market feasiability thailand presentation horace andy alex
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ECONOMIC ANALYSIS
LOCATION INTRODUCTION• Borders the Andaman Sea and the Gulf of
Thailand
• Thailand is in the heart of Southeast Asia
• Urban centers are in Bangkok and Southern Region
• Currently rated one of the top 20 countries in the medical tourism industry
DEMOGRAPHIC ANALYSIS
THAILANDS GROWTH RATE
• HIGHER THAN CHINA’s RATE 1960’s
• RATE DECLINE 1965
• 2/3 FEWER CHILDREN THEN PREVIOUS GENERATIONS
• WOMENS RIGHTS
• AIDS MORTALITY
1950 - 2015
NUMBER OF LIVE BIRTHS
• RISE ATTRIBUTED TO FLUX IN MIGRANT ARRIVALS
• SINCE 1950’s, POPULATION HAS TRIPLED
• NEARLY AT PROJECTED MAX
THAILAND‘S CURRENT POPULATION
BIRTHRATES
• REDUCTION IN MARRIAGES
• REDUCTION IN FERTILITY
• 18 – 29 MOSTLY RESPONSIBLE
• 11 BIRTHS PER 1000 THAILAND FERTILITY RATE
DISTRIBUTION OF POPULATION
• HALF OF POPULATION IS CONCERNTRATED BETWEEN THE AGES OF 25 – 54
• OLDER MEN ARE MARRING YOUNGER WOMEN
• LACK OF FEMALES
• OLDER POPULATION OF MEN
AGE CONCERNTRATION
• 0 – 14: 17.41%
• 15-24: 14.78%
• 25-54: 46.69%
• 55-64: 11.26%
• 65+: 9.86%
SEX RATIOS
• HISTORICALLY MALES ARE BORN MORE OFTEN THAN FEMALES BY 5%
• MEN ARE THE DOMINATE SEX UP UNTIL THE AGE OF 24
• WOMEN BECOME THE DOMINATE SEX AT THE AGE OF 25
POPULATION BY AGE
GEOGRAPHIC AREAS
• SOUTHERN REGION
• EASTERN REGION
• CENTRAL REGION
• NORTHERN REGION
• NORTHEAST REGION
• BANGKOK
*This is based on natural features including landforms, drainage and human cultural patterns.
REGIONAL BREAKDOWNNorthern Region:
• Suburban, Rural Agricultural Zone
• Est. Population 12M
• 260 pp sq. mile
• Light Density
Northeast Region:
• Suburban, Rural Agricultural Zone
• Est. Population 14M
• 390 pp sq. mile
• Medium Density
Central Region:
• Suburban, Rural Agricultural Zone
• Est. Population 17M
• 450 pp sq. mile
• Medium Density
REGIONAL BREAKDOWNEastern Region:
• Suburban, Rural Agricultural Zone
• Est. Population 9M
• 600 pp sq. mile
• Medium-High Density
Bangkok Region:
• Urban, Metropolis
• Est. Population 7M
• 2600 pp sq. mile
• High Density
Southern Region:
• Suburban, Rural Tourism Zone
• Est. Population 9M
• 162 pp sq. mile
• Light Density
MIGRATION RATES & PATTERNS
• FAMILY PLANNING PROGRAM
• 1970’s INCREASE
• MAJOR CONTRIBUTERS:
• JAPAN
• CHINA
• INDIA
• MYANMAR
• MUSLIM ROHINGYA
POPULATION FORECAST
• THAI POPULATION DECLINE
• MIGRANT INCREASE
• CLOSE PROXIMITY TO BROKEN COUNTRIES THAT ARE EXPERIENCING INTERNAL ISSUES
ETHNIC GROUPS
• OVER 70 ETHNIC GROUPS
• 24 DIALECTS OF TAI PEOPLES
• TAI & THAI CHINESE ARE 90% OF THE
POPULATION
• 77.3% Thai
• 32.2% Central Thai
• 26.6% Isaan
• 10.6% Northern Thai
• 7.9% Southern Thai
• 10.5% Chinese
• 6% Malay
• 3.4% Khmer
• 3% Other
• 1 % Foreigners
GROSS NATIONAL PRODUCT
• FREE-ENTERPRISE ECONOMY
• DEVELOPED INFRASTRUCTURE
• PRO-INVESTMENT POLICIES
• SLOWED GROWTH FROM 2013-2016
• AGRICULTURAL
• ELECTRONICS
• AUTOMOBILES
• PROCESSED FOODS
• THAI BAHT 8% DEPRECIATION (2015)
• LABOR SHORTAGES
• ATTRACTED 5 MILLION IMMIGRANTS
• MINIMUM WAGE POLICY
• TAX REFORMS
• MIDDLE CLASS HELP
1.071
1.107 1.107
y = 0.018x - 35.157R² = 0.75
1.07
1.075
1.08
1.085
1.09
1.095
1.1
1.105
1.11
1.115
1.12
2013 2014 2015
(US
) T
rill
ion
s
Year
GDP Purchasing Power
RATE OF GROWTH (GDP)
IN H
UN
DR
ED
S O
F B
ILL
ION
S U
SD
GDP – PER CAPITA (PPP)
AVERAGE FAMILY INCOME
CLASS INCOMES
• INCOME CLASSES: ECONOMIC & POLITICAL INEQUALITIES HAVE RESULTED IN ELITES CAPTURING MOST OF THE ECONOMIC GROWTH
• AUTHORITARIAN REGIMES DOMINATED
• PROMOTED CAPITALISM
• CAPITALIST AND MIDDLE CLASSES ARE PROTECTED
• INCOME INEQUAILITY & POVERTY REMIAN HIGH
DISTRIBUTION OF WEALTH
• Upper Class- 585,990
• Middle Class- 12,757,348
• Lower Class- 40,672,657
• Income Poor- 8,778,674
• Food Poor- 5,250,121
BY
PO
PU
LA
TIO
N
INCOME DISTRIBUTION DISTORTION
• TOP 10% CONTROL 51% OF THE WEALTH
• BOTTOM 50% CONTROL ONLY 8%
• 10% OF THE POPULATION OWNS 90% OF THE LAND
• HIGHLY DISTORTED SOCIAL CLASSES
MINERALS & RESOURCES
• OTHER RESOURCES:
• NATURAL GAS
• PERTOLEUM
• COAL
• LEADING PRODUCER IN:
• GYPSUM
• FELDSPAR
• CEMENT
• TIN
• RESERVES:
• ZINC
• IRON
• COPPER
• GOLD
SURFACE TRANSPORTATION
• MODES OF TRANSPORTATION
• BUS
• TAXIS
• METRO
• SKY TRAIN
• HIGH SPEED RAIL
• 2019
• AIR
• 11 INTERNATIONAL / 18 INNER REGION
• RURAL AREAS
• MOTORBIKES
• BICYCLES
• WATER TAXIS
• FERRIES
• FREIGHT TRANSPORTATION
• GROUND TRUCKS
• RAILROAD
AVAILABILITY• AVAILABILITY CHANGES IN EACH REGION
• HIGHLY MODERNIZED AREAS
• IMMEDIATE ACCESS
• UBER
• LIMO RENTALS
• LESS MODERNIZED AREAS
• SLOW ACCESS
• RESTRICTED TO LESSER MODES OF TRANSPORTATION
USAGE RATES (TRANSPORTATION)
USAGE RATES (TRANSPORTATION)
WORKING CONDITIONS
• EMPLOYEE PARTICIPATION
• HIERARCHICAL SOCIETY
• STRICT RULES
• RAN LIKE FAMILIES
• HARMONY TO AVOID CONFLICT
• MANAGEMENT IS CLOSELY FOLLOWED
• TOP-DOWN APPROACH
• NO PERSONAL RELATIONSHIPS
• EMPLOYEES ARE HUMBLE
• EMPLOYER-EMPLOYEE RELATIONS
• GOVERNED BY THAI GOVT
• LABOR LAWS PROMOTE SAFEGUARDS
• RIGHTS & OBLIGATIONS
• CONTRACT EMPLOYEMENT
• WRITTEN OR VERBAL
• ACT ON COMPANY’S BEHALF
• ONLY TERMINATED IF CONTRACT IS VIOLATED
WORKING CONDITIONS
• SALARIES & BENEFITS
• AVERAGE INCOME• 14K BAHT MONTHLY OR
$4500 USD
• BENEFITS• 13 PAID HOLIDAYS
• 10 VACATION DAYS
• MEAL ALLOWANCE
• 30 BAHT OR .84 USD
• MEDICAL INSURANCE
• ENTIRE FAMILY
• SOCIAL SECURITY
• MARRIAGE PAY
• $28 USD
• FUNERAL PAY
• $140 USD
PRINCIPAL INDUSTRIES
• AGRICULTURE
• 10.4% OF GDP
• 69B USD
• INDUSTRY
• 37.7% OF GDP
• 253B USD
• SERVICES
• 57.7% OF GDP
• 388B USD
• RATIO PUBLIC/PRIVATE
• 45.9% PRIVATE 308.9B USD
• 45.8% PUBLIC 308.2B USD
FOREIGN INVESTMENT• FDI
• INCREASED BY 40115 THB M
IN 2016
• SKILLED WORKFORCE
• STRATEIC LOCATION
• HEART OF ASIA
• THAI GOVERNMENT
• PERMOTES FDI
• EXTENDS HELP
• INDUSTRIES
• AGRICULTURE & FOOD
• ENERGY
• AUTOMOBILE
INTERNATIONAL TRADE STATS
• MACHINES $37.1B 17.6%
• ELECTRONICS $29.3B 13.9%
• AUTOMOBILES $26.6B 12.6%
• RUBBER $12.3B 5.8%
• PLASTICS $11.7B 5.6%
• GEMS $10.8B 5.1%
• OIL $8.3B 3.9%
• MEAT/SEAFOOD PREP $5.9B 2.8%
• MEDICAL $5.2B 2.5%
• CEREALS $4.6B 2.2%
• MAJOR EXPORTS
INTERNATIONAL TRADE STATS
• EXPORTS (2015) 210B USD
• DOWN 7% SINCE
• TOP 10 EXPORTS
• 72% OVERALL
• TOTAL GDP FROM EXPORTS
• $1.1T USD
• 72% OVERALL
• 19.% ECONOMIC OUTPUT
• EXPORT TRENDS
INTERNATIONAL TRADE STATS
• CAPITAL GOODS 78M
• INTERMEDIATE GOODS 60M
• CONSUMER GOODS 43M
• RAW MATERIALS 43M
• PETROLEUM 33M
• GOLD 6.4M
• ELECTRONICS 6.3M
• CRUDE OIL 5.5M
• COMMUNICATIONS 3.8M
• MAJOR IMPORTS
INTERNATIONAL TRADE STATS
• IMPORTS (2015) 17B USD
• DOWN 7% SINCE MAR 2016
• IMPORT TRENDS
INTERNATIONAL TRADE STATS
• BALANCE-OF-PAYMENTS
• 3B USD SURPLUS
• UP 1.5B USD FROM 2015
• RECENT TRENDS
• SALES INCREASE 19B USD
• GOLD, AUTO, MACHINES
• IMPORTS DROPPED 7%
• FEB 2016 4.9B USD SURPLUS
INTERNATIONAL TRADE STATS
• EXCHANGE RATES• SINGLE EXCHANGE
• THAI BAHT
• TRENDS
• DOWN .14% MAY 2016
• UP 6.34% FOR YEAR
• JAN 1998 HIGHEST
• 55.50
• JUY 1981
• 20.36
INTERNATIONAL TRADE STATS
• HARD CURRENCY
RESERVES
TRADE RESTRICTIONS
• TRADE ASSOCIATIONS
•WTO MEMBER (1995)
• GATT (1982)
• ASEAN
• AFTA
•NO TRADE RESTRICTIONS
•QUOTAS
• AGRICULTURAL PRODUCTS
• MILK/CREAM 164 TONS
• POTATOES 51 TONS
• ONIONS/SHALLOTS 62 TONS
TRADE RESTRICTIONS
• IMPORT TAXES
• RATES VARY 0 TO 80%
• AVG RATE 21%
• FREE DUTY
• ELECTRONICS
• COST, INSURANCE AND FREIGHT
• TAXES BASED OFF CIF
• TARIFFS
• AVG 10%
• PROCESSED FOODS• 30 TO 50%
• AGRICULTURAL• 70%
• AUTOMOBILES• 80%
• MOTORCYCLES• 60%
• PLASTICS• 30%
TRADE RESTRICTIONS
• LICENSING
• 1999 FOREIGN BUSSINESS ACT
• NOT RESTRICTED ON FOREIGNERS
• CUSTOM DUTIES
• HARMONISED SYSTEM
• CERT OF GOODS
• LICENSING
• 1999 FOREIGN BUSSINESS ACT
ECONOMIC ACTIVITY
• COUNTERTRADES
• REFINED OIL
• TECHNLOGY
• MINERALS
• COUNTER PURCHASE
• CRUDE PETROLEUM
• CIRCUITS
• AGRICULTURE
• FOREIGN AIDE
• NONE (2002)
LABOR FORCE
• SIZE
• 39.64M PEOPLE
• 38.2% AGRICULTURE
• 13.6% INDUSTRY
• 48.2% SERVICES
LABOR FORCE
INFLATION RATES
SCIENCE & TECHNOLOGY
• TECH AVAILABLE
• AGRICULTURAL ENGINEERING
• COMPUTERS
• INDUSTRIAL MACHINERY
• LANDSAT (GIS)
• R&D
• $366B USD ANNUALLY
CHANNELS OF DISTRIBUTION
• RETAILERS
• 29 MAJOR
•ABLNBEV, AHOLD, AMAZON, BA, CARREFOUR, COCA-COLA, CONAGRA, DANONE, DIAGEO, EBAY…
• 11 LOCAL
•ASIA BOOKS, BI C, CENTRAL GROUP, HONDA, TESCO LOTUS…
• SIZE OF OUTLETS
•LARGE 5500 - 12000
•MED 1000 - 5000
•SMALL 100 - 300 (sq. m)
CHANNELS OF DISTRIBUTION
•MARKUP
• STANDARD
•METHODS OF OPERATIONS
• BARTER SYSTEM
• CASH DOMINATE
• CREDIT CARDS GROWING
CHANNELS OF DISTRIBUTION
• WHOLESALE
• FIRMS• COMMISSION
• IMPORT/EXPORT AGENTS
• IMPORTING LICENSES
• WAREHOUSING
• EASY FOR STARTUP
• 30 WEEKS AVERAGE
• URBAN/RURAL MARKET PENETRATION
• DEVELOPMENT OF CHINA’S CONSUMPTION
• RURAL CONSUMERS CRUCIAL
• URBAN CONSUMERS SPEND 20% MORE
MEDIA
• MEDIA AVAILABILITY
• WELL DEVELOPED MEDIA FORUM
• FREE
• GOVT CONTROLLED
• COSTS
• TV
•80% RELY ON TV
•4.4B USD
•24 STATIONS
• RADIO
•500 FEQUENCIES
•NO GOVT VONTROL
•MASS CIRCULATION
• INTERNET
•NO GOVT CONTROL
• OTHER MEDIA (CINEMA)
• SIAM CINEMA 757 SCREENS
• 45 FILMS PRODUCED
• 142M ANNUALLY
• AGENCY ASSISTANCE
• U.S. EMBASSAY • TO CONDUCT BUSINESS
• COVERAGE OF MEDIA
• MASS POLITICAL DALLIES
• POPULATION REACHED
• INTERNET 30%
• CELL 142%
• SATELLITE/CABLE 44%
• RADIO 36%
COUNTRY ANALYSIS
• NEVER UNDER EUROPEAN DIRECT RULE
• CONSTITUTIONAL MONARCHY IN 1932
• MILITARY RULE UNTIL 1970’S
• LIBERAL DEMOCRATIC RULE UNTIL 2014
SOCIAL INSTITUTIONS
• FAMILY STRUCTURE
• COUPLES URGED TO SET UP HOME AS SOON AS POSSIBLE
• FREEDOM TO FIND MATE
• MAY LIVE WITH UNMARRIED SIBLINGS OR WIDOWED PARENTS
• MALE IS HEAD OF HOUSEHOLD, THOUGH WIFE HAS POWER AT HOME
• DIVORCE NEVER DIFFICULT TO OBTAIN
• SOME POLYGAMY IN WEALTHIER FAMILIES
• RECENT PUSH FOR GENDER EQUALITY
SOCIAL INSTITUTIONS• EDUCATION
• ORIGINALLY CARRIED OUT BY BUDDHIST MONASTARIES
• TAUGHT TASKS THAT WOULD BE USEFUL TO LIFE
• SINCE 1990’S ECONOMIC DOWNTURN, COMPULSORY
EDUCATION EXTENDED
• 22.3% OF NATIONAL BUDGET SPENT ON
EDUCATION IN 2010
• 76% FINISH PRIMARY LEVEL
79% SECONDARY, 29% HIGHER EDUCATION
SOCIAL INSTITUTIONS• POLITICAL
• KING IS OFFICIAL HEAD OF STATE
• DEMOCRATIC LEADERSHIP REMOVED FROM OFFICE MAY 7 2014
• MARTIAL LAW MAY 20 AND COUP MAY 22
• EARLIEST EXPECTED ELECTIONS MID-2017
• GENERAL PRAYUT CHAN-OCHA LEADS MILITARY
• MAJOR PARTIES PRIOR:
• PHEU THAI
• DEMOCRATIC PARTY
SOCIAL INSTITUTIONS
• BUSINESS TAXES
• VALUE ADDED
• DEALS WITH GOODS AND SERVICES IN EXCESS OF 1.8 MILLION BAHT ($51,000)
• 7%
• MOST THAI COMPANIES ARE EXEMPT
• SPECIFIC BUSINESS
• USUALLY BANKS AND FINANCIAL INSTITUTIONS
• 3%
SOCIAL INSTITUTIONS• LEGAL
• MIXTURE OF CIVIL AND CANON LAW
• GERMAN, SWISS, FRENCH, JAPANESE, ITALIAN AND INDIAN
• ALSO SOME ISLAMIC IN SOUTHERN PROVINCES
• 4 JUDICIAL COURTS
• CONSTITUTIONAL, COURTS OF JUSTICE, ADMINISTRATIVE, MILITARY
• GENERAL COURTS
• CIVIL, CRIMINAL, MUNICIPAL, PROVINCIAL WITH 2 IN BANGKOK
• INTERNATIONAL LAWS
• 1979, PATENT LAW
• PARIS CONVENTION 2009
• MEMBER WTO, IMF AND WORLD BANK, FOUNDING MEMBER OF ASEAN
SOCIAL INSTITUTIONS
• SOCIAL ORGANIZATIONS
• NON CONFRONTATIONAL, SHOWING ANGER OR RAISING VOICE IS SIGN OF WEAKNESS
• AVOID TOUCHING AND USE WAI IN DAILY MEETINGS
• HIERARCHY
• WEALTHY AND THOSE WITH TITLES
• CITY VS COUNTRYSIDE
• ETHNIC BACKGROUND
RELIGION AND AESTHETICS• RELIGIONS
• BUDDHISM 93.6%, ISLAM 4.9%, CHRISTIANITY 1.2%
• LARGEST SECT: THERAVADA 85%
• CENTRAL THAI: LANKAVAMSA, FROM SRI LANKA
• MOST YOUNG MEN BECOME BUDDHIST NOVICES
• AESTHETICS
• WRITTEN LANGUAGE DATED TO 1250 AD
• POETRY AND SONGS WRITTEN BY MONARCHY
• POPULAR PLAYS AND FICTION PORTRAY COMMON PEOPLE AND UNDERCLASS FACING ADVERSITY
• DANCE INFLUENCED BY INDIAN HAND GESTURES AND LEG MOVEMENTS
• CLASSICAL DANCES LOOKED DOWN UPON BY LIBERAL LEADERS, BUT POPULAR TOOL OF MILITARY
LIVING CONDITIONS
• DIET AND NUTRITION
• MEAT (BEEF, CHICKEN, FISH OR CRAB), SOUP, CURRY, SALAD, RICE
• SMALLER CONSUMPTION OF BEEF DUE AS SEAFOOD IS POPULAR
• NUTRITION HAS IMPROVED, BUT NORTH DOES NOT HAVE SAME ACCESS
LIVING CONDITIONS
• HOUSING
• RAISED ON POLES, OPEN FOR VENTILATION, OVERHANGING ROOF
• APARTMENTS IN BIGGER CITIES
• 1/5 RENT AND MORE EXTENDED
FAMILIES LIVING TOGETHER
LIVING CONDITIONS• CLOTHING
• RATHER MODERN, EIGHT VERSIONS FOR FORMAL OCCASIONS
•BUSINESS: WORK AROUND HEAT
• SHIRT AND SLACKS NO TIE
• LIGHT JACKET FOR STATUS
• DARK SUIT OR THAI SHIRT
AT NIGHT
LIVING CONDITIONS
• RECREATION
• SPORTS
• MUAY THAI (THAI KICKBOXING)
• TAKRAW
• ACTIVITIES
• TEMPLE FESTIVALS
• SPAS, GOLF
LIVING CONDITIONS
• SOCIAL SECURITY
• ESTABLISHED 1954, ENFORCEMENT STARTED 1972, FULL PROGRAM 1990
• HEALTHCARE
• COUNTRY OF SPECIALISTS
• TRAVEL BETWEEN HOSPITALS AND CITIES
• STRONG USE OF TELEPHONE
• EMERGENCY SERVICES STILL DEVELOPING
• NO NATIONAL HEALTHCARE, INSURANCE OR MONEY NEEDED
LIVING CONDITIONS
• LANGUAGE
• THAI 90.7%, BURMESE 1.3%, ENGLISH (SECOND LANGUAGE OF WEALTHY AND STUDENTS)
• RELATED TO VIETNAMESE, MYANMAR, LAOS
• CENTRAL DIALECT, BANGKOK THAI, IS NATIONAL LANGUAGE
• DIFFERENT LEVELS IN SPOKEN LANGUAGE
• ROYAL
• RELIGIOUS
• FORMAL
• RHETORICAL
• COMMON
MARKET DESCRIPTION
• CONSUMER BUYING HABITS
• Stability in the past year
• Increasing concern with car and mortgage loans
• Dependent on elderly for childcare
• Large presence of online-shopping
• Heavy use of social media use
MARKET DESCRIPTION
• CONSUMER SPENDING
• 1% increase in the first quarter of 2016
• 33% increase since 1993
WORLD LEADER IN MEDICAL TOURISM
VOLUME OF MEDICAL TOURISTSin 2013
POPULAR MEDICAL TOURISM COMPANIES IN THAILAND
• METAMORPHOSIS MEDICAL RETREATS
• INTERNATIONAL MEDICAL HEALTH SOLUTIONS
• LOTUS MEDICAL INTERNATIONAL
COST DIFFERENCES IN MEDICAL PROCEDURES
• Heart bypass procedure $120,000 more in the US
• Hip replacement procedure $150,000 more in the US
• Knee Replacement procedure $30,000 more in the US
THAILAND’S MEDICAL TOURISM MARKET GROWTH
• Has grown from roughly 5
million arrivals in 1998 to
roughly 30 million in 2015
• 500% increase in 17 years
ENTRY PLAN
• Develop medical tourism agency
• Takes care of itinerary and legwork for travel, medical procedure, and lodging
• Headquarter office in Bangkok
• Satellite office in US, Switzerland, and Norway for recruiting patients
• Partnerships with airlines, resorts, and medical facilities
• Develop contractual agreements that guarantee a quota of patients in order render discounted rates
• Mark-up rates for a profit margin
TARGET AUDIENCE
• Nations with high medical costs
• Nations with high health insurance costs
• Long medical waitlists
• Low to medium income levels
PER CAPITA MEDICAL EXPENDITURE
PRIVATE HEALTH INSURANCEIN THE UNITED STATES
• Average of 64% with health insurance in 2014
• 13% decrease since 1984
AVERAGE COST OF MEDICAID BY STATE PER YEAR
TRANSPORTATION
• BANGKOK AIRWAYS
• THAI AIRWAYS
PARESA RESORT PHUKET
PARESA RESORT PHUKET
PARESA RESORT PHUKET
BUMRUNGRAD HOSPITAL
BANGKOK HOSPITAL
BENEFITS
• No monthly insurance rates
• Flexibility
• Logistics are handled by agency
• Lower medical costs
• No deductible
• Resort-style recovery
• No recurring charges
• One flat fee
CONCLUSION
• Medical tourism has just recently taken off in Thailand. The industry is at its height and continues to grow. With expected revenues of $30 billion in 2017, there is no better time to enter this market. Medical costs continue to grow by 8% annually in the US and being privately insured is slowly becoming a thing of the past. With the demand for change in the medical industry knocking at the door, Thailand welcomes it with open arms.
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