Soaring oil prices hurt Thai industry

BANGKOK, June 18 (TNA) - Thailand's Ministry of Industry is preparing measures to assist operators of small- and medium-sized enterprises (SMEs) to survive, as oil prices are expected to continue rising during the third and fourth quarters of this year, a senior ministry official said Sunday.

Ministry of Industry permanent-secretary Chakramon Phasukavanich said that global oil prices had now reached US$70 per barrel and that Thailand's industrial sector was strongly affected--especially the country's food-processing industry.

The glass and ceramics industries, which consume large amounts of electricity during the production process, are no exception as the businesses are hurt by an increase in fuel tariff (FT), and are quite vulnerable.

"The Ministry of Industry is preparing several measures to help the industrial sector," Mr. Chakramon said. "The sector is being hit by rising oil prices such as developing logistics system, consume lesser oil to control electricity charges at an appropriate rate and encouraging factories to use alternative energy.

"Oil prices are expected to continue rising during the third and fourth quarters of 2006 due to higher demand in the world market and the expected economic growth of the world's leading economies."

Another senior official, Atchaka Brimble, director-general of the Industry Economics Office, said that small and medium-sized industrial production operations were more severely affected than large factories because most of them use fuel oil in their production, operations and their production efficiency was also inferior to the larger units.

SME operators must find ways to keep their businesses to survive by lowering production costs and boosting management efficiency.

A survey shows that during the first half of 2005 Thailand's industries consumed 35 per cent of the country's total energy consumption, ranking second after the transportation sector which used 38 per cent, Mrs. Atchaka added.

TNA