Danish shoe manufacturer, Ecco, has confirmed its commitment to Thailand by investing in a new factory in Saraburi province. The move came amid discussions on whether it will maintain operations in Ayutthaya’s flood-prone Saha Rattana Nakorn Industrial Estate.
Managing Director of Ecco (Thailand) James Phillips said the new factory in Saraburi is scheduled to be completed in September 2013.
The 55-rai plot in Hemaraj Industrial Estate is 5.5 metres above sea level and is fenced in by a dyke that adds an additional three metres of buffering. Ecco’s website says land in Saraburi has never flooded.
The location is situated near a major highway, offering accessibility to Bangkok and Ecco’s Ayutthaya operations.
Last year, Ecco’s shoe factory and leather tannery in Ayutthaya were inundated as floods washed over seven industrial estates there and in Pathum Thani province.
The disaster affected 35% of Ecco’s global production capacity.
While other flood-hit industrial estates have completed 70% construction of dykes to prevent recurring flooding, Saha Rattana Nakorn is the only one with no clear flood-prevention plan.
After last year’s floods, the estate was the last one to drain the remaining water from its site. Ecco’s 3,500 employees there halted production early in October and resumed partial manufacturing in mid-January.
Some production shifted temporarily to a site in Lamphun province. Ecco also runs a smaller plant in Phichit province with 1,500 employees. Despite 43 factories threatening to leave, Phillips said the company has not decided to close up shop in Saha Rattana Nakorn yet.
“They said the temporary dyke and road improvement will be completed by the beginning of September,” he said.
“The government has to ensure it will happen. We have not decided to move out from Saha Rattana, but a permanent solution is needed. There are a lot of problems there.”