"Thai manufacturers should explore investment opportunities both in Asean and outside the region, offering competitive costs and other facilities to pave the way for the establishment of Bangkok offices that focus only on trading," said Dej Pathanasethpong, president of the Thai Garment Manufacturers Association.

Though there has been only a small impact on them from trade liberalisation within Asean, Thai manufacturers have to create business models that not only allow them to compete with big exporters but also to serve importers' demands.

To strengthen the Kingdom's export competitiveness, Dej said the government should emphasise a "creative economy" as quickly as it can. The plan is to concentrate on human-resources development to upgrade manufacturing in value creation, efficiency and design.

The government drew up a plan to attract foreign investors to set up regional operating headquaters here eight years ago, but it has been implemented slowly.

"Malaysia and Singapore have moved ahead of Thailand by focusing on a service-provider strategy for the past 15 years. If Thailand does nothing, we will step backward and those two countries will seize lucrative market when the Asean Economic Community is completely formed by 2015," said Dej.

Labour shortages are expected to hurt efforts to improve the business.

The government should design investment promotion plans for Thai manufacturers to invest abroad, Dej said. Particularly, SMEsshould explore more business opportunities outside the country, not only manufacturing but also trading and services businesses, he said.

Dej emphasised that Thailand must look forward, and cannot focus solely on original-equipment manufacturing any more.

"The country's goal should look beyond being a 'manufacturing hub': It should aim to be a trendsetter � and to have an influence on the global market," he said.

 Original-brand manufacturers (OBM), particularly local brands, should step up development to strengthen their competitiveness, he said. They should improve their designs and strive to control marketing channels by themselves.

"OBMs will have greater business opportunities, both inside the country and in boosting exports to Asean," he said.

Dej said Asean's zero-tariff implementation would prompt companies involved in the supply-chain business to think of moving to set up new production bases in cheaper locations in Asean.

He also warned that Thailand would face serious labour shortages in the next five years, as the region gears up to become a single market by 2015. The government should plan to develop more technicians, experts and designers.

Dej said manufacturers should gear operations to cater to growth in major manufacturing and consumer nations like China, India and Japan.