Thai textile industry shifting its production base

14 Jun '12

2 min read

Several textile and garment industries of Thailand have decided to shift their production bases to neighbouring countries, te Federation of Thai Industries (FTI) has said.

According to FTI Secretary-General Sommart Khunset, the Federation, along with many other industrial sectors of Thailand, has expedited its efforts to develop the potential of the workers in the neighbouring countries to facilitate shifting their production bases, as several entrepreneurs have decided to establish their units abroad to escape the impact of the 300-baht minimum wage hike, which is to be implemented across Thailand in 2013.

The FTI advised the industries like garment and textiles, which require massive manpower, to change their production methods by either cutting their manufacturing costs, particularly cost on energy front, or by adding more machines to substitute manpower to reduce labour costs.

However, the FTI cautioned that if it becomes difficult for these firms to bear the pressure, they would ultimately be forced to shift to a country with cheap labour availability.

Besides high cost of energy and minimum wage hike, the industrial sector, particularly in Ayutthaya province, is also enduring a labour crisis. It is because a lot many workers have migrated to the seven pilot provinces where the minimum wage hike has already been implemented.

Besides, several others factories have shifted to Chonburi and Rayong provinces, which have become a preferred choice of firms for setting up factories to avoid the problem of flooding. Such relocation of local workers to a few regions has compelled the firms in other regions to employ immigrant workers.

On the other hand, large scale enterprises have increased the daily wage to 350-400 baht to attract workers. This may lead to a labour shortage for Thai SMEs in the near future, as the workers would get attracted to the higher paying large-scale enterprises, according to the FTI.

Fibre2fashion News Desk - India

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