Export growth seen for electrical appliances, electronic goods

Krisada Sarptuaychon, the FTI’s secretary for electrical, electronics and telecommunications goods, said domestic sales should grow by 7 per cent to Bt800 billion, while exports were projected to grow by 4 per cent, reaching Bt1 trillion. 

During the next three years, exports should grow by 3-5 per cent annually, while the domestic market is expected to expand by 5-10 per cent per year. 

Global warming has increased demand for air-conditioners and refrigerators, of which Thailand is a leading producer. Demand for digital-capable television sets has increased too, both locally and abroad. Since Thailand accounts for only 25 per cent of the global production of digital TVs, there is still room for expansion, Krisada added. 

The projection of 4-per-cent export growth is based on the generally sluggish global markets, with the exception of the United States, which has recovered slightly. Moreover, Thailand is facing stiffer competition from Malaysia and Vietnam. Hence it is necessary for Thailand to boost the quality of its export goods. Weak prices of Thai agricultural goods and high domestic household debt will dampen demand in this country for electronic goods as consumers, including farmers, have less purchasing power. 

The FTI wants the Board of Investment to grant tax incentives for joint ventures between foreign firms (49-per-cent maximum ownership) and Thai small and medium-sized enterprises in the electrical/electronic goods sector, Krisada said. Such JVs could reduce the need to import components and use advanced technologies to boost productivity and competitiveness. 

The production of electrical and electronic goods this year is projected to grow by 1-2 per cent. The electronic-goods sector is expected to grow by 0.5-1 per cent in line with the rising demand for mobile communication devices. 

Despite slumping exports, shipments of electronic components have continued to increase thanks to strong demand, which is expected to grow by 12 per cent this year. 

According to KTB Securities (Thailand), the overall profit of the electronic-components sector this year is projected to grow by 35 per cent, based on an expected 8-per-cent increase in normal operating profit. The differential is due to SVI recording profit from insurance compensation of Bt1.2 billion to Bt1.5 billion related to a factory fire last year. SVI received Bt800 million in fire insurance damages in 2014.