When you deploy production in an LEDC, you get the benefit of cheap, skilled labour, low property prices and generally cheaper everything. The downside is the stability of the government.
Lumpini, Bangkok this morning
Thailand is no stranger to government protests, especially when you consider that the current PM is the brother of a man in the dock for corruption charges. Still this article is not about politics but is to assess the potential of disruption to Pandora's (OTCPK:PNDZF) supply chain.
Excuse my paint based art skills but the circles indicate roadblocks, which occur mainly in the downtown area. Gemopolis sits to the East of the town centre and next door to Suvarnabhumi Airport, which is how Pandora export their products.
At first glance, there is no disruption to the export part of the chain as goods flowing from the factory to the airport are far removed from the protests.
The more uncertain parts of the equation are the impact on the employees and the impact on gold coming into the factory.
The first part is a two way problem, most of the manual workers live around Gemopolis itself and away from the downtown areas and Gemopolis today reports no production shut-downs due to lack of staff. It is a possibility that staff members actually join the protest but this has not happened in the past. There is a problem however, with executives who tend to live in downtown Bangkok. Some of those have not come in (possibly opted to work from home) today but for me, this is again not a problem as production doesn't require management level to be there.
Finally, raw materials also tend to come from the airport meaning that currently, there will not be any disruption to raw material supply, however the situation is more uncertain for any locally sourced products.
Speaking to the Gemopolis management, the indicate that they had no problem with the protests in 2006 and as such do not see much chance of any production impact apart from some higher level absenteeism. This is not to say that the protests won't worsen; you never know how far these things can go.
To round things up: At present, there has been no impact on Gemopolis meaning that Pandora is currently unaffected by the geopolitical situation.
I would recommend that any shareholder keep a close eye on the Bangkok situation and recommend,
1. An occasional tune in to Bangkok 88fm (English language radio)
2. Download an app called TVIR, which gives you a live traffic overview in Bangkok (you can search by place in English).
3. Check the Ministry of Foreign Affairs