Chinese producers fleeing trade war buoy leading developer
- 2 Dec 2018 at 16:15
- WRITER: BLOOMBERG NEWS
David Nardone, WHA group executive for the company’s industrial-development unit.
The upheaval in global supply chains triggered by the trade dispute between the US and China is benefiting the largest developer of industrial estates in Thailand.
Land sales have begun to surge at WHA Corp, partly because of demand from Chinese manufacturers seeking alternative production sites to skirt US tariffs, according to David Nardone, the group executive for the company’s industrial-development unit.
“We’re booming right now,” Nardone said in a Nov 30 interview . “We’ve seen a high level of activity from China as well as other markets.”
Nardone said climbing costs in China had already led manufacturers to consider locating some output in Thailand, and that trade frictions have accelerated that process. Vietnam and Malaysia are also among the options for manufacturers seeking to shelter themselves from repercussions of the US-China tensions.
WHA predicts its industrial land sales this quarter could be up to five times greater than in the first nine months of 2018, leading to an annual total of as much as 224 hectares. The firm expects 10% to 15% land sales growth in 2019.
A pick up in performance in October through December would help alleviate a difficult few months for WHA, whose profit fell from a year earlier in both the second and third quarters.
The proportion of Chinese customers may reach 30% next year, up from just one-tenth by at end of September, Nardone said. Demand from the world’s second-biggest economy is coming from sectors including rubber products, the automotive industry and home appliances, he added.
At the same time, Thailand faces a number of challenges to fully exploit opportunities from any long-term reshaping of supply chains. These include a history of tangled politics, an aging population and a shortage in workforce skills.