Ministry 'will remain on course'

An expected change of the industry minister in the upcoming cabinet reshuffle will not result in major changes in the country's industrial policies, says Industry Minister M.R. Pongsvas Svasti.

"The vision for the industrial sector [including the logistics master plan] will continue as it is even if there is a change in office because [the government] needs a systemic and stable strategy to proceed," he told a forum yesterday.

M.R. Pongsvas said the person tipped to replace him is from the same party, so policy changes are unlikely.

Prasert Bunchaisuk, whose background is barely known, is thought to be the new choice for industry minister.

The new cabinet line-up awaits royal endorsement.

The Federation of Thai Industries (FTI) expressed anxiety about the change, citing Mr Prasert's profile.

"We're a bit worried, because we don't know him or anything about his previous work or skills," said vice-chairman Tanit Sorat.

The FTI has three major concerns for the new industry minister to address including the impact of the government's wage hikes.

Some small and medium-sized enterprises (SMEs) have been forced to shut down due to the daily minimum wage hike to 300 baht, said Mr Tanit.

"We would like to ask the new industry minister and the Office of Small and Medium Enterprises Promotion to take the issue of the impact on SMEs of the daily minimum wage hike more seriously than the incumbent minister has," said Mr Tanit.

He said SMEs upcountry have been affected the most.

The FTI is also concerned about the committee set up to filter the issuance of operating permits for new businesses. It sees the committee as a bottleneck that will slow new business startups in Thailand.

Finally, there is a labour shortage in the industrial sector.

"Both the Labour and the Industry ministries have to decide whether they're going to take in more foreign labour," said Mr Tanit.

M.R. Pongsvas reiterated the need for Thai industries to reduce logistics costs that have taken a toll on competitiveness.

Thailand ranks 38th in the World Bank's Logistics Performance Index 2012, behind neighbouring countries Singapore and Malaysia.

Trust between industrial and logistics operators is vital in order to share information across the supply chain, which is necessary to cut logistics costs, said M.R. Pongsvas.

He said in an environment where foreign logistics firms could gain regional dominance as economies integrate and as Thailand loses its Generalised System of Preferences incentives with Europe, it is imperative that local industries improve logistics management to reduce costs.

The industrial sector targets reducing logistics costs as a share of gross domestic product (GDP) to 4.25% by 2015 from 5% now.

Logistics costs for manufacturing, agricultural and services industries account for 15% of the country's GDP at present, which the industry wants to cut to 12-13% in two years.

About the author

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Writer: Soonya Vanichkorn
Position: Reporter