4. Entrepreneurs have to increase investments in terms of the innovation of product development, production process and environmental management to respond to ever-changing demands of their counterparts.
These factors have incurred higher costs, the burden of which cannot be passed to trade-partners, resulting in the derived income being uneconomical when set against the production expenses.
5. Most trading transactions are in foreign currency, especially in USD. The Forex volatility, together with the invariable and rapid Baht appreciation since 2006 until now including the indication that Baht will remain strong in the long run, have caused a lot of difficulty in price competitiveness.
Moreover when manufacturers consider the matters of return from investment, competition in this business, risks and a risingnecessity to invest in other aspects in the future to meet the requirements of trade-counterparts, they may deem that the athletic footwear business has too high risks, especially the possibility of having to face even further losses.
So it is not worthwhile to continue investing. These factors lead some entrepreneurs to close operations to prevent further losses.
The problem that Thai athletic footwear industry is facing at the present time is a notable example of industries that are hired to produce goods of which business owners are ready to relocate the production base and purchase orders to other sources that have cheaper production costs.
Then the employment in that industry will be obviously affected. The problem of subsiding purchase orders in sport footwear does not only occur in Thailand, but manufacturers in Indonesia also face this problem.
The head-companies reduce the purchase orders of athletic footwear from some factories in Indonesia from the former order of around 650,000 pairs per month to only 200,000 pairs because these factories cannot produce goods as per the set standard.
And although the head companies transferred the orders to other factories in Indonesia, the employment in footwear industry was affected in much the same way as Thailand's footwear industry.
KASIKORN RESEARCH CENTER Co Ltd
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
