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Thai Footwear Industry Focuses On ASEAN
September 5, 2014
Thai footwear producers and raw-material suppliers plan to set up new factories in strategic locations across the Asean region over the next few years, as exports to neighbouring Southeast Asian markets strengthen whilst exports to major markets such as the United States and the European Union slow down.
Speaking to nationmultimedia.com, Chanin Jitkomut, president of the Thai Footwear Association, said "Higher labour costs and shortage of workers domestically have encouraged footwear enterprises to invest overseas to support business growth.” Mr. Chanin went on to comment that many in the industry were planning to expand into other Asean countries to create business growth amid the decline in exports to traditional markets.
Chanin explained that Thai footwear exports had fallen significantly in the past few years, particularly to the American and European markets. However, exports to Asean countries, particularly Myanmar, have surged in the midst of regional economic integration and increased demand as consumer incomes rise.
Given these developments, shoe manufacturers and their suppliers are planning to establish factories in Myanmar to reduce logistics costs. The significant growth in exports to Myanmar and the upcoming open trade environment and investment under the Asean Economic Community had encouraged Thai footwear producers to invest in this region. Vietnam is another interesting investment destination due to its strongly developing footwear industry and skilled workers.
According to a report issued by the Customs Department, total shipments to the US market of footwear and related materials declined in the first six months of this year by 18.69 per cent (Bt11.97 billion). Exports to the US, which is the Kingdom's largest destination with a share of 13.25 percent, fell seriously by 27.94 per cent during the first half. In comparison, shipments to the United Arab Emirates, the second-largest market, increased by 2.29 per cent, while those to Myanmar soared by 30.29 per cent.