Non-Agriculture and Infrastructure Sectors

1. CHAPTER IV
NON-AGRICULTURAL SECTOR
Introduction
Lop Buri province is located in the upper part of the central region of Thailand, ‘group 2’,
with the region also containing other provinces such as Sra Buri, Lop Buri, Singh Buri
and Chainat. It is approximately 150 kilometers north of Bangkok, covering an area of
6,641.859 km2. The district under consideration in this study is Khok Charoen, in the
North of Lop Buri province. The area is connected to Nakhon Sawan province (Tak Fa
district and Ta Kle district), and Phetchaboon province (Sri Thep District). The non-
agricultural sector consists of three major sub-sectors: industry, trade and commerce and
tourism. Table 4.1 below shows the economic structure of the Lop Buri province. Here
one can see that non-agriculture sector is a very important part to the provincial economy,
with industry and trade and commerce holding 36.88% and 14.11% of the provincial GPP
respectively. Tourism which is another area under consideration in this sector may be
part of ‘Others’ showed in the same table. Similarly, table 4.2 shows the absolute values
of the income generated, segregated into different sectors; again the percentage share of
each sector is shown.
Table 4.1 General information of Lop Buri province.
Population (200 5) 73 7,89 1 people
Area 6,64 1.85 9 s q. m.
Number of dis tricts 11 dis tricts
Gros s Provincial Product (GPP) (200 4) 66 ,5 04 million baht
Indus try 36 .8 8%
Trade and Commerce 14 .1 1%
Ag riculture 12 .5 2%
Trans port 3.29 %
Cons truction 3.14 %
Others 30 .1 6%
Average income per pers on (2 54 7) 80 ,6 25 baht
Source: Provincial employment statistics (2004)
Contrasting the case in provincial level, the non-agricultural sector is not a primary sector
engaged by the people of Khok Charoen district like the agricultural sector.
Nevertheless, this sector has a role to play in the economic development of the district as
it can still be regarded as additional employment opportunities and income for the local
people
Table 4.2 Breakdown of income generated by sector.
S ector Monetary value s (million baht) S hare (% )
Indus try 22,22 9 3 6.63
Trade and Comme rce 8 ,2 91 1 3.66
Government 7 ,5 71 1 2.47
Ag riculture 7 ,4 33 1 2.25
Education 2 ,9 66 4.89
Cons truction 2 ,0 88 3.44
Trans port 1 ,9 19 3.16
Re al e s tate 1 ,6 85 2.78
Electricity and water s upply 1 ,5 67 2.63
Bank ing 1 ,4 19 2.34
Hotel and res taurant 1 ,2 98 2.14
He alth and s oc ial welfare 1 ,2 03 1.98
Community, s ocial and pr iv ate s ervice 6 35 1.05
Fis hery 2 12 0.35
Mining 1 13 0.19
Hous e maid 33 0.05
Source: Provincial employment statistics ,2004
128

2. To give a picture on the employment status within Lop Buri province, one can see from
Figure 4.1 that roughly equal shares of the population are employed in agriculture and
non-agriculture, at 46%. Non-agricultural, however, comprises of many economic
activities and the breakdown of this is shown in Figure 4.2.
Figure. 4.1 Employment status at provincial level. Source: Provincial Employment Statistics (2005)
Others, 1.34%
Public sector,
6.50%
Agriculture,
45.92%
Non-agriculture,
46.24%
Source: Provincial Employment Statistics (2005)
Figure: 4.2 Breakdown of employment by sub-sector in Lop Buri (in number of worker)
Others 21180
Trans port and cargo 6,772
Government, arm y and other public services 10,079
Education 11,595
Hotel and restaurant 20,639
Construction 26,971
Wholes ale, retail, car and motorcycle repair, domes tic product 55,360
Factory production 78,795
Agriculture, hunting, and fores try 196,469
0 50,000 100,000 150,000 200,000 250,000
Source: Provincial Employment Statistics (2005)
Overview of non-agricultural sector in Khok Charoen district
Khok Charoen is one of the less prominent districts in the Lop Buri province whether in
terms of area, population, level of development or the income generate to the province. It
is well-evident that this is not the most appropriate area for the development of the non-
agricultural sector; this is noticeable in the vision of the district office to develop Khok
Charoen as an organic agricultural source. Nevertheless, the non-agricultural sector has a
role to play in the development of the district, as well as the improving the well-being of
its people.
Table 4.3 shows a comprehensive picture of non-agricultural sector in Khok Charoen
district. In terms of industry, there is little variety in terms of type of industry and there
are very few industrial developments within the area. Tambon Yang Rak has the highest
density per 10 km2 with 1.52. The levels of industrial development in Khok Charoen and
Khok Samae San as measured by level of density are of similar scale at 1.24 and 1.42
129

3. respectively. There is only one unit of industry in Nong Makha and none in Wang
Thong; indicating obvious areas that can be improve.
Table 4.3 Comprehensive picture of Non-agricultural sector in Khok Charoen district
Indicators/Tambon Khok Chareon Yang Rak Khok Samae San Wang Thong Nong Makha
Area (sq. km) 72.94 65.71 42.34 25.34 110.81
Population (person) 7296.00 7783.00 3231.00 2638.00 3509.00
Number of cottage industries per 10 sq. km 1.23 1.52 1.42 0.00 0.09
Number of OTOP
per 10 sq. km. 1.51 0.15 1.89 0.00 0.27
Number of market
per 1000 population 0.27 0.51 0.31 0.38 0.28
Number of service and repairing units
per 1000 population 5.21 0.26 1.24 0.00 7.69
Number of wholesale and retail
shops per 1000 population 9.87 8.87 10.83 13.27 13.68
The number of OTOP projects in Khok Charoen is of fair level. However, these OTOP
projects are clustered in 3 sub-districts in Khok Charoen and Khok Samae San, with the
density indicator showing 1.51 and 1.89 respectively. Yang Rak and Nong Makha have
little development in this area and again there is nothing in Wang Thong.
Looking at trade and commerce, the indicators shown here are based on number of
market, number of service and repair units, as well as number of whole and retail shops;
they are shown in terms of density per 1000 population. Here one can see that the
population in Yang Rak is most accessible to market places, with the market density of
0.51 per 1000 population. On the other hand, although Khok Charoen is one of the
largest sub-districts in terms of population, there exists only 2 market places; hence the
density being the lowest at 0.27. Nong Makha performs the best in our service and
repairing unit indicator with 7.69 shops per 1000 population. This is closely followed by
Tambon Khok Charoen with 5.21 units per 1000 population. An area of concern is Wang
Thong where no service providers are located at all. Lastly, the number of retail and
wholesale shops are most readily available in Nong Makha where there are 13.68 shops
per 1000 population. Wang Thong also performs very well in this indicator with the shop
density of 13.27. The sub-district which performs the worst here is Yang Rak. However,
this may due to the fact that it has the largest number of population. According to the
overall picture generated from these indicators, one can give an initial conclusion that
Khok Samae San is the most developed in the non-agricultural sector, followed by Nong
Makha, Yang Rak, Khok Charoen and Wang Thong respectively. It should be mentioned
that this is only a brief screening process to give an idea of the overall situation of the
non-agricultural sector in Khok Charoen district.
In terms of tourism, it may not be too much of an exaggeration to say that this is almost
unheard of in Khok Charoen district. There is no recorded number of visitors in the area
and there is no obvious existing tourist attraction.
130

4. 4.1 Industrial Sector
4.1.1 General information
The location of Lop Buri is suitable to the development of industry. Overall, Lop Buri
has good level of infrastructure development in terms of road network, communication,
irrigation system and power supply. It is also close to Bangkok, being around 155 km
away. 70 per cent of the area is hilly and mountainous, commonly known for the rich
availability of minerals and ores such as copper, limestone and pyrite. The other 30 per
cent of the lying in plain area are suitable for agricultural activities such as paddy,
sugarcane, maize and cassava. According to the data from the Provincial Industrial
Office, there are in total 583 industries in Lop Buri in 2008. The majority of industrial
development in Lop Buri is in the form of agro-processing, constituting 25 per cent of
provincial total. Other industries which are prominent in the province include: machinery
and equipment (13%), food and drink (11%), non-metal (9%), transport (8%) and metal
(7%). The industries which have grown the most over the last few years are agro-
processing, machinery and equipment, and metal.
4.1.2 Major institutions supporting industries and OTOPs
Table 4.4 Summary of supporting institutions of industries and OTOPs
No Major institutions Type of support Organizations to get the support
1 BOI Policy and consultancy Registered industries
2 Provincial Industry Office Registered industries
§Consultancy for funds (linked with different
banks)
§Promotion for projects
3 Chambers and Commerce Office Different types of industries and
§Policy support business organizations
§Promotion of Industries
§Consultancy for business operation
§Information for business
§Mediator between government and private
sector
4 VDF OTOPs, SMEs, other cottage industries
§Fund
5 Community Development Office OTOPs, SMEs, other cottage industries
§Policy support
§Training
§Project promotion (OTOPs)
§Fund
6 Non-formal Education Office Occupational groups
§Training
7 Provincial Labour and Welfare Office Labour of different industries
§Labour rights
§Welfare
8 Pollution Control Department Different Industries
§Pollution control measures and support
131

5. • Board of Investment (BOI)
Lop Buri is located in Industrial Zone 3 in the “Policies and Criteria for Investment
Promotion” established by the Thailand’s Board of Investment. With this, come a
maximum number of economic incentives allocated to different geographic zones,
including:
- Exemption of import duty on machinery
- Corporate income tax exemption for 8 years provided that a project with capital
investment of 10 million baht or more (excluding cost of land and working
capital) obtains ISO 9000 or similar international standard certification within 2
years from its start-up-date, otherwise the corporate income tax exemption will be
reduced by 1 year
- Exemption of import duty exemption on raw or essential materials used in the
manufacturing of export products for 5 years.
- Deduction from net profit of 25 percent of the project's infrastructure installation
or construction costs in addition to normal depreciation, and such deductions can
be made from the net profit of one or several years within 10 years form the date
of first revenue derived from the promoted activity
-
Figure: 4.3 Industrial Development and Planning Zone of Thailand
Source: BOI ,2008
• Provincial Industrial Office
The direction of regional development in Thailand follows a top-down approach,
stemming from the Office of the National Economic and Social Development Board
(NESDB), then through national policies laid by ruling government before it comes down
to provincial’s strategies. For the period between the years 2009-2012, the overall plan
for the provinces in the upper part of the central region ‘group 2’ has put emphasis on
restructuring the process of producing safe food. The Ministry of Industry has also laid
132

6. policy on ‘1 Province 1 Agro-Industrial Product’ to be promoted in all of the 75
provinces from the year 2007. In respond to this, the provincial’s strategy is to develop
Lop Buri as the largest agro-processing industry unit among the 4 associated provinces
within this region.
The Industrial Office has three main responsibilities. First of all, it has a duty to monitor,
control, support and act according legislations on industry, mining, royalty, regulation of
minerals, industrial product standard and other related laws. Secondly, it should develop
and cooperate with development plan to support industrial development at provincial
level, as well as to cooperate in the implementation and evaluation of the planned
strategy. Lastly, the PIO needs to cooperate or support the operation of other relevant
organizations.
• Provincial Community Development (CD) Office
Concerning the industrial sector, the CD office is responsible for promotion and support
of community enterprise particularly in the form of OTOP projects. Other
responsibilities include formulating community development plan, to develop potentials
of the local population through participatory approach with the view of achieving self-
sufficiency etc.
• Provincial Natural Resources and Environmental Office
The Natural Resource and Environment Office has two major functions. First, its role is
to implement waste treatment and disposal system and enhancing waste disposal capacity
of local administrative authorities for environmental protection. In addition, it has the
responsibility to promote the role of private sector in research and development for
energy conservation, environmental management, recycling of raw materials and clean
technology. However, this has not been necessary in Khok Charoen district as the poor
level of industrial development in the area has meant that the problem of pollution is
minor.
• Provincial Labour and Welfare Office
The objectives of the Labour and Welfare Office are laid down as follow:
- Promotion for the private sector to play a part in developing labour skills and
expertise in order to improve the quality and skills of the labour force,
- Implementation of adequate social security measures.
- Promotion in the creation of a labour relation system that will provide
opportunities for all sides concerned to participate in the resolution of labour
problem as well as to develop and protect labours in an efficient and just manner.
- Protection of Thai laborers living overseas from being exploited by employment
brokers and employers.
- To stipulate appropriate measures for dealing with foreign labour, taking into
account the private sector’s need for labour as well as the requirements of
maintaining order and internal security and the need to develop domestic labour
as replacement in key areas.
133

7. 4.1.3 Current situation in Khok Charoen
According to the data provided by the Provincial Industrial Office, the total number of
industries in the province of Lop Buri amounts to around 600 units. The distribution of
these industries among different districts within Lop Buri can be seen in table 4.4. Here
one can see that Khok Charoen district is the least developed with only 3 existing
industries in the area. This constitutes around 0.51% of provincial total. The same
conclusion can be reached when comparing industries in Khok Charoen to other districts
according to the amount of capital invested, number of workers and the production
capacity (as measured in horsepower). From this, one can see that the combined capital
invested in Khok Charoen district is valued at 1,170,000 baht out of the total of 8.1
billion baht for the whole of Lop Buri province (0.014%). In addition, there are only 3
industrial workers registered in Khok Charoen out of the total 12,115 for Lop Buri
(0.025%). Lastly, the combined horsepower for industries in Khok Charoen district is 48,
compare to 267,200 hp for Lop Buri (0.018%). It must be mentioned that this analysis is
purely based on the data given by the Provincial Industrial Office, whereby one must
remember that this is not necessarily a realistic practical data but rather the data used for
the purpose of registering the industry. Therefore, this may not be an unrealistic
representation of the industry situation within Khok Charoen. This is most noticeable
when looking at the number of workers in which in Khok Charoen there are only 3
people.
To further elaborate on this, from our primary data collection from different Tambon
Administrative Offices (TAOs) as well as an overview of the latest NRD2C in 2007, we
have found that there are in fact a minimum 26 industry units within Khok Charoen.
These units are all rice mills. In Thailand, based on the amount of invested capital,
industries are divided into three categories: cottage, small and medium, and large
industries. Industries with invested capital of less than one million baht are classified as
cottage industries, from one to one hundred million baht are small and medium industries
and more than one hundred million baht are large industries. Based on these criteria,
Khok Charoen district comprises of only one type of industry: cottage industry. In
addition, from our field visit to the area, we have found that there is at least one extra
home-based industry in Khok Charoen in the form of cassava drying field. The capital
invested here was 10 million baht and thus it can be classified as a small to medium
industry. It is also worth mentioning that there exists a large scale sugar factory in Sri
Thep district of Petchaboon province which is very near to Khok Charoen and has a large
influence on the local population where the primary occupation is based in agriculture.
Table 4.5 Industry situation in Lop Buri province
Di strict Num be r of industrie s P e rce nta ge sha re
Muang 194 33%
Chai Badarn 96 16%
Pattana Nikom 82 14%
Khok Samrong 63 11%
Ban M i 53 9%
Tha Wung 36 6%
Nong M uang 21 4%
Sra Boas t 17 3%
Tha Luang 13 2%
Lum Sonthi 5 1%
Khok Chareon 3 1%
Source: Provincial Industrial Office (2008)
134

8. Table 4.6 Current situation in Khok Charoen district
Type Sub-district Capital input (baht) Number of worker Horsepower
Rice mill Khok Chareon 420,000 1 16
Rice mill Khok Chareon 400,000 1 16
Rice mill Khok Chareon 350,000 1 16
Total in Khok Chareon 1,170,000 3 48
Total in Lop Buri 8,110,385,130 12115 267200
% share 0.014 0.025 0.018
Source: Provincial Industrial Office (2008)
Looking at the distribution of these cottage industries among different sub-districts (as
shown in Figure: 4.4), one can see that the areas with the largest development of industry
are Yang Rak and Khok Charoen, with the percentage share of 38 and 35 per cent
respectively. 24 per cent of these industries exist within Khok Samae San. There is only
1 cottage industry in Nong Makha (4%) and no industry exists in Wang Thong. Note that
the cassava drying field which is classified as a small and medium scale industry is not
included here; for reference it is located in Tambon Khok Charoen.
Figure: 4.4 Percentage distribution of cottage industries by location/tambon
0, 0%
6, 23%
9, 35% Khok Chareon
Yang Rak
Nong Makha
1, 4% Khok Samae San
Wang Thong
10, 38%
Since all of the industries mentioned (rice mills) can be classified as agro-processing
industries, it is interesting to relate this to the number of households partaking
agricultural activities; this is shown in table 4.4. Since Wang Thong has no industry at all,
it has been excluded from this analysis. Nevertheless, a conclusion can be reached here
that Khok Samae San is the most advanced with 58 households to one industry. This is
followed by Yang Rak, Khok Charoen and Nong Makha respectively.
Table 4.7 Number of agricultural household per one agro-processing industry
Indicator/ Number of household Number of agro-processing Number of household
Sub-district working in agricultural sector agro-processing industrt per one industry
Khok Chareon 844 9 94
Yang Rak 647 10 65
Nong Makha 191 1 191
Khok Samae San 345 6 58
Wang Thong 391 0 NA
135

9. Figure: 4.5 Distribution of cottage industries (rice mills)
136

10. 4.1.4 Rural Industry - OTOP
Khok Charoen district relies heavily on agricultural sector providing primary occupation.
However, local people have indigenous skills and other trained skills by local
government agencies which can be utilized in the non-agricultural sector to create more
employment and income. The target group is mostly females who are willing to take an
additional employment to support their work in the agricultural sector. Because of the
availability of raw materials and skilled labour, the Royal Thai Government (RTG)
introduced a program called “One Tambon One Product” (OTOP).
OTOP program was adopted from the One Village One Product (OTOP) movement in
Oita Prefecture, Japan. The scheme has an objective of mobilizing local resources to
produce local products which can be sold both domestically and internationally. The
RTG used this program as a framework for OTOP and has been promoting local
industries through the manufacturing of attractive specialised products based on the
abundant native culture, tradition and nature. The target administrative unit is as the
name suggested, at Tambon or sub-district level. The specific objectives of OTOP are
laid out as follow:
§ To construct a comprehensive database system to accommodate necessary
information from every Tambon in Thailand
§ To promote local Thai products from every Tambon, and to facilitate the buy-and-
sell procedure.
§ To bring internet and other information technology to villages.
§ To encourage and promote tourism in Thailand to Tambon level and consequently
raising income of the local community.
§ To encourage rural people to exchange information, ideas and improve
communication level across various Tambons.
In 2006, there are in 450 OTOP projects in the province of Lop Buri. The majority of
these projects are located in Muang district, accounting for 24 per cent. This is followed
by Ban Mi, Tha Wung, Chai Badarn, Khok Samrong, Nong Muang with 14, 11, 10, 9 and
8 per cent respectively. There are 24 OTOP projects currently in Khok Charoen district
accounting 5 per cent of total in Lop Buri. In terms of number of OTOP projects, Khok
Charoen is ranked at 8 out of 11 districts in Lop Buri; this is illustrated in Figure: 4.6.
Figure: 4.6 Distribution of OTOPs among different districts. Source: Provincial CD office (2006)
17, 4%
Muang
19, 4%
Ban Mi
24, 5% Pattana Nicom
16, 4% 108, 24% Tha Wung
43, 10% Khok Samrong
Nong Muang
36, 8% 65, 14% Chai Badarn
39, 9% 33, 7% Sra Boast
50, 11%
Khok Chareon
Tha Luang
Lum Sonthi
137

11. Comparing the statistics on the number of OTOP projects within Khok Charoen district
between the years 2005 and 2006, it is worrying to see the number has only increased by
one unit; this is 4.17 per cent increase. It must also be mentioned that, with the exception
of Pattana Nicom whereby the number of OTOP has actually dropped by 21.21 per cent,
Khok Charoen district has seen the small percentage of growth in the amount of OTOP
projects. In this regards, Khok Charoen is rank 8 (2006) as compared to 6 in 2005.
Table 4.8 Change in number of OTOP projects in different districts between 2006-07
Number of OTOPS Percentage
District 2006 2007 change
Muang 67 108 37.96%
Ban Mi 45 65 30.77%
Pattana Nicom 40 33 -21.21%
Tha Wung 23 50 54.00%
Khok Samrong 17 39 56.41%
Nong Muang 28 36 22.22%
Chai Badarn 35 43 18.60%
Sra Boast 13 16 18.75%
Khok Chareon 23 24 4.17%
Tha Luang 13 19 31.58%
Lum Sonthi 11 17 35.29%
Total 315 450 30.00%
Source: Provincial CD office ,2007
The degrading situation of OTOP projects in Khok Charoen can be emphasise when
analyzing the amount income generated from these projects within the area. Over the
period of 3 years from 2005-2007, Khok Charoen has experienced a steady decline in
terms of the income generated from products; reducing from 15,726,039 baht in 2005 to
14,249,451 baht in 2007. In fact, Khok Charoen is one of only three districts in Lop Buri
which have experienced a decline in income generate from OTOPs. Overall, the income
generated from Khok Charoen in these products is quite low relative to other districts
(rank at 7 out of 11). This is quite worrying considering the quality of the products in
Khok Charoen. Looking at table 4.7, it should be raised that Khok Charoen is only
second to Ban Mi district in terms of the amount of OTOP with 5 stars success status,
with 4 products being qualified. Similarly, in terms of products with 4 stars, Khok
Charoen is rank at third place with only less number of quality products than Muang and
Ban Mi districts.
138

12. Table 4.9 Comparison of income generated from OTOPs among different districts
Amount of income generated from OTOP projects (baht) Percentage change
District 2005 2006 2007 2006-2007
Muang 88,269,444 110,476,363 142,949,965 22.72%
Ban Mi 242,917,542 294,608,560 161,463,200 -82.46%
Pattana Nicom 6,969,590 8,632,680 11,190,774 22.86%
Tha Wung 25,585,100 55,980,550 86,840,950 35.54%
Khok Samrong 18,393,857 21,645,008 28,871,661 25.03%
Nong Muang 26,894,845 31,809,323 34,376,500 7.47%
Chai Badarn 108,679,900 159,701,800 183,552,130 12.99%
Sra Boast 10,803,870 11,719,200 12,185,850 3.83%
Lum Sonthi 4,510,211 6,109,764 6,739,000 9.34%
Tha Luang 4,552,964 5,594,476 3,535,746 -58.23%
Khok Chareon 15,726,039 15,289,373 14,249,451 -7.30%
Total 553,303,362 721,567,097 685,955,227 -5.19%
Source: Provincial CD office,2007
Table 4.10 Comparison of successful OTOPs (4 stars or more) in different districts of
Lop Buri
Success status Total
District 4 Star 5 Star
Muang 13 3 16
Ban Mi 11 8 19
Pattana Nicom 5 - 5
Tha Wung 3 - 3
Khok Samrong 4 - 4
Nong Muang 6 - 6
Chai Badarn 4 - 4
Sra Boast 2 - 2
Lum Sonthi 2 - 2
Tha Luang 1 - 1
Khok Chareon 6 4 10
Total 57 15 72
Source: Provincial CD office, 2007
139

13. Table 4.11 List of OTOPs in Khok Charoen district
Sl. No. Tambon Village no. OTOP's product Registered groups
1 Khok Chareon 5 Mudmee clothing product Weaving group of Khok Chareon
2 7 Mudmee clothing product Social welfare housewives group
3 6 Weaving mudmee product Weaving group of Khok Chareon
4 4 Mudmee clothing product Thai cloth weaving network v.4 of Tambon Khok Chareon
5 9 Mudmee clothing product Thai cloth weaving network v.9 of Tambon Khok Chareon
6 4 Mudmee clothing product Thai cloth weaving network v. 4 of Tambon Khok Chareon
7 4 Mudmee clothing product OTOP artists' centre
8 6 Mudmee clothing product Indegenous Knowledge Development centre
9 6 Mudmee clothing product Forward Vocational Leadger group
10 6 Processed clothings from mudmee Industry group
11 1 Domestic odour product Charcoal processing group
12 Khok Samae San 1 Mudmee cloth product Thai cloth weaving network v. 1 of Tambon Khok Samae San
13 3 Mudmee cloth product Thai cloth weaving network v. 3 of Tambon Khok Samae San
14 5 Mudmee cloth product Thai cloth weaving network v. 5 of Tambon Khok Samae San
16 6 Mudmee cloth product Thai cloth weaving network v. 6 of Tambon Khok Samae San
17 8 Broom making group Broom making group
18 3 Basketry Basketry group of Bang Muang
19 1 Wooden chair Private cooperative group Suan Pa of Lop Buri
20 Nong Makha 8 Thai dessert Agricultural house wives group of Tambon Nong Makha
21 8 Mudmee clothing product Thai cloth weaving network v. 8 of Tambon Nong Makha
22 8 Mudmee clothing product Thai cloth weaving network v. 8 of Tambon Nong Makha
23 Yang Rak 2 Mudmee clothing pattern Thai cloth weaving network v. 12 of Tambon Yang Rak
Source: Provincial CD office (2005).
* Note there is one extra OTOP product started by an individual in 2006 but data is not known.
Analysing the distribution of OTOPs among different sub-districts, one can see that these
projects are clustered in two Tambons, namely, Khok Charoen and Khok Samae San.
Tambon Khok Charoen has the highest number of OTOPs with 11 units, accounting for
48 per cent of district total. This is closely followed by Tambon Khok Samae San with 8
projects (35%). Nong Makha and Yang Rak have few OTOP projects with 14 and 4 per
cent respectively. It should also be mentioned that there are no OTOP project in Tambon
Wang Thong.
Furthermore, there are only three categories of OTOP projects in Khok Charoen district.
It can be pointed out that the overwhelmed majority of these projects are in the form of
cloths and fabric (18 projects, 79%). This is unsurprising as the district is well known for
its weaving products. Domestic products such as basketry, broom production also hold a
small percentage of 17 per cent, with 4 projects in this sector. In food sector, only Thong
140

14. Muan production in Nong Makha comes from Khok Charoen district. This accounts for
4 per cent of the total. Again the majority of weaving projects are clustered in Khok
Charoen. Khok Samae San, however, is the most diverse in terms of different OTOP
projects in the area.
Figure: 4.7 Distribution of OTOPs by location/Tambon
12 11
N ber of O P groups
10
8
8
TO
6
4 3
um
2 1
0
0
Khok Chareon Khok Samae Nong Makha Yang Rak W ang Thong
San
Tambon
Figure: 4.8 Distribution of OTOPs by function among Tambon
12
10
10
Domestic
8 product, 4, 17% Food, 1, 4%
Food
6 5 Cloths and fabric
Domestic product
4 3
2
2 1 1 1 Cloths and
fabric, 18, 79%
0
Khok Chareon Yang Rak Nong Makha Khok Samae Wang Thong
San
141

15. Figure: 4.9 Distribution of OTOPs by function among different areas within Khok Charoen district
142

16. 4.1.5 Comparison among Case Studies
During the reconnaissance survey and the sectoral field study, 7 different units of
industry were interviewed. This consists of 3 OTOP projects, 2 home-based factories, 1
small occupational group enterprise and one large sugar factory in a nearby province.
The purpose of these case studies is to gain an insight as to how the different industries
are operate and the successfulness of such operations in order to identify the problems as
well as establishing the potentials within this sub-sector. The analysis on sugar cane
factory will be based on the influence that this factory has on the population of Khok
Charoen. This analysis will consequently be used as a basis for project proposal to be
considered for implementation by the district.
Case Studies of OTOPs
The three OTOP groups used as case studies are all community- based OTOP groups. A
community-based OTOP group refers to a group of local people who are partaking in a
small local group enterprise by utilizing their common interests and skills in particular
types of products. Generally speaking, these groups are form to provide opportunities to
gain additional income from their primary occupation in agricultural sector which may be
turbulent due to a number of factors such as draught, low price of agricultural products.
The OTOP groups get support from a number of public organizations such as BAAC,
Community Development Office, Royal Thailand Government, and Tambon
Administration Office to setup projects. Additional capital has to be raise from group
members by selling enterprise’s shares and the income earned is distributed to each
member according to the number of share purchase.
These OTOP groups under consideration are weaving group in Tambon Khok Charoen,
weaving group in Tambon Khok Samae San, and Thai dessert (Thong Muan) production
in Tambon Nong Makha.
• Thai Hand Weaving Group, Tambon Khok Charoen
Like a large proportion of people in the district, people in village number 4 of Tambon
Khok Charoen are originally from the Northeastern part of Thailand, where the
indigenous skills in weaving and traditional mudmee clothing are renowned. The group
was formed in 1995 and became active during the period of 1996-1998 whereby draught
caused heavy loss of agricultural products. This led to a revival of weaving skills to be
used as a supplementary source of income to the local people.
A number of organizations have helped the group by providing financial support as well
as providing ranges of technical and skill trainings. The relevant organizations involved
include District office, Community Development office, Thammasart University,
Provincial Trade and Commerce Office. In addition, the main player who organized this
activity is Mr Winai Patchim, a local school teacher. He has contributed tremendous
support to the group by, for example, providing new patterns, teaching additional
143

17. weaving skills as well as setting up a community learning centre to teach school children
on batik painting.
The group’s major products are silk based items such as hand woven cloths with
indigenous designs and various patterns mudmee products. There are also cotton based
items available such as cotton mudmee, artificial mudmee, plained color and ‘Pakaoma’.
Besides, they also produce other products like note pad holder, glass holder as well as a
number of other domestic products. The hand woven products of the group have received
5 stars award recognition and the products are said to be of the highest quality products in
Lop Buri Province.
As to weaving products, the group can make 125 clothing items per month of the size 4
by 0.9 meter (3.6 m2). On average 5 hours per day is spent on weaving. Total cost of
production is 45,000 Baht which recovers all costs including raw materials, transportation
and marketing. Rough estimate on the cost of production is 360 baht per item. The sale
price is 850 Baht per item but price may fluctuate depending on different pattern and raw
material. From this, total income can be estimated at 106,250 Baht per month and the
average income from weaving activities per person is 2,450 Baht per month.
The group sells their weaving products to district and external markets such as other
nearby provinces and Bangkok. The ratio of quantity they sell in district and in external
market is around 10 and 90 per cent respectively. Three years ago, middle man supplied
raw materials and bought products produced by the groups. Now the group purchases the
raw materials by themselves and either directly sells their products to the wholesale
buyers or occasionally join government and private-run exhibitions.
The main problem of this OTOP group is they are lack of market information,
entrepreneurial skills and market linkages. This causes limited access to markets and low
sales volume. Besides, they have low production because they do not have adequate
capital to run their business. In addition, most adult villagers do not participate in
weaving activities and they go to find job in Bangkok. This group needs market oriented
organization structure to promote market and network building because they do not have
anyone to take role and responsibilities in marketing channel.
In summary, weaving has high potential for generating supplementary source of income
to local population. Stronger marketing networks for hand woven products should be
explored. However, further market networks must be explored and variation of patterns
and designs of silk and cotton-based mudmee should be enhanced to capture wider
audiences. If this is successfully implemented, weaving activities can be seen as a long-
term occupation for the local people as the skills can be pass on to youth and children to
become next generation hand weaving entrepreneurs.
144

18. • Thai hand weaving group, Tambon Khok Samae San
The weaving group in village number 5 of Tambon Khok Samae San was established in
1994 with an initial investment of 430,000 Baht. The majority of the funding was
provided by the Khok Samae San Tambon Administration Office (TAO) with 400,000
baht and the other 30,000 baht was given in the form of weaving equipment by local
Member of Parliament, Mr. Chaowat Sudlapa. The CD office also lend support in terms
of trainings, providing new patterns and colors, as well as organizing and managing the
group.
Initially, Ms. Kamnun Somsin took responsibility in leading the group and actively
promoting the weaving products to the outside markets. Her influence extended beyond
Khok Samae San to other weaving groups in initiating new patterns as well as purchasing
the products from them to be sold to outsiders. There were 30 members in this weaving
group during Ms. Somsin’s time in leadership. However, there are only 10 members at
present since she passed away.
The products from this weaving group are similar to those produce by the group in Khok
Charoen. It has also received 5 stars award for their quality of their product. However,
since there are only few members now, the group can only produce around 2 items per
day. This means the income generated from this is quite low with an average income
from group member being around 2000 per month for each member. This has dropped
significantly from the period led by Ms. Somsin whereby each member received around
4000-4500 baht per month.
At present, this weaving group acquire raw materials from middlemen come and the end
products are also purchased by the same people. Thus there is no other market channel.
The feeling we get from the group is that since there is no leadership role, the group lacks
organization and management skills. Consequently they seem to have become more of a
labour force for these middlemen rather than group entrepreneur themselves.
Figure: 4.10 Marketing channels for weaving products. Source: Interview of weaving groups ,2008
145

19. • Thong Muan production, Tambon Nong Makha
Thong Muan production is in village number 8 of Tambon Nong Makha. This is a
project initiated in 1999 by the Food Processing Cooperative; it is called Ruam Jai
Samakhee Thongmuan (‘Souls Unity Thongmuan’). At the beginning phrase, the group
had 20 members. The rationale behind the project is that farmers who live in this village
depend largely on agricultural production as the main economic activities. After the
cropping and harvest season, farmers are free from work and most of them migrate to
Bangkok in search for employment. Therefore, the head of the group discussed together
with the agriculture officers to get additional income for local people after the harvest
season and solution was to use Thong Muan production. This was seen appropriate as
raw materials such as cassava, coconuts can be found locally.
In the procedure of setting up the group, first of all, Agriculture Extension Officers
trained the group members on the production process: design, taste, and packaging. All
of them contributed 50 Baht each to contribute to purchasing equipments. The money
collected admittedly was not enough and thus the loan was made from the BAAC in an
amount of 50,000 Baht without collateral, but group guarantee.
In 2004, the group was separated from Ruom Jai Samakkhee group and they registered as
the Group Enterprise where 11 members were included. Nowadays, the group has 25
members. There are 5 to 7 permanent workers and they work in daily rotation. Full-time
workers can earn 4,000 to 5,000 Baht per month while part-time workers earn 3,000 Baht
per month.
The raw materials needed are coconut, sesame (both can be obtained within Tambon),
rice powder, cassava powder and sugar are purchased from provincial market. Only
Thong Muan can be considered as an OTOP product but the group also produces another
Thai dessert called ‘Khrong Khraeng’. Overall, the group can produce around 700 to 800
small packs of both Thong Muan and Khrong Khraeng combined. One big pack consists
of 6 small packs; the big pack can be sold to retailers at 24 baht per pack. The retailers
can then sell the product at 25 baht per pack. The main market of the groups is within the
province and neighboring provinces. The products are sold within Tambon Khok
Charoen and Nong Makha in Lop Buri province, and also to Srithep district and
Vangphikoon district in Phetchaboon province, as well as to Nongphai district in
Nakhonsavan province. The group has a plan to export their products to other countries,
but the product quality is not yet accredited officially due to poor production
environment.
The group has experienced problems in production largely due to inflating price of raw
materials and transportation cost. According to the head of the group, the cost of
production and transportation has doubled in comparison to the initial period. In
addition, the group has a plan to build a new processing house in order to increase
production volume and improve working environment and quality, pending on a loan
approval from TAO and Happiness and Green Society project. Other problems include
difficulties in production process in terms of skills involved in mixing ingredients and
146

20. rolling Thong Muan; in fact only 5% of the trainees can succeed after training according
to the head of the group.
Lastly, the group has potential as they can expand the volume of production and
marketing channel depending on the market need. Beside this, since Thong Muan is an
OTOP product it has potential to be accredited by Food and Medical Agency for
exporting.
In conclusion, focus is needed on reducing the cost of production. The group also need to
improve on designing and packaging techniques to make the products more marketable
e.g. inclusion of nice labeling, food nutrients etc. In addition, to expand its market the
group needs to improve on the overall working environment and condition including
cleanliness, safety and pollution free in order to get quality control assurance.
Figure: 4.11 Marketing channels of Thong Muan production.
Source: Interview with group member (2008)
147

21. Table 4.12 Comparison among OTOPs
Criteria for Weaving group Weaving group Thai dessert (Thong Muan)
Comparison of Tambon Khok Chareon Tambon Khok Samae San production Tambon NongMakha
OTOPs 1995 1996 2004
Invested Capital N/A 430,000 Baht 50,000 Baht
Sources of Capital The Royal Thailand Government - Tambon administration office BAAC (50000 baht)
(capital) (400,000)
- Local politician (weaving
materials worth 30,000 baht)
No. of 25 members (supplementary 30 members à down to 10 -25 members
Members/Labour income generation) members (supplementary income (5 to 7 permanent workers, the rest used
generation) this as supplementary income
generation)
Outputs of All year round, depends on order. All year round, depends on order. All year round
production Max. production: Max. production: 700 to 800 small
Income 125 items per month Max. production: packets per day
Average income: 60 items per month Average income:
- 61,250 baht per month for group Average income: - 24000 baht per month per group
- 2450 baht per month per - 20000 baht per month per group - 4000-5000 baht per month per
member - 2000 baht per month per member member (full-time)
(previously members can earn 4000- - 3000 baht per month per member
5000 Baht per month) (part-time)
Market network Source: Provincial market Source: provided by middlemen Source: a combination of local and
Sales: Sales: provincial market
- 10% are sold to district - Middlemen Sales:
- 90% are sold to external market - Within district
(other provinces and Bangkok) - Phetchaboon province
- Nakhonsavan Province
Success (status) 5 Star (2006) 5 Star (2006) 46 points (2005)
Problems Market problem Market problem Production
-lack of market information -Lack of market linkage -high input and transportation cost
-lack of skills for market No Leadership Role Capital
linkages - Group becoming more of a -waiting for loan from TAO
Access to finance labour force for middlemen Human Resource
-lack of capital rather than entrepreneur -only 5 % of trainees can succeed
Human Resources Access to finance in rolling product nicely
- low involvement of adults -lack of funding Quality accreditation
villagers Reduction in income -Low quality to export to
Skills and Technology neighboring country
-low of entrepreneurs skill
-limited products diversification
Organization and Management
-lack of market-oriented
organization structure
For Potentials •Good quality •Good quality •Expand the volume of production
•Skills can be pass to younger •Skills can be pass to younger depend on market need
generation generation •Expand market to other districts,
•Community learning and OTOP •Purchasing of raw materials provinces and neighboring
centre can be develop through other sources countries
•Promotion of cultural tourism •Can be accredited by Food and
Medical Agency for exporting as
assigned by OTOP
•Poor production environment
(problem with quality certification)
148

22. Analysis on OTOP projects: Overall, one can see that all OTOP projects required
external source of funding. All groups are experiencing financial problem to some
extent. In the cases of weaving groups, this may be due to poor management skills and
lack of entrepreneurship. These OTOP projects are mainly used as channels for acquiring
additional income from the primary occupation in agriculture. Only Thong Muan
production has some members working full-time. Weaving products in Khok Charoen
are renowned for their high quality (5 stars) but they cannot generate a significant level of
income for members. The main problem here is lack of marketing channels. The
weaving group in Khok Samae San, for example, relies on middlemen in both obtaining
raw materials and selling their products. On the other hand, although Thong Muan
production is of lower quality, it can generate greater income due to more proactive
marketing strategies. In the two weaving groups, although the quality of products is of
similar levels, the marketing channels in both cases are very different. One may interpret
this as lack of cooperation among different weaving groups. With cooperation, different
groups can learn from each other experiences as well as being able to achieve greater
market power through bulk buying of raw materials as for example. The loss leadership
role of weaving group in Khok Samae San also contributed to a rapid decline of the
business operation.
Analysis of small occupational group enterprise
• Basketry group – Wang Thong
This is a project initiated by Wang Thong TAO in 2006, where all nine villages in the
Tambon are involved. It can be categorized as a cottage industry, but it is not an OTOP
product. Currently, there are around 30 members, all of which are females and they used
this as an opportunity to earn additional income to their primary employment in the
agricultural sector. In fact, there are very few full-time workers in the group.
The supporting institutions involved include Community Development office and Non-
formal Education office. TAO and Community development office provide financial
support whereas non-formal education office provides classes for making basketry.
These classes normally go on for 15 days, after which the participants are capable of
producing the baskets (although experience is needed to make the products sellable).
Basketry products here are handmade in all processes. The raw materials used are hemp
and either bamboo or simple metal structure; all of which can be purchased from the
provincial markets. Nowadays, metal structures are preferred to bamboos as the baskets
made from them can demand higher monetary value. In one month, around 5-6 baskets
can be produced per person, assuming that the partaker works around 7-8 hours per day.
Each day, normally around 15-20 people turn up. For one basket, the cost of raw
materials is 170 baht if metal structure is used and 150 baht if bamboo is used (100 baht
of hemp is used for one basket), but the basket can be sold at 350 baht a piece.
149

23. Although this may sound like a good price, lack of marketing channel has meant that
group’s income is small. In fact, total production per year is around 200 items per year;
this is on average 17 pieces per month. From this, we can estimate the monthly income
to be at 5,950 baht per month (350 × 17) and thus total monthly profit is estimated at
3,060 baht per month (5,950 – (17 × 170)). This level of profit earn is noticeably low and
it is then distributed among group members depending on the amount of time they spend
working. On average, a regular worker will earn only around 300 baht per month. As
mentioned, there is a problem with marketing channel, with all the products being sold to
middlemen (normally from Tambon Khok Charoen) or to rare visitors in the area.
The conclusion can be reached that there are some potentials in Wang Thong for basketry
production. The price of each handicraft is quite high, indicating the quality of the
product. Therefore, it may be possible to develop this as an OTOP project; the first one
in the sub-district! From interviews, we have found that the level of production can be
increased since people are generally interested to join the group if there are greater
economic incentives; the problem is there is no market to sell these products to. This is a
key problem that must be tackled for further development.
Figure: 4.12 Marketing channels for handicraft basketry. Source: Interview with group members
Analysis on case studies of home-based industries
In this section, a small rice mill and cassava drying field are used as case studies to
analyse the problems and potentials of home-based industries in Khok Charoen district.
Both of these units can be regarded as agro-processing industries. Rice mill can
categorised as cottage industry with the initial investment of less than 1 million baht.
Dried cassava production, on the other hand, can be seen as a small to medium scale
industry as the capital invested here is quite high at 10 million baht. The number of
labour needed is fairly small in both cases and the raw materials used in them are readily
available within local area. In the case of cassava drying field, the extra production
capacity can accommodate more raw materials from nearby provinces. There is also
constant demand for these products but the profitability is based on the market price as
there is a lot of supply for these homogenous goods. Minor environmental problems
occur in these industries in terms of smell, noise and dust. Overall, there is generally no
problem in these small home-based industries, thus it is reasonable to say that there is
good potential for further development in Khok Charoen district. Source of funding may
150

24. however be crucial here as the area is fairly backward in terms of level of income; not
many people will have the kind of money to set up these industries.
Figure: 4.13 Marketing channels of dried cassava.
Source: Interview with owner, 2008
Figure: 4.14 Marketing channels of products from rice mill.
Source: Interview with owner ,2008
151

25. Influence of nearby large scale industry on the population in Khok Charoen
• Thai Rung Reung sugar factory
This factory is one of the seven sugar factories owned by the Thai Rung Reung group.
The company was originally established in 1958 but this particular factory started in
1996. Although this factory is not based in Lop Buri province, the district of Sri Thep
where this factory is located is actually nearer to Khok Charoen district (17 km) than
those in Lop Buri itself.
From the criteria mentioned in the introduction, this factory can be regarded as a large
scale factory i.e. more than 100 million baht was invested here. The exact detail on the
capital invested is confidential. Total factory area is 1800 rais; this consists office
building, machinery building, technicians building and cargo building. There is also an
experimental field of 100 rais which is used for testing different breeds of sugar cane, soil
and chemical.
The factory has 27000 rais of ‘support’ area within 50 km radius of the factory. The
support area means that the farmers in the area are contractually obliged to sell their
products to the factory every year. The going rate is that for 10 rais of farmland, the
farmers will have to provide 100 tons of sugar cane to the factory per year. 3000 farmers
are part of this program; it is not known how many of these farmers are from Khok
Charoen. The factory gives assistance to the farmers in the support area, in terms of
financial credit/loan. If it is to a new farmer (i.e. no machines, experience etc.), the
farmer needs around 5500-6000 baht/rai, here the factory will help around 4000 baht/rai.
If it is for existing farmer, the factory will help around 2000 baht/rai. The condition is
that the money has to be paid back by the end of the next harvesting period. The going
interest rate for loan is 7 per cent per annum
During the harvest period, the factory purchases around 25000 tons of sugar cane per day.
This is 1300 trucks per day, each truck bringing 22-25 tons. Broadly speaking, around 10
types of sugar cane breed are brought to the factory. However, 95 per cent of sugar cane
is of K84-200 breed. This is a genetically-modified breed (invented Agriculture Research
Centre) and its main advantages are high weight, sweet and most importantly it is drought
resistant. This is an important factor as 97-98 per cent of the surrounding area has no
irrigation system. The government sets the price of sugar cane, based on the sweetness
level indicator, ‘commercial cane sugar’ aka CCS. The going price is 600 baht for 10
CCS, which roughly constitutes a ton of sugar cane. The sweeter the sugar cane (i.e. the
higher the CCS level), the higher is the price. One extra CCS level gives an extra 36 baht
to the farmer (or around 10% of the government’s set price). In general, the CCS level of
sugar cane prior to mid-January is around 10.5. As the crops are more matured, the CCS
level will consequently rise. The majority of sugar cane the factory received has the CCS
level of around 12.5. The highest CCS level the factory has seen is 16 (very rare). The
CCS level of each sugar cane stock received at the factory is determined by staffs from
the Ministry of Industry.
152

26. The majority of the workers are from local and nearby surrounding areas, especially the
full-time workers. A quarter of part-time workers are migrated from the Northeastern
areas in Thailand. There are 350 full-time workers and 650 part-time workers. The part-
time workers are only employed during the harvest period between December to April.
The full-time workers receive a salary on a monthly basis. There are 3 salary brackets
within the setup.
§ The technician assistants receive less than 10000 baht/month.
§ The technician and foremen get between 10000-30000 baht/month.
§ The management staffs receive more than 30000 baht/month
The temporary workers get 157 baht/day for 8 hours of work (the average in Khok
Charoen is less than 150 baht per day). However, they can also get an OT (overtime)
pay, working an additional 4 hours for 117.75 baht. This is a 4 hours work for the wage
of 6 hours at normal rate. Processes
Analysis: this factory has a large influence on Khok Charoen even though it does not
locate within the Lop Buri province. The reason for this is that the factory is actually
nearer to the district than some other sugar factories within Lop Buri. This is particularly
important as sugar cane is one of the main agricultural products that come from Khok
Charoen. The factory has great power over the sugar cane farmers in that the farmers are
contractually obliged to sell their products as well as being tied to the loan given to the
factory. Some people from Khok Charoen are also employed by the factory, either on a
full-time or part-time basis. It is unlikely that industries of such scale can be set up in
Khok Charoen as it requires large capital of investment, significant improvement in the
level of infrastructure, availability of raw materials as well as the fact that it may not be
economically feasible to compete with existing industries. For example, as mentioned,
during harvest season the factory uses 25000 tons of sugar cane per day in their
production. The total volume in Khok Charoen in the year 2005 is only 375733 tons.
4.1.6 Summary on problems and potentials of the industrial sector in Khok Charoen
The main strength of Khok Charoen lies in the rural industry, or more specifically in the
form of weaving production. The majority of the population is migrated from
Northeastern area of Thailand, in which they bring with them indigenous knowledge and
artist expertise in weaving production. Currently, there are at least 400 people
participating in weaving activities showing there are enough skilled workers to expand
the capacity of production. The quality of weaving products here is of very high quality
and many of these products have been given OTOP status. In addition, 10 weaving
products have been given 4 or 5 stars (max. 5) for their quality; this is significant as there
are only 72 products in Lop Buri which have been given this status. It should also be
mentioned that Lop Buri lies in zone 3 in the criteria established by the Thai Board of
Investment (BOI). With this, comes a maximum benefits in terms of import duty and tax
153

27. exemption and thus an industrial unit set up in Khok Charoen will gain an economic
advantage over those set up in other geo-economical zones. Current national and
provincial strategic aim has also emphasized on the development of agro-processing
industry. This can be interpreted as strength of Khok Charoen as the majority of the
population is already employed in the agricultural sector and the district has seen high
yield in products such as paddy, sugar cane, and cassava. The agricultural input can thus
be used as input materials to facilitate agro-processing industries.
However, there are many weaknesses in the industrial sector. Despite the quality of
weaving products in Khok Charoen, there are limited market channels and opportunities
to sell the products, hence the low recognition of Khok Charoen brand of weaving
products. From the study, it was clear that members of these weaving groups lack
entrepreneurship skills and consequently they rely on middlemen coming to purchase
their products. To make problem worse, some groups even rely on the same middlemen
to provide them with raw materials necessary for production. Thus despite the quality of
their products, their income from this has actually been decreasing. To illustrate this, the
income generated from OTOP products in Khok Charoen district has decreased by
around 7% between the years 2006-2007. This weakness can also be used to describe the
situation of other groups such as handicraft. Through interview of staffs from district and
Tambon office, we have also found that there is limited collaboration among various
occupational groups performing similar activities. Thus there is no process for the groups
to learn from the mistakes that other have already experienced in their business
operations. In addition, it should be raised that there is an inadequate level of
infrastructure to set up a large scale industrial unit in Khok Charoen. From field visit to a
large sugar factory in nearby province (Sri Thep, Petchabun), we have found such scale
of industry requires a lot of water and electricity in their production and maintenance
process. It is also dependant on a large road network for transportation of their products;
this is however not sufficient in Khok Charoen.
Table 4.13 List of main problems in the industrial sector
Problems Causes
1. Shortage of § Lack of collateral for loan due to no land title.
capital for § Lack of skills in managing financial resources. Low level of
investment. entrepreneurship among the population.
§ Supporting funds are not sufficient for distributions to all
groups.
2. Lack of § Exploitation by local middlemen whether in terms of supply of
market channels raw materials or purchase of end products.
§ Limited market network and information.
§ Since many groups are small in terms of number of members (=
less production), they do not enjoy economy of scale and has
little market power.
3. Decreasing § Lack of market channels
level of income § Increasing price of raw materials and transportation cost.
generated § Low recognition of Khok Charoen brand of weaving products.
154

28. OTOPs
4. Limited § Although the majority of the people in Khok Charoen are
collaboration migrated from the Northern-eastern part of Thailand, they are
among various originated from different provinces. Thus interaction between
weaving groups various groups is limited.
§ Loss of strong community/group leaders.
§ No organized location for interaction to take place.
5. Low § Lack of market channels.
recognition of § For weaving products, there is a strong competition from nearby
Khok Charoen district such as Ban Mi where the capacity of production is much
brand of higher. There is also fierce competition from other provinces in
weaving the North-eastern region of Thailand.
products.
Table 4.14 List of potentials of industrial sector in Khok Charoen
Factors Descriptions
1. Policy § Industrial zone; maximum benefits.
§ National and regional promotion on agro-processing industry.
§ Adequate vocational training programs.
2. Access to raw § The primary occupation in the area is in agriculture. The
materials main products include sugarcane, cassava, paddy, corn. There
are also many beef cattle in the area, thus consideration on
local slaughter house may reap considerable financial reward.
§ Information from the Provincial Industrial Office has also
shown that some minerals such as pyrite are available in the
area; this can be seen as another potential for industrial
development.
3. Location § The location of Khok Charoen is on the fringe of Lop Buri in
the North. Thus Khok Charoen has access to nearby
provinces such as Nakhon Sawan and Petchaboon, as a source
of raw materials and as market outlets. Lop Buri, itself, is not
so far away from Bangkok (only 155 km).
§ There is not much competition in the area at all levels of
industry.
4. Skills and § Total working population in the area amounts to around
labour 11,000 people. Since the majority of the population engaged
in the agricultural sector, which is seasonal, they will be able
available to accept another form of employment opportunities.
§ The average income per day in non-agricultural activity is
surveyed to be around 150 baht or less, in general for the
whole district.
§ At least 590 people are recorded as having taken a form of
vocational training.
§ The population possesses indigenous knowledge and skills in
weaving production. They also possess unique design and
pattern of fabric.
155

29. § Quality weaving products are renowned in Khok Charoen.
Many OTOP products here are given 4 and 5 stars award for
their quality.
5. Adequate § Accessible road networks.
infrastructure for § Access to electricity.
small and § Adequate water supply.
medium scale
industry
4.2 Trade and Commerce
4.2.1 General Information and Current Situation on Trade and Commerce
There are 102 enterprises and partnerships with the registered investment of 154,240,000
baht in the province of Lop Buri. It classified into 28 enterprises with registered
investment of 30,900,000 baht, and 74 partnerships with the registered investment of
123,340,000 baht. The province has 18 permanent markets, 6 located in Mueang Lop
Buri, 2 in Ban Mi, 2 in Chai Badan, 2 in Khok Samrong, 2 in Nong Muang, and Tha
Luang, Ta Wung, Phattana Nikhom and Sa Bot each has one.
There is no any permanent market in Khok Charoen district, the only weekly and mobile
markets operating in the district. In the district, there are 9 places of weekly market
located in different Tambon and operating different date and time. These markets sell
cloths, grocery, house ware, electricity ware, meat, vegetable and fruit. The district has
mobile market system, traders upload there goods to pick up truck and travel around
village by village. The mobile market sell cooked food and fruit, they travel mostly
during the meal time especially lunch time. Retail shops in Khok Charoen district consist
of private shop and community shops, these shops sell grocery and soft drink. Totally,
there are 373 private shops in Khok Charoen. Those shops are requested to pay tax to
district tax office. There are two types of tax named sign tax and housing tax
Although, in the district has no permanent market. However, local traders have market
linkage with Srithep market, Phetchaboon province far away from the Khok Charoen
more than 15 km, Nong Muang market, Lop Buri province far from his home more than
30 km, and many markets in Lop Buri district the capital city of Lop Buri province.
There are two types of market in Khok Charoen district, namely weekly market and
mobile market. These markets are the main source of providing goods and service. There
are many kinds of commodities sold in the market including food, clothes, fruits,
vegetables, animal meat, grocery, electricity ware etc. The markets serve the people in
their own Tambon and also other surrounding Tambon. Some kinds of the commodities
are taken from outside Tambon, namely from Bangkok, and also neighboring province.
Khok Charoen district has no any industry to produce goods for local consumption and
export to outside, the only non-agriculture products from the district flow out is only
156

30. weaving and handicraft products. The common products in the district sold out are
agricultural product such as sugarcane, cassava and vegetables. Livestock is one main
source of outflow such as cattle which is very common in the district.
4.2.2 Markets and Shops in the District
a. Market
Weekly Markets
Weekly markets operate in different place and time found in the district. Total number of
weekly market in Khok Charoen is 10 places. These markets existed in all Tambon,
serving people living around four to five villages providing some basic goods for daily
home consumption. Some places operate more than one time a week for example in
Tambon YangRak at village number 4 and 9 operate two times a week and Tambon Nong
Makha at village number 8 operates 3 times a week (Table 4.15).
Table 4.15 Distribution time and place of weekly market in Khok Charoen district.
Location
No. Tambon Schedule (time operated)
(Moo)
Moo 2 Sunday evening (3-8pm) [one time/week]
1 Khok Charoen Monday evening (3-8pm), Thursday evening
Moo 4,5
(3NA8pm) [two times/week]
Moo 2 Sunday evening (3-8pm) [one time/week]
Wednesday and Saturday Morning (6-9am) [two
Moo 4
times/week]
2 YangRak
Tuesday and Thursday evening (3-8am) [two
Moo9
times/week]
Moo 10 Saturday evening (3-8pm) [one time/week]
3 KhokSamaesan Moo 4 Tuesday evening (3-8pm) [one time/week]
4 WangThong Moo1,2 Friday evening (3-8pm) [one time/week]
Sunday morning (6-9am), Tuesday and Thursday
5 NongMakha Moo 8
evening (3-8pm) [three time/week]
Source: Interview with TAOs
157

31. Mobile Markets
This is a dynamic kind of market for rural villagers; it provides a very convenience
service to rural people with food, fruit and other different kind of commodities for basic
needs. In Khok Charoen district, mobile market performed as direct sale, traders bring
those kinds of goods to serve people at their home. The advantage of mobile market is to
facilitate the rural people to access to the necessary goods and commodity especially food
and fruit. This type of market reduces the cost of transportation of the villagers and
villagers also can save their time on traveling to other shops or markets. However, due to
the increasing of fuel price, the cost of transportation of traders has increased and it
reducing the profit of traders. Hence, traders have to increase the price of goods which
leads villagers need to pay more and more on price of those basic goods. One of the
villagers complained that every item has increase the price at least 10% compares to last
couple years.
b. Shops
Community Shops
The community shop is an activity of cooperative base shop, establish by the saving
group with the help of district community development office. Villagers participate
through their contribution as saving capital formation and involved in management to run
the shop. The shop has a good economic implication on the rural people in term of their
saving and good service in order to get benefit through saving mobilization on non-farm
activity. The shop function as local needs support for local people who have less capacity
to travel to buy things for their family at far away market. The community shop also
helps local people who to buy goods in credit in the case that members have not enough
cash in hand, then he or she can pay back later. The shop sells beverage, food, house
ware, and grocery and some shops sell some items of motorcycle and car spare part, oil
and fuel.
Case study: Community shop of Ban Mai Si Ou Bon, Tambon Nong Makha, Khok
Charoen district
- Year establish: 1991
- Location: Ban Mai Si Ou Bon, NongMakha
- Main goods: groceries, beverage, some spare part of motorcycle, oil
158

32. and fuel
- Member: 25 (1991), 95 (2008)
- Committee member: 7 people, village head man as the chair person
- Working time: 6 am to 9pm
- Contract seller: one person
- Seller salary: 32% of annual net profit
- Source of fund: SML and share (total 950,000 baht)
- Share price: 10 baht/share
- Dividend/member: 1 baht/share (10 baht gain 1 baht)
- Duration: One year a time of dividend provided
- Infrastructure: District Community Development Office provided
- Goods purchasing: Through middlemen (Whole seller bring for the shop)
and, staff went out to buy from whole seller shops in
Khok Charoen town
- Management: Executive Committee of the shop
Private Shops
Khok Charoen district has several types of shop regarding to the tax office, shops were
classified into many types according to their functions. The largest number is convenient
or grocery shops then flow by car and motorbike repair shops and gasoline pump. These
shops are owned by private, functioned as household business to provide service for
villagers and people living around. According to the data from Tambon tax revenue list,
in each Tambon has different types and number of shops. The highest number of grocery
shop is in Tambon Khok Charoen, and then follows by Tambon Nong Makha, the least
number of grocery shop is in Tambon Wang Thong (Table 4.17). Number of grocery
shop shows the rate of household business activity in that particular Tambon.
According to Table 4.16, Tambon Khok Charoen has the largest number of shops which
account for 29.49 per cent, when we take to population ratio (total population divided by
total shops) Khok Charoen has the least ratio. Tambon Wang Thong has the least
percentage of shop but the second least ratio. It means Wang Thong has less population
even the number of shop is less, but people can also have more chance to access to the
shops. However, the variety of shop (goods and service) is not good as Khok Charoen
and other Tambon. We cannot assume the shop type due to the data on shop given is not
classified in to different type of shops dealing with different goods and services.
Table 4.16 Distribution of total shop by Tambon
No. Tambon Population Total number of shops Percentage of shop
in each Tambon
1 Khok Charoen 7,296 110 30
2 YangRak 7,783 71 22
3 KhokSamaesan 3,231 39 12
4 WangThong 2,638 35 11
5 NongMakha 3,509 75 23
Total 24,457 330 100.00
Source: TAO office, 2007
159

33. Table 4.17 Distribution of Shops by Tambon
Shops
No Tambon Car and Total
Grocery Gasoline Agriculture Construction
motorbike Pharmacy Others*
shops pump inputs material
repair
1 Khok Charoen 72 4 12 5 4 4 9 110
2 YangRak 69 2 NA NA NA NA NA 71
3 KhokSamaesan 35 4 NA NA NA NA NA 39
4 WangThong 35 NA NA NA NA NA NA 35
5 NongMakha 48 3 10 1 1 NA 12 75
Total 259 13 22 6 5 4 21 330
*Hair salon, knitting shop, restaurant and game shop
Source: TAO office, 2007
Table 4.18 Ratio of Population under the Service of Shops in Tambon
Khok
YangRak Khok Samaesan WangThong NongMakha Total
Types of shops Charoen
Shops Ratio Shops Ratio Shops Ratio Shops Ratio Shops Ratio Shops Ratio
Grocery shops 72 101 69 113 35 92 35 75 48 73 259 94
Gasoline pump 4 1,824 2 3,892 4 808 NA NA 3 1,170 13 1,881
Car and motorbike
12 608 NA NA NA NA NA NA 10 351 22 1,112
repair
Pharmacy 5 1,459 NA NA NA NA NA NA 1 3,509 6 4,076
Agriculture inputs 4 1,824 NA NA NA NA NA NA 1 3,509 5 4,891
Construction
4 1,824 NA NA NA NA NA NA NA NA 4 6,114
material
Others* 9 811 NA NA NA NA NA NA 12 292 21 1,165
Total 110 66 71 110 39 83 35 75 75 47 330 74
Source: TAO office, 2007
160

34. Figure: 4.15 Density of Population to Private Shops Map
161

35. Figure: 4.16 Distribution of Weekly Market Map
Tambon Nong Makha
3
3
2
1
1
0
Places Frequency
conducted
Tambon Khok Charoen
Tambon Wang Thong
3 3 3
2
2 2 1 1 Tambon Yang Rak
1 1
0 0
Places Frequency 8
6
Places Frequency conducted 6
4
conducted 4
Tambon Khok Samae San
3
2
2
1 1 0
1
Places Frequency
0 conducted
Places Frequency
conducted
162

36. Figure: 4.17 Market Linkage
163

37. Market Linkage and Network Analysis
The Figure 4.15, 4.16 and 4.17 provide as very clear explanation on shops and markets
density in Khok Charoen district. In the district has no any permanent market, while
district nearby named Srithep has a big permanent market; traders in Khok Charoen have
to travel to buy goods from Srithep to sell in the district. There are 10 weekly markets in
the district; the weekly markets as well as shops are not well distributed fairly in the
district. Thus, some Tambon are less number of shops and weekly market to serve their
population, while others have much more market and shops density comparing to the
population size. Hence, it means that not very people in every Tambon can access and get
their need from their local market. They have to spend some time to travel for goods
purchasing for their daily need. Regarding to this situation, the population who live at the
place has less service, they are disadvantage in term of access to variety of service as well
as price of common basic goods comparing to the neighboring area. We also can see that
the largest numbers of shops and other services are agglomerated in Tambon Khok
Charoen. Hence, maybe in Tambon Khok Charoen is the most advantage Tambon in the
district.
Neighboring districts are the sources of daily goods that traders from Kho Charoen
district usually go to buy goods to sell in Khok Charoen. Regarding to the map there are
four neighboring districts which has road connection with Khok Charoen named Srithep
district far from Khok Charoen around 25 km, Nong Muang 30 km, Sabot 20 km and
Chai Badan 45 km. In the case that traders want to buy in big volume they have to go to
Lop Buri city where far away from Khok Charoen around 80 km.
Since, the road access is very important for trade and commerce. According to the map,
transport node is quite in good situation. Thus, better the road connection provides more
choice for local traders dealing trading with neighboring markets, and also brings out
local products to outside markets.
4.2.3 Marketing Channel of Products
Marketing channel were classified in two parts namely inflow channel and outflow
channel. The inflow channel to present the goods those are being brought from outside to
the Khok Charoen district which classified into four main components related to non-
agriculture sectors namely cloths, grocery, house ware and electricity ware. The outflow
channel present the goods and products which the district and produce and send out to
sell in other market outside the district. The goods and products which are being
produced in the district and sending to market outside are weaving product, basketry
product, Thong Muan (Thai sweet role) and agro-processing product such cassava and
sugarcane. The flow of these goods and products were drawn base on the interview with
Tambon administrative offices, shop owners and traders in the various weekly markets.
The whole seller, cloth shop owners and cloth traders buy clothes from Bangkok (BoBe
market). First channel, some of them group together around 5 to 6 people, then hire a
164