Author Topic: Flooding hurts Chaiyaphum garment industry  (Read 662 times)


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Flooding hurts Chaiyaphum garment industry
« on: October 26, 2010, 03:55:26 PM »
Flooding hurts Chaiyaphum garment industry


Flooding in Chaiyaphum province, the second-biggest garment-manufacturing hub after Bangkok, has prompted manufacturers to revamp their strategies to meet shipment commitments and avoid losses.

About 32 plants, ranging from small, medium-sized through big manufacturers, have been set up in Chaiyaphum. These companies employ 25,000-30,000 locals.

However, the flooding has forced garment manufacturers in the province change to switch to the Outer Ring Road to transport goods, which adds an hour to the trip to Bangkok. As a result, they have to re-manage transport schedules.

For years garment manufacturers, whose plants in Bangkok and nearby provinces became inadequate, have set up secondary bases to ensure future export competitiveness. Buri Ram, Chaiyaphum, Khon Kaen and Laos were put on their strategic business map with little concern about a big natural disaster.

Sukij Kongpiyacharn, president of the Thai Garment Manufacturers Association, said some manufacturers would be penalised by importers if they could not ship products on time.

Many apparel factories are in flooding areas, mainly in Chaiyaphum, Lop Buri and Nakhon Ratchasima. They must transport goods to Bangkok Port for export. However, the flooding has increased travel times.

Some exporters are planning to ship products by air for fear of being penalised by importers, Sukij explained. However, this would increase their financial burden, as air freight is more expensive than marine shipping, as much as 20-30 per cent of the product price.

He said some plants have had to lower their production capacity by 10-30 per cent as labourers could not come to work.

Normally, this is the peak season for garment production, ahead of the year-end festive season. The transport difficulty has caused trouble for the industry, he said.

"The losses for the industry could be minimised if the flooding is cleared within a few weeks. However, if it lasts a long time or expands to other provinces, it will cause huge losses for the businesses."

To prevent future problems, some garment manufacturers must take the flooding into consideration before setting up new plants, he said. Some would have to shift production to other provinces that have not been impacted from the disaster.

Sukij also urged the government to set up clearer plans for preventing the problem in the future and implement plans to drain flood waters as soon as possible.

Vallop Vitanakorn, chairman of Hi-Tech Group, said the company had faced production drops of 20-30 per cent as employees could not get to work. Although it is located outside the provincial centre and away from the flooding, the group has been affected, as it could not transport its products to Bangkok Port as usual.

However, the drop in the water level in the province has allowed the group's employees gradually to come back to work, so it hopes to resume production capacity after the floods are drained.

Vallop also has a plant in Lop Buri, where the flood waters have temporarily cut the workforce of 500-600 by 50 per cent.

"We have to re-manage not only transport time but also manufacturing to ensure our shipments," he said.

The Nation