Country Focus
Thailand, moving past the growth crossroads Navigating through economic languor, Thailand is steering towards recovery through its growth industries, says Angelica Buan, based on interviews with exhibitors at the recently concluded T-Plas show in Thailand.
T
he oft-mentioned bombing incident in mid-August at Bangkok’s major business district was the last string that snapped off Thailand’s stability. Other factors have also added on to the declining economic situation, such as the weakening currency projected to slide further to nearly THB37 per US$ dollar by year end, low domestic demand and exports estimated to contract by 3.5%. Early in July, the Asian Development Bank (ADB) had already cut back on its growth forecast for Thailand to 6.1% from 6.3% on an underperforming GDP. With the recent developments, the country has recently devolved its 2015 economic growth forecast from 3% to 2.7%. China’s slowdown is weighing down the Asian economies and particularly, Thailand. The yuan depreciation (by nearly 2% in August) has hit the already weak exports in the country. Nevertheless, Thailand’s resolve against political, economic or even catastrophic havoc is its fighting spirit. Still a manufacturing ghetto The 17th largest manufacturer in the world, Thailand’s manufacturing sector is sitting on a ledge. As of July, Thailand’s manufacturing production index reportedly slid 5.3%, compared to the previous year, based on low production and exports of most key industrial goods, according to the Office of Industrial Economics. This is except for the automotive sector, which showed an increase of exports of more than 14% over the same period. Hope springs eternal. By the time the ASEAN Economic Community (AEC) integration takes effect by the end of the year, Thailand is expected to rein in its spot as a manufacturing powerhouse in the region. “Manufacturing in Thailand is the most important sector and accounts for 34% of our GDP,” stated Dr Atchaka Sibunruang, Minister of Industry, during the opening of the recent Pack Print International and T-Plas show held from 26-29 August in Bangkok. Organised by Singapore-headquartered Messe Düsseldorf Asia, the show gathered together international industry players in plastics and rubber products; as well as printing and processing machineries. Sibunruang summed up the current state of the relevant sectors. “The Thai printing, packaging, and the plastics and rubber sectors face immense price pressures, overcapacity in the industry and competition from cheaper regional manufacturers. Rising costs of operations are further eroding their declining profit margins,” she said.
Moretto’s Founder/Owner was at the show to lend his support to a growing market
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SEPTEMBER 2015
Scoring strong points Exhibitors at the Bangkok-held show had mixed opinions about Thailand’s market positioning and its manufacturing industry. “The Thai market is really starting to grow and develop and become of high quality,” Michael Parrington, Partner at Italy-headquartered auxiliary equipment firm Moretto Asia Pacific, told PRA in an interview during the exhibition. “I see the quality of equipment used by local manufacturers and the quality of their products improving. Thailand is in a very good position in Asia to grow and become one of the prominent plastic production countries in the region,” Parrington said.