Up to a quarter of small and medium-sized Thai manufacturers could be wiped out when the European Commission implements chemical-restriction requirements next year, the Thailand Research Fund said yesterday.

The new EC Reach - registration, evaluation, authorisation and restriction - directives set a number of requirements aimed at protecting consumers and manufacturers in the European Union, as well as in exporting countries, from the effects of hazardous chemicals used in the manufacturing process.

The fund said most small and medium-sized enterprises (SMEs) were likely to survive after the implementation of the law because they have enough know-how and budget to improve their operations to comply with the regulations.

The EU will enforce the legislation on both domestic manufacturers and foreign export countries from April next year.

The fund called on the government, industrial associations and SMEs to be aware of the new legislation as well as set up organisations to assist manufacturers, particularly SMEs.

Textile, furniture, electronic, rubber, cars and parts, chemical products, footwear and ceramics are the industries most likely to be affected.

Peeraporn Palapleevalya, director of the Thailand Textile Institute, said these industries would have to put in extra effort to eliminate harmful chemicals in order to comply with Reach.

Businesses will have to bear a higher cost burden in order to adjust the materials they use. And this may force small and weak manufacturers to shut down, she said.

"Others problem may follow since exporters and enterprises have not yet prepared for the change of their manufacturing process," said Peeraporn, adding that unemployment would increase, the country's exports would drop both in value and volume, there would be a flood of low-standard products from the EU, the environment would be spoiled, and, finally, Thailand would have to rely on other manufacturing countries.

She said the United States and other developed nations were also considering implementing similar regulations on imports, as they tended to care more about the environment and consumer health protection.

Varapan Danutra, a lecturer at Chulalongkorn University's Faculty of Science, said Thailand lacked information on the new legislation.

Although Thailand has enjoyed an annual export growth rate to the EU of about 10-per-cent, this may drop substantially if manufacturers are unable to follow the Reach conditions, said Varapan, who is also a researcher on EU trade regulations.

"The lack of preparedness and cooperation among concerned officials will result in a drop in export growth to the EU market," she said.

Petchanet Pratruangkrai

The Nation