The Industry Ministry reports a rise in closures of local factories producing electronics, steel, and plastics, attributing the shutdowns to reduced purchase orders and a flood of inexpensive imports inundating the Thai market.
Industry Minister Pimphattra Wichaikul highlighted that electronic parts and printed circuit board factories with an investment value of 2.29 billion baht led in closures. Following were steel and iron factories with investments totaling 1.45 billion baht, and plastic manufacturing facilities valued at 930 million baht.
Statistics from the Department of Industrial Work reveal that from January to May this year, 488 factories spanning multiple industrial sectors ceased operations, collectively representing an invested capital of 14 billion baht. The impact has been substantial, resulting in a combined layoff of 12,551 workers during this period.
A lack of competitiveness vis-a-vis foreign exporters has been a key factor driving layoffs and closures, with local manufacturers finding it challenging to match the pricing strategies of overseas competitors. To address this, some companies are relocating their production bases to neighboring countries with favorable free-trade agreements.
The EAF Long Product Steel Producers Association warned about local steel manufacturers facing closure due to significant pressure from Chinese steel imports. The surge in Chinese imports has drastically reduced the capacity utilization of Thailand’s steel industry, plunging to an all-time low of 28% between January and February.
The Office of Industrial Economics projects a stagnant or marginal 1% year-on-year growth in Thailand’s Manufacturing Production Index for 2024, a downward revision from previous estimates of 2-3% expansion.
Despite the challenges faced by certain sectors, the Industry Ministry notes a positive outlook in segments like food, animal feed, and fertilizer industries, where entrepreneurs have displayed resilience by forging ahead with new investments. These entrepreneurs have collectively poured 149.8 billion baht into establishing 848 factories from January to May of this year.
