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 2. Miss Chanida Ploddee 3. Miss Chutinard Kunmaneelert 4. Miss Ponphan Kong-iam 5. Miss Rattanaporn Mekthrong ID: 5031203014 ID: 5031203019 ID: 5031203021 ID: 5031203047 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 dont 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 Background and significant of the project 1.2 Objective 1.3 Benefits of this Study 1.4 Brand of our company 1.5 Activities and Gantt chart

1
2 3 3 4 4

Chapter 2 Industry Profile

2.1 Nature of Industry 2.1.1 History of rubber in Europe 2.1.2 History of rubber in Asian 2.1.3 History of rubber in Thailand 2.1.4 History of rubber in China 2.2 Situation of Industry 2.2.1 Rubber Industry in the World 2.2.2 Rubber Industry in Asia 2.2.3 Rubber Industry in Thailand 2.2.4 Rubber Industry in China 2.3 Summary of Market value 2.3.1 Industry and rubber products 2.3.2 Vision of our organization 2.3.3 Mission of our organization 2.3.4 Strategy

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6 6 8 9 10 11 11 16 18 25 27 27 28 28 29

Chapter 3 Market Feasibility Study

3.1 Market Analysis 3.1.1 General Environment Analysis 3.1.2 PES Analysis 3.1.3 Competition Analysis 3.2 STP analysis 3.2.1 Market segment 3.2.2 Market Target 3.2.3Positioning 3.3 Marketing Mix Strategy 3.3.1 Product 3.3.2 Price 3.3.3 Place 3.3.4 Promotion 3.4 Sale Forecast/Profit estimate 3.5 Marketing Expend Budget

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32 32 36 44 49 49 49 51 53 53 54 54 60 62 73

Table of Contents

Chapter 4 Technical Operation Feasibility Study

4.1 Product Characteristic 4.1.1 Rubber Smoked Sheets (RSS) 4.1.2 Block Rubber 4.2 Cost of good 4.3 Pricing product 4.4 Preopening cost 4.4.1 Cost of request Electric and Water 4.4.2 Prepare to be company limited 4.4.3 Fees for the establishment of the factory 4.4.4 Land Tax 4.4.5 Tax labels (per 500 square centimeters) 4.4.6 Trademark registration fee. 4.4.7 Total Cost of Pre Opening Cost 4.5 Operating investment cost /Operating expense 4.5.1 Land 4.5.2 Building 4.5.3 Features and Dimension 4.5.4 Operating investment cost 4.5.5 Production cost 4.6 Logistics and Transportation cost 4.6.1 Logistic Management 4.6.2 Inventory management 4.6.3 Total Logistic 4.7 Administration cost 4.7.1 Organizational structure 4.7.2 Administration Expense 4.7.3 Administration Zone 4.8 Depreciation 4.9 Conclusion

78 79 79 83 86 87 89 89 91 92 92 93 94 94 95 95 95 96 98 100 107 107 109 111 117 117 118 118 129 139

Chapter 5 Financial Analysis

5.1 Financial Statement 5.1.1 Total requirement and the source fund 5.1.2 Income statement 5.1.3 Balance Sheet 5.1.4 Cash Flow Statements 5.1.5 Loan 5.1.6 Total Sale 5.2 Investment Criteria 5.3.1 NPV (net present value) 5.3.2 IRR 5.3.3 Payback period 5.3.4 Break-event point

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142 142 147 150 155 159 160 161 161 161 162 163

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Table of Contents

Chapter 6 Risk Management

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

164 165 165 166 166 166 167 167 167 170

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

Overview of Project Feasibility

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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 ports Chiang Khong to facilitate for export rubber to the South of China. And now, Chiang Rai doesnt 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

13-19/1/2011

20-26/1/2011

10-16/2/2011

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

17-23/2/2011

9-15/12/2011

30-5/1/2011

27-2/2/2011

2-8/12/2011

6-12/1/2011

3-9/2/2011

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Chapter 2

Industry Profile

Industry Profile

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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 hvaculture 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.

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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 Franois 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

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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

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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.

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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-industrychina.html ) Read more: History of the Rubber Manufacturing Industry in China | eHow.com http://www.ehow.com/facts_6920005_history-rubber-manufacturing-industrychina.html#ixzz179k8k7AY

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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 rubbers 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).

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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,

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(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, lowcost 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 20092011 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

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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

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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

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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. Chinas production declined 2 percent to 589 kt after 8.4 percent growth in 19971998. Japans production declined 4 percent in 1998 to 1.5 million metric tons, Koreas dropped 2 percent to 530 kt, and Indias 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. Asias capacity has continued to grow, reaching a level of 3.1 million metric tons in 1998. (Source: http://researchwikis.com/Rubber_Marketing_Research_-_Asia)

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2.2.2.2 Alternative

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

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 So 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 Thailands forests have been swapped for cash, with rubber tree plantations now prevalent in Thailand.

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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 Thailands 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.

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In fact, nearly 90% of Thailands 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 Thailands 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-intime 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

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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: Thailands 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: Worlds 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 worlds 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.

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Figure 2-5 Worlds 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 Thailands 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 Thailands 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 countrys rubber product exports could reach US$6.6 billion in 2012.

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Figure 2-6 Thailands 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-Pacifics natural rubber requirement. The proximity of the countrys 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 (89%). 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.

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2.3.3.7 Thailands Major Rubber Product Companies

Tire products: Goodyear, Thai-Bridgestone, Michelin-Siam, Dunlop Other rubber products: Top Glove, Ansell

2.3.3.8 Thailands 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 plants 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

Thailands 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)

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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 worlds 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.

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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 worlds 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. Chinas 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/chinarubber-a163348#ixzz17L8svrz8)

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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 )

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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

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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 Chinas 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 Chinas 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

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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.

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Chapter 3

Market Feasibility Study

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)

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The People's Republic of China (PRC), , 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.

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

9,671,018 km[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 Large the total ethnic

population.

minorities include the Zhuang (16 million), (10 million), Miao Hui Manchu (9 million), Uyghur

(8 million),

(7 million), Yi (7 million), Tujia (5.75 million), Mongols (5 million), Tibetans (5 million), Buyei (3 million), and Koreans (2 million).

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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 parttime 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)

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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 nineyear 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 worlds longest high-speed rail network with over 7,050 km (4,380 mi) of service routes.

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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.

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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 Sovietstyle 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

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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

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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.

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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

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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.

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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,

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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)

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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/)

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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.

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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 companys 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

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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.

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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.

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EXHIBIT 3-1 Market Specialization US

Rubber Smoked Sheet (RSS)

CN JP IN KR DE MY TH TR

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 3500 3000 2500 2000 1500 1000 500 0

2754

2743

3043

3353

:1000Tons

#"

"#

#"

"#

(Source: Association of Natural Rubber Producing Countries, Monthly Bulletin of Natural Rubber Trends & Statistics, Vol.2 No.7 July 2010)

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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 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

Domestics quality

Exports quality -

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.

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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 customers needs, conditions and standards required. Our positioning is

EXHIBIT 3-3 Positioning of Our Company

Standard
Standard Thai Rubber XL

Domestics quality

Exports quality -

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 )

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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.

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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 Thailands rubber emphasis on export to China 39%. Based economic growth also

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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.

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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.

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3.3.3.2 Location Logistic In the present there are three ways to shipments from Thailand to The Peoples 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.

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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.

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Kunming-Singapore Railway

Rail

Kunming-Singapore rail link by 2015? The Associated Press reports that the Association Asian is of

Southeast (ASEAN) US$15 connecting

Nations a

expecting

billion

railway with

Singapore

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 )

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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 ThaiNorth 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

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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 )

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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 South Central and East Northeast North 1: Rai Figure 3-3 Quantity Production in Thailand Quantity 11,339,698 1,978,660 2,799,209 600,578

(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.

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

Month
2003 JAN FAB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC 317,725 326,993 319,282 212,220 218,882 231,656 251,020 220,323 265,523 245,494 218,593 280,055 2004 253,536 269,172 264,763 209,323 219,634 220,291 250,270 251,418 175,208 338,214 278,223 291,566 2005 272,991 259,370 263,417 207,522 216,099 201,729 240,418 271,397 264,357 242,525 269,061 243,305

Quantity
2006 254,474 264,470 263,341 203,481 214,925 212,509 236,044 268,569 264,393 276,871 299,763 297,930 2007 264,835 247,871 249,423 199,795 197,907 220,283 244,750 278,119 250,647 268,473 264,179 279,846 2008 285,172 231,867 245,239 210,967 210,299 214,381 257,850 256,397 277,473 267,253 188,070 187,113 2009 225,413 258,492 235,272 176,168 169,162 204,317 234,608 225,921 214,341 236,068 257,754 304,508

Per: Ton

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Table 3-3 Category of rubber export

Year RSS STR Latex Mix other Total

2003 1,003,309 993,504 488,559 82,443 60,236 2,628,051

2004 920,972 1,109,327 488,675 36,700 76,724 2,632,398

2005 938,984 1,069,345 555,905 129,564 77,875 2,771,673

2006 861,326 1,103,848 510,489 105,151 77,948 2,658,762

2007 796,549 1,132,135 509,375 165,164 72,060 2,675,283

2008 694,510 950,574 595,550 417,499 68,060 2,726,193

2009 322,470 524,588 245,152 197,524 26,503 1,316,237

Per: Ton
Table 3-4 Compare plant, trap and produce in 2008-2009 Plan of rubber(Rai) 2008 North Northeast Central South 600,578 2,799,209 1,977,460 11,339,698 2009 693,812 2,984,097 2,063,418 11,512,990 Trapping of rubber(Rai) 2008 14,841 569,668 1,273,204 9,514,176 2009 24,218 690,410 1,295,560 9,590,259 Produce(Ton) 2008 3,710 154,917 364,167 2,644,116 2009 6,166 198,436 349,297 2,536,381

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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.) Rubber market RSS 13 138.62 138.62 RSS 4 137.62 RSS 5 134.5 RSS bubble 133.5 134.5 RSS Cutting 127.5 130.16 Quantity (KG.) 70,500 120,000 Filed Latex 132 -

Songkhia Suratthani NakornSrithammarat

137.62 135.49

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Table 3-6 Cash market on offer price Country Thailand Indonesia Malaysia Type RSS 3 STR 20 SIR 20 SMR 20 Shipment JAN JAN JAN JAN US CENT / KG 485 485 479.6 480

Table 3-7 Future Market on AFET Month Jan-11 Feb-11 Mar-11 RSS 3 139.70 142.00 141.10

(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 RSS 3 STR Per: Ton 125 203

2012 137 223

2013 151 246

2014 166 270

2015 183 297

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Table 3-8 Sale Forecast/Profit estimate, 2011

Year 2011(Quantity) Product/Month RSS (Ton) STR (Ton) Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

5.44 8.85 14.30

5.44 8.85 14.30

6.67 10.85 17.53

6.67 10.85 17.53

4.57 7.43 11.99

4.57 7.43 11.99

4.57 7.43 11.99

4.57 7.43 11.99

6.85 11.14 17.99

6.85 11.14 17.99

7.02 11.43 18.45

7.02 11.43 18.45

70.23 114.26 184.49

Year 2011(Price) Product/Month RSS (Baht) STR (Baht) Total Jan 772,925 1,221,960 1,994,885 Feb 772,925 1,221,960 1,994,885 Mar 947,456 1,497,887 2,445,343 Apr 947,456 1,497,887 2,445,343 May 648,260 1,024,870 1,673,129 Jun 648,260 1,024,870 1,673,129 Jul 648,260 1,024,870 1,673,129 Aug 648,260 1,024,870 1,673,129 Sep 972,389 1,537,305 2,509,694 Oct 972,389 1,537,305 2,509,694 Nov 997,322 1,576,723 2,574,045 Dec 997,322 1,576,723 2,574,045 Total 9,973,223 15,767,227 25,740,450

Year 2011(Account Receivable) Product/Month RSS (Baht) STR (Baht) Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

231,877 231,877 284,237 284,237 194,478 194,478 194,478 194,478 291,717 291,717 299,197 299,197 2,991,967 366,588 366,588 449,366 449,366 307,461 307,461 307,461 307,461 461,191 461,191 473,017 473,017 4,730,168 598,465 598,465 733,603 733,603 501,939 501,939 501,939 501,939 752,908 752,908 772,213 772,213 7,722,135

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Table 3-9 Sale Forecast/Profit estimate, 2012

Year 2012(Quantity) Product/Month RSS (Ton) STR (Ton) Total Jan 7.73 12.57 20.29 Feb 7.73 12.57 20.29 Mar 7.73 12.57 20.29 Apr 7.73 12.57 20.29 May 3.86 6.28 10.15 Jun 3.86 6.28 10.15 Jul 3.86 6.28 10.15 Aug 3.86 6.28 10.15 Sep 7.73 12.57 20.29 Oct 7.73 12.57 20.29 Nov 7.73 12.57 20.29 Dec 7.73 12.57 20.29 Total 77.26 125.68 202.94

Year 2012(Price) Product/Month RSS (Baht) STR (Baht) Total Jan 1,097,055 1,734,395 2,831,449 Feb 1,097,055 1,734,395 2,831,449 Mar 1,097,055 1,734,395 2,831,449 Apr 1,097,055 1,734,395 2,831,449 May 548,527 867,197 1,415,725 Jun 548,527 867,197 1,415,725 Jul 548,527 867,197 1,415,725 Aug 548,527 867,197 1,415,725 Sep 1,097,055 1,734,395 2,831,449 Oct 1,097,055 1,734,395 2,831,449 Nov 1,097,055 1,734,395 2,831,449 Dec 1,097,055 1,734,395 2,831,449 Total 10,970,545 17,343,949 28,314,495

Year 2012(Account Receivable) Product/Month RSS (Baht) STR (Baht) Total Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

329,116 329,116 329,116 329,116 164,558 164,558 164,558 164,558 329,116 329,116 329,116 329,116 3,291,164 520,318 520,318 520,318 520,318 260,159 260,159 260,159 260,159 520,318 520,318 520,318 520,318 5,203,185 849,435 849,435 849,435 849,435 424,717 424,717 424,717 424,717 849,435 849,435 849,435 849,435 8,494,348

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Table 3-10 Sale Forecast/Profit estimate, 2013

Year 2013(Quantity) Product/Month RSS (Ton) STR (Ton) Total Jan 8.50 13.82 22.32 Feb 8.50 13.82 22.32 Mar 8.50 13.82 22.32 Apr 8.50 13.82 22.32 May 4.25 6.91 11.16 Jun 4.25 6.91 11.16 Jul 4.25 6.91 11.16 Aug 4.25 6.91 11.16 Sep 8.50 13.82 22.32 Oct 8.50 13.82 22.32 Nov 8.50 13.82 22.32 Dec 8.50 13.82 22.32 Total 84.98 138.25 223.23

Year 2013(Price) Product/Month RSS (Baht) STR (Baht) Total Jan 1,206,760 1,907,834 3,114,594 Feb 1,206,760 1,907,834 3,114,594 Mar 1,206,760 1,907,834 3,114,594 Apr 1,206,760 1,907,834 3,114,594 May 603,380 953,917 1,557,297 Jun 603,380 953,917 1,557,297 Jul 603,380 953,917 1,557,297 Aug 603,380 953,917 1,557,297 Sep 1,206,760 1,907,834 3,114,594 Oct 1,206,760 1,907,834 3,114,594 Nov 1,206,760 1,907,834 3,114,594 Dec 1,206,760 1,907,834 3,114,594 Total 12,067,600 19,078,344 31,145,944

Year 2013(Account Receivable) Product/Month RSS (Baht) STR (Baht) Total Jan 362,028 572,350 934,378 Feb 362,028 572,350 934,378 Mar 362,028 572,350 934,378 Apr 362,028 572,350 934,378 May 181,014 286,175 467,189 Jun 181,014 286,175 467,189 Jul 181,014 286,175 467,189 Aug 181,014 286,175 467,189 Sep 362,028 572,350 934,378 Oct 362,028 572,350 934,378 Nov 362,028 572,350 934,378 Dec 362,028 572,350 934,378 Total 3,620,280 5,723,503 9,343,783

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Table 3-11 Sale Forecast/Profit estimate, 2014

Year 2014(Quantity) Product/Month RSS (Ton) STR (Ton) Total Jan 9.35 15.21 24.56 Feb 9.35 15.21 24.56 Mar 9.35 15.21 24.56 Apr 9.35 15.21 24.56 May 4.67 7.60 12.28 Jun 4.67 7.60 12.28 Jul 4.67 7.60 12.28 Aug 4.67 7.60 12.28 Sep 9.35 15.21 24.56 Oct 9.35 15.21 24.56 Nov 9.35 15.21 24.56 Dec 9.35 15.21 24.56 Total 93.48 152.07 245.56

Year 2014(Price) Product/Month RSS (Baht) STR (Baht) Total Jan 1,327,436 2,098,618 3,426,054 Feb 1,327,436 2,098,618 3,426,054 Mar 1,327,436 2,098,618 3,426,054 Apr 1,327,436 2,098,618 3,426,054 May 663,718 1,049,309 1,713,027 Jun 663,718 1,049,309 1,713,027 Jul 663,718 1,049,309 1,713,027 Aug 663,718 1,049,309 1,713,027 Sep 1,327,436 2,098,618 3,426,054 Oct 1,327,436 2,098,618 3,426,054 Nov 1,327,436 2,098,618 3,426,054 Dec 1,327,436 2,098,618 3,426,054 Total 13,274,360 20,986,179 34,260,539

Year 2014(Account Receivable) Product/Month RSS (Baht) STR (Baht) Total Jan 398,231 629,585 1,027,816 Feb 398,231 629,585 1,027,816 Mar 398,231 629,585 1,027,816 Apr 398,231 629,585 1,027,816 May 199,115 314,793 513,908 Jun 199,115 314,793 513,908 Jul 199,115 314,793 513,908 Aug 199,115 314,793 513,908 Sep 398,231 629,585 1,027,816 Oct 398,231 629,585 1,027,816 Nov 398,231 629,585 1,027,816 Dec 398,231 629,585 1,027,816 Total 3,982,308 6,295,854 10,278,162

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Table 3-12 Sale Forecast/Profit estimate, 2015

Year 2015(Quantity) Product/Month RSS (Ton) STR (Ton) Total Jan 10.28 16.73 27.01 Feb 10.28 16.73 27.01 Mar 10.28 16.73 27.01 Apr 10.28 16.73 27.01 May 5.14 8.36 13.51 Jun 5.14 8.36 13.51 Jul 5.14 8.36 13.51 Aug 5.14 8.36 13.51 Sep 10.28 16.73 27.01 Oct 10.28 16.73 27.01 Nov 10.28 16.73 27.01 Dec 10.28 16.73 27.01 Total 102.83 167.28 270.11

Year 2015(Price) Product/Month RSS (Baht) STR (Baht) Total Jan 1,460,180 2,308,480 3,768,659 Feb 1,460,180 2,308,480 3,768,659 Mar 1,460,180 2,308,480 3,768,659 Apr 1,460,180 2,308,480 3,768,659 May 730,090 1,154,240 1,884,330 Jun 730,090 1,154,240 1,884,330 Jul 730,090 1,154,240 1,884,330 Aug 730,090 1,154,240 1,884,330 Sep 1,460,180 2,308,480 3,768,659 Oct 1,460,180 2,308,480 3,768,659 Nov 1,460,180 2,308,480 3,768,659 Dec 1,460,180 2,308,480 3,768,659 Total 14,601,796 23,084,797 37,686,593

Year 2015(Account Receivable) Product/Month RSS (Baht) STR (Baht) Total Jan 438,054 692,544 1,130,598 Feb 438,054 692,544 1,130,598 Mar 438,054 692,544 1,130,598 Apr 438,054 692,544 1,130,598 May 219,027 346,272 565,299 Jun 219,027 346,272 565,299 Jul 219,027 346,272 565,299 Aug 219,027 346,272 565,299 Sep 438,054 692,544 1,130,598 Oct 438,054 692,544 1,130,598 Nov 438,054 692,544 1,130,598 Dec 438,054 692,544 1,130,598 Total 4,380,539 6,925,439 11,305,978

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Table 3-13 Sale Forecast/Profit estimate, 2016

Year 2016(Account Receivable) Product/Month RSS (Baht) STR (Baht) Total Jan 1,460,180 2,308,480 3,768,659 Feb 1,460,180 2,308,480 3,768,659 Mar 1,460,180 2,308,480 3,768,659 Apr 0 0 0 May 0 0 0 Jun 0 0 0 Jul 0 0 0 Aug 0 0 0 Sep 0 0 0 Oct 0 0 0 Nov 0 0 0 Dec 0 0 0 Total 4,380,539 6,925,439 11,305,978

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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
Advertising Web marketing Production Web development Web ads/e-newsletters PR/Events/Promotion Trade show/Events Total

Jan

Feb

Mar Apr May

Jun

Jul

Aug

Sep

Oct

Nov Dec

Totals

1,000

1,000

1,000

1,000

1,000

1,000

1,000

7,000

500 200 200

500 400

3,000 0 0 0 3000 0 1000 1000

3,000 4000 1200 1000 1200

3,000 4500

9000 16,900

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Table 3-15

Marketing Expense Budget, 2012 For year 2012 Marketing Expense Budget :

Item
Advertising Web marketing Production Web development Web ads/e-newsletters PR/Events/Promotion Trade show/Events Total

Jan

Feb

Mar

Apr May

Jun

Jul

Aug Sep Oct Nov

Dec

Totals

500

500

500

1500

500 200 200 200 200

500 200 200

500

1500 1200

3,000 200 0 200 4000 200 0 200

3,000 4000 200 0 200

3,000 4000

9000 13,200

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Table 3-16

Marketing Expense Budget, 2013 For year 2013 Marketing Expense Budget :

Item
Advertising Web marketing Production Web development Web ads/e-newsletters PR/Events/Promotion Trade show/Events Total

Jan

Feb

Mar

Apr May

Jun

Jul

Aug Sep Oct Nov Dec

Totals

500

500

500 1,500

500 200 200 200 200

500 200 200

500 2,700

3,000 200 0 200 3500 200 0 200

3,000 3500 200 0 200

3,000 3500 9,000 13,200

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Table 3-17

Marketing Expense Budget, 2014

For year 2014 Marketing Expense Budget :

Item
Advertising Web marketing Production Web development Web ads/e-newsletters PR/Events/Promotion Trade show/Events Total

Jan

Feb

Mar

Apr May

Jun

Jul

Aug Sep Oct Nov

Dec

Totals

500

500

500 1,500

500 200 200 200 200

500 200 200

500 2,700

3,000 200 0 200 3500 200 0 200

3,000 3500 200 0 200

3,000 3500 9,000 13,200

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Table 3-18

Marketing Expense Budget, 2015 For year 2015 Marketing Expense Budget :

Item
Advertising Web marketing Production Web development Web ads/e-newsletters PR/Events/Promotion Trade show/Events Total

Jan

Feb

Mar

Apr May

Jun

Jul

Aug Sep Oct Nov

Dec

Totals

500

500

500 1,500

500 200 200 200 200

500 200 200

500 2,700

3,000 200 0 200 3500 200 0 200

3,000 3500 200 0 200

3,000 9,000 3500 13,200

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Chapter 4

Technical Operation Feasibility Study

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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.

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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).

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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.

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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

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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

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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

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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 )

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4.2

Cost of good
Table 4-1 Cost of goods Sold

Cost of goods sold

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

1,818,000

Year 2013 Jun Jul 20 20 105 101 2,100,000 2,020,000 Year 2014 Jun Jul 22 22 105 101 2,310,000 2,222,000 Year 2015 Jun Jul 24 24 105 101 2,520,000 2,424,000

* 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.

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4.3

Pricing product
At office of central rubber market Songkhla Suratthani Field Field Latex Latex Rubber scraps (factory) Local (factory) 89.93 96.44 98.08 101.04 81.21 85.3 87 94.38 101.22 104.95 116.47 82.76 87.93 93.8 100.5 107.53 96.88 100.8 97.88 97.77 98.07 101.5 115.42 83.98 91.1 93.77 98.87 110.19 103.59 107.08 97.83 97.04 100.44 104.13 115.08 85.75 90.56 95 101.85 106.78 98.08 102.4 98.01 96.93 98.8 101.45 114.95 92.17

Year 2010 January February March April May June July August September October November December

Local 91.34 94.15 99.44 110.01 104.1 107.87 98.34 97.63 100.85 104.82 116.58 86.27

Nakhorn- sritammarat Field Latex Local (factory) 90.93 93.71 98.99 109.87 102.89 107.35 97.33 96.75 99.68 104.2 114.58 80.91 88.18 93.88 99.68 103.33 98.5 102.36 98.93 97.51 99.02 102.43 115.4 84.09

Table 4-2 Pricing Product

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,)

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Table 4-3 Pricing Product

Year 2011 Product/Month Cost of material (ton) Price (Baht) Total Product/Month Cost of material (ton) Price (Baht) Total Product/Month Cost of material (ton) Price (Baht) Total Product/Month Cost of material (ton) Price (Baht) Total Product/Month Cost of material (ton) Price (Baht) Total Jan 14.30 75 1,000 1,072,344 Jan 20.29 75 1,000 1,522,036 Jan 22.32 75 1,000 1,674,240 Jan 24.56 75 1,000 1,841,664 Jan 27.01 75 1,000 2,025,830 Feb 14.30 75 1,000 1,072,344 Feb 20.29 75 1,000 1,522,036 Feb 22.32 75 1,000 1,674,240 Feb 24.56 75 1,000 1,841,664 Feb 27.01 75 1,000 2,025,830 Mar 17.53 75 1,000 1,314,486 Mar 20.29 75 1,000 1,522,036 Mar 22.32 75 1,000 1,674,240 Mar 24.56 75 1,000 1,841,664 Mar 27.01 75 1,000 2,025,830 Apr 17.53 75 1,000 1,314,486 Apr 20.29 75 1,000 1,522,036 Apr 22.32 75 1,000 1,674,240 Apr 24.56 75 1,000 1,841,664 Apr 27.01 75 1,000 2,025,830 May 11.99 80 1,000 959,344 May 10.15 80 1,000 811,753 May 11.16 80 1,000 892,928 May 12.28 80 1,000 982,221 May 13.51 80 1,000 1,080,443 Jun 11.99 80 1,000 959,344 Year 2012 Jun 10.15 80 1,000 811,753 Year 2013 Jun 11.16 80 1,000 892,928 Year 2014 Jun 12.28 80 1,000 982,221 Year 2015 Jun 13.51 80 1,000 1,080,443 Jul 10.15 80 1,000 811,753 Jul 11.16 80 1,000 892,928 Jul 12.28 80 1,000 982,221 Jul 13.51 80 1,000 1,080,443 Aug 10.15 80 1,000 811,753 Aug 11.16 80 1,000 892,928 Aug 12.28 80 1,000 982,221 Aug 13.51 80 1,000 1,080,443 Sep 20.29 75 1,000 1,522,036 Sep 22.32 75 1,000 1,674,240 Sep 24.56 75 1,000 1,841,664 Sep 27.01 75 1,000 2,025,830 Oct 20.29 75 1,000 1,522,036 Oct 22.32 75 1,000 1,674,240 Oct 24.56 75 1,000 1,841,664 Oct 27.01 75 1,000 2,025,830 Nov 20.29 75 1,000 1,522,036 Nov 22.32 75 1,000 1,674,240 Nov 24.56 75 1,000 1,841,664 Nov 27.01 75 1,000 2,025,830 Dec 20.29 75 1,000 1,522,036 Dec 22.32 75 1,000 1,674,240 Dec 24.56 75 1,000 1,841,664 Dec 27.01 75 1,000 2,025,830 Total 202.94 Jul 11.99 80 1,000 959,344 Aug 11.99 80 1,000 959,344 Sep 17.99 75 1,000 1,349,078 Oct 17.99 75 1,000 1,349,078 Nov 18.45 75 1,000 1,383,669 Dec 18.45 75 1,000 1,383,669 Total 184.49

14,076,528

15,423,300 Total 223.23

16,965,630 Total 245.56

18,662,193 Total 270.11

20,528,412

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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 Average Cost(Baht) Insurance Cost (Baht)

Configuration Inspection Cost (Baht) Cost (Baht) Under 200 A equal to 30,000 Baht More than 200 A equal to 40,000 Baht Under 30 A equal to 15,000 Baht More than 30 A equal to 20,000 Baht 4 Baht per KVA but Under 50,000 Baht

High voltage meter.

System under 69 KVA

Individual transformer. Do not think the average.

Individual transformer think 4 Baht per KVA

System more than 69 10,000 Baht KVA

Insurance Cost

= Guarantee for debt power.

Configuration Cost = The cost of providing meter installation and operation. Inspection Cost files. Average Cost user that Light. ****2 Transformers (1 KVA -1 MVA). We use system under 69 KVA**** Configuration Cost (Under 200 A) Inspection Cost (More than 30 A) Insurance Cost (assume 10 KVA) Total Cost per transformers Total Cost of fees for electricity 30,000 Baht 20,000 Baht 4,000 Baht 54,000 Baht 108,000 Baht = The cost of investment in the power transformer to provide power = The cost of send someone to check the wiring already in ther users

(Source: http://www.pea.co.th/th/services/services_fee_rates.htm)

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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

Water Meter Size(Inch) 1 1 2 2 3 4 6 8

Deposit Cost (Baht) Not collected Not collected 1,000 1,500 2,500 4,000 5,000 10,000 20,000 20,000

Insurance Cost (Baht) 500 1,000 1,500 3,000 4,000 4,000 10,000 15,000 21,000 30,000

Labor and Equipment Cost (Baht) 3,600 4,700

Total 4,100 5,700

Expense estimates.

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 doesnt include pipe and equipment after the water meters that applicant must be due by them self. About installing water meters is not over Diameter inches and the distance from the main water distribution pipes less than 10 meters will pay the price including VAT already.

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

Deposit Cost Insurance Cost Labor and Equipment Cost Total Cost of frees for using water

5,000 Baht 10,000 Baht 9,500 Baht 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 Registered prospectus: Capital not exceeding 1,000,000 Baht Registered capital of 100,000 Baht each set. (Fraction of the 100,000 Baht to 100,000 Baht equivalent). Capital more than 50,000,000 Baht Incorporated company: Capital not exceeding 1,000,000 Baht Registered capital of 100,000 Baht each set. (Fraction of the 100,000 Baht to 100,000 baht equivalent). Capital more than 50,000,000 Baht
: According to No.3 and No.4 of ministerial regulations The capital of all partners combined approximately 20,000,000 Baht. Registered prospectus Incorporated company Total 10,000 Baht 100,000 Baht 110,000 Baht (Source: http://www.dbd.go.th/mainsite/index.php?id=1638 )

Baht

500 50

25,000

5,000 500

250,000

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4.4.3 Fees for the establishment of the factory Following the factory act, 1992

Application for permit Permit Substitutes permit Fees factory operation (per year) Total

100 Baht 100,000 Baht 1,000 Baht 30,000 Baht 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.

Corporate income tax (withholding) Fee legal action (transfer fee). The mortgage (If mortgages from financial institutions) Stamp Duty (Pay one between stamp duty or specific business) Specific business Duty (Dont pay if holding more than five years)

1% of price (no less than at market prices commerce) 2% of market prices commerce or price of sell up on what price is higher 1% of value of the mortgages 200 Baht for 1 Baht of Stamp Duty(0.50%) following selling price but not less than market prices commerce) 3.3% of selling price but not less than market prices commerce)

***The cost of land is 6,450,000 Baht***

Corporate income tax Fee legal action The mortgage Stamp Duty Total Cost of Land Tax

64,500 Baht 129,000 Baht 64,500 Baht 32,250 Baht 290,250 Baht (Source: http://www.land.co.th/land-info-top-3.asp)

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4.4.5 Tax labels (per 500 square centimeters) EXHIBIT 4-5

Rate of Tax labels

Style Thai characters are. Thai characters mixed with the foreign language/images/other marks. Signs following - No Thai characters - 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 Baht 3 Baht 20 Baht

40 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)

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4.4.6 Trademark registration fee.

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

Patent inventions Patent or petty patent Total

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

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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 Chianhkhongs 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.

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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.

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EXHIBIT 4-7 Manufacturer Zone

1. 2. 3. 4. 5. 6.

Latex tank Latex bin Cutting machine Rubber bin Bar presses Crepe rubber machine

7. 10. 11. 12. 13. 14.

Vinyl rubber Bin to clean rubber Rubber rolling machine Gutter cleaning rubber Water tank Eauong mortar

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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

No.

Item

Picture

Price (Baht) 14,200

Amount

Total (Baht) 56,800

Eauong mortar as 50 pieces

Rubber rolling machine

8,500

68,000

Crepe rubber machine

30,000

60,000

Vinyl rubber

18,500

37,000

Bar presses

200,000

200,000

Cutting machine

25,000

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.

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EXHIBIT 4-9 Equipments within Lab room Price (Baht) Total (Baht)

No.

Item

Picture

Amount

Set of test substance solution TMTD Easy Kit Set of test substance solution ZnO Easy Kit. Laboratory state

100

1,560*

156,000 *

100

1,560**

156,000**

20,300

20,300

Desk set 3 seats(Lab staff 3)

25,000

25,000

Desk

3,345

6,690

Desktop PC(Lab staff 3) Air condition

27,900

83,700

13,900

13,900

Printer

1,670

1,670

9.

Firewood per month

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)

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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 2. Maintenance staff salary 15,000 Baht3 or 45,000 per Month 12,000 Baht2 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)

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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.

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Table 4-5 Operating expense in year 2011

Operating cost : Baht Expense Lab staff salary Maintenance salary Firewood Worker salary Electricity fee Water fee Maintenance building Maintenance machine Lubricant Total 14,004 5,000 250,484 14,004 5,000 250,484 14,004 5,000 250,484 14,004 5,000 250,484 14,004 5,000 250,484 14,004 5,000 250,484 14,004 5,000 250,484 14,004 5,000 250,484 14,004 5,000 250,484 14,004 5,000 250,484 14,004 5,000 250,484 Jan 45,000 24,000 18,000 129,480 10,000 5,000 Feb 45,000 24,000 18,000 129,480 10,000 5,000 Mar 45,000 24,000 18,000 129,480 10,000 5,000 Apr 45,000 24,000 18,000 129,480 10,000 5,000 May 45,000 24,000 18,000 129,480 10,000 5,000 Jun 45,000 24,000 18,000 129,480 10,000 5,000 Jul 45,000 24,000 18,000 129,480 10,000 5,000 Aug 45,000 24,000 18,000 129,480 10,000 5,000 Sep 45,000 24,000 18,000 129,480 10,000 5,000 Oct 45,000 24,000 18,000 129,480 10,000 5,000 Nov 45,000 24,000 18,000 129,480 10,000 5,000 Dec 45,000 24,000 18,000 129,480 10,000 5,000 540,000 14,004 5,000 790,484 Totals 540,000 288,000 216,000 1,553,760 120,000 60,000 540,000 168,048 60,000 3,545,808

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Table 4-6 Operating expense in year 2012

Operating cost : Baht Expense Lab staff salary Maintenance salary Firewood Worker salary Electricity fee Water fee Maintenance building Maintenance machine Lubricant Total 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 Jan 45,000 24,000 10,080 129,480 10,000 5,000 Feb 45,000 24,000 10,080 129,480 10,000 5,000 Mar 45,000 24,000 10,080 129,480 10,000 5,000 Apr 45,000 24,000 10,080 129,480 10,000 5,000 May 45,000 24,000 10,080 129,480 10,000 5,000 Jun 45,000 24,000 10,080 129,480 10,000 5,000 Jul 45,000 24,000 10,080 129,480 10,000 5,000 Aug 45,000 24,000 10,080 129,480 10,000 5,000 Sep 45,000 24,000 10,080 129,480 10,000 5,000 Oct 45,000 24,000 10,080 129,480 10,000 5,000 Nov 45,000 24,000 10,080 129,480 10,000 5,000 Dec 45,000 24,000 10,080 129,480 10,000 5,000 540,000 14,004 5,000 782,564 Totals 540,000 288,000 120,960 1,553,760 120,000 60,000 540,000 168,048 60,000 3,450,768

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Table 4-7 Operating expense in year 2013

Operating cost : Baht

Expense Lab staff salary Maintenance salary Firewood Worker salary Electricity fee Water fee Maintenance building Maintenance machine Lubricant Total

Jan 45,000 24,000 10,080 129,480 10,000 5,000

Feb 45,000 24,000 10,080 129,480 10,000 5,000

Mar 45,000 24,000 10,080 129,480 10,000 5,000

Apr 45,000 24,000 10,080 129,480 10,000 5,000

May 45,000 24,000 10,080 129,480 10,000 5,000

Jun 45,000 24,000 10,080 129,480 10,000 5,000

Jul 45,000 24,000 10,080 129,480 10,000 5,000

Aug 45,000 24,000 10,080 129,480 10,000 5,000

Sep 45,000 24,000 10,080 129,480 10,000 5,000

Oct 45,000 24,000 10,080 129,480 10,000 5,000

Nov 45,000 24,000 10,080 129,480 10,000 5,000

Dec 45,000 24,000 10,080 129,480 10,000 5,000 540,000

Totals 540,000 288,000 120,960 1,553,760 120,000 60,000 540,000 168,048 60,000 3,450,768

14,004 5,000 242,564

14,004 5,000 242,564

14,004 5,000 242,564

14,004 5,000 242,564

14,004 5,000 242,564

14,004 5,000 242,564

14,004 5,000 242,564

14,004 5,000 242,564

14,004 5,000 242,564

14,004 5,000 242,564

14,004 5,000 242,564

14,004 5,000 782,564

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Table 4-8 Operating expense in year 2014

Operating cost : Baht Expense Lab staff salary Maintenance salary Firewood Worker salary Electricity fee Water fee Maintenance building Maintenance machine Lubricant Total 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 Jan 45,000 24,000 10,080 129,480 10,000 5,000 Feb 45,000 24,000 10,080 129,480 10,000 5,000 Mar 45,000 24,000 10,080 129,480 10,000 5,000 Apr 45,000 24,000 10,080 129,480 10,000 5,000 May 45,000 24,000 10,080 129,480 10,000 5,000 Jun 45,000 24,000 10,080 129,480 10,000 5,000 Jul 45,000 24,000 10,080 129,480 10,000 5,000 Aug 45,000 24,000 10,080 129,480 10,000 5,000 Sep 45,000 24,000 10,080 129,480 10,000 5,000 Oct 45,000 24,000 10,080 129,480 10,000 5,000 Nov 45,000 24,000 10,080 129,480 10,000 5,000 Dec 45,000 24,000 10,080 129,480 10,000 5,000 540,000 14,004 5,000 782,564 Totals 540,000 288,000 120,960 1,553,760 120,000 60,000 540,000 168,048 60,000 3,450,768

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Table 4-9 Operating expense in year 2015

Operating cost : Baht Expense Lab staff salary Maintenance salary Firewood Worker salary Electricity fee Water fee Maintenance building Maintenance machine Lubricant Total 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 14,004 5,000 242,564 Jan 45,000 24,000 10,080 129,480 10,000 5,000 Feb 45,000 24,000 10,080 129,480 10,000 5,000 Mar 45,000 24,000 10,080 129,480 10,000 5,000 Apr 45,000 24,000 10,080 129,480 10,000 5,000 May 45,000 24,000 10,080 129,480 10,000 5,000 Jun 45,000 24,000 10,080 129,480 10,000 5,000 Jul 45,000 24,000 10,080 129,480 10,000 5,000 Aug 45,000 24,000 10,080 129,480 10,000 5,000 Sep 45,000 24,000 10,080 129,480 10,000 5,000 Oct 45,000 24,000 10,080 129,480 10,000 5,000 Nov 45,000 24,000 10,080 129,480 10,000 5,000 Dec 45,000 24,000 10,080 129,480 10,000 5,000 540,000 14,004 5,000 782,564 Totals 540,000 288,000 120,960 1,553,760 120,000 60,000 540,000 168,048 60,000 3,450,768

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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.

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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 ships 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 Tenwheel. 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)

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4.6.2 Inventory management Taxes: VAT 7% and withholding of 3 % per Year. Table 4-10 Total Taxes Year Sale Forecast (price) VAT 7% Withholding 3% Total Per: Baht 2011 25,740,450 1,801,831 772,213 2,574,045 2012 28,314,495 1,982,015 849,435 2,831,449 2013 31,145,944 2,180,216 934,378 3,114,594 2014 34,260,539 2,398,238 1,027,816 3,426,054 2015 37,686,593 2,638,061 1,130,598 3,768,659

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 )

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Table 4-11 Inventory Service Costs Year Taxes Insurance Total Per: Baht 2011 2,574,045 17,500 2,591,545 2012 2,831,449 17,500 2,848,949 2013 3,114,594 17,500 3,132,094 2014 3,426,054 17,500 3,443,554 2015 3,768,659 17,500 3,786,159

Table 4-12 Warehousing Cost Description Capital Costs (opportunity cost of capital) Inventory Risk Costs Obsolescence Damage Cost Shrinkage Cost Relocation Cost Total Cost 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 dont have any cost of obsolescence. We dont have Relocation Cost because our company has only one warehouse near manufactory. So we dont have any cost of relocation. (Source: http://logistics.arch56.com/?tag=public-warehouse-cost) 0 10,000 2,084 0 12,084 Cost/Baht -13,450,000-

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4.6.3 Total Logistic Table 4-13 Total Logistic Cost, 2011

Description Inventory Carrying Cost Taxes and insurance Warehousing Subtotal Transportation Costs Motor Carriers : Truck-Local (Diesel Ten-wheel) Tariff of Chiang Khong Port Subtotal Logistics Administration Total logistics 230,314 230,314 230,346 230,346 230,291 1,800 468 2,268 1,800 468 2,268 1,800 500 2,300 1,800 500 2,300 1,800 445 2,245 1,800 445 2,245 1,800 445 2,245 1,800 445 2,245 1,800 505 2,305 1,800 505 2,305 1,800 509 2,309 1,800 509 2,309 215,962 12,084 228,046 215,962 12,084 228,046 215,962 12,084 228,046 215,962 12,084 228,046 215,962 12,084 228,046 215,962 12,084 228,046 215,962 12,084 228,046 215,962 12,084 228,046 215,962 12,084 228,046 215,962 12,084 228,046 215,962 12,084 228,046 215,962 12,084 228,046 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Not Including 230,291 230,291 230,291 230,351 230,351 230,356 230,356

Per: Baht

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Table 4-14 Total Logistic Cost, 2012

Description Inventory Carrying Cost Taxes and insurance Warehousing Subtotal Transportation Costs Motor Carriers : Truck-Local (Diesel Ten-wheel) Tariff of Chiang Khong Port Subtotal Logistics Administration Total logistics

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

237,412 12,084 249,496

237,412 12,084 249,496

237,412 12,084 249,496

237,412 12,084 249,496

237,412 12,084 249,496

237,412 12,084 249,496

237,412 12,084 249,496

237,412 12,084 249,496

237,412 12,084 249,496

237,412 12,084 249,496

237,412 12,084 249,496

237,412 12,084 249,496

1,800 528 2,328

1,800 528 2,328

1,800 528 2,328

1,800 528 2,328

1,800 426 2,226

1,800 426 2,226

1,800 426 2,226

1,800 426 2,226

1,800 528 2,328

1,800 528 2,328

1,800 528 2,328

1,800 528 2,328

Not Including 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 Inventory Carrying Cost Taxes and insurance Warehousing Subtotal Transportation Costs Motor Carriers: Truck-Local (Diesel Ten-wheel) Tariff of Chiang Khong Port Subtotal Logistics Administration Total logistics

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

261,008 12,084 273,092

261,008 12,084 273,092

261,008 12,084 273,092

261,008 12,084 273,092

261,008 12,084 273,092

261,008 12,084 273,092

261,008 12,084 273,092

261,008 12,084 273,092

261,008 12,084 273,092

261,008 12,084 273,092

261,008 12,084 273,092

261,008 12,084 273,092

1,800 548 2,348

1,800 548 2,348

1,800 548 2,348

1,800 548 2,348

1,800 437 2,237

1,800 437 2,237

1,800 437 2,237

1,800 437 2,237

1,800 548 2,348

1,800 548 2,348

1,800 548 2,348

1,800 548 2,348

Not Including 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 Inventory Carrying Cost Taxes and insurance Warehousing Subtotal Transportation Costs Motor Carriers: Truck-Local (Diesel Ten-wheel) Tariff of Chiang Khong Port Subtotal Logistics Administration Total logistics

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

286,963 12,084 299,047

286,963 12,084 299,047

286,963 12,084 299,047

286,963 12,084 299,047

286,963 12,084 299,047

286,963 12,084 299,047

286,963 12,084 299,047

286,963 12,084 299,047

286,963 12,084 299,047

286,963 12,084 299,047

286,963 12,084 299,047

286,963 12,084 299,047

3,600 596 4,196

3,600 596 4,196

3,600 596 4,196

3,600 596 4,196

1,800 448 2,248

1,800 448 2,248

1,800 448 2,248

1,800 448 2,248

3,600 596 4,196

3,600 596 4,196

3,600 596 4,196

3,600 596 4,196

Not Including 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 Inventory Carrying Cost Taxes and insurance Warehousing Subtotal Transportation Costs Motor Carriers: Truck-Local (Diesel Ten-wheel) Tariff of Chiang Khong Port Subtotal Logistics Administration Total logistics

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

315,513 12,084 327,597

315,513 12,084 327,597

315,513 12,084 327,597

315,513 12,084 327,597

315,513 12,084 327,597

315,513 12,084 327,597

315,513 12,084 327,597

315,513 12,084 327,597

315,513 12,084 327,597

315,513 12,084 327,597

315,513 12,084 327,597

315,513 12,084 327,597

3,600 620 4,220

3,600 620 4,220

3,600 620 4,220

3,600 620 4,220

1,800 460 2,260

1,800 460 2,260

1,800 460 2,260

1,800 460 2,260

3,600 620 4,220

3,600 620 4,220

3,600 620 4,220

3,600 620 4,220

Not Including 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, Ships Agents or Applicants Vessel of over 100 GT 300.- Baht

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

(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 Employee salary 1 person 1 person 1 person 1 person 2 person (2*12,000) 1 person 2 person (2*12,000) 2 person (2*12,000) 1 person 1 person 2 person (2*8,500) 4 person (2*5,000) EXHIBIT 4-10 Wage rate for our organization 30,000 20,000 20,000 20,000 24,000 12,000 24,000 24,000 12,000 8,000 17,000 20,000 231,000
(Resource: http://www.adecco.co.th/uploads/Knowledge-Center-Thought-

General Manager Office Manager Plant Manager Logistic manager Sale and Marketing department IT support department Logistic department Export department Accountant department Housekeeper Driver Security guard Total

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

No.

Item

Picture

Price (Baht) 29,500

Amount

Total (Baht) 206,500

Desk

Desktop PC

10,165

71,155

P a g e | 120

No.

Item

Picture

Price (Baht) 3,100

Amount

Total (Baht) 12,400

Telephone

Stationery

1,250

8,750

A4 paper

10 10

550

5,500

Ink

75

750

Receipt paper

105

12

1,260

Printer

1,670

3,340

Air condition

13,900

27,800

10

Set up cost(Air)

2,500

5,000

11 12

Table

15,000

15,000

Projector

89,900

89,900 12,900

13

Loudspeaker

12,900

14

Microphone

6,600

10

66,000

15

Sofa

12,200

12,200

16

Table

3,789

3,789

17

Flower

120

480

P a g e | 121

No.

Item

Picture

Price (Baht) 440

Amount

Total (Baht) 440

18

Carpet

19

Disk rack

1,279

2,558

20

Disk

225

1,125

21

Glasses

15

12

180

22

Table

5,800

11,600

23

Refrigerator

8,190

8,190

24

Sink

3,990

3,990

25

Lavatory

1,689

1,689

26

Mirror

680

680

27

Box

320

320

28

Sink

750

750

29

Douche

180

180

30

Shelf

650

650

31

Broom

250

250

32

Mop

650

650

P a g e | 122

No.

Item

Picture

Price (Baht) 607,000

Amount

Total (Baht) 607,000

33

Vigo car

34

Van

1,338,000

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

No.

Item

Picture

Price (Baht) 50,000

Amount

Total (Baht) 100,000

Guard ready-made

Traffic cone Total

380

10

3,800 103,800

(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 Employee Salary Telephone and Internet expense Electricity expense Water expense Stationary expense Gasoline Expense Car insurance Fire insurance Machine insurance Social security insurance 17,550/month 7,571.89/month 500/month 8,750/ 3 month 5,000/month 7,545/y 2,525/y 5,000/y 33,600/y Base

(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
Employee Salary Telephone and Internet expense Electricity expense Water expense Set up air-condition expense Stationary expense Gasoline Expense Car insurance Fire insurance Machine insurance Social security insurance Total 231,000 17,550 7,572 500 5,000 8,750 5,000 7,545 2,525 5,000 33,600 324,042

Jan
231,000 17,550 7,572 500 5,000 8,750 5,000 7,545 2,525 5,000 33,600 324,042

Feb
231,000 17,550 7,572 500 5,000 261,622

Mar
231,000 17,550 7,572 500 5,000 261,622

Apr
231,000 17,550 7,572 500 8,750 5,000 270,372

May
231,000 17,550 7,572 500 5,000 261,622

Jun
231,000 17,550 7,572 500 5,000 261,622

Jul
231,000 17,550 7,572 500 8,750 5,000 270,372

Aug
231,000 17,550 7,572 500 5,000 261,622

Sep
231,000 17,550 7,572 500 5,000 261,622

Oct
231,000 17,550 7,572 500 8,750 5,000 270,372

Nov
231,000 17,550 7,572 500 5,000 261,622

Dec
231,000 17,550 7,572 500 5,000 261,622

Total
2,772,000 210,600 90,863 6,000 5,000 35,000 60,000 7,545 2,525 5,000 33,600 3,228,133

P a g e | 125

Table 4-19 Administration cost 2012

Administration cost Base Employee Salary Telephone and Internet expense Electricity expense Water expense Set up air-condition expense Stationary expense Gasoline Expense Car insurance Fire insurance Machine insurance Social security insurance Total 231,000 17,550 7,572 500 5,000 8,750 5,000 7,545 2,525 5,000 33,600 324,042 8,750 5,000 7,545 2,525 5,000 33,600 319,042 Jan 231,000 17,550 7,572 500 5,000 261,622 Feb 231,000 17,550 7,572 500 5,000 261,622 Mar 231,000 17,550 7,572 500 8,750 5,000 270,372 Apr 231,000 17,550 7,572 500 5,000 261,622 May 231,000 17,550 7,572 500 5,000 261,622 Jun 231,000 17,550 7,572 500 8,750 5,000 270,372 Jul 231,000 17,550 7,572 500 5,000 261,622 Aug 231,000 17,550 7,572 500 5,000 261,622 Sep 231,000 17,550 7,572 500 8,750 5,000 270,372 Oct 231,000 17,550 7,572 500 5,000 261,622 Nov 231,000 17,550 7,572 500 5,000 261,622 Dec 231,000 17,550 7,572 500 Total 2,772,000 210,600 90,863 6,000 0 35,000 60,000 7,545 2,525 5,000 33,600 3,223,133

P a g e | 126

Table 4-20 Administration cost 2013

Administration cost Base Employee Salary Telephone and Internet expense Electricity expense Water expense Set up air-condition expense Stationary expense Gasoline Expense Car insurance Fire insurance Machine insurance Social security insurance Total 231,000 17,550 7,572 500 8,750 5,000 5,000 7,545 2,525 5,000 33,600 324,042 Jan 231,000 17,550 7,572 500 8,750 5,000 7,545 2,525 5,000 33,600 319,042 5,000 261,622 Feb 231,000 17,550 7,572 500 5,000 261,622 Mar 231,000 17,550 7,572 500 Apr 231,000 17,550 7,572 500 8,750 5,000 270,372 5,000 261,622 May 231,000 17,550 7,572 500 5,000 261,622 Jun 231,000 17,550 7,572 500 Jul 231,000 17,550 7,572 500 8,750 5,000 270,372 5,000 261,622 Aug 231,000 17,550 7,572 500 5,000 261,622 Sep 231,000 17,550 7,572 500 Oct 231,000 17,550 7,572 500 8,750 5,000 270,372 5,000 261,622 Nov 231,000 17,550 7,572 500 5,000 261,622 Dec 231,000 17,550 7,572 500 Total 2,772,000 210,600 90,863 6,000 35,000 0 60,000 7,545 2,525 5,000 33,600 3,223,133

P a g e | 127

Table 4-21 Administration cost 2014

Administration cost Base Employee Salary Telephone and Internet expense Electricity expense Water expense Set up air-condition expense Stationary expense Gasoline Expense Car insurance Fire insurance Machine insurance Social security insurance Total 231,000 17,550 7,572 500 5,000 8,750 5,000 7,545 2,525 5,000 33,600 324,042 8,750 5,000 7,545 2,525 5,000 33,600 319,042 Jan 231,000 17,550 7,572 500 5,000 261,622 Feb 231,000 17,550 7,572 500 5,000 261,622 Mar 231,000 17,550 7,572 500 8,750 5,000 270,372 Apr 231,000 17,550 7,572 500 5,000 261,622 May 231,000 17,550 7,572 500 5,000 261,622 Jun 231,000 17,550 7,572 500 8,750 5,000 270,372 Jul 231,000 17,550 7,572 500 5,000 261,622 Aug 231,000 17,550 7,572 500 5,000 261,622 Sep 231,000 17,550 7,572 500 8,750 5,000 270,372 Oct 231,000 17,550 7,572 500 5,000 261,622 Nov 231,000 17,550 7,572 500 5,000 261,622 Dec 231,000 17,550 7,572 500 Total 2,772,000 210,600 90,863 6,000 0 35,000 60,000 7,545 2,525 5,000 33,600 3,223,133

P a g e | 128

Table 4-22 Administration cost 2015

Administration cost Base Employee Salary Telephone and Internet expense Electricity expense Water expense Set up air-condition expense Stationary expense Gasoline Expense Car insurance Fire insurance Machine insurance Social security insurance Total 231,000 17,550 7,572 500 5,000 8,750 5,000 7,545 2,525 5,000 33,600 324,042 8,750 5,000 7,545 2,525 5,000 33,600 319,042 Jan 231,000 17,550 7,572 500 5,000 261,622 Feb 231,000 17,550 7,572 500 5,000 261,622 Mar 231,000 17,550 7,572 500 8,750 5,000 270,372 Apr 231,000 17,550 7,572 500 5,000 261,622 May 231,000 17,550 7,572 500 5,000 261,622 Jun 231,000 17,550 7,572 500 8,750 5,000 270,372 Jul 231,000 17,550 7,572 500 5,000 261,622 Aug 231,000 17,550 7,572 500 5,000 261,622 Sep 231,000 17,550 7,572 500 8,750 5,000 270,372 Oct 231,000 17,550 7,572 500 5,000 261,622 Nov 231,000 17,550 7,572 500 5,000 261,622 Dec 231,000 17,550 7,572 500 Total 2,772,000 210,600 90,863 6,000 0 35,000 60,000 7,545 2,525 5,000 33,600 3,223,133

P a g e | 129

4.8

Depreciation cost

Table 4-23 Depreciation cost 2011 Administration Office room Table Computer Telephone Printer Air Condition Meeting room Table Projector Loudspeaker Microphone Living room Sofa Table Canteen Refrigerator Disk rack Table Sink Amount 206,500 71,155 21,700 3,340 27,800 15,000 89,000 12,900 66,000 12,200 3,789 8,190 2,558 11,600 3,990 Jan 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 Feb 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 Mar 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 Apr 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 May 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 Jun 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 Jul 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 Aug 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 Sep 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 Oct 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 Nov 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 Dec 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67 Total 41,300 14,231 10,850 668 5,560 3,000 17,800 2,580 33,000 2,440 758 1,638 1,279 2,320 798

P a g e | 130

Administration Toilet Lavatory Mirror Box Sink Douche Storeroom Shelf Office Transportation Vigo car VAN Guard ready- made Total

Amount

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

1,680 680 320 750 180 650

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

336 136 64 150 90 130

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 1,338,000 100,000 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667

121,400 26,760 20,000 287,288

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

P a g e | 131

Table 4-24 Depreciation cost 2012

Administration Office room Table Computer Telephone Printer Air Condition Meeting room Table Projector Loudspeaker Microphone Living room Sofa Table Canteen Refrigerator Disk rack Table Sink

Amount 206,500 71,155 21,700 3,340 27,800 15,000 89,000 12,900 66,000 12,200 3,789 8,190 2,558 11,600 3,990

Jan 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

Feb 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

Mar 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

Apr 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

May 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

Jun 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

Jul 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

Aug 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

Sep 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

Oct 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

Nov 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

Dec 3,442 1,186 904 56 463 250 1,483 215 2,750 203 63 137 107 193 67

Total 41,300 14,231 10,850 668 5,560 3,000 17,800 2,580 33,000 2,440 758 1,638 1,279 2,320 798

P a g e | 132

Administration Toilet Lavatory Mirror Box Sink Douche Storeroom Shelf Office Transportation Vigo car VAN Guard readymade Total

Amount

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

1,680 680 320 750 180 650

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

28 11 5 13 8 11

336 136 64 150 90 130

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 1,338,000 100,000 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 2,230 1,667 26,760 20,000

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 Office room Table Computer Telephone Printer Air Condition Meeting room Table Projector Loudspeaker Microphone Living room Sofa Table Canteen Refrigerator Disk rack Table Sink

Amount

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

206,500 71,155 21,700 3,340 27,800 15,000 89,000 12,900 66,000 12,200 3,789 8,190 2,558 11,600 3,990

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

41,300 14,231 0 668 5,560 3,000 17,800 2,580 0 2,440 758 1,638 0 2,320 798

P a g e | 134

Administration Toilet Lavatory Mirror Box Sink Douche Storeroom Shelf Office Transportation Vigo car VAN Guard readymade Total

Amount 1,680 680 320 750 180 650

Jan 28 11 5 13 0 11

Feb 28 11 5 13 0 11

Mar 28 11 5 13 0 11

Apr 28 11 5 13 0 11

May 28 11 5 13 0 11

Jun 28 11 5 13 0 11

Jul 28 11 5 13 0 11

Aug 28 11 5 13 0 11

Sep 28 11 5 13 0 11

Oct 28 11 5 13 0 11

Nov 28 11 5 13 0 11

Dec 28 11 5 13 0 11

Total 336 136 64 150 0 130

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 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 26,760 100,000 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

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 Office room Table Computer Telephone Printer Air Condition Meeting room Table Projector Loudspeaker Microphone Living room Sofa Table Canteen Refrigerator Disk rack Table Sink

Amount

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

206,500 71,155 21,700 3,340 27,800 15,000 89,000 12,900 66,000 12,200 3,789 8,190 2,558 11,600 3,990

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67

41,300 14,231 0 668 5,560 3,000 17,800 2,580 0 2,440 758 1,638 0 2,320 798

P a g e | 136

Administration

Amount

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Total

Toilet 1,680 28 28 28 28 28 28 28 28 28 28 28 28 Lavatory 336 680 11 11 11 11 11 11 11 11 11 11 11 11 Mirror 136 320 5 5 5 5 5 5 5 5 5 5 5 5 Box 64 750 13 13 13 13 13 13 13 13 13 13 13 13 Sink 150 180 0 0 0 0 0 0 0 0 0 0 0 0 Douche 0 Storeroom 650 11 11 11 11 11 11 11 11 11 11 11 11 Shelf 130 Office Transportation 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 Vigo car 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 VAN Guard ready100,000 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

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Table 4-27 Depreciation cost 2015 Administration Office room Table Computer Telephone Printer Air Condition Meeting room Table Projector Loudspeaker Microphone Living room Sofa Table Canteen Refrigerator Disk rack Table Sink Amount 206,500 71,155 21,700 3,340 27,800 15,000 89,000 12,900 66,000 12,200 3,789 8,190 2,558 11,600 3,990 Jan 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 Feb 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 Mar 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 Apr 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 May 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 Jun 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 Jul 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 Aug 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 Sep 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 Oct 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 Nov 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 Dec 3,442 1,186 0 56 463 250 1,483 215 0 203 63 137 0 193 67 Total 41,300 14,231 0 668 5,560 3,000 17,800 2,580 0 2,440 758 1,638 0 2,320 798

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Administration Toilet Lavatory Mirror Box Sink Douche Storeroom Shelf Office Transportation Vigo car VAN Guard readymade Total

Amount 1,680 680 320 750 180 650

Jan 28 11 5 13 0 11

Feb 28 11 5 13 0 11

Mar 28 11 5 13 0 11

Apr 28 11 5 13 0 11

May 28 11 5 13 0 11

Jun 28 11 5 13 0 11

Jul 28 11 5 13 0 11

Aug 28 11 5 13 0 11

Sep 28 11 5 13 0 11

Oct 28 11 5 13 0 11

Nov 28 11 5 13 0 11

Dec 28 11 5 13 0 11

Total 336 136 64 150 0 130

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 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 26,760 100,000 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

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

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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 companys 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

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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.

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Chapter 5

Financial Analysis

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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 Preopening Cost Operating Investment Administrative Investment Land Cost Inventory purchasing Operating Expense Administrative Expense Total funding requirement Baht 596,650 8,514,860 2,624,776 6,450,000 6,435,112 101,553 71,822 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 Production machine Testing Lab Equipment Building Total Baht 7,000,000 446,800 1,068,060 8,514,860

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Table 5-3 Administrative investment

Administrative investment Office equipments Supply Total

Baht 2,520,976 103,800 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 January February March Total Baht 1,875,000 1,875,000 2,325,000 6,075,000

Table 5-5 Operating Expense Operating Expense January February March Total Baht 1,994,885 1,994,885 2,445,343 6,435,112

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Table 5-6 Administrative Expense Administrative Expense January February March Total Baht 23,941 23,941 23,941 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.

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5.1.2 Income statement

Thai-North Rubber Industry Company Income Statement For Year Ended December 31, 2011(Baht)
Period Starting: Sales Sales Total Sales Less Cost of Goods Sold Materials Operation expense Logistic Total Cost of Goods Sold 1,072,344 242,564 230,314 1,545,222 449,663 0 324,042 701,650 13,760 57,791 1,097,243 -647,580 250,000 1,072,344 242,564 230,314 1,545,222 449,663 0 261,622 57,792 319,414 130,249 248,913 1,314,486 242,564 230,346 1,787,396 657,947 0 261,622 57,792 319,414 338,533 247,816 1,314,486 242,564 230,346 1,787,396 657,947 3,000 270,372 57,792 331,164 326,783 246,707 959,344 242,564 230,291 1,432,199 240,930 0 261,622 57,792 319,414 -78,484 245,587 959,344 242,564 230,291 1,432,199 240,930 1,000 261,622 57,792 320,414 -79,484 244,456 959,344 242,564 230,291 1,432,199 240,930 1,000 270,372 57,792 329,164 -88,234 243,314 959,344 242,564 230,291 1,432,199 240,930 4,000 261,622 57,792 323,414 -82,484 242,161 1,349,078 242,564 230,351 1,821,992 687,701 1,200 261,622 57,792 320,614 367,087 240,995 1,349,078 242,564 230,351 1,821,992 687,701 1,000 270,372 57,792 329,164 358,537 239,819 1,994,885 1,994,885 1,994,885 1,994,885 2,445,343 2,445,343 2,445,343 2,445,343 1,673,129 1,673,129 1,673,129 1,673,129 1,673,129 1,673,129 1,673,129 1,673,129 2,509,694 2,509,694 2,509,694 2,509,694 Jan Feb Mar Apr May Jun Jul Aug Sep Oct

Table 5-7 Income Statement, 2011

Nov

Dec

Totals

2,574,045 2,574,045 1,383,669 242,564 230,356 1,856,589 717,456 1,200 261,622 57,792 320,614 396,842 238,630

2,574,045 2,574,045 1,383,669 782,564 230,356 2,396,589 177,456 4,500 261,622 57,792 323,914 -146,458 237,429

25,740,450 25,740,450 14,076,528 3,450,768 2,763,898 20,291,194 5,449,256 16,900 3,228,133 701,650 13,760 693,505 4,653,947 795,308 2,925,827

Gross Profit Operating Expenses Selling administration expense Pre opening expense Supplies expense Depreciation Total Operating Expenses Operating Income Interest income (expense) Income (Loss) Before Taxes Income Taxes Net Income (Loss) Cumulative Net Income (Loss)

-897,580 0 -897,580

-118,664 0 -118,664

90,717 0 90,717

80,076 0 80,076

-324,071 0 -324,071

-323,940 0 -323,940

-331,548 0 -331,548

-324,644 0 -324,644

126,092 0 126,092

118,719 0 118,719

158,212 0 158,212

-383,887 0 -383,887

-2,130,519 0 -2,130,519

-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

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.

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Table 5-8 Income Statement, 2012

Thai-North Rubber Industry Company Income Statement For Year Ended December 31, 2012(Baht)
Period Starting: Sales Sales Total Sales Less Cost of Goods Sold Materials Operation expense Logistic Total Cost of goods sold Gross Profit Operating Expenses Selling administration expense Pre opening expense Supplies expense Depreciation Total Operating Expenses Operating Income Interest income (expense) Income (Loss) Before Taxes Income Taxes Net Income (Loss) Cumulative Net Income (Loss) 2,130,519 200 319,042 0 13,760 57,791 390,793 424,232 236,217 188,015 -6,892 194,907 0 261,622 0 57,792 319,414 495,611 234,992 260,619 -6,892 267,511 200 261,622 0 57,792 319,614 495,411 233,756 261,655 -6,892 268,547 4000 270,372 0 57,792 332,164 482,861 232,506 250,355 -6,892 257,247 200 261,622 0 57,792 319,614 -209,929 231,245 -441,173 -6,892 -434,281 0 261,622 0 57,792 319,414 -209,729 229,970 -439,699 -6,892 -432,807 200 270,372 0 57,792 328,364 -218,679 228,683 -447,362 -6,892 -440,470 4000 261,622 0 57,792 323,414 -213,729 227,383 -441,112 -6,892 -434,220 200 261,622 0 57,792 319,614 495,411 226,070 269,341 -6,892 276,233 0 270,372 0 57,792 328,164 486,861 224,744 262,117 -6,892 269,009 200 261,622 0 57,792 319,614 495,411 223,405 272,006 -6,892 278,898 4000 261,622 0 57,792 323,414 -48,389 222,052 -270,441 -6,892 -263,549 13,200 3,223,133 0 13,760 693,505 3,943,597 2,475,343 2,751,024 -275,681 -82,704 -192,977 1,522,036 242,564 251,824 2,016,425 815,025 1,522,036 242,564 251,824 2,016,425 815,025 1,522,036 242,564 251,824 2,016,425 815,025 1,522,036 242,564 251,824 2,016,425 815,025 811,753 242,564 251,723 1,306,040 109,685 811,753 242,564 251,723 1,306,040 109,685 811,753 242,564 251,723 1,306,040 109,685 811,753 242,564 251,723 1,306,040 109,685 1,522,036 242,564 251,824 2,016,425 815,025 1,522,036 242,564 251,824 2,016,425 815,025 1,522,036 242,564 251,824 2,016,425 815,025 1,522,036 782,564 251,824 2,556,425 275,025 15,423,300 3,450,768 3,021,487 21,895,555 6,418,940 2,831,449 2,831,449 2,831,449 2,831,449 2,831,449 2,831,449 2,831,449 2,831,449 1,415,725 1,415,725 1,415,725 1,415,725 1,415,725 1,415,725 1,415,725 1,415,725 2,831,449 2,831,449 2,831,449 2,831,449 2,831,449 2,831,449 2,831,449 2,831,449 28,314,495 28,314,495 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

-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

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.

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Table 5-9 Income Statement, 2013

Thai-North Rubber Industry Company Income Statement For Year Ended December 31, 2013 (Baht)
Period Starting: Sales Sales Total Sales Less Cost of Goods Sold Materials Operation expense Logistic Total Cost of goods sold Gross Profit Operating Expenses Selling administration expense Pre opening expense Supplies expense Depreciation Total Operating Expenses Operating Income Interest income (expense) Income (Loss) Before Taxes Income Taxes Net Income (Loss) Cumulative Net Income (Loss) 2,323,496 Jan 3,114,594 3,114,594 Feb 3,114,594 3,114,594 Mar 3,114,594 3,114,594 Apr 3,114,594 3,114,594 May 1,557,297 1,557,297 Jun 1,557,297 1,557,297 Jul 1,557,297 1,557,297 Aug 1,557,297 1,557,297 Sep 3,114,594 3,114,594 Oct 3,114,594 3,114,594 Nov 3,114,594 3,114,594 Dec 3,114,594 3,114,594 Totals 31,145,944 31,145,944

1,674,240 242,564 275,440 2,192,244 922,351 200 319,042 0 13,760 53,107 386,109 536,241 220,686

1,674,240 242,564 275,440 2,192,244 922,351 0 261,622 0 0 53,108 314,730 607,621 219,306

1,674,240 242,564 275,440 2,192,244 922,351 200 261,622 0 53,108 314,930 607,421 217,912

1,674,240 242,564 275,440 2,192,244 922,351 3500 270,372 0 53,108 326,980 595,371 216,505

892,928 242,564 275,328 1,410,820 146,477 200 261,622 0 53,108 314,930 -168,453 215,083

892,928 242,564 275,328 1,410,820 146,477 0 261,622 0 53,108 314,730 -168,253 213,647

892,928 242,564 275,328 1,410,820 146,477 200 270,372 0 53,108 323,680 -177,203 212,197

892,928 242,564 275,328 1,410,820 146,477 3500 261,622 0 53,108 318,230 -171,753 210,732

1,674,240 242,564 275,440 2,192,244 922,351 200 261,622 0 53,108 314,930 607,421 209,252

1,674,240 242,564 275,440 2,192,244 922,351 0 270,372 0 53,108 323,480 598,871 207,758

1,674,240 242,564 275,440 2,192,244 922,351 200 261,622 0 53,108 314,930 607,421 206,249

1,674,240 782,564 275,440 2,732,244 382,351 3500 261,622 0 53,108 318,230 64,121 204,725

34,288,431 3,450,768 3,304,835 23,721,233 7,424,712 11,700 3,223,133 0 13,760 637,294 3,885,887 3,538,825 2,554,052

315,555 24,619 290,936 2,032,560

388,315 24,619 363,695 -1,668,864

389,508 24,619 364,889 -1,303,975

378,866 24,619 354,247 -949,728

-383,536 24,619 -408,155 -1,357,884

-381,900 24,619 -406,519 -1,764,403

-389,400 24,619 -414,019 -2,178,422

-382,485 24,619 -407,104 -2,585,526

398,168 24,619 373,549 -2,211,977

391,113 24,619 366,493 -1,845,484

401,172 24,619 376,552 -1,468,931

-140,604 24,619 -165,223 -1,634,155

984,773 295,432 689,341 0

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.

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Thai-North Rubber Industry Company Income Statement For Year Ended December 31, 2014 (Baht)
Period Starting: Sales Sales Total Sales Less Cost of Goods Sold Materials Operation expense Logistic Total Cost of goods sold Gross Profit Operating Expenses Selling administration expense Pre opening expense Supplies expense Depreciation Total Operating Expenses Operating Income Interest income (expense) Income (Loss) Before Taxes Income Taxes Net Income (Loss) Cumulative Net Income (Loss) 1,634,155 200 319,042 0 13,760 53,107 386,109 0 261,622 0 0 53,108 314,730 200 261,622 0 0 53,108 314,930 3500 270,372 0 53,108 326,980 200 261,622 0 53,108 314,930 0 261,622 0 53,108 314,730 200 270,372 0 53,108 323,680 3500 261,622 0 53,108 318,230 200 261,622 0 53,108 314,930 0 270,372 0 53,108 323,480 200 261,622 0 53,108 314,930 3500 261,622 0 53,108 318,230 11,700 3,223,133 0 13,760 637,294 3,885,887 1,841,664 242,564 303,242 2,387,470 1,038,584 1,841,664 242,564 303,242 2,387,470 1,038,584 1,841,664 242,564 303,242 2,387,470 1,038,584 1,841,664 242,564 303,242 2,387,470 1,038,584 982,221 242,564 301,295 1,526,079 186,948 982,221 242,564 301,295 1,526,079 186,948 982,221 242,564 301,295 1,526,079 186,948 982,221 242,564 301,295 1,526,079 186,948 1,841,664 242,564 303,242 2,387,470 1,038,584 1,841,664 242,564 303,242 2,387,470 1,038,584 1,841,664 242,564 303,242 2,387,470 1,038,584 1,841,664 782,564 303,242 2,927,470 498,584 18,662,193 3,450,768 3,631,117 25,744,078 8,516,461 3,426,054 3,426,054 3,426,054 3,426,054 3,426,054 3,426,054 3,426,054 3,426,054 1,713,027 1,713,027 1,713,027 1,713,027 1,713,027 1,713,027 1,713,027 1,713,027 3,426,054 3,426,054 3,426,054 3,426,054 3,426,054 3,426,054 3,426,054 3,426,054 34,260,539 34,260,539 Jan Feb Mar Apr May Jun Jul Aug Sep

Table 5-10 Income Statement, 2014

Oct

Nov

Dec

Totals

652,475 203,185

723,854 201,630

723,654 200,060

711,604 198,474

-127,982 196,872

-127,782 195,254

-136,732 193,619

-131,282 191,969

723,654 190,302

715,104 188,618

723,654 186,917

180,354 185,200

4,630,574 2,332,098

449,289 57,462 391,828 1,242,327

522,224 57,462 464,762

523,594 57,462 466,132

513,130 57,462 455,668

-324,854 57,462 -382,316

-323,036 57,462 -380,498

-330,351 57,462 -387,813

-323,251 57,462 -380,713

533,352 57,462 475,890

526,486 57,462 469,024

536,737 57,462 479,275

-4,846 57,462 -62,308

2,298,476 689,543 1,608,933

-777,565

-311,433

144,235

-238,080

-618,578

-1,006,391

-1,387,104

-911,213

-442,189

37,086

-25,222

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.

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Table 5-11 Income Statement, 2015

Thai-North Rubber Industry Company Income Statement For Year Ended December 31, 2015 (Baht)
Period Starting: Sales Sales Total Sales Less Cost of Goods Sold Materials Operation expense Logistic Total Cost of goods sold Gross Profit Operating Expenses Selling administration expense Pre opening expense Supplies expense Depreciation Total Operating Expenses Operating Income Interest income (expense) Income (Loss) Before Taxes Income Taxes Net Income (Loss) Cumulative Net Income (Loss) 200 319,042 0 13,760 53,107 386,109 0 261,622 0 0 53,108 314,730 200 261,622 0 0 53,108 314,930 3500 270,372 0 0 53,108 326,980 200 261,622 0 53,108 314,930 0 261,622 0 53,108 314,730 200 270,372 0 53,108 323,680 3500 261,622 0 53,108 318,230 200 261,622 0 53,108 314,930 0 270,372 0 53,108 323,480 200 261,622 0 53,108 314,930 3500 261,622 0 53,108 318,230 11,700 3,223,133 0 13,760 637,294 3,885,887 3,768,659 3,768,659 3,768,659 3,768,659 3,768,659 3,768,659 3,768,659 3,768,659 1,884,330 1,884,330 1,884,330 1,884,330 1,884,330 1,884,330 1,884,330 1,884,330 3,768,659 3,768,659 3,768,659 3,768,659 3,768,659 3,768,659 3,768,659 3,768,659 37,686,593 37,686,593 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

2,025,830 242,564 331,817 2,600,212

2,025,830 242,564 331,817 2,600,212

2,025,830 242,564 331,817 2,600,212

2,025,830 242,564 331,817 2,600,212

1,080,443 242,564 329,857 1,652,864

1,080,443 242,564 329,857 1,652,864

1,080,443 242,564 329,857 1,652,864

1,080,443 242,564 329,857 1,652,864

2,025,830 242,564 331,817 2,600,212

2,025,830 242,564 331,817 2,600,212

2,025,830 242,564 331,817 2,600,212

2,025,830 782,564 331,817 3,140,212

20,528,412 3,450,768 3,973,968 27,953,148

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

782,339 183,465

853,718 181,713

853,518 179,943

841,468 178,156

-83,464 176,351

-83,264 174,527

-92,214 172,686

-86,764 170,826

853,518 168,947

844,968 167,050

853,518 165,134

310,218 163,198

5,847,557 2,081,995

598,874 94,139 504,735

672,005 94,139 577,866

673,575 94,139 579,436

663,312 94,139 569,173

-259,815 94,139 -353,954

-257,792 94,139 -351,931

-264,900 94,139 -359,039

-257,590 94,139 -351,729

684,571 94,139 590,432

677,918 94,139 583,779

688,384 94,139 594,245

147,020 94,139 52,881

3,765,562 1,129,669 2,635,893

-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

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.

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5.1.3 Balance Sheet

Table 5-12 Balance Sheet, 2011

Thai-North Rubber Industry Company Balance Sheet December 31, 2011 (Baht)

Beginning ASSETS Current Assets Cash Accounts Receivable Total Current Assets Non-current Assets Land Operations asset Administration asset Total non-current assets Total Assets LIABILITIES Long Term Liabilities Long Term Debt Income Tax Payable Total liabilities EQUITY Retained Earnings Total Equity Total Liabilities Equity

JAN

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

8,346,958 8,346,958 6,450,000 7,598,060 2,604,982 16,653,042 25,000,000

6,800,026 598,465 7,398,492 6,450,000 7,564,210 2,581,041 16,595,251 23,993,743

6,030,925 1,196,931 7,227,856 6,450,000 7,530,358 2,557,101 16,537,459 23,765,315

5,334,969 1,930,534 7,265,503 6,450,000 7,496,507 2,533,160 16,479,667 23,745,170

5,225,729 2,065,671 7,291,400 6,450,000 7,462,655 2,509,219 16,421,875 23,713,275

4,942,887 1,969,144 6,912,031 6,450,000 7,428,804 2,485,279 16,364,083 23,276,114

4,794,182 1,737,480 6,531,662 6,450,000 7,394,952 2,461,338 16,306,290 22,837,953

4,636,727 1,505,816 6,142,543 6,450,000 7,361,101 2,437,397 16,248,498 22,391,042

4,253,358 1,505,816 5,759,174 6,450,000 7,327,249 2,413,457 16,190,706 21,949,880

4,068,591 1,756,786 5,825,377 6,450,000 7,293,398 2,389,516 16,132,914 21,958,290

3,875,274 2,007,755 5,883,029 6,450,000 7,259,546 2,365,576 16,075,122 21,958,150

3,700,956 2,278,030 5,978,986 6,450,000 7,225,695 2,341,635 16,017,330 21,996,315

3,234,307 2,297,335 5,531,642 6,450,000 7,191,843 2,317,694 15,959,537 21,491,180

25,000,000 25,000,000

24,891,323 0 24,891,323

24,781,558 0 24,781,558

24,670,697 0 24,670,697

24,558,726 0 24,558,726

24,445,636 0 24,445,636

24,331,415 0 24,331,415

24,216,052 0 24,216,052

24,099,535 0 24,099,535

23,981,853 0 23,981,853

23,862,994 0 23,862,994

23,742,947 0 23,742,947

23,621,699 0 23,621,699

0 25,000,000

-897,580 -897,580 23,993,743

-1,016,244 -1,016,244 23,765,315

-925,527 -925,527 23,745,170

-845,451 -845,451 23,713,275

-1,169,522 -1,169,522 23,276,114

-1,493,462 -1,493,462 22,837,953

-1,825,010 -1,825,010 22,391,042

-2,149,655 -2,149,655 21,949,880

-2,023,563 -2,023,563 21,958,290

-1,904,844 -1,904,844 21,958,150

-1,746,632 -1,746,632 21,996,315

-2,130,519 -2,130,519 21,491,180

P a g e | 151

Table 5-13 Balance Sheet, 2012

Thai-North Rubber Industry Company Balance Sheet December 31, 2012 (Baht)
JAN ASSETS Current Assets Cash Accounts Receivable Total Current Assets Non-current Assets Land Operations asset Administration asset Total non-current assets Total Assets LIABILITIES Long Term Liabilities Long Term Debt Income Tax Payable Total liabilities EQUITY Retained Earnings Total Equity Total Liabilities Equity FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

3,261,126 2,393,862 5,654,988 6,450,000 7,157,993 2,293,754 15,901,747 21,556,735

3,378,631 2,471,083 5,849,714 6,450,000 7,124,142 2,269,813 15,843,954 21,693,668

3,495,935 2,548,305 6,044,239 6,450,000 7,090,290 2,245,872 15,786,162 21,830,402

3,677,911 2,548,305 6,226,215 6,450,000 7,056,439 2,221,932 15,728,370 21,954,585

3,591,814 2,123,587 5,715,401 6,450,000 7,022,587 2,197,991 15,670,578 21,385,979

3,505,917 1,698,870 5,204,787 6,450,000 6,988,736 2,174,050 15,612,786 20,817,573

3,411,071 1,274,152 4,685,223 6,450,000 6,954,884 2,150,110 15,554,994 20,240,217

2,896,457 1,274,152 4,170,609 6,450,000 6,921,033 2,126,169 15,497,202 19,667,810

2,666,265 1,698,870 4,365,135 6,450,000 6,887,181 2,102,228 15,439,409 19,804,544

2,427,523 2,123,587 4,551,110 6,450,000 6,853,330 2,078,288 15,381,617 19,932,727

2,197,331 2,548,305 4,745,636 6,450,000 6,819,478 2,054,347 15,323,825 20,069,461

1,930,761 2,548,305 4,479,066 6,450,000 6,785,627 2,030,406 15,266,033 19,745,099

23,499,239 -6,892 23,492,347

23,375,554 -13,784 23,361,769

23,250,632 -20,676 23,229,956

23,124,461 -27,568 23,096,893

22,997,028 -34,460 22,962,568

22,868,321 -41,352 22,826,969

22,738,327 -48,244 22,690,082

22,607,033 -55,136 22,551,896

22,474,425 -62,028 22,412,397

22,340,492 -68,920 22,271,572

22,205,220 -75,812 22,129,408

22,068,595 0 22,068,595

-1,935,612 -1,935,612 21,556,735

-1,668,101 -1,668,101 21,693,668

-1,399,554 -1,399,554 21,830,402

-1,142,307 -1,142,307 21,954,585

-1,576,589 -1,576,589 21,385,979

-2,009,396 -2,009,396 20,817,573

-2,449,866 -2,449,866 20,240,217

-2,884,086 -2,884,086 19,667,810

-2,607,853 -2,607,853 19,804,544

-2,338,845 -2,338,845 19,932,727

-2,059,947 -2,059,947 20,069,461

-2,323,496 -2,323,496 19,745,099

P a g e | 152

Table 5-14 Balance Sheet, 2013

Thai-North Rubber Industry Company Balance Sheet December 31, 2013 (Baht)
JAN ASSETS Current Assets Cash Accounts Receivable Total Current Assets Non-current Assets Land Operations asset Administration asset Total non-current assets Total Assets LIABILITIES Long Term Liabilities Long Term Debt Income Tax Payable Total liabilities EQUITY Retained Earnings Total Equity Total Liabilities Equity
2,076,489 2,633,248 4,709,737 6,450,000 6,752,692 2,010,234 15,212,926 19,922,663 2,293,597 2,718,192 5,011,789 6,450,000 6,719,756 1,990,062 15,159,818 20,171,606 2,510,505 2,803,135 5,313,640 6,450,000 6,686,821 1,969,889 15,106,710 20,420,350 2,800,306 2,803,135 5,603,441 6,450,000 6,653,885 1,949,717 15,053,602 20,657,043 2,793,473 2,335,946 5,129,419 6,450,000 6,620,950 1,929,544 15,000,494 20,129,913 2,786,840 1,868,757 4,655,596 6,450,000 6,588,014 1,909,372 14,947,386 19,602,982 2,771,256 1,401,567 4,172,824 6,450,000 6,555,079 1,889,200 14,894,278 19,067,102 2,293,934 1,401,567 3,695,502 6,450,000 6,522,143 1,869,027 14,841,170 18,536,672 2,128,596 1,868,757 3,997,353 6,450,000 6,489,208 1,848,855 14,788,062 18,785,415 1,954,708 2,335,946 4,290,654 6,450,000 6,456,272 1,828,682 14,734,955 19,025,609 1,789,370 2,803,135 4,592,505 6,450,000 6,423,337 1,808,510 14,681,847 19,274,352 1,252,490 2,803,135 4,055,625 6,450,000 6,390,401 1,788,338 14,628,739 18,684,363

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

21,930,603 24,619 21,955,223

21,791,232 49,239 21,840,471

21,650,467 73,858 21,724,325

21,508,294 98,477 21,606,772

21,364,700 123,097 21,487,796

21,219,669 147,716 21,367,385

21,073,189 172,335 21,245,524

20,925,243 196,955 21,122,198

20,775,818 221,574 20,997,392

20,624,899 246,193 20,871,092

20,472,471 270,813 20,743,283

20,318,518 0 20,318,518

-2,032,560 -2,032,560 19,922,663

-1,668,864 -1,668,864 20,171,606

-1,303,975 -1,303,975 20,420,350

-949,728 -949,728 20,657,043

-1,357,884 -1,357,884 20,129,913

-1,764,403 -1,764,403 19,602,982

-2,178,422 -2,178,422 19,067,102

-2,585,526 -2,585,526 18,536,672

-2,211,977 -2,211,977 18,785,415

-1,845,484 -1,845,484 19,025,609

-1,468,931 -1,468,931 19,274,352

-1,634,155 -1,634,155 18,684,363

P a g e | 153

Table 5-15 Balance Sheet, 2014

Thai-North Rubber Industry Company Balance Sheet December 31, 2014 (Baht)
JAN ASSETS Current Assets Cash Accounts Receivable Total Current Assets Non-current Assets Land Operations asset Administration asset Total non-current assets Total Assets LIABILITIES Long Term Liabilities Long Term Debt Income Tax Payable Total liabilities EQUITY Retained Earnings Total Equity Total Liabilities Equity FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

1,505,956 2,896,573 4,402,529 6,450,000 6,357,466 1,768,165 14,575,632 18,978,161

1,830,803 2,990,011 4,820,814 6,450,000 6,324,531 1,747,993 14,522,524 19,343,337

2,155,450 3,083,448 5,238,898 6,450,000 6,291,595 1,727,820 14,469,416 19,708,314

2,561,484 3,083,448 5,644,933 6,450,000 6,258,660 1,707,648 14,416,308 20,061,240

2,641,841 2,569,540 5,211,381 6,450,000 6,225,724 1,687,476 14,363,200 19,574,581

2,722,397 2,055,632 4,778,029 6,450,000 6,192,789 1,667,303 14,310,092 19,088,121

2,794,004 1,541,724 4,335,728 6,450,000 6,159,853 1,647,131 14,256,984 18,592,712

2,357,152 1,541,724 3,898,876 6,450,000 6,126,918 1,626,958 14,203,876 18,102,753

2,261,328 2,055,632 4,316,961 6,450,000 6,093,982 1,606,786 14,150,768 18,467,729

2,156,955 2,569,540 4,726,495 6,450,000 6,061,047 1,586,614 14,097,660 18,824,156

2,061,131 3,083,448 5,144,580 6,450,000 6,028,111 1,566,441 14,044,553 19,189,132

1,246,373 3,083,448 4,329,822 6,450,000 5,995,176 1,546,269 13,991,445 18,321,266

20,163,026 57,462 20,220,488

20,005,979 114,924 20,120,903

19,847,361 172,386 20,019,747

19,687,157 229,848 19,917,005

19,525,352 287,309 19,812,661

19,361,928 344,771 19,706,699

19,196,870 402,233 19,599,103

19,030,161 459,695 19,489,856

18,861,785 517,157 19,378,942

18,691,726 574,619 19,266,345

18,519,966 632,081 19,152,046

18,346,488 0 18,346,488

-1,242,327 -1,242,327 18,978,161

-777,565 -777,565 19,343,337

-311,433 -311,433 19,708,314

144,235 144,235 20,061,240

-238,080 -238,080 19,574,581

-618,578 -618,578 19,088,121

-1,006,391 -1,006,391 18,592,712

-1,387,104 -1,387,104 18,102,753

-911,213 -911,213 18,467,729

-442,189 -442,189 18,824,156

37,086 37,086 19,189,132

-25,222 -25,222 18,321,266

P a g e | 154

Table 5-16 Balance Sheet, 2015

Thai-North Rubber Industry Company Balance Sheet December 31, 2015 (Baht)
JAN
ASSETS Current Assets Cash Accounts Receivable Total Current Assets Non-current Assets Land Operations asset Administration asset Total non-current assets Total Assets LIABILITIES Long Term Liabilities Long Term Debt Income Tax Payable Total liabilities EQUITY Retained Earnings Total Equity Total Liabilities Equity

FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

1,620,360 3,186,230 4,806,590 6,450,000 5,962,241 1,526,096 13,938,337 18,744,927

2,065,727 3,289,012 5,354,739 6,450,000 5,929,306 1,505,924 13,885,230 19,239,968

2,510,894 3,391,793 5,902,687 6,450,000 5,896,370 1,485,752 13,832,122 19,734,809

3,046,792 3,391,793 6,438,586 6,450,000 5,863,435 1,465,579 13,779,014 20,217,599

3,223,057 2,826,494 6,049,552 6,450,000 5,830,499 1,445,407 13,725,906 19,775,458

3,399,523 2,261,196 5,660,718 6,450,000 5,797,564 1,425,234 13,672,798 19,333,516

3,567,038 1,695,897 5,262,934 6,450,000 5,764,628 1,405,062 13,619,690 18,882,624

3,174,704 1,695,897 4,870,601 6,450,000 5,731,693 1,384,890 13,566,582 18,437,183

3,157,354 2,261,196 5,418,549 6,450,000 5,698,757 1,364,717 13,513,474 18,932,023

3,131,453 2,826,494 5,957,948 6,450,000 5,665,822 1,344,545 13,460,366 19,418,314

3,114,103 3,391,793 6,505,896 6,450,000 5,632,886 1,324,372 13,407,258 19,913,155

1,989,083 3,391,793 5,380,876 6,450,000 5,599,951 1,304,200 13,354,151 18,735,027

18,171,275 94,139 18,265,414

17,994,311 188,278 18,182,589

17,815,577 282,417 18,097,994

17,635,055 376,556 18,011,611

17,452,728 470,695 17,923,423

17,268,578 564,834 17,833,412

17,082,586 658,973 17,741,560

16,894,735 753,112 17,647,847

16,705,005 847,251 17,552,256

16,513,378 941,390 17,454,768

16,319,834 1,035,530 17,355,364

16,124,355 0 16,124,355

479,513 479,513 18,744,927

1,057,379 1,057,379 19,239,968

1,636,815 1,636,815 19,734,809

2,205,988 2,205,988 20,217,599

1,852,034 1,852,034 19,775,458

1,500,104 1,500,104 19,333,516

1,141,065 1,141,065 18,882,624

789,335 789,335 18,437,183

1,379,767 1,379,767 18,932,023

1,963,546 1,963,546 19,418,314

2,557,791 2,557,791 19,913,155

2,610,672 2,610,672 18,735,027

P a g e | 155

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 Cash flow from operating activities Net Income Adjustment to reconcile net income to net Cash provided by operating activities Decrease (Increase) in account receivable Increase (Decrease) in income taxes payable Depreciation expense Net cash provided by operating activities Cash flows from investing activities Net cash used in investing activities Cash flows from financing activities Cash paid for interest expense Net cash used in financing activities Net increase (decrease) in cash Cash balance at beginning of the month Cash balance at ended of month
897,580 118,664 90,717 80,076 324,071 323,940 331,548 324,644 126,092 118,719 158,212 383,887

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

598,465 57,791 1,438,254

598,465 57,792 659,337

733,603 57,792

135,137 57,792 2,730

96,527 57,792 169,752

231,664 57,792 34,484

231,664 57,792 42,092

57,792 266,852

250,969 57,792

250,969 57,792 74,458

270,275 57,792 54,270

19,305 57,792 345,401

585,094

67,085

250,000 250,000 1,188,254 8,346,958 7,158,704

248,913 248,913 410,424 6,800,026 6,389,602

247,816 247,816 337,278

246,707 246,707 249,437

245,587 245,587 75,835

244,456 244,456 209,972

243,314 243,314 201,222

242,161 242,161 24,692 4,636,727 4,612,035

240,995 240,995 173,910

239,819 239,819 165,360

238,630 238,630 184,360

237,429 237,429 107,971 3,700,956 3,592,985

6,030,925 5,693,647

5,334,969 5,584,407

5,225,729 5,301,564

4,942,887 5,152,859

4,794,182 4,995,404

4,253,358 4,427,268

4,068,591 4,233,951

3,875,274 4,059,633

P a g e | 156

Table 5-18 Cash Flow Statement, 2012

Thai-North Rubber Industry Company Cash Flow Statement December 31, 2012 (Baht)
Jan Cash flow from operating activities Net Income Adjustment to reconcile net income to net Cash provided by operating activities Decrease (Increase) in account receivable Increase (Decrease) in income taxes payable Depreciation expense Net cash provided by operating activities Cash flows from investing activities Net cash used in investing activities Cash flows from financing activities Cash paid for interest expense Net cash used in financing activities Net increase (decrease) in cash Cash balance at beginning of the month Cash balance at ended of month
194,907

Feb
267,511

Mar
268,547

Apr
257,247

May
- 434,281

Jun
- 432,807

Jul
- 440,470

Aug
- 434,220

Sep
276,233

Oct
269,009

Nov
278,898

Dec
- 263,549

96,527 6,892 57,791 149,279

77,221 6,892 57,792 241,189

77,221 6,892 57,792 242,226 -

6,892 57,792 308,147 -

424,717 6,892 57,792 41,336 -

424,717 6,892 57,792 42,810 -

424,717 6,892 57,792 35,148 -

6,892 57,792 - 383,320

- 424,717 6,892 57,792 97,585

- 424,717 6,892 57,792 - 104,809

- 424,717 4,416 57,792 83,611 -

82,704 - 346,254

236,217 236,217 385,496 3,234,307 3,619,804

234,992 234,992 476,182 3,261,126 3,737,308

233,756 233,756 475,982 3,378,631 3,854,612

232,506 232,506 540,653 3,495,935 4,036,588

231,245 231,245 272,581 3,677,911 3,950,491

229,970 229,970 272,781 3,591,814 3,864,595

228,683 228,683 263,831 3,505,917 3,769,748

227,383 227,383 - 155,937 3,411,071 3,255,134

226,070 226,070 128,486 2,896,457 3,024,942

224,744 224,744 119,936 2,666,265 2,786,200

223,405 223,405 139,794 2,427,523 2,567,317

222,052 222,052 - 124,201 2,197,331 2,073,130

P a g e | 157

Table 5-19 Cash Flow Statement, 2013

Thai-North Rubber Industry Company Cash Flow Statement December 31, 2013 (Baht)
Jan
Cash flow from operating activities Net Income Adjustment to reconcile net income to net Cash provided by operating activities Decrease (Increase) in account receivable Increase (Decrease) in income taxes payable Depreciation expense Net cash provided by operating activities Cash flows from investing activities Net cash used in investing activities Cash flows from financing activities Cash paid for interest expense Net cash used in financing activities Net increase (decrease) in cash Cash balance at beginning of the month Cash balance at ended of month
290,936

Feb
363,695

Mar
364,889

Apr
354,247

May
- 408,155

Jun
- 406,519

Jul
- 414,019

Aug
- 407,104

Sep
373,549

Oct
366,493

Nov
376,552

Dec
- 165,223

84,943 24,619 53,107 283,719

84,943 24,619 53,108 356,479

84,943 24,619 53,108 357,673

24,619 53,108 431,974

467,189 24,619 53,108 136,761

467,189 24,619 53,108 138,397

467,189 24,619 53,108 130,897

24,619 53,108 - 329,377

- 467,189 24,619 53,108 15,913

- 467,189 24,619 53,108 22,969

- 467,189 44,836 53,108 7,307

295,432 53,108 183,317

220,686 220,686 504,405 1,930,761 2,435,167

219,306 219,306 575,785 2,076,489 2,652,274

217,912 217,912 575,585 2,293,597 2,869,182

216,505 216,505 648,479 2,510,505 3,158,984

215,083 215,083 351,844 2,800,306 3,152,150

213,647 213,647 352,044 2,793,473 3,145,517

212,197 212,197 343,094 2,786,840 3,129,934

210,732 210,732 - 118,645 2,771,256 2,652,611

209,252 209,252 193,339 2,293,934 2,487,274

207,758 207,758 184,789 2,128,596 2,313,386

206,249 206,249 213,556 1,954,708 2,168,264

204,725 204,725 388,041 1,789,370 2,177,412

P a g e | 158

Table 5-20 Cash Flow Statement, 2014

Thai-North Rubber Industry Company Cash Flow Statement December 31, 2014 (Baht)
Jan
Cash flow from operating activities Net Income Adjustment to reconcile net income to net Cash provided by operating activities Decrease (Increase) in account receivable Increase (Decrease) in income taxes payable Depreciation expense Net cash provided by operating activities Cash flows from investing activities Net cash used in investing activities Cash flows from financing activities Cash paid for interest expense Net cash used in financing activities Net increase (decrease) in cash Cash balance at beginning of the month Cash balance at ended of month
391,828

Feb
464,762

Mar
466,132

Apr
455,668

May
- 382,316

Jun
- 380,498

Jul
- 387,813

Aug
- 380,713

Sep
475,890

Oct
469,024

Nov
479,275 -

Dec
62,308

93,438 57,462 53,107 408,959

93,438 57,462 53,108 481,894

93,438 57,462 53,108 483,264

57,462 53,108 566,238

513,908 57,462 53,108 242,162

513,908 57,462 53,108 243,980

513,908 57,462 53,108 236,665

57,462 53,108 - 270,143

- 513,908 57,462 53,108 72,552

- 513,908 57,462 53,108 65,686

- 513,908 87,759 53,108 106,234

689,543 53,108 680,343

203,185 203,185 612,144 1,252,490 1,864,634

201,630 201,630 683,524 1,505,956 2,189,480

200,060 200,060 683,324 1,830,803 2,514,127

198,474 198,474 764,712 2,155,450 2,920,162

196,872 196,872 439,034 2,561,484 3,000,518

195,254 195,254 439,234 2,641,841 3,081,075

193,619 193,619 430,284 2,722,397 3,152,681 -

191,969 191,969 78,174 2,794,004 2,715,829

190,302 190,302 262,854 2,357,152 2,620,006

188,618 188,618 254,304 2,261,328 2,515,632

186,917 186,917 293,151 2,156,955 2,450,106

185,200 185,200 865,543 2,061,131 2,926,674

P a g e | 159

Table 5-21 Cash Flow Statement, 2015

Thai-North Rubber Industry Company Cash Flow Statement December 31, 2015 (Baht)
Jan
Cash flow from operating activities Net Income Adjustment to reconcile net income to net Cash provided by operating activities Decrease (Increase) in account receivable Increase (Decrease) in income taxes payable Depreciation expense Net cash provided by operating activities Cash flows from investing activities Net cash used in investing activities Cash flows from financing activities Cash paid for interest expense Net cash used in financing activities Net increase (decrease) in cash Cash balance at beginning of the month Cash balance at ended of month
504,735 577,866 579,436 569,173 353,954 351,931 359,039 351,729 590,432 583,779 594,245 52,881

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

102,782 94,139 53,107 549,199

102,782 94,139 53,108 622,331

102,782 94,139 53,108 623,901

94,139 53,108 716,420

565,299 94,139 53,108 358,592

565,299 94,139 53,108 360,615

565,299 94,139 53,108 353,507

94,139 53,108 204,482

565,299 94,139 53,108 172,380

565,299 94,139 53,108 165,727

565,299 135,795 53,108 217,849

1,129,669 53,108 1,235,657

183,465 183,465 732,664

181,713 181,713 804,044

179,943 179,943 803,844

178,156 178,156 894,576

176,351 176,351 534,943

174,527 174,527 535,143

172,686 172,686 526,193

170,826 170,826 33,656 3,567,038 3,533,381

168,947 168,947 341,327

167,050 167,050 332,777

165,134 165,134 382,983

163,198 163,198 1,398,855

1,246,373 1,979,037

1,620,360 2,424,404

2,065,727 2,869,571

2,510,894 3,405,470

3,046,792 3,581,735

3,223,057 3,758,200

3,399,523 3,925,715

3,174,704 3,516,031

3,157,354 3,490,131

3,131,453 3,514,436

3,114,103 4,512,958

5.1.5 Loan

Loan Principal Amount Annual Interest Rate Year Now MlR =7.75 % Loan Period in Years Monthly Payments

25,000,000 12.00% 10 358,677.37

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5.1.6 Total Sale

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

Table 5-22 Total Sale of 5 years

NOV 3,203,256 1,372,824 4,576,080 DEC 3,203,256 1,372,824 4,576,080

Sale, 2012 Cash Accounts Receivable Total Sale

JAN 3,523,582 1,510,106 5,033,688

FEB 3,523,582 1,510,106 5,033,688

MAR 3,523,582 1,510,106 5,033,688

APR 3,523,582 1,510,106 5,033,688

MAY 1,761,791 755,053 2,516,844

JUN 1,761,791 755,053 2,516,844

JUL 1,761,791 755,053 2,516,844

AUG 1,761,791 755,053 2,516,844

SEP 3,523,582 1,510,106 5,033,688

OCT 3,523,582 1,510,106 5,033,688

NOV 3,523,582 1,510,106 5,033,688

DEC 3,523,582 1,510,106 5,033,688

Sale, 2013 Cash Accounts Receivable Total Sale

JAN 3,875,940 1,661,117 5,537,057

FEB 3,875,940 1,661,117 5,537,057

MAR 3,875,940 1,661,117 5,537,057

APR 3,875,940 1,661,117 5,537,057

MAY 1,937,970 830,559 2,768,528

JUN 1,937,970 830,559 2,768,528

JUL 1,937,970 830,559 2,768,528

AUG 1,937,970 830,559 2,768,528

SEP 3,875,940 1,661,117 5,537,057

OCT 3,875,940 1,661,117 5,537,057

NOV 3,875,940 1,661,117 5,537,057

DEC 3,875,940 1,661,117 5,537,057

Sale, 2014 Cash Accounts Receivable Total Sale

JAN 4,263,534 1,827,229 6,090,762

FEB 4,263,534 1,827,229 6,090,762

MAR 4,263,534 1,827,229 6,090,762

APR 4,263,534 1,827,229 6,090,762

MAY 2,131,767 913,614 3,045,381

JUN 2,131,767 913,614 3,045,381

JUL 2,131,767 913,614 3,045,381

AUG 2,131,767 913,614 3,045,381

SEP 4,263,534 1,827,229 6,090,762

OCT 4,263,534 1,827,229 6,090,762

NOV 4,263,534 1,827,229 6,090,762

DEC 4,263,534 1,827,229 6,090,762

Sale, 2015 Cash Accounts Receivable Total Sale

JAN 4,689,887 2,009,952 6,699,839

FEB 4,689,887 2,009,952 6,699,839

MAR 4,689,887 2,009,952 6,699,839

APR 4,689,887 2,009,952 6,699,839

MAY 2,344,944 1,004,976 3,349,919

JUN 2,344,944 1,004,976 3,349,919

JUL 2,344,944 1,004,976 3,349,919

AUG 2,344,944 1,004,976 3,349,919

SEP 4,689,887 2,009,952 6,699,839

OCT 4,689,887 2,009,952 6,699,839

NOV 4,689,887 2,009,952 6,699,839

DEC 4,689,887 2,009,952 6,699,839

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.3.1 Investment Criteria 5.2 NPV (net present value)

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 investors 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/corporatefinance/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 IRRs 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/corporatefinance/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 Sales price RSS Sales price STR Low Cost High Cost Low Profits RSS Low Profits STR High Profits RSS High Profits STR Low Break-event point RSS Low Break-event point STR High Break-event point RSS High Break-event point STR

Price per Unit 142.00 138.00 75 80 67.00 63.00 62.00 58.00 1.12 1.19 1.29 1.38

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Chapter 6

Risk Management

Risk Management
6.1 Internal Analysis

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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

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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.

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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

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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

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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

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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.

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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)

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Chapter 7

Conclusion

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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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Tninsure, (n.d.) Machine insurance. Retrieved, 2010 Website: http://www.tninsure.com/ Trading Economics, (January, 2007) Thailand GDP Growth Rate. Retrieved 4 Jan , 2011 Website: http://www.tradingeconomics.com/Economics/GDPGrowth.aspx? Symbol=THB

UNCTAD, (n.d.) Technology, Natural rubber (NR) processing into different rubber categories Rubber goods (RG) manufacturing. Retrieved 5 Dec,2010 from Info Comm Market Information in the commodities area Website: http://www.unctad.org/infocomm/ anglais/ rubber/technology.htm

VictoryRisk, (n.d.) Financial analysis of business Statement. Retrieved 15 Jan ,2011 Website: http://www.google.co.th/url?sa=t&source=web&cd=1&ved=0CB8QFjAA&url =http%3A%2F%2Fvictoryrisk.com%2Fimages%2FFinancial%2520Statements.doc&rct= j&q=analysis%20financial%20ratio%20.doc&ei=JlVATfC7EsOsrAfto7HPAg&usg= AFQjCNG0ijqAZ3nH-_q0kxPUQgyo-n_SwA&cad=rja

Widipedia, (n.d.) Peoples Republic of China. Retrieved 10 Dec ,2010 from Wikipedia, the free encyclopedia Website: http://en.wikipedia.org/wiki/People%27s_Republic _of_China#cite_note-Ref_b-14

Widipedia, (n.d.) Chiang Rai Province. Retrieved 11 Dec,2010 from Wikipedia, the free encyclopedia Website: http://en.wikipedia.org/wiki/Chiang_Rai_Province

Yong Fong Machinery Co., Ltd., (n.d.) Cutting Machine. Retrieved 28 Dec, 2010 Website: http://machine.yongfongthai.com/index.php?langtype=th&pageid=th_40

Appendix
Table Loan Repayment
Cumulative Cumulative Principal Interest
108,677 218,442 329,303 441,274 554,364 668,585 783,948 900,465 1,018,147 1,137,006 1,257,053 1,378,301 1,500,761 1,624,446 1,749,368 1,875,539 2,002,972 2,131,679 2,261,673 2,392,967 2,525,575 2,659,508 2,794,780 2,931,405 3,069,397 3,208,768 3,349,533 3,491,706 3,635,300 3,780,331 3,926,811 4,074,757 4,224,182 4,375,101 4,527,529 250,000 498,913 746,729 993,436 1,239,023 1,483,479 1,726,794 1,968,954 2,209,949 2,449,768 2,688,398 2,925,827 3,162,044 3,397,037 3,630,792 3,863,299 4,094,543 4,324,513 4,553,197 4,780,580 5,006,650 5,231,395 5,454,799 5,676,852 5,897,538 6,116,844 6,334,756 6,551,261 6,766,344 6,979,991 7,192,187 7,402,919 7,612,172 7,819,930 8,026,179

Year
1

Month
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Balance
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 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 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

Payment Principal Interest

358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 108,677 109,764 110,862 111,970 113,090 114,221 115,363 116,517 117,682 118,859 120,047 121,248 122,460 123,685 124,922 126,171 127,433 128,707 129,994 131,294 132,607 133,933 135,272 136,625 137,991 139,371 140,765 142,173 143,594 145,030 146,481 147,945 149,425 150,919 152,428 250,000 248,913 247,816 246,707 245,587 244,456 243,314 242,161 240,995 239,819 238,630 237,429 236,217 234,992 233,756 232,506 231,245 229,970 228,683 227,383 226,070 224,744 223,405 222,052 220,686 219,306 217,912 216,505 215,083 213,647 212,197 210,732 209,252 207,758 206,249

Year
4

Month
36 37 38 39 40 41 42 43 44 45 46 47 48

Balance
20,472,471 20,318,518 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 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 15,926,921 15,727,513 15,526,111 15,322,695 15,117,244 14,909,739 14,700,159 14,488,483 14,274,691 14,058,760 13,840,671 13,620,400 13,397,927 13,173,228 12,946,283 12,717,069 12,485,562

Payment Principal Interest

358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 153,953 155,492 157,047 158,618 160,204 161,806 163,424 165,058 166,709 168,376 170,060 171,760 173,478 175,212 176,965 178,734 180,522 182,327 184,150 185,992 187,852 189,730 191,627 193,544 195,479 197,434 199,408 201,402 203,416 205,450 207,505 209,580 211,676 213,793 215,930 218,090 220,271 222,473 224,698 226,945 229,215 231,507 233,822 204,725 203,185 201,630 200,060 198,474 196,872 195,254 193,619 191,969 190,302 188,618 186,917 185,200 183,465 181,713 179,943 178,156 176,351 174,527 172,686 170,826 168,947 167,050 165,134 163,198 161,244 159,269 157,275 155,261 153,227 151,172 149,097 147,002 144,885 142,747 140,588 138,407 136,204 133,979 131,732 129,463 127,171 124,856

Cumulative Cumulative Principal Interest

4,681,482 4,836,974 4,994,021 5,152,639 5,312,843 5,474,648 5,638,072 5,803,130 5,969,839 6,138,215 6,308,274 6,480,034 6,653,512 6,828,725 7,005,689 7,184,423 7,364,945 7,547,272 7,731,422 7,917,414 8,105,265 8,294,995 8,486,622 8,680,166 8,875,645 9,073,079 9,272,487 9,473,889 9,677,305 9,882,756 10,090,261 10,299,841 10,511,517 10,725,309 10,941,240 11,159,329 11,379,600 11,602,073 11,826,772 12,053,717 12,282,931 12,514,438 12,748,260 8,230,903 8,434,089 8,635,719 8,835,779 9,034,252 9,231,124 9,426,377 9,619,997 9,811,965 10,002,267 10,190,885 10,377,802 10,563,002 10,746,467 10,928,179 11,108,122 11,286,278 11,462,629 11,637,156 11,809,842 11,980,668 12,149,615 12,316,665 12,481,799 12,644,997 12,806,241 12,965,510 13,122,785 13,278,046 13,431,273 13,582,446 13,731,543 13,878,545 14,023,429 14,166,176 14,306,764 14,445,171 14,581,375 14,715,354 14,847,086 14,976,549 15,103,720 15,228,575

49 50 51 52 53 54 55 56 57 58 59 60

61 62 63 64 65 66 67 68 69 70 71 72

73 74 75 76 77 78

Year

Month
79 80 81 82 83 84

Balance
12,251,740 12,015,580 11,777,059 11,536,152 11,292,836 11,047,087 10,798,881 10,548,192 10,294,997 10,039,269 9,780,985 9,520,117 9,256,641 8,990,530 8,721,758 8,450,298 8,176,124 7,899,208 7,619,522 7,337,040 7,051,733 6,763,573 6,472,531 6,178,579 5,881,688 5,581,827 5,278,968 4,973,081 4,664,134 4,352,098 4,036,942 3,718,634 3,397,143 3,072,437 2,744,484 2,413,251 2,078,706 1,740,816 1,399,547 1,054,865 706,736 355,126

Payment Principal Interest

358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 358,677 236,160 238,522 240,907 243,316 245,749 248,206 250,689 253,195 255,727 258,285 260,868 263,476 266,111 268,772 271,460 274,174 276,916 279,685 282,482 285,307 288,160 291,042 293,952 296,892 299,860 302,859 305,888 308,947 312,036 315,156 318,308 321,491 324,706 327,953 331,233 334,545 337,890 341,269 344,682 348,129 351,610 355,126 122,517 120,156 117,771 115,362 112,928 110,471 107,989 105,482 102,950 100,393 97,810 95,201 92,566 89,905 87,218 84,503 81,761 78,992 76,195 73,370 70,517 67,636 64,725 61,786 58,817 55,818 52,790 49,731 46,641 43,521 40,369 37,186 33,971 30,724 27,445 24,133 20,787 17,408 13,995 10,549 7,067 3,551

Cumulative Cumulative Principal Interest

12,984,420 13,222,941 13,463,848 13,707,164 13,952,913 14,201,119 14,451,808 14,705,003 14,960,731 15,219,015 15,479,883 15,743,359 16,009,470 16,278,242 16,549,702 16,823,876 17,100,792 17,380,478 17,662,960 17,948,267 18,236,427 18,527,469 18,821,421 19,118,312 19,418,173 19,721,032 20,026,919 20,335,866 20,647,902 20,963,058 21,281,366 21,602,857 21,927,563 22,255,516 22,586,749 22,921,294 23,259,184 23,600,453 23,945,135 24,293,264 24,644,874 25,000,000 15,351,093 15,471,249 15,589,019 15,704,381 15,817,309 15,927,780 16,035,769 16,141,251 16,244,201 16,344,593 16,442,403 16,537,604 16,630,171 16,720,076 16,807,294 16,891,797 16,973,558 17,052,550 17,128,745 17,202,116 17,272,633 17,340,269 17,404,994 17,466,780 17,525,597 17,581,415 17,634,205 17,683,935 17,730,577 17,774,098 17,814,467 17,851,653 17,885,625 17,916,349 17,943,794 17,967,927 17,988,714 18,006,122 18,020,117 18,030,666 18,037,733 18,041,285

85 86 87 88 89 90 91 92 93 94 95 96

97 98 99 100 101 102 103 104 105 106 107 108

10

109 110 111 112 113 114 115 116 117 118 119 120

Daily interest rate of commercial banks Loan Rates Commercial Banks as of 17 January 2011
Bank Commercial Banks registered in Thailand Bangkok Bank Krung Thai Bank Kasikornbank The Siam Commercial Bank Bank of Ayudhya TMB Bank The Siam City Bank United Overseas Bank (Thai) Company Ltd. CIMB THAI Bank Standard Chartered Bank (Thai) Thanachart Bank TISCO Bank Mega International Commercial Bank Kiatnakin Bank Land and Houses Retail Bank Industrial and Commercial Bank of China (Thai) The Thai Credit Retail Bank Average of Commercial Banks registered in Thailand 6.6250 6.6250 6.6300 6.6250 6.8750 7.0000 7.0000 7.4800 7.0000 8.5000 7.0000 6.7500 8.2500 6.9000 7.1250 7.2500 8.1500 7.1638 6.3750 6.3750 6.3700 6.3750 6.5000 6.7500 6.5000 6.9800 6.7500 8.2500 6.5000 6.5000 7.0000 6.6200 6.5000 7.0000 7.9000 6.7791 7.0000 7.1000 7.0500 7.0000 6.9950 7.3750 7.0000 7.7300 7.3750 11.0000 8.3750 7.0000 7.5000 7.1500 7.3750 7.5000 8.4000 7.5838 11.5000 14.1000 22.0500 19.0000 21.0000 28.0000 25.0000 28.0000 28.0000 28.0000 15.8750 28.0000 12.0000 28.0000 18.0000 21.0000 35.0000 22.5015 15.0000 18.0000 24.0500 22.0000 28.0000 28.0000 28.0000 28.0000 28.0000 28.0000 18.0000 28.0000 15.0000 28.0000 21.0000 21.0000 35.0000 24.2971 20.0000 20.0000 20.0000 20.0000 20.0000 20.0000 20.0000 15.0000 19.3750 MOR MLR MRR Ceiling Default Credit Card

Bank Foreign Bank Branches The Bank of Tokyo-Mitsubishi UFJ Citibank Sumitomo Mitsui Banking Corporation HSBC Deutsche Bank AG. JP Morgan Chase Bank Credit Agricole Corporate and Investment Bank Bank of America, National Association Indian Overseas Bank The Royal Bank of Scotland N.V. RHB Bank Berhad Oversea Chinese Banking Corporation The Bank of China Mizuho Corporate Bank, Ltd. BNP Paribas Average of Foreign Bank Branches

MOR

MLR

MRR

Ceiling

Default

Credit Card

10.7500 9.8750 8.2500 8.2500 7.0000 8.0000 8.0000 7.7500 8.5000 9.2500 7.5000 8.2500 10.7500 8.0000 8.5804

6.7500 7.2500 6.3750 8.2500 8.2500 7.0000 8.0000 7.5000 7.5000 8.2500 9.0000 7.5000 6.7500 6.7500 8.0000 7.5417

11.0000 7.8750 8.2500 8.7500 10.5000 8.0000 9.2500 7.5000 7.7500 8.7639

25.0000 20.9900 14.7500 21.0000 20.0000 14.0000 13.0000 13.5000 13.2500 25.0000 20.0000 15.0000 11.7500 50.0000 8.0000 19.0160

25.0000 45.6300 15.0000 32.2500 22.0000 14.0000 13.2500 22.0000 15.0000 25.0000 20.0000 25.0000 14.0000 50.0000 19.0000 23.8087

20.0000 19.0000 - 20.0000 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 Cash AR Total cash receive Cost Sale Administration expense Pre opening Supplies Expense Loan Total cash paid Total cash Beginning 8,346,958 Jan 1,396,419 598,465 9,743,377 1,545,222 324,042 701,650 13,760 358,677 2,943,351 6,800,026 Feb 1,396,419 598,465 8,196,446 1,545,222 261,622 358,677 2,165,521 6,030,925 Mar 1,711,740 733,603 7,742,665 1,787,396 261,622 358,677 2,407,695 5,334,969 Apr 1,711,740 733,603 7,645,175 1,787,396 3,000 270,372 358,677 2,419,445 5,225,729 May 1,171,190 501,939 6,995,385 1,432,199 261,622 358,677 2,052,498 4,942,887 Jun 1,171,190 501,939 6,847,680 1,432,199 1,000 261,622 358,677 2,053,498 4,794,182 Jul 1,171,190 501,939 6,698,975 1,432,199 1,000 270,372 358,677 2,062,248 4,636,727 Aug 1,171,190 501,939 6,309,856 1,432,199 4,000 261,622 358,677 2,056,498 4,253,358 Sep 1,756,786 752,908 6,512,083 1,821,992 1,200 261,622 358,677 2,443,492 4,068,591 Oct 1,756,786 752,908 6,327,315 1,821,992 1,000 270,372 358,677 2,452,042 3,875,274 Nov 1,801,831 772,213 6,179,044 1,856,589 1,200 261,622 358,677 2,478,088 3,700,956 Dec 1,801,831 772,213 6,255,695 2,396,589 4,500 261,622 358,677 3,021,388 3,234,307

Source of Cash, 2012

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

Source of Cash, 2013

Otc -12 Cash
Account Receivable 849,435 849,435 849,435

Nov-12

Dec-12

Jan 2,180,216 934,378 4,960,412

Feb 2,180,216 934,378 5,106,140

Mar 2,180,216 934,378 5,323,248

Apr 2,180,216 934,378 5,625,099

May 1,090,108 467,189 4,824,793

Jun 1,090,108 467,189 4,817,959

Jul 1,090,108 467,189 4,811,326

Aug 1,090,108 467,189 4,328,554

Sep 2,180,216 934,378 4,941,339

Oct 2,180,216 934,378 4,776,001

Nov 2,180,216 934,378 4,602,114

Dec 2,180,216 934,378 4,903,965

Total cash receive Cost Sale Administration expense Pre opening Supply Expense Lone Tax Total cash paid Total cash

2,192,244 200 319,042 13,760 358,677 2,883,923 2,427,523 2,197,331 1,930,761 2,076,489

2,192,244 261,622 358,677 2,812,543 2,293,597

2,192,244 200 261,622 358,677 2,812,743 2,510,505

2,192,244 3,500 270,372 358,677 2,824,793 2,800,306

1,410,820 200 261,622 358,677 2,031,320 2,793,473

1,410,820 261,622 358,677 2,031,120 2,786,840

1,410,820 200 270,372 358,677 2,040,070 2,771,256

1,410,820 3,500 261,622 358,677 2,034,620 2,293,934

2,192,244 200 261,622 358,677 2,812,743 2,128,596

2,192,244 270,372 358,677 2,821,293 1,954,708

2,192,244 200 261,622 358,677 2,812,743 1,789,370

2,732,244 3,500 261,622 358,677 295,432 3,651,475 1,252,490

Source of Cash, 2014

Otc 2013 Cash Accout Receiable Total cash receive Cost Sale Administration expense Pre opening Supply Ex lone Tax Total cash paid Ttotal cash 1954708 1789370 1252489.717 3,079,149 1,505,956 3,007,769 1,830,803 3,007,969 2,155,450 3,020,019 2,561,484 2,146,579 2,641,841 2,146,379 2,722,397 2,155,329 2,794,004 2,149,879 2,357,152 3,007,969 2,261,328 3,016,519 2,156,955 3,007,969 2,061,131 934,378 934,378 934,378 Nov-13 Dec-13 Jan 2,398,238 1,027,816 4,585,106 2,387,470 200 319,042 0 13,760 358,677 Feb 2,398,238 1,027,816 4,838,572 2,387,470 0 261,622 0 0 358,677 Mar 2,398,238 1,027,816 5,163,419 2,387,470 200 261,622 0 0 358,677 Apr 2,398,238 1,027,816 5,581,504 2,387,470 3500 270,372 0 358,677 May 1,199,119 513,908 4,788,419 1,526,079 200 261,622 0 358,677 Jun 1,199,119 513,908 4,868,776 1,526,079 0 261,622 0 358,677 Jul 1,199,119 513,908 4,949,332 1,526,079 200 270,372 0 358,677 Aug 1,199,119 513,908 4,507,031 1,526,079 3500 261,622 0 358,677 Sep 2,398,238 1,027,816 5,269,298 2,387,470 200 261,622 0 358,677 Oct 2,398,238 1,027,816 5,173,474 2,387,470 0 270,372 0 358,677 Nov 2,398,238 1,027,816 5,069,101 2,387,470 200 261,622 0 358,677 Dec 2,398,238 1,027,816 5,487,185 2,927,470 3500 261,622 0 358,677 689543 4,240,812 1,246,373

Source of Cash, 2015

Otc 2013 Cash Account Receivable Total cash receive Cost Sale Administration Expense Pre opening Supply Expense Lone Tax Total cash paid Total cash
2,156,955 2,061,131 1,246,373 3,291,891 1,620,360 3,220,511 2,065,727 3,220,711 2,510,894 3,232,761 3,046,792 2,273,363 3,223,057 2,273,163 3,399,523 2,282,113 3,567,038 2,276,663 3,174,704 3,220,711 3,157,354 3,229,261 3,131,453 3,220,711 3,114,103 1,027,816 1,027,816 1,027,816

Nov-13

Dec-13

Jan
2,638,061 1,130,598 4,912,251

Feb
2,638,061 1,130,598 5,286,238

Mar
2,638,061 1,130,598 5,731,604

Apr
2,638,061 1,130,598 6,279,553

May
1,319,031 565,299 5,496,421

Jun
1,319,031 565,299 5,672,686

Jul
1,319,031 565,299 5,849,151

Aug
1,319,031 565,299 5,451,367

Sep
2,638,061 1,130,598 6,378,064

Oct
2,638,061 1,130,598 6,360,714

Nov
2,638,061 1,130,598 6,334,814

Dec
2,638,061 1,130,598 6,882,762

2,600,212 200 319,042 13,760 358,677

2,600,212 261,622 358,677

2,600,212 200 261,622 358,677

2,600,212 3,500 270,372 358,677

1,652,864 200 261,622 358,677

1,652,864 261,622 358,677

1,652,864 200 270,372 358,677

1,652,864 3,500 261,622 358,677

2,600,212 200 261,622 358,677

2,600,212 270,372 358,677

2,600,212 200 261,622 358,677

3,140,212 3,500 261,622 358,677 1,129,669 4,893,679 1,989,083