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DE RUEHCHI #0039/01 0780208
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P 190208Z MAR 09
FM AMCONSUL CHIANG MAI
TO RUEHC/SECSTATE WASHDC PRIORITY 1000
INFO RUCPDOC/USDOC WASHDC PRIORITY 0015
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHHK/AMCONSUL HONG KONG PRIORITY 0021
RUEHDE/AMCONSUL DUBAI PRIORITY 0002
RUEHAD/AMEMBASSY ABU DHABI PRIORITY 0001
RUEHCHI/AMCONSUL CHIANG MAI 1082

UNCLAS SECTION 01 OF 02 CHIANG MAI 000039 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EINV EINT BTIO SCUL TH
SUBJECT: HOLLYWOOD, BOLLYWOOD...CNX-WOOD? U.S. FIRM LAYS PLANS FOR 
CHIANG MAI'S MOVIE CITY 
 
CHIANG MAI 00000039  001.2 OF 002 
 
 
------------------- 
Summary and Comment 
------------------- 
 
¶1. U.S.-based Creative Kingdom International (CKI) has announced 
unofficial plans to establish a "movie city" near Chiang Mai, 
with the aim of developing the area as a filmmaking and 
entertainment production center in Asia.  After five years of 
slowly and quietly expanding its investment in Chiang Mai, CKI, 
a Los Angeles-based architecture, video game design, and graphic 
animation firm, is preparing to make what could be the single 
largest U.S. investment in northern Thailand -- a $220 million 
movie production hub in Chiang Mai Province.  Though the firm 
does not expect to open the doors of the six planned studios 
until 2014, Creative Kingdom's American CEO will publicly launch 
the project on June 19. 
 
¶2. Comment:  Despite its label as Thailand's "second city," 
Chiang Mai's economy (and that of most of northern Thailand) is 
narrowly based, relying mainly on two sectors -- agriculture and 
tourism -- that are vulnerable to seasonal fluctuations. 
Creative Kingdom's bullishness on Chiang Mai demonstrates the 
potential that graphic design, information technology, and 
entertainment services have as the land-locked province's third 
economic pillar.  Success could mean that Chiang Mai will have 
found a new source of foreign investment and economic 
diversification.  End Summary and Comment. 
 
-------------------- 
Lights, Camera . . . 
-------------------- 
 
¶3. Creative Kingdom International (CKI) is a Los Angeles-based 
firm that for the past five years has slowly taken over three 
levels of office space at a major shopping complex in downtown 
Chiang Mai.  Each floor of CKI's offices is packed with Thai 
twenty-somethings who, wired to their computer terminals, are 
designing the latest online video game, brainstorming the next 
episode of a Thai animated television series, or drafting 
sketches of Macau's newest big casino resort.  While escorting 
Econ staff on a tour of the facilities, Amcit CEO Eduardo Robles 
behaves like a cartoon character of his own, jumping from 
cubicle to cubicle while riffing on the company's next video 
game launch "The Call of Cyrene," showing off the firm's design 
for a wealthy sheikh's latest real estate venture off the coast 
of Singapore, and explaining why CKI is placing its bets on 
Chiang Mai to surpass Hong Kong as Asia's next movie capital. 
 
¶4. The firm maintains offices in L.A., Johannesburg, Dubai, 
Beijing, Manila, and Chiang Mai.  Originally operating as an 
architectural design firm, CKI's most loyal clients have been in 
the Gulf region among investors in major real estate projects 
such as casinos and resorts in luxury tourist destinations like 
Macau and the Maldives.  With Dubai as the source of most of 
CKI's financial support, the firm had previously intended to 
focus its operations there, importing graphic design and 
artistic labor from Thailand and the Philippines.  At that time, 
CKI only maintained a small office in Chiang Mai as the 
subsidiary CKA Chiang Mai Co. Ltd. 
 
¶5. Over the years, the firm discovered the high level of talent 
available at low wages in an affordable setting in northern 
Thailand.  As a result, CKI began to expand its presence here, 
hiring more Thai designers and technicians.  CKI even 
re-exported its Thai labor from Dubai back to the Chiang Mai 
office, saving costs for the firm and making their employees 
happier to be back home.  Seeing the prospects for expanding its 
investment in Chiang Mai, CKI developed three separate branches 
of its company -- architecture, graphic animation, and internet 
game design -- each occupying one of the three office floors it 
leases.  CKI trains its Thai employees in Chiang Mai and keeps 
them loyal to the company by providing above-market wages and 
low-interest housing loans.  CKI has even relocated much of its 
Filipino staff to Chiang Mai to consolidate operations. 
 
------------------------------------------ 
Tapping into Chiang Mai's Creative Economy 
------------------------------------------ 
 
¶6. CKI's success in its first five years of operations in Chiang 
Mai has unveiled the province's potential for a competitive 
advantage in what Prime Minister Abhisit Vejjajiva recently 
called "the creative sectors of the economy."  According to the 
Board of Investment's northern office, Thailand is transforming 
into an animation and gaming design center where foreign 
companies are "outsourcing work for high-quality software and 
animation at economical prices."  CKI says that the wealth of 
creative talent in northern Thailand makes it a ripe destination 
 
CHIANG MAI 00000039  002.2 OF 002 
 
 
for foreign investment from the entertainment and movie 
production sector. 
 
¶7. A survey of local higher education institutions is a 
testament to the high-tech, artistry, and design skills that 
northern Thailand is producing.  Chiang Mai University (CMU), 
one of Thailand's best, offers majors in subjects such as 
industrial design, computer and software engineering, animation, 
and information management at its faculties of Fine Arts, 
Architecture, and Engineering, as well as its College of Art, 
Media and Technology.  The annual number of CMU graduates across 
these subjects per year is nearly 900.  In addition, Chiang 
Mai's Rajamangala University of Technology graduates about 265 
students per year in architecture, fine arts, and technological 
media.  The city of Chiang Mai is host to five other 
universities as well. 
 
¶8. CKI says that by investing in the creative aspects of the 
Thai economy, where the firm believes there is a national 
competitive advantage, Chiang Mai can lessen its dependence on 
the seasonally vulnerable agriculture and tourism industries. 
Currently, agriculture and hotel/restaurant services comprise 
25% of Chiang Mai's provincial GDP, with the remainder made up 
of a composite of other services including education, public 
administration, and real estate. 
 
----------------- 
Fabulous CNXwood? 
----------------- 
 
¶9. After five years of low-profile, but successful, operations 
in Chiang Mai, Creative Kingdom is finally stepping into the 
limelight.  CEO Robles told us he views CKI's first five years 
in Chiang Mai as a test pilot to see if the city could succeed 
as a host for greater entertainment industry investment.  The 
city passed this test, which is why he is ready for the firm to 
put up an estimated $220 million to construct a 12-acre movie 
city that he plans to call "CNXwood," a play on Chiang Mai 
airport's 3-letter IATA code.  He envisions Chiang Mai 
surpassing Hong Kong as Asia's movie production hub, but first 
it needs the infrastructure -- studios, back lots, and 
production facilities -- to attract more investors.  (Note: 
Chiang Mai is already well-established as a desirable, low-cost 
filming location, having served over the last two decades as the 
setting for mainstream films like "Good Morning Vietnam," "Rambo 
IV," and portions of "American Gangster," as well as lesser 
movies like "Operation Dumbo Drop," "Air America," "Rescue 
Dawn," "Stealth," "Sniper 3," and "Vampires 3"). 
 
¶10. The question everyone is asking Robles about the movie city 
is: Why Chiang Mai?  He cites three reasons why the area is 
ideal for his investment:  incredible talent in artistry, 
graphic design, and entertainment; predictably good weather for 
movie production; and (the proverbial cherry on top) an 
estimated 20% savings in movie production costs compared to 
other Asian cities such as Hong Kong.  CKI only recently began 
making public its plans, but is doing so unofficially for now as 
it tries to finalize details. 
 
¶11.  The company has already developed designs for the movie 
city on land it has tentatively agreed to acquire.  However, 
when news of the project went public in the Thai press earlier 
this month, the firm began to get better offers from other land 
developers.  Robles said one of the new offers is particularly 
tempting, so CKI is not entirely sure which site it will choose. 
 Nonetheless, the company is steaming full speed ahead and will 
officially announce the project to Hollywood-based and other 
foreign investors at a launch party on June 19 at Chiang Mai's 
swanky, Disney-esque Mandarin Oriental Dhara Dhevi Resort. 
 
¶12. This cable was coordinated with Embassy Bangkok. 
MORROW