INTERNATIONAL TRADE ADMINISTRATION

RENEWABLE ENERGY OPPORTUNITIES IN ASIA

MODERATOR:

JEFF HAMILTON (SP),

U.S. COMMERCIAL SERVICE

SPEAKERS:

DR. SAMAI JAI-IN,

ADVISOR TO DEPUTY MINISTER OF COMMERCE,

KINGDOM OF THAILAND;

GREGORY HARRIS,

COMMERCIAL ATTACHE,

U.S. CONSULATE – SHANGHAI;

SCOTT YAO (SP),

COMMERCIAL SPECIALIST, CHINA ENERGY (GENERAL),

U.S. COMMERCIAL SERVICE – SHANGHAI, CHINA

LISA TANG (SP),

COMMERCIAL SPECIALIST, CHINA ENERGY (SOLAR),

U.S. COMMERCIAL SERVICE – SHANGHAI, CHINA

ALAN CHIN (SP),

COMMERCIAL SPECIALIST,

U.S. COMMERCIAL SERVICE – TAIPEI, TAIWAN

FEBRUARY 2011

Transcript by

Federal News Service

Washington, D.C.

JEFF HAMILTON: Hi, this is Jeff Hamilton. I’m with the Commercial Service office based in Salt Lake City, Utah. Many of you are currently Commercial Service clients, and some of you are new to the Commercial Service.

Real briefly, the Commercial Service has offices throughout the United States and throughout the world, and our organization helps U.S. companies to sell their products and services overseas through a number of different manners. So any questions you may have regarding exporting, please feel free to let me know. You should have my contact information, and I can direct you to the right person.

Today – apologies for our difficulties with the webinar last week. And so today we are doing a recording of the webinar. And due to coordinating different schedules, our Singapore speaker is unavailable, but we will have speakers from China, from Thailand, and, I believe, from Taiwan as well.

So our first speaker is Greg Harris, who is a commercial counselor at the Commercial Service office in Shanghai. And Greg has a wealth of experience in Asia, in China and in Taiwan. And he will speak, along with a couple of commercial specialists from our office in Shanghai, Scott Yao and Lisa Tang, on alternative-energy opportunities in the – in the China market.

Greg, welcome. Thank you very much for joining us, and please proceed with your presentation.

GREG HARRIS: Thank you, Jeff.

Distinguished guests, I would like to welcome you to China, so to speak. China’s hot and getting hotter. I mean that literally and figuratively. China’s a big market. A lot of people are talking about it. And literally, it is getting hotter. It’s a lot of coal, which we’ll talk about in just a minute, and it’s a good place to discuss alternative energy.

Our focus of our presentation today will be to talk about what are the opportunities for you. Some of the numbers are big, but what would the numbers be for you?

Next slide, please.

We can always start with a few amazing numbers and statistics about China. The one thing we’ll need to think about what’s going to happen in China is the mass urbanization that has already occurred over the last 30 years and will occur in the next 30 years. By some estimates, we’ve still got several hundred million people that are still going to move to cities in the coming years. They’re going to want power; they’re going to want lights; they’re going to want cars; they’re going to want all the modern-day conveniences of urban life.

And to do that, we’re going to see lots of construction. Half the world’s construction in the next – or the first 30 years of this century may take place in China. These are some of the anecdotes, urban legends, what have you. But this is what they’re saying here. Half the world’s buildings constructed over the next 10 years, things like this. One of the most amazing statistics I’ve heard is there’s more floor space already in China than the U.S. and the EU combined.

I did want to segue into just a little bit of an offshoot, and that is green building and retrofitting. Because these green buildings will be already built or be in construction in the very near future, a lot of them will use current technologies. So if there’s people in – (audio break) – people in the green building sector, that may be the low-hanging fruit of energy efficiency. Retrofitting current buildings may be a way to reduce the need for some of the current based energy technologies.

Next slide, please.

MR. HAMILTON: And just – I’m sorry to jump in, Greg. I just want to make sure you’re able to see the slides flipping? Yes?

MR. HARRIS: Yes. Yes, I can see the slides.

MR. HAMILTON: That’s great.

MR. HARRIS: I hope the audience can too.

And my next one is some general advice that I would like to give to everyone. On the previous slide, I talked – there – I didn’t mention it, but I’ll mention it now. China in some ways is cheap. But it’s very expensive to do business here in some ways.

And what I mean by that is, when you come here it’s a very competitive market. It’s very cost-and quality-conscious in what they want to purchase. So I think you should really try to do things right. Over the years I’ve learned to really count on using professional support. I don’t think you should have any napkin business plans coming into China. I think you should have professional programs with professional support: lawyers, accountants, consultants. Do your own professional due diligence, do your own due diligence, have a really – (audio break) – plan and a really good theme on China to do your market-entry plan.

In IPR, there’s two schools of thought, basically. One is you just got to come here and do things, try, and don’t worry so much about the IPR. The other is, if you feel that the market is ready for you, then you should take all the precautions you can. I’m even more conservative than that. I say that you should take your precautions now. China’s a first-to-file country. If you have a – (inaudible) – (audio break) – leading technologies, I would get them patented and trademarked and such as soon as possible. Again, that goes back to a professional plan.

There are disputes in China, and the percentage may be low, but they seem to be quite big and quite – I don’t want to say vicious, but they’re – can be quite confrontational and – compared to the other places in Asia I’ve been. And so I would encourage you to have a plan to exit and to not over-rely on the people who say, “I have guanxi,” which is, I have a relationship with somebody. Because people leave, people move, people change positions. Government policies and emphasis change. And if you’re all depending on one person knowing somebody, it may not suit you the best, or it may not be your best avenue.

Okay, a little bit back to energy. Next slide, please.

Okay. What are we talking about right now? Right now, three-fourths of China’s energy comes from coal. We just wanted to just have the conversation right now, and let’s just do with what we have now. It would be a – I would encourage anybody, any geniuses out there, to find a quick and painless technology to work on clean or cleaner coal. I know there’s some technologies out there and they’re trying them, but still, the elephant in the room is coal.

Next slide, please.

In the year 2020, this is what China predicts – or the statistics predict it will look like. Coal is still predominant. And with a rising and growing base of energy use in China, there will still be a lot of coal, a lot more than now, so that one should remember that. But also look at the growth of the alternative energies. China’s stimulus and policies are looking for some big additions to the energy mix or makeup in the year 2020.

Now I’d like to introduce Scott Yao. Could we have the next slide, please?

SCOTT YAO: Thank you, Greg. Hello.

MR. HARRIS: Scott is our commercial specialist who covers conventional, nuclear and wind energy. And he’ll brief you a little bit on what he sees in the wind-energy market.

MR. YAO: Yeah, thank you, Greg. Hello, everyone. Just let me (stand ?) with you a minute to go through the wind energy and, later on, the oil energy.

As you know, China is one of the largest country in the world in terms of the geographic area. So here we have abundant resource of wind power. According to Chinese authorities’ assessment made a couple years ago, we have, total, about 3,226 gigawatts of the wind-power resource. And amount of this of 1,000 gigawatts could be commercialized. So based on this assessment, the wind power is very likely to become the third-largest resource of energy in China, so just right after thermal and hydro power.

In 2006, Chinese government issued a renewable-energies law to advance China (push broad ?) commercialization of wind-power industry. Chinese wind-power capacity has been growing (rapidly ?) there, and starting from 2.6 gigawatts in 2006 to 12 gigawatts in 2008.

So in the meantime, the manufacturing of localization of wind industry has been speeding up as well. As you can see, 50 percent of newly installed wind turbines were locally made in 2007. And it reached about 74 percent in 2008.

However, you know, because the development of a national graph lagged behind the wind-power industry, its demand, so it’s only about 70 percent of wind power was connected at rate. So that’s a (positive net ?) for the wind-power industry in China.

Although, you know – (inaudible) – there’s also some opportunity for the key components and the technologies for – (inaudible) – later on.

Next, please.

Here I’ll just give you some of the figures to remind you of the two major facts. One, the imports of the wind turbines is going down very quickly, and (opening wide ?) the export of the wind turbine increasingly – increased also sharply.

The other fact is, you can see the wind turbine imported, the value of that is very huge. The exports – unit of the exports – the unit price of the exports is very low. So that means China imports a high-value and big-capacity wind turbine, and – but exports the wind turbine which is very low-end and a small capacity.

And since 2008, Chinese government just changed a little on the current policy for imports. You can see here. Any wind turbine below 2.5 (gigawatts) will not enjoy the tax (privilege ?) policy.

Next, please.

Here I want to highlight for you that China, we have – in China we have big five power producer, which is Hua Nung (ph), Tha Song (ph), Hua Tieng (ph), Guo Dien (ph), CPI (ph). So this is a top five power producers in China. Their total power capacity accounted for about 44 percent of the national total capacity.

So here you can see for the – for each of them, the wind power capacity just kind of very, very small percent of their total capacity. And China’s government already announced their policy for each of these – for each of the power producers which is over 5 gigawatts, for them, they have to increase its ownership of power generation from 900 renewable energy – (inaudible, foreground noise) – to be 3 percent by 2010 and – by – and 8 percent by 2020. So you can see there is a huge gap for each power producer to fill in the future for the wind power.

Next, please.

Yeah, I also want to highlight for you that we have now seven wind-power-based projects, we call “wind power Three Gorges” project. Each wind-power base is capacity over 10 gigawatts. So to reach the goal of 2020, 1 gigawatt, Chinese government just set this long-term plan to construct a large – seven large-scale wind-power bases in Hebei, Gansu, Xinjiang, Jilin – (inaudible) – and Inner Mongolia.

Among these seven, the target in Gansu is currently under construction. And the other one I would highlight for you, that in Shanghai we have offshore wind farm, which is the first one, I think, in Asia.

Next, please.

What is the opportunity for the U.S. company? As I mentioned earlier, although the localization is speeding up, but still there are a lot of opportunities for U.S. companies. As you might know, in China we have currently about 80 wind-turbine manufacturers in China. So about 90 percent of them rely on import technologies. So they don’t have efficient capability to develop research on their own. So that means they also looking for some new technology and their new products. Here, the area they are looking for, like, wind turbines systems design, security policy design, (variance/bearings ?), remotoring, et cetera.

And also, the technology force not great.

However, there are also some challenges. I just want to highlight two. First is a local-content requirement. Any projects developed in China, there has to be a 70 percent local content. So that’s a challenge for U.S. or any foreign company. And also the challenge is any project under a similar package should be a domestic product.

Okay, so now, just let’s go through the bio-energy.

Next.

Same as the wind power, China also has a bio-energy resource, bioresources, which is very diversified in – widely across the China. Here just are some figures according to the Chinese government that is – next, please.

So you can see, based on the government (cancellations ?), the targets for bioenergy outputs will increase very substantially between 2010 and 2020. Here I just want to remind you, China’s government banned food – banned the food-based feedstock for the use of the biofuel in 2007, starting promoting the non-food-based feedstock. So that’s the policy change.

Mostly, I just want to highlight for – some opportunities for the foreign companies.

Next, please.

As I mentioned, it looks like they have to be speeded up. But still China is immature, and there’s – (inaudible) – lack some regulation for the biofuel industry. And also, they have a huge technology lag – gap to fill. So that means, for the Chinese government, they are looking for some technology like – (inaudible) – to produce biofuel from the agricultural residue and – (inaudible) – residue. So that’s the technology space – (inaudible). The Chinese government is eagerly – to promote it and encourage to – encouraged.

Yeah, okay. I’ll just stop here and leave – (inaudible) – solar energy.

MR. HARRIS: Okay, yes. Thanks. So – and frankly, in (east ?) China we see much less of the officials talking to us about biofuels than they do solar and wind. Every place we go to, they want to have a solar and wind energy and put it into their energy mix. But we haven’t heard that from biofuels, and we’re thinking that could be a geographic phenomenon, that other places in China may be better, and we could help you research that if you need it.

Now I’d like to introduce Lisa Tang. She’s the high-tech specialist who covers the solar industry in China.

LISA TANG: Hello, everybody. My name is Lisa. As Greg mentioned, solar is one of the – one of the most important renewable-energy source; is also very, very hot in China these days.

As you probably are aware, China is the largest manufacturer of solar panels. In the year 2008, China manufactured two gigawatts of solar panels, which is over 30 percent of the total world capacity. And China is continuing to grow the production.

So if you are in the solar business, you definitely need to come to – come to China.

Next slide, please.

Next slide, please.

In the next slide, you will see a map of the – a map of China with the distribution of the solar-panel manufacturers. You can see, apparently, that there is a concentration on the east coast, especially in the Yangtze delta region, which is close to the city of Shanghai.

The province of Jiangsu is very high focus of the solar manufacturers, with a – with some big companies like Suntech, Trina, and Chinese Energy (ph). A lot of those companies are – started in China but went IPO in overseas markets.

In China nowadays, there are altogether 10 solar companies that are listed in overseas markets. Therefore, China is also subsidizing those companies to help the growth.

Next slide, please.

China issued two policies this year, in 2009, to promote the domestic solar market. As you probably understand, that China used to export most of the panels manufactured here. But the domestic market was very – was very small compared with, like, Europe or U.S. But in – starting this year, part of the – as part of the national stimulus – economy stimulus plan, China started to promote the domestic solar market.

There are two policies, in March and in July. You can read the details on the slide. Just very briefly, these policies have – are issued by the – have – are issued in combination with the ministry of finance, so there is money already there to give to companies for solar projects. And in order to enjoy the policy, you have to apply with detailed projects – (inaudible) – reserves the power to approve or disapprove that.

Next slide, please.

And with the rising China solar market, we encouraged U.S. exporters to come to China with the listed technology, as China is still the largest manufacturer. So we first encourage the companies that can supply equipment and materials used in the manufacturing. And we especially encourage the high-end equipment and technology, because China is already trying to localize a lot of the low-end equipment.

Next slide, please.

Next slide, please.

And the – if you are considering the China solar industry, whether you are already in the solar industry or you are trying to consider – you are a traditional company but are trying to consider entering the solar industry, please let us know, and we will try our best to help you.

We had a webinar specifically on China’s PV (ph) industry in March this year. This is still available as a recorded version online. You can check the – you can download the PowerPoint. And we are planning another one early next year, so please wait for that.

That’s the major point for the solar industry. I’ll give back to – (inaudible).

MR. HARRIS: Okay, thank you, Lisa. And there’s one – I’m on the elephant theme today, but there’s one sort of elephant in the room for government organizations, and that’s the national development and reform commission, who is in charge of a lot of policies on pricing and approvals for large projects in China. And I won’t read all these, but there are several organizations you may want to research and meet if you come to China.

Next slide, please.

There are lots of shows and seminars and symposiums in China, and almost to the point of seminar fatigue. But these are some of the ones we’ve come across that may be suitable for you, but there’s lots of others, some really good, some okay. But if you have a – if you find about one and have specific questions, we may be able to see if we know who will be there and what will the topics be and things like that, just for your information.

Next slide, please.

We’ve gone over our time by quite a bit, but we did want to leave you one last resource, and that’s our contact information. And Greg, Scott, Lisa – and Andrew works with Lisa on solar. For non-solar, you can start with myself or Scott. And again, at CS, we want to help U.S. firms to export technologies and products to the China market.

FCS, the Foreign Commercial Service, also participated in the China green tech report and initiative. It was a public-private, foreign/Chinese group that just did some research and some brainstorming about the future of the green-tech market, of which alternative energy was one of the key components. So they have an open-source executive summary online, free to everybody, and that’s just another resource you can use.

We thank you for your time. You know, that’s not a lot of time to talk about alternative energy or energy market in China, but we did just want to give you some of the basic facts, some of the big numbers that people talk about in China, but also where we think you could really more actively participate in this market.

MR. HAMILTON: Great. Thank you very much, Greg, and thank you, Scott, and thank you, Lisa, for – not only for your wealth of information but also for your availability to do this a second time. We really appreciate that. And for all of you that are watching this webinar, you have their contact information here on this screen. So if this presentation has led to any questions, please feel free to contact them with additional questions.

So we’ve finished with China, and we’ll now move southeast to Thailand, where we are very lucky to have a speaker from the Thai government, Dr. Samai Jai-In, who is the – works with the Thailand house of representatives with the – in the energy standing committee.

Dr. Jai-In, are you on the line?

SAMAI JAI-IN: I’m on line, thank you, yes.

MR. HAMILTON: Great. Are – do you have the screen? Are you able to see the PowerPoint presentations on the screen?

MR. JAI-IN: Yes, I can – I can see it pretty clearly.

MR. HAMILTON: Perfect. Very good. When you’re finished with one slide, if you’d just let me know, I’ll move it to the next slide.

MR. JAI-IN: I’ll do that.

So – do a really fast one. Hello, everyone, I’m going to be presenting a brief overview of what is being done regarding the renewable energy in Thailand, and also I’ll touch a little bit on the significance of ASEAN, because I know part of the presentation will be covering China, which is an elephant – (inaudible) – just to mention. So the ASEAN countries, somehow we have to get together and – to remain significant in the world market.

Next slide, please. Next, please.

When you look at ASEAN altogether, we have – we are now approaching 600 million population, and the collective GDP is 1.5 trillion (dollars) US. So we are probably way above India in terms of committed GDP – (inaudible); one-third of China and one – perhaps one-fourth of Japan in that regard. But it is growing fast. And in six years’ time, all the ASEAN economies will come together under one roof. So this is something you have to bear in mind.

Next, please.

And when you look at the major ASEAN five economies – that is, Thailand, Indonesia, Malaysia, Philippines and Singapore – we are all fossil-dependent. Everyone is a net importer of fossil fuels, except Malaysia, of course, who’s still exporting.

Next, please.

And this has become one of the major reasons why we are developing our bio-energy as part of a renewable-energy push in the past decade. You can see in this slide the collective imports of crude oil. Last year it hit 3.7 million barrels a day in ASEAN. The largest one, of course, is Indonesia. Second is Singapore. Most – (inaudible) – countries who we export from – (inaudible) – Thailand.

Next, please.

On this slide, I show you some history of the power sector, which was pretty badly hit during the financial crisis 10 years ago. And now we are – we expect that this time around, the crisis taking place in Europe and North America should last perhaps about one or two years. So by the third quarter of next year we should see some growth, some picking up in the power sector in ASEAN.

Next, please.

And this is a broad overview of what is seen – (inaudible) – in economies in terms of biofuel development opportunities. Our country has put in some pretty good country plans in terms of the adoption of all form of alternative energies. In this graph alone, it’s – I only dictate development plan for biodiesel and ethanol.

Next, please.

Of course, they’re – the one to come up very strongly in this regard Thailand. But we have to overcome some of this debate, like the food and fuel crisis, the land and water capacity issue, the human security issue. And, of course, some people even blame some of our neighbors for turning some farmland into our energy crop, that it will be harmful to sustainable development or be harmful to food production. But I think from now we have to focus on the policy for rural job creation, because this is something the government – our government needs to address.

Next, please.

You can see in this regard, Thailand has 20 million hectares of arable land. Half of that is for rice paddy. And for rice in this region, we only – most of them, a year, can do it in – once in a year. That means we put the land to work only four months in twelve months. For the rest, of course, the family has to seek other jobs, and that is not really easy to do. That makes the productivity of our eco-sector very low.

Next, please.

Of course, some people have blamed that on the social inequality in southeast Asia in general. In this picture on the left-hand graph, you can see the red – (inaudible) – rice paddy. And the right-hand graph, the red color represents the section of first crop of life, meaning they are irrigated land for rice paddy.

Those on the right-hand side have very high productivity. But you can see on the left-hand side, (each one ?), the land are not being put to good use, meaning just to leave it to dry under the hot, tropical sun. So we are trying to do something about it.

Next, please.

And of course this is the graph showing productivity of the land in square meters per year. (Inaudible) – top is, of course, Malaysia, where they have a lot of good success in terms of palm oil and rubber plantations. Most of them are part of the large agro-industry chains. The bottom – (inaudible) – of course, is Thailand, and we are looking to solve this.

Next, please.

And this is the economy in – of Thailand in the – in 2008. We are number-one exporter of several commodity, like rice, rubber, cassava. For export of sugar cane, we are number second – second only to Brazil in terms of exports. And also, all-time, we are the first producer in the world. And it is climbing up pretty fast. And this is the – part of the major pillar of renewable-energy development in Thailand.

Next, please.

And this is the acreage for energy crops. The top two – about 1 million hectares – plantation is sugar cane and cassava, which is – which are now the feedstock for our bio-ethanol program. And the bottom one, the green one, the green graph, represents the acreage for oil palm, which is – (inaudible) – really fast.

Next, please.

And this is the farm – (inaudible) – income. So all of these are – (inaudible) – commodity a year. This is quite significant for our eco-sector in Thailand.

Next, please.

And one more reason that we need to adopt – or adapt our social workforces really fast is that Thailand’s moving into what is called an aging society. By 2025, Thailand will be an aging-population country, similar to Japan and Germany now. But the gap between Thailand and Germany or Japan is, I would say, much longer than the window of opportunity that we have. So we need to adapt that really fast. And of course, our – (inaudible) – is (emergency ?) in that attempt.

Next, please.

Bio-energy in Thailand has taken root from His Majesty the King’s effort since 1985, both ethanol and biodiesel. We even have a – (inaudible) – process in the palace, demonstrating some technology for this, to convert molasses, to convert cassava into ethanol, and to convert used cooking oil and palm oil into biodiesel, which has been running for the past decade in the grand palace.

Next, please.

And as a result of that, as a result of that inspiration, we have a – set up a long-term plan that by 2030 Thailand, (with some luck ?), turn our agricultural industry into what you call a carbohydrate economy. We will not keep on exporting cheap commodities to the world market anymore. We will try to make do with what we have, convert the debt – (inaudible) – create new jobs. And of course, in that process, we hope to be able to turn our economy around into a better shape.

Next, please.

So since we look at this input in the left ‘99 piece, and in 2003 we looked at it and have a plan, and then last year we rewrite the plan, put it 15 years further. As of last year, 5 percent of total energy consumption in Thailand is renewable energy or alternative energy. By 2022, we hope to make it 20.4 percent. Of course, we’ll try to meet the 20 by 20 (ph) agenda. And we have put in a lot of programs, incentives, and government support.

We have to – still have – (inaudible) – investment support to all forms of alternative-energy development: in electricity, in heat generation, in biofuels, and even in natural gas for transportation sector. This is a very ambitious plan. We are – by the end of this year, 2009, we should be able to make it more than 6.5-percent share. So there is quite a good plan to good in place.

By 2020, we expect that we can save the – reduce the import of fossil fuel by $12 billion US a year, and we can generate – we will need investment from the – (inaudible) – billion US dollar a year by that time. So the steady – (inaudible) – to import, we meet the investment requirement. So, in effect, this will accrue to the capital stock of the country.

Next, please.

And this is a detail of the transportation sector, where we will try to reduce the dependency on fossil fuels. And these go from 66 percent last year to 45 percent by 2022, gasoline from 28 percent to 16 percent. We developed gas for transportation from 3 percent today to 20 percent in 15 years’ time, and biofuels from, oh, 3.5 percent today to 14 percent by 2022.

At the 3 percent level, Thailand is now the leading country in Asia who has adopted biofuels in the transportation sector.

Next, please.

This is the – Thailand has mandated E2 (ph) in the – in the country since last year, and this is the gasoline consumption. Of course, more than half of – (inaudible) – now in – (inaudible) – we blend ethanol into it. And Thailand has also adopted E85 flex-fuel model, which is putting through manufacturer and now producing flex-fuel models in the country to be able to support the government plan to help in the development of new, authentic energy.

Next, please. Next, please.

So the critical component of this attempt – or this policy in Thailand is that we move to diversify our agriculture – agricultural sector from food and feed export market into what is called the energy and cyber market. In the past 10 years we have put in a lot of technology and industrial (capital ?) and of course we state the political decision even though we – (inaudible) –in the past – excuse me.

In the past civil administration, there are some barriers that we need to overcome, of course, like the consumer perception, like sustainability issues. And for this year we can say that Thailand is now in the top five bio-ethanol producer. And for biodiesel, we are top 10 in the world. And that’s not bad for a program that has been in place about 10 years’ time.

Next, please.

This is – I’m going to cover very quickly the resources that we have to – for this bio-energy program. This is for – (inaudible) – production. Thailand exports more than three-quarters of – (inaudible) – production. So we want to reduce that.

Next, please.

And this is the cassava. This is the – not a potential feedstock for ethanol program. Today Thailand has between ethanol plants and 12th – (inaudible) – using molasses, which is a byproduct from sugar cane through plants, and are using cassava in this picture. We are the world’s number one in terms of productivity and number one in terms of exports, but we are the first producer in the world behind Nigeria.

Next, please.

Of course, Thailand is now controlling 81 percent of the cassava or tapioca in terms of starch exports in the world. And – but in the future, it’ll be interesting to see the impact of that.

Next, please.

It might actually mean that there’ll be more export market for corn starch, for example.

Next, please.

This is the ethanol fuel projects all over the country. Most of them are concentrated in the eastern part of the country, or northeastern part.

Next, please. Next, please.

And this is the future plan. So by 2011, we will have a very strong sector for ethanol in our gasoline markets. And, of course, for biodiesel, we’ll (begin ?) to mandate B5 by 2011. And B10 will be given some – a tax incentive as an option for the consumer.

Next, please.

And some people will ask, how could Thailand grow more bioenergy crops? In fact, this is another problem. We have a pretty good tropical climate, and you can see in this picture we are in the same belt as Nigeria, in the same belt as the central – or southern America – American countries. So we should be able to do that in a pretty good way.

Next, please.

And this is, of course, the palm oil – (inaudible) – expansion plant.

Next, please.

It’s above 1 million acres for the next few years. And by 2012, about half of the palm oil production in Thailand will go for bio-energy, or (other ?) chemical (feeds ?). Another half will be for – the other half will be for food sector and the export sector.

Next, please.

And this is an example of what we have been able to do in terms of converting the arable land in the northern part of Bangkok and used that to grow oil palm, which is – has a very high yield.

Next, please.

And in a sense you can solve what we call the acidic-soil problem. And this is one other good example.

I’ll go to the last slide. I don’t think we have time to cover all these issues. But I would like to say that the way forward for Thailand is that there are still a lot of challenges. There’s still a lot of barrier in terms of the export and import and other things. And we are now putting in a pretty good plan.

And we’re not only talking about Thailand at the moment; we are looking to mobilize the whole – the ASEAN economy to come into this education program of our agricultural commodity. And there is a huge opportunity for investment. In Thailand, we need about 10 billion (dollars) a year in terms of investment. And I expect that the total ASEAN market will be three or four times that.

And speaking of – we have also – (inaudible) – institute strongly in terms of palm oil. We are seeking new opportunity – investment opportunity for ASEAN country in Cambodia, Laos and Myanmar, which is – even when we can’t engage them in the – in this new investment opportunity, it’ll be good, because that will serve a lot of – (inaudible) – (job program ?) that we have.

I’ll close with that. I will say that Thailand is now pretty well prepared to join the leaders in bioenergy and renewable-energy sector in the world. I don’t have time to cover all other issue, like solar, which is a rich – (inaudible) – sector in Thailand as well; hydro and so forth. We are now putting in something like 2,000 megawatts of wind farm all over the country. And there are other issues. I’ll be happy to follow up on e-mail questions if you – if you have any inquiries afterward.

Thank you for your attention.

MR. HARRIS: Thank you very much, Doctor. Really appreciate your time. One real quick question for you. You’ve talked a lot about the bioenergy sector and all of the opportunities with regard to, you know, the agriculture. Are there specific opportunities beyond investment for U.S. companies in this bioenergy sector, possibly for equipment or something of that nature?

MR. JAI-IN: Of course. There is a lot of – I know that the U.S. has a very strong automotive sector – well, at least in terms of capacity you have. That is something that I hope that big three in the American motor auto sector will come in and do something about it in the Thai market – and, of course, not only Thai market, in ASEAN as well, in auto parts.

And also, in terms of the high-tech and the second-generation biofuels, RSO (ph) or even battery. At the moment, we have a lot of interest in electricity and hybrid units. I think battery will some of the issue that technology company in the U.S. can come in and see what we can do in terms of the Thai market or the ASEAN market as such.

MR. HARRIS: Great. Thank you again, Doctor. I really appreciate your time and your availability to do this just one week after our original event. So thank you very much.

MR. JAI-IN: Thank you – you’re welcome – to talk to you again.

MR. HARRIS: Great. Alan (sp), are you on the line?

ALAN CHIN (sp): Yes, I’m on the line.

MR. HAMILTON: Perfect, Alan. Are you going to be using the presentation that we had from the speaker last week?

MR. CHIN: Yes, exactly.

MR. HAMILTON: Okay. It should be on – do you see it on your screen?

MR. CHIN: Yup.

MR. HAMILTON: Okay, perfect. Why don’t we go ahead and get started. Alan is the commercial specialist in Taipei for the Commercial Service, and he handles the energy sector, among others. And so Alan will be talking now about green-energy opportunities and industry in Taiwan.

So Alan, just like with the other speakers, when you’re ready for the slides to go to the next one, just say “next slide.”

MR. CHIN: Okay. Hi, everyone. This is Alan Chin from U.S. Commercial Service Taipei. Really, I’m glad to have this opportunity to share some opinions about Taiwan’s opportunities on the green energy.

And actually, the very beginning part of the PowerPoint material prepared by Dao Zedong Xuxing (ph). But Dao Zedong Xuxing (ph) is the deputy director of ITRI’s green-energy office. ITRI is, in fact, Industrial Technology Research Institute, which is instituted, totally sponsored by Taiwan’s MOEA. MOEA is ministry of economic affairs. So in this PowerPoint, some of Taiwan’s government policy and (accord ?) will be conveyed during the Power (sic) presentation.

Next slide, please.

In this PowerPoint, basically, we will cover three topics. One, we will talk about governmental policy on Taiwan’s green-energy industry. And basically, secondly, we will share some opinions about the best prospect in Taiwan, which will be photovoltaics, LED, wind and electrical vehicles. And finally we will do some kind of conclusions for the reference of U.S. companies that expect to export your service or product to Taiwan.

Next, please.

As compared to the mainland China, everybody knows actually Taiwan’s market is quite small, actually. But most of the time, all the – (inaudible) – are right now, including the U.S. companies, then we’ll have a perspective called the Greater China Area. The Greater China Area will include, of course, mainland China, and also Hong Kong, Macau, and finally Taiwan.

Taiwan, even though our domestic market’s not so big – however, Taiwan has been playing a very important, key role in the manufacturing base in the world. Especially, we have a very excellent success in the ICP (ph) industry. Everybody knows that maybe most of the world’s desktop computers and notebook computers and even more platforms are manufactured either in Taiwan or in the mainland China plants operated by Taiwan companies.

So sometimes, when we – when we are talking about some sectors in Taiwan, usually we are highly connected to U.S. companies, taking a broader view, thinking about Taiwan’s advantage if you have a strong interest to export your product and service to the Greater China Area.

So in Taiwan, about the green-energy sector, actually, Taiwan has set a very clear score about sustainable-energy policy, which included a CO2 emissions reduction, low-carbon energy, power generation. And just recently, the Taiwan government has (agreed ?) the so-called sunlight program that we’re promoting even further about Taiwan’s green-energy development.

And then finally, just this past June we have – Taiwan has just passed an act called the renewable-energy development act. In this act, the government is totally authorized to provide some subsidiary to promote any kind of renewable energy, which include solar, include wind, include – (inaudible) – and so on. Right now, Taiwan’s government is negotiating closely with the industry to decide the subsidiary model to further promote the development of Taiwan for the new energy sector.

Next, please.

And Taiwan’s – actually, we have a very clear (goal ?). Basically, we will cover three central – (inaudible) – to development in Taiwan as Taiwan’s sustainable-energy development policy.

First of all, we will focus on efficiency, because in Taiwan we have many quite mature industries. For example, petrochemical; for example, textile; for example, food production. All these sectors, they use a lot of energy. And some of their equipment has some – takes some basis to include their efficiency. For example, most of the companies in the petrochemical industry, they use lots of – (inaudible) – in their process. So lots of efforts with their use to increase the efficiency to be – the efficiency for this equipment in different mature sectors.

Secondly, Taiwan will have a goal to increase – (inaudible) – so we have some kind of – just as mentioned in a previous slide, we have a clear goal to review the CO2 emissions. And we also try to find some kind of alternative – for example, IGCC, integrated gasification combined cycle, a metric to be used by Taiwan’s major utilities for power generation.

Lastly, because Taiwan will rely maybe more than 98 percent on the import of foreign energy sources, so recently we also – we focused on the severity of Taiwan’s energy supply. So recently, even though we have already four nuclear power plants in Taiwan and right now the government’s saying that maybe we have to expand some nuclear power – (inaudible) – to be used to maintain Taiwan’s (superiority ?) of energy supply.

Next, please.

Okay, this is talking about energy efficiency or about the energy conservation topic that you can see in this slide. Every year the government has set a 2-percent increase to help the whole industry to increase their equipment efficiency, energy savings.

Next, please.

Okay, this is – because lots of sectors are related to the energy. So in Taiwan, basically we focus on four different approaches. One is about the industry and energy sector. The other one is, of course, transportation sector. And the last one is the residential and the government sector. So for each different sector, Taiwan’s government has already set very – (inaudible) – goal for them to do the – for them to pursue in the – to do the energy conservation as their goal in the future.

Next, please.

This slide shows a total – for example, like, an action plan, because we have a vision, just as I’ve already mentioned in previous slide, because in Taiwan we have a vision to create an energy-saving society and a low-carbon economy. So of course we have to develop some kind of action plan. So in this slide you can see that the Taiwan government has already selected two industries as the pillar industries. One is the photovoltaic. The other one is LED lights.

In addition to that, we also identified five potential industries, which include the wind; electrical vehicles; EICT; biomass; hydrogen, the fuel cell, as another five potential industries. So in the future, the two pillar industry and these five potential industry will be targeted by Taiwan as a goal to help Taiwan to achieve its – Taiwan’s vision – (inaudible) – society and the low-carbon economy.

Next, please.

So this is a challenging plan. So once Taiwan has located the two pillar industries and the five additional industries to be – to be targeted for future promotion. So first of all we have to identify what the industrial capacity is in Taiwan. As already mentioned, Taiwan’s markets – (inaudible) – more.

And the Taiwan – Taiwanese companies, Taiwanese government usually has a very established philosophy that we would like to identify first of all what kind of strengths the Taiwan companies, they already have, and what kind of collaborations (happen/habit ?) or cooperation measures that we can develop to cooperate with founding suppliers and founding vendors and to work together for a common target – market target.

So this slide shows that basically we have to identify our industrial (capacity ?) and – (inaudible) – cooperation with founding suppliers and founding vendors, we can identify the common target. For example, we can identify the Greater China as a whole market and we can – the U.S. companies can take advantage of Taiwan’s – already has a strength to enter this Asia target.

Next, please.

Okay. So you can see that in this slide – because ICT is Taiwan’s most successful industry. And based on the rapid growth of ICT, Taiwan has established a very adaptive manufacturing base for any kind of related technology or related component. So in this light, we put the ICT in the center of this action plan, and it was put with PV, put above photovoltaic and – (inaudible) – and other potential industries. And we put them together, trying to enhance the strength that we already have and trying to gather some other responses from foreign companies and to work together to convey a common market and wind-energy industry.

Next, please.

Okay, so for the major industries, I already identified in the slide – it’s solar, PV, LED wind and electro – (inaudible). We do have some kind of – (inaudible) – goals to be pursued in the following year.

Next, please.

And you can see this is for the – for the solar, for advanced voltaics. Taiwan, especially right now, we have been at the – number fourth largest power cell manufacturer in the world. And you can see from this slide, actually, the government and industry have set a very aggressive goal for us to pursue in the following years.

Next, please.

And this slide shows something I think would be very valuable for the benefit of U.S. companies. Everybody knows that within the industry of solar power, actually, there is a very long supply chain, even though right now Taiwan is number four largest manufacturer of solar cell. But for the raw material, for example, the ingot and the wafer, and for the downstream areas such as the module and – (inaudible) – we still have to – we still do not have lots of established manufacturing capability.

And even for the manufacturing of a power cell – power cell, usually the Taiwanese companies, they import the equipment and find supplier from the European companies, Japanese companies, and from USA company.

So Taiwan has already put PV solar industry as one of the pillar industry of their sunlight program. And you can see in the whole supply chain of the power solar manufacturing, including the very downstream of – (inaudible) – system, the USA companies can find opportunities to stay in Taiwan, either the very upstream raw material or some kind of key component for the Taiwanese company to be used in either assembly of the module, in the – (inaudible) – system. And even they can (sell ?) a lot of good equipment to the Taiwanese company, for them to manufacture solar cell.

Next, please.

Okay. This slide also show our – show Taiwan’s solar industry development strategy. So you can see that in the central – we put a powerful system-integration plant. So Taiwan – we already know that most of Taiwanese companies in the solar power industry, their strength is manufacturing. Their strength is mass production. However, they need upstreams of raw material. They need the equipment to be used. And they need some kind of market development ability.

So all these things can be used by USA company. If you are going to sell raw materials to Taiwan, if you are going to sell manufacturing equipment to Taiwan, then you are going to find some kind of partner of a solar system. I think that you can think of Taiwan as your first consideration to develop your international business.

Next, please.

Okay. This is for the full area. I mentioned that if you are USA company, if you really think – if you can find some company in Taiwan and you can identify even more. For example, if your business category is about – (inaudible) – solar cell or – (inaudible) – thin film or your commerce chains is in ingot or wafer, or PV module, all these three or four areas you can find the potential to work with Taiwanese companies.

Next, please.

Just as solar-cell industry, the other here industries, called LED. Actually, the Taiwan government philosophy is quite simple. Because, as I mentioned before, Taiwan has been very successful in the manufacturing of ICT industry, and we are very successful in the families – families of plants to manufacture lots of different kinds of semiconductors. So the solar cell and – (inaudible) – these two industries are quite related to the semiconductor industry. So that’s the reason why the Taiwan government and industry selected solar cell, solar power and LED as the two pillar industries in the green industry.

So this is – this slide is talking about Taiwan’s goals about how to develop LED lighting in the near future. Just recently – because right now, the Taiwan situation – the relationship between Taiwan and the mainland China is getting better and better. So sometimes – especially sometimes, China government, they will give a special opportunity for Taiwanese company to export their products to mainland China. For example, recently, the – after the coordination of China’s government, they already coordinated more than – more than dozens of cities that they are going to use the LED lighting systems manufactured by Taiwan.

However, in Taiwan, this change has only – we only have the chance to manufacture the LED itself. However, to over – to produce LED light systems, we see a need for lots of other vendors’ and suppliers’ support.

Next slide, please.

So you can see that on the left-hand side – left-hand side, we listed some – we listed some weaknesses, actually, if I can use the word. However, Taiwan’s weakness will be the opportunities for USA companies. For example, we do not – we here do not have a very stable supply of the upstream material. And we were quite short on component and manufacturing technology. And we are quite weak on the – on the systems products – (inaudible). And finally, it’s very hard for the Taiwanese companies to find the market entrance path. And also, we are quite – (inaudible) – on future needs.

So these kinds of weakness for Taiwanese company will be the opportunities for USA companies. So U.S. companies, you could think, this – (inaudible) – is your chances that you can take advantage of Taiwan-based company, which are shown on the right-hand side. For example, we have a very superior – our mass production of this kind of LED, LED cells, and we’re also quite flexible on business operation. And we can provide (timing ?) – (inaudible). And finally, this is very popular for capital investors.

So for the USA company, if you have an interest to incorporate the LED as one kind of component in your final system, I think the Taiwanese companies will be your effective partner to manufacture the final product for your company.

Next, please.

Talking about – after talking about the two pillar industries, solar power and LEDs, right now we go through very frequently about the wind-power opportunity in Taiwan. As I already mentioned, Taiwan is a small island. We do not have – Taiwan itself is not a very big market. However, Taiwan has started its wind-power generation project maybe about since five years ago. Actually, the Taiwan power company, the only utility in Taiwan, has installed lots of wind turbines along the island.

But for the USA company I think – for your companies, quite specialized in so-called offshore power – wind-power system. You can find some opportunity in the – in the near future, because you can see that between mainland China and Taiwan, there is Taiwan Strait, okay, Taiwan Strait. And, you know, Taiwan Strait is a sea water level. It’s quite shallow.

So it’s easy for us to build some kind of offshore wind farm in the Taiwan Strait and just connect it – the wind farm to the Taiwan island. So if your company is specialized in this offshore wind-power generation, I think you can find some opportunity in Taiwan. And we are very glad to introduce you to the Taiwan power company to make any kind of successful business transaction for your company.

Next, please.

Okay. This is – this slide also mentions some kind of targeted strategy about Taiwan’s wind-power development. So you can see there is – of course we target some kind of research and development. We talk about something about the industry. For example, because most of the key components right now are still imported from foreign suppliers. And so we hope the Taiwanese companies, they can provide some kind of maintenance service after the announcement of this wind farm. And we also hope we can join some kind of standard preparation, and a standard – (inaudible) – in the world.

Of course, if a USA company, you can find the Taiwanese companies as your partner, the Taiwanese companies are more than happy to be your manufacturing base in Asia, and also, we can target any kind of potential market in the mainland China area, and also the southeastern Asia area.

Next, please.

Okay. Finally, we are talking about something about the electrical vehicles. Actually, for the time being, Taiwan has sometimes, just like the – (inaudible) – before, Taiwan’s quite successful in ICT. And everybody knows – no good for a mobile phone. They need lots of batteries.

So some kind of – some Taiwanese companies specialize in the manufacture of batteries and have already devoted their efforts for the batteries to be used by any kind of electrical vehicle, such as for the automobile. Maybe it’s much more challenging for Taiwanese companies. But right now we are quite successful to provide batteries to be used by motorcycles and some kind of very light battery (coat ?) to be used in the sports industry.

Next, please.

So right now I’d point you – offer some kind of conclusion for the rest of the USA companies. As I – as I mentioned before, Taiwan itself is not a very big market. However, Taiwan has such a wonderful location, just very near to the mainland China. And right now the relationship between Taiwan and mainland China is getting better and better. And Taiwan’s being very successful in the industry of ICT and the semiconductors. So identifying the Taiwanese strengths, the Taiwanese government and industry has already selected solar PV and LED as two of the pillar industries to be developed in the green-energy industry.

So any U.S. company, if you have any kind of equipment, any kind of technology, any kind of service, and your main target is in the Greater China Area or southeastern Asian countries, you can really think of Taiwan as your best partner, even a manufacturing partner or a marketing partner, because of Taiwan’s – we really have a very unique and special location and a very special position in the manufacturing supply chains around the world. So this is – we use very limited time to offer you some kind of very detailed information for your reference if you have interest to enter Asia market.

So if you have any questions, you can contact me directly. We are more than happy to – (inaudible) – and offer you any kind of counseling opinion or any kind of research – (inaudible) – for your reference.

Thank you very much. Thank you, Jeff.

MR. HAMILTON: Thank you, Alan. Thanks again to you and to our speakers from China and from Thailand for being available on very short notice to do this rebroadcast of our – for a second time of our renewable-energy webinar.

And for all of you listeners and viewers on this webinar, the contact information for Alan, for our energy specialist in Thailand and our energy specialist in China, will be included on the e-mail that I send to you, as well as Singapore.

Unfortunately, our speaker for Singapore was unavailable to join us today, but we will include the contact information for our specialist in Singapore.

So if today’s webinar has led to any additional questions that you may have, please feel free to contact any of them with your questions, and they’ll be sure to get back to you.

So once again, I want to appreciate all of the speakers, I want to thank all of the speakers, and I – and I want to thank all of the viewers for your patience with us. And I hope you find this useful. And if it leads to any questions, please contact us and let us know how we can help you with your international efforts.

With that, I think we will conclude. Thanks again, and good luck exporting. Good-bye.

MR. : Thank you, Jeff.

MR. HAMILTON: Thanks.

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