Mon, Dec 19, 2011 - Page 10 News List

Slow recovery for flood-hit Thai factories


Piles of rubbish, rusting furniture and discarded machinery litter one of Thailand’s top high-tech parks, a former symbol of economic prowess laid to waste by weeks of flooding.

Many of the companies located in the country’s industrial heartland say it will be several months, at least, before their operations return to normal. Investor confidence is likely to take even longer to recover.

At least one major manufacturer, Sanyo Semiconductor, is pulling the plug on its operations in Ayutthaya Province north of Bangkok -altogether, while others are considering moving to safer areas.

Even if large dykes were built around the industrial parks, production would have to be suspended if the area is flooded again because access to the site would become too difficult, he said.

The disaster caused billions of US dollars in damage and dealt a severe blow to the global supply chain. There are also questions about whether insurers will continue to cover companies located in the flood-prone region.

Japanese high-tech giant Toshiba still has no idea when operations will resume at eight of its affected factories because new machines and parts are needed and electricity and telephone links have not yet been fully restored.

In total seven major industrial estates in central Thailand fell victim to the nation’s worst floods in half a century, which left hundreds dead.

While many Japanese companies — a key pillar of the economy — have said publicly they remain committed to Thailand, in private there is frustration with the -government’s handling of the crisis, particularly its confusing advice.

“I wish the government had done more,” said the president of a local subsidiary of a Japanese textile producer, who had to rely on the media for information about the disaster.

His factory, located in the northern suburbs of Bangkok, close to where the government set up its emergency response center, was submerged in 1.5m of water, despite the firm’s efforts to protect it with sandbags.

“In the beginning Don Mueang was a flood relief and evacuation center so the government said it would be OK ... but they completely failed,” the Japanese businessman said, speaking on condition of anonymity.

The factory’s stock was destroyed and the machinery is now rusting and needs to be repaired or replaced, but he has no plan to abandon the country.

The Thai Board of Investment is planning to invite chief executives to Bangkok next month for a forum at which it says long-term flood prevention measures will be announced.

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