Thailand faces electronic exodus
Sampan Silapanad, president of the Electronics and Computer Employers’ Association, said Thailand has lost its competitiveness in skilled human resources. In addition, the minimum wage hike to 300 baht per day in April has made Thai wages uncompetitive with Malaysia.
“Thailand has been caught between low and high-end production, unable to move either up and down the value chain,” he told a forum on the Asean Economic Community (AEC) co-hosted by the Thailand Management Association yesterday.
“Thailand can no longer rely on cheap labour and we must upgrade to high value-added production. However a major obstacle is many of our workforce cannot speak English,” he added.
With total export value of 1.6 trillion baht, the electronics and electrical industry employs 200,000 people. The headcount could dip by half over the next three years, noted Sampan, also vice-president of Western Digital (Thailand).
The Commerce Ministry said the sector’s exports edged up by only 0.8 percent last year, versus growth of 25.7 percent in 2010, to $53.95 billion due mainly to severe floods. While shipments of electrical appliances expanded by 8.5 percent to $22.3 billion, electronics exports fell 4 percent to $31.64 billion.
The majority of the association’s members have relocated some manufacturing activities to other countries due to the floods late last year and have not moved back to Thailand.
“Although we heard a guarantee there will be not be another flood this year, no information is available to make manufacturers confident about this claim,” said Sampan.
Pongsak Assakul, president of the Thai Textile Manufacturing Association (TMA), said Asean’s top textile mills and garment factories formed an alliance to offer a full package of services to global customers.
Under the agreement, Thailand and Indonesia will supply upstream materials such as fabric to lower-cost Cambodia, Laos, Myanmar, and Vietnam to do final production for export outside Asean.
The alliance aims to increase Asean’s share in the global textile and garment market from 6 percent at present. China dominates at 50 percent and Thailand has a 1.6 percent share.
Some 22 factories in Asean are participating, including six in Thailand and eight from Indonesia, he said.
Pongkarn Hongskul, senior marketing manager at Tata Steel (Thailand), said Thailand has a geographical competitive disadvantage to cash in on the growing demand of building materials in neighbouring countries. Collaborations with other Asean members in areas such as upstream material sourcing need to be developed to serve regional integration by 2015.
In a separate development, Thailand dropped to 30th from 27th in a ranking of 59 countries in IMD International’s World Competitiveness Scoreboard 2012. Among Asian countries, Thailand ranked eighth, ahead of India, Indonesia and the Philippines.
Thailand scored very poorly in productivity and efficiency, which includes the industrial, agricultural and small business sectors. Thailand ranked 57th in this category.
Other areas where Thailand ranked poorly was technology, scientific advancements, and health and education infrastructures.
Thailand scored well in cost competitiveness, skilled workforce, open and positive attitudes and business-friendly environment.
http://www.bangkokpost.com/business/economics/297641/thailand-faces-electronic-exodus
Category: Thailand
