THE Federation of Thai Industries (FTI) urged the government to urgently implement both short- and long-term measures to help manufacturers after 567 factories were shut down in the first five months of this year, Thai Rath newspaper said today (June 21).
Mr. Kriengkrai Thiennukul, FTI’s chairman, said short-term action include reducing the impact of the trade war which has led to foreign products grabbing market share from Thai products by taking steps to prevent dumping of goods here; promoting the use of Thai-made products; and help reduce the production cost of Thai industries, including energy, transportation and financial costs among others.
In the medium-to-long term the authorities should seriously promote the use of technology and innovation among Thai industries; increase the productivity of the workforce; restructure Thai industries; and amend laws and regulations to facilitate business, primarily focussing on small and medium enterprises (SMEs), which are suffering the most.
Mr. Nawa Chanthansurakon, FTI’s vice president, said latest data released by the Department of Industrial Works showed that during the first five months of this year 567 factories were closed, an average of 113 per month, with 15,300 workers having already lost their jobs.
Industries where most closures occurred include plastics, metal work and wood and wood processing.
In comparison, last year altogether 1,337 factories were closed, an average of 111 per month, with this showing that the situation remains worrying with the trend being more factories shutting down potentially pushing the Thai industrial sector into a recession, he warned.
The key factor is the trade war having led to prices of products dropping, especially cheap Chinese products that are grabbing the market from Thai products within the country.
Chinese manufacturers have not ramped up production but as their exports to the US and European Union have decreased because of restrictions and control measures, they have turned to exporting more to Asean countries.
Nava urged the government to use tax measures as a tool to reduce import of cheap goods; help Thai manufacturers lower production costs by reducing the price of raw materials; decrease the cost of living; control energy prices and logistics costs; and boost the competitiveness of entrepreneurs in the country.
Meanwhile Ms. Nattaporn Triratsirikul, deputy managing director of Kasikorn Research Centre, said although Thai economic growth is likely to pick up in the second half of this year, this is more due to a low base in the previous year.
At risk is the strengthening of protectionist measures leading to Chinese products flooding other world markets including Thailand. Along with this is a decline in competitiveness leading to Thai export recovery being slower than expected.
Kasikorn Research Centre now expects the Thai economy to expand at 2.6% this year.
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Top and Front Page: Two Thai factories. Photos: Thai Rath
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