By ACHARA PONGVUTITHAM
THE NATION
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The Thai garment industry faces a bleak export outlook as orders for June and July delivery are down significantly.
As a result, production will be cut back by 15 per cent. However, there are no plans to lay off workers as most factories could still manage with their current workforce.
“We have to wait for orders towards the end of April to get the bigger picture for the rest of this year,” said Wallop Witanakorn, president of Hi-Tech Group, the country’s fourth biggest garment exporter.
He told The Nation that pricing is not a major issue at this stage, but the outlook depends more on consumer confidence, particularly in the US, which is the biggest market for Thai garments.
A sharp decline in new orders is evident in mass product segments, reflecting weak retail business in the US.
In addition, orders from the European Union, Japan and Asean markets also have dropped.
Thailand’s garment exports to the US, EU and Japan account for 82 per cent of the industry’s total shipments.
Last year, business was still brisk, requiring staff to work long hours of overtime and the hiring of sub-contract workers, said Wallop.
At present, factories have reduced |overtime production from six to two hours only.
Thailand’s total garment export value in the first quarter of this year is forecast to drop 5-7 per cent to US$875 million (Bt31 billion).
“Last year, the industry needed tens of thousands of workers but we recruited just a very small number, even though the government’s unemployment figures were as high as 800,000 people,” he said, unsure if some of the unemployed are reluctant to find new work.
He urged the government to review its policy on unemployment and new job placement.
By law, those who face lay-offs get compensation ranging from three to 10 months’ salaries depending on their service period.
In addition, they get benefits from the Social Security Office equivalent to 50 per cent of the last salary for a period of six months.
However, the latter benefit was extended temporarily to eight months.
In addition, workers whose salary is Bt15,000 or less are now entitled to a Bt2,000 cash handout.
According to Wallop, some of the unemployed also decided to go back to their home province and work in agriculture such as rice and sugarcane fields.
As a result, many have been reluctant to find another factory job as soon as possible as they are still happy with these benefits.
“The government may have to study if this is good for the country’s competitiveness. Moreover, society needs to adapt an attitude towards work.
“We’re waiting to see if more people will return to work after the Songkran festival,” he said, adding that new college graduates would also find it difficult to get a job this year.
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