INDUSTRIAL WATER DEMAND PREDICTION MODEL: THE CASE OF CHANGING INDUSTRIAL MARKET SHAREFROM FREE TRADE AGREEMENTS
Pongsak SUTTINON, Takashi NISHIOKA, Seigo NASU
Kochi University of Technology
ABSTRACT: Industrial water demand prediction model is an essential tool for industry water demandmanagement. In study area, industrial part is the main production sector of Thailand economic growth.
Industrial water demand in the future depends on water use unit per output and changing industrial structure.
However, the changing market share resulted from government policy or international agreement is one ofthe main factors of errors in prediction of industrial structure and water demand affected to water
infrastructure construction, operation and maintenance costs. This study presents development of industrial
water demand prediction model by using input-output table with Thailand industrial master plan and thesituation of changing industrial market share from free trade agreements or FTAs.
KEYWORDS: Industrial water demand prediction model, Input-output table, Free trade agreements (FTAs)
1. INTRODUCTION

water demand in all sectors especially industrial part.
In the past, the water demand was mostly calculated

Lower Chao Phraya River Basin (LCPRB) is one ofby trend analysis from historical data; however, one

the important areas of development in economic andof disadvantages of this method is difficulty toindustrial sector in Thailand. Development ofmodel with the change of some conditions in theindustrial sector in Thai and regional scale needfuture such as government policy, industrial structure

more water which used in production, utility, andand etc.

other processes.
In case of Tokyo, Japan in 2004, the water demand is
From the limitation of water supply and waterless than total production capacity about 2 million

protected measure such as groundwater pumpage

cu.m./day and tends to increase in the future. Thisclosing policy, water shortage may be the main

big difference of water demand prediction means

problem to obstruct development of economic

that water infrastructure was constructed to supply

activities in this area and Thailand also. If the policy

water much more than needed demand and loss

makers cannot control the rapidly increasing water

money for construction, operation and maintenance.

demand in this area, conflicts among each user inindustrial, service, household, and agricultural sector

This paper shows the development of model to

may be the critical problem.

predict industrial water demand in the LCPRB withscenarios of changing industrial market share in

An interesting solution for this problem is water

Thailand by using input-output table model todemand side management to decrease the amount ofsimulate the change of industrial structure from theeconomic viewpoint.

In this step, three are two growths of gross domestic
product or GDP simulated in this model. The first

1.1 Objectives

was normal growth analyzed from historical data of

The objectives of this study are: 1) to develop

economic activities of Thailand. The generated

mathematical input-output table model and simulate

growth about 6.2 % was calculated by using average

the changing industrial market share in Thailand; 2)growth of last 20 years from 1984 to 2004. The

to develop mathematical industrial water demand

generated growth from the previous one withmodel under scenarios of the changing industrial

industrial cluster strategy in the future declared bymarket share in Thailand.

Thai government was the second growth. (P.
SUTTINON, 2006)

1.2 Study area
The study area and the scatter of factories in Lower

The scenario of changing Thailand industrial market

Chao Phraya River Basin are shown in figure 1.

share which used in this model was analyzed by

There are 7 provinces in this area; Ayutthaya,focusing on the future plan of government agencies

Bangkok, Nakon Pathom, Nontaburi, Pathum Thani,

related to control industrial policy and possibility of

Samut Prakan, and Samut Sakhon.

movement of production base from the effect ofdeclared policy and the world situations in free trade
agreements or FTAs.
THAILAND SCALE

Input-output table model

Thailand Industrial
Strategyand master plan

Changing Industrial
Market Share from FTA

Thailand Input-output table

PROVINCIAL SCALE

Figure1 the Study Area and Scatter of Factories.
2. METHODOLOGY
The schematic diagram of industrial water demand

Provincial Input-output tablewater use data

Real output by 107 industrial types

water use byquestionnaires survey

Water use unit in 107 industrial types

Water demand in each province by 107 industrial types

Water demand in each province by ISIC code

model is shown in figure 2. The model was divided
into 2 steps; Thailand and provincial scale. In theFigure2 Schematic Diagram of Industrial Water

first step, Input-Output (IO) table model was

Demand Modeldeveloped by using IO table data from National
Economic and Social Development Board (NESDB)The developed I/O tables in this step were edited andto produce Thailand IO table in the future.

transformed to provincial scale with the constraint ofeach province in the second step. In the provincial

step, provincial IO tables were generated from Thaiproducts imported from aboard. The links between

IO table. Outputs from the generated IO tables werethe industries and the impact of changes in one

transformed into 107 industrial types.

sector on others are illustrated from transactions
among industries as shown in table 1.

Water use units in this study developed from theof

In this research, the simple RAS and modified RAS

Technology (KUT) is used for forecasting (P.

techniques (United Nations, 1999) were used to

SUTTINON and N. SEIGO, 2006).

update entire input-output tables and simulate thequestionnaire

surveyofKochi

university

effects of economics structure change from theFinally, water demand in the study area wasdeclaredindustrialclustersummarized from the form of IO table to 107

government agencies and FTAs.

strategybyThai

industrial types and transformed into the format ofinternational standard industrial classification of all

2.2 Analysis of changing industrial market shareeconomic activities (ISIC code).

from Free Trade Agreements (FTAs)
Nowadays, the international economic changes

2.1 Input-output (I/O) table model

rapidly and is more complicate than the past. Free

Input-output (I/O) table was developed from detailedtrade agreements or FTAs are one of interesting

census and survey data to show the value of sales ofagreements which resulted to reduce the tax or trade

product, classified by the industry which produces it.

obstructs among the partners in bilateralism,

This I/O table focuses on the interrelationships

multilateralism and regionalism scale. However, thebetween industries in an economy with respect to thepolicy makers have to concern about both positive

production and uses of their products and theand negative effects with Thai economic structure.

Table 1 input-output sector classification
i, AGRIINDSER

TOTAL(001-029)(030-134)(135-180)(190)

I/O code(301-309)(310)(401-409)(501-509)

(600)

(700)

Total final

Total

Total

Total

ControlTotaldemanddemandimports

margintotal

supply(409)

andj, AGRI
(001-029)
Intermediate demand
(309)
IND
transport(030-134)

This matrix tell the amount of sectoration
i’s output used in the production of(509)sector j.

SER

= sum

= sum

= sum

(190+309(600+409(401-404)(501-503)-409-509)+509)(135-180)(301-306)

TOTALTotal intermediate transaction = Sum(190)(001-180)(201-209)

Total value added = sum (201-204)(210)

Control total = 190+209

Source: NESDB(190+309)

From analysis of Thai economic structure, Export

product and service sector.

and foreign direct investment (FDI) have been key
factors for developing Thai economic activities.

Table2 impacts of Free Trade Agreements on

Nowadays, the United States of America (US), Japan

Industrial sectors (percent changes of output

and China are the main export destination ofvalue, %)Thailand about 41 percent of all trade, thus, FTAs

codeISIC

Scenariowith these countries will effect to the high changing
industrial market share in Thailand. (OIE, 2006)

15Food products

Case3*

Case4*

12.28

22.77

Vegetable oils and fat-10.58

1.69

Base on the FTAs, Thailand will get benefits andDairy products-11.81

1.53

complement with the developed countries such as

Processed rice

13.56

11.43

the US, Japan, Australia and Singapore but tends toSugar

6.57

16.28

Beverage products

-3.64

2.70

compete with China and the developing countries
with low labor cost such as India, Indonesia, South16

Tobacco products-3.64

2.70

Korea, Mexico, Vietnam and Philippines.

17Textiles

1.70

5.11

18

Wearing apparel

9.10

12.52

Table 2 shows impacts of FTAs on changing

19

Leather products

8.40

14.70

Thailand industrial structure. Industrial types which

20

Wood products

-8.33

-4.72

have many benefits from FTAs are food and fashion

21

Paper products

-2.40

0.81

sector. For metal and motor vehicles sector, the22

Publishing

-2.40

0.81

output value will decrease affected from these23

Petroleum, coal products

1.62

0.85

agreements.

24

Chemicals products

-4.74

-1.84

25

Rubber and plastic products

-4.74

-1.84

3. RESULTS

26

Non-metallic products

-1.92

0.09

Table 3 shows water demand in each cases classified

27

Basic metals-0.0-4.65

Metal product-7.09-5.96

by ISIC code in 2025. The table shows how water
demand change after applying FTAs with the global

28

Fabricated metal products-8.45-6.60

in case 3 and the group of the US, Japan and China

29

Machinery

4.26

0.08

in case 4.

30

Office machinery

-1.92

0.09

31

Electrical machinery

3.44

-0.07

As can be seen after applying FTAs in case 3 and 4,

32

Communication equipment

3.44

0.07

water user can be divided into 3 main groups as

33

Medical instruments

-1.92

0.09

following. The first one is the group which needs

34

Motor vehicles-20.44-16.16more water such as food and fashion cluster. For the35

Other transport equipment

50.98

-1.92

second group, water demand is less than the case

36

Furniture

-1.92

0.09

without applying FTAs such as chemical, rubber,

37

Recyclingnana

plastic and metal sectors. The last one is the group of
constant water demand in case of with and without
applying these agreements such as wood, paper,publishing, petroleum, office product, electronic

Source: edited from Office of Industrial Economics
Note: Case3*:normal growth with industrial

cluster strategy and FTAs

with the global and Case4*: normal growth with industrial cluster
strategy and FTAs with the US, Japan and China

Table 3 water demand in each cases classified by ISIC code, 2025
ISIC code

Code

Description

Water demand in each cases, MCM/year
Case1#

Case2#

Case3

Case4

normal growthnormal growth andCase 2 and FTAs

Case 2 and FTAs

industrial strategywith global

with US, JP, CN*

A01

Agriculture and service activities

991010C

14

Other mining and quarrying

4444D

15

Food products and beverages

111

130

142

155

16

Tobacco products

4444

17

Textiles

265

310

316

326

18

Wearing apparel

31

37

40

41

19

Tanning and dressing of leather

25

25

28

29

20

Wood and of products of wood

998821

Paper and paper products

28

28

28

28

22

Publishing, printing

10101010

23

Coke, refined petroleum products

333324

Chemicals and chemical products

157

157

149

154

25

Rubber and plastic products

5050474926

Other non-metallic mineral products

1212121227

Basic metals

2020201928

Fabricated metal products

4747434429Machinery

78788278

30Office, computing machinery

911111131

Electrical machinery

8910932TV, and communication equipment

2323242333

Medical and optical instruments

1010101034

Motor vehicles

786735

Other transport equipment

335336

Furniture

33

33

32

33

37

Recycling

000040Electricity, gas, steam supply

000041

Collection and distribution of water

000050

Sale and repair of motor vehicles

1111111152

Retail trade

4444I

63

Supporting transport activities

11111111K

74

Other business activities

8888O

90

Sewage, sanitation activities

0000

93

Other service activities

125125129

129

Study area

1,115

1,188

1,205

1,234

E

G

Note:

*

US: the United States of America, JP: Japan, CN: China#the result from P. SUTTINON, 2006

Remark: This calculated output and water demand classified by ISIC code were transformed from 107 industrial
types of Department of Industrial Works.

Figure 3

comparison of industrial water demand with and without the effects of FTAs
classified by ISIC code, 2025

According to the results, industrial sectors need morewater demand in each province compared between

water after applying FTAs in global scale as showedcase 2 and 4 in 2025 was shown in figure 3. Textile,case 3 and bilateralism agreement with the US,

food and chemical products are the top three main

Japan and China in case4.

water users in this area about 51 % of total water use.
After applying FTAs, textile and food sector need

Base on the results of case 4 which is recommended

more water but the water use in chemical sector

by Office of Industrial Economics (OIE), the higherdecrease. The main reason is the higher production

production was supported by FTAs mainly in foodneeded from partners in FTAs.

and fashion sectors which have the main production
base in the study area. From this reason, water

Samut Prakan, Bangkok and Samut Sakhon are thedemand in case 4 is more than case 2 about 46 MCM

top three main water users in study area about 67 %in 2005. This higher demand is quite serious in thisof total because of the high density of factories. Afterarea because the limited of water supply from theapplying FTAs, these three provinces need moregroundwater pumpage closing to protect the land

water about 30 MCM, however, most of fashion

subsidence and the high quality for production

factories located in this area needs the high quality

process in food and fashion sectors. In somewater such as groundwater may have problem form

factories, production line cannot use the pipe water

this policy.

because of the changed quality of goods by chlorine.
Figure 4 shows trend of industrial water demand in
Industrial water demand classified by ISIC code andeach cases from 2005 to 2025.

Figure 4

industrial water demand in each cases from 2005 to 2025

The industrial water demand increase rapidly in thisresulted from high growth of industrial activities inperiod since industry is the main part concentrated

this area may face the problem of water shortage inth

the future because of the critical groundwater zone

national economic and social development plan,and risk of low water supply. Thai policy makers

Thai industrial master plan and international trade

should have water management plan to supply more

by FTAs. However, Thai government has towater or decrease water use to keep the satisfied

concern about the higher water demand affectedlevel of all users. However, the suitable choice forfrom declared policy and provide water supply orThailand

water demand measure to decrease the water use inmanagement mainly concentrated in water demand

this area.

that use fewer budgets.

4. CONCLUSION

5. RECOMMENDATION

The proposed industrial water demand model with

After the calculation of water demand in thethe scenario of growth with Thai industrial cluster

possible scenarios related with Thai government’s

strategy and free trade agreements can illustrate thepolicy and international free trade agreements orneeded water of industrial activities by usingFTAs, this study area which is the main area of

Input-Output (IO) table model, water use unit

economic development of Thailand need more

analysis and simulation of industrial market changewater to implement that policies. With the risk ofin study area.

water supply and limitation of budget for moreby Thai government declared in the 9thand 10should

betheintegrated

water

water infrastructure, the next interesting topic isThis area is the central of Thai economic

how to decrease industrial water demand. Water

development; however, the higher water demand

pricing policy is one of interesting countermeasures,however, this policy have to keep the target of hightowards

growth of economic activities by policy makers.

Reduction", October 16-18, 2006, Thailand.

The past experiences of Japan and analysis ofindustrial questionnaire survey in this area by Kochi
University of Technology (KUT) is one of theinteresting method to study how the industrial water
demand change under the pricing policy.
Finally, the demand side management should beconsidered with the supply side management togenerate the situation of water in the future by using
the future plan of water infrastructure, risk analysis,climate model, and the other measures.
REFERENCES
Department for Economics and Social Affairs,
Statistics Division,

United Nations. Detailed

Structure and Explanatory Notes, UN Web,URL http://www.un.org/esa/desa/
Department for Economics and Social Affairs,
Statistics Division, United Nations, Handbook of
Input-output Table Compilation and Analysis,
Handbook of National Accounting Series F, No.74,
New York, 1999.
National Economic and Social Development Board,
2004. National Account Statistics, NESDB web,
URL: http://www.nesdb.go.th/, 2004.
Office of Industrial Economics, Impacts of Free
Trade Agreement on Thai Manufacturing Sectors,
Bangkok, Thailand, (downloaded report)
URL: http://www.oie.go.th
P. SUTTINON and N. SEIGO, Industrial Water
Demand Prediction Model: The Case of Thailand
IndustrialCluster

Strategy,

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