Thailand’s food makers not ready for EU-like future, survey

By Ankush Chibber

- Last updated on GMT

Related tags: Southeast asia

A majority of Thai food businesses are not ready for the new cooperative network, NFI finds
A majority of Thai food businesses are not ready for the new cooperative network, NFI finds
Research conducted by Thailand’s top food institute has found that the majority of food manufacturers are unprepared for the looming deadline of a regional cooperation treaty.

By 2015 Cambodia, Thailand, Myanmar, Laos and Vietnam will be integrated into a EU-­like regional economic bloc and will cooperate in the food sector.

However, a National Food Institute (NFI) survey revealed that most food business operators are still not ready to cope with the deadline or catering to new markets and facing increased competition.

The survey was conducted between May 8 and May 25 and spanned 78 food manufacturers, including small (15), mid-sized (17) and large food businesses (46). It featured rice traders, vegetable oil makers, fruit and vegetable processors, beverage manufacturers and seafood processors.

More than half unprepared…

Just over half (55%) of the operators surveyed are not ready, it detailed. While 45% said that they are well prepared, 83% of the small businesses surveyed were not ready.

Small and medium-sized enterprises have found it hard to prepare for 2015, NFI said, as they lack information on consumer taste and behaviour in other countries.

There is also a lack of understanding of foreign laws and tax measures, it found.  

Findings showed that under the current Association Southeast Asian Nations (ASEAN) Free Trade Area agreement, only a minority (28%) of businesses make use of the sweeping tariff reductions.

The surrounding countries within the network also have cheaper operating costs due to lower wages, although Petch Chinabutry, president of NFI, remained confident that the country can maintain its edge within the new network.

Thailand has “bountiful and diverse raw materials, sophisticated production technology and capital and infrastructure, even with higher wages,”​ he said.

Related topics: Business, South East Asia, Industry growth

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