Aid measures rushed as factories flooded

State agencies are rushing to assist industries in central provinces that have been inundated by flood waters.
The Industrial Estate Authority of Thailand has reported huge damage to manufacturers, with an estimate as high as Bt25 billion from one industrial estate in Ayutthaya province alone. Government reports say 500 industrial plants are now submerged in 19 provinces.
The Thai Federation of Industries (FTI) met urgently with Deputy Prime Minister and Commerce Minister Kittirat Na-Ranong yesterday to discuss flood-affected areas and damage assessments.
FTI vice president Tanit Sorat said later that flooding had affected key industrial areas in Ayutthaya, Lop Buri and Chai Nat, which were a production base for upstream manufacturers in industries including auto parts, electronics and fibres.
“After assessing the situation, manufacturers normally need a few months for repairs, so they want to be allowed to pause the repayment of principal for existing loans for two or three months, and also access new loans supported by state-owned banks, with low interest rates,” he said.
The meeting also agreed on the establishment a centre of information for healing the industry sector affected by flooding.
Industry Ministry permanent secretary Witoon Simachokdee said measures would be put in place to help those affected financially. Initially, the Board of Investment has agreed to extend duty-free imports on machinery replacements, while the Industrial Works Department will waive annual licence fees.
He said more than 500 industrial plants in 19 provinces were submerged by floodwater and some might have to suspend production for three months, resulting in huge opportunity losses.
Meanwhile, the Bank of Thailand has sought cooperation from banks and non-banking institutions to assist individual and corporate flood victims financially.
In a circular distributed to commercial banks, credit-card business operators and personal-loan providers under the central bank's supervision, the BOT asked them to consider two remedial measures to ease the impact of the flood disaster on their clients:
First, they should consider debt restructuring, to ensure the continuity of their clients’ businesses, and second, non-banking institutions may lower the minimum-debt repayment amount for flood victims. Minimum repayments are currently set at 10 per cent of outstanding debts. The relaxation will be in effect from now until June 30, 2012.
The BOT also asked institutions that undertake any assistance measures to submit monthly reports, so it can monitor the assistance.
Board of Investment (BoI) secretary-general Atchaka Sibunruang Brimble said about 40 manufacturers in the Saharatnakorn Industrial Estate in Ayutthaya province had been granted BoI privileges. Two of them contacted the BoI and asked to be able to re-export their raw materials to manufacturing facilities in other countries.
“BoI has just set up a task force to handle the troubles of these manufacturers. We will consider helping them case by case,” she said.

HUGE DAMAGE IN SAHARATNAKORN
The Industrial Estate Authority (IEAT) has estimated the cost of damage to manufacturing plants and related industries like automotive and electrical appliances in the flooded Saharatnakorn Industrial Estate in Ayutthaya province at as much as Bt25 billion.
IEAT deputy governor Narapote Thewtanom said yesterday the Saharatnakorn estate would need three to five months to recover. The damage estimate includes recovery costs, lost opportunities for all manufacturers in the estate, and the impact on related industries relying on parts supplied by manufacturers in the estate.
Most of the manufacturing plants at Saharatnakorn Industrial Estate make parts for automotive and electrical appliances industries, so many downstream manufacturers will inevitably be affected.
“The manufacturers in the Saharatnakorn estate cannot supply parts to their clients. Their clients will have to place orders with other suppliers, so the manufacturers will lose these opportunities to do business,” he said. Narapote said the Industry Ministry would negotiate with the Small and Medium Enterprise Development Bank of Thailand (SME Bank) for soft loans for the Saharatnakorn manufacturers.
Nipit Arunvongse na Ayudhya, managing director of Navanakorn, the operator of Navanakorn Industrial Estate in Pathum Thani province, said his industrial estate had not been hit by flooding because it had invested more than Bt100 million over many years to build a 2.5-metre earth dam around the industrial estate. The company also has feed pumps with a capacity of nearly 1 million cubic feet per day to drain water in case of flooding.
“We not only invest to protect the 270 manufacturing plants in our 6,500-rai estate, but also communities within a 5-kilometre radius,” he said.
 Rojana Industrial Park’s independent director Amara Charoengit-wattanagun said the company’s industrial estate, in Ayutthaya province, had so far not been affected by flooding. However, it has prepared sand bags to prevent inundation and has warned its clients to be ready for immediate flooding.

AUTO-MAKERS HIT INDIRECTLY
The manager of Honda Automobile (Thailand)’s marketing division, Oranuch Pruckwattananon, said her company’s executives were evaluating the flood situation and its impact on the company’s factory in Rojana Industrial Estate. The outcome of the evaluation will be revealed later.
“There is no serious problem, nor any direct impact on our Rojana factory. But the flood has already hit Saharattana Nakorn Industrial Estate, which is about 35 kilometres from Rojana,” Oranuch said.
“We will try to manage the situation so that it makes as little impact as possible on our fourth-quarter performance,” she said.
Honda Automobile (Thailand) revealed on Wednesday that it would suspend production for a week at its plant in Rojana Industrial Estate, Ayutthaya, because its suppliers were facing flash floods.
According to Honda executive Pitak Pruittisarikorn, three of the company’s suppliers have plants in Ayutthaya that are affected by flooding. As these suppliers are unable to operate as usual, Honda has temporarily shut down its production line even though its own plant has been spared by the floods.
He said that Honda could raise the pace of production later.
Honda's Ayutthaya plant has an annual capacity of 240,000 vehicles. It resumed full operation only last month, after supplies were disrupted in the aftermath of Japan’s earthquake and tsunami in March.