Second-half export growth depends on unique products, meeting global needs: EXIM

Success will also come to those who emphasize diversification into new markets and innovation to meet modern consumers’ demands, it said.
EXIM Thailand has stepped up its support for exporters, especially small and medium-sized enterprises, as they launch or expand their export business. There has been a sharp increase – at 69 per cent – of outstanding credit among SMEs over the past five years. That growth has resulted from continued product and service development and the incubation of new exporters.
The bank’s president Pisit Serewiwattana said that in the first half of 2019, Thai exports shrank by 2.9 per cent as a result of the ongoing trade war between the US and China, which has continued to dampened Thai exports to supply chains with a heavy dependence on the Chinese market, such as computers and parts, printed circuit boards and plastic resin, among other products.
The gloomy outlook has led EXIM Thailand among other agencies to revise down their export growth forecast to a mere 0.2 per cent for 2019.
Thai export growth in the second half of 2019 will depend largely on a group of rising star products that have recorded consistent growth for the past years amid several looming risks, according to EXIM. 
This group of products comprise consumer goods in which Thailand has high expertise, especially processed foods, fruits and vegetables, beverages, seasonings and cosmetics.
Certain goods – Thai foods, herbs and kitchenware – have meanwhile benefited from Thai tourism, which helps highlight Thai identity on the global market 
In addition, the side-effects of the US-China Trade War have indirectly helped Thai products bearing certain similarities and serving as close substitutes for Chinese goods to increase US market share, such as car tyres, toys, garments, electrical appliances, among others.
Concurrently, a number of products continue to maintain competitiveness, thanks to the adaptability of Thai producers and their ability to evade the trade war impacts. 
These are products taking refuge in alternative markets. Most of these products are a part of the Chinese supply chains, including computers and parts that are seeing high growth in India, Mexico and Vietnam, printed circuit boards which have grown healthily in Mexico and Belgium, and wood and products that are seeing impressive expansion in Cambodia, Laos, Myanmar and Vietnam (CLMV), as well as India. 
Though these markets cannot fully replace the Chinese market, they have reduced the prevailing adverse impact and sustained Thai exports to some extent. 
At the same time, certain products have responded to existing demand and expanded into new markets, somewhat substituting for the demand shrinkage in the existing markets. 
Demand for rubber, for example, contracted as a result of pricing problems and slowing demand from China (which is Thailand’s largest rubber market), but robust growth has been witnessed in such markets as eastern Europe and Canada.

However, Thai rubber requires greater development to better compete in the long term. Likewise, export of auto and parts to Australia, which is Thailand’s largest export market for the products, has continued to contract against the backdrop economic slump. 
On the other hand, export to the CLMV and India has expanded, driven by demand from the increasing middle-class population and its desire for oil-fuelled cars. Nevertheless, in the long run, Thai products will need to use production technology and innovation to fulfill the changing demand of new-generation consumers. For example, with the increasing awareness of environmental protection and energy saving in several countries, demand for electric vehicles (EV) and bio-chemicals has been on an upward trend. 
Another engine that may help sustain Thai exports comes from the service sector. Thai tourism has already reached the top 10 on the global scale in terms of both revenues and number of visitors, but other service sectors such as construction, logistics and recreation have grown in reputation, giving a boost to exports from other related industries. 
Pisit further said that EXIM Thailand has recently accelerated support for Thai exporters, particularly SMEs, for their business start-up and expansion. Outstanding loans to SMEs surged from Bt22.930 billion in 2014 to Bt38.834 billion as of the end of June 2019, representing a growth of 69 per cent in the past five years and 17.79 per cent year on year. 
Total outstanding loans of the Bank in the first half of 2019 amounted to Bt107.183 billion, a 11.10 growth year on year. This contributed to a business turnover of Bt94.750 billion, of which Bt52,953 million came from SMEs. 
SME exporters continue to gain greater access to EXIM’s financial facilities, representing 12.48 per cent of SME exporters across the country. The gain is attributable to the Bank’s product and service development and export incubation projects for Thai entrepreneurs.
At present, EXIM has extended loans for international projects to a total Bt86,024 million, with outstanding loans of Bt41,330 million as of the end of June 2019. Outstanding loans to support Thai entrepreneurs’ trade and investment expansion to the CLMV amounted to Bt30,415 million, a Bt1,338 million increase year on year. 
In addition, EXIM Thailand has rendered export credit insurance to enhance Thai entrepreneurs’ confidence in penetrating new frontier markets or expanding export. In the first half of 2019, the Bank recorded Bt53,920 million in export credit and investment insurance business turnover, up by Bt9,153 million year on year, of which Bt11,487 million came from exports by SMEs, representing 21.56 per cent of the Bank’s accumulated insurance business turnover.