Failure To Develop Water Plan Not An Option: Manufacturers

[webfact]

POST-FLOOD SEMINAR

Failure to develop water plan not an option: manufacturers

ACHARA DEBOONME

THE NATION

Given the magnitude of the flood-inflicted losses to manufacturers both small and large, Thailand's industrial competitiveness can only be maintained if a comprehensive water-management master plan is developed, panellists at a seminar said.

At the seminar, "Industrial Rehabilitation after Flood Disaster", hosted last week by Krungthep Turakij, three industrial-estate operators said that aside from the construction of more robust flood barriers at the estates as a short-term measure, investors are demanding a water master plan for long-term security.

"The plan is a priority to ensure quick recovery in the manufacturing sector," said Kobkarn Wattanav-rangkul, chairwoman of Toshiba Thailand and Bangkadi Industrial Park - one of seven inundated industrial estates.

"Though it may require seven to eight years to implement, the plan is a must; there are fears that this will be forgotten about over time. It's the private sector that is pushing for drastic and permanent action," she said.

"We need quick action, as some [manufacturers] have decided to shift investment from Thailand."

Around the middle of this month, drainage at Bangkadi is expected to be complete and workers should be able to return to the factories. A flood barrier is planned, with construction to begin early next year and completion expected in August.

The situation is better at Rojana Industrial Park, which is now dry. Large trucks were expected to be able to enter to deliver heavy machinery as of last Thursday. Nava Nakorn Industrial Park is expected to be dry by December 10 Saturday.

"The comprehensive master plan must take into account water usage for industrial, agricultural and consumption purposes," said Khajohn-sak Mahakunawan, an adviser to Rojana. "Proper resource allocation would automatically prevent floods, as it would be assisted by sluice gates and 'monkey cheek' [catchment] areas. This disaster shows that |blocking water only worsened the |situation."

Nipit Arunvongse Na Ayudhya, managing director of Nava Nakorn - the operator of Nava Nakorn Industrial Estate - said operators had no problems with investing in barriers, though some stand to benefit little from the investment as they sold all the land and benefit only from utilities services.

"As the master plan is not available yet, insurance companies put renewals on hold. This is scary. Though some companies want to maintain investment here, they cannot do so without the insurance and parent companies' consent," Nipit said.

"To foreign investors, the point is not who is responsible for the disaster. Instead, they want clear water-management strategies: how dam water is managed, how waterways will be built, and who should be responsible for regular waterway drainage and sluice-gate maintenance."

Vice Minister for Industry Suparp Kleekhajai said factories in the seven industrial estates showed preliminary losses of Bt125.8 billion, including Bt27.4 billion in damaged raw materials and Bt16.5 billion in damaged finished goods. Some of the machinery losses of Bt68 billion might be recoverable if repairs are successful.

The World Bank estimates losses at Bt1.3 trillion, due mainly to supply-chain disruptions affecting factories outside the estates and those overseas. The automotive and electrical/electronics sectors were hit the hardest, and there are fears that delayed recovery may result in permanent loss of clients.

"Production [of automobiles] should return to normal early next year, except for Honda. Three new manufacturing plants will start next year to boost output," said Vallop Tiasiri, president of the Thailand Automotive Institute.

"All are geared towards the new goal, to boost output to 2.5 million units and capacity to 3 million in the next few years, which will turn Thailand into the world's 10th-biggest car manufacturer.

"The crisis has not led to any change in the plan. Yet it could dampen Thailand's future attractiveness, as automotive investment is long-term and risk management is crucial."

Supachai Suthipongchai, chairman of the Federation of Thai Industries' Electrical, Electronics and Allied Industries Club, said he expected the crisis to cut Bt500 billion from export value in the current fourth quarter.

He is seriously worried about the recovery, given the shortage of specialists to help fix machinery. At the seven industrial estates alone, more than 10,000 plastic-moulding machines were damaged. It could take a year to fix all of them, because of lengthy diagnosis and the imports of parts. Ordering replacements would take a similar amount of time, as manufacturers could not cope with such huge orders all at once.

"All are concerned about a recurrence of this disaster and possible relocations. Compared with the auto industry, relocation of electrical and electronics plants is easier. Don't forget that Thailand will be less attractive [anyway] with higher minimum wages, labour shortages, and poor education quality," Supachai said.

Seeing the problems in the supply chain, Suparp said that aside from tax waivers on parts and machinery for the automotive industry, the ministry is helping small and medium-sized enterprises through an industrial clinic. As of November, about 1,325 factories had registered for help, ranging from machinery diagnosis to maintenance.

The Small and Medium Enter-prise Development Bank of Thailand will also focus on affected business operators.

Suparp said he was convinced |that Thailand would remain attractive to Japanese companies, which are looking for new manufacturing sites after the tsunami in their own country, even though 80 per cent of factories at the seven inundated industrial estates belong to Japanese manufacturers.

"The overall sentiment remains positive. Thailand should benefit from the relocation from Japan, thanks to smooth political, economic and cultural ties. Despite some negative factors, there has been no significant change in that sentiment," he said.

-- The Nation 2011-12-06

[maidu]

Message to manufacturers; move away from flood plains.

Alternatively, stay in flood plains, and you and gov't can pay tens of billions of baht per year on dubious 'fixes.' including berms, pumps that may not work, and watch Burmese less-than-min-wage workers walk off in waist deep water, with nary a satang given in compensation.

[hellodolly]

I agree with the article except for this part.

quote

"Don't forget that Thailand will be less attractive [anyway] with higher minimum wages, labour shortages, and poor education quality," Supachai said."

The quality of education is a non issue. No matter where they go in Asia they will be looking at a low quality.

[moe666]

A flood plan is low on the priority list for this government until job number 1 is finished, bringing BIG T back But in all seriousness I would bet they will not have much of a plan this time next year.

[mijan24]

A flood plan is low on the priority list for this government until job number 1 is finished, bringing BIG T back But in all seriousness I would bet they will not have much of a plan this time next year.

I aggree but believe it would be more correct to say:

I would bet they will have no viable plan this time next year.

[cloudhopper]

"We need quick action, as some [manufacturers] have decided to shift investment from Thailand."

And it should be apparent to the rest that a workable solution could not be implemented fast enough even in the absence of incompetence and corruption.

[preechathan]

Nipit Arunvongse Na Ayudhya, managing director of Nava Nakorn - the operator of Nava Nakorn Industrial Estate.

How is your niece Praewa? Did her white Honda get flooded?????

[jombom]

For me the amazing thing is that virtually nobody, can think outside the box.

When this water falls as rain, it is fairly pure ---- water is also a precious natural resource.

Surely, somebody will wake up soon, and realize that draining it into the sea, as soon as possible, is a terrible waste of money.

The figures are fairly simple, and do not require rocket science.

In Thailand it rains for 8 months (66% of a year) and it is dry for 4 months (33% of a year). Simple logic suggests a minimum of 33% needs to be stored.

The reality also, is that storage is less than 20%.

Another reality is that only 2 of the 5 rivers feeding the Chao Praya have storage capacity.

Yeah, we need a water plan.

[ResX]

For me the amazing thing is that virtually nobody, can think outside the box.

When this water falls as rain, it is fairly pure ---- water is also a precious natural resource.

Surely, somebody will wake up soon, and realize that draining it into the sea, as soon as possible, is a terrible waste of money.

The figures are fairly simple, and do not require rocket science.

In Thailand it rains for 8 months (66% of a year) and it is dry for 4 months (33% of a year). Simple logic suggests a minimum of 33% needs to be stored.

The reality also, is that storage is less than 20%.

Another reality is that only 2 of the 5 rivers feeding the Chao Praya have storage capacity.

Yeah, we need a water plan.

Oh yes. Thailand need it since 30 years ago. Probably longer. It is not a question of need anymore. It is a question of when it should start....

[kirk0233]

The Thai have a remarkable history of procrastination. It is a skill that saved their country from the French and British rule, but has otherwise ended in neglect of important advances in the country.. Ruth Benedict, the noted anthropologist wrote the following 70 years ago: "The Siamese Government never used force or threats, but it was adept at humiliations and subterfuges and infuriating requisitions. The one diplomatic receipt of Siamese officials is Delay, delay, delay, again and again; and if pressed, ask, as a last resource, for the advice of the person who is pressing you; then say that you must refer it to headquarters; and thus keep the ball rolling, until he perhaps gives up in despair of ever getting to the bottom of your diplomacy. From the point of view of the Kingdom of Siam, these methods could hardly have been bettered, and Siam actually maintained her independence." It is amusing to me these tactics of delay and confusion of others to the point of despair can still be seen in dealing with the Thai in business or government as a means of avoidance of a request or responsibility.

[Bagwan]

The Thai have a remarkable history of procrastination. It is a skill that saved their country from the French and British rule, but has otherwise ended in neglect of important advances in the country.. Ruth Benedict, the noted anthropologist wrote the following 70 years ago: "The Siamese Government never used force or threats, but it was adept at humiliations and subterfuges and infuriating requisitions. The one diplomatic receipt of Siamese officials is Delay, delay, delay, again and again; and if pressed, ask, as a last resource, for the advice of the person who is pressing you; then say that you must refer it to headquarters; and thus keep the ball rolling, until he perhaps gives up in despair of ever getting to the bottom of your diplomacy. From the point of view of the Kingdom of Siam, these methods could hardly have been bettered, and Siam actually maintained her independence." It is amusing to me these tactics of delay and confusion of others to the point of despair can still be seen in dealing with the Thai in business or government as a means of avoidance of a request or responsibility.

I beg to differ although the I have no qualms about accepting ther main thrust of the statements. However the reality is that Britain never wanted Thailand which had nothing of value to offer or they would have walked in and taken it. The sole value of Siam, as it was then called, to Britain was that it acted as a buffer against the French in what is now Cambodia, Laos and Vietnam. Siam fulfilled the same purpose that the English Channel still does - keeps the Froggies at arms length.One prime example of non prevarication was the invasion of Thailand by the Japanese in 1941 when the Thai Government couldn't surrender quick enough. They didn't waste too much time in joining them in arms either, but to little effect.

[Bagwan]

The Thai Government didn't show too much procrastination in 1941 when the Japanese walked in. They couldn't surrender quick enough, presumably waiting just long enough to get all their liquid assets off to Switzerland.

I doubt that Britain ever had designs on Thailand. To what end? What did Thailand have that was of use to the UK? The Brits exercised a significant positive influence on Rama 5 during the modernisation of the country. What was of value to Britain was that Thailand acted as a buffer state against the French, much like the English Channel does, thank goodness.