Financial Support for innovative SMEs : Thailand Experiences

1. Financial Support for innovative SMEs : Thailand Experiences Mr. Wachira Kaewkor Director of SMEs Promotional Development Scheme Department, OSMEP APEC SME Innovation Seminar 25-28August 2009 Seoul Korea

2. SMEs Data • Action Plan • Registration • Service Provision • Service Provider Creation Network to Promote SMEs Supply Chain International Governmental & Private Units • Coordination • Action Plan • MOU Implementing & Supporting Mechanism Implementing & Supporting Mechanism • Board of SMEs Promotion • Executive Board of the Office of SMEs Promotion Regional Central Governor Ministry • Sectoral Strategies State Enterprise Local Ministerial Office OSMEP • Formulate Master & Action Plan • Create Mechanism in Implementing • Allocate Budget • Monitor and Evaluate Other Public Sector Agencies Academics • Policy / Action Plan Public Org. Local Admin. Agency Academic/ Expertise Institution • Projects under SMEs Promotion Action Plan Chamber of Comm./Fed Of Thai Industries/ Bankers’ Assoc. • SMEs University Provincial Industrial Federation • Community/ Local Product Provincial Chamber of Comm. Policy Mechanism OSMEP Regional offices - Implement - Report Operational Result - Identify Problem/Demand - Implement - Report Operational Result - Identify Problem/Demand

3. The Organizational Structure SMEs Promotional Development Scheme Department’s Structure Knowledge Based Financial Supports SMEs Promotional Development Scheme Department SMEs Promotional Development Division 1 SMEs Promotional Administration Division SMEs Promotional Operation Division SMEs Promotional Development Division 2

4. Monitoring System Incubation Center Advisory Services SMEs Growth Stage Later Stage Early Stage Strengthen SMEs Technology Development (Competitiveness) Product & Service Development Export Market Development Business Development Expansion Intellectual Property, Internationalization, Fund Venture Capital Fund Seed Fund Consultancy Fund Machine Fund Financial Support

5. Financial Support Model Machine Fund Approval Approval Public Organizations Consultancy Program Executive Board of OSMEP Board Of SME Promotion Intellectual Property Program Private Organizations Internationalization Program

6. Interest Subsidy 3% 5 years up to Machine Fund

7. MAIN OBJECTIVES Machine Fund Supporting Industry Development – Prototype Building, Reverse Engineering, Retro-fit and Testing Machine Modification Machine Fund System Installation Machine Replacement – Mainly focusing on productivity MAIN CONDITIONS OSMEP subsidizes 3% loan interest/yr. for 5 yrs. Thai- German Institute (TGI) is a major agency in technical analysis and evaluation (fee = 10,000 Baht) Financial Institution will consider loan approval to SMEs.

8. Project Partners : 9 Commercial Banks in Thailand Machine Fund

9. Machine Fund Model Apply Apply Machine Fund Technical Analysis By TGI team 9 9 BANKS Loan Approval Process 3% Subsidy for 5 years Apply Apply

10. Success Case I : Innovative SMEs in Machine Fund Project Essential Oil Plant Lanna Products Co.,Ltd. Mustard Essential Oil Evaporator System • Lanna’s main product is Mustard Essential Oil which production process generates many Mustard Slurry. • Machine Fund accomplished in supporting new innovation project that aims to collect more Essential Oil and recycled water from Mustard Slurry by installing Special Designed Evaporator Set. Moreover, the rest slurry from Evaporator will be dried by Spin Flash Dry and become fuel for Biomass Boiler. “With this project, all of waste from production will be fully collected and fully recycled as Energy for production again.” Fuel for Biomass Boiler Spin Flash Dry (Drying Machine)

11. TRANG PALM OIL Success Case II: Innovative SMEs in Machine Fund Project Palm oil production plant have a lot of waste water mainly consist of oil and protein, which are very good resource for Biogas system. Machine Fund here to support the Biogas Project, changing waste water to energy by microbial process. Electricity to Grid Line Bacteria change organic matter to gas, enrich with Methane, called Biogas. As the fuel of Engine, Biogas is turned to Electricity and sale to Grid line. Beyond the Biogas System, this project also install Boiler and Chiller which use exhausted hot air from Engine to generate steam and cool water, using in process of the factory. Waste Water from Palm Oil Factory With the lower organic in waste water after Biogas system, the problem of water treatment system are relief. Exhausted Gas for Boiler & Chiller 2 MW Gas Engine Biogas System

12. How much value SMEs get from the Machine Fund Project Imported Machine Reduction Cost Reduction Human Resource Development Productivity Increase

13. Grant up to 500,000 Baht Capacity Building FundFor Thai SMEs

14. MAIN OBJECTIVES To support SMEs in developing business in such areas as IP management, , and marketing Capacity Building Fund for Thai SMEs To enhance SMEs capabilities and standards to increase opportunities in the international market. Capacity Building Fund To add value to SMEs businesses, products and services. MAIN CONDITIONS Is a financial support given in form of a grant. The maximum subsidy is 50 % of the related expenses and not exceeding 500,000 THB. per enterprise.

15. A.) Consultancy Fund Capacity Building Fund for Thai SMEs Capacity Building Fund B.) Intellectual Property Fund C.) Internationalization Fund

16. Consultancy Fund

17. Consultancy Fund OBJECTIVES It is a financial support for SMEs consultancy on business system development, product/service development. Moreover, it supports SMEs that face entrepreneurial problems in management, accounting, financing and so on. CONDITIONS Capacity Building Fund Stage1 Business Diagnosis Process Maximum25,000THB. within Bangkok and vinicity. Maximum 35,000THB.in other provinces. Stage2 Consulting Process The subsidy is 50%of the related consulting expenses and not exceeding 250,000THB. Subsidy Process Reimbursement

18. Intellectual Property Fund

19. Intellectual Property Fund OBJECTIVES It is a financial support for SMEs in intellectual property registration both domestically and internationally as well as in acquiring licenses and buying from local IP owners. The Maximum Subsidy CONDITIONS Capacity Building Fund The Maximum Subsidy 50 % The Maximum Amount 500,000 THB. Subsidy Process Reimbursement IP Fund Buying IP IP Registration Acquiring Licenses International Domestic Domestic Domestic

20. Internationalization Fund

21. Internationalization Fund OBJECTIVES It is a financial support for SMEs in the internationalization process, which involves participation in international level for foreigntrade fairs, business matching, market research and survey. CONDITIONS Capacity Building Fund The Maximum Subsidy 50 % The Maximum Amount 250,000 THB. Subsidy Process Reimbursement Internationalization Fund Market Research and Survey Business Matching International Trade Fairs

22. Success Cases for innovative SMEs participating in Internationalization Fund Prempracha’Collection is a leading manufacturer and exporter of ceramic household product such as vase, bowl, plate. Each piece is individually hand crafted, with quality and elegance being the criteria. An association of small & medium enterprises of Chiengmai handicraft manufacturers, exporters & related service companies that have banded together topromote and support the development of the handicraftindustries and assist in the marketing of their products.

23. How much value SMEs obtain from Internationalization Fund Prempracha’CollectionCo.Ltd. • Ceramics Subsidy process : Reimburstment

24. Q&A Q&A E-mail: wachira@sme.go.th 21 TST Tower , Floor G , 15 ,17 – 20,23 Viphavadi-Rangsit Road , Chomphon, Jatujak, Bangkok 10900, Thailand. Tel : 66-2-2788800 ext. 440 Fax : 66-2-2738850