Industry
From The Report: Thailand 2012
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Thailand’s most critical economic sector was hard-hit by flooding in 2011 that inundated industrial estates northeast of Bangkok, but recovery has been faster than anticipated. Moreover, factories resuming production now face a build-up of latent demand that has allowed them to make up lost ground. The industrial sector is led by electronics and electrical manufacturing, which accounts for some 23% of exports, followed by the automotive and petrochemicals industries. Manufacturers who base their production in Thailand benefit from strong cluster effects, inexpensive labour, and attractive investment incentives. Still, Thailand is hoping to shift its economy to more value-added growth, and the government is pushing reforms such as an increase to the minimum wage as a catalyst for this transformation.

This chapter has interviews with MR Pongsvas Svasti, Minister of Industry; Boonchai Chokwatana, Chairman, President & CEO, Saha Pathanapibul (Sahapat); and Thapana Sirivadhanabhakdi, President & CEO, Thai Beverage Public Company (ThaiBev).

Articles from this Chapter

Overview

Still moving: Despite major setbacks, some segments are recovering full swing
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Having proved itself a regional manufacturing powerhouse in 2011, Thailand exhibited strong growth across the board on the year in spite of enduring the its worst monsoon flooding in 50 years. Unlike other countries in the region that depend heavily on the export of raw materials such as timber, petroleum or mineral wealth to even the trade balance, Thailand’s exports are fuelled by a manufacturing sector that accounted for 84% of all exports in 2011. In fact, raw material exports barely registered…

Interview

Supporting small businesses: OBG talks to MR Pongsvas Svasti, Minister of Industry
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Interview: MR Pongsvas Svasti How has the Ministry of Industry (MoI) aided the recovery of industry following the floods in 2011? PONGSVAS SVASTI: Foreign direct investment is very important for Thailand, so our main priority was to reassure investors and get the affected industries back on their feet. We offered assistance with draining the water, provided engineers to support rehabilitation, applied a 0% tariff on new equipment imports and allowed foreign companies to bring in more staff from…

Analysis

Life in the fast lane: A resilient auto sector has quickly bounced back from disaster and is now looking to go green
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In spite of absorbing some of the most substantial damage to any sector meted out by the October 2011 flooding disaster, Thailand’s automobile industry barely broke stride in its decade-long growth spurt. In fact, once the sector resumed full-scale production, output reached an all-time high of 499,000 units in the first quarter of 2012, on the strength of a 190,000-unit output in March 2012, according to data from the Federation of Thai Industries (FTI). Provided these production rates keep…

Analysis

Paper trail: The pulp and paper sector is seeing new interest and techniques
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The pulp and paper industry in Thailand is well positioned to take advantage of the strengths of the country’s well-established agricultural industry and strong export market. This combination of abundant raw materials and consistent demand have provided an attractive climate where paper producers have thrived. As a result, manufacturing capacity and output have followed an upward trajectory in recent years, with data from the Central Bank of Thailand showing an increase in the paper and…

Analysis

Shine on: The jewellery segment briefly soared with commodity prices, but now faces a slowdown
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While much of Thailand’s industrial prowess is based on efficiently assembling high-demand products for large international corporations, its burgeoning jewellery sector has evolved from strong tradition of artisan craftsmanship into one of the world’s leading jewellery production centres. According to the Board of Investment (BOI), Thailand is the world’s largest producer of silver jewellery, as well as ranking in the top-five diamond cutting and polishing centres. All told there are more…

Analysis

Going digital: A rapid return to form after flood damage forces factory shutdowns
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Along with the auto and food processing sectors, Thailand’s electronics and electrical (E&E) industry is one of the strongest manufacturing segments and accounted for approximately 23% of the country’s export revenues in 2011. The region-leading industry currently has some 800 factories, many operated by high-profile companies, including Japanese heavyweights Sony, Hitachi, Mitsubishi and Panasonic, as well as European, American and Korean manufacturers Electrolux, Schneider Electric,…

Interview

OBG talks to Boonchai Chokwatana, Chairman, President & CEO, Saha Pathanapibul (Sahapat)
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Interview: Boonchai Chokwatana What do you think the impact of the rise in the minimum wage in 2012 will be? BOONCHAI CHOKWATANA: It varies from sector to sector on the production lines. In principle we support the notion of increasing the minimum wage; it is good, but it must be done step by step, not all of a sudden at one time. If it was increased over three or four years, 25% each year, it would help industry to adjust. Companies would be able to drive efficiencies or look at more automation,…

Interview

OBG talks to Thapana Sirivadhanabhakdi, President & CEO, Thai Beverage Public Company (ThaiBev)
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Interview: Thapana Sirivadhanabhakdi How did the recent floods affect the supply chain of beverage producers in Thailand? THAPANA SIRIVADHANABHAKDI: The massive floods affected everyone, in one way or another. As a result, the private sector jumped in and jointly contributed to the relief and recovery efforts, working alongside non-governmental organisations and the local government. Our business operation was no exception. The floods had interrupted and damaged part of our Oishi green tea beverage…