Thailand's SMEs hit by floods

At 37% of GDP with 2.32 million jobs affected by the floods, SME's 1.75 trillion baht in exports fallen to 16% growth from 25% projected.

flood garbage

As floodwaters recede the damage they have caused in the neighborhoods where SMEs typically operate becomes visible, as in the photo above (Photo: Rattaseema Pongsen)

Click button to listen to SMEs & the Floods download

SMALL BUSINESS: SME growth estimate cut sharply on flooding impact by Post Reporters


The gross domestic product of small and medium-sized enterprises (SMEs) is expected to grow only 1.4-2.5% this year, a sharp drop from the earlier projection of 4-5% because of heavy floods, says the Office of Small and Medium Enterprises Promotion (Osmep). 

Yuthasak Supasorn, Osmep's director, said 550,000 small businesses have been affected by floods.

Some 102,000 were in the manufacturing sector, 264,000 in the retail and wholesale sector, 163,000 in the service sector and the rest in construction.

Direct and indirect damages from the floods for SMEs are estimated at 71.1 billion baht a month, with 2.32 million jobs affected. 

There are close to 3 million SMEs in Thailand, making up 99.6% of total businesses and generating over 3.75 trillion baht for the economy, or 37% of GDP.

Mr Yuthasak said heavy floods had prompted electronics, electrical appliance and car makers to halt their production, causing dry factories to delay their production because of supply shortages.

SME export growth projections for the year were cut to 12-16% from 23-25% earlier. SME exports last year totalled 1.75 trillion baht, led by Japan with 10.1% of the share, followed by China at 9.8% and Hong Kong at 9.5%. 

For the first 10 months of the year, 49,900 new SMEs registered with Osmep, up 16% from the same period last year, while 6,600 SMEs reported closing, an increase of 36%. 

Mr Yuthasak said exports from SMEs were estimated to surge 24.5-26.1% next year, with GDP recovering to a robust 3.8-4.2% growth

We forecast exports from SMEs are still in good shape next year, despite the fragility of the US and EU economies. Demand for Thai products, particularly from Asian markets, is expected to surge," he said. "Local spending should also rise substantially next year, driven by rehabilitation measures after the floods. 

In a bid to help SMEs, the cabinet on Tuesday set up an SME Board to be chaired by Deputy Prime Minister Kittiratt Na-Ranong. 

OSMPE plans to propose to the board it provide low-interest soft loans for inundated SMEs and come up with additional measures to strengthen and develop new entrepreneurs and rehabilitate their businesses. 

(Source: Bangkok Post, SMALL BUSINESS, SME growth estimate cut sharply on flooding impact, 9/12/2011, Post Reporters, link

Small Business in the Economy Vocabulary

small and medium-sized enterprises (SMEs) - a business that does not have a large number of employees or sell a large amount of goods and services, and is often run by a family (See Wikipedia)
enterprises - companies

estimate - guesses an amount (not exact); to say what you think an amount or value is or will be, either by using available information or by guessing คาดคะเน โดยประมาณ
impact - an effect or influence ผลกระทบ

SME growth estimate cut sharply on flooding impact by Post Reporters

gross domestic product (GDP) - the total value of all the goods and services produced by a country in one year (See Wikipedia)

gross
domestic product of small and medium-sized enterprises (SMEs) - the contribution of SMEs to the country's GDP

expected - believe will happen คาดว่า (จะเกิดขึ้น)
expected to grow only 1.4-2.5% this year

projection - guessing a future amount; a calculation or guess about the future based on information that you have การคาดคะเน
sharp - very big ที่รุนแรง
a sharp drop from the earlier projection of 4-5%

sector - a part of the economy ภาคเศรษฐกิจของประเทศ  (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia)

retail
- to sell directly to the public for their own use ขายปลีก
wholesale - buying and selling goods in large quantities, during distribution before the goods reach the store การขายส่ง
construction - the work of building or making something, especially buildings, bridges, etc. การก่อสร้าง

102,000 [SMEs] were in the manufacturing sector, 264,000 in the retail and wholesale sector, 163,000 in the service sector and the rest in construction.

indirect
- A affects B affects C affects D (effect only comes through a chain of effects)
direct and indirect damages from the floods for SMEs

halt - to stop หยุด หยุดนิ่ง
delay - when you have to wait longer than expected for something to happen การเลื่อน to make something happen at a later time than originally planned or expected เลื่อน
shortages - when there are not enough goods for people to buy การขาดแคลน

heavy floods had prompted electronics, electrical appliance and car makers to halt their production, causing dry factories to delay their production because of supply shortages.

projections - what is expected to happen in the future
SME export growth projections for the year were cut

share - to have or use something at the same time as someone else ใช้ร่วมกัน
SME exports last year totalled 1.75 trillion baht, led by Japan with 10.1% of the share, followed by China at 9.8% and Hong Kong at 9.5%. 

registered - officially recorded as a business with the government (and given permission to operate) (
49,900 new SMEs registered with Osmep

surge - a sudden increase in something การเพิ่มขึ้นอย่างรวดเร็ว
robust - strong

exports from SMEs were estimated to surge 24.5-26.1% next year, with GDP recovering to a robust 3.8-4.2% growth

forecast - a statement about what will happen in the future based on information available now พยากรณ์
fragility - easy to break or fail

we
forecast exports from SMEs are still in good shape next year, despite the fragility of the US and EU economies.

rehabilitation (noun) - the process and activity of improving the condition of something so that it can operate again; making a system, building, etc., suitable for use again, i.e., bringing it back to a good condition การฟื้นฟูสภาพกิจการ  การทำให้กลับสู่สภาพเดิม, การทำให้กลับมาดีเหมือนเดิม

rehabilitate (verb)) - to return someone or something to a good or healthy condition, state or way of living ฟื้นฟูสุขภาพ
measures - actions taken to deal with a problem มาตราการ

local spending should also rise substantially next year, driven by
rehabilitation measures after the floods

bid - an attempt to do something ความพยายาม
In a bid to help SMEs, ...

the board - the group of people who make the policy and high level decisions for an organization
provide - to give someone something that they want or need

soft
- not strict; weak ไร้น้ำหนัก อ่อนด้วยเหตุผล
soft loans - loans that are easier to pay back (with easier terms such as a lower interest rate, longer term to payback, etc)

interest
- payments made for the use of another's money for a period of time
low-interest soft loans

inundated - flooded ถูกน้ำท่วม, จมลงใต้น้ำ
entrepreneurs - business people เจ้าของกิจการ

OSMPE plans to propose to the board it provide low-interest soft loans for inundated SMEs and come up with additional measures to strengthen and develop new entrepreneurs and rehabilitate their businesses

About the author

columnist
Writer: Jon Fernquest
Position: Online Writer