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Published on August 9, 2007

"The shut-down plants, including Thai Silp [South East Asia Import Export] and Union Footwear, were not special. It is the nature of doing business, as risks always persist," he said.

Kosit based his comments on figures from the Industrial Works Depart-ment, which reported that 1,254 plants with a total investment of Bt94.86 billion had shut down in the first half of the year. In comparison, 1,256 factories with a combined investment of Bt12.06 billion closed during the same period last year.

Nevertheless, 2,183 new businesses applied for licences in the first half, 248 fewer than in the same period last year.

To handle the number of laid-off workers, the Commerce Ministry will aim to transfer them to other plants in those industries. Otherwise, it will cooperate with operators in the service sector, which has a rising demand for staff.

Asked if he will put more money into the SME fund, Kosit said the decision to do so depended on the success of the current fund, which is valued at Bt5 billion.

Meanwhile, Industry Ministry

permanent secretary Chakramon Phasukavanich said the industrial sector should expand at least 5 per cent this year, as targeted.

Taking a similar view to Kosit on the closure of plants, he did not show much concern about the reported number of shut-down factories, saying it was natural in the business world. He added that many plants in industrial estates were still announcing plans to recruit more workers.

Separately, Kasikornbank CEO Banthoon Lamsam said the economy still showed growth prospects, but he admitted that not all companies would survive, especially labour-intensive ones which fail to improve product quality and manufacturing lines.

He said that in the current climate, commercial banks needed to adjust their strategies, be more innovative and thoroughly check business feasibility before approving new loans.

"Banks also need to re-engineer, or their costs would be exorbitant. While competition defines pricing, we have to shoulder costs," he said.

Despite the insistence on maintaining calm, the Industry Ministry is closely monitoring furniture plants, fearing that they could follow the misery experienced by textile and footwear companies due to the baht's appreciation, a shortage of raw materials - particularly parawood - and fierce competition.

Next week, furniture plant operators will be invited to talks at the ministry.

Chalida Ekvitthayavechnukul

The Nation