Manufacturing in Thailand adapts to higher wages – The Nation

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Companies get lean and mean. Many labour-intensive sectors have tried to adjust their operations to deal with the nationwide imposition of a Bt300 minimum daily wage. These…

Michel Baudin‘s insight:

Wages rise in Thailand, as in China and Vietnam. It means these economies are in transition away from competing based on cheap labor. It means more elaborate products, higher quality and productivity, along with the rise of a middle class hungry for imports. In the garment industry, higher wages also trigger a move from cotract manufacturing of cheap goods into high fashion.

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One comment on “Manufacturing in Thailand adapts to higher wages – The Nation

  1. Actually it was long overdue. If you looked at wage growth since the financial crisis in 1997, it was almost flat. From my own experience, most business owners saw no need to invest in improving productivity (both through people or technology); but they have changed their tune.

    The companies hardest hit are the SME’s, by Thai definition under $3 M in revenue. Many have deregistered or have move to casual labor to keep costs low.

    As far as the insight about moving from Contract Manufacturing to Brand Management, just about every factory in Asia (maybe with the exception of Foxconn) wants to do this, but like the rest of world most of them lack the maturity to make it happen.

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