Virus outbreaks in Thai factories threaten export sector and recovery

  • Virus outbreaks in factories threaten wider economic impact
  • So far, infections have affected only a small number of factories
  • But the rapid spread of the virus is hurting the production of some manufacturers
  • Government’s “bubble and seal” containment policy sparks criticism

BANGKOK, June 14 (Reuters) – A spate of coronavirus outbreaks in Thai factories has raised fears that the export sector will be hit hard, threatening to further undermine an economy as it struggles to recover from the crippling blow of pandemic for the crucial tourism industry.

The virus has swept over 130 factories, including those supplying international brands, with more than 7,100 cases in 11 provinces, making manufacturing one of the main sources of infection along with prisons and construction camps.

Affected factories represent only a fraction of the estimated 63,000 factories in Thailand that employ 3.4 million people, government data shows, but officials are concerned about the impact on exports that have kept the economy going struggling as tourism revenues collapsed.

In 2020, exports accounted for 45% of gross domestic product. The tourism-dependent economy, a hub of global trade, suffered a sharp 6.1% contraction last year, and last month the government cut the GDP growth forecast for that year to 1, 5% -2.5% against 2.5% -3.5% previously.

Electronics, rubber gloves and food are among the export sectors hit by infections, Thai Industries Federation vice president Kriengkrai Thiennukul told Reuters, but he said he was too early to assess the overall impact.

“If this continues, the damage will increase, so factories will need to be fully vaccinated,” he said.

Already, some of the manufacturers affected by the epidemic have had to reduce their production.

Charoen Pokphand Foods Pcl (CPF.BK), which exports to 40 countries from Thailand, said a factory closed due to infections accounted for 10% of broiler production.

Instant noodle maker Thai President Foods Pcl (TFMAMA.BK) has shut down a factory that produces rice vermicelli and rice noodles. Foreign sales accounted for about one-third of the company’s sales of semi-finished products.

Some factories have continued with partial operations while others have temporarily closed and quarantined their workers. The outbreak has sent industry sentiment plummeting to its lowest level in 11 months. Read more

Thailand has recorded a total of 199,264 COVID-19 infections and 1,466 deaths so far, with more than 80% of new cases and 90% of deaths reported after April. Currently, only 1.6 million people out of a population of over 66 million have been fully immunized.

IMPACT OF BUBBLE AND SEAL

The government has attempted to contain the epidemic with a “bubble and seal” policy, which takes effect when 10% of factory workers are infected. Confirmed cases are then sent for treatment while the rest are held at the plant for 28 days.

The factory and construction camp workers who live there – many of whom are low-wage migrant workers – have not been able to leave their workplaces, even though they are not infected. The policy differs from other workplaces affected by the coronavirus.

“This is not appropriate,” said Suthasinee Kaewleklai, coordinator of the Migrant Workers Rights Network (MWRN) in Thailand, adding that authorities should do more testing.

Suthasinee said companies should improve conditions, give more space for social distancing and increase training for workers so those who were in good health could avoid infection and move around freely.

The Industry Ministry has given factories until the end of June to improve conditions, including providing mandatory masks and administering temperature checks.

A government official defended the bubble and seal policy, saying it allows businesses to continue operating and limits the outbreak.

“Those with symptoms will be sent for treatment, others will be in the bubble, if it spreads it will spread inside and not outside,” health official Taweesap told Reuters Siraprapasiri.

“It limits the epidemic and allows business to continue.”

Reporting by Chayut Setboonsarng and Panarat Thepgumpanat Editing by Shri Navaratnam

Our Standards: The Thomson Reuters Trust Principles.

Comments are closed.