Thai Labour woes turn producers to Myanmar

THE electrical-appliance and auto-parts industries are already forging trade relations with partners in Myanmar due to the labour shortage in Thailand.

“Some companies aim to set up factories there this year so that they can start production next year,” Suparp Suwanpimolkul, honorary president of the Thai Subcontracting Promotion Association, said yesterday.

As the members of the association are SMEs, their strategies have to rely on those of giant brand-name foreign companies, he said.

When these big manufactures move into Myanmar, Thai SMEs will follow them.

“Thailand will see the expansion of refrigerator and air-conditioner parts manufacturers to Myanmar first before other industries,” he said.

Auto-parts manufacturers will have to wait for three to four years.

Myanmar’s automobile market relies on imported used cars. Thailand is exporting spare parts there before the potential establishment of factories.

The domestic market will continue to grow but at a slower pace of 5-10 per cent in line with domestic demand.

The production of 2 million automobiles cannot increase to 3 million because of the labour crunch.

Logistics projects, namely the Bangkok-Kanchanaburi motorway, will boost trade and possible investment in Myanmar.

The garment and textile industries face similar labour difficulties.

In the past five years, the workforce in the garment industry has shrunk sharply by over 50 per cent to about 300,000-400,000 people, said Chartchai Singhadeja, director of the Overseas Trade and Investment Centre of the Thai Garment Manufacturers Association.

The loss of tax privileges such as those under the generalised system of preferences will further pressure the industries to look abroad as it will increase production costs by about 25 per cent. The industries aim to maintain research and development centres in Thailand, while plants will be set up in other ASEAN countries.

Both associations urged the Board of Investment to provide assistance in abiding by laws and regulations as well as information. Double taxation is another issue that was raised during the discussion yesterday.

Siriporn Nurugsa, director of the Overseas Investment Promotion Division, reported on the performance of the division in promoting Thai investors in Asean.

From its inception in December 2012 to last April, 86 operators have expressed distinct interest in investing abroad, of which 41 have already established a manufacturing footprint in Asean.

Thailand enjoys the top rank in the investment contest in Asean, with Myanmar in second place in overall investment volume.

Source: the Nation

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