Quick Links
 Thailand Discount Hotels
Bangkok Hotels
Chiangmai Hotels
Hua Hin Hotels
Koh Samui Hotels
Krabi Hotels
Pattaya Hotels
Phuket Hotels
 Thailand Guide Directories
About Thailand
Arts and Humanities
Business and Services
Business to Business
Computers and Internet
Guides and Directories
Maps and Photos
News and Media
Pub and Restaurant
Real Estate
Recreation and Sports
Science and Environment
Society and Culture
Travel and Tourism
Browse By Provinces
Browse By Island
 Home > About Thailand > Manufacturing

Capacity Utilization of the Manufacturing Sector

Since 1990, the manufacturing sector has expanded annually at an average of 13.3 percent. A survey of 1994 capacity utilization covering 40 types of manufacturing industry (representing about 39 percent of total manufacturing activity), indicates an upward trend in capacity utilization from 76.1 percent to 78.7 percent of full capacity. The increase reflects production expansion to meet the increase in domestic demand and exports.

Comparing the current situation with the situation in 1990, when the rate of capacity utilization reached 84 percent, and the cement industry operated at 100 percent capacity, this year's high level of capacity utilization is not expected to exert significant pressure on domestic prices, provided economic growth in 1995 does not exceed the projected 8.5 percent. Consumer goods, steel products, vehicles, plastic pellets and electrical appliances still have excess capacity due to recent investment expansion.

Exports and Imports of Manufacturing Goods

Thailand has moved from being heavily dependent upon the export of agricultural commodities (less than 3 percent of exports being manufactured products) in 1960, to its current position, where over 80 percent of its exports are manufactured goods, and the export sector is the principal engine of growth for the Thai economy.

Thailand's exports have experienced double-digit annual growth de to the dynamism of the sector itself, combined with consistent government policies promoting free trade and fair competition. These policies have paid off.

Thailand's present export structure reveals a greater diversity (in terms of both products and markets) than most of her competitors, including the East Asian dragons. Thailand is the world's largest source of precision ball bearings, for example, and will soon become Honda's largest production base for worldwide export. In agricultural products, Thailand is the world largest exporter of frozen shrimp, canned seafood, tapioca and canned pineapple. The top twenty export items include a growing number of industrial products and new entrants are seen every year.

Throughout the late 1980s and early 1990s, Thailand's exports have increasingly included electrical products, integrated circuits, and computers and their components. In 1990, electrical consumer goods registered growth of over 54 percent, while computers and components grew by more than 44 percent.

In 1993, manufactured exports (which accounted for over 80 percent of total export value) expanded at a 17.7 percent to 747 billion baht, an increase of 17.7 percent from the previous year.

In 1994, exports grew faster than anticipated, with export earnings exceeding 1.000 billion baht, claiming a market share of more than 1 percent of the world's exports for the first time. The growth rate of around 19 percent was observed in all categories. Manufacturing and fishery exports, in particular, grew by 20 percent and the continued development of the production efficiency for new manufactured items was evidenced by an exceptional increase in exports of products requiring high technology, such as vehicles and parts, electrical appliances and computers and computer parts.

The United States continued to be Thailand's largest market, with overall exports growing more than 9 percent. More than 80 percent of exports to the United States were manufactured products, and major items which recorded significant increase were textiles, computer parts and components, electrical circuit breakers, integrated circuits and parts. The second most important export market was Japan. Over 60 percent of exports to Japan were manufactured products, with major exports being electrical appliances, furniture and parts, electrical circuit breakers and integrated circuits. Export to ASEAN countries expanded at more than 30 percent in 1993.

On the import side, the rapid growth of the manufacturing sector has created a large demand for a growing range of intermediate goods. Thailand currently imports large quantities of capital goods, raw materials, and intermediate goods each year. From 1988, when total imports reached about 501.4 billion baht, (a record increase of 46.6 percent), imports have seen consistent growth reaching 1,337 billion baht in 1994.

The value of imported capital goods increased substantially throughout the late 1980s. The import values of raw materials and intermediate goods increased by 50.1 percent, with prices rising by 24 percent and volume increasing by 21 percent. Import values of basic metals grew by 75 percent, with imports of iron and steel rising by 72 percent. Imports of raw materials used in the production of consumer goods also increased significantly. Import values of chemicals grew by 34.5 percent and precious stone imports jumped by 74 percent.

In 1992, the value of exports registered substantial growth to approximately 824 billion baht, and the value of imports also rose considerably to about 1,033 billion baht. In line with the buoyant expansion in economic activities, imports in 1994 rose by 17 percent, with a volume growth of 15.6 percent.

Reflecting the acceleration in domestic expenditure, the imports of capital goods and consumer goods increased markedly, while the import of raw materials and semifinished products grew in line with the expansion of manufactured exports. Other imports, particularly fully-assembled automobiles and parts, moderated after rapid growth in 1993.

Due to the rapid growth of exports relative to imports, the trade deficit rose slightly to 240.5 billion baht but declined as a proportion of GDP for the fourth consecutive year to 6.7 percent; Thailand's trade deficit is due primarily to the import of capital goods and raw materials used for investment and increasing the country's production capacity in the future. However, recognizing this dependence on foreign supplies, the government encourages investment in capital goods and intermediate products which add value to the basic raw materials that are exported. Throughout the 1990s, export-oriented business will continue to display strong performance and increasing sophistication.

Copyright © 2003 Thailand Gateway, All Rights Reserved.
Any question or comment, please contact us