AWR Lloyd’s role: Theos-2 seminar

INTRODUCTION TO AWR LLOYD

AWR Lloyd is a specialist consulting firm focused on the development of Asia’s strategic industries, natural resources, and infrastructure sectors. The concept of ‘strategic industries’ includes advanced technologies such as earth observation satellites, considered critical to the long term security and socio-economic welfare of a country. AWR Lloyd also has a related geo-political risk practice including crisis contingency planning (e.g. oil supply disruption scenarios).

AWR Lloyd is a Hong Kong registered company with a BOI-approved subsidiary in Thailand and with subsidiaries and representation also in Vietnam, Indonesia, Korea, Australia and the US. AWR Lloyd has around 50 staff and consultants in the region. AWR Lloyd provides consulting and corporate finance advisory services to Asia-Pacific governments, companies and financial institutions in relation to feasibility studies, valuation, business planning, capital-raising, mergers, acquisitions and investment.

AWR Lloyd has been active in Thailand since 2000 working with government agencies and companies in mining (e.g. Banpu), energy (e.g. Bangchak, SPRC, Energy Regulatory Commission, APICO), infrastructure (e.g. Energy Landbridge), real estate (e.g. Raimon Land, Erawan) and strategic industries (e.g. GISTDA, MOST).

AWR LLOYD’S CONSULTING ASSIGNMENT RELATING TO THEOS-2

Earlier this year AWR Lloyd was appointed as consultant to Thailand’s Ministry of Science & Technology to advise on aspects of the THEOS-2 project, after participating in a competitive tender process. The scope of work includes:

• User needs: Analysis of Thailand’s requirements in relation to earth observation satellite technology with a focus on water management, disaster management, agriculture, natural resources, infrastructure development and national security.
• Assessment of THEOS-1: Analysis of the extent to which THEOS-1 has met Thailand’s requirements and a summary of ‘lessons learned’.
• International benchmarking: Case study analysis of other countries’ earth observation satellite strategies, utilization and technology.
• Business plan and value proposition: A careful assessment of the likely costs of THEOS-2 including the initial investment and launch costs plus annual operating costs. Summary and quantification (where possible) of the likely benefits. Comparison of alternative strategic scenarios.
• Preliminary analysis of suppliers: Review of potential suppliers with preliminary recommendations on the extent to which they can meet Thailand’s needs.

AWR Lloyd’s preliminary conclusions have highlighted certain key themes:

• Vertical integration and independence: The need to build on the experience of THEOS-1 (continuity), strengthening the country’s local capabilities from upstream (satellite development, management) through midstream (ground station processing) to downstream (data dissemination, interpretation and utilization).
• International collaboration: Formulating long term strategies which give Thailand ‘bargaining power’ for collaboration and constellation arrangements with other countries, facilitating reliable access to a range of different satellite technologies (and in recognition that no one new satellite can meet all of Thailand’s user needs).
• Economic and know-how stimulus: Thailand’s satellite strategy should be a platform for the further development of the country’s capabilities in space-related industries with strong economic and technological multiplier effects.
• Vulnerability of non-ownership: If Thailand ceased to develop its ‘Thai-owned’ satellite programme, the country could fall behind in terms of space technology and become increasingly dependent on other Asian countries bringing technical disadvantages as well as strategic vulnerability in times of international conflict or emergencies.
• Crisis contingency and response: For crisis prevention, contingency planning and response management, ‘certainty’ and ‘timeliness’ of access to comprehensive satellite information becomes critical. This level of access can only really come through Thailand owning its own satellites and being part of collaborative arrangements with other satellite owners and suppliers. The ‘savings’ from this approach could run into thousands of lives saved – and hundreds of millions or even billions of dollars saved.

FOCUS: NATURAL DISASTERS IN THE ASIA-PACIFIC REGION

The UN ESCAP and UNISDR ‘Asia-Pacific Disaster Report 2012’ notes that the “Asia-Pacific region is the most disaster prone area in the world”. In 2011, economic damage from natural disasters in the region was over US$290 billion, accounting for 80% of global economic losses from such disasters. The economic impact of the Thai floods that year was estimated at US$47 billion with 2 million houses affected and 19,000 houses destroyed. Since 1970 around 2 million people have died in natural disasters in the region, three-quarters of all disaster fatalities globally.

• National security: For national security crises including military and terrorist threats – and policing (e.g. drugs, arms and people trafficking), in addition to the timeliness and security of access, the need for confidentiality and secrecy also become paramount.

For more information on AWR Lloyd’s Strategic Industries and Geo-Political Risk practices, please contact us at: info@awrlloyd.com