Low-risk sectors

Lower-risk industries include steel, glass, paper and automotive manufacturing, although they still face rising costs.

Steel production has energy costs of 15.3%, while glass stands at 12.4% and paper at 11.2%. The automotive sector has energy costs of 7.3% but remains exposed to broader supply chain pressures.

Heavy reliance on imports

Thailand remains highly dependent on Middle Eastern raw materials. Imports of naphtha, used in plastic production, account for 90.2% of supply.

Urea fertiliser imports stand at 71.4%, mainly from Saudi Arabia and Oman, affecting farmers in fruit, rice and crop sectors.

Helium imports account for 56.8%, impacting electronics manufacturing and medical industries.

In the short term, policymakers are being urged to focus on easing living costs and supporting business liquidity. Over the longer term, economists recommend accelerating the transition to renewable energy and increasing reliance on domestic production inputs, such as organic fertilisers and plastic recycling.

SCG shifts to daily cost management

The situation has forced companies to adjust their strategies. SCG has halted operations at its olefins plant in Rayong to manage feedstock supplies, shifting production to facilities in Map Ta Phut.

Thammasak Sethaudom, president of SCG, said the Middle East situation directly affects the petrochemical industry, particularly shipping routes through the Strait of Hormuz, which is a key global choke point. SCG relies on the route for 50–60% of its raw materials, increasing pressure on freight and energy costs.

The company is responding by diversifying supply sources, managing inventory in real time and prioritising strategic domestic customers, while operating under a “war room” approach to manage rising production costs.

Transport sector raises fees

Thongyu Kongkhan, president of the Land Transport Federation of Thailand, said rising diesel prices had forced transport operators to increase service fees.

The first adjustment took place on April 1, when diesel prices reached 40 baht per litre, followed by a second increase on April 6, when prices rose to 50 baht per litre. However, many operators are still holding rates steady to avoid passing costs on to customers.

Operators are also facing rising costs for engine oil, lubricants, filters and tyres, which have increased by 20–25%. Meanwhile, demand for transport and logistics services has fallen by 15–20% compared with last year, particularly in agriculture and construction.

Double A seeks new channels to reduce risk

Jatupon Dumnernchanvanit, executive director of Double A (1991) Plc, said the Middle East conflict has pushed up operating costs, although the company has been able to absorb the impact over the past two months.

The company is adapting by seeking new business channels and managing risks related to freight costs, currency volatility and supply chain disruptions.

Transport costs, particularly for wood and paper, remain a major burden. Double A has invested in 215 electric trucks and plans further expansion to reduce reliance on oil-based energy.

“The shift to EV trucks is a winning formula,” he said, adding that the company also generates its own electricity to improve cost competitiveness and sustainability.

Double A exports to more than 130 countries. With rising shipping costs and longer lead times, it is sending products earlier to build inventory for distributors, while also using alternative transport routes.

Despite higher costs, the company has maintained domestic paper prices and ensured sufficient supply.

Lion launches Cost Transformation

Prasert Suruttanamethakul, managing director of Lion (Thailand) Co Ltd, said production costs have surged, particularly for detergents, dishwashing liquid and shower cream.

Petrochemical-based inputs such as Linear Alkyl Benzene (LAB) have risen by more than 100%, while plastic packaging costs have increased by 30%. Palm oil-based inputs have also become more expensive.

Despite the pressure, the company has no immediate plans to raise prices, instead focusing on internal efficiency measures and launching a “Cost Transformation” initiative.

Lion has set a target of reaching 30 billion baht in sales by 2030, with cost restructuring and agile management seen as key to maintaining competitiveness.

Measures include reducing packaging materials and cutting plastic use by 40 tonnes per year.

Businesses absorb rising costs

Other companies, including Farmhouse, Mama, EssilorLuxottica, Onetouch, BJC, Big C and LG Electronics, said they are working to absorb rising costs while managing supply chains to prevent product shortages.

The situation highlights how rising energy costs are cascading across Thailand’s economy, affecting everything from production and transport to consumer prices and long-term competitiveness.