Adapt to global changes, SMEs told at seminar AEC and other external factors force efficiency

Thai small and medium-sized enterprises must adapt and increase their competitiveness if they want to cash in on the opportunities presented by the changes in the global economy and the upcoming Asean Economic Community (AEC).

Vichit Suraphongchai, chairman of the executive committee of Siam Commercial Bank (SCB), told a seminar titled "Next Steps for Thai SMEs in 2012" that this year would bring opportunities and challenges for which SMEs, especially exporters, must follow the economic changes driven by global factors and the coming AEC.

The seminar was co-hosted by SCB, the Federation of Thai Industries (FTI) and the Office of Small and Medium Enterprises Promotion (Osmep).

Thai SMEs are expected to face fierce competition domestically and overseas, both globally and regionally; moreover, climate change is another factor that will influence their operations.

Commodity-price volatility and slowing growth of purchasing power will add pressure on SMEs, so they must quickly adapt their operational management and increase efficiency, Vichit said.

To help ensure competitiveness, the state, private and banking sectors should jointly assist SMEs through investment policies and financial support.

Sirichai Sombutsiri, senior executive vice president of SCB, said business opportunities this year remained based in domestic consumption because the European public debt crisis would certainly affect Thai exports, capital movements and currency fluctuation. The rehabilitation of flood damage and the transition to the AEC in 2015 will be opportunities for Thai businesses, he said.

SMEs are the foundation driving the country's business in line with SCB's strategy of knowledge enhancement for customers, he said.

FTI chairman Payungsak Chartsutipol said SMEs must closely monitor both internal and external factors to cash in on business opportunities, while they should prepare for changes in climate and the rise in the minimum wage to Bt300 per day, as well as rising energy prices.

The FTI will join with the government and private organisations to focus on small and medium-sized manufacturers to strengthen their productivity and ensure sustainable competitiveness, he said.

Osmep director Yuttasak Suppasorn said Thailand had more than 2.9 million SMEs, or 99.6 per cent of total enterprises. Therefore, they had an important role in driving the economy.

To improve SMEs' preparation for 2015, Osmep will promote new SMEs, boost One Tambon One Product participants, and broaden opportunities for Thai businesses to prosper in the AEC, he said.

He noted that the office estimated that SMEs this year would expand by 3.8-4.2 per cent over 2011. The export sector alone should grow by 24.5-26.1 per cent, backed by economic growth in Asian countries as major export markets for Thai SMEs.

Auto parts, electronics, processed foods, sugar, and rubber products are among the industries that are expected to post healthy growth but fashion businesses (textile and apparel, leather products, jewellery and accessories), fisheries, and steel and related products are expected to face lower growth.