Natural disasters disrupt global supply chain
Thai floods curb production of cars, electronics.
BANGKOK:
Thailand’s worst floods in decades have jolted a global supply chain already straining under the impact of Japan’s tsunami, as deluged factories threaten some of the kingdom’s key export industries.
The floods have killed about 300 people, damaged one-tenth of Thailand’s rice paddy and made major roads north of Bangkok impassable.
Toyota, Ford, Honda and Isuzu have all suspended car assembly in Thailand, a regional automotive hub - a move expected to hit output of thousands of vehicles.
While most of the country’s auto factories are on the eastern coast, outside the worst affected zones, a clutch of large industrial parks north of Bangkok home to plants producing vital components have been inundated.
Electronics firms are also braced for a slowdown in output, with US groups Seagate Technology Inc. and Western Digital Corp. warning their production of hard disk drives would be hit by the disaster.
Chipmakers ON Semiconductor Corp and Microsemi Corp as well as high-tech gaint Nikon have suspended output at Thai factories, while Canon Inc. said it would temporarily move ink jet printer production to Vietnam.
The disruption is another setback to Thailand’s crucial export sector, which was still recovering from the impact of parts shortages caused by the March earthquake and tsunami disaster in Japan.
The effects of the latest disruptions will be felt outside Thailand, said the chairman of the Federation of Thai Industries, Payungsak Chartsutthipol.
“This has also affected factories abroad because many plants in Thailand are suppliers for factories outside Thailand,” he told AFP.
Outside one Honda plant in Ayutthaya, about 80 kilometres (50 miles) upriver of Bangkok, rows of cars have been almost totally submerged by the muddy water, while others were moved to an overpass to keep them dry.
Toyota on Friday said it would extend the production halt in Thailand until at least October 22.
“Thailand is a key production hub for Japanese automakers, particularly Toyota and Honda. And they will be hurting from the disruption,” he said in Tokyo.
Forecasters at the University of the Thai Chamber of Commerce have estimated the total cost of the floods to the Thai economy at about $4.9 billion - roughly 1.3-1.5% of annual gross domestic product.
Published in The Express Tribune, October 17th, 2011.
Thailand’s worst floods in decades have jolted a global supply chain already straining under the impact of Japan’s tsunami, as deluged factories threaten some of the kingdom’s key export industries.
The floods have killed about 300 people, damaged one-tenth of Thailand’s rice paddy and made major roads north of Bangkok impassable.
Toyota, Ford, Honda and Isuzu have all suspended car assembly in Thailand, a regional automotive hub - a move expected to hit output of thousands of vehicles.
While most of the country’s auto factories are on the eastern coast, outside the worst affected zones, a clutch of large industrial parks north of Bangkok home to plants producing vital components have been inundated.
Electronics firms are also braced for a slowdown in output, with US groups Seagate Technology Inc. and Western Digital Corp. warning their production of hard disk drives would be hit by the disaster.
Chipmakers ON Semiconductor Corp and Microsemi Corp as well as high-tech gaint Nikon have suspended output at Thai factories, while Canon Inc. said it would temporarily move ink jet printer production to Vietnam.
The disruption is another setback to Thailand’s crucial export sector, which was still recovering from the impact of parts shortages caused by the March earthquake and tsunami disaster in Japan.
The effects of the latest disruptions will be felt outside Thailand, said the chairman of the Federation of Thai Industries, Payungsak Chartsutthipol.
“This has also affected factories abroad because many plants in Thailand are suppliers for factories outside Thailand,” he told AFP.
Outside one Honda plant in Ayutthaya, about 80 kilometres (50 miles) upriver of Bangkok, rows of cars have been almost totally submerged by the muddy water, while others were moved to an overpass to keep them dry.
Toyota on Friday said it would extend the production halt in Thailand until at least October 22.
“Thailand is a key production hub for Japanese automakers, particularly Toyota and Honda. And they will be hurting from the disruption,” he said in Tokyo.
Forecasters at the University of the Thai Chamber of Commerce have estimated the total cost of the floods to the Thai economy at about $4.9 billion - roughly 1.3-1.5% of annual gross domestic product.
Published in The Express Tribune, October 17th, 2011.