Fashion exports still selling
Exports of fashion goods are expected to meet their target of 5% growth from 586 billion baht last year despite the slumping economy and daily minimum wage hike prompting some manufacturers to relocate to neighbouring countries.
Atchaka Sibunruang, director-general of the Industrial Promotion Department, said fashion exports should achieve the department's goal, as the baht is weaker this year, driving shipments.
In 2013, fashion goods export revenue grossed 586 billion baht, with gem and jewellery products accounting for 306 billion, followed by 227 billion for textiles and garments and 53 billion for leather and footwear.
Yet prolonged political instability has caused many foreign business partners to cancel trips to Thailand.
"Investors are concerned about the political conflict," said Ms Atchaka.
The hike in the daily minimum wage also encouraged foreign businesses to move their production to China, India, Cambodia or Vietnam, where labour costs are lower.
"This has tremendously affected the fashion industry, particularly the textile and garment, leather and footwear sectors, even gem and jewellery," she said.
In the markets where Thai products compete such as India, Belgium and Hong Kong, they have lower value-added tax rates than the 7% collected in Thailand, so competitors in these markets have cost advantages over Thai exporters, said Ms Atchaka.
Somsak Srisupornvanich, president of the Thai Textile Association, said technology remains the key to drive the industry's growth through research and development.
"It is essential for Thai manufacturers to adjust by using up-to-date technology since the fashion industry requires modern designs. The textile industry has bought new machinery with advanced technology to maximise its capabilities," said Mr Somsak.
Yesterday the department signed a memorandum of understanding with the Institute for Small and Medium Enterprise Development, Kasem Bandit University, the Thai Gem and Jewellery Association and seven associations related to the Thai fashion industry to help upgrade the competitiveness of Thai SMEs in the global market.
The pact is aimed at modernising the fashion industry over the next five years.
A fashion week and network expansion will be held to encourage SMEs to innovate.