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Thai garment businesses look towards Vietnam
Five Thai garment companies plan to invest in Vietnam as production costs in Thailand are increasing, according to some officials from the Thai Garment Manufacturers Association (TGMA).
TGMA’s honourable adviser Vallop Vitanakorn said five Thai companies will start business in Vietnam in 2011 thanks to cheap labour, and hope to attract around 24,000 new workers. They include Hong Seng Knitting Company, Hi-Tech Apparel Company, Nice Apparel Company, Liberty Garment Company, and Golden Thai Industry Company.
According to TGMA, the Thai Democratic Party’s promise of a 25 percent raise in the minimum salary over the next two years will lower the competitive edge in the garment sector.
Many other companies will move to markets with cheap labour, such as Vietnam, Bangladesh, Indonesia, Cambodia and Myanmar when Thailand lacks a sufficient labour force.
Thailand currently has 1,600 garment factories, which is 2,600 lower than in 2005. If labour costs continue to rise in the next five years only around 500-600 factories will survive.
The TGMA aims to achieve a growth rate of 5 percent. The Thai garment sector earned US$3.2 billion in 2010.
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