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Thailand: New factory growth seen rebounding
The Industrial Works Department expects the number of newly registered factories to rise 10% to 4,817 and investment value to climb 3.4% to 500 billion baht in 2020, driven by the government’s investment incentives and megaprojects in the Eastern Economic Corridor (EEC).
Prakob Vivitjinda, director-general of the department, said the EEC can give investors confidence to expand their business presence in the country.
“Factories should take advantage of the baht’s appreciation to expand their business and import machinery or raw materials,” Mr Prakob said. “The department has a positive view of the country’s economy and the industrial sector, expecting growth in line with Thai GDP.”
He said US-China and US-Iran tensions are key concerns of the private sector that the government is monitoring closely.
In 2019, the department reported 4,379 newly registered factories, down 15.8%, while new jobs rose by 1.5% to 207,602.
Investment value from new factories totalled 483.67 billion baht, up 31.9%.
The department in 2019 reported 1,743 closed factories, down 12.9%, and 43,987 unemployed workers, up 5.7%. The closed factories had combined registered capital of 56.56 billion baht, up 57.1%.
Mr Prakob said many factories could not afford higher labour costs and suffered from the sluggish economy.
“But the number of closed factories in 2019 was less than the 2018 figure of 2,001 factories. It was the business cycle,” he said. “Newly registered factories in 2019, on the other hand, were 2,636 higher than the closure figure.”
Mr Prakob said 2019 saw factories close in automotive and related sectors: components, metal products, repairs. Most were small and medium-sized enterprises.
The department said newly registered factories in the EEC fell by 10.9% to 550, though investment value surged 64.5% to 111 billion baht.
Mr Prakob said the three EEC provinces — Chachoengsao, Chon Buri and Rayong — are still flagship locations for new factories.
“Chon Buri is the most famous because most logistics megaprojects are located in that province to facilitate both the industrial and tourism sectors,” he said.
The current drought will not affect industrial operators and factories, he said, because they have prepared water management to avoid a water utility shortage.
“The department will provide short-term measures to assist local farmers in the northeastern region, such as water retreatment from sugar millers and cassava factories, in a bid to have sufficient water for farming,” Mr Prakob said.
Source: https://www.bangkokpost.com/business/1830894/new-factory-growth-seen-rebounding