12 October 2011 08:14 [Source: ICIS news]
By Nurluqman Suratman
SINGAPORE (ICIS)--The widespread flooding in Thailand, which is threatening to break through barriers protecting the capital Bangkok later this week, is expected to slash GDP growth by 0.6-1.0% this year, analysts said on Wednesday.
Water has spilled over the banks in eight ?xml:namespace>
The floods, considered to be
Thai officials are now rushing to finish work on three additional flood barriers and five more canals over the next week to drain water from the capital before high tides peak on 17 October, the analysts said.
Meanwhile, the country’s petrochemical hub of Map Ta Phut, in Rayong province, is safe from the floods, as it is near the eastern coastal lines, according to Lertchai Kochareonrattanakul, an analyst at Bangkok-based brokerage firm Fitch Ratings.
“Most of the plants in the chemical sector are located in Chanburi and Rayong provinces, so they are still safe as they are located quite far away from the central areas,” Kochareonrattanakul said.
“The floods will mostly impact downstream industries such as electronics and automobiles, but no significant impact on petrochemicals is expected,” he added.
Some 1,215 factories of various industries in 33 provinces have already been submerged by flood water, with some 41,099 workers affected so far, analysts at Bangkok-based brokerage DBS Vickers Securities said in a research note.
Damages to the agricultural sector is estimated at Bt54bn ($1.7bn), industries at Bt20bn, trade at Bt9.8bn, tourism at Bt5.7bn, public utilities at Bt9bn, and housing at Bt2.2bn, according to the note.
The Bank of Thailand estimates overall flood damages at Bt60bn, or 0.6% of GDP, while the country’s National Economics and Social Development Board estimates damages from the flood to hit Bt80bn, or about 0.9% of GDP, the note said.
“If flood waters reach
Japanese automaker Honda Motor Corp has been forced to shut production at its factory in
The automotive industry is an important pillar of demand for petrochemicals and is also a large end-market for materials such as polypropylene (PP), nylon, acrylonitrile-butadiene-styrene (ABS), polyurethane (PU) flexible foam, synthetic rubber, as well as paints and coatings.
Meanwhile, Indorama Ventures’ wool yarns and polyethylene terephthalate (PET) polymers facilities in Lopburi province remains shut because of the floods, a company spokesperson told ICIS.
“Our Lopburi factory, representing 5% of total revenue, is off line due to flooding. We have full coverage for any business losses,” the spokesman said.
No restart dates have been set for the factory, he added.
The floods, however, could have a positive impact on some firms such as building materials producers and distributors, according to DBS Vickers Securities.
Siam Cement Group, Thailand’s largest industrial conglomerate, stands to benefit from reconstruction efforts once the flood waters subside, it said.
“Demand for cement and building materials should be down in the near term, but [it should] recover strongly when reconstruction starts,” the research firm added.
($1 = Bt30.97)
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