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NEWS UPDATES Asean Affairs           18   August  2011

Proposed wage hikes too much for Thai firm

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Hana Microelectronics Plc is exploring opportunities in Vietnam and China in anticipation of Thailand's daily minimum wage rising to 300 baht next Jan 1.

Chief executive Richard Han said the increase planned by the new Pheu Thai-led government would hurt Hana's bottom line too much.

The electronic parts maker employs 10,000 workers in Thailand and 2,000 in Jiaxing, China, almost all of them paid the legal minimum, he said.

"Wages account for only 6-8 percent of Hana's costs, but increasing the minimum wage to 300 baht would have a big effect because our margin is low," said Mr. Han.

He will visit Vietnam next week to look at potential locations for printed circuit board assembly facilities.

"Vietnam's minimum wage now is less than half of Thailand's. It's the only country in Asean that devalues its currency," said Mr. Han.

He said Hana was also looking at other parts of China for future expansion. The Chinese government is also raising its wage but gradually over five years.

The Federation of Thai Industries (FTI) yesterday proposed that the government gradually raise the minimum wage to 300 baht over three years and not do so all at once.

Chairman Payungsak Chartsuthipol said small businesses may need further help, such a waiver of Social Security Fund contributions for three years, and possibly even a direct subsidy of 40-50 baht per day per worker from the government.

Mr. Han said higher wages in Thailand, baht appreciation, economic uncertainty in the US and the euro zone, and China's attempts to control inflation would pressure Hana's second-half financial performance.

Group sales increased by 6 percent year-on-year in the second quarter in US$ terms to $143 million.

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More


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