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Thailand: 719 factory closures in 2020 ‘not so bad’
A total of 719 industrial factories went out of business last year, citing the economic impacts of the Covid-19 outbreak and causing 30,000 workers to lose their jobs, says the Department of Industrial Works.
On the flipside, as many as 3,324 factories were either created or expanded last year, which created as many as 187,088 jobs, said Prakob Vivitjinda, director-general of the department.
As the opening and expansion of these factories involved 325 billion baht in total investments, the combined investment value of those 719 factories which stopped operating last year was only 41.7 billion baht, he said.
Food manufacturers dominated the factories that opened or the existing ones that expanded last year, he said.
With a substantial difference in the economic situation last year compared to 2019, the actual drop in the number of factories (when counted together with the new factories established) last year was only 200 more than the number recorded in 2019, he said.
The number of factories that closed in 2019 was 1,391, he said.
These figures, especially the rise in number of factories established, are evidence the economy remained strong despite the impacts of the Covid-19 pandemic on the economy, he said.
The rising number of new factories reflects a growing confidence among investors in the country for new investments, especially by local investors during a time when their foreign counterparts cannot enter Thailand due to the pandemic, he said.
These new or expanded factories last year created close to 200,000 new jobs in a variety of sectors, he said.
“Although the lay-offs and factory closures happening now are mainly a consequence of the Covid-19, there will still be more new factory openings this year,” he said.
Among the 719 factories which closed last year, 64 were plastic product-making factories with a total of 2,119 staff; 62 were factories producing plant-based products with a total of 585 workers; and 58 were metal factories employing a total of 1,660 workers.
Another 52 were food factories with a total of 3,500 workers and the other 52 were non-metal manufacturing factories laying off a total of 786 workers, according to the department.
Nava Chantanasurakon, chairman of the Steel Industry Club, however, expressed concern that Thailand will face a shortage of steel.
He is worried the country will later have to import it for use in large-scale construction projects undertaken by the government.
This comes after more steel factories went out of business last year due to an oversupply of steel exceeding 3 million tonnes, he said.
However, as the government rolls out new large projects, the cyclical demand for steel will surge again, he said.
Source: https://www.bangkokpost.com/business/2062107/719-factory-closures-in-2020-not-so-bad