Update on Thailand Industrial Estates

Highlight from a recent article in the Bangkok Post:

Nation on road to recovery after floods

‘Weak links’ were to blame

Published: 24/02/2012

Deputy Transport Minister Chadchart Sittiphan admits he has no excuse for last year’s catastrophic flooding but says the government will do its best to make sure it will not happen again.

“Building dykes around industrial estates is necessary but it is not enough,” Mr Chadchart said.

“Industries can’t survive if they become dry islands surrounded by water with no logistics links.

More than 80% of Thai and foreign industrial companies affected by the 2011 floods are expected to restart operations by the third quarter, says Industry Minister Pongsavas Svasti.

MR Pongsavas said that of more than 830 companies affected by the flooding that hit six industrial estates and zones in Ayutthaya and Pathum Thani last year, 23% were able to resume operations by the end of last month.’

The figure is expected to rise to 40% by the end of this month, and 50% by the end of March.

The 2011 floods took a devastating toll on the country’s manufacturing sector, with millions of people affected and supply chains across the world disrupted.

MR Pongsavas said the floods, with damage estimated as high as US$50 billion, ranked as the fourth costliest disaster ever, behind the 2011 Sendai earthquake, the 1995 Kobe earthquake and Hurricane Katrina in 2005.

Authorities are now intent on creating barriers to safeguard not just key industrial zones, but also logistics links to ensure that even in the event of flooding, business operations and supply chains remain intact.

The Industry Ministry is pushing rebuilding programmes, including new tax exemptions from the Board of Investment (BoI) to encourage reinvestment and enable flood-hit companies to quickly restart operations.

The BoI will ease restrictions on outsourcing, the use of foreign labour and plant relocations to enable companies to continue to operate while they rehabilitate their affected plants.

Import tariffs on raw materials and parts will also be waived to help reduce costs.

The ministry has also established five centres in four provinces for use as temporary manufacturing facilities for small- and medium-sized companies.

“In Ayutthaya, over 100 companies are currently using the facilities while their factories are being refurbished. And we welcome more to come and use these facilities,” MR Pongsavas said.

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