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Manufacturing / Premium Garment Exports
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2009-02-25 04:07:06-05
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US eco-crisis affects thousands of Thai workers
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Overall export value to drop 15 percent if main orders vanish
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The US economic downturn will force the country's 20 or so high-end garment manufacturers to cut thousands of employees from payrolls this year as orders fade away. "If they cannot export to the US market, it will hit the industry's export value by 15%," Wallop Vitanakorn, president of Hi-Tech Group, the country's fourth-biggest exporter in the sector, said yesterday. High-end exports accounted for 15% of the garment industry's exports worth USD3.5 billion (THB126 billion) last year, up 2.14% from the previous year. Some companies, mainly owned by Hong Kong investors , have gradually laid off staff and in the worst case shut down completely since last year. Each premium producer hires up to 3,000 workers. Wallop pointed out that those companies had lost orders since the US sub-prime crisis broke last year. The financial crisis has crippled the US overall economy, prompting leading apparel brands such as Gap and Ann Taylor to close down their shops in the United States. Their counters in department stores have also suffered as consumers turn to cheaper products. Late last week, Thai Garment Export TGE , wholly owned by Hong Kong businessmen and the second biggest exporter in the sector, said it had reduced 1,400 jobs after export orders declined by 25-30%. The company has paid compensation according to Labor Ministry regulations, plus an extra month. Thai Garment Group operates five plants in Thailand employing 7,200 workers. Last week, the company had to lay off 800 workers at its Oom-noi plant in Bangkok, which employs a total of 2,500. According to US figures, the total number of white-collar workers reached 20 million, of whom 40 per cent would be made redundant. Somboon, TGE said the high-end garment business had not yet bottomed out and the economic problems would continue for two more years. Overall garment exports grew slightly by 0.42% to USD 285.37 million last month, but exports to the US contracted by 9.6% to USD 126.08 million, which accounted for 44 % of the total.
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