Floods Cripple Thai Economy

[webfact]

FLOODS

Floods cripple economy

NALIN VIBOONCHART

THE NATION

Heavy inundation in Ayutthaya will hit auto industry hard: Toyota exec; FTI calls for 25 per cent pay cut and delay in Bt300 minimum daily wage

Economic ripples from the nationwide flooding are reverberating, with rumours that some Japanese companies will relocate production facilities out of the country as some industrial estates are submerged and many more are threatened.

Distressed companies are pressing for government relief, which could come in the form of a delay to the Bt300 minimum wage as well as other financial assistance.

Within a few days, the Board of Investment (BoI) will decide if it will host the BoI Fair from November 10-25 as scheduled, following fears that the inundation may last until mid-November.

Suparat Sirisuwannangkura, senior vice president of Toyota Motor Thailand and chairman of the Federation of Thai Industries (FTI)' Automotive Industry Club, quashed the relocation rumour, saying Japanese investors retain confidence in Thailand.

"The tsunami in Japan, which also resulted in supply chain disruption, left behind far greater damage than the floods. What worries them more is discrepant news flows. To help, the government should streamline the information to avoid causing confusion," he said.

As water hit its assembly plant and those of its suppliers, Honda Automobile (Thailand) suspended operations at its sole assembly plant in Thailand, located in the Rojana Industrial Park of Ayutthaya. However, the company's executive admitted that relocation was another question.

While saying that the floods would deal a huge psychological blow to car buyers and those planning to join the government's first-car buyer scheme to be launched today, Suparat said the floods would hit the auto industry hard. Due to the supply disruption, which will affect exports and domestic sentiment, the industry's output may not reach the 1.8 million-unit target this year, he said.

Toyota has cut out all overtime as production declines.

Ayutthaya is home to many major car and electronics manufacturers.

Somboon Hortrakool, director of the Electrical and Electronics Institute, said plants run by 200 firms in the industry are flooded, but it remains unclear how many workers they employ and how their exports will be affected. Besides the drop in demand in the US and Europe, the supply chain disruption would crimp exports, he said.

The FTI yesterday sought help from the Industry Ministry. FTI chairman Payungsak Chartsutipol said he proposed a 25-per-cent slash in employee pay. Then, while employers pay 25 per cent, the Social Security Fund should pay the remaining 50 per cent.

He also proposed the establishment of a support fund to help businesses replace or repair damaged machines and equipment with soft loans carrying a zero to 1-per-cent interest rate.

The government should also postpone the implementation of the Bt300 minimum wage policy by two to three years.

"Businesses are facing tough times. We want clarity on this. Then, the FTI will keep Japanese investors - through Jetro and the Japan Chamber of Commerce - updated on the government's measures to revive the situation," Payungsak said.

Vice Industry Minister Suphap Khleekajai said he would rush the FTI proposals for Cabinet approval.

Amara Charoengitwattanagun, director of the Rojana Industrial Park, said all three phases of the estate in Ayutthaya covering 10,000 rai and 300 factories were swamped.

The water could be pumped out only when tides outside the estate retreat, she said.

Songsri Boonba, inspector-general of the Labour Ministry, said many factories in the Saharattana Nakorn Industrial Park and Hi-Tech Industrial Estate have closed from October 7-16, affecting 180,000 workers

As the plants will need time for maintenance, the ministry plans to urge employers elsewhere to hire the laid-off workers.

Atchaka Sriboonruang, secretary-general of the BoI, said the Foreign Ministry would be asked to help speed up work permits for factories that want to bring in technicians to inspect machinery.

Some foreign workers should also be exempted from penalties if their work permits, now destroyed by floods, expire.

Pathum Thani Governor Peerasak Hinmuangkao insisted that industrial estates in the province would be spared from the floods, thanks to floodgates as well as preventive measures including reinforced dykes and pumps.

-- The Nation 2011-10-11

[softgeorge]

Has the baht taken a hit as well or is it still strong?

[toenail]

Maybe modern architects and engineers designing factories and homes should follow the "traditional" Thai style buiding and build everything on stilts or one level above the ground.

[steveromagnino]

Maybe modern architects and engineers designing factories and homes should follow the "traditional" Thai style buiding and build everything on stilts or one level above the ground.

Or maybe the flooding could have been addressed since July by hurting early, hurting a little; rather than waiting and delaying things until the last minute in the hope weather would cooperate.

putting an automotive factory on stilts would be a deal breaker for business.

[jimbeam1]

Pay cuts and delay in the 300bt minimum wage. That didn't take long.

Are the FTI anything to do with the Government?

jb1

[Mosha]

Not only are they not getting 300 Baht, but the FTI proposes a wage cut! If it wasn't so tragic it would be hilarious.

[Rama]

Talked with a Thai I know in Samut Prakon last night. Their Japanese factory has no water damage, but they have stopped 2 of their 3 shifts for at least 2 days - their component supplier is underwater. The floods are hitting the economy in factories not in the flood zones...........

[ScubaBuddha]

Just made the trip from Chiayphum to Phuket, much of it by bus and motorbike. I was amazed at the extent of the flooding. Just about every region we saw between Issan and Bangkok had visible signs/damage or was under water. All the lowest rice fields (they are tiered) were dead, I would say about 20-30% of total. We saw factory after factory outside Bangkok sitting in the middle of enormous lakes. Trip took over an hour longer than usual due to detours. Here in Phuket we had to forge a few rivers crossing the main road the bike getting from the airport. Once had water up over the windscreen. Thought I would stall out for sure.

Edited October 11, 2011 by ScubaBuddha

[David48]

Has the baht taken a hit as well or is it still strong?

Aussie vs Thai Baht

http://www.xe.com/ucc/convert/?Amount=1&From=AUD&To=THB&image.x=47&image.y=14ℑ=Submit

[Ned]

By this time next year more of the country will lie under concrete and more natural watercourses will be criss- crossed by roads. That's the truth. As some local researchers have said , it doesn't take much rain to put a lot of the country underwater nowadays. I'm sure Mr Honda is now aware of this.

[letitbe]

Not only are they not getting 300 Baht, but the FTI proposes a wage cut! If it wasn't so tragic it would be hilarious.

maybe its a silver lining that Taksins party won and if world economic problems continue Taksin lovers and those who think he can make all rich will be see light. Red propaganda has all poor uneducated Thais really believing at leastl oads I have spoken to

Taksin paid off IMF with his own money

Taksin himself paid for 30 baht scheme

Abhisit himself borrowed money (government borrowing) and put it into his bank account

Taksin is a financial genius who will make all poor thais richer

Anhisit and dems are worse than the Devil or Hitler

Dems made food prices go up Taksin will get them down

When Taksin comes back rice will rice to 5,000 baht and gold half in value so everyone can have gold

I kid you not those are all things Thai red supporters have said to my wife. Well although you cant blame government for floods you can blame Taksins governments in power for arond 10 years before dems for doing nothing to help floods have less impact but not ot worry when he comes back their will never be floods again, economy will grow 20% a year all thais will get minimum 1000 baht a day by 2020 , prices will fall and everything will be back to lovely jubly

HOwever it will probably just make his poor Issan and rest supporters say only he can lead and then when he gets back he can really implement the plan for a Taksin state. Who needs democracy of any type.

[chooka]

Not only are they not getting 300 Baht, but the FTI proposes a wage cut! If it wasn't so tragic it would be hilarious.

maybe its a silver lining that Taksins party won and if world economic problems continue Taksin lovers and those who think he can make all rich will be see light. Red propaganda has all poor uneducated Thais really believing at leastl oads I have spoken to

Taksin paid off IMF with his own money

Taksin himself paid for 30 baht scheme

Abhisit himself borrowed money (government borrowing) and put it into his bank account

Taksin is a financial genius who will make all poor thais richer

Anhisit and dems are worse than the Devil or Hitler

Dems made food prices go up Taksin will get them down

When Taksin comes back rice will rice to 5,000 baht and gold half in value so everyone can have gold

I kid you not those are all things Thai red supporters have said to my wife. Well although you cant blame government for floods you can blame Taksins governments in power for arond 10 years before dems for doing nothing to help floods have less impact but not ot worry when he comes back their will never be floods again, economy will grow 20% a year all thais will get minimum 1000 baht a day by 2020 , prices will fall and everything will be back to lovely jubly

HOwever it will probably just make his poor Issan and rest supporters say only he can lead and then when he gets back he can really implement the plan for a Taksin state. Who needs democracy of any type.

Yes and Taksin left the tap on as part of his big plan to flood S/E asia geez some people never let up.

[h90]

Not only are they not getting 300 Baht, but the FTI proposes a wage cut! If it wasn't so tragic it would be hilarious.

maybe its a silver lining that Taksins party won and if world economic problems continue Taksin lovers and those who think he can make all rich will be see light. Red propaganda has all poor uneducated Thais really believing at leastl oads I have spoken to

Taksin paid off IMF with his own money

Taksin himself paid for 30 baht scheme

Abhisit himself borrowed money (government borrowing) and put it into his bank account

Taksin is a financial genius who will make all poor thais richer

Anhisit and dems are worse than the Devil or Hitler

Dems made food prices go up Taksin will get them down

When Taksin comes back rice will rice to 5,000 baht and gold half in value so everyone can have gold

I kid you not those are all things Thai red supporters have said to my wife. Well although you cant blame government for floods you can blame Taksins governments in power for arond 10 years before dems for doing nothing to help floods have less impact but not ot worry when he comes back their will never be floods again, economy will grow 20% a year all thais will get minimum 1000 baht a day by 2020 , prices will fall and everything will be back to lovely jubly

HOwever it will probably just make his poor Issan and rest supporters say only he can lead and then when he gets back he can really implement the plan for a Taksin state. Who needs democracy of any type.

You forgot in 6 Month we are all rich.

I think 2-3 month have already passed so just 3-4 month to go till we are all rich.

[chooka]

Not only are they not getting 300 Baht, but the FTI proposes a wage cut! If it wasn't so tragic it would be hilarious.

maybe its a silver lining that Taksins party won and if world economic problems continue Taksin lovers and those who think he can make all rich will be see light. Red propaganda has all poor uneducated Thais really believing at leastl oads I have spoken to

Taksin paid off IMF with his own money

Taksin himself paid for 30 baht scheme

Abhisit himself borrowed money (government borrowing) and put it into his bank account

Taksin is a financial genius who will make all poor thais richer

Anhisit and dems are worse than the Devil or Hitler

Dems made food prices go up Taksin will get them down

When Taksin comes back rice will rice to 5,000 baht and gold half in value so everyone can have gold

I kid you not those are all things Thai red supporters have said to my wife. Well although you cant blame government for floods you can blame Taksins governments in power for arond 10 years before dems for doing nothing to help floods have less impact but not ot worry when he comes back their will never be floods again, economy will grow 20% a year all thais will get minimum 1000 baht a day by 2020 , prices will fall and everything will be back to lovely jubly

HOwever it will probably just make his poor Issan and rest supporters say only he can lead and then when he gets back he can really implement the plan for a Taksin state. Who needs democracy of any type.

You forgot in 6 Month we are all rich.

I think 2-3 month have already passed so just 3-4 month to go till we are all rich.

Did they promise to make farangs rich???

[webfact]

related

Flooding to Cost Industrial Sector 300-400 Billion Baht in Damages

Follow this link:

[Thai at Heart]

Why Rojana Ayutthaya?

70 km from downtown Bangkok

43 km from Bangkok International Airport

12 km from Ring Road Highway

5 km from Ayutthaya Railroad Station

90 km form Suvarnabhumi Airport

Free from concerns of industrial water contamination by brine and the possibility of equipment damage from salt which are often present at other industrial estates near the seaside.

Well, I guess it was a selling point.

http://www.business-in-asia.com/rojana_industrial_park.htm

Unfortunately completely lacking in flood preparation and if I am not mistaken criss crossed by several irrigation canals because the land was bought bloody cheap.

[webfact]

Thailand losing Bt75-113 billion in countrywide flooding

BANGKOK, Oct 12 – Thailand could lose Bt75-113 billion from its gross domestic product (GDP) in countrywide flooding, according to Kasikorn Research Centre (KRC).

The assessment was calculated based on continued flooding since late July, with possible further damage as massive quantise of water passing through the Chao Phraya River basin, flowing into Thailand's central part and Bangkok, and future storms that may hit Thailand.

The damage estimates include the agricultural sector at Bt20-30 billion, the industrial sector at Bt38-59 billion, and the service and other sectors at Bt17-24 billion.

The central province of Ayutthaya is expected to be the most affected. Its economic losses are already seen at Bt20-30 billion.

The centre said the current serious flooding will impact the country's economic growth this year to drop by 0.69-1.04 per cent to overall economic growth at only 2.9-3.6 per cent.

Most damage will be realised in the fourth quarter of this year, resulting in lower GDP growth at 2.0-3.8 per cent compared to the previously expected 4.0-5.8 per cent.

Other consequences from flooding include impacts on goods prices, a main factor contributing to inflationary pressure next year in light of the 300 baht minimum wage hike, the end of the subsidy for low-income earners and energy price adjustments.

According to Kasikorn Research Center, this year's headline inflation stands at 3.8-4.0 per cent, while the core inflation is at 2.3-2.6 per cent.

Challenges to the Thai economy will especially be on Thailand's automobile and electronics industries, which have just recovered from Japan's March quake and tsunami disasters, as well as the government's minimum wage rise policy, which is to start next year.

External factors also pay a role such as the European debt crisis, the fragile US economy, and currency exchange rates.

Continued floods are also impacting foreign investment. The centre advised public agencies to build and strengthen confidence among foreign investors regarding Thailand's economic stability by having a clear policy to prevent future problems caused by flooding. (MCOT online news)

-- TNA 2011-10-12

[ginjag]

Not only are they not getting 300 Baht, but the FTI proposes a wage cut! If it wasn't so tragic it would be hilarious.

maybe its a silver lining that Taksins party won and if world economic problems continue Taksin lovers and those who think he can make all rich will be see light. Red propaganda has all poor uneducated Thais really believing at leastl oads I have spoken to

Taksin paid off IMF with his own money

Taksin himself paid for 30 baht scheme

Abhisit himself borrowed money (government borrowing) and put it into his bank account

Taksin is a financial genius who will make all poor thais richer

Anhisit and dems are worse than the Devil or Hitler

Dems made food prices go up Taksin will get them down

When Taksin comes back rice will rice to 5,000 baht and gold half in value so everyone can have gold

I kid you not those are all things Thai red supporters have said to my wife. Well although you cant blame government for floods you can blame Taksins governments in power for arond 10 years before dems for doing nothing to help floods have less impact but not ot worry when he comes back their will never be floods again, economy will grow 20% a year all thais will get minimum 1000 baht a day by 2020 , prices will fall and everything will be back to lovely jubly

HOwever it will probably just make his poor Issan and rest supporters say only he can lead and then when he gets back he can really implement the plan for a Taksin state. Who needs democracy of any type.

You forgot in 6 Month we are all rich.

I think 2-3 month have already passed so just 3-4 month to go till we are all rich.

Did they promise to make farangs rich???

No but if the Thais are rich they will pay us