Garment firms seek assistance from govt in overseas push

Local textile and garment manufacturers have urged the government to reduce tariff barriers, strengthen promotion activities in new targeted markets and support their investments in neighbouring countries as urgent steps to stimulate growth amid a severe export decline to Europe, as well as a labour shortage.

After a meeting with textile and garment exporters, Nuntawan Sakuntanaga, director-general of the International Trade Promotion Department, said this group of exporters comprises one of the priority sectors that need the government’s help, as their shipments declined dramatically in the first half of this year. These products have relied mainly on the European Union, US and Japanese markets, all of which are facing slowing growth.

According to the department, exports of textiles and garments fell 15.3 per cent year on year to US$3.59 billion (Bt113 billion) in the first half of this year.

Nuntawan said that enterprises have urged the government to draw up a plan to promote their investments overseas as they are having difficulty expanding their business at home.

Supportive measures that the enterprises want from the government include a waiver on corporate tax when they bring money back into the country, and tax incentives under the Board of Investment’s regulations on supporting local enterprises to invest in neighbouring countries. They also urged the Commerce Ministry to support the plan to set up a Fashion Design Centre in Thailand so that Thai garments would be able to add value and develop new designs for their products.

The government has also been urged to strengthen activities in new markets focusing on Asean, Eastern Europe, Latin America and the Middle East, all of which have seen strong economic growth.

Exporters urged the government to provide in-depth information about market demand in each target country to help them draw up marketing strategies and compete with other exporters.

Enterprises also wanted the government to cut import tariffs for synthetic yarn to 1 per cent in order to facilitate manufacturing growth. Exporters also called on the government to closely monitor possible dumping activities by China as it would destroy Thai enterprises’ competitiveness.

They also called for enterprises to be able to set up breaching plants outside industrial estates, if they can manage the environmental problems. The government has also been urged to provide soft loans to help small and medium-sized enterprises in the industry.

Vallop Vitanakorn, secretary-general of the Thai Garment Manufacturers Association, said Thai textile and garment enterprises are struggling to promote business by expanding investment overseas as a strategy to solve the labour shortage problem. He said the government should waive corporate tax for investors in Asean markets, so they don't have to shoulder a double burden.

Vallop said exports of textiles and garments are expected to decline by 12-15 per cent this year due to serious impacts from the euro-zone crisis.

In addition, to increase the efficiency of its support for the export sector, the department is scheduled to meet with food and jewellery producers this week to brainstorm on how to boost exports of those particular industries.