Shippers fear decline as prospective clients stay away

Corporate January 25, 2014 00:00

By Prakaidao Bengsantia
The Nati

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The Thai National Shippers' Council is worried that the protracted political protests will affect export purchase orders next quarter, as some customers from importing countries postpone or cancel their visits to Thailand because of safety concerns.

Council chairman Nopporn Thepsithar said it came to this conclusion after soliciting its members’ opinions about the political impacts on the export sector.
Customers in some sectors, especially textiles and garments, in general will visit Thailand for talks with the manufacturers before deciding whether to contract them to produce goods on an OEM (original equipment manufacturer) basis. Others, however, particularly those whose home countries are highly sensitive on the subject of political demonstrations, have stayed away from Thailand and placed orders with Vietnam instead. 
Nopporn said that if the demonstrations are prolonged further, this situation could spread to the textile and garment sectors next quarter and last throughout the year.
The council will convene with its members at the end of the month to revise its export-forecast data. Earlier it predicted that the export sector would expand by 5-7 per cent this year but this might drop to the low end of that range on several factors, including the political row.
Some exporters have been attempting to boost purchase orders by flying out of the country to meet customers, rather than waiting for them to come here. 
The irony is that import markets that had been in the doldrums because of the global economic slowdown have begun to pick up just as the political problems in Thailand erupted. Nopporn is concerned that the country will fail to cash in on the global economic recovery.
Vallop Vitanakorn, vice chairman of the council, said garment manufacturers were worried that as clients from the United States, Europe and Japan, which together represent 75 per cent of the Thai export market, fail to come to Thailand to develop products jointly with local manufacturers, this would affect purchase orders in the second and third quarters.
Garment orders for the current quarter have expanded, but those for the second quarter have declined by 30 per cent, he added.

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