Quality focus set to help shipments

Thai leather goods exports are expected to remain strong after manufacturers shifted their focus to quality.

Veera Lertruang punyavut, vice-president of the Thai Leathergoods Association, said despite the country’s sluggish overall export prospects, shipments of leather products were expected to manage growth of 4% this year to US$1.9 billion.

In the first quarter, Thailand shipped $360 million worth of leather goods, up by 4% from the same period last year.

The US market was the destination for 20% of shipments, with the EU accounting for 19%, China 5%, Vietnam 5% and other destinations the rest.

“Thai leather goods makers have done quite well in adjusting their production to supply more to the premium market and secured original equipment manufacturer contracts with many leading brands from Europe,” Mr Veera said.

“More importantly, new-generation manufacturers stress more the importance of creative design, colour and models.”

Mr Veera said Thai shipments to the US were also expected to be more active this year, boosted by that country’s economic recovery.

However, he admitted the industry still faced many challenges for the remaining months including foreign exchange risks, political uncertainty and particularly an expected wage hike.

“Any wage increases will definitely hit our industry, particularly factories located upcountry,” Mr Veera said.

“This will make our products less competitive, as we have to increase the prices accordingly.”

But he brushed aside a possibility for Thai manufacturers to relocate their production bases to neighbouring countries to enjoy cheap labour costs, saying many Thai leather goods makers and raw material manufacturers had already successfully migrated to make high-quality products.

In a related development, in a move to stimulate sales of Thai leather goods, the International Trade Promotion Department in cooperation with the Thai Leathergoods Association will host the Thai Leather Week 2015 Mid-Year Sale from June 19-28 at its exhibition hall on Ratchadaphisek Road in Bangkok.

The 10-day event with more than 200 exhibitors showcasing their products is expected to attract 25,000 visitors and see sales of 20 million baht.