Thailand 'must improve supply chain'

Speaking at a seminar entitled "The Thai Industry after 2015" held by the Federation of Thai Industries, Gao said yesterday that China |eyed Asean as a strategic location |for its products made from the |western part of the country. Burma and Thailand, which are adjacent to China, could be the gateway to enter the Southeast Asian region, and will be strategic countries, he said.

He said Thailand should take this opportunity to improve the supply chain in order to strengthen the industrial sector. The country should also utilise its natural resources and develop value-added products.

"The Chinese government has a policy to encourage Chinese companies to invest in Asean, including Thailand. The implementation of the AEC has created the channel for both China and Southeast Asian countries to enjoy mutual benefits. So, Chinese companies are willing to share our experiences to help companies in this region. The question is how tight the collaboration between China and Asean can be," he said.

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Somchai Pakapaswiwat, independent scholar for social science and economics, said free trade actually has been in effect in Thailand for decades since the Asean Free Trade Area (Afta), but Thai manufacturers seem to have ignored it and have not adapted themselves much. Regarding Afta, about 99 per cent of goods can flow in the region with zero tax. Hence, the AEC is not new for Thai industries.

"It is too late to ask what are the products in which we can compete with other Asean countries. Now, Thai manufacturers have to think about how we can adapt ourselves instead," he said.

Somchai said more than 90 per cent of the Thai industries were small and medium-sized enterprises (SMEs). So, they cannot win over the market with the lowest cost. Thai SMEs, therefore, should think about how to differentiate their products and services with high value and innovation. This is one way to help them adapt their businesses.

Isara Vongkusolkit, chairman of Mitr Phol Group, said the industry in this region after 2015 would change. Intra-region investment as well as the expansion of product distribution centres will increase. The Thai food industry has the potential to benefit from the market integration of AEC as the country has the largest arable area proportion of 31.97 per cent or 110 rai. Despite having the largest population, the arable area in Indonesia accounts for 18.06 per cent, lower than Thailand.

"The sugar industry, for example, was the sunset industry over the past decade. Now, it is the sunrise industry. The key message I would like to convey is that do we exactly know whether the industries that we are involved with will be the sunrise ones? If we have enough information, we can move forward in the right direction," he said.