Effects of Thailand's Flood Crisis Spreading Across Asia

The effects of Thailand's worst flood in decades is spreading beyond the country, affecting businesses across Asia. The floods have devastated agricultural crops and inundated over 14,000 factories, threatening the supply chain for exports.


The flood crisis, which is likely to last another four to six weeks, has forced Honda Motor Co. to cut back output at its Southeast Asian operations amid disruptions in the parts supply chain because of flooding in Thailand, according to a Dow Jones article published by the Wall Street Journal.


Following Honda is Toyota Motor Corp. which announced it will scale back production in Indonesia, the Philippines and Vietnam because of difficulties exporting some parts from flood-hit Thailand.


The disruptions to the supply chains of the Japanese auto makers in Thailand won't be nearly as severe as those following the March disasters in Japan, said the chairman of the Japan Automobile Manufacturers Association.


Some Singapore companies have also been affected by the crisis, with their factories reportedly being completely destroyed, reports ChannelNewsAsia. One Singapore-based company, which deals with precision machining parts, was submerged in water measuring some 2.5 metres as of October 22.


Taiwanese companies have also not been able to escape the brunt of the floods. A new bottled beverage company in Ayutthaya suffered at least US$64 million in damage to its new processing system.


Though Taiwanese businesses in Thailand have been hurt by the flooding, companies in Taiwan or China may see business improve because of the natural disaster, according to a report by Singapore's Lianhe Zaobao.


A company estimated that auto part prices could be hiked by 10-20 percent if supplies from Thailand were disrupted by the flooding. "In that scenario, we will consider importing the parts from Taiwan or Japan," a company spokesman told the Singaporean daily.





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