Thailand to Offer Post-Flood Financial Aid to Industry

With floodwaters predicted to hit central Bangkok in the next few days, Industry Minister Wannarat Charnnukul says the Thai government cabinet has agreed in principle to provide 250 billion baht ($8.2 billion) in loans for business recovery.

The money will be raised through loans from the Government Savings Bank, commercial banks and the Japan Bank for International Cooperation, the Bangkok Post reports.

Shift canceled at AutoAlliance Rayong plant.

Board of Investment Secretary General Atchaka Sibunruang is quoted by the paper as saying tax exemptions for a period of eight years will be offered to foreign investors to encourage them not to move new projects to other countries.

There also will be import tax exemptions for machinery and raw materials needed to rehabilitate the flooded factories.

But Toyota Thailand President Kyoichi Tanada says the government should focus on the flood situation before talking about rehabilitation plans for businesses.

“We want the government to solve the flooding first so we can assess the damage,” Tanada tells the newspaper. “Rehabilitation plans can come later.”

Toyota Thailand has halted operations at its three plants until at least Nov. 5 because of a lack of parts.

Parent Toyota Motor says in a statement it also will continue reduced production in Japan through Oct. 29, after which output will be adjusted at each individual production line depending on availability of parts.

“Vehicle production plants in the U.S., Canada, South Africa, Indonesia, the Philippines and Vietnam will adjust production for the week starting Oct. 31,” the auto maker says.

Toyota will decide later whether it can resume normal production beginning Nov. 7.

Honda Thailand production continues suspended and the auto maker says it is unclear when it will resume because it hasn’t been able to access its facility. The Rojana Industrial Park where the plant is located was ordered evacuated and Honda has confirmed floodwaters have entered the facility.

Mercedes-Benz also reportedly has suspended production and AutoAlliance Thailand's plant in Rayong, which builds cars for Ford and Mazda, has halted the night shift because of a parts shortage.

The Thai government says 1,300 factories and 400,000 workers have been affected by flooding.

Of the TB250 billion the government will allocate to rehabilitation, TB210 billion ($6.9 billion) will be loans for small and medium enterprises, TB15 billion ($492 million) for manufacturers in flooded industrial estates and TB25 billion ($820 million) for independent businesses.

The Bangkok Post says the Industrial Estate Assn. is calling on the government to rehabilitate flooded industrial estates within 45 days of the water receding, which is expected to take up to six weeks.