Manufacturers hit by floods delay openings

The number of new factories granted operating licences began to slow in October because of the flooding, DIW director-general Arthit Wuthikaro said.

Another factor that will influence manufacturers' decisions on opening new factories is the increase in the minimum wage to Bt300 per day, which the government is expected to implement in April.

According to the DIW, 302 factories were granted licences in October, down from 424 in September. The number was down 3.21 per cent from 312 licences in the same month of 2010.

New licences dropped in November to 204. Compared with November last year, the number is down 34.82 per cent, while investment also decreased by 41.10 per cent from Bt14.054 billion in November 2010 to Bt8.278 billion. The statistic for November is the lowest for the first 11 months of this year.

The number of factories planning to expand was also down year on year. In September, 45 factories requested permission to expand, down 36.62 per cent from 71 in the same month of 2010. The number fell 41.54 per cent year on year in October from 65 to 38, and 52.46 per cent year on year in November from 61 to 29. The number of factory expansions during the first 11 months of this year sank by 26.28 per cent from 605 in 2010 to 446 this year. Investment value of the plant expansions in November dropped 72.01 per cent from Bt23.437 billion last year to Bt6.56 billion.

The number of factories informing the department of closure increased year on year in November from 89 to 110, and month on month from 84 in October. November was the only month of this year to see an increase in factory closures.

"The number of new factory registrations in the first half of next year is likely to slip compared with the same period of this year, based on what we've seen during the past few months," Arthit said.

Industry Minister Wannarat Charnnukul said that when he met with Yoshihisa Kainuma, president of Minebea Thailand, on FridayDecember 2, Kai-numa insisted the company would keep its main operations in Thailand. The electric-motor company has moved only labour-intensive operations to Cambodia, he said, with the items made in Thailand's neighbouring countries eventually being shipped here for assembly.

Minebea will hold an opening ceremony for its factory in Cambodia on December 17.

Wannarat said he was still confident that foreign investors would not leave Thailand. Some may leave, but not because of flooding, he said.