A man tests an automation machine at the Metalex fair held in Bangkok. Manufacturers are being urged to use high technology and innovation to lower production costs. SOMCHAI POOMLARD
The Federation of Thai Industries (FTI) has urged local firms, especially in the manufacturing sector, to invest more in new machines to save energy, raise competitiveness and create added value for products under Thailand 4.0.
FTI chairman Chen Namchaisiri said Thai manufacturing has ignored investment in new machines for more than a decade, focusing on economies of scale rather than innovation to create higher value.
"Thai companies, especially small and medium-sized enterprises (SMEs), should rethink their capacity utilisation since it has been ignored for years, when all businesses produce what they want to produce, but may not match the current market demand," Mr Chen said.
"They should analyse market demand and adjust their production processes and machines in order to produce what the market wants."
He said most SMEs are still reluctant to invest more money on expansion or changing their machinery as they are quite sure about domestic and global economies that could remain fragile.
But Mr Chen said investment in new machines is crucial for businesses to compete in the global market of the future.
Moreover, changing machines will help reach the goal of Thailand 4.0 faster as the government is encouraging industries to move in to the era of 4.0, when all industries use modern machines with higher technology and new innovation that creates added value for Thai products.
With the government's policy to support Thailand 4.0, Mr Chen said he has seen clear signs industries are gradually changing to make special grade products rather than commodity grade, or mass products, that focus on making profit from economies of scale.
The FTI also expects investment in 2017 to surpass the target of 550 billion baht in 2016, thanks to supportive government policies such as the Eastern Economic Corridor, which is expected to attract substantial new investment in the eastern region.
With increasing investment, the FTI expects the economy to continue to grow in 2017, supported by a recovering oil price, which is forecast to stay at an average of US$50 a barrel.
In addition, rising farm product prices and recovering business as well as Thai business expansion in Asean are expected to help increase purchasing power and demand.
But Mr Chen said the private sector remains concerned about the changing global economic climate under the incoming US president, Donald Trump.
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