Singaporean investors undeterred by floods

He was speaking at the Asean Manufacturing Forum held in Singapore by Reed Tradex entitled "Coming Out of Waters – Emerging Business Opportunities in Thai Industry after Floods".

The AEIS comprises 200 firms – 10 per cent of them auto-parts producers – with plants in China, Malaysia, Vietnam and Thailand. It believes that the Kingdom is still attractive to foreign investors, and that once the Asean Economic Community (AEC) is set up in 2015, Thailand’s geographical positioning will make it a trading hub.

No Singaporean firms have moved out of the country after last year’s floods, and one of the reasons is that Thailand has a better working culture than rivals like Vietnam and the Philippines. Thai labourers work harder and do not go on strike when they have problems with their employers, Wong said.

"Political problems and lack in English ability are not problems for investment in Thailand,’’ he said.

He added that Thailand would strengthen its position after 2015, especially since the electronics industry can cash in on the free flow of skilled labour. Manpower is key to this business, and it will be a strong point to lure foreign investors, especially large-scale firms.

For instance, he said, one of the world’s largest producers of electronic components, Taiwan’s Hon Hai Precision Industry, or Foxconn, has poured huge sums into China because it was able to recruit 10,000 skilled employees in two months and 800 engineers in five days. This would have been difficult in any other country, but China was able to serve the company’s needs.

Similarly, once the AEC is set up, Thailand can also capitalise on labour from neighbouring countries. Plus, a market of 600 million people, which is half the size of China, will be a new magnet for investment.

Wong added that Thailand would not lose out on opportunities if the minimum daily wage is set at Bt300 in April, because compared to Malaysia, this rate is still better. Malaysia plans to raise its minimum monthly wage from 650 ringgit to 800 ringgit (Bt6,500 to Bt8,000).

However, he said, some nations might lose out if they do not adjust to the new changing environment. Wong said Vietnam was a good example, because it still does not have a clear investment policy, especially in terms of land purchase, which is bringing down investors’ confidence.

Hideki Tsukamoto, president of Sodick (Thailand), a producer of machine tools, also agreed that Thailand is good for investment. Even though 95 per cent of the Sodick plant was damaged by last year’s flooding, and cost Bt2 billion, the firm is going ahead with production in the Nava Nakorn Industrial Estate. In addition, Sodick has invested Bt900 million in building another plant nearby, which should be completed by September.

Tsukamoto said the damaged plant is already at 60-per-cent production capacity, and it should return to 100 per cent by April. He, too, believes Thailand will play a key role in the region once the AEC is established.