Electronics exports see LED at end of tunnel

Electronics exports are expected to resume growth and top 1 trillion baht this year after stagnating the past two years following heavy floods in 2011, says the Federation of Thai Industries (FTI).

Supachai Suthipongschai, chairman of the FTI's electrical, electronics and allied industries club, said electronics exports are projected to grow by about 5% this year despite the slowing global economy.He noted China, Asean, Europe and the US account for more than 70% of international shipments.

The industry reported negative export growth of -2% over the last two years. Exports dropped to 829 billion baht in the first 10 months of last year compared with 1.04 trillion for all of 2010, one of the best years for the industry.

"We only started seeing some growth in the second half of 2012 due to domestic demand," said Mr Supachai.

Exports of electrical appliances will grow by 5% to 760 billion baht this year thanks largely to Asean demand.

About 60% of electrical appliances, particularly refrigerators, washing machines and air conditioners, are exported.

"While Europe and the US are slowing down, the Asean market is growing, particularly Cambodia, Laos and Myanmar, as they have such a low base," he said.

Domestic demand for electrical goods is expected to grow by 10% to 500 billion baht this year, he added.

Still, the industry faces a major challenge in the form of labour shortages at all levels including unskilled workers and engineers as it competes with the automotive industry for staff.

"Just as the auto industry comes out with new car models at higher prices every year, we have to cut prices," said Mr Supachai.

He said it remains to be seen over the next six months if the nationwide minimum wage hike to 300 baht a day will cause small labour-intensive operators to close, easing the labour shortage in the sector.

While the industry has the potential to compete in the global market, it needs to work harder to create innovative and value-added products, use research and development for commercial purposes and enhance product design development, he added.

"For sustainability, the industry has to work on human resource development, which needs to be tackled at the early education stages," said Mr Supachai, adding that the Industry and Education ministries must work more closely together on this matter.

About the author

Writer: Soonya Vanichkorn
Position: Reporter