FTI Urges Government Action as 567 Thai Factories Close in Five Months

[webfact]

 

The Federation of Thai Industries (FTI) has called on the government to take immediate measures to aid manufacturers after the closure of 567 factories in the first five months of the year, reported Thai Rath on June 21.

 

Speaking on the matter, FTI chairman Mr. Kriengkrai Thiennukul highlighted the urgency of implementing both short- and long-term strategies to buoy the struggling industrial sector.

 

For the short term, he suggested actions such as mitigating the effects of the ongoing trade war that has seen foreign products biting into the local market share, preventing the dumping of goods, promoting Thai-made products, and lowering production costs, including expenses related to energy, transportation, and finance.

 

In the medium-to-long term, Mr. Kriengkrai emphasised the need to promote technological innovation within Thai industries to boost productivity, restructure the sector, and reform laws and regulations to facilitate smoother business operations, particularly focusing on small and medium enterprises (SMEs) which are facing the brunt of the crisis.

 

Mr. Nawa Chanthansurakon, FTI’s vice president, provided alarming numbers: 567 factories shut down, averaging 113 per month, resulting in 15,300 job losses. This trend, consistent with the previous year where 1,337 factories closed, raises concerns about an impending industrial recession.

 

Most heavily affected are industries involved in plastics, metalwork, and wood processing. The primary cause cited is the trade war, which has led to a surge in cheaper Chinese imports as China redirects its export focus away from US and EU markets to ASEAN countries, including Thailand.

 

Addressing this, Mr. Nawa advocated for the government to leverage tax measures to curb the import of low-cost goods and support local manufacturers by reducing raw material prices, energy costs, and logistics expenses, thereby enhancing their competitiveness.

 

Ms. Nattaporn Triratsirikul from Kasikorn Research Centre noted that while Thai economic growth might improve in the latter half of the year, there's a risk of protectionist measures seeing an influx of Chinese products and hampering Thai export recovery, which could slow below expectations. Kasikorn Research Centre anticipates a 2.6% expansion for the Thai economy this year.

 

Picture Courtesy: Thai Rath

 

-- 2024-06-22

 

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[Geoffggi]

25 minutes ago, webfact said:

Mr. Nawa advocated for the government to leverage tax measures to curb the import of low-cost goods

I wonder where these item are originating from??? .................LOL

[impulse]

If they made it a little easier for foreigners to open legal factories and a little more difficult for foreigners to operate illegal factories, I suspect they could replace 15,000 Thai jobs in a heartbeat.

 

Also, I wonder about the net...  Factories open.  Factories shut down.  That's normal.    The question is, are there more new ones opening than closing, or is this a net loss?  And is it a significant number?  (Obviously it is for the 15,300, but hopefully, they can find new jobs at new and/or growing factories)

 

Also, 567 factories with 15,300 jobs is less than 30 jobs per.  That would lead me to believe it's smaller factories, that normally have a higher churn.

 

[Tropicalevo]

29 minutes ago, impulse said:

Also, 567 factories with 15,300 jobs is less than 30 jobs per.  That would lead me to believe it's smaller factories, that normally have a higher churn.

SME's get lots of platitudes from governments, but very little help.

We employ 13 Thais and the business has been struggling since Covid.

We cannot increase prices, customers are having difficulty paying what we were charging 15 years ago, but costs have increased significantly.

[Xonax]

I wonder what they were thinking about, when making the free trade agreement with China! Maybe some heavy brown envelopes have been distributed?

 

[impulse]

31 minutes ago, Tropicalevo said:

SME's get lots of platitudes from governments, but very little help.

We employ 13 Thais and the business has been struggling since Covid.

We cannot increase prices, customers are having difficulty paying what we were charging 15 years ago, but costs have increased significantly.

 

Out of curiosity, what's your sector?  Are you in manufacturing, service, hospitality....?

 

[connda]

I know - impose a carbon tax!  That will solve it!

[Gottfrid]

44 minutes ago, Tropicalevo said:

SME's get lots of platitudes from governments, but very little help.

We employ 13 Thais and the business has been struggling since Covid.

We cannot increase prices, customers are having difficulty paying what we were charging 15 years ago, but costs have increased significantly.

So, what should the government do to help, people run their business? Should they create a demand that does not exist? Should they make overproduction invisible and include no costs? Does the knowledge of market research and adapting to changes suddenly become the governments job? 

[John Drake]

4 hours ago, webfact said:

Most heavily affected are industries involved in plastics, metalwork, and wood processing. The primary cause cited is the trade war, which has led to a surge in cheaper Chinese imports as China redirects its export focus away from US and EU markets to ASEAN countries, including Thailand.

 

This is the definition of a colony. Thailand is becoming a colony that exports its raw materials and agriculture to the mother country and in return receives manufactured goods. So its own manufacturing shuts down. This also explains the trade deficit with China. (And why things like durian are so much more  expensive for Thais than in the past.)

[Pouatchee]

1 hour ago, Gottfrid said:

So, what should the government do to help, people run their business? Should they create a demand that does not exist?

 

wasnt sreta just saying in the last few days that his digital wallet would do just that?

 

also, wasnt there an article last week and that there were like 5000 newly registered businesses?

[Purdey]

Yeah the digital wallet is the short, medium and long term plan because there is no other plan. 

Maybe allow foreigners to buy one rai of land for residential use will bring in some billions in cash but 75% of condo ownership?

Oh but then the Chinese will own Thailand! Sacre Bleu.

Edited June 22 by Purdey

[topt]

34 minutes ago, Pouatchee said:

 

wasnt sreta just saying in the last few days that his digital wallet would do just that?

 

also, wasnt there an article last week and that there were like 5000 newly registered businesses?

My thoughts as well - but can't be bothered to search for the article.

[HauptmannUK]

Free Trade Agreement with China was a stupid move. There is nothing made in Thailand (apart from food products) that can't be made cheaper in China. They have huge economy of scale and the coming protectionist measures in the West will lead to massive 'dumping' into Thailand.

[khunjeff]

4 hours ago, impulse said:

Also, I wonder about the net...  Factories open.  Factories shut down.  That's normal.    The question is, are there more new ones opening than closing, or is this a net loss?  And is it a significant number? 

 

"The net growth of new factories has also slowed, with the number of new factories opening minus those closing dropping to 50 per month, a sharp decline from the previous average of 150 per month."

 

So if these figures are accurate, the number of factories is actually increasing, not decreasing. 

 

https://www.thailand-business-news.com/corporate/146599-thai-industries-face-challenges-from-chinese-competition-and-minimum-wage-increase

[Tailwagsdog]

2 hours ago, Gottfrid said:

So, what should the government do to help, people run their business? Should they create a demand that does not exist? Should they make overproduction invisible and include no costs? Does the knowledge of market research and adapting to changes suddenly become the governments job? 

Signing a free trade agreement with the largest industrialized economy in the world does not help, furthermore Vietnam is eating Thailand's Lunch ......

[Gottfrid]

45 minutes ago, Pouatchee said:

 

wasnt sreta just saying in the last few days that his digital wallet would do just that?

 

also, wasnt there an article last week and that there were like 5000 newly registered businesses?

What Srettha says, we should not think about so much. he does not have a clue what disaster the wallet will bring if implemented.

It might have been an article about that. If true, will only add to the number that closes next time.

[mfd101]

1 hour ago, John Drake said:

This is the definition of a colony. Thailand is becoming a colony that exports its raw materials and agriculture to the mother country and in return receives manufactured goods. So its own manufacturing shuts down.

As in Australia. Welcome to the club.

[hotchilli]

Wait for all the high speed rail links roads and bridges are in place... then watch Thailand flooded with cheap Chinese goods.

It's in it's infancy now.

[BangkokReady]

12 hours ago, webfact said:

Addressing this, Mr. Nawa advocated for the government to leverage tax measures to curb the import of low-cost goods and support local manufacturers by reducing raw material prices, energy costs, and logistics expenses, thereby enhancing their competitiveness.

 

"Remove our competitors and give us free stuff, because we want it." - A very Thai response.

[NoshowJones]

On 6/22/2024 at 8:40 AM, impulse said:

If they made it a little easier for foreigners to open legal factories and a little more difficult for foreigners to operate illegal factories, I suspect they could replace 15,000 Thai jobs in a heartbeat.

 

Also, I wonder about the net...  Factories open.  Factories shut down.  That's normal.    The question is, are there more new ones opening than closing, or is this a net loss?  And is it a significant number?  (Obviously it is for the 15,300, but hopefully, they can find new jobs at new and/or growing factories)

 

Also, 567 factories with 15,300 jobs is less than 30 jobs per.  That would lead me to believe it's smaller factories, that normally have a higher churn.

 

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Posted yesterday at 08:40 AM

"If they made it a little easier for foreigners to open legal factories and a little more difficult for foreigners to operate illegal factories, I suspect they could replace 15,000 Thai jobs in a heartbeat.

Common sense is not the trait of Thai governments.

[john donson]

I cannot wait for the real estate industry to start to panic as 25-35% tax for buying condo's surely will stop me ...  as you get nothing in return for that.. au contraire