August 2, 2007

By News Desk 

Union Footwear and Rangsit Footwear have become the latest victims of the strong Baht together with several small factories which announced plans yesterday to shut down due to a range of negative factors including the currency's appreciation and higher operating costs, The Nation reported .

Union Footwear, which is an original equipment manufacturer of foot-wear for many brands including Nike, employs 2,414 workers while Rangsit Footwear employs 1,900.

Both companies are paying full compensation to the workers and they are ready to relocate the laid-off workers to affiliated plants, said Padungsak Thephasdin na Ayudhya, director-general of the Department of Labour Protection and Welfare.

Thai Silp South East Asia Import Export recently went bankrupt and laid off about 6,000 workers from its apparel plants, while more factories are on the verge of shutting down due to the rising Baht and growing competition from neighboring countries.

Prayod Lerswatanasiwalee, president of the Thai Footwear Association, noted that Thai sneaker manufacturing is facing tougher competition from countries like China, India and Vietnam. According to Prayod, the strong baht adds to the already heavy burden of higher production costs. Bigger exporters suffer more than smaller producers due to their export volume, which leads to higher foreign exchange losses. [The Nation ]

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