The government will set up a 2.5 billion baht fund for rubber industry development

A 2.5-billion baht fund for development of rubber industry will be set up to help manufacturers increase their competitiveness in the world market.

Chakan Saengraksawong (ฉกรรจ์ แสงรักษาวงศ์), deputy permanent-secretary of the Agriculture and Cooperatives Ministry, said the fund will lend producer of rubber products 30 million baht each for production restructuring and improvement of machinery.

Mr. Chakan said Thailand’s production costs of rubber goods are higher than those of competitors such as Vietnam, Malaysia, Taiwan and China. For example, production of a piece of glove costs 18 satang in Thailand but only three satang in those countries, he said. BR>

Mr. Chakan said manufacturers eligible for financial assistance must have at least 70% of their stakes held by Thai shareholders. The loan, which carries an annual interest of 4%, must be repaid in seven years, he said.

The fund will be owned by the Finance Ministry and managed by a board whose members are executives of both the public and private sectors, Mr. Chakan said.

Source: Thai National News Bureau Public Relations Department - 22 August 2006

Mr. Chakan said Thailand’s production costs of rubber goods are higher than those of competitors such as Vietnam, Malaysia, Taiwan and China. For example, production of a piece of glove costs 18 satang in Thailand but only three satang in those countries, he said.

This sounds very odd. Why is it so more costly in Thailand then Taiwan/Malaysia?