Thailand'S 300 Baht Policy Hits The Garment Industry

Taweji, vice president of Thailand Industrial Institute, said that the minimum wage of 300 baht will be implemented nationwide in January 1, 2013, which is bound to have a negative impact on the business operation of Thailand businesses, especially small and medium enterprises (SME).

Taweji said that the salary adjustment system in April this year raised the national minimum wage level by 40%, and affected the orders received by merchants to reduce 20-30%.

It is estimated that overseas businesses will not order products in Thailand factories until next year when they pay a full salary. Instead, they will order products from Vietnam and Kampuchea manufacturers from their production costs below Thailand.

Therefore,

The labor intensive industries need to accelerate the pace of adjustment, especially the SME of the foreign government.

In this year's salary adjustment system, the pat Yao government has raised the daily wage per worker by more than 70 baht. Next year, it will need to increase about 80 baht per person per day, which will enable the business to raise the daily wage of workers by 141 baht in 9 months, with an average increase of 3661 baht per worker's monthly salary.

The industrial institute has submitted relevant information to the government on the above situation and waited for the government to provide support measures. The 27 subsidy measures derived from the Ministry of labor and industry can only help businesses to reduce 10% of their salaries and expenditure.

TK Garment

The company said it planned to move the production base to Kampuchea, with an average daily wage of 60-70 baht from Kampuchea.

At the same time, the company has replaced the Bangkok factory's labor wages in the form of piecework payment instead of daily wages, and invested in the introduction of advanced production equipment to deal with the problem of labor loss.

The monthly salary of the company will increase to more than 2 million baht, or it is necessary to move the factory to Bangkok to reduce the cost of logistics and pportation.

Taweji said the rise in labour wages and labor shortages contributed to the problem.

The kimonben house of kimono clothing center has been hit hard, and many factories plan to relocate production base to Vietnam and Kampuchea.

In addition, SME also suffered from financial problems. Financial institutions refused to grant loans to them when they could not provide mortgage assets higher than the loan amount, resulting in SME not having enough capital to move the production base.