
Many local factories producing electronics, steel and plastics have shuttered this year as purchase orders shrink and cheap imports flood the Thai market, says the Industry Ministry.
The shutdowns were ranked based on the investment value of the factories.
"The closed electronic parts and printed circuit board factories had the highest investment value of 2.29 billion baht," said Industry Minister Pimphattra Wichaikul.
Coming second was steel and iron factories with investment of 1.45 billion baht, followed by plastic manufacturing facilities, valued at 930 million baht.
From January to May this year, a total of 488 factories across industrial sectors left their businesses, said Ms Pimphattra, citing statistics from the Department of Industrial Work.
These factories have a combined investment value of 14 billion baht.
Several companies decided to lay off a combined 12,551 workers during this five-month period.
A key reason that caused the companies to resort to lay-offs and factory shutdowns was their lack of competitiveness, compared with some foreign countries exporting products to Thailand, said Ms Pimphattra.
Local manufacturers cannot compete with rivals who sell products at lower prices. Some decided to solve the problem by relocating their production facilities to neighbouring countries to take advantage of free-trade agreements, she said.
The EAF Long Product Steel Producers Association said earlier that many local steel manufacturers are likely to shutter their businesses this year after succumbing to the flood of dumping from China.
Chinese steel imports have dented the capacity utilisation of Thailand's steel industry, with the rate declining to 28% between January and February, marking a new low, the association said.
The Office of Industrial Economics expects Thailand's Manufacturing Production Index to remain flat or gain 1% year-on-year in 2024, which is a downgrade from earlier projections of 2-3% growth.
According to the Industry Ministry, entrepreneurs in some sectors, especially food, animal feed and fertiliser, have pushed ahead with new investment plans.
The value of their investments in setting up 848 factories stood at 149.8 billion baht between January and May.