Ministry to seek 5 measures to help SMEs

The Industry Ministry will propose to the Cabinet on Tuesday additional measures to assist small and medium-sized enterprises that have been affected by the new minimum wage. 

According to a report by the ministry on the existing and anticipated impacts of the rise in the minimum wage to Bt300 a day, it has resulted in the cost of labour increasing by between 35.75 and 88.68 per cent and caused the industrial sector’s overall costs to surge by 5.25 per cent on average. Most affected is the garment industry, followed by foods and beverages, electronics, ceramics, cement, printing, wood and wood products, footwear and leather goods. 

About 1,310 factories shut down last year, 4.1 per cent fewer than in 2011. According to information gathered by the ministry between April 2012, when the higher wage was introduced in seven major provinces with a large number of SMEs, and December, the number of factories closing down was 6 per cent lower than in the same period of 2011. The wage increase was imposed nationwide at the beginning of this year.

The ministry will propose five assistance measures to the Cabinet. 

First is the setting up of an industrial clinic to help 3,296 SMEs in the production sector raise their productivity and income while reducing their costs. If approved, the ministry will allocate Bt201.75 million for the project, finding experts who will monitor, evaluate and make business plans for the SMEs, as well as advising them on securing loans to raise their productivity. The ministry will also help about 500 SMEs in the commercial and service sectors to adjust their management systems and reduce the impact of higher operating costs.

The second measure is the injection of working capital into SMEs in cooperation with financial institutions, which will grant loans of no more than Bt1 million to each affected business, with a low interest rate of 3 per cent in the first year. The loans will allow participating SMEs to maintain financial liquidity and employment. About 6,300 enterprises are expected to participate in the project, resulting in total lending of Bt6.3 billion.

Third is a joint investment project with SMEs to develop their machinery and raise their competitiveness in production and market expansion. The proportion of the investment by the ministry will be about 15-35 per cent of the registered capital of each participating enterprise, but no higher than Bt10 million each. The joint investment period will be around five years. No fewer than 200 SMEs are expected to participate in this project.

The fourth measure will allow on a case-by-case basis the waiver of import duty for machinery for three years. 

The final measure is waiving annual service fees charged by industrial-estate operators for three years beginning on October 1.