Hana sees Feb opening for site in Ayutthaya

CEO Richard Han said recently that Thailand’s worst floods in more than five decades had caused estimated damage of US$35-40 million(Bt1.1-1.2 bilion) to the company’s machinery and production facilities at High-Tech Industrial Estate.

“Some of the equipment has to be replaced so we have already ordered new machines. We were underwater for six weeks starting in mid-October. After one month, we knew that some of these machines could not be repaired.
“In the meantime, we actually took out many machines by boat with the help of the Royal Thai Navy. Without them, we wouldn’t have been able to do it. Some of these weigh one to two tonnes each. We moved these machines to our temporary factory on Vibhavadi-Rangsit Road so that we could continue to serve some important customers to prevent further disruptions of the supply chain.

“The Ayutthaya factory accounts for 35 per cent of our group’s revenue, employing about 4,000 workers out of the group’s total workforce of 12,000. The floods have caused a significant impact on our earnings because from mid-October when the flood came and then November and December we would have very little revenue from the factory.
“By the way, we also had to move about 400 workers to another plant in the northern province of Lamphun to help produce critical electronic parts for our customers,” he said.

customers cautious

“Generally speaking, about 95 per cent of revenue from the Ayutthaya factory was lost in the fourth quarter. The first quarter of next year will also be impacted because the factory will not be fully repaired until mid-February.
“However, it will take time (to resume overall operations) and by the middle of next year I don’t think we could get back more than 50 per cent of our business prior to this event. A lot of our customers are now frightened to come back.
“Now we have three factories in Thailand in Ayutthaya, Lamphun and here on Vibhavadi-Rangsit Road. We also have a factory in China just south of Shanghai.
“We produce semiconductors, parts and modules – very small devices used in consumer electronics, mobile telephones, digital cameras, laptop computers as well as automobiles and medical electronics.
“We’re part of the global supply chain of electronic and auto industries in which Thailand plays a significant role. This tragic flood event has exposed how large Thailand is in producing many important parts. We have seen big companies like Western Digital or Honda badly damaged. Many companies which were not flooded directly also had problems due to the disruption of the supply chain in Ayutthaya.

“For Hana, the important thing is how our customers react to this event. If they have the confidence to come back, then that’s fine. If not, we’ll have to think differently. My opinion is that most will come back, but they will not bring back all the business they had prior to the floods because they don’t want to rely too much on this area. We don’t know if we will have another flood like this.
“They are also watching to see what will happen in terms of infrastructure, what the government will do and what the companies will do (in response to this event),” he said.