companies cutting back

Several industries in Thailand are beginning to cut costs by neglecting product quality and safety inspection despite a general trend towards serious product-quality control, says a leading testing company.

Intertek Testing Services (Thailand) last week said several of its clients had cut their budgets for product quality and safety control, due to decreased orders. As a result, general manager Pitak Supanantakarn said he believed problems with product quality and safety would increase next year.

Intertek is a branch of the UK-based Intertek Group, a provider of testing and inspection services and product certification.

Pitak said manufacturers - particularly exporters - should not neglect product quality and safety inspections, because that might harm their business. Rather, they should be focusing on product inspection, in order to give them a strong market position when the economy recovers.

Manufacturers and exporters in developed countries have a higher rate of product inspection than those in developing countries, because they believe building product quality is more important than building product image.

"The costs of product quality and safety inspection are an investment in prevention that does not directly increase a company's profit. Most Thai manufacturers believe they can increase their profits by building product image. As far as I'm concerned, reducing costs amid the economic slowdown is an acceptable practice, but if manufacturers reduce prevention costs they'll not gain profits in the coming tough year," he said.

Pitak said Intertek had two clients groups in Thailand: retailers and manufacturers. All of Thailand's local and international retail chains are Intertek clients. The company also provides product quality and safety inspection services to several well-known producers of consumer goods. Most of its private-sector clients are medium-sized and large companies.

Compared with manufacturers in developed countries, Thai manufacturers are rarely active in the fields of product quality and safety inspection, he said.

Retail chains are the key drivers in urging manufacturers to pay attention to product inspection. If retail chains are serious about controlling the quality of products in their stores, producers will be forced to make their product quality meet the retailers' requirements, he said.

Laws related to product-quality control should also be strong enough to force manufacturers to inspect their products before sending them to market.

Pitak said Intertek planned to penetrate new markets in Thailand, including small and medium-sized enterprises. It will show these companies how product-quality inspections can help them succeed in business. Intertek will also offer new service solutions for its existing clients.

"Offering new service solutions to our regular clients is easier than providing existing services to new clients," he said.