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Wage rise forces Thailand garment firms to relocate
02 Apr '12
1 min read
The implementation of increase in minimum wages by 40 percent in seven provinces of Thailand is forcing several apparel companies to unveil plans to shift their production base to neighbouring countries, according to experts.
The rise in wages is especially going to affect labour intensive industries like garment manufacturing, which will be relocating to countries like Cambodia, Laos, Myanmar and Vietnam, experts say.
They add that wages form an important part of production cost for small and medium enterprises, which are not in a position to pay the new minimum wage of 300 baht per day.
While some garment companies have already shifted their manufacturing units, the remaining firms might also soon relocate, experts stated.
Experts cite lack of adequate knowledge about investment rules in other countries as the main problem being faced by firms that want to relocate their production units. According to them, the Government is also unable to provide detailed information about the same.
The rise in wages is especially going to affect labour intensive industries like garment manufacturing, which will be relocating to countries like Cambodia, Laos, Myanmar and Vietnam, experts say.
They add that wages form an important part of production cost for small and medium enterprises, which are not in a position to pay the new minimum wage of 300 baht per day.
While some garment companies have already shifted their manufacturing units, the remaining firms might also soon relocate, experts stated.
Experts cite lack of adequate knowledge about investment rules in other countries as the main problem being faced by firms that want to relocate their production units. According to them, the Government is also unable to provide detailed information about the same.
Fibre2fashion News Desk - India
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