Thai manufacturers in six key sectors are targeted for a 15percent reduction in inventoryholding costs, or Bt27 billion, by 2016 under the Industry Ministry's manufacturing logistics road map, in a move that would enhance their regional competitiveness.
It will not however be easy to substantially reduce transport costs, which are one of the three major elements in overall logistics costs, Anong Paijitprapapon, director of the Bureau of Logistics at the Primary Industries and Mines Department, said yesterday.
Anong was speaking about the country's manufacturing logistics road map at the "Logistics Cost Reduction Strategies" seminar held by Logistics Digest.
She said competitiveness figures were in correlation with logistics costs, as countries with low logistics costs normally have high competitiveness, such as Singapore, Japan and the US.
Thailand was 26th in IMD world competitiveness rankings in 2009 and 35th in the Logistics Perspective Index rankings. This paced the Kingdom behind Malaysia, which was ranked 18th and 29th respectively.
According to data collected by the National Economic and Social Development Board, Thailand's overall logistics costs accounted for 18.6 per cent of gross domestic product in 2008. They are divided into three main components: administration, inventory carrying and transport costs.
About 8.2 per cent of the logistics costs was taken up by inventorycarriage costs, 90 per cent of which was stock and the rest warehousing. Three per cent of the total, or Bt260 billion, was inventorycarriage costs in the industrial sector and 5 per cent was from the agricultural, trades and services sectors.
To help manufacturers reduce logistics cost more effectively, Anong said her bureau had sorted them into the 13 largest inventorycost groups, the top six of which represent Bt180 billion, or 1.12 per cent of GDP.
The six groups are food, petrochemicals and plastic, automotive, electrical appliances and electronics, pararubber products, and textiles and garments. Small and mediumsized enterprises are included.
"We are considering the matter in advance when comparing with others in Asean, as we already have a national master plan on logistics strategy development," said Anong.
Under the manufacturing logistics road map, she said it was set to kick off next year and run through 2016 with a target for inventoryholding cost reduction of 15 per cent, or Bt27 billion, for the six major manufacturing sectors.
In regard to the road map, she added that the agency aimed to enhance the investment in logistics and transports businesses and related businesses, such as through a special border economic zone, an industrial estate at Pak Bara deepsea port in Satun province, and electric trains.
For the special border economic zone, the pilot project will be at Mae Sot in Tak province, which will link to the Myawaddy province of Burma to promote more trade in textiles and clothing, consumer and petrochemical products.
The next four projects will be at Chiang Khong in the northern province of Chiang Rai, linking with northern Laos and China's Shenzhen; the Northeast's Mukdahan province, linking with the SawanakateSeno special economic zone in Laos and the Lao Bao special economic zone in Vietnam; the East's Sa Kaew province, linking with the PoipetO Neang special economic zone in Cambodia; and the South's Sungai Kolok, linking with Malaysia.