Flood-Hit Japanese Firms May Quit Thailand: Survey

[webfact]

Flood-hit Japanese firms may quit Thailand: survey

BANGKOK, February 29, 2012 (AFP) - Almost one in 10 Japanese manufacturers with operations in Thailand plans to relocate out of the kingdom after last year's devastating floods, a survey showed Wednesday.

Electronics makers were particularly hard hit, with more than half directly affected by the disaster, according to the poll of 1,345 companies by the Japanese Chamber of Commerce Bangkok (JCCB), in which 366 responded.

"The electronics sector suffered more than other industries," said Setsuo Iuchi, chairman of the organisation's economic research committee, adding that such companies were now trying to spread their risk.

Eight percent of all Japanese manufacturers in Thailand plan to relocate out of the country, while 85 percent will resume their business in the same place. Others expect to move within the kingdom.

The months-long floods last year took a heavy toll on Thailand's industrial heartland north of Bangkok, with many factories forced to close temporarily.

Japanese auto giant Honda has suspended operations since early October at its factory in Ayutthaya, where it was forced to destroy more than 1,000 cars that were submerged by the muddy waters.

The survey showed 72 percent of manufacturers expected to resume their operations between December 2011 and March 2012, while 21 percent will restart in April-May this year, and six percent in June or later.

"Those companies that are resuming late have to wait for new machinery imported from Japan, and some are still waiting to see the Thai government's flood prevention plan," Iuchi said.

The JCCB has urged the Thai government to speed up the implementation of a flood control plan.

-- (c) Copyright AFP 2012-02-29

[animatic]

8% is no laughing matter.

Incompetence, sloth and greed runs off the a significant segment of industry that gives jobs and pays taxes.

Clearly the owners don't believe the anti-Flood government propaganda campaign and are voting with their feet and their assets.

[Unkomoncents]

A factory owner friend from Pathum Thani told me a month ago that in his industrial estate, which didn't flood, roughly 30% of tenants discontinued their contracts in the immediate aftermath of the floods (November).

[pimay11]

"Those companies that are resuming late have to wait for new machinery imported from Japan, and some are still waiting to see the Thai government's flood prevention plan," Iuchi said.

Just in time to be flooded again.

[animatic]

A factory owner friend from Pathum Thani told me a month ago that in his industrial estate, which didn't flood, roughly 30% of tenants discontinued their contracts in the immediate aftermath of the floods (November).

A number likely much closer to the reality.

[lovetotravel]

I met an engineer from a very well know company who said he's been instructed to start looking at alternatives. Not good for Thailand.

[TheGhostWithin]

The numbers don't add up... again!

The article states that 8% of businesses are relocating after being hit by the floods, though then goes on in the next paragraph to list the re-launching delay, which adds up to 99% of companies hit. Are 99% of companies re-launching, or only 92%? Deceptive numbers here. Not good for business, not good for investors - which are going the opposite way in Thailand.

I wonder what percentage value this will shave off the Thai economy? This may go to explain some of the recent repatriation movement in the yen that we have seen.

The US and Thai economies both undertook stimulus, the US as we know pumped money into banks and other manufacturers in need.

Thailand increased the minimum wage, attempting to stimulate domestic demand and grow local industry to insulate it from external shocks in the USA and Europe - the floods have effectively run alongside the wage rise to leave big business questioning if bigger profits can be made easier, on other shores (in Vietnam, Cambodia, Burma).

Edited February 29, 2012 by TheGhostWithin

[bedouin1990]

I well understand the position of the Japanese. But Thailand and it's people desperately need the jobs these companies provide. While I have little faith in the Thai government, for the sake of it's people, I hope they plan better for the future.

[toenail]

Good, many of the companies are coming to Rayong. Let's face it the government cannot guarantee anything.

[OZEMADE]

It's not hard to work out. don't build where it flooded and don't build in low areas that may be prone to flooding in the future. Assist these companies that bring in billions of Baht and employ millions of Thais, by building factories for them.

I mean for goodness sake they are talking about re-locating Bangkok.

Edited February 29, 2012 by OZEMADE

[pisico]

Good, many of the companies are coming to Rayong. Let's face it the government cannot guarantee anything.

No government (of any color shirt) in Thailand can guarantee anything. Priorities first: 1- Image, 2-Save face, 3-Give face, 4-Rituals, 5-Magical thinking, 6-Denial of the obvious. That is what Thainess is all about.

Thailand has yet to realize that it did not reach this status of a country in (seems like perennial) development without foreign investment.

The only thing that any government in Thailand can guarantee is: same same... with new slogans: Miracle Thailand !

[allan michaud]

Good, many of the companies are coming to Rayong. Let's face it the government cannot guarantee anything.

No government (of any color shirt) in Thailand can guarantee anything. Priorities first: 1- Image, 2-Save face, 3-Give face, 4-Rituals, 5-Magical thinking, 6-Denial of the obvious. That is what Thainess is all about.

Thailand has yet to realize that it did not reach this status of a country in (seems like perennial) development without foreign investment.

The only thing that any government in Thailand can guarantee is: same same... with new slogans: Miracle Thailand !

This hits the proverbial nail on directly on the head.

[TackyToo]

Besides all the tragedy caused by the flood. I find it quite ironic that after decades of bashing all westeners for anything that went wrong in the country, they finally find out that they need them?

[ajarnyai]

I've recently had a lot of trouble getting parts for my Honda motorcycle (I waited 3 weeks). Does anyone know if the Honda bike factory will stay closed. If so, all you Honda owners might want to think about selling your vehicle soon.

[sexy man]

no mano soda for ages ,just got tonic water back i wonder why

[belg]

the rest of the companies will relocate after they found out that they wage hike took the last of their profits and it's time to go to a poorer country, i mean, one with cheaper labour ... china, vietnam, laos ?

[cloudhopper]

What I find particularly ominous is that less than 1/3 of the companies surveyed even bothered responding.

[h90]

8% is no laughing matter.

Incompetence, sloth and greed runs off the a significant segment of industry that gives jobs and pays taxes.

Clearly the owners don't believe the anti-Flood government propaganda campaign and are voting with their feet and their assets.

Consider, that the 92 may not fully rebuild.

Consider that some companies that leave may not respond.

So MAYBE the situation is worse than the 8 % suggest.

(Did some minister already tell that it won't hurt the economic grow?)

[BigBikeBKK]

I've recently had a lot of trouble getting parts for my Honda motorcycle (I waited 3 weeks). Does anyone know if the Honda bike factory will stay closed. If so, all you Honda owners might want to think about selling your vehicle soon.

The Honda motorcycle factory is in the Lad Krabang Industrial Estate and was not flooded and did not close. They did suffer some part-supply challenges but never closed.

[TallGuyJohninBKK]

according to the poll of 1,345 companies by the Japanese Chamber of Commerce Bangkok (JCCB), in which 366 responded.

That's a pretty low response rate... And it wasn't even a poll being taken by some Thai organization, but instead, one by the Japanese firms' own Chamber of Commerce.

Tends to make one think, considering Japanese tendencies, that there's a higher ratio of those companies thinking about leaving or having decided to leave who chose for those reasons to not respond to the survey at all.

BTW, nothing about this whole ordeal suggests the Thai officials have somehow concluded they need foreigners. Nothing of the kind. I'm sure Thai electronics and car manufacturing companies can step in and more than fill the void created by the departing Japanese.

What's the name of that Thai car company again??? And where do I buy my Som Tam brand 1 GB hard drive for my computer?

[ajarnyai]

I've recently had a lot of trouble getting parts for my Honda motorcycle (I waited 3 weeks). Does anyone know if the Honda bike factory will stay closed. If so, all you Honda owners might want to think about selling your vehicle soon.

The Honda motorcycle factory is in the Lad Krabang Industrial Estate and was not flooded and did not close. They did suffer some part-supply challenges but never closed.

Thanks. I was really worried about that. I was told by my local shop that the factory was closed (a language problem I guess). I still think It's something to think about..... Not my fear of getting parts, but the companies fear of the next flood......

[Scott]

My car was in the dealership for close to a month. There was an engine part that was needed and the factory (in Bang Pa-in, I believe) had not been able to resume manufacturing after the flood.

It took them less than an hour it fixed after they got the part.

[rakman]

8% is no laughing matter.

Incompetence, sloth and greed runs off the a significant segment of industry that gives jobs and pays taxes.

Clearly the owners don't believe the anti-Flood government propaganda campaign and are voting with their feet and their assets.

Consider, that the 92 may not fully rebuild.

Consider that some companies that leave may not respond.

So MAYBE the situation is worse than the 8 % suggest.

(Did some minister already tell that it won't hurt the economic grow?)

I wonder about the size of the companies that are planning to re-locate out of Thailand?

The bigger ones might would have the resources to move and rebuild, especially if a rebuild was required. Intel has a huge plant in Vietnam.

All in all, it is not good for Thailand.

[nong38]

Wake up call for the govt! Just because they have a factory here does mean they will stay forever. If another opportunity comes in with lower costs and no flood you would think about it would you not? Thai logic needs updating and they had better move quick.

Edited February 29, 2012 by nong38

[tlansford]

isuppli just reported that seagate took the #1 spot for harddrives from WD.

Why?

Because their plant is not in the flood plain.

Site location is not rocket science.

[tombkk]

according to the poll of 1,345 companies by the Japanese Chamber of Commerce Bangkok (JCCB), in which 366 responded.

That's a pretty low response rate... And it wasn't even a poll being taken by some Thai organization, but instead, one by the Japanese firms' own Chamber of Commerce.

Tends to make one think, considering Japanese tendencies, that there's a higher ratio of those companies thinking about leaving or having decided to leave who chose for those reasons to not respond to the survey at all.

BTW, nothing about this whole ordeal suggests the Thai officials have somehow concluded they need foreigners. Nothing of the kind. I'm sure Thai electronics and car manufacturing companies can step in and more than fill the void created by the departing Japanese.

What's the name of that Thai car company again??? And where do I buy my Som Tam brand 1 GB hard drive for my computer?

If that is a low response rate, please tell us what is the average response rate for surveys conducted by foreign chambers of commerce in Thailand. You've made me curious.

[givenall]

How many screw ups this government can do before Thai people wake up and do something about them, mismanagement of water system causing flood, salary increase during the economic down turn only for political purpose, etc. etc.

[metisdead]

An offensive post has been removed.

[IsaanUSA]

The numbers don't add up... again!

The article states that 8% of businesses are relocating after being hit by the floods, though then goes on in the next paragraph to list the re-launching delay, which adds up to 99% of companies hit. Are 99% of companies re-launching, or only 92%? Deceptive numbers here. Not good for business, not good for investors - which are going the opposite way in Thailand.

I think what they are saying is 8% of Japanese companies plan to leave Thailand. Of the Japanese companies remaining in Thailand, 99% will be operational after June.

Edited February 29, 2012 by IsaanUSA

[Pseudolus]

Besides all the tragedy caused by the flood. I find it quite ironic that after decades of bashing all westeners for anything that went wrong in the country, they finally find out that they need them?

They have always known that (especially the kick backs) but they will never admit it because in doing so they risk the hiso owned incompetent firms being put out of business. They can never allow this to happen and watch the gravy train dry up. Think of any Thai firm. Compare it to the world leaders basically forced out of the market or even entering the market, and the picture is clear.

Not alone in this, but the country would be better governed by a committee of international business leaders. At least then there would be a modicum of compassion for those struggling in their lives.