SOUTHEAST ASIA: THAI REPORT
In Thailand, one of the most industrialized countries in Southeast Asia, automation is accelerating in the manufacturing industry as the working population tapers off. Workers’ attitudes are changing, and fewer Southeast Asians are migrating to Japan. Business models based on cheap labor are no longer viable in Asia.
When I visited the Amata City plant of Siam Kubota, a locally incorporated subsidiary of agricultural machinery giant Kubota Corporation, I saw countless automated guided vehicles (AGVs) running in every direction.
Sales of tractors and combine harvesters are booming, thanks in part to the government’s special demand for subsidized farm machinery for those who lost their jobs due to the COVID-19 disaster and are now returning to their hometowns to start farming. The fruits of this policy are being returned in the form of year-end bonuses, and Siam Kubota is not suffering from a labor shortage at this time.
Nevertheless, there is a strong sense of crisis that in five to ten years’ time, it will become considerably more difficult to secure workers in the manufacturing industry. To dispel the image of factory work as “hard, dirty, and dangerous,” the company has begun to steadily implement measures with an eye to the future. The large number of AGVs is an indication of this.
According to the Thai government’s May 2022 forecast, the total population is expected to peak at 67.19 million in 2022 and then begin to decline. The manufacturing industry has begun to prepare for future labor shortages.
Source: The Nikkei
PSR Analysis: Local manufacturing sites are improving their benefits packages and investing in equipment for automation. By raising the salary level, they are trying to deter the exodus of labor to other countries in search of better income. This seems to be the right direction to take. Automation at manufacturing sites is in high demand in Thailand and other Southeast Asian countries such as Indonesia. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia for Power Systems Research
