Garment industry at risk

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Garment industry at risk

Ungelesener Beitragvon KoratCat » Sa Jul 14, 2007 6:08 am

Garment industry at risk

(dpa)

Up to 300,000 workers could lose their jobs in the apparel industry if the baht continues its relentless strengthening against the dollar, industry sources warned on Friday.

Phongsak Assakul, president of the Thai Textile Manufacturing Association, has warned the government that Thailand's apparel industry, which employs more than 1 million people in the weaving, garment and textile sectors, was heading for a "genuine crisis" unless something is done about the baht, reported the Bangkok Post.

Boosting by huge inflows of foreign investments in the local bourse, the baht currency has already appreciated 7 per cent against the greenback this year, on top of the 12 per cent appreciation in 2006.

Despite the appreciation, Thailand's exports grew 18 per cent in the first five months of 2007, but economists have pointed out that this surge was essentially in exports of high-tech items such as electronic, electrical appliances and automobiles, which account for nearly 70 per cent of all exports but all of which have a high import content.

Thailand's lower-tech export items such as garments and agricultural products are suffering from declining price competitiveness.

Thai Silp South East Asia Import Export Company, an exporters of sports wear, closed its doors on Tuesday, sparking a mass protest among its 5,000 employees.

The factory's owners cited declining orders because of the high baht as their reason for closure, although they agreed on Thursday to reopen in the face of the mass protest by their laid-off workers.

The baht's appreciation has merely added to Thailand's uncompetitiveness in labour-intensive industries such as garments, experts say.

"The reality is that the factory (Thai Silp) closed because it failed to recognize that we can no longer depend on cheap labour to compete overseas," said Finance Minister Chalongphob Sussankarn.

Garment exports have declined 5.7 per cent during the first five months of 2007, compared with the same period last year, said the Bangkok Post.

Bangkok Post July 14, 2007
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