Appliances and electronics opportunity loss hits Bt170 bn

Factory closures and relocations are predictable. At least two in the Bangkadi Industrial Estate, whose names cannot be revealed, will likely not bother to reopen. It is unclear whether other manufacturers will further invest in Thailand or move out to other countries.
The electrical-appliance and electronics industries were hit the heaviest by the run-off that swamped large areas of the Central region. Ayutthaya and Pathum Thani are major manufacturing bases for the two industries, representing 40 per cent of their total output. The main products are hard-disk drives (HDDs) and integrated circuits.
The HDD manufacturers with plants in the Nava Nakorn and Bangpa-in industrial estates are the world’s largest, supplying 60 per cent of global consumption.
Somboon Hotrakool, director of the Electrical and Electronics Institute, said yesterday that the institute had calculated the opportunity loss of the two industries based on their inventories. The loss is expected to be even worse, as most flood-affected manufacturers cannot run at normal levels. Some cannot recover their machines.
Electronics exports are expected to drop by 3.81 per cent from US$33.05 billion last year to $31.79 billion (Bt993 billion) this year because of the serious impact from the flooding. Production had remained flat early this year and recovered slightly in the middle of this year. Output in October then plunged by 51.25 per cent to $2.03 billion from$2.79 billion in the same month of last year as the floods began to bite into production.
Electrical-appliance exports, however, are forecast to expand 8.09 per cent from $20.27 billion last year to $21.91 billion this year, as this industry did not take as great a direct blow from the floods. However, supply shortages from parts makers based in Ayutthaya and Pathum Thani caused production problems for manufacturers outside inundated areas.
Electrical-appliance exports in October alone dropped to $1.54 billion from $1.85 billion in the previous October.
The institute estimates the electronics industry’s exports will grow by 11 per cent next year from the expected $31.79 billion this year, while electrical-appliance exports will increase by 6 per cent from this year’s estimate of $21.91 billion. The average growth of these two industries will be 9 per cent.
However, the forecasts will need to be revised, as the institute has to monitor when the key players in both industries can return to normal operations, Somboon said.
A source from the two industries said two Japanese companies in inundated industrial estates were quite certain to withdraw from Thailand. They are not large and have difficulties with insurance claims.
The source said some companies might have to wait for their foreign head offices to decide whether they will transfer their factories to other countries.
“The manufacturers in both industries have to stay still. They … are waiting for the government’s measures to prevent future floods, and the incentives given to flood-affected factories. Whether the investors will leave Thailand depends on the government’s measures and incentives,” the source said.