Ceramics firms in Lampang are asking the government to speed up addressing their troubles, citing the impact of higher energy prices, the daily minimum wage hike and bearish exports.
Vongchai Srithai, vice-president of the Lampang Ceramic Association (LCA), said as many as 300 local factories have suffered since the price of liquefied petroleum gas for industrial use was floated in 2011 and the nationwide daily minimum wage was raised this year.
Some 80-90% of those factories are small and medium-sized enterprises with 50-100 employees.
Most of the factories in Lampang have cut production by half and tried their best to keep workers.
Lampang is home to 70-80% of Thai ceramics for export.
The LCA predicts Lampang ceramics exports of 1.5 billion baht this year, a sharp decline from 3 billion last year.
Mr Vongchai said Europe's economic slowdown did drastic damage to local factories, as the European market accounts for 60-70% of Lampang ceramics exports.
The LCA reported five factories closing down, one of them a large, unnamed shop with 2,000 employees.
Mr Vongchai said the LCA is concerned that most small factories will be forced to close in the next few years if the government fails to deliver aid.
Earlier this year, the group petitioned the government via a joint public-private committee to provide 1.5 billion baht in soft loans to factories to upgrade facilities.
The LCA also asked for 600 million baht in financial support to build a central kiln that would save energy costs.
"We've asked the government to help alleviate the effect on local factories from higher energy costs over the last three years, but nothing has happened," said Mr Vongchai.
"Now the situation is getting worse on the back of higher labour costs and sluggish exports."
The local industry's key competitors are in Asean countries and China, where firms enjoy relatively low costs.