Saha Group rolls back investment
Baht volatility blamed, amid rise in cost of locally made goods
Major manufacturing and trading conglomerate Saha Group has slowed its investment this year because of the baht’s volatility, which sparked a surge in imports at the expense of locally made products.
Chairman Boonsithi Chokwatana said the group had shut down some plants that produced shoes and socks on a subcontract basis. However, the company has maintained its plan to invest in Myanmar.
He said purchasing power in Thailand this year was unlikely to register the same growth as last year, which was affected by government projects such as the first-car scheme. This year, along with the volatility of the baht, has seen a rise in the daily minimum wage to Bt300 nationwide. This, he claimed, had driven up the cost of living, prompting consumers to slow their spending.
Out of Saha’s total production, 20 per cent is for export.
“Thailand should have better measures for defending the baht’s value. The baht has weakened during the past few weeks because of the capital outflow. The baht’s volatility makes trading hard,” Boonsithi said.
He said the appropriate exchange rate should be Bt33 against the US dollar, which would be a boon to the export sector.
Saha Group does not expect high earnings this year, estimated growth in Thailand’s gross domestic product at 2-3 per cent. The group does not expect to see revenue growth of 10 per cent, and it could be as low as 4-5 per cent.
Boonkiet Chokwatana, president and executive chairman of Saha Group’s subsidiary ICC International, said its revenue in the first half was lower than the target. In normal times its revenue would grow by 10 per cent year on year. He blamed the missed target on the higher minimum wage, the baht’s volatility, and political instability.
But Korakot Srivikorn, marketing communications director of the Ratchaprasong Square Trade Association (RSTA), believes that consumers’ purchasing power in the second half will stay high, boosted by such festive events as Christmas and New Year. But she is worried about the political situation.
The RSTA, together with six shopping malls in the area, is holding Ratchaprasong Grand Sale 2013 with more than 1,500 shops participating. It started on Saturday and will run until August 31. More than 250,000 shoppers per day are expected to attend the event and spend Bt22 million.
