Mike King, Special Correspondent | Oct 17, 2011 8:33AM EDT
The worst monsoon floods to hit Thailand in decades have crippled the country’s international trade as rushing waters prevent workers from reaching their offices, flood warehouses and stall factory production.
The latest government estimates suggest as much as 0.9 percent could be wiped off GDP growth this year because of the floods, which have already killed almost 300 people and affected more than two-thirds of the country’s provinces. Some analysts said the economic loss could climb as high as 1.5 percent of GDP with the impact on exports set to be particularly hard.
The waters have cut off areas north of Bangkok, including a number of major industrial centers located near the former capital of Ayutthaya, and output has been brought to a halt. Efforts are being made to prevent the Navanakorn estate, home to numerous electronic and automotive parts suppliers, from being flooded.
Toyota, Honda, Ford and Isuzu have suspended most or all of their car assembly operations in Thailand, a move which could have international ramifications because of the country’s role as a regional automotive hub.
Thailand is also estimated to supply around 60 percent of the world’s hard-disk drives. SeaGate Technology and Western Digital Corp have been among a host of major electronics and semi-conductor makers to warn that output had fallen because of the floodwaters, either because locally sourced parts were not available or because factories had become inaccessible.
Bangkok’s Suvarnabhumi International Airport is still operating, but operators are now poised to divert flights should the situation deteriorate later this week.
Like other leading integrators and logistics companies, DHL said it had put in place business contingency plans and was working closely with the relevant government agencies to minimize any service impact of the floods in and around Bangkok. “Delays are to be expected north of Bangkok and in the province of Ayutthaya,” the company said.
Kuehne + Nagel said its offices remained open and sea freight and airfreight activities had not so far been seriously affected, but exports from Chang Mai to Bangkok were now being deviated, mostly via the port of Laem Chabang.
-- Contact Mike King at michael@borderline.eu.com
