Flood Impact On Supply Chain Worries Thai Chamber

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Flood impact on supply chain worries chamber

The Nation

The Thai Chamber of Commerce has expressed concern over the impact of the flood disaster on the export sector, fearing a long-lasting spillover to the country’s supply chain.

Chamber chairman Phongsak Assakul said the government must hurry to reassure the country's trading partners that after the flood waters completely recede, Thai businesses will be able to produce and export goods to customers on time. Otherwise, those customers might start placing their orders in other countries.

The manufacturers at risk of being affected by the flood disaster in the long term are those in the electrical products and electronics segments, as well as labour-intensive sectors, which can easily move their production bases out of Thailand.

If that happens, it will have an impact on small and medium-sized enterprises in the supply chain, Phongsak warned. However, he believes that the automotive business will remain in Thailand, which has a favourable investment climate.

The export sector will feel the impact of the flooding into the first quarter of next year, given that some manufacturers are still in the restoration stage and do not expect to be able to resume full operations until the second quarter.

It is estimated that the export sector next year will see lower expansion than this year, forecast at 10 per cent versus the estimated 15-per-cent growth this year.

Phongsak added that the government must urgently restore flood-hit industrial parks to enable them to resume production quickly. It should also quickly help SMEs restore their businesses, as they are in need of huge cash injections to rehabilitate themselves.

Moreover, the government must assure foreign investors that there will not be another massive flood next year, he said.

-- The Nation 2011-12-10

[Tanaka]

This is beyond stupidity. How should the government guarantee that there won't be a flood next year? Especially if nothing is done to prevent one.

[puipuitom]

This is beyond stupidity. How should the government guarantee that there won't be a flood next year? Especially if nothing is done to prevent one.

I remember the floods of 1995 still. What is done since then ? Only a lot of tax payers money disappeared in the pockets of government officials and politicians.

Are they really so stupid to think, overseas customers again will wait till Thai production is at the old level again ? NOT. Many already switched to other origins. No computer brand will stop sales, because a Thai hard disk supplier is flooded. Same with cars and any other item. Even the simple baby corn or bamboo shoots customer like me is gone to southern China.

Thai officials are also good in promising. I did not forget their promises how often Thailand was this time really free of bird flue.. N O T !

[ronz28]

Thailand simply must invest now in flood control projects that work to avoid future flood costs. They can do a far better job with constructing floodways (channels and dikes) and keeping them clear of debris with regular maintenance. The current canals are insufficient and should be better maintained to deal with the volume of water in these big floods in Bangkok and other flood prone areas. Properly constructed floodways around Bangkok, etc. like those used in many countries with similar flood prone areas could help provide additional paths to take the water to the Gulf and drain Central Thailand's flood waters.

Lots of construction labor is needed for these projects that could help the laid off people from the closed flooded factories earn a living and business would regain confidence with Thailand investments. Its going to cost the government a lot of money but will avoid far more in flood recovery expenses in future.

[sfbandung]

This is beyond stupidity. How should the government guarantee that there won't be a flood next year? Especially if nothing is done to prevent one.

Yep.

[ronz28]

Intel, whose microprocessors power more than 80 percent of the world's PCs, is cutting the forecast after other chipmakers indicated the industry was recovering from the floods in Thailand, which makes about a quarter of the world's hard-disk drives. http://www.bloomberg...ive-supply.html

It worries the rest of the world too as tech stocks sell off today partly due to the Intel news confirming what many have expected.

Edited December 12, 2011 by ronz28

[IsaanUSA]

However today seems like a great time to be buying the stocks of those companies. The demand still exists, it's just that supply is very tight. Prices are higher but sales quantities are down due to shortages.

EDIT : Not to mention hard drive shortages are helping the sales of SSDs, which Intel also produces.

Edited December 12, 2011 by IsaanUSA