In the past three years, Thailand’s garment industry has undergone major changes, including encountering problems such as rising labor wages and labor shortages. Many garment factories have moved their factories to neighboring countries in order to survive.
Wang Luo, consultant to the Thai Garment Industry Association and vice president of the Thai Maritime Goods Exporters Association, pointed out when analyzing the future survival and development of Thailand’s garment industry that small and medium-sized garment factories in Thailand are basically unable to survive. It is a small manufacturer that supplies orders to large shopping malls. After experiencing the impact of the daily wage of labor rising to 300 baht, large garment factories moved their factories to neighboring countries for development. So far, 22 garment companies have invested in a total of 30 factories in neighboring ASEAN countries. The next step is worth it. The focus is on which country international buyers will have better profit margins from when ordering from.
Currently, Thailand’s main export markets for ready-made garments are broken down into: the United States accounting for 32%, the European Union accounting for 28% and Japan accounting for 13%. Negotiations on the Trans-Pacific Strategic Economic Partnership (TPP) led by the United States have not made much progress because the government believes that joining the agreement will lose benefits, but the industry believes that it can benefit from it. For example, the service industry does not agree because the TPP overwrites As many as 95% of the service product market needs to be opened to member countries. There are 27 negotiated agreements, including deeper openings in labor, employment policies, society, etc., while the remaining 11 member states have also shown no support for this. It is estimated that the negotiations will be delayed for three years before they are completed.
For the EU market, Thailand will be deprived of the 20% preferential tariff treatment under the EU Generalized System of Preferences (GSP) from January 1, 2015. The original intention to promote the negotiation of the EU-Thailand Free Trade Area Agreement can be canceled under the GSP. After the cancellation, Thailand’s exports to the EU will receive zero tariff treatment, but there is currently no fully functional cabinet. When the negotiations in April failed to reach any decision, whether a new round of negotiations in the next three months will It is not yet known whether this will continue, so the EU-Thailand Free Trade Agreement will definitely not be implemented in time for 2015.
Facing the current situation of difficulties for small and medium-sized manufacturers in Thailand, the Thai Garment Industry Chamber of Commerce discussed the support plan for the domestic garment industry this year and formulated a blueprint for the support plan for the Thai garment industry from 2014 to 2016, which is divided into six aspects. : The first is to strengthen product development and encourage operators to pay attention to product development, set up a product development center, and obtain approximately 10 million baht from the Ministry of Commerce for operation; the second is to improve production efficiency, improve production processes, reduce losses and costs, Improve production management, strive to form a comprehensive and efficient mechanism within the industry, develop operators’ diversified production skills, and strive to reduce the impact of production on the environment; third, strive to create product brands and retail brands. Currently, up to 90% of orders for Thailand’s garment industry It is OEM production and processing, and only 10% is private label. Because there are problems in the consignment process of retail malls, private brand operators need to bear the program inventory themselves and are charged unreasonable high entry fees by consignment malls; 4. The first is to strive to build a world-class raw material procurement system, organically combine the upstream, mid-stream and downstream industrial chain links, and promote the systematic supply of raw materials; the fifth is to develop product trade and adapt to the opening up of the international market, and establish user profiles of Thai product target markets program library and strengthen negotiations with foreign countries to sign free trade area agreements; sixth, expand production bases to foreign countries. If Thailand’s garment industry can achieve the above-mentioned development steps, Thailand’s garment product trade is bound to develop.
