The Japan-Thailand Free Trade Partnership Agreement (Jtepa) has prompted Japanese bleaching and dyeing manufacturers to consider moving their production base to Thailand to enjoy tariff privileges, boost exports to the region and re-export to the homeland.

Before the signing of the free-trade agreement, some Japanese manufacturers had made a survey in Thailand on potential areas of investment and supporting factors to facilitate their production here.

Deputy Industry Minister Piyabutr Cholvijarn said yesterday that the pact was also expected to boost the country's annual textile export value by 10 per cent to Bt200 billion this year.

"Thai textiles have never been a sunset industry, but we cannot catch up on global trends. The cooperation between the official and private sectors will strengthen the country's competitiveness and turn textiles into sunrise manufacturing," he said.

Previously, the ministry allocated a budget of Bt1.2 billion to encourage the manufacturing efficiency of the industrial sector. Of the total, Bt800 million was provided to the Federation of Thai Industries and the remainder to the National Science and Technology Development Agency and the Thailand Research Fund.

In a seminar yesterday entitled "How the Thai Textile and Garment Industry Can Move Ahead", Piyabutr said the sector had faced severe competition from China, Vietnam and some European countries. These rivals have enjoyed lower production costs, mainly wages.

Due to the increasing number of exporters and pricing strategies, the Kingdom's share in the global marketplace has gradually fallen.

However, Thailand has a high potential to become both a manufacturing and distribution hub for textile products in Asia. Success will boost the country's exports to serve a regional population of 4 billion.

Virat Tandaechanurat, executive director of the Thailand Textile Institute, said Thailand and Japan should form joint ventures in developing the bleaching and dyeing industry here. Production would not only be used as raw material for local high-end textile and garment products, but also for re-export to Japan.

"Japanese manufacturers would consider moving their plants from Vietnam, China and Malaysia to Thailand to snatch more privileges from the free-trade agreement," he said.

The institute will receive a budget of Bt150 million-Bt160 million from the ministry next year to develop the industry. The money will be spent on research and development, as well as for innovative products derived from local wisdom.