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Published on July 16, 2007

The Thai Garment Manufacturers' Association has come up with a sustainable-development plan, under which successful exporters are ready to offer technology and management-skills transfers to manufacturers who want to shield themselves from currency volatility.

The plan follows the sudden closure of garment manufacturer Thai Silp South East Asia Import Export Co last week. It will be proposed to Deputy Prime Minister and Industry Minister Kosit Panpiemras and the Thailand Textile Institute at their meeting today.

Kosit called the urgent meeting to sound out ideas on how to help companies in the industry survive the baht crisis, as well as other problems, in light of a possible domino effect. Closures of more textile and apparel factories, which are all labour intensive, could throw thousands of workers out of jobs.

Wallop Witanakorn, secretary-general of the Thai Garment Manufacturers Association, said last week that successful exporters would be selected according to their development strengths in areas such as human resources, efficiency and process management.

Those exporters have both knowledge and equipment to transfer to those who want to upgrade their production lines. Interested exporters can select the assistance that solves their manufacturing problem, he said.

"The proposal will usher the industry into a new era of development. In the past, all manufacturers were taken as competitors, and technology and management transfer among exporters was prohibited. But the plan will create a network so manufacturers will help each other," he said.

In the beginning, the development plan will focus on helping members of the association survive. The garment industry is down to about 700-800 manufacturers and exporters, of which 493 producers are association members, accounting for 80 per cent of the industry's total exports.

About 30 members export more than Bt1 billion a year. They all offered to help transfer management and technology know-how to small and medium exporters.

The plan classifies manufacturers into three groups - small, medium and large. Those that need help will, it is hoped, benefit from factory visits by successful manufacturers.

"We want to upgrade the whole industry by strengthening all manufacturers' competitiveness through technology development and management modernisation," Wallop said.

The government should provide a budget to support the proposal for sustainable development, he said.

Garment exports are expected to stay flat this year due to the continued strength of the baht. The Commerce Ministry targets the industry as a whole to grow 5 per cent to US$3.47 billion (Bt115 billion) this year.

Despite some high-profile failures, Somjin Plengkhum, deputy director-general of the Export Promotion Department, said most garment manufacturers were coping with the baht's appreciation.

"The baht has continued rising since last year. The ministry has found that most garment manufacturers have adapted quite well by investing in neighbour countries and upgrading their product quality to meet the demands of upper-end markets," she said.

To help garment manufacturers, the department and the National Federation of Thai Textile Industries will conduct a road show in Japan from September 24-28, with a view towards the Japan-Thailand Economic Partnership Agreement, which will be implemented soon.

Somjin said the pact would benefit the textile and garment industries amid tougher competition.

About 30 local manufacturers are expected to join this trip in the hope of picking up technology and know-how from Japan's textile and garment industries. They expect to find Japanese firms with which to form alliances both to increase efficiency and possibly to join them in investing in other Southeast Asian countries.

Achara Pongvutitham,

Petchanet Pratruangkrai

The Nation