile net income to net
Cash provided by operating activities
Decrease (Increase) in account receivable - 96,527 - 77,221 - 77,221 - 424,717 424,717 424,717 - - 424,717 - 424,717 - 424,717 -
Increase (Decrease) in income taxes payable - 6,892 - 6,892 - 6,892 - 6,892 - 6,892 - 6,892 - 6,892 - 6,892 - 6,892 - 6,892 4,416 - 82,704
Depreciation expense 57,791 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 57,792 -
Net cash provided by operating activities 149,279 241,189 242,226 308,147 41,336 42,810 35,148 - 383,320 - 97,585 - 104,809 - 83,611 - 346,254
Cash flows from investing activities
Net cash used in investing activities
Cash flows from financing activities
Cash paid for interest expense 236,217 234,992 233,756 232,506 231,245 229,970 228,683 227,383 226,070 224,744 223,405 222,052
Net cash used in financing activities 236,217 234,992 233,756 232,506 231,245 229,970 228,683 227,383 226,070 224,744 223,405 222,052
Net increase (decrease) in cash 385,496 476,182 475,982 540,653 272,581 272,781 263,831 - 155,937 128,486 119,936 139,794 - 124,201

Cash balance at beginning of the month 3,234,307 3,261,126 3,378,631 3,495,935 3,677,911 3,591,814 3,505,917 3,411,071 2,896,457 2,666,265 2,427,523 2,197,331
Cash balance at ended of month 3,619,804 3,737,308 3,854,612 4,036,588 3,950,491 3,864,595 3,769,748 3,255,134 3,024,942 2,786,200 2,567,317 2,073,130
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Table 5-19
Cash Flow Statement, 2013

Thai-North Rubber Industry Company

Cash Flow Statement
December 31, 2013 (Baht)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash flow from operating activities
Net Income 290,936 363,695 364,889 354,247 - 408,155 - 406,519 - 414,019 - 407,104 373,549 366,493 376,552 - 165,223
Adjustment to reconcile net income to net
Cash provided by operating activities
Decrease (Increase) in account receivable - 84,943 - 84,943 - 84,943 - 467,189 467,189 467,189 - - 467,189 - 467,189 - 467,189 -
Increase (Decrease) in income taxes payable 24,619 24,619 24,619 24,619 24,619 24,619 24,619 24,619 24,619 24,619 44,836 295,432
Depreciation expense 53,107 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108
Net cash provided by operating activities 283,719 356,479 357,673 431,974 136,761 138,397 130,897 - 329,377 - 15,913 - 22,969 7,307 183,317
Cash flows from investing activities
Net cash used in investing activities
Cash flows from financing activities
Cash paid for interest expense 220,686 219,306 217,912 216,505 215,083 213,647 212,197 210,732 209,252 207,758 206,249 204,725
Net cash used in financing activities 220,686 219,306 217,912 216,505 215,083 213,647 212,197 210,732 209,252 207,758 206,249 204,725
Net increase (decrease) in cash 504,405 575,785 575,585 648,479 351,844 352,044 343,094 - 118,645 193,339 184,789 213,556 388,041

Cash balance at beginning of the month 1,930,761 2,076,489 2,293,597 2,510,505 2,800,306 2,793,473 2,786,840 2,771,256 2,293,934 2,128,596 1,954,708 1,789,370
Cash balance at ended of month 2,435,167 2,652,274 2,869,182 3,158,984 3,152,150 3,145,517 3,129,934 2,652,611 2,487,274 2,313,386 2,168,264 2,177,412
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Table 5-20
Cash Flow Statement, 2014

Thai-North Rubber Industry Company

Cash Flow Statement
December 31, 2014 (Baht)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash flow from operating activities
Net Income 391,828 464,762 466,132 455,668 - 382,316 - 380,498 - 387,813 - 380,713 475,890 469,024 479,275 - 62,308
Adjustment to reconcile net income to net
Cash provided by operating activities
Decrease (Increase) in account receivable - 93,438 - 93,438 - 93,438 - 513,908 513,908 513,908 - - 513,908 - 513,908 - 513,908 -
Increase (Decrease) in income taxes payable 57,462 57,462 57,462 57,462 57,462 57,462 57,462 57,462 57,462 57,462 87,759 689,543
Depreciation expense 53,107 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108
Net cash provided by operating activities 408,959 481,894 483,264 566,238 242,162 243,980 236,665 - 270,143 72,552 65,686 106,234 680,343
Cash flows from investing activities
Net cash used in investing activities
Cash flows from financing activities
Cash paid for interest expense 203,185 201,630 200,060 198,474 196,872 195,254 193,619 191,969 190,302 188,618 186,917 185,200
Net cash used in financing activities 203,185 201,630 200,060 198,474 196,872 195,254 193,619 191,969 190,302 188,618 186,917 185,200
Net increase (decrease) in cash 612,144 683,524 683,324 764,712 439,034 439,234 430,284 - 78,174 262,854 254,304 293,151 865,543

Cash balance at beginning of the month 1,252,490 1,505,956 1,830,803 2,155,450 2,561,484 2,641,841 2,722,397 2,794,004 2,357,152 2,261,328 2,156,955 2,061,131
Cash balance at ended of month 1,864,634 2,189,480 2,514,127 2,920,162 3,000,518 3,081,075 3,152,681 2,715,829 2,620,006 2,515,632 2,450,106 2,926,674
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Table 5-21
Cash Flow Statement, 2015

Thai-North Rubber Industry Company

Cash Flow Statement
December 31, 2015 (Baht)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash flow from operating activities
- - - -
504,735 577,866 579,436 569,173 590,432 583,779 594,245 52,881
Net Income 353,954 351,931 359,039 351,729
Adjustment to reconcile net income to net
Cash provided by operating activities
- - - - - -
- 565,299 565,299 565,299 - -
Decrease (Increase) in account receivable 102,782 102,782 102,782 565,299 565,299 565,299
Increase (Decrease) in income taxes payable 94,139 94,139 94,139 94,139 94,139 94,139 94,139 94,139 94,139 94,139 135,795 1,129,669
Depreciation expense 53,107 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108 53,108
-
549,199 622,331 623,901 716,420 358,592 360,615 353,507 172,380 165,727 217,849 1,235,657
Net cash provided by operating activities 204,482
Cash flows from investing activities
Net cash used in investing activities
Cash flows from financing activities
Cash paid for interest expense 183,465 181,713 179,943 178,156 176,351 174,527 172,686 170,826 168,947 167,050 165,134 163,198
Net cash used in financing activities 183,465 181,713 179,943 178,156 176,351 174,527 172,686 170,826 168,947 167,050 165,134 163,198
-
732,664 804,044 803,844 894,576 534,943 535,143 526,193 341,327 332,777 382,983 1,398,855
Net increase (decrease) in cash 33,656

Cash balance at beginning of the month 1,246,373 1,620,360 2,065,727 2,510,894 3,046,792 3,223,057 3,399,523 3,567,038 3,174,704 3,157,354 3,131,453 3,114,103
Cash balance at ended of month 1,979,037 2,424,404 2,869,571 3,405,470 3,581,735 3,758,200 3,925,715 3,533,381 3,516,031 3,490,131 3,514,436 4,512,958

5.1.5 Loan Loan Principal Amount 25,000,000

Annual Interest Rate Year 12.00%
Now MlR =7.75 %
Loan Period in Years 10
Monthly Payments 358,677.37
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Table 5-22
5.1.6 Total Sale
Total Sale of 5 years

Sale, 2011 Beginning JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Cash 8,333,198 2,482,523 2,482,523 3,043,093 3,043,093 2,082,116 2,082,116 2,082,116 2,082,116 3,123,175 3,123,175 3,203,256 3,203,256
Accounts
Receivable - 1,063,939 1,063,939 1,304,183 1,304,183 892,336 892,336 892,336 892,336 1,338,503 1,338,503 1,372,824 1,372,824
Total Sale 8,333,198 3,546,462 3,546,462 4,347,276 4,347,276 2,974,452 2,974,452 2,974,452 2,974,452 4,461,678 4,461,678 4,576,080 4,576,080

Sale, 2012 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Cash 3,523,582 3,523,582 3,523,582 3,523,582 1,761,791 1,761,791 1,761,791 1,761,791 3,523,582 3,523,582 3,523,582 3,523,582
Accounts
Receivable 1,510,106 1,510,106 1,510,106 1,510,106 755,053 755,053 755,053 755,053 1,510,106 1,510,106 1,510,106 1,510,106
Total Sale 5,033,688 5,033,688 5,033,688 5,033,688 2,516,844 2,516,844 2,516,844 2,516,844 5,033,688 5,033,688 5,033,688 5,033,688

Sale, 2013 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Cash 3,875,940 3,875,940 3,875,940 3,875,940 1,937,970 1,937,970 1,937,970 1,937,970 3,875,940 3,875,940 3,875,940 3,875,940
Accounts
Receivable 1,661,117 1,661,117 1,661,117 1,661,117 830,559 830,559 830,559 830,559 1,661,117 1,661,117 1,661,117 1,661,117
Total Sale 5,537,057 5,537,057 5,537,057 5,537,057 2,768,528 2,768,528 2,768,528 2,768,528 5,537,057 5,537,057 5,537,057 5,537,057

Sale, 2014 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Cash 4,263,534 4,263,534 4,263,534 4,263,534 2,131,767 2,131,767 2,131,767 2,131,767 4,263,534 4,263,534 4,263,534 4,263,534
Accounts
Receivable 1,827,229 1,827,229 1,827,229 1,827,229 913,614 913,614 913,614 913,614 1,827,229 1,827,229 1,827,229 1,827,229
Total Sale 6,090,762 6,090,762 6,090,762 6,090,762 3,045,381 3,045,381 3,045,381 3,045,381 6,090,762 6,090,762 6,090,762 6,090,762

Sale, 2015 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Cash 4,689,887 4,689,887 4,689,887 4,689,887 2,344,944 2,344,944 2,344,944 2,344,944 4,689,887 4,689,887 4,689,887 4,689,887
Accounts
Receivable 2,009,952 2,009,952 2,009,952 2,009,952 1,004,976 1,004,976 1,004,976 1,004,976 2,009,952 2,009,952 2,009,952 2,009,952
Total Sale 6,699,839 6,699,839 6,699,839 6,699,839 3,349,919 3,349,919 3,349,919 3,349,919 6,699,839 6,699,839 6,699,839 6,699,839
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5.2.3.1 NPV (net present

Investment value)
Criteria

5.2.1 NPV

Net Present Value (NPV) is a way of comparing the value of money now with the
value of money in the future. A dollar today is worth more than a dollar in the future, because
inflation erodes the buying power of the future money, while money available today can be
invested and grow.

NPV = 128,275,797

NPV > 0

This project we can accept.

Advantages and Disadvantages of the NPV Method:

Advantages

 Consistent with shareholder wealth maximization: Added net present values generated
by investments are represented in higher stock prices.
 Consider both magnitude and timing of cash flows
 Indicates whether a proposed project will yield the investor’s required rate of return
Disadvantage

 Many people find it difficult to work with a dollar return rather than a percentage
return
(Source: http://www.investopedia.com/study-guide/cfa-exam/level-1/corporate-
finance/cfa13.asp)

5.2.2 IRR

Internal rate of return (IRR) is a rate of return on an investment. The IRR of a project
is the discount rate that will give it a net present value of zero.

IRR = 2

2 > 0.12

This project can be accept

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Advantages and Disadvantages of IRR

Advantages

 People feel more comfortable with IRR

 Considers both the magnitude and the timing of cash flows
Disadvantage

 Multiple internal rates of return with unconventional cash flows any change in sign
(+,-) in period cash flows produces as many IRR’s as there are changes in the cash
flow directions of the investment.
 Lending or borrowing. The IRR does not distinguish between a lending (investing) or
a borrowing (borrow and invest) situation, whereas the NPV clearly points out the
negative aspects of the borrowing strategy

(Source: http://www.investopedia.com/study-guide/cfa-exam/level-1/corporate-
finance/cfa13.asp)

5.2.3 Payback period

The payback period is both conceptually simple and easy to calculate. It is also a
seriously flawed method of evaluating investments.

PB = 0.69 year

Advantages

 Measure of risk and liquidity

 Useful for evaluating small projects
Disadvantages

 Ignores the time value of money

 Ignores cash flows after the payback period
 Objective not consistent with shareholder wealth maximization

(Source: http://faculty.kfupm.edu.sa/FINEC/mfaraj/fin301/notes/Ch7.pdf)
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5.2.4 Break-event point

Table 5-30
Breakeven Point

Break-even point Price per Unit

Sales price RSS 142.00

Sales price STR 138.00

Low Cost 75

High Cost 80

Low Profits RSS 67.00

Low Profits STR 63.00

High Profits RSS 62.00

High Profits STR 58.00

Low Break-event point RSS 1.12

Low Break-event point STR 1.19

High Break-event point RSS 1.29

High Break-event point STR 1.38

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Chapter 6

Risk Management
 P a g e | 165
Risk Management

6.1 Internal Analysis

Risks within the Thai North Rubber company, we can control but how risk can happen?, most
of the risk occurs within the company.
The company has the Operating Risk, Integrity Risk, and Technology Risk. Our
company operates by separate following characteristics of the risk.
There are
 Human Resources
 Product Development
 Efficiency
 Capacity
 Product / Service Failure
 Health and Safety
 Manufacturing Equipment Modernization
 Development of New Produces
 Changing in Business Practices

The risks are often internal on the company such as

6.1.1 Human resource

Risks occur at any time. If we look at those matters, we will be able to
manage it. All problems can be solved, it also therefore the Thai North Rubber
company have the human resource management to more value in the organization.
For achieve the company's business. It must be developed and improved over time.
For this reason the company has difference the department. In terms of personal
selection employee, in this section we cannot know that how employees come to work
such as Person Competency, knowledge and education, talent. Experience in working
or through training before working. The company can solve immediate problems
correctly. This is the most important of the reason. So when we select the personal to
working we cannot predict what is happening or will happen with each employee. So
the companies will be able to solve these risks is encouragement of the staff. The
 P a g e | 166

company's welfare when they get these things. He will be expressed in terms of
working in a better way. The last can make a job well. And get maximum satisfaction
to the company, and the employees themselves. Each the positions are different
mutual benefit.

6.1.2 The limits of the employee

All employees in the company would have limited the ability in the internal
environment. Which may have Knowledge and ability to work according to plan or goal to
the company successfully but to the various activities will be faced with the changes always
on time? Under changing conditions changes to the new environment may be violent that
exceeds the capabilities of the executives .It would risk performing their duties. That will lead
to failure at any time in the practice these jobs. Therefore the executives should be interested
in some details of the employees is important.

6.1.3 Changing operating environment.

Conditions of operation of the company to success or failure depend on the

environment on economy, society and politics, which have to changing on always time. Risk
management organization that will certainly have to face another variation is to change the
economic, social and political environment that may lead to failure as well.

6.1.4 Health and Safety

The company operates for confidence to good health. Good the Weather and
pollution, including medical employees, a training seminar, use of equipment to secure the
places. Therefore, the company has been certified safe. Build the confidence to the employee
and customers. Along with maintaining equipment and care the equipment and related safety
equipment for such as all of employees will receive health care, and has been helping.
 P a g e | 167

6.2 External Analysis

6.2.1 Political Factor

According to the form of politics has the potential to become important to the general
business environment and domestic political institutions and political changes frequently and
security instability that often cause no rules changes and most changes are often affected lack
a stable image of politics in the support and plug pressure policy of government to channel
the business sustainable. For example, in the last 20 years, Thailand has changed the Prime
Minister from the political party differences and how they are the party in the country at
different so business in Thailand will need to review and analyze that thing happened and
what will follow in the policies that affect both direct and indirect business organizations and
their very often.

Generation to make trade operators will also need to study and attention to factors that
regulates international trade agreements such as to make free international trade and
agreements are often the leading economic countries than any other segment. Sometime a
majority interest may be vested in the company's operators are foreigners (Host Country
Enterprises) more than the business operators who area (Home Country Enterprises).

(Source: http://www.arip.co.th/businessnews.php?id=409693)

6.2.2 Economic Factor

6.2.2.1 Economic growth

THAILAND GDP GROWTH RATE

The Gross Domestic Product (GDP) in Thailand contracted 0.20 percent in the third quarter
of 2010 over the previous quarter. From 1993 until 2010, Thailand's average quarterly GDP
Growth was 0.97 percent reaching an historical high of 7.10 percent in September of 1993
and a record low of -5.10 percent in March of 1998. The economy of Thailand is an emerging
economy which is heavily export-dependent, with exports accounting for more than two
thirds of gross domestic product (GDP). Well-developed infrastructure, a free-enterprise
economy, and generally pro-investment policies, made Thailand one of East Asia's best
 P a g e | 168

performers. However, overall economic growth has fallen sharply in 2008 and 2009 as global
downturn and persistent political crisis stalled infrastructure mega-projects, eroded investor
and consumer confidence. This page includes: Thailand GDP Growth Rate chart, historical
data and news.
Exhibit 6-1
GDP Grow Rate

Country Interest Rate Growth Rate Inflation Rate Jobless Rate Current Account Exchange Rate

Thailand 2.25% -0.20% 2.80% 1.20% 2909 31.0300

Figure 6-1
QGDP Grow Chart

(Source: Gross Domestic Product: Q2/2010, published August 23, 2010, Office of National
Economic and Social Development Board)

Gross domestic product at current market prices valued at 2,494.4 billion baht in
2Q2010. After deducting 153.3 billion baht of net factor income from the rest of the world,
the gross national product (GNP) registered at the value of 2,341.1 billion baht, rising at the
rate of 6.8% in real terms. Balance of trade and services at current market prices registered a
surplus with the value of 158.7 billion baht. After incorporated net factor income and net
 P a g e | 169

current transfer from the rest of the world, current accounts showed a surplus with the value
of 42.0 billion baht.

GDP implicit price deflator in 2Q2010 increased by 3.8% compared to 4.5% in

previous quarter. Meanwhile, producer price index and consumer price index increased by
9.3% and 3.3% compared to 12.0% and 3.8% in previous quarter, respectively.

Economic growth is the increase in value of the goods and services produced by an
economy. It is conventionally measured as the percent rate of increase in real gross domestic
product, or GDP. Growth is usually calculated in real terms, i.e. inflation-adjusted terms, in
order to net out the effect of inflation on the price of the goods and services produced. In
economics, "economic growth" or "economic growth theory" typically refers to growth of
potential output, i.e., production at "full employment," which is caused by growth in
aggregate demand or observed output. As economic growth is measured as the annual percent
change of National Income it has all the advantages and drawbacks of that level variable. But
people tend to attach a particular value to the annual percentage change, perhaps since it tells
them what happens to their pay check.

The real GDP per capita of an economy is often used as an indicator of the average standard
of living of individuals in that country, and economic growth is therefore often seen as
indicating an increase in the average standard of living. However, there are some problems in
using growth in GDP per capita to measure general well being.GDP per capita does not
provide any information relevant to the distribution of income in a country. GDP per capita
does not take into account negative externalities from pollution consequent to economic
growth. Thus, the amount of growth may be overstated once we take pollution into account.
GDP per capita does not take into account positive externalities that may result from services
such as education and health. GDP per capita excludes the value of all the activities that take
place outside of the market place (such as cost-free leisure activities like hiking).

Economists are well aware of these deficiencies in GDP, thus, it should always be viewed
merely as an indicator and not an absolute scale. Economists have developed mathematical
tools to measure inequality, such as the Gini Coefficient. There are also alternate ways of
measurement that consider the negative externalities that may result from pollution and
resource depletion (see Green Gross Domestic Product.)The flaws of GDP may be important
 P a g e | 170

when studying public policy; however, for the purposes of economic growth in the long run it
tends to be a very good indicator. There is no other indicator in economics which is as
universal or as widely accepted as the GDP, follow Economic growth is exponential, where
the exponent is determined by the PPP annual GDP growth rate. Thus, the differences in the
annual growth from country A to country B will multiply up over the years. For example, a
growth rate of 5% seems similar to 3%, but over two decades, the first economy would have
grown by 165%, the second only by 80%

A Factor of stable economic environment and impact on business opportunities and

threats that include economic stability inflation interest rates of tax rates, income distribution,
and total revenue per household. Growth of the industry is important currency exchange rates
between countries. Growth of the population labor market and unemployment rate. Policy
changes and economic problems government policy to create economic stability (Including
the policy to support export and import goods from foreign countries, respectively) and that
the majority of attention is products in the initial (Gross Domestic Product, GDP) because
GDP is a factor that led to economic growth is and what impact the power consumption
(Purchasing Power) of the population as a whole in any direction

Entrepreneurs must understand that before the economic environment has the
potential to be both positive and negative to which the company will success of failure of
strategy of the company as well or used as a key business opportunities or obstacles.

(Source: http://www.tradingeconomics.com/Economics/GDP-Growth.aspx?Symbol=THB)

6.2.3 Technological Factor

Technology Risk

Technology permeates the operations of an entire institution and therefore technology

risk cannot be compartmentalized as a process that focuses on a particular area. Technology
enables key processes that a company uses to develop, deliver, and manage its products,
services, and support operations. Understanding the role that technology plays in enabling
core business operations establishes the framework for understanding where relevant
technology risks lie.
 P a g e | 171

By understanding the role that technology plays in supporting various business

functions, company management is in a better position to determine the relative importance
of these functions and prioritize the systems, applications, and data involved. Technology
risks are present throughout the company and must be addressed as a whole.

Identifying vulnerabilities and threats provides company management with a view of

the risks faced by the company given the enabling role of information technology. Once these
risks have been identified, an appropriate technology risk management strategy can be
developed and implemented.

(Source: http://www.allaboutrisk.com/technology_risk/index.asp)
 P a g e | 172

Chapter 7

Conclusion
 P a g e | 173
Conclusion

Thai-North Rubber Industry is the rubber processing project that operates in

Chiangrai province, Chiangkhong district. Our project business is a factory of rubber which
has many types for sale, respond the higher demand in Chinese market. The North of
Thailand is possible for this project to make a higher profit in rubber industry.

We found with many information can be support for market feasibility of this project
like which the higher number of rubber export in Thailand, increasing in demand of rubber in
China and growth rate of rubber plant in Chiangrai each year. Thai-North Rubber also has
policy to production with higher quality and tries to develop standard and quality of basic
processing rubber to meet the demand as much. We also provide with only Rubber Smoked
Sheet and Block rubber product, mainly in higher class of rubber which are RSS1 (Extra light
color), RSS1, RSS2, STR XL, STR 5L, STR 5 and STR 5CV**. We focus our product
directly to only one main target with China (Specialization Market). And the sale forecast
feasibility of the potential market, Thai-North Rubber Industry can generate sale 0.45% of
4% of North export in Thailand and increase 10% every year.

Thai-North Rubber Industry is register as the company limited according to the

Department of Business Development. We buy the land and need to build our building, there
are 2 mainly zone which are administration zone and one for Manufacturing zone for
production in all of 2 products, are relate together. We find out the source of funding from the
investor 25,000,000 baht that we will offer the interest rate about 12% per year and will pay
all of the interest rate at the end of year 5 that we guarantee the all of principal of the investor
by we have the backup plan for the investor In the financial analysis that represent in 3
financial statement, Thai-North Rubber Industry have strong in the financial status that also
represent in the ratio analysis.

Thai-North Rubber has a strong in the financial status that also represent in the ratio
analysis, although we have the many risk which is the economical risk, political risk,
operating risk and etc., it can be acceptable because we also cope with this risk from using
the risk management.
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 Appendix

Table Loan Repayment

Cumulative Cumulative
Year Month Balance Payment Principal Interest
Principal Interest
1 1 25,000,000 358,677 108,677 250,000 108,677 250,000
2 24,891,323 358,677 109,764 248,913 218,442 498,913
3 24,781,558 358,677 110,862 247,816 329,303 746,729
4 24,670,697 358,677 111,970 246,707 441,274 993,436
5 24,558,726 358,677 113,090 245,587 554,364 1,239,023
6 24,445,636 358,677 114,221 244,456 668,585 1,483,479
7 24,331,415 358,677 115,363 243,314 783,948 1,726,794
8 24,216,052 358,677 116,517 242,161 900,465 1,968,954
9 24,099,535 358,677 117,682 240,995 1,018,147 2,209,949
10 23,981,853 358,677 118,859 239,819 1,137,006 2,449,768
11 23,862,994 358,677 120,047 238,630 1,257,053 2,688,398
12 23,742,947 358,677 121,248 237,429 1,378,301 2,925,827
2 13 23,621,699 358,677 122,460 236,217 1,500,761 3,162,044
14 23,499,239 358,677 123,685 234,992 1,624,446 3,397,037
15 23,375,554 358,677 124,922 233,756 1,749,368 3,630,792
16 23,250,632 358,677 126,171 232,506 1,875,539 3,863,299
17 23,124,461 358,677 127,433 231,245 2,002,972 4,094,543
18 22,997,028 358,677 128,707 229,970 2,131,679 4,324,513
19 22,868,321 358,677 129,994 228,683 2,261,673 4,553,197
20 22,738,327 358,677 131,294 227,383 2,392,967 4,780,580
21 22,607,033 358,677 132,607 226,070 2,525,575 5,006,650
22 22,474,425 358,677 133,933 224,744 2,659,508 5,231,395
23 22,340,492 358,677 135,272 223,405 2,794,780 5,454,799
24 22,205,220 358,677 136,625 222,052 2,931,405 5,676,852
3 25 22,068,595 358,677 137,991 220,686 3,069,397 5,897,538
26 21,930,603 358,677 139,371 219,306 3,208,768 6,116,844
27 21,791,232 358,677 140,765 217,912 3,349,533 6,334,756
28 21,650,467 358,677 142,173 216,505 3,491,706 6,551,261
29 21,508,294 358,677 143,594 215,083 3,635,300 6,766,344
30 21,364,700 358,677 145,030 213,647 3,780,331 6,979,991
31 21,219,669 358,677 146,481 212,197 3,926,811 7,192,187
32 21,073,189 358,677 147,945 210,732 4,074,757 7,402,919
33 20,925,243 358,677 149,425 209,252 4,224,182 7,612,172
34 20,775,818 358,677 150,919 207,758 4,375,101 7,819,930
35 20,624,899 358,677 152,428 206,249 4,527,529 8,026,179
 Cumulative Cumulative
Year Month Balance Payment Principal Interest
Principal Interest
36 20,472,471 358,677 153,953 204,725 4,681,482 8,230,903
4 37 20,318,518 358,677 155,492 203,185 4,836,974 8,434,089
38 20,163,026 358,677 157,047 201,630 4,994,021 8,635,719
39 20,005,979 358,677 158,618 200,060 5,152,639 8,835,779
40 19,847,361 358,677 160,204 198,474 5,312,843 9,034,252
41 19,687,157 358,677 161,806 196,872 5,474,648 9,231,124
42 19,525,352 358,677 163,424 195,254 5,638,072 9,426,377
43 19,361,928 358,677 165,058 193,619 5,803,130 9,619,997
44 19,196,870 358,677 166,709 191,969 5,969,839 9,811,965
45 19,030,161 358,677 168,376 190,302 6,138,215 10,002,267
46 18,861,785 358,677 170,060 188,618 6,308,274 10,190,885
47 18,691,726 358,677 171,760 186,917 6,480,034 10,377,802
48 18,519,966 358,677 173,478 185,200 6,653,512 10,563,002
5 49 18,346,488 358,677 175,212 183,465 6,828,725 10,746,467
50 18,171,275 358,677 176,965 181,713 7,005,689 10,928,179
51 17,994,311 358,677 178,734 179,943 7,184,423 11,108,122
52 17,815,577 358,677 180,522 178,156 7,364,945 11,286,278
53 17,635,055 358,677 182,327 176,351 7,547,272 11,462,629
54 17,452,728 358,677 184,150 174,527 7,731,422 11,637,156
55 17,268,578 358,677 185,992 172,686 7,917,414 11,809,842
56 17,082,586 358,677 187,852 170,826 8,105,265 11,980,668
57 16,894,735 358,677 189,730 168,947 8,294,995 12,149,615
58 16,705,005 358,677 191,627 167,050 8,486,622 12,316,665
59 16,513,378 358,677 193,544 165,134 8,680,166 12,481,799
60 16,319,834 358,677 195,479 163,198 8,875,645 12,644,997
6 61 16,124,355 358,677 197,434 161,244 9,073,079 12,806,241
62 15,926,921 358,677 199,408 159,269 9,272,487 12,965,510
63 15,727,513 358,677 201,402 157,275 9,473,889 13,122,785
64 15,526,111 358,677 203,416 155,261 9,677,305 13,278,046
65 15,322,695 358,677 205,450 153,227 9,882,756 13,431,273
66 15,117,244 358,677 207,505 151,172 10,090,261 13,582,446
67 14,909,739 358,677 209,580 149,097 10,299,841 13,731,543
68 14,700,159 358,677 211,676 147,002 10,511,517 13,878,545
69 14,488,483 358,677 213,793 144,885 10,725,309 14,023,429
70 14,274,691 358,677 215,930 142,747 10,941,240 14,166,176
71 14,058,760 358,677 218,090 140,588 11,159,329 14,306,764
72 13,840,671 358,677 220,271 138,407 11,379,600 14,445,171
7 73 13,620,400 358,677 222,473 136,204 11,602,073 14,581,375
74 13,397,927 358,677 224,698 133,979 11,826,772 14,715,354
75 13,173,228 358,677 226,945 131,732 12,053,717 14,847,086
76 12,946,283 358,677 229,215 129,463 12,282,931 14,976,549
77 12,717,069 358,677 231,507 127,171 12,514,438 15,103,720
78 12,485,562 358,677 233,822 124,856 12,748,260 15,228,575
 Cumulative Cumulative
Year Month Balance Payment Principal Interest
Principal Interest
79 12,251,740 358,677 236,160 122,517 12,984,420 15,351,093
80 12,015,580 358,677 238,522 120,156 13,222,941 15,471,249
81 11,777,059 358,677 240,907 117,771 13,463,848 15,589,019
82 11,536,152 358,677 243,316 115,362 13,707,164 15,704,381
83 11,292,836 358,677 245,749 112,928 13,952,913 15,817,309
84 11,047,087 358,677 248,206 110,471 14,201,119 15,927,780
8 85 10,798,881 358,677 250,689 107,989 14,451,808 16,035,769
86 10,548,192 358,677 253,195 105,482 14,705,003 16,141,251
87 10,294,997 358,677 255,727 102,950 14,960,731 16,244,201
88 10,039,269 358,677 258,285 100,393 15,219,015 16,344,593
89 9,780,985 358,677 260,868 97,810 15,479,883 16,442,403
90 9,520,117 358,677 263,476 95,201 15,743,359 16,537,604
91 9,256,641 358,677 266,111 92,566 16,009,470 16,630,171
92 8,990,530 358,677 268,772 89,905 16,278,242 16,720,076
93 8,721,758 358,677 271,460 87,218 16,549,702 16,807,294
94 8,450,298 358,677 274,174 84,503 16,823,876 16,891,797
95 8,176,124 358,677 276,916 81,761 17,100,792 16,973,558
96 7,899,208 358,677 279,685 78,992 17,380,478 17,052,550
9 97 7,619,522 358,677 282,482 76,195 17,662,960 17,128,745
98 7,337,040 358,677 285,307 73,370 17,948,267 17,202,116
99 7,051,733 358,677 288,160 70,517 18,236,427 17,272,633
100 6,763,573 358,677 291,042 67,636 18,527,469 17,340,269
101 6,472,531 358,677 293,952 64,725 18,821,421 17,404,994
102 6,178,579 358,677 296,892 61,786 19,118,312 17,466,780
103 5,881,688 358,677 299,860 58,817 19,418,173 17,525,597
104 5,581,827 358,677 302,859 55,818 19,721,032 17,581,415
105 5,278,968 358,677 305,888 52,790 20,026,919 17,634,205
106 4,973,081 358,677 308,947 49,731 20,335,866 17,683,935
107 4,664,134 358,677 312,036 46,641 20,647,902 17,730,577
108 4,352,098 358,677 315,156 43,521 20,963,058 17,774,098
10 109 4,036,942 358,677 318,308 40,369 21,281,366 17,814,467
110 3,718,634 358,677 321,491 37,186 21,602,857 17,851,653
111 3,397,143 358,677 324,706 33,971 21,927,563 17,885,625
112 3,072,437 358,677 327,953 30,724 22,255,516 17,916,349
113 2,744,484 358,677 331,233 27,445 22,586,749 17,943,794
114 2,413,251 358,677 334,545 24,133 22,921,294 17,967,927
115 2,078,706 358,677 337,890 20,787 23,259,184 17,988,714
116 1,740,816 358,677 341,269 17,408 23,600,453 18,006,122
117 1,399,547 358,677 344,682 13,995 23,945,135 18,020,117
118 1,054,865 358,677 348,129 10,549 24,293,264 18,030,666
119 706,736 358,677 351,610 7,067 24,644,874 18,037,733
120 355,126 358,677 355,126 3,551 25,000,000 18,041,285
Daily interest rate of commercial banks

Loan Rates Commercial Banks as of 17 January 2011

Bank MOR MLR MRR Ceiling Default Credit Card

Commercial Banks registered in Thailand

Bangkok Bank 6.6250 6.3750 7.0000 11.5000 15.0000 20.0000
Krung Thai Bank 6.6250 6.3750 7.1000 14.1000 18.0000 -
Kasikornbank 6.6300 6.3700 7.0500 22.0500 24.0500 20.0000
The Siam Commercial Bank 6.6250 6.3750 7.0000 19.0000 22.0000 20.0000
Bank of Ayudhya 6.8750 6.5000 6.9950 21.0000 28.0000 -
TMB Bank 7.0000 6.7500 7.3750 28.0000 28.0000 20.0000
The Siam City Bank 7.0000 6.5000 7.0000 25.0000 28.0000 20.0000
United Overseas Bank (Thai) Company Ltd. 7.4800 6.9800 7.7300 28.0000 28.0000 20.0000
CIMB THAI Bank 7.0000 6.7500 7.3750 28.0000 28.0000 -
Standard Chartered Bank (Thai) 8.5000 8.2500 11.0000 28.0000 28.0000 20.0000
Thanachart Bank 7.0000 6.5000 8.3750 15.8750 18.0000 15.0000
TISCO Bank 6.7500 6.5000 7.0000 28.0000 28.0000 -
Mega International Commercial Bank 8.2500 7.0000 7.5000 12.0000 15.0000 -
Kiatnakin Bank 6.9000 6.6200 7.1500 28.0000 28.0000 -
Land and Houses Retail Bank 7.1250 6.5000 7.3750 18.0000 21.0000 -
Industrial and Commercial Bank of China (Thai) 7.2500 7.0000 7.5000 21.0000 21.0000 -
The Thai Credit Retail Bank 8.1500 7.9000 8.4000 35.0000 35.0000 -

Average of Commercial Banks registered in Thailand 7.1638 6.7791 7.5838 22.5015 24.2971 19.3750
 Bank MOR MLR MRR Ceiling Default Credit Card

Foreign Bank Branches

The Bank of Tokyo-Mitsubishi UFJ 10.7500 6.7500 11.0000 25.0000 25.0000 -
Citibank - 7.2500 - 20.9900 45.6300 20.0000
Sumitomo Mitsui Banking Corporation 9.8750 6.3750 7.8750 14.7500 15.0000 -
HSBC 8.2500 8.2500 8.2500 21.0000 32.2500 19.0000 - 20.0000
Deutsche Bank AG. 8.2500 8.2500 - 20.0000 22.0000 -
JP Morgan Chase Bank 7.0000 7.0000 - 14.0000 14.0000 -
Credit Agricole Corporate and Investment Bank 8.0000 8.0000 8.7500 13.0000 13.2500 -
Bank of America, National Association 8.0000 7.5000 10.5000 13.5000 22.0000 -
Indian Overseas Bank 7.7500 7.5000 8.0000 13.2500 15.0000 -
The Royal Bank of Scotland N.V. 8.5000 8.2500 - 25.0000 25.0000 -
RHB Bank Berhad 9.2500 9.0000 9.2500 20.0000 20.0000 -
Oversea Chinese Banking Corporation 7.5000 7.5000 - 15.0000 25.0000 -
The Bank of China 8.2500 6.7500 7.5000 11.7500 14.0000 -
Mizuho Corporate Bank, Ltd. 10.7500 6.7500 7.7500 50.0000 50.0000 -
BNP Paribas 8.0000 8.0000 - 8.0000 19.0000 -

Average of Foreign Bank Branches 8.5804 7.5417 8.7639 19.0160 23.8087 20.0000

Information as of 12.00 p.m.

* Since July 1, 2005 Exclude Interest rates of Personal Loan under Supervision
" - " means no service for this type of transaction.
MLR=Minimum loan rate, MOR =Minimum over draft rate, MRR=Minimum retail rate

(Source: http://www.bot.or.th/english/statistics/financialmarkets/interestrate/_layouts/application/interest_rate/IN_Rate.aspx#)
 5.1.7 Source of Cash

Source of Cash, 2011

Description Beginning Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash 8,346,958 1,396,419 1,396,419 1,711,740 1,711,740 1,171,190 1,171,190 1,171,190 1,171,190 1,756,786 1,756,786 1,801,831 1,801,831
AR - 598,465 598,465 733,603 733,603 501,939 501,939 501,939 501,939 752,908 752,908 772,213 772,213
Total cash receive 9,743,377 8,196,446 7,742,665 7,645,175 6,995,385 6,847,680 6,698,975 6,309,856 6,512,083 6,327,315 6,179,044 6,255,695

Cost 1,545,222 1,545,222 1,787,396 1,787,396 1,432,199 1,432,199 1,432,199 1,432,199 1,821,992 1,821,992 1,856,589 2,396,589
Sale - - - 3,000 - 1,000 1,000 4,000 1,200 1,000 1,200 4,500
Administration expense 324,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622
Pre opening 701,650 - - - - - - - - - - -
Supplies Expense 13,760 - - - - - - - - - - -
Loan 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677
Total cash paid 2,943,351 2,165,521 2,407,695 2,419,445 2,052,498 2,053,498 2,062,248 2,056,498 2,443,492 2,452,042 2,478,088 3,021,388
Total cash 6,800,026 6,030,925 5,334,969 5,225,729 4,942,887 4,794,182 4,636,727 4,253,358 4,068,591 3,875,274 3,700,956 3,234,307

Source of Cash, 2012

Description Otc- 11 Nov-11 Dec-11 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash 1,982,015 1,982,015 1,982,015 1,982,015 991,007 991,007 991,007 991,007 1,982,015 1,982,015 1,982,015 1,982,015
Account Receivable 752,908 772,213 772,213 849,435 849,435 849,435 849,435 424,717 424,717 424,717 424,717 849,435 849,435 849,435 849,435
Total cash receive 5,969,230 6,015,354 6,132,859 6,327,384 5,518,353 5,432,256 5,346,360 4,826,795 5,303,189 5,072,997 4,834,255 5,028,781
Cost 2,016,425 2,016,425 2,016,425 2,016,425 1,306,040 1,306,040 1,306,040 1,306,040 2,016,425 2,016,425 2,016,425 2,556,425
Sale 200 - 200 4,000 200 - 200 4,000 200 - 200 4,000
Administration
319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622
expense
Pre opening - - - - - - - - - - - -
Loan 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677
Supply Expense 13,760 - - - - - - - - - - -
-
Tax
82,704
Total cash paid 2,708,104 2,636,724 2,636,924 2,649,474 1,926,539 1,926,339 1,935,289 1,930,339 2,636,924 2,645,474 2,636,924 3,098,019
Total cash 3,875,274 3,700,956 3,234,307 3,261,126 3,378,631 3,495,935 3,677,911 3,591,814 3,505,917 3,411,071 2,896,457 2,666,265 2,427,523 2,197,331 1,930,761
 Source of Cash, 2013
Otc -12 Nov-12 Dec-12 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash 2,180,216 2,180,216 2,180,216 2,180,216 1,090,108 1,090,108 1,090,108 1,090,108 2,180,216 2,180,216 2,180,216 2,180,216
Account
849,435 849,435 849,435 934,378 934,378 934,378 934,378 467,189 467,189 467,189 467,189 934,378 934,378 934,378 934,378
Receivable
Total cash
4,960,412 5,106,140 5,323,248 5,625,099 4,824,793 4,817,959 4,811,326 4,328,554 4,941,339 4,776,001 4,602,114 4,903,965
receive

Cost 2,192,244 2,192,244 2,192,244 2,192,244 1,410,820 1,410,820 1,410,820 1,410,820 2,192,244 2,192,244 2,192,244 2,732,244
Sale 200 - 200 3,500 200 - 200 3,500 200 - 200 3,500
Administration
319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622
expense
Pre opening - - - - - - - - - - - -
Supply Expense 13,760 - - - - - - - - - - -
Lone 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677
Tax 295,432
Total cash paid 2,883,923 2,812,543 2,812,743 2,824,793 2,031,320 2,031,120 2,040,070 2,034,620 2,812,743 2,821,293 2,812,743 3,651,475
Total cash 2,427,523 2,197,331 1,930,761 2,076,489 2,293,597 2,510,505 2,800,306 2,793,473 2,786,840 2,771,256 2,293,934 2,128,596 1,954,708 1,789,370 1,252,490

Source of Cash, 2014

Otc
Nov-13 Dec-13
2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash 2,398,238 2,398,238 2,398,238 2,398,238 1,199,119 1,199,119 1,199,119 1,199,119 2,398,238 2,398,238 2,398,238 2,398,238
Accout Receiable 934,378 934,378 934,378 1,027,816 1,027,816 1,027,816 1,027,816 513,908 513,908 513,908 513,908 1,027,816 1,027,816 1,027,816 1,027,816
Total cash receive 4,585,106 4,838,572 5,163,419 5,581,504 4,788,419 4,868,776 4,949,332 4,507,031 5,269,298 5,173,474 5,069,101 5,487,185

Cost 2,387,470 2,387,470 2,387,470 2,387,470 1,526,079 1,526,079 1,526,079 1,526,079 2,387,470 2,387,470 2,387,470 2,927,470
Sale 200 0 200 3500 200 0 200 3500 200 0 200 3500
Administration expense 319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622
Pre opening 0 0 0 0 0 0 0 0 0 0 0 0
Supply Ex 13,760 0 0 - - - - - - - - -
lone 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677
Tax 689543
Total cash paid 3,079,149 3,007,769 3,007,969 3,020,019 2,146,579 2,146,379 2,155,329 2,149,879 3,007,969 3,016,519 3,007,969 4,240,812
Ttotal cash 1954708 1789370 1252489.717 1,505,956 1,830,803 2,155,450 2,561,484 2,641,841 2,722,397 2,794,004 2,357,152 2,261,328 2,156,955 2,061,131 1,246,373
 Source of Cash, 2015
Otc 2013 Nov-13 Dec-13 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash 2,638,061 2,638,061 2,638,061 2,638,061 1,319,031 1,319,031 1,319,031 1,319,031 2,638,061 2,638,061 2,638,061 2,638,061

Account Receivable 1,027,816 1,027,816 1,027,816 1,130,598 1,130,598 1,130,598 1,130,598 565,299 565,299 565,299 565,299 1,130,598 1,130,598 1,130,598 1,130,598

Total cash receive 4,912,251 5,286,238 5,731,604 6,279,553 5,496,421 5,672,686 5,849,151 5,451,367 6,378,064 6,360,714 6,334,814 6,882,762

Cost 2,600,212 2,600,212 2,600,212 2,600,212 1,652,864 1,652,864 1,652,864 1,652,864 2,600,212 2,600,212 2,600,212 3,140,212

Sale 200 - 200 3,500 200 - 200 3,500 200 - 200 3,500
Administration
319,042 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622 270,372 261,622 261,622
Expense
Pre opening - - - - - - - - - - - -

Supply Expense 13,760 - - - - - - - - - - -

Lone 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677

Tax 1,129,669

Total cash paid 3,291,891 3,220,511 3,220,711 3,232,761 2,273,363 2,273,163 2,282,113 2,276,663 3,220,711 3,229,261 3,220,711 4,893,679

Total cash 2,156,955 2,061,131 1,246,373 1,620,360 2,065,727 2,510,894 3,046,792 3,223,057 3,399,523 3,567,038 3,174,704 3,157,354 3,131,453 3,114,103 1,989,083