Around 500 Thai and foreign workers were laid off by a Taiwanese mining company operating in Thailand this week after the company said it had lost its access to raw materials from China due to the outbreak of the coronavirus.
Sica New Materials in Kanchanaburi said that it was shutting its operations at its Kanchanaburi plant immediately and that unemployment compensation was in the process of being paid out.
Workers at the factory, which produces quartz from silicon metal, said they were not notified in advance of the shutdown, according to Thai media.
Workers have been forbidden from talking to the media and queries from Thai Enquirer were not returned or declined citing company policy.
It is one of the first examples of sectors outside of tourism and travel that are being affected by the widening epidemic in China.
Investors wiped nearly US $393 billion from China’s benchmark stock index on Monday over fears about the disease and its economic impact, according to Reuters.
“The new virus has created alarm because it is spreading quickly, much about it is unknown, and authorities’ drastic response is likely to drag on economic growth,” said the Reuters analysis.
Thailand has felt a knock-on impact from China’s downturn. The University of the Thai Chamber of Commerce said last week that the spread of coronavirus could pull the country’s GDP down by 1.3 per cent.
Thailand’s Ministry of Finance followed suit and lowered its GDP projection from 3.3 per cent down to 2.8 per cent. The numbers now look more in line with other institutional predictions from the World Bank and market analysts who said that the ministry’s numbers had been too optimistic.
The Stock Exchange of Thailand (SET) is also suffering from the instability caused by the virus with the index dropping nearly 40 points last Monday due to news about the scope and scale of the epidemic in China.
Thai government economists have recommended several course of actions to the Prayut government including extending visa exemptions to more countries, accelerating the disbursement of the remaining 2019 fiscal budget, accelerating the investment projects of state-owned enterprises, increasing loan measures from specialised financial institutions, and to keep the baht between 31.5 to 32 baht per US dollar to support export competitiveness.
The Tourism and Sports Ministry have already taken up the recommendations and have proposed to the cabinet more visa exempted countries as well as to petition Prayut not to scrap visa-on-arrivals for Chinese tourists.
The move has been met with criticism from Thai society who accuse the government of valuing profit over the wellbeing of its citizens.
Additional reporting by Erich Parpart.