Surapon Foods Public: Migrant worker shortage threatens major Thai exports and economic recovery

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Even as global demand rebounds and the baht’s 9% drop this year makes Thai products more attractive, the lack of migrant workers threatens exports as the economy is already facing a tourism recession and sluggish domestic consumption in due to virus containment measures.

Major export industries such as food and rubber production can rely on migrant workers for up to half of their workforce, according to company and industry officials. Exports accounted for 45% of Thailand’s gross domestic product in 2020.

Thailand has around 3 million legal migrant workers, mostly from Myanmar, while there is demand for around 390,000 more, Labor Minister Suchart Chomklin told Reuters.

But the strict enforcement of border controls and quarantines since the coronavirus began to hit Thailand hardest in 2021 has meant labor migration has all but come to a halt, according to companies and union activists.

“These are jobs that Thai workers don’t want to do,” Suchart said, referring to labor-intensive factory work.

“We have talked about bringing in migrant workers, but it will be very difficult due to the large number of infections.”

Some factory owners are responding to the labor shortage by offering higher wages and bonuses to attract Thai workers, but the incentives have not been sufficient to attract locals to lower paying jobs and low-skilled, even as the country’s unemployment rate has reached 12 years. high this year.

“We’ve had quite a few orders. But due to lack of manpower, we can only operate at 75% to 80% of our capacity,” said Suparp Suwanpimonkul, deputy general manager of SK Polymer Co., who manufactures rubber parts, especially for automobiles and electronics, and exports 43 to 45% of its products, mainly to the United States.

Exporters fear that similar production cuts mean exports may not even reach the 10% growth forecast by Thailand’s National Shippers Council for 2021, which is more modest than the central bank’s expectation that exports will increase to an 11-year high of 17.1%. This year.

Last month, the central bank cut its 2021 growth forecast to 1.8% amid rising coronavirus cases, and stricter containment measures imposed this month could further weigh on the outlook for this year after the tourism dependent economy shrank 6.1% in 2020.

Suparp, who is also vice chairman of Thailand’s National Shippers Council, said the labor shortage now competes with companies for workers, with many paying more than the minimum daily wage of 300 baht (9, $ 13) – paying 400 or even 500 baht. his own company tries to attract new workers with a six-month work bonus and a referral program of 500 to 1,000 baht per worker.

“But we still can’t compete with other factories,” he said.

The labor shortage particularly hit producers of low-wage food, textiles and some rubber producers, who together accounted for 20% of total shipments and brought in $ 27 billion in January-June 2021, compared to $ 44 billion for all of last year.

Thai manufacturers of electronics and automobiles, Thailand’s two main export sectors, are still booming as higher-wage sectors employ a higher percentage of Thai workers and rely less on migrants.

At Surapon Foods, which produces frozen shrimp and chicken products and exports 80% of its goods, management has asked some of its 4,000 employees – more than a third of whom are migrants – to work overtime to meet export commitments.

“We are also short of manpower but we can still manage”,

Sriprasert Sriprawatkul, vice president of finance and accounting at Surapon, told Reuters.

“But if we can choose, we would rather add more workers than pay overtime because it’s cheaper,” he added.

($ 1 = 32.85 baht)

(Additional reporting by Kitiphong Thaichareon; Editing by Kay Johnson and Ana Nicolaci da Costa)

By Orathai Sriring and Satawasin Staporncharnchai


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