Danish shoe manufacturer Ecco shut down a factory in the northern province of Pichit effective yesterday (11 November 2013), reasoning that it could no longer absorb higher production cost following the introduction of nationwide THB300 minimum daily wage in January this year. Its main manufacturing plant in the central Thai province of Ayutthaya, where some 3,000 workers are employed, continues its normal operation.
A total of 1,138 workers, 1,000 of them daily contract workers, at Pichit factory were laid off after they received compensation and partial bonus payment.
Pichit Governor Surachai Khanarsa confirmed that Ecco, which had employed local workers to partially assemble shoes at a factory in Vachirabarami district in the past 6 years, had ceased operation.
Ms. Kerdsiri Sawetmalanon, a provincial social welfare and labour protection offial, quoted an unnamed Ecco executive as saying the minimum daily wage rose from THB170 to THB300 when the Thai government enforced countrywide minimum daily wage on January 1 this year. Ecco used to ship materials to the factory in Pichit where local workers had them sewn together.
“Pichit used to have a competitive pool of skilled labour, most of them farmers who had been trained to use industrial sewing machines to assemble shoes in their free time outside planting season,” the official said.
However, Ecco has offered to employ any workers who were willing to relocate to work at its main production facility in the central province of Ayutthaya. According to Kerdsiri, about 300 workers had taken up the offer so far.
