Thai Govt Bid To Restore Investors' Faith

[webfact]

Govt bid to restore investors' faith

Achara Deboonme

The Nation

Government units are preparing proposals for the Cabinet's consideration tomorrow to restore investor confidence after widespread flooding disrupted manufacturers' supply chains.

"We need measures to rehabilitate the inundated factories so they can resume production as soon as the water subsides," Deputy Prime Minister Kittiratt Na-Ranong said yesterday.

The Finance Ministry plans to allow damaged factories to deduct losses from corporate taxes, he said after meeting with several economic ministers, Board of Investment secretary-general Atchaka Sribunruang and Federation of Thai Industries chairman Payungsak Chartsu.

Kittiratt also promised sufficient loans and loan guarantees for affected companies.

Finance Minister Thirachai Phuvanatnaranubala would discuss with commercial banks about setting special loan rates and repayment conditions, he added.

Payungsak said clean-up centres should be established at each zone, while the government should remove any regulatory obstacles.

"From the discussion today, I have the impression that the financial assistance is sufficient to rehabilitate the manufacturing sector quickly.

"But what concerns foreign investors the most is the government’s short- and long-term plans for water management. This should be on the national agenda," he said. The severe flooding has caused widespread supply problems among industries in both inundated and other zones, he added.

Cooperation from all parties is needed, as rehabilitation must be planned for small and large firms through the entire supply chain.

With support from the military, police and public, the rehabilitation effort would replenish the confidence of the foreign community, he added.

Among some measures announced earlier, affected plants in export-oriented zones are now allowed to relocate their machinery and inventory without the BoI’s approval. Import duties on replacement machinery will be waived and the work permit process will be facilitated for technicians needed to check production equipment.

Atchaka said the BoI is asking for the Cabinet’s approval for a cut in corporate income tax. A

package will also be proposed to help industrial estates finance new infrastructure to prevent

another disaster.

"The most important thing now is to restore the confidence of industries in inundated industrial estates, so that their existing investment will stay and new investment will flow in," she said.

Kittiratt will tomorrow convene a meeting at the Stock Exchange of Thailand with Industry Minister Wannarat Charnnukul and representatives of industrial estates.

The government was allowing retailers to start using Don Mueang Airport’s warehouse today as a distribution centre, to ease the shortage in consumer goods caused by people stocking up ahead of floods. This is exacerbated by the closure of several distribution centres in Ayutthaya's Wang Noi district.

From the airport's cargo terminal covering 30,000 square metres, consumer goods could reach retail outlets within 48 hours, he added.

-- The Nation 2011-10-24

[Bizz]

Act of budda act of god what is to be will be.

Ya i left the ke, sa, raa, out of it

Govt bid to restore investors' faith

Go on clean it up, investors know this, most understand natural calamities.

[hellodolly]

Well they are certainly talking about the financial side of things but investors are not going to come flocking to Thailand for that if the government does not do some thing to insure their investments every time the rainy season starts up.

[KKvampire]

How can the government "restore investors confidence",

1) There was never any plan for protecting major industrial estates in the event of flooding.

2) They never gave any warnings of the threat until it was hours away from the buildings

3) They dont know when this will end , when the flooding will recede and pumping can begin

4) All this could happen again next year.

Nice words of promises from government are meaningless and any Investor with production / manufacturing in Thailand and knowledge of how things operate here knows it too well.

Edited October 24, 2011 by KKvampire

[TechnikaIII]

Whilst the immediate and often mindless reaction here, or should I say bad habit, is to bash and blame the Thai authorities for everything, the "Investors" must also share responsibility for their actions > the risk they take by building factories on a flood plain. In 1964 at school in Australia, at the age of 15, I began studying S.E. Asian history and geography. I learnt then that a flood plain was good for agriculture, particularly rice in the tropical regions. With Thailand's history of flooding, available now to anyone within 10 seconds or less on a Google search, you'd think that with millions to spend, an industrialist might do his/her homework before moving in? When I selected my building to rent, out there in Nakhon Sawan province, (and it's a year ago today I first moved there) I noted where the water was laying around from last year's monsoon, and looked for signs of flooding in and around the building before I said "Yes".

Does anyone remember the 1954 film "Elephant Walk"? Elisabeth Taylor, Peter Finch and so on .. Well, the details of the romance are neither here nor there, but I always remember the main plot as a lesson of what happens when Man defies the force of Nature. The plantation was built across the path of an historical elephant trail, and the elephants were becoming agitated. The climax saw the elephants stampeding through the mansion, demolishing it.

Edited October 24, 2011 by TechnikaIII

[noahvail]

Whilst the immediate and often mindless reaction here, or should I say bad habit, is to bash and blame the Thai authorities for everything, the "Investors" must also share responsibility for their actions > the risk they take by building factories on a flood plain. (snipped)

Agreed. I suppose most of the large factories have flood insurance and business interruption insurance.

On the other hand, I suppose the president of Pepsico is congratulating herself on *not* building their plant in Thailand.

[KKvampire]

Whilst the immediate and often mindless reaction here, or should I say bad habit, is to bash and blame the Thai authorities for everything, the "Investors" must also share responsibility for their actions > the risk they take by building factories on a flood plain. In 1964 at school in Australia, at the age of 15, I began studying S.E. Asian history and geography. I learnt then that a flood plain was good for agriculture, particularly rice in the tropical regions. With Thailand's history of flooding, available now to anyone within 10 seconds or less on a Google search, you'd think that with millions to spend, an industrialist might do his/her homework before moving in? When I selected my building to rent, out there in Nakhon Sawan province, (and it's a year ago today I first moved there) I noted where the water was laying around from last year's monsoon, and looked for signs of flooding in and around the building before I said "Yes".

Does anyone remember the 1954 film "Elephant Walk"? Elisabeth Taylor, Peter Finch and so on .. Well, the details of the romance are neither here nor there, but I always remember the main plot as a lesson of what happens when Man defies the force of Nature. The plantation was built across the path of an historical elephant trail, and the elephants were becoming agitated. The climax saw the elephants stampeding through the mansion, demolishing it.

Who's "mindless" telling companies to locate factories and production in areas near to Bangkok? Yes The good old government

[SICHONSTEVE]

"Cooperation from all parties is needed, as rehabilitation must be planned for small and large firms through the entire supply chain".

"Please help me Mr Abhisit"!!! "I know that we got in by lieing, giving them false hopes and promising to fix all their earthly ills with false pledges that we knew could never be met", "but I'm new at this game and don't know what to do". "Thaksin's chums won't listen to me or do what I'm told to tell them to do and nobody told me that all this water would come and make this problem for me"!!! " my brother just told me to win the election (by whatever means it takes - illegal is OK as he does this all the time) LoL!!!!, and get him an amnesty". "What's all this working for the people stuff"??? "He never mentioned anything about this and I'm rather miffed that the people are starting to hate me when its not my fault". "As for those nasty TV forum people, they are being ever so unkind and saying awful things about me" - "Oh please!! Khun Abhisit, come back as I'm not cut out for this and don't have the stomach for it any more".

"Sod my brother, he can do his own dirty work in the future - I'm out of here, abandon ship!!!!" :jap:.

Edited October 24, 2011 by SICHONSTEVE

[geriatrickid]

Who's "mindless" telling companies to locate factories and production in areas near to Bangkok? Yes The good old government

Did the government force those companies to build their plants in these locations? No. the companies decided on their own.

You are ignoring the fact that companies like Honda and Sony undertook a site assessment. I would expect that the risk averse Japanese would have analyzed the risks of flooding and windstorm etc. Either these companies didn't do their homework, or their interpretation of the various risks was such to allow the investment. Other companies that followed these companies to the industrial estates most likely were relying on the assumption that the big company due diligence was competent. under a worst case scenario, it seems that the multinational firms were comfortable with risk attached to their locations. Why play the blame game?

Large multinationals locate in Thailand for business reasons. A skilled competitively paid labour force is one reason. Another is the logistics support. Another is the favourable climate to large multinationals. Unlike China, there is no fear of expropriation or government sanctioned raiding. The large multinationals were also given seductive tax breaks and subsidies to locate in Thailand. The companies didn't come for the bargirls or for the garlic & pepper gai.

[Robby nz]

Who's "mindless" telling companies to locate factories and production in areas near to Bangkok? Yes The good old government

Did the government force those companies to build their plants in these locations? No. the companies decided on their own.

You are ignoring the fact that companies like Honda and Sony undertook a site assessment. I would expect that the risk averse Japanese would have analyzed the risks of flooding and windstorm etc. Either these companies didn't do their homework, or their interpretation of the various risks was such to allow the investment. Other companies that followed these companies to the industrial estates most likely were relying on the assumption that the big company due diligence was competent. under a worst case scenario, it seems that the multinational firms were comfortable with risk attached to their locations. Why play the blame game?

Large multinationals locate in Thailand for business reasons. A skilled competitively paid labour force is one reason. Another is the logistics support. Another is the favourable climate to large multinationals. Unlike China, there is no fear of expropriation or government sanctioned raiding. The large multinationals were also given seductive tax breaks and subsidies to locate in Thailand. The companies didn't come for the bargirls or for the garlic & pepper gai.

Most of these companies located in designated industrial estates and would have had a right to expect such estates to have some protection from floods such as we are experiencing

It would seem this flood protection was not in fact in place.

I read that at least one company, Houa lens, I think was moving out what with the 300b min wage coming up how many more will follow?

[TechnikaIII]

Whilst the immediate and often mindless reaction here, or should I say bad habit, is to bash and blame the Thai authorities for everything, the "Investors" must also share responsibility for their actions > the risk they take by building factories on a flood plain. In 1964 at school in Australia, at the age of 15, I began studying S.E. Asian history and geography. I learnt then that a flood plain was good for agriculture, particularly rice in the tropical regions. With Thailand's history of flooding, available now to anyone within 10 seconds or less on a Google search, you'd think that with millions to spend, an industrialist might do his/her homework before moving in? When I selected my building to rent, out there in Nakhon Sawan province, (and it's a year ago today I first moved there) I noted where the water was laying around from last year's monsoon, and looked for signs of flooding in and around the building before I said "Yes".

Does anyone remember the 1954 film "Elephant Walk"? Elisabeth Taylor, Peter Finch and so on .. Well, the details of the romance are neither here nor there, but I always remember the main plot as a lesson of what happens when Man defies the force of Nature. The plantation was built across the path of an historical elephant trail, and the elephants were becoming agitated. The climax saw the elephants stampeding through the mansion, demolishing it.

Who's "mindless" telling companies to locate factories and production in areas near to Bangkok? Yes The good old government

You seem to miss the point. The onus still remains on the investor to do the research. When you, if you ever buy anything, a camera, a computer, a car, do you read the reviews in magazines, online, feedback on Amazon, consult independant parties? Or do you just hand over money in response to an advertisement... The more expensive the item, the more important it is to do the homework.

Regardless, the insurance companies will certainly be restructuring the risk strategies with premiums to match.

1. "You want cover for flood damage?"

2. "What is the height above sea level of the land you build on?"

3. "What is the flood history of that location?"

4. "How high are the levees around the property to be insured?"

5. "What is capacity of the installed emergeny pumping system?"

6. "There is an independant power source for the pumping system?"

7. "Pending our inspectors' visits, and government flood history documentation, your risk catagory will be calculated on the basis of the above information."

8.

Edited October 24, 2011 by TechnikaIII

[KKvampire]

Who's "mindless" telling companies to locate factories and production in areas near to Bangkok? Yes The good old government

Did the government force those companies to build their plants in these locations? No. the companies decided on their own.

You are ignoring the fact that companies like Honda and Sony undertook a site assessment. I would expect that the risk averse Japanese would have analyzed the risks of flooding and windstorm etc. Either these companies didn't do their homework, or their interpretation of the various risks was such to allow the investment. Other companies that followed these companies to the industrial estates most likely were relying on the assumption that the big company due diligence was competent. under a worst case scenario, it seems that the multinational firms were comfortable with risk attached to their locations. Why play the blame game?

Large multinationals locate in Thailand for business reasons. A skilled competitively paid labour force is one reason. Another is the logistics support. Another is the favourable climate to large multinationals. Unlike China, there is no fear of expropriation or government sanctioned raiding. The large multinationals were also given seductive tax breaks and subsidies to locate in Thailand. The companies didn't come for the bargirls or for the garlic & pepper gai.

Factories are built in designated industrial areas not a "blame game" A fact.

[bigbamboo]

How can the government "restore investors confidence",

1) There was never any plan for protecting major industrial estates in the event of flooding.

2) They never gave any warnings of the threat until it was hours away from the buildings

3) They dont know when this will end , when the flooding will recede and pumping can begin

4) All this could happen again next year.

Nice words of promises from government are meaningless and any Investor with production / manufacturing in Thailand and knowledge of how things operate here knows it too well.

Can't disagree with any of that.

[TechnikaIII]

Who's "mindless" telling companies to locate factories and production in areas near to Bangkok? Yes The good old government

Did the government force those companies to build their plants in these locations? No. the companies decided on their own.

You are ignoring the fact that companies like Honda and Sony undertook a site assessment. I would expect that the risk averse Japanese would have analyzed the risks of flooding and windstorm etc. Either these companies didn't do their homework, or their interpretation of the various risks was such to allow the investment. Other companies that followed these companies to the industrial estates most likely were relying on the assumption that the big company due diligence was competent. under a worst case scenario, it seems that the multinational firms were comfortable with risk attached to their locations. Why play the blame game?

Large multinationals locate in Thailand for business reasons. A skilled competitively paid labour force is one reason. Another is the logistics support. Another is the favourable climate to large multinationals. Unlike China, there is no fear of expropriation or government sanctioned raiding. The large multinationals were also given seductive tax breaks and subsidies to locate in Thailand. The companies didn't come for the bargirls or for the garlic & pepper gai.

Most of these companies located in designated industrial estates and would have had a right to expect such estates to have some protection from floods such as we are experiencing

It would seem this flood protection was not in fact in place.

I read that at least one company, Houa lens, I think was moving out what with the 300b min wage coming up how many more will follow?

No. They have absolutely no right to expect any such thing. No more right than do I to expect my landlady to offer me such assurances. But having a brain, I made my own assessment, and based on previous flood history, could see that there was some, but minimal likelihood of water reaching even the ground floor level. So I planned the layout and use of the building accordingly. It is my responsibility. I blame no one in the event of exceptional circumstances.

Those companies must have made their own risk assessment. Whose fault would it be if I were to have a week in San Francisco when there happens to be an earthquake?

[Bpuumike]

"Cooperation from all parties is needed, as rehabilitation must be planned for small and large firms through the entire supply chain".

"Please help me Mr Abhisit"!!! "I know that we got in by lieing, giving them false hopes and promising to fix all their earthly ills with false pledges that we knew could never be met", "but I'm new at this game and don't know what to do". "Thaksin's chums won't listen to me or do what I'm told to tell them to do and nobody told me that all this water would come and make this problem for me"!!! " my brother just told me to win the election (by whatever means it takes - illegal is OK as he does this all the time) LoL!!!!, and get him an amnesty". "What's all this working for the people stuff"??? "He never mentioned anything about this and I'm rather miffed that the people are starting to hate me when its not my fault". "As for those nasty TV forum people, they are being ever so unkind and saying awful things about me" - "Oh please!! Khun Abhisit, come back as I'm not cut out for this and don't have the stomach for it any more".

"Sod my brother, he can do his own dirty work in the future - I'm out of here, abandon ship!!!!" :jap:.

"Big Brother, if you're so good at managing things how have you let the batteries on all 9 of your mobile phones run flat at the same time?"

"Little Sis, that's precisely because I'm so good at managing things. In fact I'm not even sure about the battery on this laptop I'm using for VOIP. If we should sudd".........................

[tlansford]

Who's "mindless" telling companies to locate factories and production in areas near to Bangkok? Yes The good old government

Did the government force those companies to build their plants in these locations? No. the companies decided on their own.

You are ignoring the fact that companies like Honda and Sony undertook a site assessment. I would expect that the risk averse Japanese would have analyzed the risks of flooding and windstorm etc. Either these companies didn't do their homework, or their interpretation of the various risks was such to allow the investment. Other companies that followed these companies to the industrial estates most likely were relying on the assumption that the big company due diligence was competent. under a worst case scenario, it seems that the multinational firms were comfortable with risk attached to their locations. Why play the blame game?

Large multinationals locate in Thailand for business reasons. A skilled competitively paid labour force is one reason. Another is the logistics support. Another is the favourable climate to large multinationals. Unlike China, there is no fear of expropriation or government sanctioned raiding. The large multinationals were also given seductive tax breaks and subsidies to locate in Thailand. The companies didn't come for the bargirls or for the garlic & pepper gai.

Most of these companies located in designated industrial estates and would have had a right to expect such estates to have some protection from floods such as we are experiencing

It would seem this flood protection was not in fact in place.

I read that at least one company, Houa lens, I think was moving out what with the 300b min wage coming up how many more will follow?

I am not meaning to pick a fight here, but 2 things seem clear.

If you are a company and investing millions in a plant, you should be taking responsibility for all of the functional aspects of that facility. If the proposed location is on a flood plain, then you as a company have made the choice (and not a wise one, IMO)

The second thing is that if a company is serious considering a relocation of a plant costing million of euros because of a minimum wage of 7.50€ per day for some workers, then perhaps it is better that they take their business elsewhere.

"Faith" as it were, or confidence, related to seasonal flooding will come from addressing long-term water management issues - a point made in the article. Overall confidence in Thailand as a place to do business is obviously more complex, but it will not be based on how little you are allowed to pay people.

[rubl]

Deputy Prime Minister Kittiratt Na-Ranong promised a flood-prevention system for industrial estates, in the government's bid to restore investors' faith.

To date, seven industrial estates have been inundated. Kittiratt said that it should take 45 days to drain water out of the flooded industrial estates, from the day that the water level stabilises.

Sounds like operation 'dry-up' will be completed by year's end. As for the 'Flood Prevention System for Industrial Estates', when may we see a plan to get to it. Details like what, where, how, timeframe, financing. Will a rough draft by year's end be possible?

Edited October 24, 2011 by rubl

[whybother]

Deputy Prime Minister Kittiratt Na-Ranong promised a flood-prevention system for industrial estates, in the government's bid to restore investors' faith.

To date, seven industrial estates have been inundated. Kittiratt said that it should take 45 days to drain water out of the flooded industrial estates, from the day that the water level stabilises.

http://www.thaivisa....ost__p__4790235

Sounds like operation 'dry-up' will be completed by year's end. As for the 'Flood Prevention System for Industrial Estates', when may we see a plan to get to it. Details like what, where, how, timeframe, financing. Will a rough draft by year's end be possible?

Is the 45 days from now or from when the water stops flowing in?

[hammered]

Deputy Prime Minister Kittiratt Na-Ranong promised a flood-prevention system for industrial estates, in the government's bid to restore investors' faith.

To date, seven industrial estates have been inundated. Kittiratt said that it should take 45 days to drain water out of the flooded industrial estates, from the day that the water level stabilises.

http://www.thaivisa....ost__p__4790235

Sounds like operation 'dry-up' will be completed by year's end. As for the 'Flood Prevention System for Industrial Estates', when may we see a plan to get to it. Details like what, where, how, timeframe, financing. Will a rough draft by year's end be possible?

Is the 45 days from now or from when the water stops flowing in?

There are going to be a lot of people missing out on wages for a month or so in those industrial zones although I guess there will be a lot of infrastructure work as the floods recede and masses of overtime when factories get up and running again in the New Year. I would guess the 45 days varies as some places must see stability already while others closer to BKK dont

[Arkady]

This seems to rely on the basic premise of "puu yai" that people of lesser status are under an obligation to believe their bullshit. Thai politicians, bureaucrats, police and military lie through their teeth so often on this basis that they begin to believe the fantasies they weave to pump up their images. And that is what all the conflicting announcements by government ministers is about, as they fight for the microphone like a group of "nak leng" in a karaoke parlour. Unfortunately for them foreigners don't subscribe to this patronage culture. They are only interested in results. Nevertheless, it is a great excuse for a series of round-the-world roadshows first class with a large entourage of family and hangers on to explain the "true facts" to foreigners from the "puu yai" perspective.

[rubl]

Deputy Prime Minister Kittiratt Na-Ranong promised a flood-prevention system for industrial estates, in the government's bid to restore investors' faith.

To date, seven industrial estates have been inundated. Kittiratt said that it should take 45 days to drain water out of the flooded industrial estates, from the day that the water level stabilises.

http://www.thaivisa....ost__p__4790235

Sounds like operation 'dry-up' will be completed by year's end. As for the 'Flood Prevention System for Industrial Estates', when may we see a plan to get to it. Details like what, where, how, timeframe, financing. Will a rough draft by year's end be possible?

Is the 45 days from now or from when the water stops flowing in?

There are going to be a lot of people missing out on wages for a month or so in those industrial zones although I guess there will be a lot of infrastructure work as the floods recede and masses of overtime when factories get up and running again in the New Year. I would guess the 45 days varies as some places must see stability already while others closer to BKK dont

The Dept. PM may have been deliberately vague, politician you know. 'water level stabilises' suggest that NakhonSawan and possibly Ayutthaya may be drained by begin of December, even though some places still have upto three meters of standing water. As a lot of water still needs to reach / flood Bangkok, Eastern Bangkok with lots of industrial estates (and a few million people living there) still hasn't seen the worst part.

As for work, people involved in running factories in Industrial Estates are not necessarily the same workforce needed to cleanup or work on infrastructure. That's probably the odd Burmese with a few Cambodians in-between looking for 300B/day. Unless those factory workers were unskilled personel that is.

[whybother]

Deputy Prime Minister Kittiratt Na-Ranong promised a flood-prevention system for industrial estates, in the government's bid to restore investors' faith.

To date, seven industrial estates have been inundated. Kittiratt said that it should take 45 days to drain water out of the flooded industrial estates, from the day that the water level stabilises.

http://www.thaivisa....ost__p__4790235

Sounds like operation 'dry-up' will be completed by year's end. As for the 'Flood Prevention System for Industrial Estates', when may we see a plan to get to it. Details like what, where, how, timeframe, financing. Will a rough draft by year's end be possible?

Is the 45 days from now or from when the water stops flowing in?

Industrial estates to be rehabilitated within 45 days after water recedes with government financial support: Commerce Minister /MCOT

So expect things to get going by mid January next year.

[rubl]

Industrial estates to be rehabilitated within 45 days after water recedes with government financial support: Commerce Minister /MCOT

So expect things to get going by mid January next year.

In these dire times you need to work on trying to keep your sense of humour.

'the water recedes with government financial support'?

[noahvail]

Industrial estates to be rehabilitated within 45 days after water recedes with government financial support: Commerce Minister /MCOT

So expect things to get going by mid January next year.

In these dire times you need to work on trying to keep your sense of humour.

'the water recedes with government financial support'?

I guess everything has its price in LOS

[ginjag]

Industrial estates to be rehabilitated within 45 days after water recedes with government financial support: Commerce Minister /MCOT

So expect things to get going by mid January next year.

In these dire times you need to work on trying to keep your sense of humour.

'the water recedes with government financial support'?

I guess everything has its price in LOS

Why don't they start to landfill Bkk--Ayuttaya there are many logged hills and mountains around. In issan it's an on going thing ,everyone is raising their land and in many cases, raising their houses.

This problem can never be solved--see Bangladesh delta area. If you want long term benefit raise the land level in vital areas. have a law if not doing this that all houses to be built on stilts in low lying areas. raise the level of roadways where they are too low. EASIER SAID THAN DONE :jap:

[geriatrickid]

I suggest critics looking to play the blame game read the financial filings of some of the multinationals. Start with the SEC filings. For example, Try page 20 of Sony's Form 20F. Read about risk assessment. Sony did not rely on the government to assess the likelihood of flooding, but instead managed the risk itself, just as it manages its other risks. The likelihood of flooding is minimized by site selection, location prevention measures and by the purchase of insurance (through its captive insurers).

Sh*t happens. Using the logic of some in this thread, Toyota's earthquake related damages in Japan are the fault of the Japanese government.

[rubl]

I suggest critics looking to play the blame game read the financial filings of some of the multinationals. Start with the SEC filings. For example, Try page 20 of Sony's Form 20F. Read about risk assessment. Sony did not rely on the government to assess the likelihood of flooding, but instead managed the risk itself, just as it manages its other risks. The likelihood of flooding is minimized by site selection, location prevention measures and by the purchase of insurance (through its captive insurers).

Sh*t happens. Using the logic of some in this thread, Toyota's earthquake related damages in Japan are the fault of the Japanese government.

Whereas some may have done their own assessment others might have relied on the government (of the day). Some are in estates which opened decade(s) ago when things were less severe.

Anyway in any country if you want to blame you blame the current government because that's the government in power and able to do something. Blaming previous governments may be correct as well, but less effective.