Exim urges exporters to adapt their strategies
To ensure sustainable growth, Thai exporters must adapt to the current disruption
Rak Vorrakitpokatorn, the new president of the Export-Import Bank (Exim) of Thailand.
Digital disruption and pandemic have served as a wake-up call for Thai exporters to change their business strategies to ensure sustainable growth in the global market, said Rak Vorrakitpokatorn, the new chairman of the Export Bank -import from Thailand (Exim Bank).
Thai exports contracted by 6% last year, mainly due to the impact of the pandemic. However, the sector has a much better outlook this year, based on the recovery of the global economy.
Many local research houses and Exim Bank predict that the local export sector will see double-digit growth this year.
Mr Rak said the export sector continues to face pressure from technological disruption, ongoing trade wars, changing consumer behavior and the impact of the pandemic.
He compared exporters to a football team, noting that shippers need to improve their tactics and all segments need to play together transparently and flexibly in all situations.
Identifying manufacturers as strikers, Mr Rak said they need to boost their production capacity by using automated systems to maximize productivity. Automation can also promote social distancing and contactless work practices.
He said exporters should also conduct R&D to produce products that can quickly adapt to megatrends, such as environmentally friendly or health-conscious products, as well as working from home.
Midfielders – referring to the shipping industry – should diversify risks by creating a balanced export market portfolio between high purchasing power markets, such as the US, Europe and China , and emerging markets like Cambodia, Laos, Myanmar and Vietnam. , South Asia and Africa.
In addition, they should focus more on building online sales channels, which have grown rapidly since the start of the pandemic.
Mr Rak said shippers need to create a clear identity in popular online marketplaces and social media networks in export destinations to further expand the reach of their new customer groups.
“Going online is not an option, it’s the only way to survive,” he said.
For the defensive line, exporters will have to prepare tools to prevent possible risks. They should always have a second choice when it comes to suppliers, distributors and logistics providers in an emergency.
Mr Rak said some exporters had already learned this lesson from the pandemic, as the outbreak had caused supply chains to temporarily shut down in some industries.
He advised exporters to always insure their shipments. The relentless pandemic in many countries can cause importers experiencing declining sales to fail to pay for products on time or refuse to receive goods, Rak said. Both scenarios would affect exporters.
Mr Rak said that Exim Bank is keen to play a role in improving and revitalizing traditional sectors, which suffer from structural problems, such as a shortage of labor and raw materials and a lack of R&D, which can all erode their competitiveness. These exist in the agricultural products sector, such as rice and rubber, as well as in labor-intensive industries and tourism and related sectors.
He said Exim Bank stands ready to provide exporters with financial assistance measures and related advice at all stages of their business transformation, with the aim of improving their production capacity.
He said that Exim Bank had continued to offer relief measures to customers during the pandemic and he noted that the crisis had also impacted the situation of non-performing loans (NPLs) of the banking sector and Exim Bank. .
Exim Bank has set up a working panel to closely monitor clients affected by the volatile economic situation, with a focus on clients facing high NPL risk. The aim is to enable the bank to offer the customers concerned greater financial assistance in order to guarantee the continuation of their commercial activities to all.
The bank is targeting its NPLs at the end of this year at 3.5-4% of outstanding loans, up from 3.81% at the end of last year. He is targeting 145 billion baht in new loans this year, which is a difficult target given the impact of the pandemic on the global and local economy.