Electronics, garments firms warn against wage move
Threat of relocating to other countries if govt fails to heed their point of view
Some industrial enterprises, mainly in electronics and garments, have threatened that investment in their industries will move overseas soon, after their factories were devastated by floods and they face higher labour costs next year.
At a meeting of 169 trade associations with the Commerce Ministry’s Department of Export Promotion, Business Development Department and Intellectual Property Department seeking measures for flood relief, private enterprises voiced strong concern that an increase in the daily minimum wage to Bt300 would hold back industries already reeling from the flood disaster.
Most called on the government to delay its promised wage-hike policies to help ease the impact on manufacturers from the floods. They shared the view that the government’s financial assistance and soft loans would not be enough for their companies’ rehabilitation if they are offset by higher labour costs.
Chiengchuang Kalayanamitr, chairman of the board of directors and owner of Maxon Systems (Thailand), said he would move his factory to Cambodia because the Thai government has failed to protect industries in many estates.
Maxon is one of the world’s leading manufacturers of portable FM radios and data modules. One of the Thai unit’s three factories, in Rojana Industrial Estate in Ayutthaya, was seriously hit by the flood. This plant represents an investment of Bt2 billion to Bt3 billion.
Chiengchuang added that the government’s plan to increase labourers’ wages without listening to the private sector’s views on this issue would worsen investor confidence in Thailand.
Sukij Kongpiyacharn, president of the Thai Garment Manufacturers Association, said new investment in the garment industry would move to other countries in Asean that have lower risk from government policies. The shortage of labour due to the floods will also cause problems for the garment industry in the future, he said.
Flat growth
Because of the flood impact, garment exports are expected to see flat growth this year. He claimed that many small and medium-sized enterprises that were hit by floods would suffer more from higher labour costs.
Jirabul Vitayasingh, secretary-general of the Lifestyle Products Association, said the government should urgently provide funds to remedy the impact to enterprises of the flood disaster, and launch policies to boost investor confidence.
The Thai National Shippers Council has also called on the government to delay the increase in minimum wages for a year or two and exempt the cost of utilities for about three months to help affected enterprises.
The ministry reported that about 350,000 enterprises in 31 provinces, or 70 per cent of the enterprises in the Kingdom, were affected by this year’s floods.
