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Kasikorn Bank Expects Japanese Firms to Relocate Production to Thailand to Avoid Disaster Risks

Kasikorn Research Center expects Japanese investors to shift their investments to Thailand and other Southeast Asian nations, as offshore production may be a better choice than to rebuild factories on the quake-prone island.

Executive Chairman of Kasikorn Research Center Wiwan Tarahirunchote said the recent earthquake in Japan may prompt Japanese businesses to relocate their production bases to Thailand, where production costs are lower.

She noted that this would be better than rebuilding factories in Japan as there is less risk of natural disasters, which have recently proven to be catastrophic.

Meanwhile, Wiwan said Thailand will experience growth in the export of food, aluminum, plastics, and machinery because of the quake, since a number of Japanese firms use Thailand as a production base.

However, she observed that certain Thai products, such as vehicles and home appliances, may experience a slowdown due to a decline in purchasing power of Japanese consumers.

It is expected that demand will pick up later, as the recovery process continues.

Deputy Managing Director of Kasikorn Bank Songpol Cheewapanyaroj said the earthquake in Japan should not gravely impact the bank's lending.

He added the bank has issued 20 billion baht in loans to Japanese clients in cooperation with 14 Japanese banks.

-- Tan Network 2011-03-16