SMEs 'moderately competitive' amid cost, marketing woes
Play
Govt, private-sector help urged for improvement
Thai small and medium-sized enterprises show moderate competitiveness amid rising costs of production and lack of marketing strategies and funds, which could make it difficult for them to penetrate overseas markets or even survive at home, according to the latest survey by the University of the Thai Chamber of Commerce.
The survey pegged the SME competitiveness index at 59.6 points in the first quarter of this year, reflecting moderate competency in various areas.
The index measures SME health, competency and sustainability. A score above 50 means strong competitiveness.
“Most Thai SMEs are facing problems with production costs, marketing, human-resource development, and ability to access funds. This has made it difficult for them to survive in each sector, while having low ability to grow outside their community or penetrate overseas markets,” said Isara Vongkusolkij, chairman to the Board of Trade of Thailand and the Thai Chamber of Commerce.
He urged relevant government agencies and the private sector to help SMEs improve the weak points in their competitiveness, emphasising education on marketing, HR development, and facilitating their ability to acquire funding.
SMEs are one of the Kingdom’s major economic drivers. There are about 2 million in operation. Their income accounts for 40 per cent of gross domestic product, though they make up 98 per cent of total enterprises.
Thanavath Phonvichai, director to the UTCC’s Economic and Business Forecasting Centre, said SME revenue was projected to grow by 4-5 per cent this year, lower than the growth in GDP because of their low ability to compete with large and international enterprises.
The major problems for Thai enterprises in every region and type of business are higher costs of production, low profit, and poor vision on long-term development, Thanavath said. Enterprises in the South showed the poorest competitiveness in the first quarter because they must shoulder higher costs of labour at the same time as the market price of rubber is low.
The SME competitiveness index in the South is 51.5, while the Northeast is at 56.3, the North 60.2, the Central region 65.7, and Bangkok and nearby provinces 64.5.
Categorised by type of business, the one showing the poorest competitiveness is retail at 53.5 points, followed by garments and fashion at 56.3, food and beverages 59.5, restaurants 60.8, hotels and guest houses 61.5, tourism at 64.5, and wholesale at 67.2 points.
UTCC president Saowanee Thairungroj said that based on the survey of 1,106 SME respondents nationwide, the SME health index was 61.5 points. The health index measures SMEs’ abilities on financial liquidity, raw-material stocks, debt, assets, total sales, profit, and non-performing assets.
The SME competency index is 59.5 points. This index measures production costs, quality of goods, price-setting ability, access to funds, employee competency, and relations to clients.
The SMEs sustainability index is 57.7 points. It measures vision and strategies, risk management, HR development plans, investment on marketing, information technology and research and development, and corporate-social-responsibility programmes.
