For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on tri-monthly basis.
根据 Fortune Business Insights 的报告,2022 年价值 944 亿美元的全球棉纱市场预计将从 2023 年的 828.1 亿美元扩大到 2028 年的 1006.8 亿美元左右,预计 CAGR 为 4% % 在估计期间。 估值上涨的原因被认为是影响成品纺织品质量的纱线的独特特性。
在纱线类型中,估计普梳纱部分在此期间显示出相当大的扩张,这是由于该产品用于制造羊毛线的增加使用。在估计期内,服装部门也将实现合理增长,这可归因于电子商务渗透率的提高、可支配收入的增加等。
为国内纺织行业的利益而增加的政府举措被视为推动棉纱市场增长的关键因素。 这些举措侧重于纺织行业的技能发展、基础设施建设和部门发展。然而,由于与合成纱线价格较低相比的价格竞争,行业扩张可能会受到阻碍。
亚太地区的棉纱市场份额预计在预测期内将大幅增长,这可以归因于人口增长和消费者支出增加对产品的需求不断增加。然而,据估计,欧洲市场在预测期内将实现有利可图的增长速度。 这是由多年来不断增长的原材料需求和产业用纺织品的兴起所推动。
全球阻燃服装市场 2023-2027 预计在未来五年内将增长 100104 万美元,在预测期内以 4.9% 的复合年增长率加速增长。
阻燃 (FR) 服装是技术纺织品领域的一部分,该领域是全球的阳光产业。
市场研究解决方案 Reportlinker 的“2023-2027 年全球阻燃 tecApparel 市场”报告提供了全面分析、市场规模和预测、趋势、增长驱动因素和挑战,以及涵盖约 25 家供应商的分析。
本研究确定可穿戴技术是未来几年推动阻燃服装市场增长的主要原因之一。 此外,通过零售和在线渠道不断增长的分销以及新兴经济体不断增长的需求将导致市场需求巨大。
一些领先的阻燃服装公司是 3M Co.、Ansell Ltd.、Arco Ltd.、Carhartt Inc.、Carrington Textiles Ltd.、Cintas Corp.、DEVA FM。 sro、DuPont de Nemours Inc.、Frham Safety Products Inc.、Honeywell International Inc.、Hultafors Group AB、Hydrowear BV、Kimberly Clark Corp. 等。
根据 IMARC Group 的一份报告,2022 年印度的纺织品回收市场规模达到 3.087 亿美元,预计到 2028 年将达到 3.75 亿美元,2023-2023 年期间的增长率(CAGR)为 3.4% 2028.
纺织品回收是对旧衣服、纤维废料、边角料等进行再加工和再利用的方法。这些材料通常来自地毯、轮胎、家具、鞋类、废弃衣服、毛巾和床单。
纺织品回收有许多环境和经济效益,包括降低水和土地污染水平、限制化学染料的使用、优化能源消耗、最大限度地减少对原生纤维的依赖等等。
模拟印度纺织品回收市场的关键因素包括对生态完整性服装的需求不断增加、可持续时尚的新兴趋势以及消费者对生产新服装对环境的不利影响的认识不断提高。
由回收纺织品、塑料和有机原材料制成的生态服装越来越受欢迎,这进一步促进了这一增长,这有助于限制浪费并最大限度地减少垃圾填埋场空间。
政府政策和非政府组织计划以及纺织废料数量的增加和回收技术的改进也在推动回收市场,除了各种技术进步和回收过程中日益自动化以及领先制造商的广泛研发之外。
2021 年全球智能和互动纺织品市场估计为 21.476 亿美元,预计到 2030 年估值将达到约 164 亿美元,从 2022 年到 2030 年的复合年增长率为 25.6%。智能和交互式纺织品是与边缘计算、云数据、人工智能 (AI) 和蓝牙低功耗 (BLE) 等技术集成的织物,可以监控和交流穿戴者的数据。
根据 Global Market Insights Inc. 发布的报告,在研发方面的投资激增,以制造能够在战争情况下提供伪装效果、智能感知和响应能力的装备精良的士兵制服,再加上面料中的智能技术,以实现更轻的负载和更少的设备,促进了智能和交互式纺织品在军事和国防应用中的使用。
军事用途的智能纺织品能够监测穿戴者的表现,并配备 GPS 系统、传感器和活动跟踪器,提供多种属性,即绝缘性能、防弹保护和防水面料。在这些因素的加速下,预计从 2022 年到 2030 年,军事和国防应用领域将以超过 28.5% 的复合年增长率大幅增长。
在区域格局中,预计到 2030 年,欧洲的智能和互动市场将出现大规模扩张,占据约 28% 的行业份额。
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on tri-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
JELLYFISH SWIMWEAR(Code: MT0123-01)
30 PANMURE ST
ROUSE HILL
2155 NSW
AUSTRALIA
PRODUCT: BATIK APPAREL
EMPERIL-COMERCIO INTERNACIONAL S.A. (Code: MT0123-02)
RUA NOSSA SENHORA ASSUNCAO 1
ESPRELA – TROFA
4785-177
PORTUGAL
PRODUCT: POLYESTER FABRICS
MAXI IMPORT AS (Code: MT0123-03)
BJORNERUDVEIEN 15
1266 OSLO
NORWAY
PRODUCT: UNISEX APPAREL
本会不负任何交易后果。
欲索取联络 ,请联络本会办事处,并注明代号。
Fact.MR 发布的关于纺织染料市场的最新见解预测,到 2031 年,该市场的估值将超过 80 亿美元。快速发展的时尚趋势正在刺激对时尚服装的需求,促使制造商采用新的色彩组合和设计,推动销售,预计 到 2031 年以超过 6% 的复合年增长率推动市场扩张该市场在过去 5 年取得了令人瞩目的收益,到 2022 年底接近 60 亿美元。在此期间,年增长率约为 5%。 制造商预计将主要关注亚洲市场,印度和中国等主要国家将成为利润丰厚的增长中心。根据印度品牌资产基金会 (IBEF) 的数据,印度纺织业在 2018-19 财年占工业产值的 7%,预计到 2027 年估值将超过 230 亿美元。同样,根据纺织世界的数据,中国的化纤生产 超过 5000 万吨,占全球产量的 66% 以上。 这种趋势正在激励知名企业加大对这些市场的涉足力度。
市场研究的要点
• 对直接纺织染料的需求保持高位,到 2031 年将超过 20 亿美元
• 到 2031 年,活性纺织染料将以约 7% 的复合年增长率实现最快增长
• 预计粘胶纤维染料的复合年增长率约为 6%
• 涤纶纺织染料增长迅猛,复合年增长率约为 7%
• 美国纺织染料销售额可能会增加,2021 年达到近 7 亿美元
• 到 2031 年,印度、韩国和澳大利亚的总收入将略高于 6 亿美元
• 中国纺织染料领域的收入将超过 20 亿美元
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on tri-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on tri-monthly basis.
MAXI IMPORT AS (Code: MT0322-01)
BJORNERUDVEIEN 15
1266 OSLO
NORWAY
PRODUCT: UNISEX APPAREL
TARGET CONTRACT SRL (Code: MT0322-02)
VIA MONTE ROSA 27
LIMBIATE (MI)
20812
ITALY
PRODUCT: WOVEN FABRIC
SIAM BUSINESS & TRADING CO., LTD. (Code: MT0322-03)
1011-5 SONGWAT RD.KHWANG SAMPHANTHAWONG,
KHET SAMPHANTHAWONG, BANGKOK
10100 THAILAND
PRODUCT: LADIES APPARELS
CHEMISETTE (Code: MT0322-04)
16 DE SEPTIEMBRE NO.621
MONTERREY NUEVO LEON
MEXICO
PRODUCT: LADIES APPARELS, LADIES UNDERGARMENTS
根据 Future Market Insights 的最新研究,尽管 2020 年增长放缓,但在 2021-2031 年的预测期内,全球二手服装市场销售额预计将以 11.2% 的复合年增长率增长。
2021 年,衬衫和 T 恤占据了 29% 的市场份额,原因是随着职业女性劳动力不断扩大,消费者偏好产生了变化。
该报告进一步指出,由于存在大量较低的社会经济消费者基础,巴基斯坦占南亚二手服装销售额的 40% 以上,而危地马拉在拉丁美洲领先,在预产期内占据超过 30% 的价值份额。
这一增长归因于终端消费者生活方式的变化,加上工业化、城市化、经济发展和全球化,在过去十年加速了时装业的销售,特别是在发展中的国家和地区。电子商务也改变了购物体验,超过 60% 的人选择通过在线平台购买产品、服务和获取商品。该报告进一步提到,ThredUP 和 Poshmark 等公司的存在将在未来几年推动对廉价和生态替代新衣服的需求。 在线分销渠道的扩张也将是兆头。消费者对在线转售平台的认知度不断提高,快速增长的在线初创企业提供二手品牌、设计师商品和租赁民族服饰,这进一步推动了二手服装市场的发展。
中国产业用纺织品行业在两年内增长了 12%。根据国家统计局的数据,2021 年 1 月至 2021 年 9 月,非织造布和帘子布产量分别下降 1.01% 和上升 29%。过去两年,产业用纺织品行业的营业收入下降了 14.74%,相比之下,前两年的平均涨幅为 10.78%。在前两年平均增长 14.12% 之后,他们的整体收入同比下降了 63.78%。营业利润率为5.25%,比上年下降7.11个百分点。 31家上市企业第三季度营业收入下降1.15%,整体利润下降33.59%。例如,运输车辆用纺织品和过滤纺织品领域的上市企业增长强劲。
前三季度,非织造布、特种纱、麻绳(索)、丝带出口增长6.91%。非织造布出口下降了 4.52%。出口量增长8.06%。工业用纺织品出口额增长39.74%。化纤无纺布防护服(含医用防护服)出口下降79.81%。
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on tri-monthly basis.
PT.SHAILENDRA TSHAI INDONESIA (Code: MT0222-01)
UDANG 3 MULTI KAVLING A 03/03/KEL, KADU
KEC.CURUG, TANGERANG, BANTEN 15810
15810 TANGERANG INDONESIA
INDONESIA, REPUBLIC OF
PRODUCT: BABIES APPAREL
COMERCIAL COPELEC SA (Code: MT0222-02)
AV 18 DE SEPTIEMBRE 688
CHILLAN CHILLAN
CHILE
PRODUCT: LADIES APPARELS
LUCKY STAR WEAVING CO., LTD. (Code: MT0222-03)
33/8, 33/11 MU4, OMYAI, SAMPRAN, NAKORNPATHOM
73160 THAILAND
PRODUCT: YARNS
2020 年全球产业用纺织品市场规模为 1903.3 亿美元,预计到 2028 年将达到 2858.8 亿美元,从 2021 年到 2028 年的复合年增长率为 5.15%。
Verified Market Research 的一份报告称,由于全球人口以惊人的速度增长,预计纺织品的增长将在预测期内激增,从而导致采用现代技术来促进成果。
该报告按材料(天然纤维、合成聚合物、金属、矿物、再生纤维)、工艺(机织、针织、无纺布)、应用(运输纺织品、医疗和卫生纺织品、工业产品和组件)分析了产业用纺织品市场) 和地理。
由于跨境需求高,技术纺织品的出口活动增加,有利于市场增长。
然而,与传统的低成本替代品相比,该市场的增长主要是由于产品成本高而受到阻碍。这主要是由于用于制造这些技术纺织品或在制造过程中使用的原材料成本上涨。
在全球范围内,公司正在扩大产业用纺织品领域;例如,去年,土工建筑材料制造商NAUE推出了可生物降解的无纺土工布Secutex Green。
Freudenberg Performance Materials Apparel 推出了适用于 Freudenberg Active Range 中所有类型运动服的新型高弹性和透气衬垫和胶带。
同样,全球科技集团 Freudenberg 收购了总部位于英国的 Low & Bonar PLC,这是一家生产技术纺织品的公司,收购金额未披露。
印度政府也准备通过 PLI 计划吸引对这一产品类别的投资。
根据最新报告,到 2027 年底,全球自适应服装市场价值预计将达到 4087.6 亿,复合年增长率为 4.1%。
适应性服装是专门为有不同程度残疾的人设计的服装,包括后天残疾、先天缺陷、先天性发育障碍和其他身体残疾。专门为满足这些群体的需求而设计的服装可以为在英国生活的许多人提供一种赋权感并提高生活质量。不幸的是,对于有学习障碍的人来说,适应性服装通常是有这种类型障碍的人最不希望购买或穿着的。但是,有一些选项可以为这些人在款式、合身性和功能方面提供更多选择,使他们能够购买外观精美且功能良好的物品。紧身裤、紧身衣、袜子和裤子都是适应性服装,适合那些可能难以每天走路、说话或执行普通任务的人。紧身裤和紧身裤是最容易穿脱的可穿戴服装类型之一,这要归功于它们紧贴身体的方式,并且可以根据个人穿着者的体型和尺寸进行塑造。适应性服装(例如这些特殊类型的服装)采用高质量、耐用的材料制成,可抗撕裂、撕裂和褪色。
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
For further information or news, please refer to MKMA Newsletters which are circulated to members only and published on bi-monthly basis.
2. To attack these trade practices through WTO cases and US trade law. NCTO supports passage of legislation by the US Congress to address China’s ongoing currency manipulation including the imposition of tariff sanctions on China’s exports to the US and allowing US companies to attack Chinese subsidies at their source through the use of countervailing duty laws.
3. A permanent textile safeguard in the Doha Round of trade talks to address the unique problems posed by China and other non-market economies.
4. Not to allow China additional access to the US market through loopholes in future trade agreements. Future success on trade liberalisation in this sector hinges upon the prevention of such loopholes being included in future agreements.
5. Finally is that the US should resist any pressure to lower US textile tariffs during the Doha Round negotiations.
It is the result of the first online bidding for next year’s quotas set by the European Union.
Nationwide, there are 20,047 companies eligible for joining the bidding, and 6,935 of them have received bidding permission numbers. Of the total of 5,284 companies that bid, 3,385 won contracts.
The bidding move was made upon the request of many textile manufacturers in China for a more transparent and fairer process. It will also help better manage exporters’ performance.
Another 12% of the total quotas will go through the bidding process next time. A special committee under the ministry has been set up to take charge of bid invitations. The majority of the export quotas, 70%, are allocated based on textile dealers’ shipments from the previous year.
The government filed an appeal with the U.S. Court of Appeals for the Federal Circuit, asking it to overturn a decision by the U.S. Court for International Trade banning threat-based petitions.
Last year, textile industry groups filed a number of requests with the federal government to impose safeguard quotas on some types of Chinese textile imports. The safeguard quotas are designed to prevent Chinese textiles from overrunning the U.S. textile market and driving U.S. producers out of business.
Another group of U.S. companies, principally retailers and apparel makers, had filed suit asking the court to ban the government from considering those quotas purely on the basis of a potential threat rather than proven harm to the industry. Those companies are in favor of an open trade regime because it allows them to make clothing cheaper abroad and hence sell it for less in the United States.
The Court of International Trade’s decision came out of that lawsuit, which the federal government is now challenging.
In January, the United States imported more than $1.2 billion in textiles and apparel from China, up from about $701 million a year ago. Imports of major apparel products from China jumped 546%. Last January, for example, China shipped 941,000 cotton knit shirts, which were limited by quotas; this January, it shipped 18.2 million, a 1,836% increase. Imports of cotton knit trousers were up 1,332% from a year ago.
The 25 countries that are part of the European Union also registered big increases, importing about $1.4 billion worth of textile and apparel goods from China, up from about $975 million a year ago, a jump of 46% with Germany rising sharply by 46.39% in January. Germany was China’s fourth largest market in January.
The United States overtook Hong Kong and Japan to become the biggest buyer of Chinese textiles and apparels in January. Besides the United States, other countries that saw major increases in Chinese textile and apparel included EU countries, Turkey and Canada .Exports to Turkey increased 78.9%; those to Japan increased 11.9%; and products to Hong Kong increased 18.26%.
The top 10 markets for such Chinese exports in January include the United States, Japan, Hong Kong, Germany, South Korea, Russia, Italy, Australia, Britain and the United Arab Emirates. These countries comprised 65% of China’s total exports in textiles and apparels in January.
According to the latest consumer price index report from the US Department of Labour, clothing prices slipped 1% in July following a 0.9% slide in June and a 0.6% fall in May.
Those slides combined with earlier falls means clothing prices have fallen 3.2% from the year-ago period as firms who have switched their operations to countries with cheap labour pass on the savings of lower production costs.
Industry observers and economists say that move combined with greater competition at retail level has kept prices down with many shoppers tending to buy apparel from discount stores or shopping only during sale periods.
Commentators also point out that apparel prices could fall even further if trade chiefs were to increase textile quotas and reduce import duties as well as cut other strict trade regulations.
Organizer
Ministry of International Trade and Industry (MITI)
Eligibility
· Local companies with Malaysian equity of 51% and above
· Foreign companies incorporated in Malaysia (open category)
Judging Criteria
· Export Performance
· Market Penetration
· Product Development
· Market Operation
Benefits for Winners
· Exemption from the total participation fee of RM12,000 for 3 International trade fairs.
· Exemption from participation fee for exhibition space at the MEEC at Matrade headquarter and at Dubai for one exhibition session.
· Given space to advertise in Matrade’s export directory.
· Publicity of company profile of award winners on NPC, SIRIM, MITI and Matrade website.
Closing Date
31 July 2002 (Entry form and further details available at MKMA)
Anugerah Industri Selangor 2002
Anugerah Industri Selangor (AIS) is open to all companies operating in Selangor. The objective is to give recognition and also as a form of appreciation for outstanding achievements in Selangor.
1 Selangor Product Excellence Award
1 Selangor Quality Management Excellence Award
1 Selangor Export Excellence Award
There were six award categories. Award includes a trophy, certificate, eligible to use the award logo for 3 years and publish company particulars on SSIC website. Closing date for application is 31 July 2002. For further details please contact Ms. Zalina Mat Nasir (Tel : 03-5510 2005 / 5511 7988)
Making the condition worse for the domestic industry is the falling demand for Indian garments in the international market. According to the Apparel Export Promotion Council (AEPC), garments exports from India to quota countries during the month of November showed a decline of 9.19% in terms of quantity to 82 million pieces from 90.3 million for the same period last year. In value terms, however, the decline has been 15.71% to US$ 274.8 million from US$ 326 million last year. Garment exports in October had shown a slight recovery, registering an 11% increase in value terms to US$ 253.9 million as compared to US$ 228.8 million a year ago.
Exports during the April-November period of 2001 increased by a marginal 1.65% in terms of quantity to 635 million pieces. However, they posted a decline of 7.40% in terms of value to US$ 2314.7 million over the same period last year. When compared to November 2000, garment exports to the US increased by 10.86% in terms of quantity to
23 million pieces, but registered a decline of 15.50% in terms of value to US$ 116.6 million as against US$ 136 million in 2000.
Garment exports to the US during April-November amounted to 191.3 million pieces valued at US$ 1128.8 million, representing growth of 4.76% in terms of quantity but a decrease of 10.02 % in terms of value.
Exports to the EU during November showed a decrease of 15.50% in terms of quantity and 15.34% in terms of value, while exports to Canada decreased by 14.29% in quantity terms and 20.67% in terms of value. Readymade garment exports to the EU during April-November amounted to 400.5 million pieces valued at US$ 1048.3 million, representing an increase of 1.19% in terms of quantity but a decrease of 3.89% in terms of value.
From the beginning of the calendar year until November, overall readymade garment exports to the restricted countries registered a decline of 1.93% in terms of quantity to 954.2 million pieces compared to 8.80 % in terms of value to US$ 3477.5 million.
The above table shows that there has not been a significant change in the ten most important export-markers during the period 1991 – 1999. In other words, Malaysian apparel producing firms hardly diversified their most important export markets. Most exports of apparel go to the North American market, whereby Canada only plays a limited role. The share of exports to the US has been about three-quarter (SITC code 841 – 844), with the exemption of 1991, when exports to the United States accounted for half of the total exports. Exports to the EU have accounted about 40 percent of total exports during the period 1991 until 1997. In 1999 these exports, as a share of total apparel exports, dropped to about 28 percent.
The results of the key indicators merely give a rough picture of the respondents. This is due to a lack of accuracy and reliability of obtained information, which seems to reflect the sensitivity of certain subjects for apparel producers. Besides, data collection in the interviews regarding key indicators was based on 1997 with the aim to retain consistency in the ongoing research of Malaysian apparel producers. Many respondents pointed out that this turbulent year was not representative with the impact of the crisis. Moreover, some small firms with more than one establishment often did not break down the overall turnover into that of the different establishment.
Data regarding value added (value added is measured as the real value in RM a producer adds to a product: turnover ? input prices.) have also proved to be unreliable. It seems to be a measurement of little concern to most producers, because only 30 percent of the respondents had some kind of calculation for that and the figures vary from 14 to 75 percent of turnover. The aims of IMP2 regarding higher value added apparel might seem rather difficult to reach with such a low awareness of the principle. This lack of awareness could hinder measurement and evaluation of the degree of upgrading. Without past data it will be hard to determine if the industry is making any progress in this respect.
II. Employment
The average number of workers in the interviewed establishments is about 192. Survey shows that there is no tendency foreign companies setting up large-scale factories for assembly activities with many workers.
The number of workers was divided into a production and non-production segment, whereby the latter included personnel in management, administration, sales etc. The average share of non-production workers in total employment is rather high: 18 percent. In Penang it was below average: about 16 percent (43 non-production workers and 264 production workers). Firms in Selangor on the contrary, have a slightly higher share of non-production workers in total employment: nearly 19 percent (17 non-production workers and 91 production workers). This outcome is partly influenced by the fact that two of the respondents were a domestic headquarter in Selangor and had recently shifted to buying their items instead of producing them. This resulted in the absence of production workers.
III. Age
Regarding the age of the establishments, the average is 15 years in both Penang and Selangor. This implies that there is not such a high establishment/company turnover. However, according to most respondents and institutions, the recent crisis in 1997 has caused a shake out, in which many weaker producers had to end operations. In future, the trade liberalization in ASEAN is expected to have a similar impact. Unfortunately, in Malaysia there is no statistical data available on closed-down companies (or factories). Otherwise, there would have been more opportunity to bring some dynamics into these statistics.
IV. Ownership
About 76 percent of the establishments are domestically owned. The remainder consists of joint venture (13 percent) and foreign owned producers (11 percent). More than three-quarter of those establishments with foreign participation is exporting its total output and, according to expectations, 70 percent of them are located in Penang.
More than three-quarter of the foreign investments was already done in Malaysia before 1990. Since the Malaysian apparel industry is confronted with a changing competitive base, it seems that in the course of the 1990?s fewer companies still consider it as a good base for overseas apparel productions. The origin of joint venture capital is Europe in 50 percent of the cases and USA in only 17 percent. In the balance of 33 percent of cases capital is originated from the Newly Industrialized Countries (NICs). In establishments with full foreign ownership the NICs have a stronger foothold with 50 percent. Both Singapore and Hong Kong are represented in one establishment, while only two establishments have their HQ in Taiwan. Again the European countries take a strong position with 38 percent (UK, Sweden). The minor role of the USA in foreign establishments is striking. This may well mean that in general, US companies prefer to focus more on subcontracting and in later section regarding buyers, this will further be examined.
V. Products
Apparel producing establishments in Selangor are on average producing about four different items, whereas firm in Penang seem more specialized with an average of only two items in their production process. This pattern could be interpreted from both a positive and a negative side. First by specializing in certain product a producer can improved its competitive position by focusing on only one or a few products. The workers become very skilled in the production and assembly and a firm becomes a desirable supplier of its items through creation of knowledge and expertise, which enable improved product quality and quicker delivery time. On the other hand, more specialization could imply more vulnerability in a changing environment. If a producer decides to specialize in certain items, then at least it would be wise to keep some variety in the buyer base.
There is a clear regional specialization in certain items. First of all, Selangor has a strong focus on children?s wears as almost one-third of the establishments is producing this type of apparel. Then there is a broad second layer of knitted tops, (especially women’s) underwear, dresses and sportswear. Note however, that the lion share consists of knitted products with, on average, a moderate level of value added. The respondents in Penang seem to have other preferences as nearly half of the respondents produce outerwear, sportswear or both. Being more laborious in the production and using relatively better fabrics, outerwear is generally characterized by high value added. Therefore it is one of the items that make the producers eligible for the ?Pioneer Status incentive program’ of MIDA. Moreover, most of this outerwear will be exported, because in the tropical Asian countries the needs for outerwear (e.g. skiwear or winter wear) is much lower.
Compares to knitwear, woven items do not seem to be produced very much. It appeared that only three of the respondents are producing woven items. In other words, a remarkable share of 95 percent of the respondents was involved in the production of knitwear.
VI. Export
80 percent of all the respondents ? partly-exports its products. However, only 36 (20 producers) percent of all respondents is exporting its complete output, implying that the remainder of exporters (44 percent of all respondents) is only partly focused on foreign buyers or markets. In general, the average share of output that is exported is little more than two-third of total outputs. The two major export destinations for Penang apparel producers are the USA and the EU. This resembles national trade characteristics. Both markets are heavily restricted by quota. The peculiarity is that 32 respondents (71 percent of the exporting establishments) were producing quota items, but 36 respondents viewed quota as a problem in the last ten years. This would imply that four companies do not have a quota while they would like to have one. This does not automatically mean that they have applied for it. Many of the respondents said that it was not even worth a try to obtain ?more- quota. According to them the quotas were unequally divided, whereby the larger exporting companies with a long exporting history were always in favor to receive additional quota.
Producers in Selangor bring their products less far from the source and have countries like Indonesia, Philippines, Singapore and Japan as important regional consumer markets. Exporting apparel producers in Selangor have a high focus on certain markets: the average share of total exports going to Europe is 65 percent of total exports of the establishment. For Asia and America these figures are in both cases 67 percent.
VII. Buyers
As much as 93 percent of our respondents stated to have one or more buyers, accounting for an average of 90 percent of total output. Besides, a number of establishments produce for own brands as well. About 39 percent of the aggregate number of buyers has been further identified in terms of type, share of output, origin and whether or not they deal with an agent. When, for example, a producer said to have 15 buyers, he only identified five of them more thoroughly. Furthermore, some overlap occurs, as one buyer can obtain its items from more than one Malaysian producer. This has been the case with, for example, Adidas, Nike and Gap, which have spread their manufacturer base among many establishments. The more buyers a producer has, the less power each individual buyer can exert on a producer?s strategies. Naturally, this can only be the case if a producer has evenly spread its buyer base. The average number of buyers per producers is about 11.
This section will further be dominated by a categorization of buyers based on two different types of manufacturers. These two types are contract manufacturing and own brand manufacturing. The most common group of manufacturers is the contract manufacturers, whereas the group of own brand manufacturers has a much smaller share in Malaysian apparel production.
Contract Manufacturing
The buyers involved in Malaysian contract manufacturing can be divided into four major categories:
International Branded Companies
International branded companies have been categorized as follows: first there are the international sports and casual wear branded companies, such as Nike, GAP, Adidas, etc. Here, items vary from low to medium value items for the broad market (e.g. knitted shirts & tracksuits). The second group consists of companies like Nautica and Polo Ralph Lauren, for which higher value casual wear for more exclusive segments is produced. Thirdly, there are fashion houses carrying high value international designer brands such as Versace, Yves Saint-Laurent, Pierre Cardin and Boss. The last group includes the international jeanwear producers like Levi’s, Lee, Lois, Wrangler, etc. The first segment of buyers is the most common one, as half the total numbers of buyers identified belong to this segment.
Taking a closer look at the share in total output, the high-end casual wear companies have the largest share with nearly 30 percent on average. This could imply that this type of buyers prefers to have a limited number of core suppliers. In addition, with growth in demand they may be more willing to increase orders to existing suppliers instead of searching for new ones. By doing so, the buyer and manufacturer will better understand each other’s specifications and standards and build up a long-term relationship. In this sense it is kind of surprising that international designer brands have much less dedication in terms of share in total output. Although they tend to work with smaller batches, optimum quality standards and delivery times are crucial in this segment. Therefore, one should expect that this type of buyer prefers to have a frequent and dense relationship with the producer in order to guarantee its full attention to its orders. By having such a relatively small part (13 percent) in a firm?s output, they can exert less power to meet their high demands. On the other hand, generally producers seem to prefer spreading their risks by restricting the share to specific buyers in total output and not let it exceed a quarter of total.
Regarding the origin of international branded companies it will not be a surprise that the lion share (nearly two-thirds) is located in the US. Germany takes a second place and is responsible for 13 percent of total number of buyers. However, note that these shares are frequently dominated by just a small number of buyers. Main contributors in the US are Nike, FILA, GAP and Tommy Hilfiger, while in Germany Adidas has a central role in this respect.
Department stores
The department stores in the contract manufacturing are mostly the Japanese in Malaysia (Jaya Jusco, Isetan, SOGO) and to a lesser extent the local department stores (Metro Jaya and Parkson Grand). The latter generally focus on other market segments. Whereas the Japanese stores have more international quality brands, the Malaysian stores have a higher share of local and private brands.
Local branded companies
This is the third and last group of importance. It appears that they have a share of 8 percent in total number of buyers. Due to the limited size of the Malaysian market they lack the scale compares to many other buyers and often have a small share in manufacturers’ output.
Other buyers
The most prominent ones are the regional underwear brand companies, constituting 8 percent of the total number of buyers. Another group is that of Asian buyers (Giordano, U2, Urdan), which play a minor role compares to the former mentioned international buyers. They constitute only two percent of the number of buyers.
Own Brand Manufacturing
About 45 percent of the respondents are ?at least partially- own brand manufacturer. With OBM production, there is a different type of buyer in the scene. These companies have to deal with the final consumer and have to invest heavily in marketing, because the creation of brand loyalty takes at least a few years. This brand loyalty is especially needed to have guarantee and stable sales. Maintaining an own brand will also entail extensive market research to stay updated of the changing trends, whereas in the case of the contract manufacturers this is fully done by the buyers. More than one-third (35 percent) of the establishments with an own brand were operating its own shops or boutiques with the final customer as buyer. About 80 percent of these establishments still have some contract manufacturing besides their own brand with the main reason to spread risk and remain being updated on developments in the industry and markets. Having an own brand could vary from plain t-shirts with just an own label to whole product ranges with own brands. About 58 percent of total own brands’ output was sold at the domestic market in either department stores or own outlets or boutiques. Of those goods being exported, an important share is destined for Singapore and another part deals with intra-company transactions to other branches throughout Asia.
VIII. Suppliers
The number of suppliers used by our respondents was on average 18, divided into four main categories: fabric, threads, accessories and machinery. Regarding their relationship, 90 percent of the apparel manufacturers maintained mostly long-term connections with the suppliers. By far the most common reason for this was trust and a long-standing personal relationship. In general, it takes a few years to fully understand each other’s demands, capabilities and constraints. Particularly the last factor can be crucial when moving up to higher value added apparel. In case of increasing standard, the role and achievements of suppliers need to be reassessed and adjusted to a different level playing field. Whatever the value of the inputs, it is of pivotal importance that a supplier can meet the delivery times. Otherwise, the manufacturer would run the risk of serious disturbance of the production process due to lack of timely supply. The easiness of changing suppliers can also be linked to the quality of the product. Manufacturers of low value products tend to change the supplier base earlier in case of price differences, whereas high quality producer prefer to stick with their suppliers due to much more sophisticated requirements. In other words, the higher the quality, the more commitment there generally is between buyer and supplier. This is of course valid only for the high quality inputs that cannot easily be obtained elsewhere.
The large majority of the respondents stated they were fully dependent on foreign supply for their fabric and that either Malaysian suppliers could not provide them with a similar price/quality combination or the fabric are simply not available domestically. Nearly two-thirds of the respondents viewed rising input prices as a serious problem that has affected their business in the last ten year. According to some respondents it has proven to be very hard to maintain their quality-fabric suppliers. This has been especially apparent since the depreciation of the Malaysian Ringgit in 1997 to 3.8 RM/1 US$. Since then, some companies were forced to start searching for lower quality fabric for their apparel. Besides the depreciation of the Ringgit, there has also been a rather substantial increase in Taiwanese and Hong Kong output prices in the last few years.
IX. Organization of activities
Most of the respondents said to use subcontractors for at least one part of the production process. The share of companies using subcontractors is in Penang lower than in Selangor with 80 and 97 percent respectively. Out of the 50 respondents that were aware of their subcontracting network, only two (4 percent) stated to have subcontractors abroad and one of them did not indicate any local subcontractors. The remaining 49 producers have on average seven main local subcontractors, which are mostly located within proximity of the firm. By having the subcontractor in the area, the producer can better control the quality of the activities and delivery times are reduced.
Besides the larger number of main subcontractors, establishments in Selangor are also characterized by the contracting out of more activities (on average more than three activities), against two activities in Penang. Establishments in Selangor, more often contract out the production of entire garments to third parties. Especially the subcontracting including cutting is more frequently done by Selangor respondents than those in Penang. Seven of the respondents were actually third party CMT ? subcontractors for other local apparel manufacturers. Thereby, giving away practically every form of responsibility. In this case, the lion share of supplies will be delivered and the CMT producer only needs to cut and assembly the pieces of garment. It is not hard understand that this only gives marginal returns to the producer.
To initiate this focus program, US Customs sent letters to high volume importers and importers with a history of problems when importing ribbons and trimmings in mid-February. These letters set forth US Customs? concerns with improper classification upon entry into the US and with inadequate descriptions on the invoice. The letter states that on or about 17 June, US Customs will begin compliance review of ribbon and trimmings imports. This 120-day grace period is designed to allow importers, brokers and foreign manufacturers sufficient time to properly classify their goods and to modify invoice descriptions as necessary.
If problems are found during the reviews, the importers are likely to be referred to US Customs for further action. Such action could include increased entry reviews, cargo examinations, penalties or other remedial actions.
資料來源:馬來西亞工業發展局 (MIDA)
台灣在馬國紡織業最大的投資案是華隆公司,其他均以中小企業為主,經營規模都不大。由於勞工短缺,工資已沒有競爭力,早期到馬設廠生產成衣的台商多半已移到鄰近工資相對便宜的越南或柬埔寨,更多的廠商則移到大陸投資,在馬來西亞繼續經營成衣的幾乎沒有。至於投資其他紡織品的台商並不多,規模也不大,投資的地點也很分散,彼此間聯繫也很少。
由於台商在馬來西亞投資紡織業的廠商並不多,因此較難做深入的分析,目前先就華隆公司在馬來西亞的投資情況做介紹,以了解台商在馬來西亞紡織業經營的一些概況。馬來西亞的華隆公司成立於1989年,剛開始由布做起,慢慢向上整合到做人纖,目前有兩個廠運作,一在馬六甲,另一在森美蘭,一共雇用11,000人,資本額80多億台幣,但真正投入的資金有500億台幣左右。1998年營業額30億馬幣,最主要的產品是布,其他尚有聚酯粒、聚酯紗及短纖紗。華隆在馬的經營相當上軌道,營業額也年年成長,由1991年的1.2億馬幣成長到1998年的30億馬幣,8年間成長24倍,成績相當不錯。
華隆是屬於一垂直整合的紡織大廠,除了紡織最上游的人纖原料是向本地外商公司或向國外購買外,其他從人纖到成品布到個項紡織品華隆均在自己工廠生產。華隆採取一貫化生產的主要理由是可節省行政管理、運輸與包裝費,對競爭力的提升有幫助。華隆產品有95%外銷,內銷只占5%,雖然政府現在已放寬出口廠商的內銷限制,但華隆依舊以外銷為主。其外銷主要市場在大陸占30%,產品大多是聚酯紗;其他市場包括歐洲、中東、美洲、亞洲及台灣,比例都很平均。由於大陸市場所占的比重過高,亦受大陸內部政策及景氣好壞的影響,因此目前已著手進行市場分散策略,試圖將大陸出口比例降到20%左右。華隆產品有不少部份回銷台灣,均占出口值的10%左右,主要以布為主,因為馬國染整技術比不上台灣。華隆的台灣廠與馬來西亞廠雖然互相獨立,但彼此間仍會支援,包括產能上的互通、技術人員的派駐與受訓等。
華隆是馬來西亞最大的紡織廠,并沒有競爭對手,由於其產品大都出口,因此競爭對手仍以台商為主,這包括在台灣及在東南亞或大陸投資的台商。東南亞金融風暴對華隆公司的影響不小,雖然馬幣貶值有利出口,但相較之下,韓國、印尼及泰國貶值的幅度更大,因此造成華隆的競爭力下降。而馬國經濟衰退、銀行銀根緊縮,也造成華隆融資困難,新的貸款取得不易,影響工廠擴建與新投資計劃。華隆原先準備在1998年股票上市,但因受金融鋒暴影響,股價不振,因此延遲上市的時間,目前尚在等待時機。
台灣與馬來西亞紡織品的雙邊貿易,有些產品剛開始因為台商過去投資下游成衣業,帶動中、上游產品如纖維、紗及布的出口大增,但隨著馬來西亞勞工短缺及工資上漲等問題日益嚴重的影響,有些下游成衣業不是倒閉就是外移,或轉中、上游發展,使到台灣出口到馬來西亞的中、上游產品有逐漸減少的趨勢 (見圖二)。
圖二:台灣與馬來西亞雙邊紡織品貿易
Sri Lanka has agreed to tie all its tariffs for textiles and clothing in the World Trade Organisation (WTO) at rates of 0% for raw materials, 5% for fibres and yarns, 10% for fabrics and 17.5% for clothing products. Sri Lanka officials also decided to bring down a number of tariff peaks from the current level of 25 per cent down to just 10 per cent. In return the EU will suspend current quotas on imports of trousers, cotton blouses, cotton shirts and anoraks from Sri Lanka.
Certain products will be subjected to a double-checking system of import and export licensing in a bid to prevent third parties taking advantage of the agreement. EU officials also revealed that they had put in place a checking system for goods under current quota import restrictions with Bosnia and Herzegovina, in addition to the initial agreement out in place in November.
The agreement will also provide significant benefits to the European textiles and clothing industry. Under its terms, Bosnia and Herzegovina will not increase customs duties currently applied to textiles and clothing imports from the EU. Bosnia and Herzegovina will harmonise technical regulations and standards with those of the EU, in particular with regard to certification and labeling requirements. Both parties have committed themselves not to introduce or maintain non-tariff barriers on textile and clothing imports.
To prevent circumvention of textiles trade and to guarantee the origin of products from Bosnia and Herzegovina, the 11 most sensitive textile products for the EU (cotton yarn, woven cotton and synthetic fabric, pullovers, blouses, shirts, trousers, terry toweling, woven overcoats, suits) will be submitted to a double-checking systems (licensing).
An agglomeration of inter-linked or related activities comprising industries, suppliers, critical supporting business services, requisite infrastructure and institutions.
The industrial masterplan was again very theoretical, and we became very keen on finding out about cluster-based theory in the real world. Our interest became unraveling a cluster. We choose the textile and apparel industry because the University of Utrecht was already involved in a research project in this industry in Malaysia. Besides this, we were interested in this sector because it will always be there some way or another for the simple reason that ‘Everybody needs clothes’.
Questions we wanted to be answered through this research were for instance: What kind of actors (companies, institutions) operate in such a cluster? Do these actors co-operate with each other? And if they do, how was this relationship established and what does this relationship mean for the operations of a company? To answers these questions we formulated a questionnaire and came to Batu Pahat to uncover the depth and extent of this cluster and the linkages that are part of it.
All we knew about Batu Pahat when we came to Malaysia was that it is widely known as the textile town of Malaysia. Some people call it a ‘cowboy town’, some refer to it as the ‘Best Place’ in the world, but the truth lies in the fact that it is home to almost half of the textile factories in the country. The large amount of textile industries makes Batu Pahat the perfect area to conduct this research.
Firstly, the MKMA gave us an insight into how Batu Pahat turned itself into a textile town. We learned that the textile industry in Batu Pahat has a long history. In the 1950s a spinning mill was situated here. This mill was the start of a concentration of textile companies in this region. A lot of new textile companies were established by former workers of this mill. Nowadays especially the knitting segment is very strong represented in this area. Besides many small and medium sized enterprises, there are also a couple of very large players situated in Batu Pahat, e.g. Ramatex and the PCCS group. These companies are mainly export oriented and have also branches overseas, but are also seen as the frontrunners in the region for other companies. The opening of the southern branch of the MKMA was another boost for the textile industry in Batu Pahat. MKMA opened up a branch here because it felt that it could cater more for the welfare of the knitting related industries such as spinning, printing, and sewing. All these activities are well represented in Batu Pahat and the MKMA felt that a geographical closeness to the companies could help these companies in their representation to the government. In other words, being near the companies was a way to decrease the psychological distance to the government in Kuala Lumpur.
Batu Pahat can be seen as a special place for the textile industry in Malaysia. From one simple spinning mill the town has grown to an area with the largest concentration of companies in Malaysia that represent textile industry. In Batu Pahat almost all the activities in the textile commodity chain are carried out. Batu Pahat is a special place because the textile industry here is very linked with each other. The informal linkages are very tight in Batu Pahat. Most of the companies exchange information with each other and say that they help each other whenever they can.
These informal linkages were very striking to us. Textile manufacturers in Batu Pahat tend to “knit closely”. Instead of being organised in a formal matter through for instance an employers association, the contacts between the different companies occur mainly over dinner. Being invited to different of these lunches we could see with our own eyes how these contacts work. Events in the industry are discussed, day-to-day worries are shared, and new gossips cross the table. These informal contacts are in our opinion a good basis to share knowledge and information. We found out however that this does not occur on a large scale and could/should be improved. The owners of the different companies show reluctance when it comes to sharing knowledge. They always keep in mind that they are competitors. We think that when these entrepreneurs become less suspicious to one and another advantages can be gained for everyone. Two examples will make this clear.
Most of the companies we visited told us that they have a problem with finding skilled labour. A common reason for this is (according to them) the unattractive character of the industry. The general view of the industry is dirty, underpaid, long hours, and not glamorous at all (compared to electronics and automotives). Each of the companies tries on their own to get the right people, e.g. by importing foreign workers or shift operations to the kampong where there is still an unemployed workforce. Instead of solving the problem by them selves we think that when these companies join forces they should be able to overcome this lack of skilled labour. Training programmes could be initiated for instance on the workplace (financed by all companies), the general view of the industry could be improved by promoting it on universities and other training institutes. By solving the problem together time and money could be saved.
Another example is that companies complain about the locally produced fabrics. Local fabrics are often of a quality, which is not according the international standards. This causes problems for the garment companies as well for the fabric producers. The garment companies have to import their inputs and the local producers have to offer their products for a lower price. A solution could be a more intense co-operation between local suppliers and garment industries. With a more intense co-operation on product and process development quality could be improved and companies could get a better price for their products. The garment companies could get quality products in the vicinity instead of having to import it, which comes with uncertainties about delivery time and import regulations. In this way, local supply and local demand could become more linked in this way. Again, this would bring benefits for all participants.
Other problems the industry faces could also be solved more easily according to us when co-operation between the companies intensifies and trust increases. We see that the opportunity to co-operate is there (= informal contacts), but people do not make fully use of it. We even think that in order to survive the companies will have to co-operate more intensely in the future. Innovativeness is one of the keys to staying in business. Working together (as two people know more than one) on innovations is an opportunity to increase the competitiveness of the industry as well. Competition will increase and staying competitive will become harder and harder. Joining forces will become the way to survive!
At the moment we are working on our final report. Hopefully this will be finished at the end of July. This report will be send, of course, to the MKMA where everybody is free to take a look at it in the library.
Finally we would like to take the opportunity to thank all the companies who were willing to let us come to their factory and answer all of our questions. The interviews held have given us a lot of information about the industry to write our final report. We will remember Batu Pahat as the Best place!
(By Thomas Akveld & Pieter Liebregts, B.A. Candidates, University Utrecht, The Netherlands)
For more information, please log on to www.philau.edu/mba/tam.htm
or Email frumkins@philau.edu
Many of the products integrated in Stage Two were never under quota (and of course all of the products in the US Stage One integration were never covered by a quota). Despite the best effort to delay all important liberalization until the very end of the 10 year phase-out which is at midnight, December 31, 2004, there are some important consumer products that will be removed from quota protection in 2002 for WTO members countries creating new trade opportunities.
II. 2002 Quota Elimination Categories
Textile exporters are likely to be able to increase their exports to USA next year when quota affecting items are eliminated in line with WTO rules. Liberated items include gloves, gown, caps, suits, womenswear, neckties, fabrics and yarn.
The following categories will no longer be under quota in year 2002 :
331, 350, 359, 431, 459, 631, 649, 650, 659, 831, 833, 834, 835, 836, 838, 840, 842, 843, 844, 847, 850, 851, 858, 859, 222, 223, 621, 622, 810, 369, 464, 469, 666, 669, 670, 870, 870, 600, 606, 607, 800, 911.
III. Highlights for 3rd Phase Quota Removals
H Yarns – Several of the manmade fibre yarn categories – 600, 606, 607 will no longer
be under quota. This offers some opportunities.
H Fabrics – Category 222 which is cotton and/or MMF Knit Fabrics
Currently, major suppliers to USA are Canada (55%) Korea (7%), Taiwan (7%) and Hong Kong (6%)
In category 223 cotton and /or MMF non-woven fabrics. Major suppliers are Canada (22%) and Israel (19%)
H Apparel – Potential areas where US consumers are likely to increase their purchases
are Knit Shirts and Blouse (838) .
As a condition of doing business with Gap Inc., each and every factory must comply with this Code of Vendor Conduct. Gap Inc. will continue to develop monitoring systems to access and ensure compliance. If Gap Inc. determines that any factory has violated this Code, Gap Inc. may either terminate its business relationship or require the factory to implement a corrective action plan. If corrective action is advised but not taken, Gap Inc. will suspend placement of future orders and may terminate current production.
I. General Principle
The factory operates in full compliance with all applicable laws, rules and regulations of their respective counties.
The factory allows Gap Inc. and/or any of its representatives or agents unrestricted access to its facilities and to all relevant records at all times, whether or not notice is provided in advance.
II. Environment
Factories must comply with all applicable environmental laws and regulations. Where such requirements are less stringent than Gap Inc.’s own, factories are encourages to meet the standards outlined in Gap Inc.’s statement of environmental principles.
The factory has an environmental management system or plan.
The factory has procedures for notifying local community authorities in case of accidental discharge or release or any other environmental emergency.
III. Discrimination
The factory employs workers without regard to race, color, gender, nationality, religion, age, maternity or marital status.
The factory pays workers wages and provides benefit without regard to race, color, gender, nationality, religion, age, maternity or marital status.
IV. Forced Labor
The factory does not use involuntary labor of any kind, including prison labor, debt bondage or forced labor by governments.
If the factory recruits foreign contract workers, the factory pays agency recruitment commissions and does not require any worker to remain in employment for any period of time against his or her will.
V. Child Labor
Every worker employed by the factory is at least 14 years of age and meets the applicable minimum legal age requirement.
The factory complies with all applicable child labor laws, including those related to hiring, wages, hours worked, overtime and working conditions.
The factory encourages and allows eligible workers, especially younger workers, to attend night classes and participate in work-study programs and other government-sponsored educational programs.
The factory maintains official documentation for every worker that verifies the worker’s date of birth. In those countries where official documents are not available to confirm exact date of birth, the factory confirms age using an appropriate and reliable assessment method.
VI. Wages & Hours
Workers are paid at least the minimum legal wage or the local industry standard, whichever is greater.
The factory pays overtime and any incentive (or piece) rate that meet all legal requirements or the local industry standards, whichever is greater. Hourly wage rates for overtime must be higher than the rates for the regular work shift.
The factory does not require, on a regularly schedules basis, a work week in excess of 60 hours.
Workers may refuse overtime without any threat of penalty, punishment or dismissal.
Workers have at least one day off in seven.
The factory provides paid annual leave and holidays as required by law or which meet the local industry standard, whichever is greater.
For each pay period, the factory provides workers an understandable wage statement which includes days worked, wage or piece rate earned per day, hours of overtime at each specified rate, bonuses, allowances and legal or contractual deductions.
VII. Working Conditions
The factory does not engage in or permit physical acts to punish or coerce workers.
The factory does not engage in or permit psychological coercion or any other form of non-physical abuse, including threats of violence, sexual harassment, screaming or other verbal abuse.
The factory complies with all applicable laws regarding working conditions, including worker health and safety, sanitation, fire safety, risk protection, and electrical, mechanical and structural safety.
Work surface lighting in production areas – such as sewing, knitting, pressing and cutting – is sufficient for the safe performance of production activities.
The factory is well ventilated. There are windows, fans, air conditions or heaters in all work areas for adequate circulation, ventilation and temperature control.
There are sufficient, clearly marked exists allowing for the orderly evacuation of workers in case of fire or other emergencies. Emergency exit routes are posted and clearly marked in all sections of the factory.
Aisles, exits and stairwells are kept clear at all times of work in process, finished garments, bolts of fabric, boxes and all other objects that could obstruct the orderly evacuation of workers in case of fire or other emergencies. The factory indicates with a “yellow box” or other markings that the areas in front of exits, fire fighting equipment, control panel and potential fire sources are to be kept clear.
Doors and other exits are kept accessible and unlocked during all working hours for orderly evacuation in case of fire or other emergencies. All main exit doors open to the outside.
Fire extinguishers are appropriate to the types of possible fires in the various areas of the factory, are regularly maintained and charged, display the date of their last inspection, and are mounted on wall and columns throughout the factory so they are visible and assessable to workers in all areas.
Fire alarms are on each floor and emergency lights are places above exits and on stairwells.
Evacuation drills are conducted at least annually.
Machinery is equipped with operational safety devices and is inspected and serviced on a regular basis.
Appropriated personal protective equipment – such as masks, gloves, goggles, ear plug and rubber boots – is made available at no cost to all workers and instruction in its use is provided.
The factory provides potable water for all workers and allows reasonable access to it throughout the working day.
The factory places at least one well-stocked first aid kit on every factory floor and train specific staff in basic first aid. The factory has producers for dealing with serious injuries that require medical treatment outside the factory.
The factory maintains throughout working hours clean and sanitary toilet areas and places no unreasonable restrictions on their use.
The factory stores hazardous and combustible materials in secure and ventilated areas and disposes of them in a safe and legal manner.
Housing (if applicable)
Dormitory facilities meet all applicable laws and regulations related to health and safety, including fire safety, sanitation, risk protection, and electrical, mechanical and structural safety.
Sleeping quarters are segregated by sex.
The living space per worker in the sleeping quarters meets both the minimum legal requirement and the local industry standard.
Workers are provided their own individual mats or beds.
Dormitory facilities are well ventilated. There are windows to the outsides or fans and/or air conditioners and/or heaters in all sleeping areas for adequate circulation, ventilation and temperature control.
Workers are provided their own storage space for their clothes and personal possessions.
There are at least two clearly marked exits on each floor, and emergency lighting is Installed in halls, stairwells and above each exit.
Halls and exits are kept clear of obstructions for safe and rapid evacuation in case of fire or other emergencies.
Directions for evacuation in case of fire or accessible to all sleeping quarters.
Fire extinguishers are placed in or accessible to all sleeping quarter.
Hazardous and combustible materials used n the production process are not stored in the dormitory or in buildings connected to sleeping quarters.
Fire drills are conducted at least every six months.
Sleeping quarters have adequate lighting.
Sufficient toilets and showers or mandis are segregated by sex and provided in safe, sanitary, accessible and private areas.
Potable water or facilities to boil water are available to dormitory residents.
Dormitory residents are free to come and go during their off-hours under reasonable limitations imposed for their safety and comfort.
VIII. Free of Association
Workers are free to join associations of their own choosing. Factories must not interfere with workers who wish to lawfully and peacefully associate, organize or bargain collectively. The decision whether or not to do so should be made solely by the workers.
Workers are free to choose whether or not to lawfully organize and join associations.
The factory does not threaten, penalize, restrict or interfere with workers? Lawful efforts to join associations of their choosing.
Proposed Import Duty Deduction on Selected Textile Items
HS Code | Description | Current Rate (%) | Proposed Rate (%) |
581100190 580121190 580122110 580124110 580125190 580131190 580135190 580190110 580190130 580190190 |
Quilted Textile Products Woven piled fabrics and chenille fabrics |
25 25 30 30 25 25 25 30 25 25 |
20 |
580211190 580211900 580219900 580220190 580220920 580220990 |
Terry toweling and similar woven terry fabrics |
25 30 30 25 30 25 |
20 |
580230130 580230300 580230900 580390100 |
Tufted textile fabrics |
25 30 25 30 |
20 |
580410110 58040190 580421110/30/90 580429110/30/90 |
Lace in the piece, in strips or in motifs |
30 25 30 30 |
20 |
630120100 630120900 630130100 630130900 |
Blankets and traveling rugs |
25 30 25 30 |
20
|
581010000 |
Embroidery without visible ground |
30 |
20 |
581091000 581092000 581099000 |
Cotton & other textile materials embroidery |
30 |
20 |
621210100 621210900 |
Cotton & other Brassieres |
30 |
20 |
621220000 |
Girdles and panty-girdles |
25 |
20 |
621230000 621290900 |
Corselettes |
25 |
20 |
621600100 621600300 621600900 |
Gloves, mittens and mitts |
25 |
20
|
630210000 630221000 630222000 630229000 930231000 630232000 630239000 630240000 |
Bed Linen |
25 30 30 30 30 30 30 30 |
20 |
630251000 630252000 630253000 630259000 |
Table Linen |
30
|
20 |
630260000 630291100 630291900 630292100 630292900 630293100 630293200 630293300 630293900 630299100 630299200 630299900 |
Toilet Linen and Kitchen Linen |
30 25 30 30 30 30 25 25 30 30 25 30 |
20 |
630311000/2000 630319000 630391000/2000 630399000 |
Curtain (including drapes) and interior blinds |
25 |
20 |
630411000 630419100/200 630419900 630491000 630492100/900 630493100/900 630499100/900 |
Furnishing Articles Bedspreads Mosquito Nets |
25 |
20 |
630510900 630520000 630532000/3000 630539000 630590000 |
Sacks and bags for packing of goods |
25 |
20 |
630511100 630611900 630612100 630612900 630619100 630619900 |
Tarpaulins, awnings, sunblind |
30 25 30 25 30 25 |
20 |
630631000 630639000 |
Sails |
25 |
20 |
63691000 630699000 |
Pneumatic Mattresses |
25 |
20 |
630790300 630790910 630790990 |
Canvas, webbing straps |
30 25 25 |
20 |
630800000 |
Woven Fabric and Yarn |
25 |
20 |
Lost stores and the health and whereabouts of employees have remained a primary focus for retailers with outlets in or near the World Trade Center. Fortunately, stores in the Centre itself were located at the base of the towers, making it easier for employees to escape. Gap Inc employees left safely, as did those of Marks & Spencer owned Brooks Brothers, which has a location across the street from the Center. Its site was later used as a rescue centre. However, Gap lost one Gap and one Banana Republic store housed in the World Trade Center. Boston-based TJX Cos has been hard hit ?the company lost seven female employees, who were on the American Airlines plane which crashed into the north tower.
Loss of Business
The economy of the US was already showing signs of distress in the months before the September 11 attacks. Sales figures on September 6 reported disappointing results. Federated reported a 2.6% decline, while Dillard posted a 2% drop. Saks Inc. posted 2% decline. Gap reported a 17% decline in spite of hard struggling. For most retailers, hopes of recovery collapsed after the attacks when consumer confidence plunged. Sara Lee Corp net income fell almost 5% in its fiscal first quarter as the company continues to face tough competition, higher raw material prices and a weakening economy.
With the consumer spending outlook becoming even gloomier, retailers are now requesting their suppliers to reduce or postpone their deliveries for the remainder of the year. Many Department Stores will also be canceling orders In New York, shopping plummeted.
Inevitably, clothing manufacturers in Asia, Mexico, the Caribbean and other countries, who mainly focus on the American market, will be hit by the fall in US consumption. Will European clothing imports compensate for this? Most probably not. European economy was slowing even before the terrorist assault on the US; now it could be heading into recession. Since the terrorist attacks, most economists have halved their forecast for euro-zone GDP growth in 2002, to just 1.1%.
Loss of Jobs
America’s fourth largest retailer, Sears, Roebuck and Co, announced to cut 4,900 salaried jobs in an effort to boost profitability at its 860 department stores. The job cuts represent 22 per cent of Sears’ salaried work. The reductions are about 2 per cent of the company’s total staff of 300,000 nationwide.
US based retail clothing Nordstrom Inc. has slashed its workforce by 3.6% due to sales slowdown. Following the September 11th attacks, Nordstrom which has 126 outlets in 25 states, has responded to declining sales by laying off 1,600 employees. In UK, unemployment rate currently stands at a 26-year low of 3.1 per cent, but job cuts are mounting.
Yarn manufacturer Parkdale America is to close two of its North Carolina plants because of high imports, an oversupply of yarn in the market and overall poor business conditions. Its decision will affect 84 workers at its plant at Belmont which produces cotton and polyester/cotton open-end yarns, and 34 workers at its plant at Kings Mountain which produces all cotton open-end yarns.
Loss of Confidence
US consumer confidence plummeted in October to its worst reading for more than seven years as widespread lay-offs made Americans increasingly gloomy. Last year, US retail sales of apparel and footwear totaled about $322 billion . However, many produces are now bracing themselves for a huge fall in sales as consumers’ confidence continues to wane.
UK consumer confidence, which has held up well for most of this year, slumped in October to its lowest level. The Consumer Confidence Barometer fell for a fourth consecutive month to -5 in October from -1 in September and a peak of +6 in June. Sharp drops in confidence after shocking events can be a poor leading indicator of future economic activity.
Change of Strategy
The terrorist attacks may also have some less expected longer-term effects. One of those could be the rise of protectionism, especially in the US. Harvard University researchers found that high levels of nationalism and patriotism are associated with support for protectionism. This finding suggests that sustained global conflict – which boosts nationalist fervour at home and abroad – could undermine support for free trade. Will the American textile and clothing industry accept without further campaigning the end of the ATC quota regime on January 1, 2005? Will they follow sensitive policies against China’s, the textile and clothing exporting giant, who in the next few months will be admitted to the World Trade Organization?
Change of Sourcing
Another longer-term effect of the September 11 attacks could be a change in the world map of clothing resourcing, and especially of Cutting, Making and Trimmin (CMT) activities.
This map has never been a pure reflection of wage and salary differences between countries, and not even of differences in total production costs. Otherwise, countries such as Egypt, Cambodia, Vietnam would be the leading clothing producers of the world while little if any clothing would be made in Italy, Hong Kong or Turkey. International clothing buyers and contractors, When looking for new sourcing locations, do not rush automatically to the cheapest possible labour countries. They also take into account the overall efficiency of a country, special import terms, lead times, the flexibility of factories, the availability of local fabric and accessories, the knowledge of foreign languages and the many parameters which define the “business climate” of a country.
Business climate factors which probably will be pushing companies to rethink their location strategy. Of course costs of clothing production will remain an important factor in deciding where to source. However more attention will probably be given to the general business climate in a country, including the security factor. Besides, American and European clothing groups will feel pushed to reconsider their choice whether to produce at home or overseas.
Change of Investment
Foreign investment invariably flows to countries where safe and high returns can be expected, that is preferably to North America, Western Europe and Eastern Asia. It generally shuns poor or dangerous countries. Another longer-term consequence of terrorism might be that domestic and foreign direct investment in the US itself and in some other countries will be deterred, leading to reduced output.
Worldwide Hit
Taiwan : US Apparel Exports Could Shrink By $100m
Exports are expected to shrink by 20 per cent or approximately US$100 million – although demand for army and medical textiles could increase. US is Taiwan’s largest outlet for textile and apparel products, accounting for 74 per cent of the island’s exports in the third quarter
In addition to subsiding market demand, higher rates for shipping services and war insurance costs on freight exports to the Middle East area are also hindering Taiwan’s textile and apparel exports. After the US, Saudi Arabia and United Arab Emirates are its largest customers.
On the positive side, US sourcing shifts away from Pakistan, Indonesia and other anti-US countries could benefit Taiwan.
Pakistan : Uneasy Position
Violent opposition from parts of its own population and revenge strikes from Afghan forces could be the price Pakistan has to pay for its co-operation in the international struggle against terrorism.
The ambitious Five Year Plan Textile Vision 2005 is aimed at reshaping the Pakistan textile and garment sector in a modern, dynamic industry. Government planners are dreaming of “a royal path” to modernization involving US$6b in investment over the period 2001-05. The chance that the sector can take this ‘royal path’ would considerably increase should the American-Pakistani cooperation against terrorism bring success (and a huge flow of American aid as ‘thanks’ ). It could however greatly diminish should internal political struggle – for and against the Taliban – result in chaos.
South Africa: US Clothing Sales Down
October is proving a quiet month for clothing exports from South Africa to the US following the September 11 attacks, with a number of orders.
Between March and September, clothing exports to the US from South Africa had increased by 45 % over the previous year. In March, South Africa qualified for preferential access to the US clothing market under the Africa Growth and Opportunities Act, which did away with import duties of between 15 per cent and 32 per cent for qualifying suppliers in nine sub-Saharan African countries. Following promulgation of the Act, South Africa is expected to improve on last year’s figure of $142 million dollars of exports to the United States.
Indonesia: Textile Exporters Face Huge Slump In Orders
Worries officials of the Indonesian Textile Association (API) say they expect the country’s 2001 textile export to decline 25% this year due to the economic slowdown in the main US market. Indonesia’s textile exports to the US topped $2.1 billion last year but that figure is expected to drop sharply in the next few months.
Several textile companies have already lost orders as a result of the US terrorist attacks, while others have been forced to slash their prices or risk losing the orders. About 26.3% of the country’s textile export goes to USA. Textile companies may decrease production first or reduce overtime work in order to survive the difficult time.
UK : Plain for Clothing Retailers
With the problems of M&S, the sale at a knock-down price of Bhs and the dramatic exit from the UK of C&A it is clear that the clothing sector has been among the hardest hit in Britain’s beleaguered retail industry. Nevertheless, even worse news is on the horizon. The latest five year forecast from retail consultancy Verdict says that life will get considerably tougher over the next few years.
For the last 2 months, we have honour to receive the Trade Commissioner of South Africa Embassy to present a talk on the African Growth and Opportunity Act (AGOA). Besides, 3 representatives from Jordanian Investment Board came all the way to reveal the mystery mask of Jordan. They were arranged to hold talks and meetings from Penang to Johor Bahru. Besides located in the Middle East, the conditions seems quite abundant supply of high quality manpower. Next, our Presidents were interviewed by journalist from Paris. They are from the London based Global Business Report to write a report on Malaysian Textile and Apparel Industry to be published on the winter issue of Fashion Business magazine.
Red Traffic Light
Further to the Budget 2002, we were informed by MIDA that they had consulted Custom not to lower the import duty of knitted products for the moment. However, related manufacturers needs to seek for new markets and adopt new measures before the red light turns green in the days ahead facing the unavoidable implementation of AFTA and WTO.
Red Hot Activities
Otemas, ITMA Asia, Factory Visits, Practical Trainings, Seminars, Meetings. We devote our best to members and we appreciate your full support to all activities.
Domestically, this will result in two irrevocable changes: first, the further opening up of the Mainland market and secondly, the progressive transformation of China into a transparent and rule-based market economy. Foreign companies may import most products into any part of China three years after accession.
The opening up of markets will speed up the institutional reform of the Mainland economy. The WTO system based on rules allows trade disputes among members to be solved fairly and objectively. Operating under this framework, China has to comprehensively improve its investment environment.
China is now the world’s fifth largest trading entity. According to a World Bank estimate, following its accession to the WTO, China’s share in world exports will almost double in five years: from 3.9% in 2000 to 6.3% by 2005. Economic reform and liberalisation will no doubt benefit the Mainland economy profoundly.
China : Cut Textile Tariffs
Upon becoming a member of WTO , China will cut import tariffs on industrial products to an average 12 % in 2002 from the current 15.3 % as it fulfils its World Trade Organisation commitments.
China would cut import tariffs on farm products to 16%, starting from January 1, 2002. Tariffs on textiles would fall to 18 %, on electronics to 11%, on machinery products to 10%, on cosmetics to 8 % and marine products to 14 %
Quotas on Chinese textile imports will formally end in 2005 as mandated under a WTO-wide accord, although a special import “safeguard” system will be in place until the end of 2008. China’s textile and apparel sector is one of the few that should see a clear benefit from WTO entry with the lifting of import quotas abroad. Chinese textile firms focused on exports will be best positioned to capitalise on the agreement.
China, now a member of the World Trade Organisation, also plans to become an ITA member, which means it would have to remove tariffs on all IT products by 2005. The average tariff on industrial products would be slashed to 9-10% by 2005.
US : Cutting off China Textile Quotas
According to a spokeswoman for the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), the US government’s unilateral quota deduction on textile imports from China seriously violates the Sino-US bilateral textile agreement. She said that the US government, which recently decided to slash quotas on Chinese textile imports, had so far “provided no clear evidence” of the need to make the quota deduction which is estimated to be worth about $28 million.
She claimed the Chinese government has consistently implemented the Sino-US bilateral agreement, had developed bilateral trade relations on the basis of equality and mutual benefit and solved trade disputes with a practical and cooperative attitude. She added that MOFTEC was most unhappy with the situation and called on the US government to consider the overall Sino-US trade relations and correct its decision in order to ensure the smooth development of bilateral textile trade.
China vs India
China eyes 40% of world textile market by 2004 while India trying hard to manage its current 3% share.
If it is a race between the giants —India and China—for the global textiles market, the entry of China in the WTO will mean that India will have to think for a new strategy to compete or lose the race even before it has begun. Despite having similar resources and being clubbed in the same category for the race, one contender is capturing international market share while the other is losing ground.
With the growth of the world economy, it is expected that world textile trade would grow at 3-5 % every year. China which presently has a 19 % share in the world textile trade aims high and has set itself a target of achieving 40 % of global clothing market by the year 2004 dominating the scene completely. India on the other hand currently has 3 % share and nothing that it is doing can prevent the declining trends.
China – Advantage of Labour cost and Policy
According to Sudhanshu Bhushan, economist, Indian Cotton Mills Federation (ICMF): “the competitive advantage of Chinese textile industry arises from the low labour costs and economies of scale”.
Though India also has its own set of advantages as perceived supplier of fashion garments and rich designs, China is way ahead in terms of certain economic parameters like power tariff, interest rate and labour policy. China’s economic performance over the past two decades has been astounding with 6% GDP growth in the year 2001. Its entry into WTO has stimulated an upsurge in FDI and China may turn out to be world’s factory. Its stock of foreign direct investment is growing by over $40 billion a year and bulk of this has gone into export industries.
The Chinese textile industry employs more than 13 billion people making a contribution of 13 % of the total manufacturing employment. The production capacity of garment, cotton, wool, silk and chemical fibres in China take the first place in the world with 5.7 million tonnes of cotton yarn and 6.02 million tonnes of chemical fibres making up 30 % and 20 % of the world output respectively.
The biggest advantage with China lies in its abundant labour pool with a clear hire and fire policy. Attached to this is exit policy when a unit can be closed down at any time if it is not economically viable. Besides this China also has the advantage of capital available at most competitive rates. Rate of interest varies between 6.13 % and 6.5 % depending upon the duration of the loan. Power rates in China are a fourth of those in India.
China – Strong Domestic Market
The developing domestic market is a strong support to textile industry in China and nearly 66 % of the total output of garment industry is sold in the domestic market. Further, to accept the challenge presented by the China’s WTO entry, reformation in this industry has taken place through high tech modernisation. China has already quickened the pace of industrial upgrading of the textile industry and become a textile powerhouse with an intention of having 45% share by 2005-06.
India – Lacking Consensus
In China, half of the exports are generated by textile industry whereas Indian textile industry contributes 30 % of India’s foreign exchange earnings. The biggest problem with India is its fragmented textile industry lacking consensus. There are excise duty exemptions and concessions which prevent innovation and technical upgradation with illogical reservations for the small scale industries. Moreover, Indian industry has to face utterly rigid and archaic labour laws.
Indian industry is very resilient to pressures and downturn provided its backed up with correct duty structure and to make it competitive, the fiscal regime has to be re-focused and be in consonance with thrust on exports. Concessions and exemptions at various levels need to be reviewed to complete the chain.
India- Mass Closures
In India there are already reports of rampant closures. Between March 2000 and August 2001, 54 cotton textile mills have been closed in the country. Mentioning that the escalation in running cost and decline in profit have affected the liquidity of the mills leading to wide spread sickness and closure. 403 textile mills remained closed as of August, 2001. The crisis that has engulfed the textile industry has serious consequence for the economy as a whole and if corrective steps are not taken well on time, it will lose its premium status.
Strategic Business Responses
Europe’s Shoppers Spend Their Way Out Of Attack Blues
At Hennes & Mauritz, the world’s biggest fashion retailer, posted a 20 % year-on-year sales increase – despite lower turnover at its US outlets.
To underline the schism in retail activity on either side of the Atlantic, H&M’s arch-rival Gap Inc chalked up a thumping 25 % fall in November sales, rounding the bad news off with a profit warning.
But H&M is just one example of the tidings of joy borne by retail chains across Europe. In Britain, recent retail reporters such as Great Universal Stores, Allders and Sainsbury’s all chorused the good news.
Britain’s Office for National statistics said UK retail sales had increased 1.3% in November, the largest month-on-month percentage increment in almost a year.
It’s not just Britain. French shoppers pushed spending to exceptional levels at two of Paris’ flagship department stores in the first Sunday shopping day in the run-up to Christmas. On that day alone, Parisian shoppers spent 33.9 million francs ($4.6m) at Le Printemps department store on the Boulevard Haussman, and 26 million francs ($3.5m) next door at Galeries Lafayette.
In Netherlands, economist commented on the prevailing mood in the country “What consumers think about the economy is mostly determined by what they read in the newspapers – companies going bankrupt, a slowdown in economic growth. But unemployment in the Netherlands is not increasing sharply and the value of houses isn’t falling. Share markets are performing weakly, but there are more Dutch owning their own houses than owning shares.”
This doesn’t explain everything, of course. One of the main factors behind perky consumer activity in Europe is the suite of interest rate cuts by the European Central Bank (four cuts this year totaling 150 basis points).
But the US Federal Reserve has cut rates, too, slashing its headline rate to 1.75% from 6.50% in January in a bid to counter a sagging economy and the psychological blow of the September 11 attacks on New York and Washington.
Jerome Bedier, president of France’s traders and retailers federation, had a further explanation. He believed December 2001 could be marked what he called “overconsumption” due to “precautionary buying” ahead of the adoption of euro notes and coins on January 1.
Back in Stockholm, there is a pragmatic explanation for a boom in Christmas present buying because many people have cancelled their Christmas vacation trips abroad, and so they have more to spend on presents.
USA: Apparel Retailers Hit Hard By Shopping Slump
US shoppers proved picky in their spending over Christmas ignoring many last-minute pre-Christmas specials on apparel and luxury items, as economic worries continued to depress consumer sentiment.
Apparel retailers like Federated Department Stores Inc are among the companies hardest-hit by shoppers’ new-found frugality. Shoppers are reluctant to commit themselves to spending on items they deem non-essential in light of the continuing fallout in unemployment
The overall US same-store sales in the first 24 days of the holiday shopping season rose 1.8 per cent year-on-year, down from growth of 2.4 per cent a year earlier.
Wal-Mart Stores Inc, whose business has received a boost from consumers’ search for value, also said business at its discount stores was also a bit disappointing in the December 8-14 week.
Bentonville, Arkansas-based Wal-Mart said while goods such as Christmas trees and lights sold well in that week, sales at its discount stores trended “slightly below plan.”
Kmart, which has been losing ground to its larger rival Wal-Mart, said on Monday in its weekly sales update same-store sales for the week ended December 12 were slightly below plan for the month, which pegged an increase of nil to 2%.
To make things worse, apparel retailers such as the Gap Inc – the largest US clothing chain – have continued to slash prices to try to lure shoppers, a step which hurts profitability. Gap had 543 markdown items in the week versus 189 last year.
Most retailers, particularly those in apparel, were headed for the worst Christmas in a decade. There is a confluence of risk factors that have been building up for a decade at the retail bubble.
Analyst expected the outcome of this holiday shopping season to lead to some consolidation in the retail sector, which has been plagued by sluggish sales and weak profits since late last year.
Exporters in Pakistan have voiced serious concern that the new provisions will hurt their sales. Pakistani exporters have build up sizable export business with Saudi buyers; for example, Pakistan has exported $66 million of bed linen to Saudi Arabia since May 2001.
Cambodia has over 250 registered factories that manufacture wearing apparel and some made-ups (e.g., tents). Some factories in Cambodia are owned by foreign companies, which tend to utilize exclusively ex-patriate workers visiting on work permits. However, other apparel factories are owned by Cambodians and some of the factories are joint ventures employing primarily Cambodian workers. In such a poor country production of wearing apparel is one of the easiest industries to establish.
The government of Cambodia relies on revenue from textile factories and their products for many of its operations. Revenue from quota sales supports a major portion of the government and provides employment for hundreds of employees on the government payroll. In addition, sales of wearing apparel bring money into the country and provide employment opportunities for Cambodian workers. The wages of Cambodian workers in garment factories are generally less than $100 per month including benefits (food, medical assistance, etc.) Even though the wages seem extremely low, these wages are well above the average in Cambodia and provide a reasonable standard of living for the workers and their families. To lose these jobs would be devastating to the workers and their families.
Because Cambodia factories are fairly new entries into the global wearing apparel market, the quality is not very high, but is improving. Factories in most industrialized countries cannot possibly compete with the production costs in Cambodia of simple wearing apparel to be sold in the low-end markets in the United States and Europe.
One of Cambodia’s greatest successes has been the U.S. market. Exports during the January through September time period are up nearly 50 % from year ago levels. This follows a 51 % increase during 2000. Over 92 % of all exports to the U.S. are apparel.
The Gulf Cooperation Council, a loosely organized political alliance established in 1981, had previously announced plans to set up a customs union by 2005, but has decided to accelerate the process in order to become better positioned for potential free trade negotiations with E.U. or other Western powers in the near future and to implement a new regional currency.
The member countries of the Gulf Cooperation Council account for about half of the world’s known oil reserves.
After a wait of 18 months, Tanzania on 12 February 2002 became the latest country to secure the right to export textile products to the US duty-free under the African Growth and Opportunity Act (AGOA).
Tanzania’s apparel companies have struggled to meet AGOA’s strict conditions, notably over a system to verify that goods to be exported are actually produced in Tanzania. Conditions for AGOA eligibility include a commitment to the rule of law and political pluralism; lifting barriers to US trade and investment; protecting intellectual property; fighting corruption; and reducing poverty.
Under the AGOA scheme, participating African countries can export unlimited quantities of apparel made from US fabric, yarn and thread to the US without duties or quotas, and greater quantities of apparel made from locally produced fabric.
Speculation on Kmart’s financial condition had been intensifying for weeks as the company faced a cash shortage that was accelerated by a slump in holiday sales and a failed price-cutting campaign. But Kmart’s underlying problems had been mounting for some time as it lost ground to Wal-Mart the nation’s No. 1 retailer, and Target, the discount retailer known for its relatively fashionable merchandise.
Kmart, the nation’s third-largest discount retailer, said that all 2,114 of its currently operating stores would remain open for now. But analysts say that several hundred stores will be closed after a corporate review is completed at the end of April, which could mean layoffs for thousands of the company’s 240,000 workers. Kmart will also extricate itself from leases on some 350 stores that it has already closed or leased to other companies.
Kmart’s fall is bad news for an economy already stung by Enron, which made the largest bankruptcy filing in history, and ripples will be felt by creditors and suppliers. Companies ranging from Eastman Kodak to Delta Galil Industries, a small Israeli underwear maker, said they had millions of dollars in payments outstanding.
Gap’s December Sales Flat
Clothing giant Gap Inc revealed that its December sales were flat to the previous year and that its comparable store sales for last month were down 11%, compared to a 6 % fall in the year ago period.
Year-to-date sales of $13.2bn for the 48 weeks ended January 5, 2002 increased 3% compared with sales of $12.8bn for the 48 weeks ended January 6, 2001. The company’s year-to-date comparable store sales decreased 13% compared to a decrease of 4% in the prior year. As of January 5, Gap Inc operated 4,179 stores compared to 3,693 stores last year – an increase of 13%.
Jacobson Shuts Stores, Files For Bankruptcy Protection
Troubled specialty apparel retailer Jacobson Stores Inc on 1 January 2002 filed for Chapter 11 bankruptcy protection and announced it was closing five stores with the loss of around 520 jobs.
The closures, which are subject to the approval of a bankruptcy judge, would leave the firm with 18 stores and come just weeks after the company axed 225 of its 4,100 employees and reported a third-quarter net loss of $13.9 million.
Doubts Grow Over Guilford Mills’ Future Amid Losses
Troubled textile giant Guilford Mills Inc on January 2002 reported a loss for 2001 of $160.8 million on sales of $643.5m as its auditors voiced doubts over the company’s ability to continue as a going concern.
Sales fell 21% compared to fiscal 2000, with sales in the apparel segment down 36% and smaller falls in its automotive and home fashions segments. Sales in the apparel segment during the fourth quarter plunged 47% on the year ago period as a result of low-priced imports and depressed retail sales.
Ramtex Axes Scores Of Workers
Dozens of workers at textile manufacturer Ramtex Inc lost their jobs when the firm slashes the size of its weaving operation.
The cuts, which affected 85 out of its 650-strong workforce, was enforced on January 21 when the firm’s weaving operation was reduced by a third to eight hour shifts instead of 12 hour shifts. The cuts were in response to poor textile market conditions and an effort to control fabric inventory.
Troubled Burlington Axes 4,000 Jobs
Troubled textile giant Burlington Industries Inc plans to axe up to 4,000 workers in the US and Mexico as it bids to streamline its apparel and fabrics business while under Chapter 11 bankruptcy protection.
The North Carolina-based firm says it plans to slash manufacturing capacity by closing down or selling off five factories within the next six months as part of a major reorganisation.
Burlington will axe 2,800 jobs in the US and a further 1,200 in Mexico although some of those positions could be saved if buyers are found for the plants. It also plans to merge its separate apparel sales and marketing operations under one roof.
Senior executives blamed the job cuts on continuing pressures from cheaper foreign imports and the weak economy.
Levi Strauss To Close Plants In Europe And US
Jeans giant Levi Strauss & Co was in talks with unions about the possible closure of some of its manufacturing plants in the US and in Europe.
In Scotland, where the company operates seven plants, it is proposing to shut two high-cost factories in order to reduce production costs. The number of factory closings in the United States, where the company has eight plants, has not yet been determined. The company reported a 16 % fall in its net income in the fourth quarter ended 25 November to $63 million from $75 million a year ago. Net income for the full year decreased 32% to $151 million compared to $223 million in 2000. For the full-year, net sales declined 8.3% to $4.259 million from $4.645 million in fiscal 2000.
Levi Strauss – which is one of the world’s largest apparel manufacturers – said that its business had been negatively impacted by the difficult economic environment and weak retail markets. It has been particularly hard-hit in Japan, where a number of the company’s retailers have been closed as a result of the economic downturn.
However, the European business stabilised, experiencing modest growth on a constant currency basis for three consecutive quarters.
Looking ahead to 2002, focus will be on delivering relevant products, continuing to improve operational capabilities, enhancing retail relationships and making sure the brands are available to a broad range of consumer markets.
Charming Shoppes Axes 207 Stores
Retail giant Charming Shoppes Inc is to axe one of its plus-sized women’s clothing chains and 207 stores in a move that will see it take a $37.5 million fourth-quarter pre-tax restructuring charge.
The company intends to focus on building its more productive Lane Bryant chain and as a result will close the 77 outlets in the Added Dimensions/Answer chain, along with 130 under-performing Fashion Bug stores.
Most of the store closures will take place in the second half of the fiscal year ending February 1, 2003, with the actions set to improve its annual earnings by $12m before taxes, starting in the fiscal year ending January 31, 2004.
Galey & Lord Files For Chapter 11 Protection
Textiles manufacturer Galey & Lord Inc, which makes denim for Levi Strauss & Co, filed for Chapter 11 bankruptcy protection on 19 February 2002.
In a press release, Galey & Lord said it had filed for reorganisation because of poor retail environment and the filing offers the most viable way to restructure its balance sheet and access new working capital while ensuring an uninterrupted flow of product to its customers. Over the past two years, Galey & Lord has taken a number of steps that have reduced its costs and rationalised its production to the appropriate size. As painful as these actions were, they are now complete, and the company does not contemplate any additional plant closures.
Included in the filing are Galey & Lord Industries and Swift Textiles Inc. The company’s international subsidiaries, including Klopman International, have not filed for reorganisation and will not be affected.
Galey & Lord makes textiles for sportswear, including cotton casuals, denim and corduroy, and is a major international manufacturer of workwear fabrics.
The Malaysia Export Exhibition Centre or MEEC is a permanent display area established to promote Made-in-Malaysia products and services to foreign buyers and incoming trade delegations. It is strategically located in the centre of the city of Kuala Lumpur, within the MATRADE office sited in Wisma PKNS. It is easily accessed by public and private transportation systems.
Has a total floor space of 250 sq meters, the Centre showcases products from more than 200 Malaysian companies, with exhibits that are reviewed and rotated every six months. The products on display reflect the diversity of Malaysians exports including textiles and garments.
MEEC SERVICES
For The Malaysian Exporter, the following services are provided:
Participation Details
Display fee : RM 600 Validity period : 6 months
Conditions:
i. A list of products to be displayed
ii. Photograph or catalogue of the products
Each participant is entitle to exhibit their products or services for a six months period. Companies that wish to extend their participant are advised to submit a new application for every session of the MEEC.
Scope
The Scheme provides assistance for purchasing of ICT software for manufacturing and manufacturing related services.
Funding
Acquiring ICT Software
RosettaNet Linkage
Eligible Expenses : Purchase of software and accompanying hardware
Implementing Agency
Small & Medium Industries Development Corporation (SMIDEC)
The Scheme provides grants to assist SMEs’ participation in:
E-COMMERCE
Scope
The Scheme provides assistance to SMEs for the cost of setting up of web-sites for enabling e-commerce activities through on-line transactions (B2B, B2C) and payment gateways.
Funding
Eligible Expenses
This Scheme is for the promotion of Malaysian branded products and services overseas. The SME’s brand must be registered in Malaysia or overseas and rights to the brand owned by the applicant company.
Set-up charge
First year Hosting
The clock is ticking. By the end of 2004 approximately ten additional countries could become part of the European Union. There are currently 13 countries asking for membership, Estonia, Latvia, Lithuania, Czech Republic, Slovakia, Hungary, Slovenia, Romania, Bulgaria, Malta, Cyprus, Poland and Turkey.
These changes will forever change the face of the European textile community. The change is already occurring as traditional manufacturers in Spain, Portugal, Germany, Italy and others find that one way to compete is to move cut and sew operations to many of these nations.
Internal consumption of apparel in much of the eastern block is rapidly improving. Many of these countries experienced economic growth far above the U.S. or Europe in 2001. One estimate places annual apparel consumption growth in the former eastern block of Poland, Hungary, Czech Republic, Slovak Republic, Estonia, Latvia and Lithuania at nearly 5% . This is phenomenal growth and if it continues it will play a major role in shaping apparel consumption patterns.
The strong growth in apparel consumption is making these markets quite attractive for importers as well as manufacturers. Chinese exporters have targeted many of the markets. So far, their main penetration has occurred in the lower end markets and in underwear, gloves and sportswear.
Scope
The Scheme provides grants to SMEs to upgrade their production/engineering and design capabilities.
Funding
Eligibility Expenses
Costs incurred in upgrading production/engineering and design capabilities such as:
Implementing Agency
Small & Medium Industries Development Corporation (Smidec)
Tel : 03-7660 8585 Fax : 03-7660 1919
Based on the Dialogue with KDN held on February 5, 2002, the following policies on Employment of Foreign Workers will take effect immediately :
Introduction
Worldwide textile and apparel industry is going through a period of change and transition. The challenge of staying competitive in this mature and overcrowded marketplace is already taking its toll on some companies, and an industry-wide shakeout is looking increasingly likely over the next few years. But despite this there are key areas if growth and avenues of opportunities for the most strategically aware suppliers. Besides, some of the countries are adopting rescue plans either as a whole headed by the government or individually. Lets find out more in this feature.
Philippines : $8m Garment Rescue Plan Targets US
A new US$8 m development package has been proposed by the Philippine government in a last ditch attempt to help the country’s struggling garment and textile industry maintain its dwindling share of the US market in the face of stiff competition from China and fast- rising apparel makers in Asia and Latin America.
The Garments and Textile Export Board (GTEB) and the Department of Trade and Industry (DTI) are confident their ‘Garment Export Industry Transformation Package’ will help the sector generate exports of $4 billion by 2005 – when the United States abolishes its quotas and competition for this lucrative market intensifies.
The bulk of the funding will go towards setting up two skills and technology training academies to provide courses on industrial sewing machine operation, pattern making, production supervision, and product development.
Also available under the programme will be low-cost financing, substantial cuts in government fees and penalties, faster customs processing, and plans to set up marketing desks in New York and Hong Kong.
Other incentives focus on slashing quota fees by 30% – a move likely to generate P100 million in savings for the industry. The GTEB has also allocated a third of the annual incremental quota it gets from the United States to reward apparel and textile makers for strengthening their operations. And penalties on industry players who fail to use up their quotas have been waived.
Trade and industry secretary Manuel A Roxas II told a press briefing: “Within 34 months we expect to have a competitive, viable and vibrant garments and textile export industry employing at least 400,000 workers with exports of at least $4 billion in 2005.”
He stressed, however, that the initiative is aimed at strengthening the Philippines’ hold on the US market. He added that although garments and textiles are the country’s second biggest dollar earner, the industry’s growth has been dependent on the guaranteed market access provided by US quotas (accounting for 87 % of the $3 billion in exports last year). Of the $2.6 billion of exports to quota countries, 76% or $2.2 billion went to the US. Philippines’ ranking as a supplier to the US dropped to eleventh (based on quantity) and ninth (based on value) in 2001. Six years ago the country ranked seventh in both quantity and value.
Thailand : Turn into a Fashion Hub
A major new international fashion show based on the world-famous London Fashion Week will be held in Bangkok later this year. The autumnal event, called “Bangkok, A World Fashion City”is part of an ambitious government-backed action plan to turn its apparel industry into a leading regional fashion and design hub by 2005.
It will feature famous designers and models. It also aims to increase the value of the industry by at least 120 billion bath by promoting Thai brand names. More than 1.2 million people work in the nation’s clothing industry across 9,000 factories operated by small and medium-size enterprises.
In line with the above action, an ambitious Thai garment manufacturer and exporter plans to transform itself into a fashion company through the creation of a new fashion label and recruitment of top designers. Apparel Avenue Co intends to become a fashion firm by 2006 by emphasising “Original Design Manufacturing” (ODM) instead of “Original Equipment Manufacturing” (OEM).
The company plans to have three experienced fashion designers by the end of 2002 and at least eight by 2006. It currently has only one. They want to use their own brand names to penetrate both the local and particularly the Asean market by taking advantage of tariff reductions under the Asean Free Trade Area.
New Zealand: Apparel Import Duty Review Underway
Government officials began a review of import duties post-2005 in a move which could affect up to 20,000 jobs in the country’s important textiles, clothing and footwear industries.
Tariffs of up to 19% are currently imposed on the industry until July 2005, but the Ministry of Economic Development is now seeking submissions on what should happen after that date. Union chiefs fear any reduction or abolition in the tariffs would lead to widespread job losses. The tariff review is expected to be completed by March 2003.
India : Takes Proactive Steps
Tapping the Domestic Market
The Indian apparel market, with a growth rate of 5-6%, is one of the fastest growing market in the world. There is a high increasing population of Indian consumers who are young, trendy and have high purchasing power, shifting towards contemporary clothing from traditional one. The number of readymade trousers sold locally, for example, rose form two million pairs in 1985 to 14 m pairs in 2001.
The use of the domestic market as a leverage for exports is a new dimension. The world textile-garment trade exports have indicated that a major feature of the 2000s will be the shifting of garment production to regions of both production sourcing and consumer markets. India with a population of more than 1 billion, is eminently suited as a candidate for outsourcing as well as for domestic retail sales.
New Sizing System
Almost 80% of the garments manufactures in the world today are using the traditional size chart. Initial analysis has proposed to divide the Indian male population into 15 distinct shape clusters. The work is going on to understand the proportions and correlations between the dimensions of each of these clusters, to establish the critical dimensions of Indian bodies the sizing system is being looked upon as a powerful tool.
New Textile Policy
The New Textile Policy was announced by India’s Ministry of Textiles in 2000 to enhance foreign direct investment and R & D. A major Indian initiative was the Technology Upgradation Fund (TUF) of US$5.3 billion providing concession loans to modernize units.
Singapore – Aggressively Establishing Trade Pacts
Singapore has been aggressively seeking trade pacts with many nations. It has already signed free-trade agreements with New Zealand and Japan. It is in the midst of negotiating with United States, Canada and Australia. FTAs are trade agreements that lower or scrap tariffs and enhance trade among a small group of countries.
During this fifth round negotiation on 22-26 Oct. 2001, substantial progress occurred on drafting the customs administration text and achieving a full understanding on the approach for rules of origin. Progress was also achieved on the investment chapter. On textiles and apparel, both sides reached an understanding on the importance of information and appropriate controls.
In 1999, Singapore was the source of about $337 million (80.6 million square meter equivalents) of textile and apparel products. Majority of this – about $326 million – was apparel. In that same year, Singapore imported about $55.7 million worth of textiles and apparel from the United States — $9.9 million worth of apparel, $6.9 million worth of yarns, $16.5 million worth of fabrics, and $22.4 million worth of made up articles.
There are more than 140 garment factories and about 40 knitting, dyeing, finishing and printing factories operating in Singapore, employing about 10,000 workers. Besides the United States, which is the destination of about half of Singapore’s textile and apparel exports, Singapore ships garments to the United Kingdom, Germany, France, Malaysia, Canada, and Japan.
On the other hand, the national American Apparel and Footwear Association (AAFA) has commented on several aspects of the on-going negotiations with Singapore for a bilateral Free Trade Agreement (FTA) especially on the following 2 aspects :.
1. Rule of Origin
It was proposed that rule of origin for the textile and apparel sector along the lines of the Breaux-Cardin rules of origin – which essentially confer origin on the location of the garment’s most important assembly operation – as the operative model.
A more restrictive rule, such as one that requires fabric or even yarn to originate in one or both countries, would be totally unacceptable. Singapore produces little fabric or yarn and cannot be reasonably expected to do so in the near future. Moreover, it does not import much fabric from the United States, despite the fact that Singapore is one of the few countries in the world that maintains virtually no import barriers to U.S. textile products. Because of distance, cost, and the current lack of market barriers, Singapore is not expected to increase its consumption of U.S. textile products under the proposed FTA. Therefore, if garments are required to contain U.S. or Singaporean fabric or yarn before they can benefit from the agreement, very few garments, if any, will be covered. Much of the existing trade under such a rule would be excluded from the agreement entirely.
2. U.S. Duties and Quotas
The average trade-weighted duty rate faced by imports of textile and apparel products from Singapore exceeds 20 % (compared with about 11 % for imports from the entire world). Moreover, Singapore’s apparel exports to the United States faces quotas on 26 categories. AAFA encourage the quick phase out of these U.S. maintained barriers. They suggest that quotas be lifted immediately and that duties be placed on a suitably quick phase out period of 3-5 years. Given the relatively low levels of trade with Singapore, AAFA believe that such a plan would have minimal disruption for the U.S. industry while fostering additional trade links based on existing trade ties.
MATRADE in collaboration with Embassy of Malaysia in Tashkent, Uzbekistan is organizing catalogue display at the new Chancery building in Tashkent.
Interested Malaysian exporters are invited to send directly 30 – 50 copies of product catalogues or brochures to Embassy of Malaysia in Tashkent with a copy of cover letter and a brochure to MATRADE. The address of Embassy of Malaysia in Tashkent is as follows:
Embassy of Malaysia
No. 85 A Khurshid Street, Yunus Abad District700017
Tashkenet, Republic of Uzbekistan
Tel: 998-71-1376 758 / 1376 759 Fax: 998-71-1376 753
E-mail: mwtskont@online.ru
Attn: TYT Yahaya Abdul Jabar
Ambassador of Malaysia to Republic of Uzbekistan
Participant fee is free of charge except that companies have to bear the cost of sending catalogues to Tashkent. Should you have any inquiry, please contact Mr. Khairul Izan Ahmad Saufi / Ms. Siti Azlina Ali Hanafiah of Matrade at:
Tel: 03-2694 7259 ext 179 / 147
Email: khairul@hq.matrade.gov.my / azlina@hq.matrade.gov.my
Canada is to cut tariffs on textile goods from some of the world’s poorest countries in a bid to reduce poverty in African nations.
The decision follows Prime Minister Jean Chretien’s pledge to scrap tariffs of up to 19% on clothing and garment imports from Africa in order to give the region’s industry a major boost and help its people tackle poverty.
He made that pledge during a visit to several African nations recently but such a move is sure to face strong opposition from Canada’s textile industry which employs up to 150,000 people.
Up to 700 jobs are set to be created at three huge new dyeing, spinning and weaving mills in Vietnam’s Hung Yen province. Work on the $30 million project got underway and is expected to be completed by the second and third quarters of 2003.
Once complete, the dyeing mill will have an annual capacity of 20 million metres of cloth; the spinning mill 9,000 tonnes of fibre; and the weaving mill 12 million metres of denim.
Vietnam garment industry is aiming for textile exports of $4 billion by 2005. These new mills and others will help meet the current shortfall in the demand and supply of cloth.
On the other hand, officials from the Vietnam National Garment and Textile Corporation (Vinatex) unveiled ambitious plans for a new $191 million polyester fibre plant.
The huge project – in conjunction with the state-run Vietnam Oil and Gas Corporation (PetroVietnam) – will see a factory with an annual production capacity of 130,000 tons built to provide for the nation’s textile industry.
Vietnam’s garment and textile industry still imports all its foreign polyester fibre but this new project – which still needs government approval to proceed – will see that figure slashed.
French clothing manufacturers are performing far better than counterparts in the UK. On average, French clothing firms are stronger financially, with essentially less debt giving them an edge. Market is also expanding faster in France than Britain, with average sales growth standing at 7.3 % compared to 0.8% across The Channel.
For some years now the UK market has shown very little growth. Any growth by individual companies has been at the expense of others. This has been feeding intense competition and fuelling reduced margins.
The resulting problem is that UK companies have been forced to finance capital and losses to fight the competition. Where as the French market is booming, levels of debt are well below that of a UK company and the level of profitability is excellent. The French seem to be able to finance growth out of normal cash flow.
Up to a dozen export-oriented textile and garment makers have axed their factories in Indonesia with many relocating to China. The clothing and fibre firms include those involved in printing, dyeing, and weaving
Factory shutdown has been happening since last year in consequence to competition both in domestic and export that are recently overwhelmed by illegal import products.
The chairman of Indonesian Textiles Association (API), Lili Asdjudiredja cited lucrative incentives being offered to Indonesian-based manufacturers for the closures and called on the Indonesian authorities to address the situation immediately.
South Korea : Textile Export Slows In April
South Korea’s textile and clothing exports fell 4.5% in April to $1.313 billion, but the rate of decline was the slowest this year. The year-on-year drop in March was 16.3% and in February, 24.5%. This improvement reflects recovery in the global economy and a rise in the price of chemical fibres.
Textile exports to the US, which accounts for 20% of the country’s textile exports, fell 1.5% in April. South Korean expects textile exports to reach $16.5 billion in 2002, up 3.2% on last year.
Taiwan : April Textile Exports Plunge 9%
Taiwanese exports of textile goods by value plunged 8.9% to $1.08 billion in April from $1.19bn in the year-ago period. The statistics revealed yarn and fabric exports fell 9% to $828m in April, with garment exports slumping 18% to $97.6m from 2001.
Those falls contributed to a 13.4% year-on-year slide to $4.17bn in textile exports for the first four months of 2002. Garment exports fell 20.3% in the period and yarn and fabric exports 14.4%.
India : Garment Exports Drop 11.4 %
Textile exports from India fell by 10.2% between April 2001 and February 2002. During this period, the value of Indian exports was $9.81 billion, compared to $10.9 billion last year.
Exports of ready-made garments dropped 11.4% to $2.7 billion, while cotton textiles were down 10.5% to $4.5 billion. Traditional textile products such as handicrafts were hardest hit, declining 15.9% to $979 million.
Slovakia : Clothing Sales Drop As Overseas Orders Fall
Companies within the Slovak Textile and Clothing Industry Association (ATOP) reported a 1% drop in sales revenue in the first quarter of 2002 to 2.768 billion Slovak crowns compared to the same period last year. The decline was attributed decline to slower overseas orders – particularly from the US.
Thailand : Garment Chiefs Confident Despite Export Plunge
Thai trade chiefs said they were not concerned at a 12.6% year-on-year plunge in first quarter garment exports to $1.1 billion as they are confident the market will recover during 2002.
Deputy Commerce Minister, Suvarn Valaisathien, said that the “rebound” of the global economy should boost the garment and textile industry which saw a 5.7% drop in exports last year to $5.3bn compared to the year-ago period.
Philippines : Garment & Textile Exports Drop 18%
In the first four months of this year Philippine garment and textile exports have dropped by 18% to $805.99 m. from $982.91 million in the same period last year
Exports were pulled down by a 23% decline in the US market where imports fell from $749.25 million last year to $577.70 million in the first quarter. Exports to Canada were down 12.71% to $16.87 million, and exports to the European Union fell by 5.9 % to $95.22 million. Exports to non-quota countries, however, were up slightly at 2.7 % to $116.19 million.
Vietnam : Quota Shortages Hit Industry
Vietnam earned $608m from garment and textile exports in the January-April period – up 5.4% from 2001. EU was its biggest customer as it bought textiles worth $160m. It was followed by Japan ($152m), the US ($82m) and Taiwan ($65m). However, exports to two of Vietnam’s key overseas markets, Japan and Taiwan, fell sharply in the first four months of 2002. Apparel and fibre exports to Japan fell 20% to $38 million compared to 2001, while orders to Taiwan contracted 24%.
According to officials, by 22 February around 62.9% of the quota for T-shirts and polo shirts had been filled, while for trousers it is as high as 73.5%. By mid-March the shipment of shirts had also reached around half the volume allowed to the market.
Eligibility
P Technology proposed for acquisition must be on the approved list of high technology as outlined in the Promotion of Investment Act (PIA) 1986 and other strategic technologies as approved by the Government;
P Company is locally incorporated and has at least 51% Malaysian equity/ownership;
P Company must produce evidence of the signed technology agreement, where applicable; and
P A consortium of firms can also apply
Activities Eligible For Funding
P Purchase of High-Tech Equipment and Machinery
P Technology Licensing
P Acquisition of Patent Right, Prototypes and Design
P Placement of Malaysian in Foreign Technology Based Companies and Foreign Technology Institute
P Expert Sourcing Programme
Application
P Applicants are advised to discuss the proposed project with MTDC prior to making a formal application.
Technology Acquisition Fund (TAF)
Malaysian Technology Development Corporation (MTDC)
Malaysia Technology Centre
University Research Park
43400 Serdang
Selangor
Tel: 03-8941 2000
Fax: 03-8941 1100
Attn: Mr. Abd. Halim Bisri
On 23rd July 2002, 11 MKMA representatives headed by President Mr. Seow Hon Cheong visited the Kolej Tuanku Abdul Rahman, Johor branch. The objective of the visit is to gain a better understanding of the Diploma/ Certificate Apparel Manufacturing Course offered by the Kolej.
The objective of the Apparel Manufacturing Course is to provide trained personnel to the apparel and textile industry. The course commences this year with the 1st intake of 20 students. It is a two years course conducted in English. Subjects taught include Clothing History, Quantitative Studies , Knowledge of Materials, Pattern Construction, Sewing Technology, Marketing, Merchandising, Business Organisation, Costing, Business Statistic, Application Packagess and Language units etc. A total of 94 credits for diploma level and 62 credits for certificate level. Total tuition fee exclusive of living expenses is approximately RM5,000 for diploma candidates and RM3,500 for certificate studies. The minimum entrance requirements include SPM or SPMV with a pass in BM and English and at least 3 credits for certificate or 5 credits to pursuit diploma course.
We urge members to render your support to the course to make it a success. You may encourage students with at least SPM level to take up the course. In addition, as the course is at the pioneering stage, the Kolej need to set up the workshop with basic facilities and equipment. They are in urgent need for the following list of equipments :-
Members are encouraged to sponsor generously to the above items (either new or used) to the Kolej. Interested donors please contact MKMA secretariat to make arrangements.
The Danish Import Promotion Office ( DIPO) offers its services to assist exporters in developing countries obtain market information and establish contacts with Danish importers. Malaysian exporters interested may forward their product information and offers to DIPO to be published free of charge at its website (www.dipo.dk) and in its Newsletter UlandsHandel, which is published five times annually and distributed to Danish importers. Exporters may contact DIPO at the following address:
Danish Import Promotion Office
Danish Chamber of Commerce
Boersen, DK-1217 Copenhagen K, Denmark
Phone: 45 33 95 0500 Fax: 45 33 12 05 25
Email: dipo@commerce.dk
Website: http://www.dipo.dk
Illegal Imports Cost Nepal Textile Industry $76m A Year
Smugglers flooding the market with cheap textiles from India and Chinese-administered Tibet are costing Nepal six billion rupees ($76 million) a year in lost revenues, as well as closures and lay-offs affecting three-quarters of the country’s industry.
Over 75% of the industries have either voluntarily closed or are preparing to shut down as the smuggled textiles are much cheaper than the domestically produced goods. Some 300 million meters (one billion feet) of textiles were brought into Nepal each year, but only one-sixth of this was recorded for customs tariffs. Not only are textiles from India and Tibet significantly cheaper than those made domestically, but a bilateral trade treaty renewed earlier this year states Nepal must give concession duty rates to Indian products.
Investments of around 15 billion rupees ($192 million) over the past two decades have failed to halt the decline of the industry, which employs 700,000 workers. In the mid-1990s, the kingdom produced 80 million metres of textiles but this has now fallen to 20 million metres.
More than 75% of Nepal’s textile industries – including what was the largest, Butwal – have since shut down, and the remaining 25 businesses are incurring losses.
Mexican Clothing Industry Troubled by Illegal Chinese Imports
Illegal Chinese clothing imports are the second main cause for concern amongst the Mexican industry, after worries about the US economic recession.
According to Antonio Juan Marcos Villarreal, president of the National Clothing Industry Chamber (Canaiv), around 80 tons of garment from China were seized and burnt recently in the area of La Laguna, Coahuila. Various industrialists in the textile sector are being affected by the entry of large amounts of clothes, which has forced the government and Canaiv to start promotional plans.
Mexico currently manufactures 3 million items of clothing each week – 95% of which are exported to the United States.
─── An Analysis of Malaysian Apparel Performance from USA Import Statistics
Introduction
Globally, the United States is the dominant consumer of imported apparel, with an estimated 29% of world imports. Germany, Japan and France together account for the next 25% of import consumption
During the last 10 years from 1992 to 2002,there were 201 countries worldwide exporting clothing to USA. (Please refer to Statistic for full context) show that Malaysia rank as the 15th supplier of apparel to USA in year 1992 in terms of value. We are maintaining our sales for the past 10 years. Unfortunately, compared with the double digit market growth, our ranking fell to no. 23 as at May 2002. Are we striving hard for breakthroughs ? Or are we lagging behind letting go our opportunities? Are Malaysia Apparel industries doing well? Where is our future?
Our Competitors : Who have by pass Malaysia?
Table 2 indicates the significant rising stars of apparel suppliers. Cambodia has the fastest growth (94,712 times). In 2001, apparel export to USA rose 41.36% in quantity and 1.66% in value compared with year 2000 and accounted for 2.23% of USA textile and apparel imports. The ranking also rose from 21 to 16. El Salvador (6.5 times) and Honduras (4.5 times) also emerge rapidly as key suppliers.
Our Challengers : Who are still behind Malaysia and impose potential threat?
Table 3 listed out countries that are dynamic suppliers of apparel to USA posing great threat to Malaysia. Among which Vietnam who had gained MFA status last year is expected to by pass Malaysia within a year or two.
Our Neighbours : Asean Ranking
Table 4 shows that besides Malaysia, Singapore, Philippines and Laos, all other 6 Asean countries are gaining a larger share of the American apparel market.
Our Mirror: Changes in Export Performance
Table 5 reveal the export performance for the last 10 years following the reshaping of sourcing. Strong upward growth shown in Latin America since 1993. The influence of NAFTA and the CBI is evident. Combined imports from CBI countries account for a major share of US imports.
Losers : Where is our potential opportunity?
Despite of the NAFTA influence, Mexico is loosing their market share for the last 2 years. In, 2001, shipments from the country fell by almost 10%. South Korea, Taiwan and Italy are having higher labor cost than Malaysia. It is notable that Japan, Hong Kong, Taiwan and South Korea apparel manufacturers are shifting to China and other Asian countries for offshore manufacturing. We may take advantage of this opportunity to develop potential products.
Conclusion
The most significant expansion of apparel manufacturing is still in Asia. Despite of the intense competition and pressures, Asia is still having competitive advantage for US buyers. Lets continuously explore & develop the niche of Malaysia Products together. To prevent breakdown, let’s breakthrough.
Officials in Beijing were reported to be drawing up plans for an international garment town that will make the capital’s clothing industry one of the country’s key foreign exchange earners.
Trade chiefs have set aside more than $4 million to establish four major garment centres around the city’s ring road over the next six years as well as upgrade machinery and technology.
Beijing currently has more than 1,300 garment enterprises with the blueprint including ideas to boost its image through the staging of international design contests and exhibitions. It will also create thousands of new jobs.
South East Asia
INDONESIA: Garment Exports To Key Markets Plunge In H1
Indonesia’s textile and garment exports dropped in three of its key markets in the first half of this year as buyers began to cut their orders in favour of rival producers such as China.
Exports to the US plunged to $902 million from $1.1 billion in the year-ago period, with EU exports down to $471m from $583m and Canadian exports down to $33m from $47m in 2001.
The decline reflected the problems faced by the nation’s textile industry, particularly increased worldwide competition. Textile association API warned the industry would “collapse” in 2005 unless the government takes urgent action to help scores of clothing companies that employ tens of thousands of workers.
THE PHILIPPINES: Garment/Textile Exports Slip 9%
Garment and textile exports from the Philippines plunged nearly 9% year-on-year in the first eight months of 2002 to $1.9 billion. Exports to the key US market slumped 11.9 % to $1.4bn but exports to the EU rose about 4% to $220.6 million. However, there was an improvement over July’s results when exports fell almost 10% year-on-year.
Clothing and textile exports to non-traditional markets including South Korea and China surged 332% and 121%, respectively, which more than offset falls to leading non-quota markets such as Japan and the UAE.
VIETNAM: Garment Exports Surge To $1.9bn
Vietnam’s garment exports have soared 23% year-on-year to $1.88 billion in the first nine months of 2002 on the back of a flood of orders from major international apparel firms.
The surge were attributed to foreign firms relocating in Vietnam in order to take advantage of its cheap and plentiful workforce and lower utility costs. However, officials warned the nation’s textile manufacturers they need to improve the quality of their products.
CAMBODIA: Garment Exports To US & EU Surge
Cambodia’s garment exports jumped 11.2% in value terms in the first nine months of this year to $904 million from $812m in the year-ago period. Garment exports to the US soared nearly 12% to $650m in the period while clothing exports to the EU grew 7.7% to $237m. Cambodia’s garment industry, which employs around 200,000 workers, generated exports of $1.1 billion last year of which $820m ended up in the US.
West Asia
TAIWAN: Textile Exports Slip In August
Taiwan’s textile exports slipped 2.6% year-on-year to just over $1 billion in August. Customs data showed yarn and fabric exports were flat at $698 million, while garment exports plunged 15.5 % to $172m and exports of textile goods rose 4.8 %. For the first eight months of this year total textile exports were down 7.3% at $8bn with garment exports down 16.8% at $1.2bn and yarn and fabric exports down 7.2% at $6.2bn.
North West Asia
SOUTH KOREA: Textile Exports Jump In July
Textile exports rose 6.4% in July, the first monthly increase for almost two years. The country’s monthly textile exports grew to almost $1.5 billion having fallen or been flat since October 2000. Synthetic textile exports jumped 33%, yarn exports 31%, nylon yarn exports 80% and fabric exports 10%. However clothing exports fell almost 5%.
MONGOLIAN performance
Mongolia produced and exported 16.2 million items of knitwear worth US64.3 million in 2001. Of all clothing and knitwear factories operating in Mongolia, domestic entrepreneurs have established 39.3% with direct foreign investment and 46.8% as joint ventures. Chinese companies own 35% of foreign invested clothing ventures, 23.7% by South Korean companies and 13.7% by companies based in Hong Kong.
Middle Asia
NEPAL: Garment Exports Upsurge By 49% To USA
The garment industry, the largest exportable manufacturer of Nepal, recorded a recovery in its exports for the first time after a series of downfall since July 2001.One of the hardest hit sectors of the national economy, readymade garments, recorded an upsurge by 49% in its exports to the United States in August as compared to the figures of the same month of the last year. The United States is the largest market of the Nepali garment items, consuming some 85% of the total exports.
During the first eight months this year, readymade garment worth US $ 62.07 million was exported to the US, while the figure was US $ 108.32 million during the corresponding period last year. While the export to EU in August stood at US $ 1.49 million, it was US $ 1.08 million in the same month last year.
Garment exports to Canada during the first eight months of this year plunged by some 79% valued at US $ 0.27 million.
South Asia
Sri Lanka’s textile and garment export earnings soared 47% in August from the year-ago period on the back of higher orders from the EU and North America. Earnings from textile and garment exports jumped to $339 million in August, highest level for almost two years which helped the country post a trade surplus. The increase in textile and garment exports was largely due to the higher demand from the US, UK , Canada and Germany.
INDIA: Garment Exports Surge 20% In July
According to data revealed, Indian exports of ready-made garment to quota countries surged 20% in July in value terms to $379 million with exports to the US up more than 50% in terms of quantity. In July ready-made clothing exports climbed 15.4% in quantity terms to 93.6 million pieces, despite a 16% fall in exports to Canada.
Exports to the EU rose 3.4% in terms of quantity and 22.7% in value terms in July, with exports in the first four months of 2002 up around 9% in both terms to 376.6 million pieces worth $1.4 billion.
BANGLADESH: Garment Exports Plunge, 300,000 Jobs Axed
Clothing exports fell 5.7% to $4.58 billion in the year to June compared to the year-ago period amid the global economic slowdown and increased competition from rival apparel-making countries. This is the first fall in Bangladeshi garment export in more than 20 years.
EU was its biggest customer with a 52.7% slice of the market, followed by the US with a 40 % share. The slump in export orders has led to 300,000 garment workers losing their jobs as more than 1,000 garment plants have been forced to close down in the past year.
PAKISTAN: Value Added Textile Exports Jump 20%
Pakistan revealed a 20.7% year-on-year jump to $1.69 billion in exports of value added textiles to quota countries in the first nine months of 2002.. In quantity terms, exports to the US, EU and Turkey all increased but there was a fall in exports to Canada in terms of quantity and value.
Europe
TURKEY: Fall In Regional Exports Of Knitted Goods
Exports of knitted textiles from Turkey’s South-Eastern Anatolia Project fell to $21.5 million in the first half from $26.8m in the year-ago period. The main destinations for those knitted items were the US, Greece, Belgium, France and Israel.
Latin America
MEXICO: Textile Industry On The Road To Recovery
Mexico’s textile industry lost 32,000 workers in 2001 but it is now on the road to recovery with more than 8,000 jobs created in the first half of this year and brighter times just around the corner.
Although second quarter textile output fell 2.9% from the year-ago period, output was higher than the previous two quarters. The sector now employs almost 160,000 people and textile sales to Mexican apparel exporters jumped 20% in the first half of 2002 to $836 million, although total textile exports slipped 1.6% to $2 billion.
Apparel exports to the US fell 4.7% in the first half but increased shipments to nations such as Barbados and the Dominican Republic helped offset that slide which was blamed on the economic impact of September 11.
However, the country’s 2,000 textile and garment enterprises would only be able to survive fierce competition from major Asian rivals such as China and Vietnam by cutting costs and upgrading technology.
The officials also called on the authorities to crackdown on counterfeiters and producers of fake apparel which cost the industry $10m a year as well as firms which dodge import quotas and customs duties.
The incentive schemes administered by the Ministry of International Trade and Industry (MITI) through its agencies includes:
i Grants i Soft Loans i Venture Capital
In this issue, we will focus on grants relevant to the textile & apparel industry only. Available grants are as follows:
Other grants not directly relevant to the textile and apparel industry include Engineering Design Grant, Product Development Grant , RosettaNet Grant, Women Entrepreneur Grant.
INTRODUCTION
Geographical Position
Situated in the centre of Italy, Umbria is the only region in central Italy without a coastline. It belongs to the Tyrrhenian side of the peninsula and borders with the Marches to the northeast and east, with Latium to the south and Tuscany to the west and northwest. It has the fourth lowest population of all the Italian regions (only Basilicata, Molise and Valle d’Aosta have fewer inhabitants) while the density of population is about half the Italian average.
THE ITALIAN TEXTILE INDUSTRY
Internationally recognised fashion and style are the main characteristics of the Italian ready-made garments industry. The exhibitions and catwalks of Milan and Florence are the meeting points for acclaimed top-level fashion designers and foreign buyers of the Italian “prêt-à-porter”. The main customers of the Italian ready-made garments industry are France, Switzerland, Japan and the United States.
THE TEXTILE AND GARMENT INDUSTRY IN UMBRIA
The Umbrian textile and garment industry thrives on its small and medium-sized companies. Apart from their own labels, Umbrian companies also manufacture clothing articles and accessories for Italian and international brand names. One Umbrian-based company label that is in the Malaysian market is Ellesse, which is based in Perugia.
Up to end June 2001, active Umbrian companies in the textile sector amounted to 1,020, an increase of 47 from its 1996 figure of 817. In the section of garment manufacturing, the number resulted at 1,244 during the same period.
Operating Companies in the Textile/Garment Sector by Activity, 30 June 2001
UmbriaWorld, Kuala Lumpur
The UmbriaWorld project in Kuala Lumpur began in June 2001, focusing on technological sectors such as telecommunications, engineering and metalworking. This garnered a response from 160 or so Malaysian companies seeking working partnerships with suitable Italian counterparts.
The participation procedure included the completion of a questionnaire with company information, the submission of a company brochure complete with pictures of the company premises, the board of directors, the manufacturing and distribution process and the final products. The information was then put on the UmbriaWorld intranet database with the pictures, to allocate each company its own personal page on the UmbriaWorld site.
Through information given by the companies from both Umbria and Malaysia, the project devised a business-matching tool which locates counterparts from the same sector with similar interests. The companies are then informed and sent the names of their potential partners. Throughout the first phases of the process, staff at the UmbriaWorld help desk in Kuala Lumpur are available to assist the participating companies.
UmbriaWorld: A new innovative step towards the internationalisation of manufacturing companies
UmbriaWorld is the new communication tool on the Internet devised to help and support effective cooperation between companies located in Umbria and other foreign companies.
This project is the result of a joint effort between the Local Government of Umbria, the Agency for the Economic Development of Umbria, Sviluppumbria, and the Italian Institute for Foreign Trade, represented in Malaysia by the Italian Trade Commission.
The way Umbriaworld operates is very simple: Umbriaworld will send accurately tailor made e-mails to the Umbrian companies with specific links attached whereby the firms will access the UmbriaWorld Intranet Website. From there and through a personalised channel, the Umbrian companies will receive a list of accurately selected potential partners abroad, which operate in similar sectors to them in search of foreign partners.
For each company, UmbriaWorld provides an online information sheet illustrating the companies profile and its products, with relevant photo-images and a description of the type of commercial co-operation sought by the firms.
The Right Partner at your fingertips
At UmbriaWorld we realise that, besides supplying valuable information about potential Italian business partners, it is also essential to offer further assistance in order to fully take advantage of the profitable opportunities envisaged.
The UmbriaWorld network is ready to assist foreign firms throughout the delicate phase of the first contact with Italian partners. To request our assistance, you can simply send us a message completing the ad hoc online form available by clicking on the button “contattaci”, placed on the UmbriaWorld’s homepage. Qualified professionals will provide the needed support during the initial steps require to start a new commercial partnership.
With UmbriaWorld, you can make your company more competitive in the Italian market, by optimising your production and distribution processes, while working with an established Italian partner.
What is a Brand?
There are many definitions toward the concept of a “Brand”. At the one extreme, brands defined in principally physical terms akin to a definition of a trade mark, with source identification and differentiation as the two key objectives.
On the other extreme, brands are defined in terms of intangible values primarily directed at the relationship between the consumer and the manufacturer. In part this diversity of opinion as to what constitutes a brand name can be explained in terms of the evolution of the brand concept.
Thus, the more traditional approach tend to be based more on the physical attributes associated with a brand, and the more contemporary approach tend towards its intangible values.
Professor Phillip Kotler[1] based his definition of a brand on that of the traditional 1960 American Marketing Association (“AMA”) definition which describes a brand as:
“A name, term, sign, symbol or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors”.
From the above definition, we see that one of the essential requirements of a brand is distinctiveness which can lie in the name, symbol, logo or packaging of the brand.
According to Aaker[2], the requirement for distinctiveness serves two purposes:-
Aaker goes on to state that the brand is the only distinguishing element between two otherwise identical products, articles, thus emphasizing the function of differentiation.
David Arnold[3] goes one step further, observing that:-
“The top 10 brands … are virtually all leaders in their markets. This cannot be explained by the weight of their advertising or some inherent product superiority, or the catchiness of their name, even though they all score well on these count. [Research] suggests that the real key to market leadership is superior perceived quality. Not inherent product quality, only the perception of the quality by the consumer”.
This “perceived quality” or “added value” as it is sometimes termed, is a nebulous concept. It can be based upon the packaging style or the appearance of the product, the advertising used, the belief that the brand is effective (as in the case of pharmaceutical products), the sort of people who use the brand (eg social status) or the experience of the brand (eg where it has been used before).
Arnold also emphasis that :-
“Branding is about the way people perceive, and not about the product in isolation”.
Mr. Southgate, an advertising executive and author of “Total Branding” also explains[4]:
“If you think of a brand only as a mark denoting ownership you can slap it on anything – and many brand owners still do. But this is to use branding in its crudest and simplest form. It is to use branding in the same way as the Wild West ranchers used itu, simply to say ‘this is mine’.
To think of a brand as a set of ‘intangible values’, by contrast, is to understand something which is absolutely crucial in the successful development of brands today. And, that is that brands do not exist, in any meaningful sense, in the factory or even in the marketing development. They exist in the consumer’s mind”.
Nilson asserts that when a consumer is make a purchasing decision, the consumer will first and foremost concerned about acquiring a product and is not concerned about emotional or intangible aspect of a brand, in his view:
“The physical purchasing action is caused by a decision to acquire a product; the brand is there to serve as a means of identifying the manufacturer. The values of the brand will reflect on the product, but one must not forget that it is the product that is bought”.
It is true that purchasing decisions are often motivated by the desire to acquire a particular product to satisfy a perceived need, buying behavior is complex and is influenced by many factors. In some situation, the physical features of a product will be the most important factor for the consumers, but in other situation, intangible factors may have an important role.
For example, when purchasing a car or technical equipment, the consumer may place special emphasis on the image associated with the particular make or style in question, its reliability or social status. The extend to which intangible factors help determine the purchasing decision will vary according to the nature of the consumer, the nature of the product, the channels through which the product is marketed and the level of advertising associated with the product.
Why register your Brands?
If a brand owner is considering extending the use of a brand name or other mark, trade mark protection has a number of attractions, not least the fact that it lasts considerably longer than copyright protection in relation to commercial items.
A trade mark may be your most valuable marketing tool. The public will identify a certain quality and image with goods and services bearing your trade mark. If you are thinking about a new product or service and you want to establish an image for it, you should also be thinking about a distinctive trade mark under which to market.
What are the benefits to register a trade mark?
As registered trade mark owner, you:-
What are the difference between trade mark and my company/business registration?
Trade mark is a letter, word, phrase, logo, picture, device, label, ticket, name, signature and numbers aspect of packaging or combination of these. Registration of the Trade Mark gives the owner the legal right to exclusively use or control the use of the mark for the goods or services for which it is registered. Registration is obtained under the Trade Mark Act 1976 and covers the whole of Malaysia.
Business name (ROB) is the name under which a business operates and registration identifies the owners of that business. Registration is compulsory for every business owners before the commencement of the business. Unlike trade mark, business names do not provide proprietary rights for the use of the trading name.
Company Name (ROC), or registered body, must be registered with the Malaysian Securities Commission (SC). If a company wishes to trade using a name other than its registered company name, it must register that trading name as a business name. Unlike Trade Mark, company names do not provide proprietary rights for the use of the trading name.
Lawrence Yip Jiun Hann, LLB(Bond)
Registered Trade Mark Agent
Registered Industrial Design Agent
[1] Nilson, Valued Added Marketing (McGraw Hill, Maidenhead, 1992) p.19
[2] David Aaker, Managing Brand Equity (Macmillan, NY 1991) p.7
[3] Arnold, The Handbook of Brand Management (Financial Time Pitman Publishing, London, 1993) p.14
[4] Total Branding by Design (Kogan Page, London, 1994) p.18
Besides adopting protective measures, a more practical approach is to develop proactive actions.
THAILAND Emphasis on Textile Fashion Education
The Thai Garment Manufacturers Association (TGMA) launched a two-year “Garment Industry Development Strategy”. The plan includes strategies for creating a base of fashion professionals, brand development, fashion-design management, supply-chain management and production efficiency.
The association plans to set up short-term and long-term courses for fashion professionals and to regularly hold seminars on brand-building. It is anticipated to have around 1,100 fresh fashion industry professionals over the next two years and to set up Thailand’s first fashion university, in a bid to become more competitive. The university is to provide fundamental knowledge on fashion design, commercial issues and technical skills to those interested in the industry.
The officer said one option was to design the country’s own fashion courses with the curriculum based on those in other fashion universities. The other was to invite foreign fashion universities to set up independent campuses here. The well-known Fashion Institute of Technology (FIT) in New York, which has branches in India and China, has shown interest in Thailand。
Thai garment and textile exports this year are expected to drop by 6% on year as a result of the global economic uncertainty, rising production costs and tough competition from countries such as China and Vietnam.
In the first eight months of 2002, total exports of garments and textiles dropped 6-7% to US$5.26 billion (Bt229 billion), with garment exports alone dropping 9.5 %.
Singapore May Complete FTA with USA
The U. S. and Singapore may sign a free trade agreement (FTA) very soon, despite several outstanding issues concerning financial services and textiles.
In terms of the textile issue, rules of origin have remained a contentious point. U. S. negotiators reflecting the concerns of domestic mills, as concerned that Singapore will become a transshipment point if strong rules of origin are enforced. There is skepticism in U. S. textile circles that Singapore will be able to control such quota-circumventing trade. In the past, Singaporean firms had been singled out for funneling shipments from Malaysia and China.
The Singaporean government, on the other hand, says that it is more than up to the challenge in that all trade shipments are subjected to checks that make transshipments virtually impossible.
The U. S. has proposed a strong yarn-forward rule of origin that is similar to the rule found in NAFTA. Singapore has yet to agree to the U. S. proposal and has remained a sticking point in the negotiations. With a small spinning industry, Singapore claims that its clothing firms will have a difficult time importing qualified yarn from appropriate sources to make up for a shortage in domestic production.
The agreement with Singapore is the first involving the U.S. Aside from its NAFTA partners, at present the U.S. only has FTAs with Israel and Jordan.
Brazil – EU Agree Textile Trade Deal
European Union and Brazil agreed a deal to free up textile trade by opening their markets for each other’s textile and apparel goods on 6 November 2002.
The deal will see the EU ditch quotas on 10 apparel and textile products from Brazil, ranging from trousers and T-shirts to cotton and synthetic fabrics. Brazil will reciprocate by limiting tariffs to a maximum of 20% and refrain from applying any additional taxes on EU textile and clothing exports.
Both countries also committed themselves to dismantling all tariffs on textiles and clothing in the continuing discussions between the EU and Mercosur countries: Brazil, Paraguay, Uruguay and Argentina.
Brazil’s clothing and textiles exports to the EU in 2001 were 239 million euros while EU exports to the Latin American nation were 243 million euros.
EU is ready to anticipate opening up its textile market ahead of the WTO deadline of 2005, provided its trading partners are ready to provide better access to their markets.
South Korea Unveiled New Textile Blueprint
Korea on early November unveiled a series of initiatives as part of an ambitious industry blueprint aimed at doubling the country’s textile and apparel exports to $30 billion by 2010.
The plan, drawn up by the Ministry of Commerce, Industry and Energy, includes boosting the market share of fashion apparel exports from 5% to 10% in the next eight years.
A state-of-the-art digital dye factory where operators can manage colour control, logistics and trade online will also be set up. A huge new fashion venue also set up for companies to showcase their products. New research centres for the development of net silk and sports textiles will also be established. Cotton spinners will be encouraged to invest in new hi-tech equipment.
The blueprint hope to pull up trade surplus in the industry to $20bn from the current $11bn by 2010.
Indian Government Creates Rehabilitation Fund for Spinners
The Indian government is likely to create a special fund of USD240 million for the rehabilitation of spinning mills that are facing shortage of working capital but are still potentially viable firms.
77 mills were considered and classified into 3 groups – A, B, C based on parameters such as financial performance, labour and machine productivity levels and degree of modernization. 35% of the mills constituting group A, are profit-making mills, which do not require any financial assistance; 38% mills under group B require financial assistance. Mills incurring losses, which cannot operate viably, even with reasonable financial assistance, under group C, accounts for 27% of the mills.
According to study, a sum of USD100 million is required to rehabilitate mills falling under group B. Non-availability of such funds may lead to closure of the potentially viable mills along with production loss of 450 million kg. Of spun yarn per annum putting 150,000 workers jobless.
The study further states that a capital investment of USD1.5 billion would be required to create new capacity.
Facing the ever tough worldwide competitiveness, the textile industry in many countries on one hand are losing out their international market share, while on the other hand domestic markets also being flooded with cheap imported goods. Production plummet, jobs cut and factories closing down. They are restlessly appealing for help from the government to adopt protective measures.
Philippines Calls to Delay AFTA
A number of key manufacturing industries in the Philippines have petitioned the Philippines government to postpone implementation of the tariff reduction provisions of the ASEAN Free Trade Agreement (AFTA).
The call for a “go slow” policy has been led by the domestic textile industry which has been struggling with a rising tide of low cost imports from China and elsewhere.
Under the AFTA agreement, the Philippines is obligated to lower its imports tariffs on a range of manufactures products – including textiles and apparel. However, AFTA members do have the option of postponing tariff reductions while business conditions are reviewed and the impact of tariff reductions are analyzed.
The textile industry has asked that the government postpone tariff reductions for textiles and apparel for 6 to 12 months awaiting review by the government of which products should be liberalized and which should not.
To date, the Filipino government has only notified the AFTA council that it will take more time to review tariff structures in petrochemicals. No mentioned has been made of postponing reductions in other products.
Indonesia to Impose Limitations On Textile Imports
The Ministry of Industry and Trade, Indonesia has issued a decree to limit textile imports in a bid to help the local industry affected by the massive quantities of cheap imports with effect from 1 November 2002. Under the new decree, Indonesian textile producers can only import textile products for used as raw material or supplements for the production process of the “importers-producers” and may not be sold or transferred to others. They must also seek approval from the Ministry of Industry and Trade and report
the realization of the imports to the ministry every month. Import duties on garments in Indonesia is currently range from 15 to 25 percent.
USA: ATMI Blasts Indonesian Textile Import Ban
The American Textile Manufacturers Institute (ATMI) on 3rd November 2002 called on the Bush Administration to take immediate action over Indonesia’s decision to ban textile imports.
ATMI chairman Van May blasted the ban as illegal and in breach of WTO rules. He also criticised the Indonesian government for imposing such a sweeping ban in response to increased imports from only one nation – China.
ATMI propose that a fair response to Indonesia would be to prohibit imports of Indonesian textile goods, which totaled $350 million last year until the ban is lifted.
Bangladesh Unveil Industry Blueprint
The Bangladesh Textile Mills Association (BTMA) on early November unveiled its blueprint for the clothing industry’s future, which includes the withdrawal of all duties and taxes.
BTMA officials said they do not want cash incentives put forward under an alternative plan by the government, but low-interest loans, a 25% rebate on utility bills and port charges at international levels.
They also want the ready-made garment and textile industries brought under the umbrella of one ministry to avoid confusion, and downward adjustment of banking charges. The association also called for a crackdown on fabric and apparel smugglers. The government were urged to set up specific entry points throughout the country to better manage a surge in low-cost imports of yarns and fabrics from India and other suppliers.
China Imposed Anti-Dumping Measures On Korean Polyester
China has initiated temporary anti-dumping measures against South Korean imports of polyester staple fiber, state media reported on November 2002. The decision followed a probe into claims last year the imports were hitting domestic polyester staple fiber producers hard.
The ministry now requires importers of South Korean polyester staple fiber to provide customs officials with cash deposits, although it did not specify a sum.
Israel: Calls For Surcharge On Chinese Imports
The Manufacturers Association’s textile division is demanding a15-20% surtax on imports from China to help local manufacturers recapture lost sales.
Massive cheap Asian imports have hit sales at 45% of Israel’s textile factories, leading to a loss of some 5,500 jobs. It estimates more than 70 textile factories have been forced to relocate to low-cost areas over the past year.
Asia products have surged in recent years. For the first six months of 2002, apparel imports from all Asian suppliers reached $335 million, up 16% from comparable 2001 levels.
The Malaysian Export Exhibition Centre (MEEC) is a permanent exhibition center located at the MATRADE office in Kuala Lumpur. The Centre showcases a sample of quality Malaysian products and services for the export market.
Companies interested to exhibit their products or services at the coming session of the MEEC commencing April 2003 – September 2003, are invited to submit their participation forms by 1st March, 2003.
Conditions:
i. A list of products to be displayed
ii. Photograph or catalogue of the products
Each participant is entitle to exhibit their products or services for a six months period. Companies that wish to extend their participant are advised to submit a new application for every session of the MEEC.
SRI LANKA : Textile, Garment Exports Up 17% In Oct. 2002
Sri Lanka’s textile and garment sector enjoyed a 17% year-on-year rise in exports in October, 2002. The rise was the combined effect of a 14% increase in volume and a 2% increase in unit prices.
Clothing and textiles are the island’s largest export income earner and helped the country record flat export earnings of $408 million for the month.
VIETNAM : Clothing, Textile Exports Jump 36% In 2002
Vietnam’s textile and garment exports soared 36% this year due to surging US orders. The quota-free status has attracted a large number of American buyers to Vietnam. Textile and clothing shipments to the US rocketed to $900 million this year from $47m in 2001. The industry is on course to hit the $2.6bn mark by the end of this year.
Nevertheless, textile and garment exports to the EU and Japan fell by 10 and 20%, respectively, amid fierce competition from rival producers in China
PORTUGAL : Nine Month Textile Exports Total $3.7bn
Portuguese textile and clothing exports fell 4.8% to $3.7 billion in the first nine months of 2002 compared to the year-ago period. Data from the Portuguese Centre for Applied Textile Studies also showed imports of knitwear for the January to September period climbed 7.4% year-on-year while imports of other apparel rose 16.4% year-on-year.
CHINA : Textile Industry Enjoys Strong 2002
China’s textile industry is expected to have generated a combined output value of $121 billion in 2002, up 15% on the previous year. The industry’s profit up 23% year-on-year and exports of more than $60bn. The increases is attributed to China’s entry into the World Trade Organisation.
THE PHILIPPINES : Garment Exports Fall 6% To $2.8bn
Garment exports from the Philippines fall 6% year-on-year to $2.8 billion in 2002. The Confederation of Garments Exporters of the Philippines (Congep), says exporters may shift their focus from the US and European markets to southeast Asia, where there are around 3.7 billion consumers.
TURKEY : Export Rise
Apparel exports from Turkey climbed 23% year-on-year in 2002 to $9.2 billion. Figures compiled by the Association of Turkish Clothing Industrialists showed 2002 textile exports rose 4% to $2.9bn from the year-ago period.
TAIWAN Textile Exports Fall To $12bn In 2002
Taiwan’s textile exporters had a miserable 2002 with overseas orders down 3.8% year-on-year to $12.1 billion. Industry chiefs attributed the fall to fierce competition after its entry into the World Trade Organisation, first half currency fluctuations and the US West Coast dock strike which hampered its performance in the second half.
You’re the CEO of an up-and-coming Web start-up called “Widgets.com.” ( a fictitious name) Your company sells widgets over the Internet to people throughout Malaysia. One day, you’re reading a newspaper and discover a new competitor calling itself “Widgets-R-Us.” What to you do?
Your options depend at least in part on whether you’ve properly protected your trademarks.
To protect a trade or service mark, you need to correctly use and register the mark. Once you decide upon a particular mark, file an application with the Malaysia Patent and Trademark Office. The timelines of your application could make a difference if your company later becomes involved in a trademark legal dispute.
Even if your business isn’t yet off the ground, you can still file an application, based on your intent to use the mark in commerce. When you begin to use the mark, there are a number of things to keep in mind:
Assuming correct use and registration, Widgets.com could go after Widgets-R-Us for trademark infringement. Although a claim of infringement isn’t dependent upon federal registration, it greatly improves the position of the company or individual making the claim.
Trademark infringement depends on the likelihood that there will be confusion in the marketplace. The party claiming infringement has the burden of proving ownership of the mark as well as the potential for confusion. In the case of two direct competitors with similar product lines, confusion is easier to prove. Most cases aren’t this clear cut. That’s why courts consider a number of factors when they hear an infringement case:
The similarity in the overall impression created by the two marks (including the marks’ look, phonetic similarities and underlying meanings);
The similarities of the goods and services involved (including an examination of the marketing channels for the goods);
Generally, courts consider the first two factors to be the most important. But it may never come to that. A strongly worded letter from an attorney may be sufficient to stop the infringement.
If it should come to litigation, the trademark owner has several remedies if infringement is found. Courts can grant a permanent injunction so the infringer can’t use the disputed mark. Money damages may also be awarded. If you’ve registered the trademark, attorney’s fees can be recovered by the successful plaintiff.
This is a huge factor and another big reason to register the mark with the Patent and Trademark Office. But the best way to protect your trademark is to register it immediately and begin using it in commerce as soon as possible.
Lawrence Yip Jiun Hann, LLB (Bond) Registered Trade Mark/Industrial Design Agent
Sri Lankan apparel industry was told to understand their customers and brands, build up their performance record, focus on productivity if they want to succeed after 2005.
Speaking at a meeting hosted by The American Chamber of Commerce in Sri Lanka, industrialist Martin Trust warned that the removal of quotas in 2005 could easily see US exports from the “China region” (China, Hong Kong, Taiwan and Macau) increase from $11 billion to $20 billion.
Outlining some of the industry’s strengths, Trust explained that garments constitute around half of Sri Lanka’s total exports, and garment exports to the USA make up a third of Sri Lanka’s total exports. In return, Sri Lanka is sixteenth on the list of garment exporters to the USA.
He added: “On a per capita basis, Sri Lanka’s exports are fourfold those of Pakistan and significantly more than India.” As to the quality of the products exported, buyers were willing to pay more for a Sri Lankan garment because they were “highly valued by the customers.”
However, US consumers are no longer willing to accept any garment put before them. Producers must be “brand savvy, posses the ability to understand why it was being made for consumption and track the brand to comprehend its image significance to the consumer.”
Likewise, compliance with labour laws and regulations has evolved into compulsory business practice. “Non-Governmental Organisations (NGOs) and other industry watchdogs are ever vigilant and no manufacturer can afford to ignore them.
Paying glowing tributes to Sri Lanka and its workforce, Trust said that in 20 years of doing business, “every time I visit Sri Lanka, I see real progress, better efficiency, more convenience, enhanced service, improved skills, greater professionalism, innovation and most importantly, world class talent.”
Continued sluggish retail sales in 2003 across much of Western Europe will exacerbate the already tough competitive environment for apparel retailers.
According to a study, the ability of specialty chains such as H&M and Zara to implement fast response is placing pressure on traditional retailers, including independents and department stores. Their explosive growth is shifting apparel market share and is changing the structure of apparel distribution across Europe.
Despite the difficult environment, major European clothing retailers, and particularly multi-national specialty chains, are succeeding by taking market share through innovative, fast-changing product offers and lower cost, more efficient business models. The ability of these specialty chains to implement faster and more flexible supply chains is giving them a real competitive advantage.
Consolidation, internationalisation, and the speed of the fashion cycle will continue to drive change in the structure of European apparel retailing. Speed and integration of the supply chain will continue to shape the future of the retail apparel industry in Europe by enabling more flexible, demand-driven fulfillment. The hallmark of successful apparel retailers is an ability to create distinctive product ranges that are responsive to quickly changing consumer expectations.
Japan’s Ministry of Economy, Trade and Industry (METI) is responding to slumping domestic demand and rising apparel imports with a plan of action aimed at stimulating local production over the next few years.It’s five-pronged approach will focus on:
1. Technological developments to build demand for new fibres and fabric;
2. The promotion of merchandising and direct marketing;
3. Brand and export building exercises;
4. Reforms to improve the country’s high cost structure;
5. The elimination of differences in trade systems between countries.
Although there is already a budget for technological developments by small and medium-sized textile manufacturers, METI will seek a sharp budget increase for fiscal 2004. It is also requested a budget increase for the Japan External Trade Organisation to help grow exports from 80 million yen in fiscal 2002 to 340 million yen in fiscal 2003.
Some 680,000 people – or 7 % of all manufacturing employees – work in Japan’s textile industry.
The two delegations also called for the removal of non-tariff barriers to trade, and expressed concern that inadequate attention was being paid in WTO to the difficulties which a number of least developed countries would face after 2004. Besides, both parties share the same rational view to the challenges of international trade in textiles and clothing after 2004 and the end of the quotas.
US textile manufacturers unveiled the eight-part action plan aimed at reviving the industry and renewed their call for tough new import restrictions on cheap textiles from countries such as China and Vietnam. The following are the components of ATMI 2003 Textile Action Plan for Growth:
1. Doha Round: The U.S. Government must address in the World Trade Organization Doha Round negotiations the barriers that currently exist in textile and apparel trade. Specifically, the U.S. should insist that all countries must immediately eliminate their non-tariff barriers to textile and apparel imports. The U.S. should further insist that the high textile and apparel tariffs imposed by many major exporting nations be reduced to U.S. levels in order to provide real access into those markets.
2. Sound Dollar Policy: The U.S. Government must adopt a sound Dollar policy, allowing the overvalued U.S. dollar to return to more natural and historic levels, and take immediate and strong action against countries such as China, Korea and Taiwan that intentionally manipulate their currencies. A recent study by the Manufacturers Alliance concluded that China currency was 40% undervalued.
3. No Non-Reciprocal Trade Expansion: The U.S. Government must continue to reject demands of developing countries to change the terms of existing agreements and programs to further increase their access to the U.S. market. The U.S. must also reject attempts at unilateral trade liberalization such as the expansion of Qualified Industrial Zones (QIZs).
4. China Textile Safeguard: The U.S. Government must immediately institute quotas on certain categories of U.S. imports from China in response to the massive surges of such products from China.
5. FTAs, Rules of Origin, Customs Enforcement, Intellectual Property Protection: The U.S. Government must ensure that all Free Trade Agreements (FTAs):
a) are based on a strong, enforceable yarn-forward rule of origin, without unwarranted exceptions through tariff preference levels (TPLs);
b) contain effective Customs enforcement provisions, including clause for countries that do not enforce the textile rules; and
c) fully protect U.S. textile and apparel intellectual property
6. Vietnam Textile Agreement: The U.S. Government must quickly negotiate a textile agreement with Vietnam imposing quotas on textile and apparel imports from that country. Such imports have soared since Vietnam was granted Normal Trade Relations (formerly known as Most Favored Nation) status and are currently increasing at a rate of 50 million square meters a month.
7. Industry Not a Bargaining Chip: The U.S. Government must avoid using the American textile industry as a bargaining chip in the war on terrorism. The cost of this campaign must be equally borne by all Americans, without singling out American textile manufacturers and their workers for trade concessions.
8. Effective Customs Enforcement: The U.S. Government should provide for strong and effective Customs enforcement of all textile and apparel trade. The government must crack down on the massive smuggling of Asian textile products using the in-bond system to gain duty-free access to the U.S. market. The U.S. Government must continue to swiftly and fully explore how to develop so-called Tracer Technology that will allow the Customs Service to ensure that imported goods claiming to be made of U.S. fabric and yarn do indeed contain U.S. components
46,000 Textile Jobs Lost In 2002
46,000 workers lost their jobs as mills and factories across the US were closed and textile mill shipments fell for the seventh consecutive year to $42.7 billion. The US textile industry employs 425,000 workers.
Imports of yarn, fabric and made-ups jumped 20% in 2002, after a slight fall in 2001 amid a wave of shipments from China, Pakistan, India, South Korea and Taiwan. The only good news was a sharp rise in industry net profit to $1bn from $200 million in the year prior, although that improvement was mainly due to strong gains in the carpet and industrial textiles sectors rather than the fabric and yarn segments.
2005 Quota Fears
US and Caribbean textile chiefs described the phasing out of quotas in 2005 will deal a “devastating blow” to their industries amid a flood of low-priced clothing and fabric imports from China.
ATMI foresee China dominating the US import market from 2005 with other countries that enjoy preferential trade deals with the US, such as Vietnam, India and Pakistan, forming a second tier.
However, even after the quotas are dropped, the US will be allowed to maintain tariffs averaging 24% on textile products and 9% on apparel products at least until a new global trade deal is agreed.
On the other hand, the American Apparel and Footwear Association (AAFA) noted that many of their members have considerable investments in Central America and the Caribbean Basin. The region was rapidly losing ground to Asian countries where there is less red-tape and labour costs are lower.
We are entering into an era of small margin and low profit. It is best described as an age full of competitiveness, challenges, price war, retrenchments, pay cuts and unemployment. The lifetime for winner is short but it is very easy to lose the race.
In facing such a downturn, we should adjust our mindset. Be ready to change and to walk out of the darkness. Restructure brought about opportunities whereas innovation creates new pathway. Learn risk management and tried to change the situation. Man is the key factor of success. Only if we are prepared to upgrade, to restructure and to improve, then dawn not far away.
Unfortunately, it seems that we are still stagnate at the stage of grumbling that business is tough, quality demand too high, delivery time too short and profit too low. I am afraid that trap such a situation, our business will shrinkage, unstable, import of fabric and garment will increase, buyers splitting big orders into small ones resulting in higher production cost and unsteady qualities..
As we entered another new year, I wish that we will strive forth :
2 Small margin & low profit
2 Fast speed
2 Find out the difference between products
2 Cannot survive without quality
2 Customer orientated
May the Malaysian textile & apparel industry continues to flourish in our land.
A six-fold increase in seizures of smuggled clothing and fabric has been reported by the US Customs Service – up to $45 million in 2002 from $7.8 million in 2001. Most of the illegal shipments are believed to come from China, and the impact is depriving the North American industry of millions of dollars in duties as well as lost jobs.Textiles and apparel represent about 45% of all the duties the Customs Service collects annually, and account for about $80 billion worth of US imports each year.
But according to Janet Labuda, director of the textile enforcement division at the US Customs Office of Field Operations, last year’s seizures represent only a small fraction of the illegal trade. Both the Customs Service and the US textile industry are worried that the problem will worsen as the United States negotiates more free-trade agreements in the Americas and Africa.
Some of goods are smuggled outright into the United States, and some are trans-shipped illegally — made in China, sent to another country and labelled as if they were made there with US fabric, and then moved on to the United States. One of the main difficulties is determining whether yarns or fabrics are US-made – a major stipulation of US trade agreements.
Quotas on infant garments were removed last year, and imports from China in 2002 surged more than nine times 2001 levels.
Soaring imports of autos and other consumer goods propelled the nation’s trade deficit to a record $435 billion in 2002. The biggest trade gap was with China, from where the US imported $125 billion but exported only $22 billion – a $103 billion deficit.
The US State Department last month warned Malaysia’s ambassador in Washington that it might pull its ambassador out of Kuala Lumpur, urge American businesses to leave Malaysia and discourage further investments in the country.
Mr. Abdullah subsequently met the US Ambassador to Malaysia, Marie Huhtala, and assured her that ‘Malaysia’s anti-war stance should not be seen as being anti-US’. Hence, the tense situation has somewhat abated. Abdullah made it clear that the Malaysian government’s disagreement with the US administration is confined to the war in Iraq and should not be taken out of context. Washington had accepted the explanation and ‘it appears that they are not going to pursue the matter.’
Frank Whitaker, a spokesman for the US embassy in Kuala Lumpur, confirmed that Mr Abdullah met Ms Huhtala on March 22, but denied there had been any threats against Malaysia. (AP)
Malaysian garment makers can also tap into the opportunities to fill the gap given that the US or European buyers’ marketing strategy to spread their order across several countries to minimise risks.
However, despite the positive outlook of the local garment manufactures, they lose out to countries like China in terms of cost advantage. To remedy the situation, some local manufacturers are moving to countries such as Vietnam and China to set up their manufacturing units due to their lower operating cost.
Still, many are hoping that some of businesses secured by manufacturers in southern China will land here following the SARS outbreak. However, it is too early to feel the impact now.
Bangkok Fashion Week
Thai apparel chiefs announced plans to hold an international fashion show next summer as part of an action plan to turn the country into a leading regional fashion and design hub by 2005. Actually, it was planned to hold the inaugural Bangkok Fashion Week in 2002 but the government-backed event will now go ahead in July or August of 2004.
The ambitious action plan aims to turn Thailand into a regional fashion hub by 2005 and a global fashion hub by 2012. The sector blueprint will be funded by a new multi-billion baht fund set up by the Thai Garment Manufacturers Association (TGMA) and leather and jewellery trade groups as well as the government.
To Embrace Technology
An industry official warned that one out of every four garment makers in Thailand will go bust in 2005 unless they embrace the latest technology and modern management methods. A lot of firms were still using out-of-date machinery.
The country’s 2,600 clothing factories employ around 840,000 peoples. Computer systems and modern management such as enterprise resource planning (ERP) and quick-response management is needed for manufacturers to survive the upcoming WTO free-import quota in 2005.
Textile, Apparel Exports Hit $5.15bn In 2002
Despite fierce competition from apparel manufacturers in China, Vietnam and Indonesia which have low labour and production costs, total textile and apparel exports climbed 2.1% year-on-year in 2002 to $5.15 billion.
Contributions of the Textile Industry
According to Trade Minister Rini Suwandi, Indonesia should continue maintaining the textile and textile product industry because it absorbed a lot of employment, investment as well as contributed significant foreign exchange to the country. The state’s foreign exchange income from the industry comprised 15.2 % of the country’s total income from non-oil exports.
Indonesia’s exports of textiles and textile products in 1990 were recorded at only US$2.9 billion but in 2002 they rose to US$6.8 billion in value. However the industry is continuously facing hindrances internally as well externally causing performance decline.
The country’s exports of textiles and textile products in the past four years had continued to drop in value.
To Crack Down Smuggling
On the other hand, Indonesian smuggling of textiles, textile products and used clothing has escalated recently. To avoid textile smuggling cases, API suggested that the government change the existing customs law. Many items in the customs law are inappropriate and could be misinterpreted.
To Seek Funds from Taiwan
Several Taiwanese banks are being approached by textile producers in West Java in a bid to raise finance to pay for machinery upgrades and replacement. Taiwan’s creditors have already expressed their willingness to provide long-term credits to the textile producers who purchase new machinery from Taiwan.
The decline of Indonesian textile exports in recent years is partly due to the inefficient aging machinery used by many of the country’s textile makers. The country’s textile industry needed some $6 billion to repair aging machinery to boost production. Around 60% of current textile machinery has been in use for more than 15 years.
Initiated by : Selangor State Government
Purpose: To give recognition and appreciation for outstanding achievements by industries in
Selangor that have certified national and international recognition.
Award · Selangor Product Excellence · Selangor Design Product Excellence Categories: · Selangor Product Brand Excellence · Selangor Export Excellence
· Selangor Innovative Product Excellence
Benefits: · A trophy and certificate.
· The right to use Award logo for publicity purpose for three (3) years.
· Complementary publicity of winners profile in SSIC Berhad website.
Closing Date: 31st July 2003
For Registration, please contact :
Secretariat AIS 2003 |
The United States is offering to eliminate within five years all tariffs on textiles and apparel from other Western hemisphere countries as part of a proposed regional free trade agreement.Announced on 11 February 2003 by US Trade Representative Robert Zoellick, the proposal is intended to get things moving on plans to expand the existing North American Free Trade Agreement (NAFTA) to all countries in the hemisphere, with the exception of Cuba. Its aim is the eventual elimination of duties on the trade in goods and services throughout North and South America.
Eliminating tariffs on textile and apparel is conditional upon other countries being willing to do the same, but is still likely to draw protests from the US industry. Countries likely to benefit from the deal exported almost $21 billion of textiles and apparel to the US last year.
The plan is to achieve expansion by 2005, the same time as year as quotas on textile and apparel imports are to be eliminated under the WTO.
Introduction
Due to the rising of new suppliers and the competitiveness from many low production cost countries particularly China, textile and apparel industries in many countries are facing great threat. Factories closing down and job cuts. In Malaysia, even though we do not have the published figures of job losses from this sector, we are aware that some companies are shutting down while many others just struggling to maintain. According to the President of Perak Garment Manufacturers Association, Mr. Loh Wai Fong who is also the Treasurer of the Federation of Textile General Goods Association, in the state of Perak itself, garment factories are closing down from the previous 180 companies to just about 50 operations. National wise, the leftovers is about 800 factories from the previous 2000 factories. Many manufacturers are resorting to traders.
Employment in the US knitting sector is being hit hardest by the tidal wave of imported fabric from China, according to the American Textile Manufacturers Institute (ATMI).
Chinese knit fabric imports have risen from 3.3 million kg to 7.7 million kg in the last eight months, jumping 110% in the last two months alone. Bureau of Labor Statistics figures show that the US knitting sector has lost 6,500 jobs or 7% of its workforce over the last year, the most of any textile sector.
The picture elsewhere in the industry is no less depressing. US textile employment has hit a new low of 409,000 and the rate of job losses is accelerating. There were 6,000 jobs lost in the US textile industry as a whole during April, more than double the 2,900 lost in March.
Cass Johnson, senior vice president of ATMI, said, “These job losses were entirely preventable. ATMI asked for the US government to implement the WTO China textile safeguard. As of today, we’re still waiting in bureaucratic limbo while China mounts the biggest export surge in US history and thousands more US textile workers are losing their jobs.”
MEXICO Textile Sector hit by Illegal Import
Textile Industry has warned that it will go on national strike if federal government does not stop illegal imports of products, mainly from the East Asia. The general secretary of the Coalition of Textile Industry Unions, said that illegal imports is menacing companies and jobs in the sector. In the last three years around 200,000 jobs have been lost. He called for the government to burn 4,000 tons of confiscated cloth, which was imported from China. He said the authorities had three months to do something before strikes broke out.
SLOVENIA 13,000 Textile Jobs At Risk
Up to 13,000 textile and leather processing industry workers could lose their jobs in the next three years, a worried union chief claimed.
Secretary general of the Slovenian textile and leather industry trade union, Anton Bozman, said 1,000 workers had already been axed this year as a result of poor market conditions and another 13,000 are at risk.
Employment in the clothing industry shrank 13% last year from 2001 as output fell 24% amid a wave of bankruptcies and insolvencies.
GREECE 30,000 Textile Jobs Lost In 10 Years
Up to 30,000 textile and clothing industry workers in Greece have lost their jobs in the past 10 years because of the growing move to offshore manufacturing.
Data from the Greek Association of Knitting and Clothes Manufacturing Companies showed the losses were mainly due to firms relocating production to Bulgaria, Macedonia, Albania, Romania and Turkey.
Officials said up to 50,000 jobs were created in those countries as a result but the switch has left the Greek industry with only 10,000 workers this year compared to around 40,000 in 1993.
The Bangladesh garment sector is the biggest foreign exchange earner of the country, employing 1.8 million workers. The industry flourished due its cheap and predominantly female labour market as well as the favoured international textiles and clothing regime under the MFA.
In recent years, about 600 garment factories of Bangladesh have faced closure rendering about 500,000 labourers out of employment, of whom 80% are females.
In the aftermath of the September 11 incident in the US, a total of 1,276 RMG factories closed down in Dhaka and Chittagong, and 350,000 workers were rendered jobless. Some of the factories have gradually reopened since March 2002, 501 factories still remain closed.
According to the Bangladesh Garment Workers Protection Alliance (BGWPA), 72 Caribbean and Sub-Saharan LDC are to enjoy quota free and duty free access to the American market under the USTDA – 2000 law. India and Pakistan have also been given concessions by the US for their cooperation in the “war on terrorism”, while China dominates the RMG market. Bangladesh would face dire consequences for its failure to compete with the other LDCs due to its lack of linkage industries in this sector.
Specifically, the two sides agreed on quotas for 38 of the 40 originally proposed categories. Only luggage (Category 670) and man-made fibre coats (Category 634/635) were dropped from the list. For cotton knit shirts (Category 338/339), the bilateral agreement would impose a quota of 14 million dozen. For cotton woven trousers (Category 347/348), the quota would be slightly above 7 million dozen. This represents cutbacks from the current level of trade of 21% and 57%, respectively, and this reduction is significant, particularly because these two categories accounted for more than 50% of the total value of Vietnam’s apparel exports to the US last year. The quotas for all other categories are set at the level of trade for the twelve-month period ending in February 2003 plus 10%. For example, for woven shirts (Category 340/640), the quota of 2 million dozen would translate into a cutback of 46% from the current level of trade.
The quotas will rise 7% a year for cotton products and 2% a year for wool products.
Although all quotas will end on December 31, 2004, the agreement will continue until Vietnam is a member of the World Trade Organisation, likely to be in the next couple of years.
Vietnam has emerged as one of the world’s leading bases for clothing producers and last year shipped $975m of textiles and apparel to the US.
Vietnam’s textile and garment exports almost doubled in the first three months of 2003 amid a flood of orders from the US. Vietnam has already shipped $530 million of textile goods to the US in the first three months of this year. However, exports to the EU and Japan slumped around 20%.
Nevertheless, the fact remains that the negotiated deal makes no one really happy. US importers and retailers arguing that the quotas are too small and do not cover the orders US firms already have placed in Vietnam this year. The US Association of Importers of Textiles and Apparel (USA-ITA) stressed that the quotas for cotton knit shirts and cotton pants “may sound large”, it also pointed out that this quota was already 50% filled in January and February 2003. US apparel importers would like to see the Vietnamese textile and apparel industries grow stronger to be able to become a reliable source of low-cost, quality products and as a competitive alternative to China.
On the other hand, the US textile industry will continue arguing that the quotas contained in the deal are too large and will harm US producers by reducing orders from Mexico and the Caribbean, where producers use US yarn and fabric to get duty-free access to the US market.
alls For Tariff Freeze
The Council of Textile and Fashion Industries of Australia (TFIA) said that it is clear at this stage that there are activities undertaken by many of the more significant suppliers of textile, clothing and footwear products that are contrary to Australia’s approach to opening up market access. It said that some countries are observing tariff reductions but still keeping Australian textile and clothing products out of their markets by raising domestic taxes on imports. The effect had been offset by luxury goods taxes on imported goods only.
The commission is assessing what changes need to be made to assist provisions for the textile, clothing and footwear industries after January 1, 2005, when TCF tariffs will be cut by 33% across the board.
TFIA argued that tariffs should be frozen at the new levels until January 1, 2010. Action then should be after a review of progress in gaining market access and in tariff reductions. TFIA also argued that the Strategic Investment Program, which offered grants for upgrades and research and development, should continue to 2015. Besides, TFIA urged a revision of anti-dumping procedures, which did not give the protection intended.
More Subsidies For Textile
Looking forward to make goods cheaper for consumers, the Productivity Commission is demanding to extend subsidies for textile and clothing industry until 2013. This extra subsidy is to compensate for a proposed cut in industry tariffs. This can result in additional $840 million for taxpayers.
The commission wants to cut all textile and clothing tariffs to 5% by 2015. Industry tariffs are already slated to fall in 2005, with those on clothes due to drop from 25% to 17.5%, and those on shoes, carpet and cotton sheets and fabrics set to drop 5% to 10%.
To ease manufacturers and workers into the changes, the commission says the Government’s $678 million, five-year subsidy for the industry should be extended for another eight years beyond the expiry date in 2005. This would give the industry $560 million over the first four years, and $280 million over the last four years.
Key points of the assistance program included internationalising supply chains, producing more innovative supply chains that can change quickly to suit consumer preferences, and the creation of more niche brands.
The blueprint was put together by the Textile, Clothing, Footwear & Leather Forum (TCFL) which believes the industry’s future lies in a shift away from manufacturing to design, global marketing and product innovation.
The Productivity Commission has acknowledged that specific support might be needed for people who lose their jobs as a result of the changes. The Textile, Clothing and Footwear Union said 30,000 jobs had already been lost over the last five years as a result of tariff reductions. The troubled industry worth $9 billion and employs 65,000 people.
The government says it will grant tax concessions and other incentives to those who wish to make use of this opportunity in manufacturing fabric for the clothing industry in Sri Lanka and for export.
Clothing accounts for 55% of Sri Lanka’s total exports, but without a local fabric base manufacturers have to import substantial amounts of material annually.
The development of a local fabric base has been identified as a major downstream integration initiative that is essential if the country is to meet the challenges arising from the removal of quotas after 2005.
“U.S. businesses are part of Malaysia, we are part of society there, providing jobs, education and training. We consider our relationship with Malaysia to be vital to our Asia and worldwide strategies. The United States and Malaysia are very close partners in trade, investment, education, security cooperation, and in many other areas,” said Bower.
Two-way trade between the U.S. and Malaysia last year stood at US$34.4 billion, the largest volume of bilateral trade with any ASEAN country, and the U.S. exports more to Malaysia than it does to such countries as India, Italy, Russia, Spain, or Switzerland.
The US-ASEAN Business Council is America leading private business organization dedicated to promoting increased trade and investment between the United States and the member nations of ASEAN. The Council’s membership includes approximately 150 of the Fortune 1000 American companies with trade and investment interests in the ASEAN region, and the council’s members are represented in diverse industries, including aerospace, agribusiness, automobiles, computers and information technology, consumer goods, energy exploration and development, express delivery services, financial services, health care and pharmaceuticals, software, and telecommunications.
WHAT IS CEPA?
ê A free trade deal between Hong Kong and mainland China
(China’s first free trade agreement)
ê Effective from 1 January 2004
ê Significant China market liberalisation
ê Preferential access to China’s market from Hong Kong
ê Offers better deal than China’s WTO commitments
A boost to your first-mover advantage in China
WHAT DOES IT MEAN?
ê Zero tariffs on 90% of Hong Kong exports to China
ê Faster/easier market access for 18 service sectors
ê Lower entry thresholds for smaller players (capital/trading history requirements)
ê 100% ownership of many China ventures
ê Makes Hong Kong the simplest, most profitable route into/out of China
ê Manufacturers in China able to use Hong Kong services
An expressway to China through Hong Kong
WHO QUALIFIES?
ê Hong Kong-based companies, regardless of size or nationality, can be eligible.
ê Service providers (in 18 Cepa-eligible areas):
ê Must be incorporated in Hong Kong
ê Doing business in Hong Kong for past 3-5 years
ê Liable for profits tax
ê Employing 50% of staff locally
ê Manufacturers/distributors of goods (273 categories of goods covered):
ê Goods must qualify as “made in Hong Kong” under Rules Of Origin
ê Rules being finalised – decision expected in October 2003
Strengthens Hong Kong as your platform for China business
HOW CAN OVERSEAS COMPANIES TAKE ADVANTAGE?
ê Partner with a Cepa-qualified firm in Hong Kong
ê Invest in a Cepa-qualified company
ê Buy a Cepa-qualified company
ê Access TDC Cepa services
What is the difference between a Free Trade Agreement and a Closer Economic Partnership Agreement?
Normally FTAs are signed between two countries. Because of the ‘one country, two systems’between the Chinese mainland and Hong Kong, a new name has been used. In all other ways Cepa is a FTA.
Although imports are clearly slowing down, US quotas are being rapidly filled in a series of sensitive categories. China, Vietnam, the Philippines and Indonesia are facing a general saturation in US limits.In China, a larger series of categories is now above the average rate of 59% for this period of the year. From July 7th, for instance, utilization rate in category 433 (wool hosiery) rose from 48.20% up to 61.90%. Quota fill rate for wool trousers (category 447) jumped from 53.80% up to 72%.
China’s exports of cotton trousers in the most sensitive categories 347/348 are also threatened by a fill rate of 81.60%.
Quota alert in Vietnam
For Vietnamese exporters, the surge in shipments to the United States will probably lead to US embargoes being placed before the end of the year for a large series of categories.
In category 342/642 (skirts), the US quota is already 96% filled. The utilisation rate reached 84% in category 301 (combed cotton yarns). In the past month, quota fill rates surged from 30% to 40% to about 55% to 70% for a majority of categories.
In Indonesia, exporters are also under pressure, although the rise in the rupiah depressed sales to the United States. Quota fill rates already exceed 70% in categories 443 (M&B wool suits) and 447 (M&B wool trousers). In category 347/348, the saturation rate rose 10% in the past month, from 55% to 65%.
The same categories 347/348 is also facing a possible saturation in the Philippines, such as in several other countries, as usual.
Quota adjustment for India
India benefited from a general adjustment in its quotas, granted by the US administration and effective from July 23rd. As a result, quota fill rates actually declined compared with a month ago.
India’s exports to the US surged in the first quarter before declining at the end of the first half. Categories 338/339 are still threatened by a possible saturation, however, with a fill rate of 73.80% and five months to remain before the end of the year.
In Malaysia, quota filled rate is 68.3% for category 338/339 (cotton knitted shirts and blouses) and 58.9% for 347/348.
The idea was hinted at in a report in the China Daily newspaper, “China will not voluntarily impose limits on textile exports as a way to head off possible safeguard measures,” said an unnamed official who went on to suggest that businesses could be better off by adapting to the change and finding more buyers outside the United States.
The lobby group on route to the US includes representatives from major textile companies, industrial associations and the government. Their visit is a direct response to a move by a group of US textile associations, which last month asked the US Government to renew limits on a range of Chinese-produced textile products.
The aim of the Chinese delegation is to form a close alliance with US importers and retailers. The notion of voluntary restraint is the carrot in a carrot and stick approach. The stick is the threat of countermeasures if the US administration imposes safeguard limits.
On 3 April 2003, at the 54th Annual Meeting of the American Textile Manufacturers Institute (ATMI), Under Secretary of Commerce for International Trade Grant Aldonas announced that the US government has finalised the process for employing the textile safeguard provision contained in China’s World Trade Organisation (WTO) accession protocol. This China-specific textile safeguard will remain in effect until 31 December 2008. Under this provision, the US retains the right to impose quotas to address surges in imports of textile and apparel products from China that have been “integrated” into the WTO trade regime, ie, removed from quota. Aldonas also noted that studies have shown China gains a 30-40% price advantage solely from its currency peg.
ATMI Chairman Van May welcomed the announcement by saying, “We look forward to working with the government to help them quickly review ATMI’s existing petitions on knit fabric, dressing gowns, brassieres, luggage and gloves, as well as further petitions we might file on other affected products, and to impose the safeguard”. ATMI is now evaluating other textile and apparel categories where imports from China are seen as disrupting the US market. However, May bemoaned that it had taken so long for the process to be approved, as Chinese imports “have continued to surge in the seven months since we first asked the government to take action”. ATMI’s press release also noted that over the past year, imports of Chinese textile and apparel products have increased by 135%. Meanwhile, numerous US textile mills have closed and more than 25,000 US textile jobs have been lost.
Under the new procedures, safeguard petitions may be filed with the Committee for the Implementation of Textile Agreements (CITA). CITA then has fifteen days to decide whether the petition meets minimum standards. Requesters must provide CITA with specific information in support of a claim that Chinese-origin textiles or apparel products are causing a market disruption or threaten the orderly development of trade in such products. Among other things, the required information will include import data going back five years, US production data for the same period and market share information detailing Chinese gains.
Subsequently, CITA will solicit public comments on the request. Following the fifteen-day public comment period, a determination on whether CITA will request consultations with China will be made within 60 calendar days of the close of the comment period. Should the US government decide to request consulations, a Federal Register notice will announce this decision and the minimum quota, which will come into force immediately. A 30-day consultation period will follow, and could be extended to 90 days.
Aldonas also announced the conclusion of the first stage of the textile marker project undertaken by the DOC with the help of the Oak Ridge National Laboratory of the US Department of Energy (DOE). This technology is designed to remedy the problem that the origin of fabrics and yarns can be difficult to determine, which compromises enforcement of US apparel import preference programs that require the use of US fabrics and yarns. Once fully developed, this marker system could be used by US textile manufacturers to mark their products and by the US Department of Homeland Security’s Bureau of Customs and Border Protection (CBP) in its origin verification efforts.
With these initiatives the Bush administration seeks to mollify the despairing US textile industry, parts of which still cling to the fading hope that the US government will provide similar relief for the textile industry as it did for the steel industry in 2002. While the Bush administration has formalised the provision of textile safeguard guidelines, it is unlikely that it will go this route shortly, particularly because the steel industry bailout was a presidential election campaign promise in the year 2000, and it affected important swing states, such as Michigan, Pennsylvania, Ohio and West Virginia. Additionally, the same does not apply to the southern textile producing states, which are firmly in President George Bush’s corner. This factor reduces the US textile industry’s political leverage further. Nevertheless, particularly where US imports of Chinese textiles and apparel are concerned, the outcome will also be influenced by the overall health of the US economy.
Cambodia Finishes WTO Entry Talks
After eight and a half year bid to secure membership, the heavily apparel export dependent and poor Southeast Asian nation, Cambodia, finally reached an agreement recently in Geneva to enter the World Trade Organization (WTO).
In a time of harsh and fierce global competition, the survival of a country depends very much on the ability to capture the right opportunities and at the right time. Under the agreed entry terms, textiles and apparel import quotas that other WTO members apply on imports from Cambodia will have growth rates as provided for in the WTO Agreement on Textiles and Clothing (ATC) and shall be applied from the date of Cambodia’s accession. These growth rates would end when the ATC terminates in 2005. Under the terms of a bilaterial Cambodia-U.S. agreement, the U.S. had placed quantitative restrictions on 13 categories of apparel from Cambodia. In 2001, Cambodia’s apparel exports totaled $1.1 billion and accounted for a 72% share of its total merchandise exports. Cambodian exports to the U.S. in 2001 reached $987 million, up 15% from the year before and accounting for a 1.5% share of U.S. apparel imports.
WTO Ministerial Conference approves Nepal’s membership
The WTO’s Ministerial Conference on 11 September 2003 approved by consensus the text of the Protocol for Nepal’s entry into the WTO. Nepal will be the second least-developed country (LDC) to joint the WTO, after Cambodia, through the full working party process.
Nepal still has to ratify the agreed terms and inform the WTO. Thirty days after that it will become a member. When these steps are complete, Nepal and Cambodia will bring the WTO’s membership to 148. Nepal applied to join the WTO in May 1989.
Nepal has a population of 23 million and a per capita income of US$240. Agriculture is the main source of income and employment, and accounts for 41% of GDP and more than 80% of employment. Tourism is one of the most import services sectors and contributes about 12% of the total foreign exchange and 3.8% of GDP. Nepal has been increasingly developing hydroelectric energy resources. India is the most important trading partner of Nepal.
Nepal’s clothing exports to the United States fell 18% in September to $8.5 million from $10.5m in the year-ago period. Exports to the US generates 80% of its total overseas apparel revenue. Prior to August’s 1% slip, exports had risen for 12 months in a row. The industry employs around 100,000 people.
First I would like to thank the MKMA for giving me an opportunity to write my views on the textile industry for the October’s issue of the MKMA Newsletter.
The Malaysian textile industry is currently going through a “very rough” patch in its industrial life cycle. Is it nearing its end of its life cycle or are there more years left in it? Will it go the way like what has happened in Taiwan, Hong Kong and Korea or will it have its own distinctive existence in Malaysia? Whatever the lifeform it will take will greatly depends on what will happen in the next 2 to 3 years.
The following events that will take place between now and 2006 will probably set the direction of the global textile industry for at least the next decade:
4. Phasing out of quotas on 1st Jan 2005 as per the WTO agreement.
We all know that the WTO agreement will kick in on 1st Jan 2005 and quotas will be abolished for all textile imports from MFN countries to the US and EC. This will bring immediately to our minds that only the fittest will survive meaning able to produce products at the lowest price possible. To the buyer this means landed cost so factors like logistics and duties come into play. Total cost will mean CnF plus duties. So competitiveness will be measured based on these points.
Ensuring the lowest cost of production and logistics costs will not ensure the winner unless you can bridge the import tariff barrier. That’s where survival trick lay for the next decade. We can overcome this tariff barrier either by working very efficiently or just simply ask for its removal (through Free Trade Agreements). This is where the industry and the government of every country producer should base its incentives and strategy on.
2. China’s role in the present and post 2005 period
Countries like China have other advantages due to measures like currency control and export subsidies at their disposal. Cost of manufacturing is measured in the currency of the country of production and later translated to the country currency of the buyer. Hence an element of currency exchange takes place when the transaction is done. The exchange rate can be either determined by market forces or be artificially fixed by the country having a currency control regime. Countries like China and Malaysia practices “fixed rate” or “pegged” rate to eliminate short term variations in order to provide some kind of predictability to businessmen. However it can also be “fixed” to give an artificially low rate to the exporter in order to gain an unfair advantage over others. China and Malaysia to a lesser extent have been accused of using such practices.
If China which is under tremendous pressure from the US is forced to revalue its currency (RMB) to a much higher rate say 20% or more it will greatly change the entire scenario of the trading environment of not only textiles but of all manufactured products from China to the world. This will also impact greatly all those who have invested there recently thinking the current situation will carry on.
Another unfair method of increasing export competitiveness is “export subsidy”. China has been accused of subsidizing exports in the order of 17%. This had been carried out since the earlier communist years when the need for foreign hard currencies were sought to increase national reserves and to give support and legitimacy to the RMB. However recent years of economic successes and investments from overseas that had brought in so much foreign currencies, China would gradually see the need of slowly removing such subsidies. Such export subsidies are actually effectively lowering the exchange rate of the RMB further and can be seen as currency rate manipulation. The exporters are actually getting more RMB for the goods they export much higher than the official rate. Export subsidies are not allowed under WTO rules. China will be expected to abolish them eventually if she wants to be on a level playing field. Think what will happen to China’s competitiveness when this happens.
3. Terrorism , war and unpredictable events like SARS emerging.
We have seen what incidents like 9-11 , Bali explosions and SARS can bring to a country’s economy. Acts of terrorism will force buyers to avoid sensitive and unsafe regions. After all businessmen want to make money in order to be able to enjoy it and not to risk their lives and lose everything. Investments in unsafe countries or places perceived to be so are very risky. From current reports countries like Thailand, Vietnam, Cambodia, China and even Malaysia are considered safe from terrorism problems.
Another problem is SARS which had affected China and Vietnam to a larger extent than other countries. SARS can bring on even more unpredictable results than terrorism. With travel bans imposed, movement restricted, fear of goods being contaminated by germs can completely wipe out the industry if prolonged. We have seen it and it is even more fearful than terrorism. This will cause buyers to second source their goods from other countries in order for their flow of goods not to be disrupted. Good management warrants you to second source your goods in case your primary source may be destroyed by strikes, riots, war, fire and now diseases (SARS). The morale here is that secondary source countries will have a role to play if you are still competitive enough to warrant the buyers’ attention.
I hope that with the short analysis I have given, our textile industry players will be more the wiser to put in their investments in the right places. I have always pondered over how true this saying is:
“There is no sunset industry, just sunset products”
However, that agreement will end in December 2004, by which time Cambodia is expected to have become a member of the World Trade Organisation.
This latest increase, according to US embassy spokeswoman Heide Bronke, was less than the 18 per cent it could have been under the existing agreement because “there is still work to be done”.
Lingering irregularities included correct payment of wages, involuntary and excessive overtime and anti-union discrimination, an embassy statement claimed.
The garment industry is Cambodia’s main source of foreign revenue and accounts for 36% of its economic output, earning up to US$1.3 billion annually.
More than 75% of its clothing exports go to the US under brand names including Gap, Banana Republic and Polo Ralph Lauren.
The United States and Thailand intend negotiating a free trade agreement, both countries announced at APEC meeting. First round of discussions between the US and Thailand could take place by mid-2004.
Thailand and Australia also completed another FTA at the same time while Bangkok will discuss a similar agreement with New Zealand and Canada.
Although such an agreement could stimulate sales of US textiles to Thailand, it would certainly boost Thai apparel exports to the United States, depending on rules of origin negotiated by both countries.
George Bush made it clear that he wanted rewarding Thailand for its support in the fight against international terrorism. This is the second FTA negotiated with an Asian nation after a deal was concluded with Singapore.
After Singapore, Australia and Central America
The United States and Australia are also negotiating a free trade agreement. Discussions could be completed in year 2004. In addition to the FTA with Australia, Washington is currently discussing a similar agreement with Central America.
The recent failure of WTO talks in Cancun will result in a series of bilateral free trade agreements being separately negotiated between member countries, observers warned.
US accounting for 53% of apparel exports
The US market accounted for 53% of Thailand’s total apparel exports in the first half of 2003, according to Thai official data. Shipments to the US were up nearly 10% to US$762 million in the same period after falling 4.5% in 2002 to US$1.65 billion.
After still rising 6.35% in July, US apparel imports from Thailand declined nearly 19% in August in volume terms.
Thailand was the US 14th apparel supplier in August before Pakistan, Guatemala or even Cambodia. The low-cost country was able shifting to value-added products in the past years after labor costs substantially increased. Thailand is a major supplier of children’s wear, including baby garments.
Local content limited to 30%
Thailand and Australia just completed a free trade agreement after negotiators finally agreed on textile rules of origin. Australia accepted limiting to 30% the local content of apparel from Thailand, instead of the 50% local content Canberra was requiring until now.
222 – Knit Fabric
6002.10.4000 Other knit cotton fabric < 30cm wd >5% elstmarc yarn / rub thread
6002.10.8000 Other knit fabric <30cm wd >5% elstomeric yarn / rub thread
6002.20.3000 Other knitted or crochet cotton fabric width < 30cm
6002.30.2000 Other knit / crochet fabric; 5% or > elastomeric yrn
6002.30.9000 Other knit or crochet fabric 5% or > rubber thread
6002.42.0000 Other warp knit fabrics (including galloon) of cotton
6002.43.0080 Fabrics of manmade fibers nesoi, warp kint
6002.92.0000 Other knitted of crocheted fabrics of cotton, nesoi
6002.93.0020 Other knitted / crochet fabric dbl knit / interlock nylon, nesoi
6002.93.0040 Other knitted / crochet fabric dbl knit / interlock polyester, nesoi
6002.93.0060 Other knitted / crochet fabric dbl knit / interlock oth MMF, nesoi
6002.93.0080 Other knitted / crochet fabric of man-made fibres, nesoi
349– Brassieres & Other Body Supporting Garments
6212.10.1010 Brassieres containing lace, net or embroidery of cotton
6212.10.2010 Bras not containing lace net of embroidery cotton
6212.20.0010 Girdles and panty – girdles of cotton
6212.30.0010 Corsets of cotton
649
6212.10.1020 Brassieres containing lace net / embroidery manmade fibers
6212.10.2020 Bras not containing lace net or embroidery MMF
6212.20.0020 Girdles and panty – girdles or man-made fibers
6212.30.0020 Corsets of man-made fibers
350– Robes Dressing Gowns etc
6107.91.0040 Men’s underpants, briefs, niteshirt of cotton, knit
6107.91.0090 Boys’ underpants, briefs, niteshirts of cotton, knit
6108.91.0030 Women’s negligees, bathrobes etc of cotton, knit
6108.91.0040 Girls’ negligees, bathrobes etc of cotton, knit
6207.91.1000 M/B bathrobes, dressing gown etc cotton, not knit
6208.91.1010 Women’s negligees, bathrobes etc of cotton, not knit
6208.91.1020 Girls’ negligees, bathrobes etc of cotton, not knit
650
6107.92.0040 Men’s underpants, briefs, niteshirts of MMF, knit
6107.92.0090 Boys’ underpants, briefs, niteshirts, of MMF, knit
6108.92.0030 Women’s negligee, bathrobe, etc of manmade fib, knit
6108.92.0040 Girls’ negligees, bathrobe, etc of manmade fib, knit
6207.92.2020 M/B bathrobe dressing gown etc MMF < 36% WL/FAH, not knit
6208.92.0010 Women’s negligee, bathrobe, etc of manmade fib, not knit
6208.92.0020 Girls’ negligees, bathrobe, etc of manmade fib, not knit
Abbreviations : MMF – Man-made FIB – Fibre NESOI – Not Elsewhere Specified
The US Government has decided to impose quotas on three types of textile products in an effort to give the US textile industry temporary breathing room from the recent flood of Chinese imports.The decision will affect Chinese imports of knit fabric (Category 222), cotton and man-made fibre dressing gowns (Category 350/650) and cotton and man-made fibre bras (Category 349/649). US textile makers hailed the decision as a major victory to protect their beleaguered industry, but critics warned that the decision would hurt American consumers by raising prices.
If agreement is not reached by March 23, 2004, the following unilateral restraints will take effect retroactive to December 24, 2003:
Category Limit
222 9,664,477 kg
349/649 16,828,971 doz
350/650 4,094,382 doz
These levels are based on US imports for the 12-month period ending on September 30, 2003, plus the agreed upon uplift of 7.5% and would be effective from December 24, 2003, through December 23, 2004.
Earlier this year, the US textiles industry filed petitions under a special provision of the agreement China signed to gain entry into the World Trade Organization. This provision allows the United States and other WTO members to impose temporary quotas on textile imports from China in the event that those products are causing “market disruption”.
Surging Chinese textile imports to the United States are to be capped following the announcement of new import quotas by the Bush administration. The decision will see Chinese textile shipments capped at 7.5% annually above the previous 12 months’ total.
However, the quotas extend to less than 5% of China’s textile exports to the US, with affected garments to include knit fabrics, dressing gowns and brassieres.
A trade group for retailers including Gap Inc and JC Penney Co have expressed opposition to the decision, saying it will cause consumer prices to rise, while China’s Ministry of Commerce has also protested the quotas.
China has threatened to appeal the decision through the WTO, in a bid to “protect the rights and interests of Chinese industries”.
Since 1997, the textile industry has closed more than 250 US plants, including 50 in the last 18 months according to American Textile Manufacturers Institute figures. More than 200,000 US workers have lost their jobs in the industry in that time, including 30,000 since January 2002, the trade body said.
Data compiled by the American Manufacturers Trade Action Coalition, which has pushed for the “safeguard” quotas, shows that in the first nine months of this year, cotton bra imports from China grew nearly 53%; manmade fiber bras, nearly 78%; knit fabric, 39%; cotton gowns, nearly 141%; and manmade fibre gowns and robes, nearly 85%.
The European Commission has adopted measures aimed at strengthening the competitiveness of the EU textile and clothing sector in anticipation of the elimination, after almost of four decades, of WTO import quotas in January 2005. This profound change in trade in textiles will take place shortly after EU enlargement, which will add half a million direct employees to the EU textiles and clothing industry’s 2.1 million workforce. The Commission has identified areas to enhance the EU industry’s dynamism and competitiveness, which will be translated into concrete measures after consulting with all stakeholders.
Areas of Action
Research and development and innovation: R&D in areas of specific relevance for the textile sector such as development of new materials (including technical textiles), new production processes and clean technologies to contribute to sustainable development. Innovation should focus on fostering creativity and fashion,
Education and training policy: improve SME’s access to existing funding opportunities by simplifying application procedures, disseminating information and co-ordinating actions to avoid duplication,
Regional policy: programmes and initiatives for regions particularly dependent on textiles both in the framework of the discussions on the future of structural funds after enlargement and in the discussions on the new Financial Perspectives for the EU 2007-2013.
Actions in External trade
– in the context of the WTO Doha Development Agenda, promote the significant reduction and harmonisation of customs duties to enhance market access and the elimination of all non-tariff barriers
– complete the Euro-Mediterranean area by 2005, to ensure free movement of textiles for those countries applying the same rules of origin and an agreed system of administrative cooperation
– concentrate the EU’s trade preferences on the poorest countries, and provide these countries with the possibility to source intermediate inputs for the manufacture of garments which can be exported to the EU without losing trade preferences
– explore the use of labelling to facilitate access to the EU of products made in respect of international labour or environmental standards
– action to enforce intellectual property rights and to fight against fraud and counterfeiting
– increased vigilance to counter unfair trading practices examine the use of a “Made in Europe” label of origin to promote European quality products and offer consumers better information.
Importance of EU Textiles and Clothing Industry
It may look strange for a grouping of developed countries such as the EU to be worried about the future of the textiles and clothing industry but it indicates the importance of this industry:
– The EU is the world’s largest trader of textiles and clothing (T&C) products which in
the year 2002 amounted to 113 billion Euro (71.4 billion Euro imports and 43.5 billion
Euro exports;
– The EU is the biggest exporter of textiles products and the second largest exporter
of clothing products;
– In 2002, the EU T&C sector comprised of 177,000 enterprises (mostly SME’s), directly employing 2.1 million people;
– Total turnover of the EU T&C industry is estimated at 200 billion Euro;
– The next EU enlargement in May 2004 will add another 0.6 million people who are directly employed in the industry;
– The EU T&C industry has established strong links with Mediterranean countries through investments and subcontracting relationships. In 2002, 58 % of EU textile exports went to these countries, mostly for processing and transformation into garments (in 2002 the EU exported 16.6 billion Euro of textiles and imported 25 billion Euro of garments to and from these countries); and
– EU investments and subcontractors also gain through the market access given to
the Mediterranean countries in other quota markets;
Background for formulation of an EU-wide policy
The EU is in particular having a re-look at the T&C industry at this time due to:
– The expiry of the Agreement on Textiles and Clothing (ATC) on 31st December 2004 would free trade of all T&C products that are currently restricted by quantitative quota limits.
– The impending EU enlargement in May 2004 will bring in 10 new member states that are economically backward as compared to its current 15 member states. (The combined GDP of the new member states is only the size of the GDP of Spain, one of the poorer of the current EU member states). These new member states are dependent more heavily on the T&C industry than the current EU, not only through domestic investments but through EU investments and sub-contracting relationship.
– There is concern that the end of the ATC will benefit only a small number of exporters, particularly China. It is feared that competition from China may wipe out the T&C industry in most countries, including EU investment aboard.
– There will be economic difficulties internationally if China dominates the T&C exports. The share of T&C exports of total exports of selected countries worldwide, including neighbouring countries to the EU in the Mediterranean are : Bangladesh (95%), Laos (93%), Macao (89%), Cambodia (83%), Pakistan (73%), Sri Lanka (71%), Nepal (61%), Tunisia (46%), Morocco (43%), Turkey (38%), India (30%), Romania (27%), China (12%).
Textile City in Pakistan
Besides the garment cities in Karachi, Lahore and Faisalabad, plans are advanced for setting up a Textile City on a plot of land in Karachi covering 1,250 acres. The city will be owned and operated by a joint stock company with an initial capital of US$17.4 million, of which 50% will come from the Federal Government and the other half will be contributed by a corporate sector.
The city will be self-sufficient in water supply, power generation, desalination plant and effluent treatment plant. The concept of a Textile City is part of the Trade Policy for 2003-04, with the objective of providing the much needed infrastructure for the textile and leather sectors This mega project will create 80,000 new jobs and additional export earning of US$2.2 billion yearly from export of value-added textile products.
Vietnam Textile Zone Opens
Vietnam’s first textile and garment industrial zone opened in Dong Nai Province, 50km from HCM City. The Vinatex-Tan Tao Investment Joint-Stock Company (Vinatexin) operates the zone, located on 183.5ha in the Nhon Trach Industrial Park.
The Viet Nam Textile and Garment Corporation (Vinatex) has signed a contract to lease 80ha in the new zone. Vinatex has already invested in a water-treatment plant on the leased land, aiming to supply water to its subsidiary factories operating in the zone.
Eight other investors have registered for an additional 30 ha in the Industrial Zone. With an investment of VND239 billion (US$15.3 million), the joint-stock company’s shareholders include Vinatex (51 per cent), Tan Tao Industrial Park Company (25 per cent) and Sai Gon Construction Company (24 per cent).
The Government has approved a plan mapped out by Vinatex to develop 11 textile industrial zones and complexes across the country.
Dubai Textile City
A six million square foot plot of land has been allocated for the Dubai Textile City (DTC) project in Warsan. Construction of the project id scheduled to complete by mid-2005. Investment in the DTC has reached more than $55 million since it was first launched two years ago. The local textile trade is valued at approximately $4.4 billion annually.
Jimo- A City of Knitting
As a traditional industry of Jimo, the knitting industry achieved RMB9.1 billion output in 2002. It is the backbone industry in Jimo. Jimo had 360 knitting and garment enterprises. As a whole, the sector is able to produce 20 million meters of fabrics and 500 million sets of knitwear annually. Many enterprises are trying to establish their brands. Currently, Jimo has more than 50 registered trademarks.
Jimo Municipal Government aims to propel its knitting and garment industry to reach the goals of RMB20 billion in annual output value and 1 billion sets of knitwear and garment. To achieve this, the Jimo Government will invest RMB5 billion for enterprises to conduct technological innovations and brand building. The ultimate goal is to make Jimo the largest research, development, production and marketing base for the knitting and garment industry in the north of the Yangtze River.
Malaysian Textile and Apparel Posted Slight Growth in 2003
Compared with export of RM 11.68 million in year 2002, textile and apparel export from Malaysia posted a slight growth of 3.22% to RM12.05 million in year 2003 after a consecutive decline for the previous 5 years since 1998. However, if compared with year 2001, the sector still registered a drop of 0.98% from RM12.17 million.
The growth in year 2003 is mainly due to a sharp rise of 23.65% of fibre export. Textile and clothing sector only registered 2.59% and 2.76% growth respectively.
South Korea Apparel Exports Fall 7.2%
Apparel exports from South Korea have fallen 7.2% year-on-year to US$3.57 billion for 2003, the Korea Apparel Industry Association revealed. According to the association, the disappointing figure came as a result of to fierce competition from Chinese exporters.
Double-digit drops in garment exports to the United States (10.0% year-on-year to US$1.85bn) and Japan (19.6% year-on-year to $4.5bn).
Philippines Garment And Textile Exports Down 3.65%
Garment and textile exports from the Philippines have fallen 3.65% year-on-year for 2003 to $2.73 billion, according to Garment and Textile Exports Board data.
Manufacturers in the south-east Asian country, who posted $2.83bn in full-year exports for 2002, saw all major markets except the European Union post negative growths for the past year.
Of the total exports, quota countries contributed $2.4bn, a 3.81% slide from $2.5bn in 2002. Exports to non-quota countries, meanwhile, were down 2.39% to $323.36 million, compared to $331.26m in the prior year.
Only the EU saw an improvement, with exports to the region growing 6.34% year-on-year to $359.32m in 2003.
Pakistan Textile Sector Revenue Up 9%
Pakistan’s textile sector has posted revenue growth of 9% for fiscal 2003, largely due to higher input prices.
Although gross margins for the sector fell to 12.6% from 14.6 % in 2002, with operating margins down to 8% from 9.8% in the prior year, the bottom line was able to show a nominal 3% year-on-year increase thanks to a 27% decline in financial charges.
The spinning sector, meanwhile, was faced with 14% higher average cotton prices compared to the previous year, but spinning sales grew by 12% year-on-year.
According to statistics from Customs China Office, China exported US$ 46.9 billion worth of clothing or apparel products for the period January-November 2003, an increase of 25.2% as compared to exports in the same period 2002.
China’s clothing industry is export oriented where 50% of its annual outputs are sold overseas. During the first 11 months last year, China produced 8.805 billion pieces of apparel, an increase of 12.3% as against the same period of 2002. Among the various categories of apparel, the production volume of down-filled coats recorded the highest growth of 35.5% as compared to growths recorded by other types of apparel.
China’s total sales volume of clothing last year grew at 9% as against 2002 and the sales volume accounted for 10% of China’s total sales volume of consumer goods. Despite the increase in sales volume, competition in clothing industry is getting fiercer. Retailers have been forced to cut prices and offer discounts, even at peak sales periods, and the present trend is expected to shrink the sales volume in the future. However, at the same time the declining retail price will generate and stimulate demand as nearly 50% of Chinese consumers prefer to make purchases when discounts are offered, especially when the season change.
As Chinese consumers become more affluent, prices are no longer serve as the determinant factor of purchasing consumers items. More consumers now have greater brand awareness and as for clothing industry, many second-rate brands have rushed into China in recent years. At the same time, the selection of domestic brands has skyrocketed. Various regions in China have also fostered their own brand. While Ningbo and Wenzhou, two booming cities in East China’s Zhejiang Province, are well known for its best-selling men’s clothes, ZhongShan, in South China’s Guangdong Province, is well known for its leisure apparel. In terms of women’s clothing, the best sellers are from Hangzhou, in East China’s Zhejiang Province, and Beijing.
Chinese consumers have now more channels to buy clothing. The traditional sales channels, which include department stores, chain stores and rural fairs, continuous to be popular places for shopping clothing. In the meantime, consumers can also now buy through television, e-commerce or mail. Although department stores remain the most important sales channel of brand-name clothing, chain stores and franchised stores have developed rapidly in China. In particular, the sales volume of some men’s brands and leisure brands, sold in chain stores, have increased as much as 30% annually.
VIEW FROM MATRADE BEIJING:
China’s clothing market is expected to continue booming this year. This could be attributed to the following factors:
The booming clothing and apparel industry in China provides opportunities to the Malaysian producers and exporters. The growing number of affluent consumers generates demand for branded and imported items. These consumers want to spend more in order to enjoy better lifestyles and therefore needs something of good and high quality products.
In addition to exporting directly to Chinese market, Malaysian companies may also consider to establish presence in the market by through setting up operation offices, franchised stores or boutiques in potential cities. This will help them promote their products directly to consumers.
1.1 Definition of Textile
Textile was originally a woven fabric, but the terms textile ant textiles are now also applied to fibres, filaments and yarns, natural and manufactured, and most products for which these are a principle raw material.
This definition embraces, for example, fibre-based products in the following Categories:
Textile materials are general term for fibres, yarn intermediates, yarn, fabrics and products made from fabrics that retain more or less completely the strength, flexibility, and other typical properties of the original fibre or filaments.
Industrial textiles are specially designed and engineered structures that are used in products, process or services of mostly non-textile industries. According to this definition, an industrial textile product can be used in three different ways:
Another indication of industrial textiles are that unlike ordinary textiles which have been traditionally used by the consumer for clothing and furnishing, industrial textiles are generally used by professionals from industries of non-textile character in various high- performance or heavy duty applications. The term “industries textile” is the widely used terms for non-traditional textiles. Other terms used are “technical textile”, “high performance textiles”, “high tech textiles”, “engineered textiles”, “industrial fabrics” and “technical fabrics”.
Fabric is a manufactured assembly of fibres and/or yarns that has substantial surface area in relation to its thickness and sufficient cohesion to give the assembly useful mechanical strength. Fabrics are commonly woven or knitted, but the term includes assembles produced by felting, lace-making, net-making, nonwoven process, and tufting.
Cloth is a generic term embracing most textile fabrics, which are suitable for clothing used. Cloth may be formed of any textile fibre, wire, or any other material, and it includes any pliant fabric woven, knit, felted, needle, sewn, or otherwise formed. This term was originally applied to wool cloth suitable for clothing.
Shirting is means a cloth for shirt. Plain and fancy woven fabrics used for shirting – broad cloth, poplin, oxford, etc. Usually are mercerised cotton, glazed and preshrunk finishes. White shirting is a general British term for white finished fabrics as long cloths, cambrics, muslins. Shirt-frill is a fine cambric frill worn on shirt.
Suiting is a clothing material suitable for making suits. Palm-beach fabric is originally cotton warp, mohair weft fabric use for men’s suit. A light weight suiting fabric of mohair, rayon, or nylon in plain weave, white, yarn or piece dyed for ready-to-wear cloth.
Sheeting is a medium-weight, closely woven, plain weave or 2/2 twill-weave fabric, made from yarns of medium linear density and used primarily for bed coverings. Condenser-spun weft may be used. Typical construction: ⑴ Plain weave: 25X23, 35X33 tex; K=14.8+13.2; ⑵ 2/2 Twill weave: 24X28; 21X37; tex; K=11.0+17.0; ⑶ Plain weave: raised; 228X18; 30X9; tex; K= 15.3+ 5.4.
Lining Fabric is a fabric that is used to cover inner surfaces, especially when the inner surface is of a different material than the outer. May refer to garment lining, lining for boxes, etc. Generally made of smooth, lustrous appearing fabrics, but also of felt and velvet. Both manufactured fibres and natural fibres.
Apparel is personal outfit, garments, clothing or attire, including headwear, and footwear. This definition includes all apparel even if made of non-fibrous materials. Some dictionaries imply the inclusion of other, non-clothing habiliments and attached or carried accessories such as jewellery, handbags or walking sticks within the definition of apparel.
1.2 Fibre Types and structure
Fibre is a unit of matter, either natural or manufactured, that forms the basic element of fabrics and other textile structures. A fibre is characterized by have a length at least 100 times its diameter or width. The term refers to units that can be spun into yarn or made and twisting. The essential requirements for fibres to be spun into yarn include a length at least 5mm, flexibility, cohesiveness, and sufficient strength. Other important properties include elasticity, fineness, uniformity, durability, and lustre.
Natural and manufactured fibres are the two major categories of fibres used for manufacturing varies of textile. Natural fibres are derived from sources in nature such as wool from sheep and cotton from cotton plants. Cotton and other natural fibres such as silk and hemps have been extensively used as textile raw materials may be as old as tradition textile dating back to several thousand years ago. The invention of manufactured fibres between the late 19th and early 20th century changed the textile market forever. Development of manufactured fibres presented new opportunities to special properties into the textile products, especial to the industrial textile products. Today, most of the textile products are made of manufactured fibres either regenerated or synthetic fibres.
Manufactured fibre consists of regenerated and synthetic fibre. Regenerated fibre is a material which begins a natural fibre but at some stage in the chemical processing take the form of another chemical compound, then appears again in it completed state as the original fibre material. Synthetic fibres are man-made fibres and are not found in nature. They have to be prepared by chemical engineering processes through polymerisation, extrusion and spinning method to form the fibres. Manufactured fibres can be used in many shapes or forms. They can be in the long continuous form of filaments or be chopped into shorter lengths in the form of staple fibres. Filaments provide a smooth surface and high strength. Fibres can be made with different diameters, cross-sectional shapes and a combination of different polymeric materials in the form of hybrid or bi-component fibres.
Staple fibre is a fibre of limited and relatively short length. The characteristic fibre length of a staple fibre is usually estimated by subjective visual assessment for natural fibres. The staple length of cotton corresponds very closely to the modal or most frequent length of the fibres when measured in a straightened condition. The staple length of wool is usually taken as the length of the longer fibres in a hand-prepared tuft or ‘staple’ in its naturally crimped and wavy condition. Natural staple fibres range in length from a few millimeters in single filament (e.g. cotton linters), up to about a meter (some bast fibres). The staple fibre less than 19mm (0.75 inch) long are term as short-cut staple. Typically used in wet-laid nonwoven processes to make fabrics, or as reinforcement in plastics, concrete, asphalt, and other materials.
The manufactured fibres can be composed of two-components during extrusion or in the spinning process.
Biconstittuent fibre is a fibre extruded from a homogeneous mixture of two different polymers. Such polymers combine the characteristics of the two polymers into a single fibre.
Bilateral fibres is a fibres of two generic fibres or variants of the same generic fibre extruded in a side-by-side relation.
Composite fibres (Bicomponent fibres) are fibres composed of two or more polymer types in a sheath-core side-by-side (bilateral) relation.
Conjugate fibre is a two-component fibre with specific ability to crimp on hot or hot/wet treatment because of differential shrinkage.
1.1.1.1 Spinning:
The present participle of the verb ‘to spin’ used verbally, adjectivally, or as a noun, meaning the process, or the processes, used in the production of yarns or filaments. The term may applied to:
In the spinning of manufactured filaments, fibre-forming substances in the plastic or molten state, or in solution, are forced through the holes of a spinneret or die at a controlled rate of extrusion. There are five general methods of spinning manufactured filaments, but combinations of these methods may be used. These filaments spinning method are: dispersion spinning, dry spinning, melt spinning, reaction spinning, and wet spinning.
In the bast and leaf –fibre industries, the terms ‘wet spinning’ and ‘dry spinning’ refer to the spinning of fibres in the wet state and in the dry state respectively.
1.1.1.2 Spinning Stages:
In the tradition textile process, natural or manufactured staple fibres are converted into yarn through a series of processes, in principle may be divided into two stages:
1.1.1.3 Spinning Preparation
In order to convert the bulk of fibres represented by a fibre bale about 50 billion fibres into a long thin yarn typically, 100 fibres/cross section, a number of preparatory processes are used. These processes are listed in table 1.1.
Table 1.2 Spinning Preparatory Processes
Some of these processes are mandatory in all yarn making operations and others may be need depending on the type of fibres to be spun, yarn count, and the spinning system utilized.
1.1.1.4 The Principle of Spinning
The spinning process is the final stage of staple yarn manufacturing. It is the final opportunity for a fibre to interact with the machine. In the spinning process, the goodness of fibre preparation through the different preceding processes can be easily be evaluated. A failure in spinning is often a result of a default in the preparatory process.
There are different spinning techniques available in to-day’s technology. Each technique is unique in its principle and in its requirements of fibre quality. New spinning techniques involve high drafting where the input fibre strand(the drawn sliver is separated, partially or fully, into approximately single fibres, flown in an air stream, and reconsolidated to form the yarn. These techniques are therefore, highly sensitive to fibre quality, and to the presence of fine trash and rust.
In any spinning method, three main mechanisms should be used to convert fibres into a yarn. These mechanisms are:
Figure 1.1 Basic Mechanisms of Spinning
The drafting mechanism works on the same principle as the drawing process; sliding fibres over one another without elongation or stretching them. The objective of drafting in the spinning process is to reduce the size of the fibre strand to the desirable size of yarn.
The fibre coherence mechanism produces cohesive force to hold the fibres together in the yarn by introducing inter-fibre three-dimensional cross-linking. In any spinning system, the coherence mechanism is responsible for providing yarn strength.
The winding mechanism involves winding on yarn on a package bobbin or a cone, and building the yarn along the length of the package. Proper yarn winding is extremely important particularly in weaving preparation. Yarn tension should be uniform and the appearance of the package is a critical factor.
1.1.1.5 Classification of Spinning Techniques:
Different type of staple yarn process with varies manufacturing techniques, there are four major spinning technologies:
Provide different yarn structures and hence properties. The twist level of a yarn is another variable that can affect texture and strength. These spinning techniques may be classified in may different ways. In principle, spinning techniques may be divided into two main categories:
Figure 1.2 Classification of Spinning Techniques
In the continuous spinning, the fibres flow is continuous from the feeding point to the delivery point; and fibres are under a full mechanical control. The conventional ring spinning is a continuous spinning process. In interrupted spinning, fibres undergo a complete or partial separation(rotor, and air-jet spinning, respectively before they are reconsolidated into a yarn. The primary reason for the interruption in fibre flow is to allow separation of the fibre coherence mechanism and the winding mechanism. This separation results in producing large yarn packages, increasing production, and introducing strength at minimum energy consumption. Table 1.3 shows comparison of the various spinning techniques:
Table 1.3 Comparison of different spinning Techniques
There have been many attempts to establish a ranking of fibre characteristics according to their contributions to the quality of yarns produced using a particular spinning system. These attempts have mainly been based on long experience and understanding of the principle involved in converting fibres into yarns in a particular spinning system. Table 1.4 provides a suggested general ranking of fibre properties according to their contributions in different spinning systems.
Table 1.4 Ranking of Fibres Properties According to Their Contribution to the yarn Quality for Different Spinning Systems
The existing European Union comprises of 15 countries namely Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxemburg, Netherlands, Austria, Portugal, Finland, Sweden and the United Kingdom.
1st May 2004 marks an extraordinary achievement for the European Union with the accession of 10 new member countries i.e. Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia. The new Member States will share the European values and contribute to the enlarged EU economic prosperity. They will benefit from the European model of integration, aiming at harnessing economic forces to achieve peace, stability and prosperity.
In trade matters, the EU is a leading power because it is united and speaks with one voice. With enlargement, this single voice will represent ten additional countries. After 1 May, the enlarged EU will be a larger internal market, and based on a single set of trade rules and an open economy. This will not just benefit the new member states, but it will also constitute an excellent opportunity for all third country partners, which will gain facilitated access to the new member states, through either free trade agreements, benefits of the Generalised System of Preferences (GSP) benefits, or tariffs which are generally significantly lower under the Common Commercial Policy than in the acceding countries. The enlarged EU will gain in economic importance with third countries and hence in influence.
There are also three candidate countries for accession which are not joining the EU on 1st May:
Third countries will fully benefit from enlargement
With a population of almost 455 million and a GDP of around €9231 billion, the enlarged EU will account for some 19% of world trade and be the source of 46% of world outward FDI and host to 24% of inward FDI.
The current European Union is already the largest single market in the world. There are no internal borders between the Member States and the harmonisation of regulations and standards ensures a freer circulation of goods and services than is possible within some countries. Enlargement will extend these characteristics to the acceding countries.
Third countries will benefit from an increased single market, and a simplified and enhanced access to the current acceding countries’ markets.
For textiles, the increased quotas will apply only until the end of the year, after which all quotas on imports from WTO members will cease to exist with the expiry of the WTO Multi-fiber Arrangements on 1 January 2005.
Enlargement will extend the EU’s trade policy regime to the acceding countries. The current system, featuring a single trade regime for the EU and a different regime for each of the candidates, will disappear. A single set of trade rules, a single tariff, and a single set of administrative procedures will apply not just across the existing fifteen member states but across the enlarged Union of twenty-five. This will greatly simplify the dealings that third country operators have within Europe.
Beyond the simplification of procedures, enlargement will bring a range of immediate and tangible economic benefits to third countries. These will arise out of the acceding countries adopting the same open standard of treatment of third countries which the current EU applies.
For trade in goods the new member states will have to adopt the Community Common Customs Tariff (CCT) upon accession. The average weighted industrial tariffs of the acceding countries are in general higher than the 3.6% average for the EU. Thus, in most cases, third countries’ business will benefit from lower tariffs in their trade with new member states.
SA 8000 is a comprehensive, global, verifiable standard for auditing and certifying compliance with corporate responsibility. The heart of the standard is the belief that all workplaces should be managed in such a manner that basic human rights are supported and that management is prepared to accept accountability for this. The standard was initiated by Social Accountability International (SAI).
An international perspective
The SA 8000 system is modelled after the established ISO 9001 and ISO 14001 standards for Quality and Environmental Management Systems. The standard was developed and field-tested by the non-profit Council on Economic Priorities (CEP), and assisted by an international Advisory Board including representatives of prominent corporations, human rights organisations, certification professionals, academics, and labour.
Incorporating international labour rights
The standard is based on a number of existing international human rights standards including the United Nation’s Universal Declaration of Human Rights and the UN Convention on the Rights of the Child. SA 8000 certifying the performance of companies in nine essential areas:
The USITC carried out the confidential study upon request from the United States Trade Representative (USTR). The report assesses the textile and apparel industries of more than 40 countries as of June 2003.
According to the report, low labour cost, a near self-sufficiency in knit fabrics, duty-free access to major world import markets including the EU, Canada and Norway and mass production in basic garments are the major competitive factors for Bangladesh.
Some US firms consider that Bangladesh could emerge as competitive alternative to China for mass-produced and low-end apparel. World’s leading chain stores are opening their offices in Bangladesh.
The garment industry is the country’s largest foreign currency earner and employs two million skilled workers, 85 percent of whom are women.
Pursuing Preferential Market Access
Travis and Andrew Samet, a former US assistant secretary of Labour visited Bangladesh recently. They are holding talks with the government officials and garment exporters ahead of lobbying for preferential treatment of Bangladeshi products in the US market during the quota-free regime.
Travis said Bangladesh government and the industry people should jointly work quickly and aggressively to pursue the preferential market access issue to the US government.
The two consultants are representing Sandler, Travis & Rosenberg, a US company which is the advisor of Wal-Mart, JC Penny, Vanity Fair and many other large US retailers. These companies buy readymade garments from Bangladesh.
Duty free access to the Canadian market had helped increase export volume to this particular market by 135 percent in a single year. Besides, there is need to simplify rules of origin with EU.
Efficient Port and Customs
International buyers now want quick and efficient delivery. Making Chittagong Port and customs efficient, reducing lead-time, simplifying Customs formalities and cutting cost of business will be major challenges for Bangladeshi garment exporters to survive in the quota-free trade regime. The industry needed improvements in the areas like shipping costs and goods handling at the ports to attain competitiveness.
Time is now main factor to the international buyers. They used to give 120 days shipment time earlier but now it has come down to 30 to 35 days.
In order to solve the problem and reduce delivery time, BGMEA had long ago proposed setting up of a central bonded warehouse. Improvement in utility services including gas and electricity are also major issues that need government support and initiative
Capacity Building
Bangladesh has still chance to sustain in the readymade garment market in the post-MFA era, but the sector urgently needs capacity building and setting up adequate backward linkage industries for enhancing export competitiveness.
Training
A government-sponsored project titled ‘Quality and Skill Development Project (SQDP)’ will cover three major areas — productivity management, quality management and compliance norms. 10,000 garment sector employees will be trained in the next two years to help them face the post-MFA challenges.
In the first phase of the two-year training programme, a total of five different organisations will conduct 26 courses, each will consist 25-30 students, in four months. Later, the number of courses will increase as per demand.
The training co-ordinated by the Export Promotion Bureau (EPB) formally began with the launching of two short courses on ‘Managing Quality in Garment Industry’ and ‘Productivity Calculation in Knitwear Industry’.
Supports from Bank
The Industry sought supports from bank including continuing the cash assistance, reduction of the bank interest rates, access to the Equity and Entrepreneurship Fund (EEF) of Bangladesh Bank, an allocation of Tk 200 crore for BMRE of small and medium RMG units and rescheduling of forced loans of small and medium factories.
India has allocated 25,000 crore rupees to disburse among the entrepreneurs at only 5 percent interest,
Seeks Import Duty and VAT Exemption
The industry stakeholders demanded the waiver of Customs duty and VAT on the import of spare parts of industrial sewing machines, knitting machines, various types of needles and machine tables.
The industry leaders also demanded reduction of income tax from 10 per cent to 5 per cent, exemption from paying VAT on RMG-related services, although refundable, and extension of bonding period to three years from one year.
Political Environment
The industry raised the issue of political unrest and urged the political leaders to give up negative politics for the greater interest of economy.
Companies are urged to analyse the issue based on your capacity, business nature, products, customers, directions and policy. Some companies all the while are enjoying the quota umbrella to secure orders whereas others losing orders because cannot get quotas. Will quota be a blessing or a stumbling block to your business? This is the moment to express your point of view.
Prepared by : Mr. Liaw Fenn Yenn, Head of TAR College, Johor Branch Campus
Some recent commentaries commented that Malaysia Textile and Apparel Industry has been slowly losing its competitive advantage from competitors such as China, Vietnam. Some said that Malaysia Textile and Apparel Industry is at a crossroads after the Asian financial crisis and Quota abolishment in 2005. Malaysia ‘s textile and apparel companies will have to fight for the survival and growth as Malaysia will no longer be allowed to enjoy the advantages under the quota systems.
How would higher learning institution like Tunku Abdul Rahman College (TARC) be able to play an important role necessary for making positive contribution in this industry? TAR College understands the needs of textiles and apparel industry and its future development. After a thorough analysis of the industry facing the problem of failing to attract the desired of young generation with skills and knowledge needed by the industry to deal complex textile products and manufacturing techniques, a Certificate/Diploma in Apparel Manufacturing course has been created for SPM students.
In the management literature, there has been a lot of theory present the how firms develop human resources and skills necessary for gaining competitive advantage. The management literature suggests that reinvestment on the human resources is needed to sustain a causally ambiguous competitive advantage. As such, it is critical for higher learning institution such as TAR College to provide proper education and training for our younger generation to join the industry with the knowledge and skills required to deal with the challenges of Quota abolishment in the year 2005.
There are two important roles to be played by TAR College for by making its efforts in the development effective technical personnel for the Malaysia Textile and Apparel Industry. . Firstly, TAR College plays the role of “helper”. As a helper, TAR College has been constantly maintained good relations by collaborative projects and research. In fact, TAR College has already opened the door by creating regular dialogues with MKMA (Malaysia Knitting Manufacturers Association). Some collaborative could encourage pooling industry resources to create closer partnership with MKMA members in search of better support and understanding to attract younger generation to join the workforce required by the industry.
As a Catalyst, TAR College has provided relevant courses to train and educate the right people to key positions needed in the industry by modifying the curriculum that include modern and relevant concepts. Some of these concepts are also being introduced into the secondary school curriculum. Another role of our College as catalyst would be commit to improve the knowledge base of our lecturing staff. This could be done through exchange programs with local firms and vendors. It also promote alliances between academia and individual firms in the industry either through joint research or direct investments that offer scholarships for the students who enrolled in the courses offered by the College.
By establishing the collaborative relationship, TAR College can thus help to create more young blood to join the skilled-based industry to have a workforce, which can contribute to the success of the industry. It is important to have the support of the textiles and apparel industry in Malaysia to facilitate the development of shared vision, which is essential to the survival of organization.
TAR College is committed to providing the education and resources that our Malaysia Textile and Apparel industry needed for growth and survival in long run as the Chinese proverb goes, “ If you want 1 year of prosperity, grow grain. If you want 10 years of prosperity, grow trees. If you want 100 years of prosperity, grow people.”
~ Yong Kok Swee~
1.3.1.6 Classification of Spinning Process: Depend on the nature of the fibre, the spinning processes can be classified as in the following:
1.3.2 Continuous-filament yarn
Continuous-filament yarn composed of one more filaments that run essentially the whole length of the yarn. Yarns of one or more filaments are usually referred as ‘monofilament’ or ‘multifilament’ yarn respectively.
Raw silk are natural continuous filament or strands containing no twist, drawn off or reeled from silk cocoons produced by silk worms. The natural protein fibre is cover by sericin (silk gum), which is usually removed in processing. Pure silk in which there is no metallic or other weighting of any kind, except that which is an essential part for dyeing. Wild silk is the fibre that extruded by insect larvac other than Bombyx mori.
The manufacture of continuous filament yarn is a relatively simple matter of collecting the number of individual filaments necessary to produce the desired yarn size. As manufactured by the fibre producing companies, they are called “producer’ yarns”. They contain minimum twist, ranging from about zero to 2.5 turns per inch, which is just sufficient to maintain the yarn’s integrity.
Most producer’s yarn is delivered with a thin resinous finish, lubricant, or size which protects the filaments from damage due to abrasion and snagging. The finish, amounting usually to less than one percentage by weight, may or may not be water soluble. Such finishes should not be confused with water soluble sizes such as starch, gelatin, or synthetic resin, which may be applied in warp yarns at the mill to give additional protection during weaving. Sometimes, a light lubricant has also being applied to the yarn by the producer or the mill. This improves the running quality by reducing static and friction, and reduces abrasion of the yarn and wear on the textile machinery guides, rollers,etc.
Because of filament uniformity and the compete absence of protruding fibre ends, continuous filament yarns are particularly smooth and lustrous. Such properties are advantageous in the manufacture of many fabrics, but a degree of filament and yarn uniformity is necessary. Even minor irregularities will be observed as fabric defects due to change in luster, dye pick-up, irregular yarn twist or yarn spacing. Producers must always be on the alert to insure yarn uniformity, both within a package and among packages. Any differences in the amount that the yarn is drawn during manufacture will be manifested as differences in optical and physical properties, for example, dye absorption and residual rupture elongation. Excessive elongation at the beginning or end of the yarn package can result in fabric with visually obvious defects. Staple yarn being less uniform, can afford more irregularities, without the danger of the resulting fabrics being considered “defective”.
1.3.2.1 Throwing and twisting of continuous filaments
There are so many different filament yarn constructions required by textile mills that it is quite impossible for the man-made fibre manufacturer to have all of them available, or make them on order. Instead the fibre producer sells several popular sizes, packaged usually on a standard spool. The textile mill must then arrange to have the producer’s yarn converted into the desired yarn of proper weight, twist and ply,, properly sized, lubricated, and packaged for subsequent mill operations. These procedures are collectively called “throwing”. Throwing may be carried out by the mill which will ultimately weave or otherwise use the yarn, or by a commission “throwster” The term usually applied to the preparation of relatively lightweight yarn, to contrast to “twisting” which pertains to the preparation of heavier yarn constructions. More recently, the term also applies to a company that specializes in texturing yarns.
It is usually impractical to make a heavy yarn by twisting many units or ends of producer’s yarn together in the same direction. Such a yarn would be soft, bulky, unstable, and might have low strength. Instead, plied yarns are constructed. Several turns of twist are inserted in one direction in single producer’s yarn, and then several of these are twisted together, usually in the opposite direction, to make the plied yarn. Several plied yarns can then be twisted together to form a cord. By properly designing the twist relationships among single, ply, and the cord, large size stable and balanced yarn, cords and ropes can be manufactured.
The two common methods for twisting are called “up-twisting” and “down-twisting”. Down-twisters operate on the ring traveller basis, the name being derived from the fact that the input yarns are placed above the twisting unit. They feed down to the twister bobbin where, via the ring and traveller, they may be twisted and wound up. The number of turns per inch inserted is a function of the traveller velocity and the feed roll speed. The up twister utilizes a vertical bobbin on a spindle which rotates at high speed. The yarn is drawn up over the end of the bobbin at a constant rate, and is wound upon a take-up bobbin. The ratio of spindle speed to windup speed determines the number of turns per inch inserted.
1.3.2.2 Texturing of filament yarn
The process of crimping, imparting random loops, or otherwise modifying continuous filament yarn to increase cover, resilience, abrasion, resistance, warmth, insulation, and moisture absorption or to provide a different surface texture. Texturing methods can be placed roughly into six methods:
1.3.2.3 Various types of Continuous Filament
Depends on finished goods requirement, varies types of continuous yarns are used:
(1) Two fold staple yarn, when the singles components are different;
(2) Two fold continuous-filament yarns, when the singles components are different;
(3) Yarns in which a filament yarn is doubled or folded with a staple-fibre yarn;
(4) Core-spun yarn, wrapped yarns, or other core-sheath configurations;
(5) Filament blend yarns.
Korean and US Business Leaders To Push For FTA
Business leaders from South Korea and the United States have agreed to make stronger efforts to promote the signing of a free trade agreement (FTA) between the two countries.
According to the business lobby group, officials from both sides of the annual Korea-US Business Council meeting, also decided to form separate working bodies on the trade pact and step up pressure on their respective governments.
US Trade Representative Robert Zoellick proposed in June this year to begin talks on an FTA with South Korea.
Australia Signs Free Trade Agreement With Thailand
The deal, which is the first between Thailand and a developed country, was signed by prime ministers Thaksin Shinawatra and John Howardb on 5 July 2004. Tariffs on items such as clothing, textiles, footwear and leather are set to be eliminated after the signing of the Thailand-Australia Free Trade Agreement.
The agreement comes into force on 1 January next year, and around $700 million worth of Australian exports stand to benefit from immediate tariff cuts. By 2010, 95 per cent of all trade between Australia and Thailand will be tariff free.
Thailand is Australia’s 12th-largest export market, taking vehicles, aluminium, cotton, copper, wool and dairy goods, and the 13th-largest source of imports, such as seafood, heating and cooling equipment, computers and crude oil.
The agreement is Australia’s second with an ASEAN-member country after it signed a free trade deal with Singapore last year.
United States and Australia Sign Free Trade Agreement
U.S. and Australia signed a landmark Free Trade Agreement (FTA) on 18 May 2004 that will eliminate more than 99 percent of manufactured goods tariffs between the two countries, open services and agricultural markets, and further deepen their already strong economic ties.
The U.S.-Australia FTA is the first FTA between the United States and a developed country since the U.S.-Canada Free Trade Agreement in 1988. Australia is a large and growing trade and investment partner of the United States, and in 2003 was America’s 14th largest export market for goods. Two-way goods and services trade is nearly $29 billion, a 53-percent increase since 1994. Two-way foreign direct investment is about $61 billion. Australia purchases more goods from the United States than they do from any other country, and the United States enjoys a bilateral goods and services trade surplus of $9 billion.
The United States currently has FTAs with Israel, Canada and Mexico (NAFTA), Jordan, Chile and Singapore.
U.S.-Morocco FTA
If the U.S.-Morocco FTA implementing legislation is passed by Congress, it could take effect as early as January 1, 2005. More than 95% of bilateral trade in consumer/industrial products will becomes duty free immediately, with all remaining duties eliminated within nine years.
Under the U.S.-Morocco FTA, textile and apparel trade will be duty-free if imports meet the FTA’s rule of origin, promoting new opportunities for U.S. and Moroccan fiber, yarn, fabric, and apparel manufacturing. In addition, the U.S.-Morocco FTA requires qualifying apparel to contain either U.S. or Moroccan yarn and fabric and contains a temporary 30,000,000 m2 allowance for apparel containing “third country” content.
South Africa Opens Free Trade Area Talks With China
South Africa and China have agreed to open negotiations for a free trade area, which the South African government hopes will regulate the flood of cheap Chinese apparel and textiles into the country. South African officials said they would propose a free trade area that would give preference to local exports to China over Chinese exports to South Africa.
If the three nations call for a delay in abolishing tariffs on some textile products, Japan would request equivalent measures, according to the agreement. Governments of the three nations appear to be giving serious consideration to the basic agreement.
By removing the tariffs, the three nations are expected to increase their exports to Japan of such low-priced products as underwear, silk and polo shirts in competition with price-competitive Chinese products. Japan can expect an expansion of its exports of high quality fabrics and women’s clothes to the three countries.
But Japan is concerned that small and midsize domestic textile makers, which total about 40,000 to 50,000, would face severe competition due to increases in imports. The firms produce towels, shirts and other textile goods. The government is considering extending assistance for those firms to help them shift their production to high-quality goods and enhance their brand images and production technologies.
Textile products imported from the three nations to Japan stood at 73.2 billion yen in 2002. Tariffs on those products range from 2 percent to 12.5 percent. Textile goods exported from Japan to the three nations stood at 55.7 billion yen the same year, and tariff rates ranged from 5 percent to 30 percent.
Import quotas on textiles and apparels are due to become non-existent as from 1 January 2005 pursuant to the WTO’s Agreement on Textiles and Clothing.
Pro-Extension Coalition
The Global Alliance for Fair Textile Trade (GAFTT) is an alliance of textile and apparel groups from around the world united under the Brussels Communiques, the successor to the “Istanbul Declaration”. The Alliance is planning a worldwide campaign to raise the awareness of the world community about the consequences of the end of the quota-phase-out. As of 17 June 2004, 91 trade groups in 49 countries have joined the alliance.
According to the coalition, the expiration of worldwide textile and apparel quotas represent a crisis of unprecedented worldwide proportions. 30 million textile and clothing manufacturing workers will lose their jobs and US$200 billion in world market share will be lost if one or two countries monopolize the world’s textile and clothing market.
A few countries are believed to be well positioned to monopolize the world market. For example, Japan and Australia are developed countries with no quotas on textile and apparel imports. China now controls more than 75% market share in those countries. In the United States, in apparel categories released from quotas on January 1, 2002, China jumped from 9 % market share in 2001 to 65% market share as of March 2004.
Asian Endorsements
Pledges of support from the Bangladesh Textile Mills Association (BTMA), Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA), The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), and the Confederation of Garments Exporters of the Philippines are the first Asian endorsements of the Istanbul Declaration.
Seek Government Support
Mauritius has become the first country to publicly call for a special World Trade Organization (WTO) meeting to examine the impact of the pending elimination of all remaining textile and apparel quotas among WTO members. Mauritius will seek to persuade other African countries to follow its lead. The GAFTT also urged its members to step up their efforts to persuade their home governments to support the WTO meeting.
The Mauritius announcement came one week after the Summit on Fair Trade in Textiles and Clothing in Brussels, which the GAFTT said marked a shift in its efforts. Whereas previously the group had concentrated on gaining trade association members, at the summit it moved into a phase of actively seeking government support. Only a WTO member government can request the emergency meeting.
India Oppose Extension of Textile Quota Regime
According to World Bank studies, China, India and Pakistan are expected to do better than the existing exporters from the developing world in a more competitive environment.
The Union Commerce Ministry has been watching the development. Appropriate steps would be taken if it reaches a stage when a meeting of WTO is called on the issue.” India will oppose any move to modify or repeal the agreement on quota phase-out.
The Secretary General of the Indian Cotton Mills’ Federation (ICMF) described the so-called Istanbul Declaration logic, that accession of China to WTO happened after the Agreement on Textiles and Clothing was reached and therefore the new entrant should not have the benefit of the quota phase-out, as false.
“Everybody knew in 1993-94, when the agreement was being drafted and finalised that China will join WTO sooner or later”, he argued. Mr Nair pointed out that the US manufacturers were not asking the quota regime extension for China alone. This they could have asked under the special provision of the accession for China. The blanket extension demand raises the suspicion that they may want the current quota regime to continue to protect their interests.
The regional trade pacts and preferential trade agreements have made a mockery of the quota regime. Imports from those countries, which enjoy preferential trade agreements into the US, do not have to follow the quota restrictions. Thus, quota regime is used by the US manufacturers as a restrictive trade practice and a sort of non-tariff barrier against free competition.
Rejected by Bush Administration
On June 9, over 100 Republican and Democratic members of Congress ask President Bush to persuade WTO to delay the phase-out of the textile quota system. The Administration at once rejected the request. A spokesman for the office of USTR said that US woull abide by its international obligations that were negotiated over a decade ago. Adding that the Administration had been helping the American industry through bilateral and regional trade agreements which required nations to use American yarns and fabrics if they want the benefit of duty-free access to the US market.
Group 18 Coalitions
A coalition of American, Canadian and European retailing, importing and consumer associations, called the group of 18, is campaigning against any extension of the quota and against a special global trading session. “The end of the quotas was an essential concession by the developed countries to the developing countries, requiring the developing countries to accept new international rules and disciplines. Efforts now to disregard this grand bargain raise grave concerns about the future of the international trading system.”
“Businessmen fish in trouble waters. When you see trouble on the water, then you should fish there because the big fish underneath are driving the small fish up to the surface…. In every crisis, big fortunes are made.” quoted by Mr. Robert Kuok, the most successful Malaysian businessman.
As we studied the strategies adopted by other countries, we found that there is no short cut, no easy way nor overnight miracles.
The Bangladeshi is aggressively pursuing preferential market access, improves port and customs efficiency, increase capacity building, emphasis on training and seeks supports from banks as well as appeal for import duty and VAT exemption from the government. The ambitious Thai plans to become a regional fashion hub through training of fashion professionals, brand development, fashion design management, supply-chain management and product efficiency. They embrace latest technology and modern management methods.
Subsequently, the Pakistani is advised to improve on quality. They are setting up a series of “Textile Cities” to optimize backward support and supplies. On the other hand, the Sri Lankan focus on setting up fabric base to make up the shortfall of local fabrics.
Looking west, the EU adopted measures to strengthen their competitiveness and dynamism. The areas identified are research and development, education and training. In Australia, the government supports the textile and clothing industry by providing subsidizes and assistant program to create more niche brands.
Looking east, the Japanese adopted a five-pronged approach focusing on technology developments, promotion of merchandising and marketing, brand building, reforms on cost structure and trade systems.
Let’s prepare ourselves into the new post-MFA era with hopes and dreams. With concrete plans and actions. The natural law is that when a door closes, another always opens. The common approaches including develop new products and markets, increase productivity, improve value change management, develop e-applications, emphasis on training to upgrade the skills and performance of human resources, swift from OEM to ODM, brand development, form strategic alliance etc.
On a macro perspective, the government can assist the industry by expedite trade preferential negotiations, launching of grants and assistant programs with more relax conditions, transparency in trade and foreign labour policies, efficient customs and clearing, simplify all application procedures, control of dumping activities and exemption on sales tax.
The stiff competition ahead is unavoidable. It’s how we handle them that make the different. Let’s turn trials into triumphs.
Date : 20 October 2004
Time : 9.00 am – 5.00 pm
Medium : Chinese
Venue : MKMA Seminar Hall, Batu Pahat, Johor
The goal of this workshop is to impart knowledge about key management issues and to share experiences with managers in order to keep up-to-date of the latest trends.
Seminar Contents:
*History of Apparel and Textile industry
* Apparel Textile Market in Malaysia
* New Challenges for Apparel and Textile Sector
* Asian Crisis in 1997 and privatisation in Malaysia
* Vision 2020
* Outlook and Prospects for the Malaysian Economy in 2005
* Major trends and issues affecting the industry
* Concept of Strategy and Key Success Factors for competitiveness
Speaker : Mr. Liaw Fenn Yenn
Mr. Liaw Fenn Yenn graduated with a BA degree from University of Guelph, Canada. He also holds a Diploma of Office Management/ Administration and MBA from University of Leicester, UK. He has nearly 10 years experience working in the textile and apparel companies. Currently, he is the head of Tunku Abdul Rahman College (Johor campus). In year 2002, he started the Apparel Manufacturing course.
Fee Per Participant:
/ RM120.00 (Early Bird rate register before 30/9/2004)
/ RM150.00 (Register after 30/9/2004)
Fee is inclusive of training materials, lunch, refreshments & Certificate of Attendance / Training fees is claimable under HRDF – SBL Scheme
/ Prior approval must be obtained from HRDB before the workshop commences
「從馬來西亞紡織和成衣業的競爭優勢探討企業成功之道」研討會
日期 : 2004年10月 20日 (星期三) 9:00am – 5:00pm
媒介語 : 華語
地點 :馬來西亞針織廠商會(南馬分會)禮堂
报名表格 (Please fax to 07-4314682)
Please register the following participant(s) for the above conference
Name Designation
1.
2.
3.
4.
5.
Submitted by :
_____________________ ____________________
Name Designation
Company Name : ____________________________________________
Address :____________________________________________________
Tel : _________________ Fax : ________________ E-mail : ________________
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Date
Payment please make in favour of the ‘Malaysian Knitting Manufacturers Association’
A market size of 1.3 billion, 260 million middle class population, GDP of US$ 1.3 trillion and per capita surpassing US$ 4,000 in major cities like Beijing and Shanghai. China is the biggest exporter of garments/clothing in the world. In 2003, China exported 16 billion garments worth US$ 80 billion.
Increasing Brand Conscious
China’s consumers are nowadays enjoying their modern lifestyles and have greater brand awareness. The clothing retail market used to be dominated by domestic players but now foreign players like PIERRE CARDIN, CARTIER, OMEGA, ESPRIT, ESCADA, ERMENIGILDO ZEGNA, DUNHIL and HUGO BOSS are appealing among the customers. Foreign fashion brands are widely available at department stores, special boutiques and supermarkets nationwide.
Presence of Foreign Brands
Foreign fashion brands started to enter China in late 1970s where PIERRE CARDIN held its pioneering fashion show in Beijing in 1979. Several household names later followed suit including such popular brands as CARTIER and OMEGA. However, significant progress on the entry of foreign brands came after the Government lifted retails business restrictions in 1992. Since then, the number of foreign fashion brands entering China’s market increases. The increase is also in tandem with the increasing number of affluent Chinese middle class in the country.
Foreign fashion brands have started to enjoy brisk business in China. It is noted that foreign brands, which establish their presence earlier in the market, enjoy greater recognition from the consumers as compared to newcomers. ESPRIT, one of the most prominent and successful high street fashion chains, established its China operation in 1992 and since then has established 300 stores in 70 cities. Another popular brand, Italian men’s wear retailer ERMENIGILDO ZEGNA, has invested in China 12 years ago with currently 43 stores nationwide. DUNHILL and HUGO BOSS both are operating 45 stores with the latter plans to set up additional 13 stores in the next five years.
There is a tendency that Chinese consumers will continue to admire foreign brand fashion items. Since the market is huge, a small portion of market share means big to the producers. In addition to first class luxury brands, second line brands are also increasingly popular among Chinese consumers. Brands like CERRUTI JEANS and MAX & CO. are getting popular among young consumers. Another foreign brand, VISCAP, is experiencing brisk business and currently has 80 stores nationwide.
Other new foreign players are also embarking on establishing their presence in China clothing and fashion market. A Spanish fashion brand, MANGO, which operates in China under the MNG brand, opened its first store in China in February last year and has since then opened up stores in Shenzhen, Dalian and Shanghai.
Babies and Children Brands
It is estimated that 10 million babies born every year in China. The ‘one-child’ policy and improving living standards lead to growing tendency by parents to spend more to purchase high quality and foreign brand clothing. NIKE KIDS, TOMMY TIPPEE, CAKEWALK, PARROT, MINIMAN, MAXI-COSI, SAFETY FIRST, COSCO, QUINNY AND HUFFY SPORTS are some foreign brands for children fashion items that are already established their presence in China. These foreign producers established partnership with the local manufacturers and retailers of children’s products to secure access to the existing extensive marketing and distribution network that the local manufacturers and retailers already have.
Endure for Long-term Profitability
Despite the booming market and the increasing popularity of luxury foreign brands, most foreign fashion producers feels that their sales turnovers are relatively modest. This is due to the fact that luxury items cater for niche market, which limit the sales volume and the high import duties reduce the profit margin. According to a report by Morgan Stanley, foreign companies can expect profit return only after five years presence in the market, so the first five years are considered as the period to strengthen the market presence.
In doing business in China, patience and endurance with continuous promotion is needed to ensure long-term profitability. The view is in line with the optimistic outlook by Morgan Stanley on China’s future luxury market. The market size of luxury items in China will reach 100 million, which is about 8 percent of the population.
Local producers of clothing and fashion related items have started to feel the heat of competition from their foreign counterparts, especially for the upper and medium end items. Due to lucrative market for high quality items, the local companies are now competing with foreign counterparts by collaborating with them in upgrading their overall design and branding capability with their objective of producing their own brand.
View from Matrade Beijing: Opportunities For Malaysian Exporters
Malaysian exporters shall look at the present trend in fashion and clothing industry in China as an opportunity to gain access to the lucrative market. It is essential to undertake preliminary study on the market and to establish contacts with a trustworthy and reliable partner.
Many of foreign brands producers, which have entered the market partnered with local companies that already involved in fashion and clothing industry as manufacturers or retailers. The reason is to capitalize on the existing marketing and distribution network that the local partners already have in the industry. Some foreign companies have also successfully entered China market through merger and acquisition (M&A) with local companies with similar purpose of capitalizing the market through the available marketing and distribution network and also to cater not only for upper and medium end market but also low end market, that occupies 70 percent of China market.
~Yong Kok Swee~
A fabric may be defined as a planar assembly of fibres, yarns or combination of these. There are many different methods of manufacturing, each capable of producing a great variety of structure dependent upon the raw materials used and the set up of control elements within the processes involved. The particular fabric selected for a given application depends on the performance requirements imposed by the end use and/or the desired aesthetic characteristics of the end user with consideration for cost and price. Fabrics are used for many applications such as apparel, home furnishings and industrial.
The most commonly used fabric forming methods are; interlacing(weaving and braiding), inter-looping (weft and warp knitting),Tufting and bonding. The fabric structure can be woven, non-woven, knit, braided, laminated, or stitched,(Figure 1.3). There is many other non-traditional fabric manufacturing methods as well.
Figure 1-3 Type of fabrics
A fabric structure can consist of single layer or multi-layers. Each layer can be made of one or more types of fibres or yarns. There are endless numbers of fabric design patterns that provide different properties.
1.1.1 Interlacing — Weaving and Braiding
Thread interlacing is the arrangement of the warp and weft over and under one another. The normal method of denoting an interlacing is to show the movement of a warp thread over and under weft threads thus: _3 1___
2 2
which indicates warp passing over three, under two, over one, and under two weft threads. It is sometimes more convenient to describe a weave in terms of weft interlacing, in which case,
2 2
3 1
indicates the weft passing under three, over two, under one and over two warp threads.
1.1.1.1 Weaving:
Weaving is interlacing, at right angle, two or more series of flexible materials, the lengthwise member being called warp, while the crosswise is called weft. Weaving is interlacing of warp and weft to construct woven fabric. The warp yarn is that yarn system in woven fabric lying parallel to the lengthwise direction of the cloth or parallel to the selvagesside edge. Warp yarns are often referred to simply as ends. The filling is the yarn system in a woven fabric lying across the width of the cloth perpendicular to the selvages. The filling is also referred as weft. Individual filling yarns are called picks because in early hand weaving a filling yarn was inserted by tying it to a pointed device which are used to pick the filling yarn through the warp yarns. The weaving machine (loom)provides mechanisms required to deliverer and manipulate warp yarns for interlacing with filling yarns which are inserted into the warp. Warp yarns are delivered to the loom in sheet form on a warp beam while filling yarns are delivered usually one pick at a time from small single-end packages. The basic weave(Figure 1.4 and 1.5)are:
Figure 1.4 Symbolic notation for plain, rib, and basket weave
For loom-state(unless otherwise stated)woven fabrics parameters are quated in the following order and in the units given:
(1) Numbers of ends per cm X Numbers of picks per cm;
(2) Yarn linear density(tex);
(3) Twist level(turns per metre)and twist direction(S or Z):
(4) Yarn crimp;
(5) Fabric thickness;
(6) Area density(g/㎡);
(7) Cover factor (K ),warp + weft;
(8) Fabric width
In all weave diagrams, marked squares indicate where the warp is lifted over the weft.
A) Plain weave; tabby: The simplest of all weave interlacing in which the odd warp threads operate over and under one weft thread throughout the fabric with the even warp threads reversing this order to under one, over one, throughout. A plain weave does not necessary result in a plain surface effect or design in the fabric, e.g. variation of the yarn linear densities warp to weft or throughout the warp and/or weft and variation of the thread spacing warp to weft can produce rib effects, such as taffeta, poult, faille, and grosgrain, while colour patterning of the warp and/or weft results in colour-and-weave effects.
1) Cambric: a light weight, closely woven plain fabric usually given a slight stiffening. Constructions of typical fabrics were: ⑴ handkerchief cambric, loomstate; 35×35;10×7.4tex Egyptian cotton; 3×7.8%; 74g/㎡; K=10.0+9.5; 96cm; ⑵ linen cambric, bleach: 38×35;11x1tex linen; 4.1×3.1%; 83 g/㎡; K=12.6+11.6; 94㎝.
2) Canvas: a fabric usually made from cotton, flax, hemp, or jute in weights traditionally range from 200 to 2000 g/㎡. The weave is plain or double-end plain. In cotton canvas, the yarns may be singles but frequently piled; in other canvases, the yarns are generally singles. The warp predominates, and a feature of the heavier canvases is very close packing of the warp, which is highly crimped over a straight weft. The term canvas covers cloths with a great variety of uses, but the salient of all are strength and firmness.
3) Crêpe de chine: A light weight crêpe fabric of plain weave, made with two S and Z highly twisted continuous filament warp.
4) Duck: A closely woven, plain weave fabric similar to canvas usually made from cotton or linen yarns. The name canvas and duck have become almost generic and are usually qualified by terms that indicate the use of fabrics, e.g. Royal Navy canvas, artist’s canvas, duck suiting, belting duck.
5) Georgette: A fine, light-weight, open-texture fabric, usually in a plain weave, made from crêpe yarns, usually having two S-twisted and two Z-twisted yarns alternately in both warp and weft.
6) Gingham: A plain weave, light-weight cotton fabric, approximately square in construction, in which dyed yarns, or white dyed yarns, from small checks or, less usually, narrow stripes. If fibres other than cotton are used the term should be suitably qualified, e.g. viscose gingham, polyester/cotton gingham.
7) Lawn: A light thin cloth made of carded or combed yarns, the fabric is given a crease-resistant, crisp finish. Lawn is crisper than voile but not as organdy.
8) Organdy: a very thin, transparent, stiff, wiry, muslin fabric used for dresses, neckwear, trimmings, and curtains. Swiss orandy is chemically treated and keeps its crisp, transparent finish through many launderings. Orandy without chemical treatment loses its crispness in launderings and has to be restarched. Organdy crushes or musses but is easily pressed. Shadow orandy has a faint printed design in self-colour.
9) Oxford: A plain-weave shirting of good-quality yarns that has two warp ends weaving as one. Fancy-weave effects can be incorporated, and dyed yarns are used to form stripes. Typical cotton-type construction: 35×20; 20x30tex; K=15.6+10.9
10) Pongee: originally and traditionally a light weight fabric hand-woven in China of wild silk in plain weave. The term is now also applied to fabrics having a similar weight and appearance, power-weave, and made with yarns other than silk. If made from cotton, these fabrics are usually mercerized and schreinered.
11) Poplin: a Plain-weave cotton-type with weft-way ribs and high warp sett, typically: 48×24; 16x18tex; K=19.2+10.2
12) Taffeta: A plain weave, closely, smooth and crisp fabric with a faint weft-way rib, produced from filament yarns. The rib effect is produced by making the warp end density that is greater than the pick density. The warp and weft yarns are of similar linear density. Taffeta belongs to a group of fabrics that have ribs in the weft direction. Example of this group, arranged in ascending order of prominence of the rib are: taffeta, poult, faile, and grosgrain. The term ‘wool taffeta’ is often applied to a plain weave, light weight fabric produced from worsted yarns.
B)Twill weave: A woven fabric in which the warp is raised one thread and depressed 2 or more threads for the passage of weft – thus effecting a curious appearance of diagonal lines. The succession of diagonal lines at the angle of 45°.
Figure 1.5 Graphic and symbolic illustrations for twill and satin weave
A) Drill: A woven twill fabrics which are made in both linen and cotton and usually bleach or piece-dyed and finished stuff. A stout twill linen or cotton cloth usually three threads. Drill is also named because weave originally used in construction was three-leaf.
Denim: Traditionally a 3/1 warp-face fabric made from yarn-dyed warp and undyed weft yarn. Typical cotton construction: 32×19; 45x54tex; 310 g∕㎡; K=21.5+14.0. More recently, other weaves have been used in lighter constructions.
Jean: A 2/1 warp-faced twill fabric used chiefly for overalls or casual wear. Typically: 35×34; 32x21tex cotton; K=19.8+11.0. The term ‘jeanette’ is sometimes used to discribe the lighter weights and these may used for linings.
B) Sateen weave;A weft-face weave in which the binding places are arranged with a view to producing a smooth fabric surface, free from twill. In North America, sateen fabric is a smooth, generally lustrous cotton fabric with a five-harness satin weave in either warp or filling-face effect.
C) Satin weave: A warp-faced weave in which the binding places are arranged with a view to producing a smooth fabric surface, free from twill. In North America, satin is a smooth, generally lustrous with a thick close texture made in silk, manufactured or other fibres in a satin weave for warp-face or sateen weave filling face effect.
D) Pile or piled fabrics: A woven fabric with a pile surface, which the portions of warp or weft assume a vertical position, besides the ordinary longitudinal and transverse parallel lines. In this case, here are two series of weft threads, one intersecting with warp threads to form the ground texture while the other although bound to the ground is picked up at regular intervals which effects a uniform brush-like surface, e.g. warp-piled-fabrics, velvet, velour, chenille, plushes, corduroy, etc.
E) Crêpe weave: A weave having a random distribution of floats so as to produce an ‘all-over’ effect in the fabric to disguise the repeat.
F) Jacquard weave: A patterned design weave produced by a large number of warp threads, in excess of a dobby, weave differently and therefore require a jacquard mechanism. A shedding mechanism, attached to a loom, that gives individual control of up to several hundred warp threads and thus enables large figured designs to be produced.
G) Triaxial weave: A system of weaving that interlacing two warp ends and one set of picks in such a way that the three sets of threads form a multitude of equilateral triangles. The resulting fabric has excellent bursting, tearing, and abrasion-resistance.
H) Welt weave: A weave showing rounded cords in the weft direction, with pronounced sunken lines between them that are produced by the nature of the weave. The weave on the face of the cords is plain. They are warp floats the width of the cords on the back. Wadding picks are used to accentuate the prominence of the cords. For many years, the term pique has been applied to a much less expensive white fabric made in a light-weight Bedford –cord weave.
9th September is a special day for MKMA. In year 1990, the Southern Branch was established on 9th September 1990. In 2000, we celebrated the inauguration ceremony of the Southern building on that particular day.
Looking back, we are grateful to the pioneers who contributed greatly to the association since it’s inception on 1975. The late Mr. Chi Kwei Yung devoted to MKMA as President from 1975-1987 followed by Mr. Hooi Hong Weng on 1987-1989. Subsequently, Mr. Loh Wu How was elected for his Presidentship on 1989-1993. Under their leadership, they accomplished the mission of MKMA through years of meetings and hard work. Finally, they succeeded to bring down the import tariff of yarn and ensure the adequate supply of yarn. Hence, the antagonism between spinners and knitters no longer exist, in contrary, they work hand in hand. Today, many spinning firms are our members.
The young generation Mr. Tan Soo Seng became President for the period 1993-1997. Under his term, the Kuala Lumpur premise was purchased and many activities were hold. In 1997-2001, Mr. Kang Chin Lon took his term. Miraculously, during the Asian economic crises, he stabilised MKMA’s poor financial status so that we can move forth without the financial hindrance. With the support from committee and members, he purchased the Southern branch building. He not only continuously to work closely with Federal Government departments but also brought MKMA onto international arena.
The recent announcement by the Finance Minister during his 2005 Budget Speech to implement the VAT in year 2007 was a great news to Mr. Kang and his subordinates especially Mr. Khadmudin and Mr. Cheong KW who have strived hard together to propose the introduction of VAT in replacement of Sales Tax system.
Since 2002, Mr. Seow Hon Cheong took his term as MKMA President. We believe he is capable to relieve us from present plight, as he is very knowledgeable, talented and embrace latest information and technology.
The Southern branch was set up in year 1990 at the “Textile City”. This is another milestone of the association. The debut President Mr. Tan Chong Tian contributed greatly. Then, Mr. Lim Chai Sen played his role especially towards the fund raising for the building. At present, we are delighted to have Mr. MY Lau as President. One of the Southern branch’s vital role is to nurture new blood for the association.
MKMA is the fruit of many faithful pioneers as well as loyal members. We can’t list out all the names due to space constraint. We have many many faithful members who paid the annual subscription at their earliest convenience to facilitate our administrative work. Their concern and faithfulness bring warmth to our heart and motivated us to strive hard for the industry.
Today, MKMA not only serving knitters. Instead, we have expanded our coverage to include spinners, knitters, dyers, garment manufacturers as well as all related suppliers. In 2005, as the regime of quota is ending, we are no longer restricted by the system. Let’s march into the promise land hand in hand as “The Barisan Malaysia ” .
o By Mr. Yong Kok Swee
Braiding is the simplest form of fabric formation and probably it is older than weaving. A braid structure is formed by the diagonal intersection of yarns. There are no warp and filling yarns in the sense of woven fabric. Braiding does not require beat-up and shredding; the yarns do not have to go through heddles and reed. Flat, tubular or solid constructions may be formed in this way. Tubular fabrics made by this process may be constructed with or without core, gut, filter, or stuffing threads, which when present are not interlaced in the fabric.
Figure 1.6 Common Types of Braiding Pattern
Diamond braid Regular braid Hercules braid
A) Two-dimensional braiding: A two-dimensional circular or flat braid is formed by crossing a number of yarns diagonally to that of each yarn passes alternately over and under one or more of the others. The most common designs in two-dimensional braids are as follows:
– Diamond braid: 1/1 intersection repeat
– Regular braid: 2/2 intersection repeat
– Hercules braid: 3/3 intersection repeat
B) Three-dimensional braiding: Three-dimensional braiding is relatively new compared to two-dimensional braiding. The first 3-D braiding machine was developed in the 1960s. The three-dimensional braiding concept has been developed mainly for textile structural composites. There is no three-dimensional braiding machine that is commercially available. The main reason for this is that every different three-dimensional braided structure requires a different machine with specific characteristics and dimensions. Therefore, companies and research institutions custom-build their 3-D braiding machine.
C) Narrow fabric weaving: Ribbons, tapes and webbing are all considered as woven narrow fabric if they contain woven selvage, and are less than12 inches. They are woven on special narrow fabric looms, using the basic principle of warp and filling interlacing.
1.4.2 Interlooping
Knitting is a process of forming a fabric by the intermeshing of loops of yarn. Knitting involves the interiooping of one yarn system into continuously connecting vertical columns(wales)and horizontal rows(courses)of loops to form a knitted fabric structure. There are two basic types of knit structure: weft and warp knit. Knitted loop is a basic unit of weft- knitted fabric consisting of a loop of yarn meshed at its base with a previously form loop. At the point of mesh with the previously formed loop, a knitted loop is usually open but may be cross. Component parts of the knitted loop may be identified as:
Figure 1.7 Knitted loop of weft knitting
Back loop face or front loop needle loop sides or loop sinker loop
In the weft knitting, he yarn loops are formed across the fabric width, i.e. in the course of weft direction of the fabric In the warp knitting, the loops are formed along the fabric length, i.e. in the wale or warp direction of the cloth. In both knitting systems, the fabric is delivered in the wale direction.
The basis of knit fabric construction being the continuing intersecting of loops, any failure of a loop yarn will cause a progressive destruction of the loop sequence and a run occurs. Thus, knitting yarns must of good quality in order that yarn failures be kept at a minimum. Other important geometrical definitions relating the knit structures are as follows:
There are different types of warp and weft knitting machines for the production of fabrics, garments and are classified and named, primarily, according to:
A) The type of fabric or garment they are intended to produce;
B) The type of needle used;
C) The form, arrangement and activation of their needles or needle beds;
D) The types of patterning control used;
E) Whether they are hand-operated or power-operated
There are no convenient English terms to distinguish between machines in which the individual needle operate independently (Germany, Strickmaschine), and machines in which the needle are mounted so that they must be operated in unison (German, Wirkmashine), although this distinction forms the basis of classification of knitting machines.
Both weft and warp knit structures can be used for composite reinforcement, especially for flexible composite. Weft knit structure can be easily conform to different shapes. Weft or warp knitting is suitable to manufacture 3-D knit structures. By inserting yarns in the 0° and 90º direction, addition reinforcement can be obtained in the knit structure. One disadvantage of knit structures is low fibre volume fraction.
1.4.2.1 Weft knitting
Weft knit goods are made by feeding a multiple number of ends into the machine. Each loop is progressively forming by the intermeshing of loop of yarn by the needle or needles. The previously formed yarn loop actually becomes an element of the knitting process with the latch needle. This is why the latch needle is referred to as the “self-acting” needle. As the needle is caused to slide through the previous yarn loop, the loop causes the swiveled latch to open, exposing the open hook head of the needle. The newly selected yarn can now be guided and fed to the needle. If a simple knitted loop is to be formed, the previous loop, the one which opened the latch, must slide to a point on the needle stem allowing it to clear the latch. Having the needle reach this clearing position allows a reversal of the sliding action which in turn pulls down on the new yarn and uses the previous yarn loop to close the latch trapping the new yarn inside the hook. The previous loop is now in a position to ride over the outside of the latch and be cast off the needle head, thus becoming a part of the fabric while the new yarn loop is pulled through the previous loop.
Depending on the structure in weft knitting, several types of knitting stitches are used including plain, tuck, purl(reverse), and float(miss), stitch which are in Figure 1.7:
Figure1.8 Types of Stitching in Weft Knitting
purl(reverse)stitch float(miss)stitch tuck stitch
The plain stitch fabric has all of its loops dawn through to the same side of the fabric. The plain fabric has a very smooth face and a rough back. Other stitches produce different effects depending on the arrangement of the loops. Special stitches are also available to prevent runs.
Weft knitting machines may be either flat or circular, the former knitting a flat single layer of fabric, the latter knitting a continuous tube. No matter which machine configuration is used, weft knit manufacturing involves the same fundamental functions:
Knit fabrics can be classified as single knits and double knits. Single weft knits have one layer of loops formed with one yarn system. Three major types of single weft knits are jersey, rib and purl structures. Double knits have two inseparable layers of loop. Each yarn forms loops that appear on both faces of the fabric. Two major types of double knits are interlock double knit and rib double knit.
Figure 1.9 Eight-lock weft knitted fabric
Figure 1.10 Interlock, Weft-knitted Diagram
Broad rib fabric, weft knitted: A rib fabric in which groups of three or more adjacent wales are of the same types, rather face or back.
6×3 rib fabric, weft-knitted; Derby rib: a fabric in which all the loops of six adjacent wales are intermeshed in one direction and all the loops of the next three wales knitted at the same course are intermeshed in the opposite direction, and so on alternately.
1X1 rib fabric, weft-knitted; English rib: A rib fabric in which single wales of face loops alternate with single wales of back loops.
2X2 rib fabric, weft-knitted; Swiss rib: A rib fabric in which two adjacent wales of face loops alternate with two adjacent wales of back loops in a series.
Cambodia applied to join the WTO in December 1994.
Another 26 countries are negotiating membership (listed from oldest to most recent application): Algeria, Russian Federation, Saudi Arabia, Belarus, Ukraine, Sudan, Uzbekistan, Vietnam, Seychelles, Tonga, Kazakhstan, Azerbaijan, Andorra, Laos, Samoa, Lebanese Republic, Bosnia Herzegovina, Bhutan, Cape Verde, Yemen, Serbia and Montenegro, Bahamas, Tajikistan, Ethiopia, Vanuatu and Libya.
Eight are least-developed: Bhutan, Cape Verde, Ethiopia, Laos, Samoa, Sudan, Vanuatu and Yemen.
The coalition filed 10 threat-based safeguard petitions cover 15 of the 91 product categories on which U.S. quotas will expire on January 1, 2005. Most of those are apparel related, but several include cotton sheets, synthetic filament fabric and cotton yarns. The group also expected to file three additional petitions shortly including one for knit fabrics. Still more may be in the offing.
The petitions are being filed with the Committee for the Implementation of Textile Agreements (CITA), a five-member U.S. government interagency group, including the U.S. Department of Commerce. At least three of the five member agencies must vote to approve the safeguards for any to take effect. The committee has 15 days to accept or reject the petitions.
If approved, the final decisions by CITA could come in mid to late January; two to four weeks after quotas are removed.
And, if they receive a favorable ruling, it could bring China back to the negotiating table. If not, the United States could limit Chinese exports in the safeguard categories to a 7.5 percent growth ceiling. In the safeguards enacted last year, China declined to return to the negotiating table.
On the other hand, the Global Alliance for Fair Textile Trade (GAFTT), a coalition of 96 textile and clothing associations from 54 countries, has urged the U.S. government to approve China textile safeguard petition filings.
The group says the safeguard petitions will prevent China from taking more than $37 billion in textile and apparel exports in these items which are currently being supplied by dozens of other countries.
Once consultations are sought, a quota will be put in place to limit U.S. imports of socks from China to a 7.5 percent increase over current import levels, a far smaller increase than has occurred in recent years.
“The United States will make every effort to reach a mutually satisfactory agreement with the Government of China to ease or avoid the disruption in the U.S. market within 90 days of such a request,” the department said. If talks fail, the quota will remain in effect for a year.
Alabama Rep. Robert Aderholt a Republican, joined the effort by the Hosiery Association and asked the Commerce Department to help shield the sock industry from Chinese imports in a letter signed by Aderholt and 22 other members of Congress from both parties.
In 2002, 69.6 million pairs of Chinese socks were imported. Last year, that number jumped 370 percent to 265 million pairs. Fort Payne, Ala., is the self-proclaimed Sock Capital of the World, employing 6,200 workers in 95 factories that produce 14 million pairs a week.
There are different responses to quota elimination beginning 1st January 2005. Some follow the whole story closely. Some feel unbelieving whereas some are confused. This article presents a very brief story of the whole issue.
1. Brief Quota History
Protection of the textile and clothing sector has a long history. For more than 40 years, trade in this sector was governed by special regimes as follows :
1.1 The Short Term Arrangement Regarding International Trade in Cotton Textiles (STA) in 1961.
1.2 The Long Term Arrangement Regarding International Trade in Cotton Textiles (LTA) in 1962-1973.
1.3 Multifibre Arrangement (MFA) 1974-1994. The MFA, as the name suggests, extended restrictions on trade to wool and man-made fibres in addition to cotton. Under this agreement, industrialized countries were allowed to negotiate complex quantitative restrictions with textile and apparel producing countries on a country-by-country basis, contrary to guidelines set forth in the General Agreement on Tariffs and Trade (GATT). As of 1990, 65.3 percent of all U.S. textile and apparel trade was under quota. The MFA was renegotiated four times, the last time in 1991, and it finally expired in 1994. Six developed countries applied quotas under the MFA during the final years of the agreement (the EU, Austria, Canada, Finland, Norway and the United States), and the quotas were applied almost exclusively to imports from developing countries.
1.4 Agreement on Textile and Clothing (ATC) 1994-2004. The expiration of the MFA did not mean the end of quotas on textile and clothing exports from developing countries. Instead the MFA was followed by the Agreement on Textiles and Clothing (ATC), which came into force with the establishment of the WTO in 1995. Four countries carried the MFA restrictions into the ATC (Canada, the EU, Norway and the United States). Austria and Finland, which had applied quotas within the MFA in 1994 became EU members on 1 January, 1995.
2. The Integration Process
The new agreement requires a gradual phase-out of quota restrictions over a ten year transition period. The first stage required countries to eliminate quotas on at least 16 percent of the total volume of textile and apparel imports by January 1, 1995. The second stage and third stage required the integration of an additional 17 and 18 percent by January 1, 1998 and January 1, 2002, respectively. All quotas must be eliminated by January 1, 2005.
Although technically we are already in the third-stage of liberalization, in reality the bulk of the liberalization will not occur until 2005. Not surprisingly, importing countries first integrated the least sensitive products, or those that were quota-free even prior to the Uruguay Round. Survey found that 67.3 percent of U.S. textile and apparel imports under quota in 1990 would not be integrated until the fourth phase. The most sensitive products and the products with the highest value-added have been left to the final stage of integration.
3. Possible Impacts of Quota Elimination
3.1 Retailers reduce Sourcing Countries
Eliminating quotas will likely consolidate production into larger companies and a smaller number of supplying countries. Large retailers and manufacturers such as the Gap, JC Penney, Liz Claiborne, and Wal-Mart once sourced from 50 or more countries now source from 30-40; when quotas are eliminated, it is predicted that the number will fall to 10-15. Competition among garment-producing countries will increase.
3.2 Price Fall
Quotas add to the cost of production, both indirectly, through restricting supply and thereby raising prices, and directly, since quota are frequently sold and thus become a cost of doing business. Price reductions of anywhere from 50 cents to $2.00 per unit are predicted
3.3 Benefit to Consumers
The immediate beneficiaries of quota elimination are predicted to be consumers, who will experience declining costs of textile and apparel products. Eliminating quotas is predicted to lower costs, increase efficiency, and reduce risks.
3.4 Job Loss
Quotas protect jobs in the industrial countries. Indeed, this is the purpose for which they were originally intended. Mass job losses are happening and anticipated both in the importing countries and less competitive supplying countries.
3.5 Dominating Countries
One recent review of existing research offered a straight-forward summary: “The lion’s share of these benefits will accrue to India and China”, with Indonesia, Viet Nam, Mexico and Turkey moving into the second tier at the global level. Republic of Korea and Taiwan Province of China will continue to exploit their niche as suppliers of textile input to the major Asian apparel exporters, and they are likely to retain smaller but still significant exports of relatively high-value apparel items in which quality, product development, timely delivery and related services are at a premium.
3.6 Declining Countries
Most of rest of the developing world will likely experience a decline in apparel exports. This includes Countries in which more than three-quarters of all apparel exports are in highly constrained quota categories, countries that sell a limited range of products, and that compete on the basis of price rather than quality.
It should be noted that quotas are only one form of non-tariff barriers that constitute a “hindrance to trade.” Elimination of quotas will not by itself result in a fully competitive global market for textile and apparel production. This is for several reasons:
4.1 Preferential Trade Agreements Already Weaken the Impact of Quotas and Tariffs
The U.S., EU, and Japan all have preferential bilateral and regional trading agreements with selected trading partners. Such agreements, typically have rules of origin exempting apparel that uses the importing country’s yarn, fabrics and dying from quota and tariff restrictions. Preferential access to US and European markets has been an important mechanism for selected developing countries to improve their competitive position. Given that the average U.S. tariff for apparel is around 13%, preferential treatment can make a large difference in the ability of a country to export to the U.S.
4.2 Regional trading blocks may become more important.
The relaxing of quota constraints will increase the relative importance of geographical proximity (which reduces delivery time), contributing to the strength of trading blocks such as NAFTA, an expanded EU and ASEAN.
4.3 Tariff barriers
Favorable tariff treatment will continue to play a role (although tariffs are less restrictive than quotas); indeed, pressures to increase tariffs may increase. Tariffs currently vary considerably across countries (see Table one):
4.4 Anti-dumping measures.
Anti-dumping measures will doubtless continue to be invoked by importing countries as a way to protect their domestic industries from low-cost imports. The EC, for example, has repeatedly initiated such measures on behalf of industry associations, with significant impact on the exporting countries. Between 1993 and 1998, the volume of cotton fabric imports was reduced from 59% to 38% for Egypt, India, Indonesia and Pakistan, all of which were involved in anti-dumping investigations.
4.5 The growing power of large contractors.
Large retailers who import are likely to develop “mega-relationships” with big suppliers. To the extent that giant contractors squeeze out smaller competitors, concentration of production in a handful of giant companies.
4.6 Safeguards Measures
China’s accession agreement to the WTO included a safeguard to protect trade from possible “market disruptions”. Under the terms of China’s accession to the WTO, this consultation mechanism is to be in place for four years following the elimination of quotas (through the end of 2008), although actions taken under the mechanism are limited to one year’s duration.
Confusion over Quota Lifting
The MFA was initially welcomed by textile and apparel producing countries, albeit with concern that the bulk of the liberalization was being delayed until 2005. However, as we quickly approach the date of complete quota elimination many small international producers are becoming nervous that the elimination of quotas will actually have a negative effect on exports.
Although the Global Alliance fro Fair Textile Trade (GAFTT) consisting of 91trade groups from 49 countries was formed to persuade WTO to extend the quota system. However, as we approach the end of year 2004, seems that we have no choice but to wave farewell to the Quota System. Let be prepared to face a liberalized world of post quota era.
The European Commission has adopted a proposal setting out the details of the EU system of trade preferences (Generalised System of Preferences – GSP) for the period 2006-2008. This proposal builds on the guidelines issued by the Commission in July. The GSP is a key instrument to help developing countries reduce poverty by stimulating their exports to the EU. The Commission proposes to improve the current system in a number of areas: simplification; expanding the product coverage; focusing the benefits on those developing countries most in need; and setting up an additional GSP benefits (“GSP+”) to encourage sustainable development. The text will now be sent to the EU Member States, European Parliament and Economic and Social Committee so that it can be adopted in time for entry into force on 1 July 2005. The Commission’s proposal in detail:
A Simpler GSP: the current five GSP arrangements are reduced to three:
Countries with preferential access to the EU market under a bilateral agreement (e.g., a free trade area) will be removed from the list of GSP beneficiaries since they already better access to the EU market.
A new GSP incentive to encourage sustainable development and good governance: it is proposed to replace the three former incentive schemes by a new single scheme– the “GSP+” – providing special benefits for vulnerable countries (representing less than 1% of EU imports under GSP) that accept the main international conventions on social, human rights, environmental protection and governance, including fight against drugs.
Stabilise the GSP: the GSP will apply during three years without any changes, including graduation; under the previous GSP system, graduation took place every year, creating difficulties for both developing countries and EU importers.
A GSP with larger product coverage: the new basic GSP incorporates nearly 300 additional products.
A clearer, simpler, fairer graduation process: GSP will only be withdrawn for certain product groups for one or several countries – when these products are competitive on the Community market and no longer need the GSP. Graduation will be based on a simple criteria: when a group of products (“section” of the custom code) from a particular country exceed 15% of total EU imports of the same products under GSP over the last three consecutive years. For textiles, the threshold would be 12.5%. Graduation is not a penalty but a sign that the GSP has successfully performed its function of triggering exports flows; and thus the GSP will better benefit to the weakest and the most vulnerable countries;
Greater flexibility on rules of origin: Regional cumulation should be enhanced to allow members of a regional group (ie ASEAN, SAARC…) to make better use of the preferences, thus promoting regional cooperation. In particular, regional cumulation should be relaxed through the elimination of the value added rule criterion. In addition, cumulation across regions will be introduced if interested countries request it (so countries from SAARC could cumulate origin from ASEAN, for example).
The European Commission has announced what it will do to help the EU textile sector ahead of the disappearance of the remaining WTO textiles quotas on 1 January 2005.
Arrived at in response to requests and issues raised by the High Level Group report published in June, the seven action points to be implemented by the Commission are:
The Memorandum of Understanding (MoU) between Government of Malaysia and Government of Source Country Regarding the Recruitment of Workers, stipulates in Article 4(iii), (iv) and (v); Article 5 and Article 8(C)(vi) that all foreign workers working in Malaysia must possess sufficient knowledge of Malaysian culture and social practices, be able to communicate either in the English or Malay language and comply with all Malaysian laws, regulations and immigration procedures in Malaysia. One of the factors identified as contributing to misunderstandings, social problems and workplace problems among the foreign workers in Malaysia is their inability to communicate in English or Malay and a lack of understanding of Malaysian cultures, laws and regulations.
In order to enable compliance with the relevant provisions of the MoU, the Malaysian government requires foreign workers working in Malaysia to attend an induction course on communication skills, Malaysian culture and laws and regulations.
New foreign workers are required to attend a ten-day (10) pre-departure induction course in their home country on communication skills on basic communication skills in English or Malay, Malaysian culture, laws and regulations.
Foreign workers who started work in Malaysia between 1st Jan 2004 and 30th Oct 2004 required to attend an intensive three day induction course. The course is to be completed before 31st January 2005.
Foreign workers who successfully complete the induction course will receive a Certificate of Eligibility. This Certificate of Eligibility is mandatory and is a pre-requisite to:
a) Enable new foreign workers to obtain a calling visa; and
b) Enable foreign workers already in Malaysia to extend their working
PURPOSE
The aims of this induction course for foreign workers in Malaysia are to:
a) Enable foreign workers in Malaysia to have basic communication skills in English or Malay;
b) Provide awareness of and respect for cultures and customs practiced in Malaysian; and
c) Develop understanding and compliance with Malaysian laws and
COURSE SYLLABUS
The course syllabus and content will focus on the following three main areas:-
a. Workplace Communication in English / Malay;
b. Introduction to Malaysian customs, culture and social practices; and
c. Awareness on the relevant laws, rules and regulations under existing labour laws.
The course can be conducted by the individual companies, trade associations or approved training providers (MTP). Prior notice with particulars of the workers and training details should be submitted to the labour office before commencement of the course. The labour office will visit and supervise the training. Hence, they will report to the Head Office who will issue Letter of Certification.
The United States of America is one of the largest consumer markets for apparel. Over 290 million consumers spend a sizable portion or their income on apparel and related products. In 2003, the US Office of Textile and Apparel announced total apparel imports reaching US$55 billion. The USA imported US$29.7 billion worth of knit apparel and woven apparel valued at US$33.2 billion in 2003. Apparel was among the USA’s top ten imports from Malaysia, with knit apparel ranked fourth at US$410.7 million and woven apparel, worth US$293.14 million, ranked seventh.Knit Apparel accounted for 1.6% of Malaysia’s total exports to the USA in 2003. Malaysia’s top exports of knit apparel were sweaters, pullovers and vests, women’s or girl’s suits and baby garments and accessories. Malaysia was 23rd largest supplier of knit apparel to the USA in 2003.
Woven Apparel represented 1.2% of the USA’s imports from Malaysia. The USA’s imported US$33.2 billion of woven apparel in 2003 recording a growth of 7.3%. Malaysia’s export of woven apparel was US$293.14 million, comprising mainly men’s or boys’ shirts, suits and overcoats, women’s or girls’ blouses and suits.
Consumer Trends
As consumers in the USA are becoming increasingly discerning, they are very much aware of the ratio between quality and price. They will pay more for a product or brand that is perceived as being stylish or of high quality, while saving money on other products. Consumers are rapidly embracing the cross-shopping experience, a label given to the trend that sees consumers, for example, purchasing branded handbags while buying discounted t-shirts from department stores.
Consumers in the USA are also buying dress down, casual apparel for all occasions. As such, Malaysian manufacturers entering the USA should consider a number of options, for example, manufacturers of men’s formal suits should consider other product categories. Given that consumers are also brand-conscious, spin-off clothing categories can reflect some of the prestige associated with the original brand.
The growth of the large size market in the USA should also be taken into account. There is increasing demand for oversized apparel in the market. As such, the more size groups a company is capable of producing, the larger the potential number of buyers.
The USA Sourcing Market
Retailer in the USA and their private brands, are increasingly sourcing the production of their apparel overseas. There are a number of potential market sectors for Malaysian apparel firms.
The group referred to as branded merchandisers, or marketing firms, are firms that conduct product design, research and development, sourcing, quality control and advertising. They do not own any apparel manufacturing facilities, but instead source their apparel form all over the world, the five major umbrella firms in this segment are Kelwood Co., Jones Apparel Group, Phillips-Van Heusen Corp., Liz Claiborn, Inc. and V.F Corp.
Apparel made for retailers of private label merchandise today accounts for over 36% of the total market. Private labels are brands created for a specific store. As retailers seek differentiation, private labelling has come to encompass not just basic apparel groups but niche, fashion and value-added categories as well. Among the categories of retailers selling private label apparel are national specialty chains, department stores and buying offices, catalogue firms, mass merchants, retail clubs and outlet stores.
Other potential market sectors are private label development companies that work with major retailers and chains in product development and sourcing, overseas buying offices and speciality clients.
Staying in the US market
With the dismantling of textile quotas in January 2005, Malaysian exports will face stiff competition from low cost producers in Asia. Malaysia textile companies should focus on building niche and specialty markets to cope with the competition.
When it comes to sourcing apparel, there are a number of factors that companies in the USA take into account. Price is an important consideration. Timing is also an important factor, as retailers seek to source fabrics and trims as quickly as possible.
For exporters, a good way of ensuring continued business is to form trading groups or clusters within a region. This allows a variety of service providers and manufacturers based in the same area or sector to offer a full package service to retailers. It is also prudent to monitor the regions where firms from the USA are sourcing and to learn about competing companies.
In order to sustain market share, Malaysian exporters should venture into higher-end apparel, as well as pursue brand building, advertising and participate in promotional activities including trade shows and exhibitions.
Source: UNCTAD (2002), based on UNCTAD and the World Bank
World Integrated Trade Solution database.
Note: The tariff rates for the most recent year for which data was
available; Manufactures are SITC 5-8 less 68; textiles (65);
and clothing (84).
Nanotechnology is starting to bring big profits to many consumer product makers. Estimates of nanotechnology’s financial impact across all industries ranges from about $20 billion to $50 billion in revenues today, jumping to as much as $1 trillion by 2010 and more than $2 trillion by 2015.
The US has invested US$982 million in research and development of nanotechnology, Japan has spent US$875 million, Korea US$237 million and Hong Kong US$12.8 million.
In 2002, clothing maker Levi Strauss introduced Dockers pants that use stain defender to keep spills out of fabric. About 40% of Dockers’ women’s and men’s classic and premium clothes now have stain defender or other nanotechnology, such as the perspiration guard line that draws moisture from the body and spreads it across the fabric to dry out faster.
More than 20 million garments using its treatments have been sold in 2004. Major customers include Gap, Eddie Bauer, Nordstrom, Brooks Brother, Nike, Old Navy, Perry Ellis and Tommy Hilfiger.
According to a report, a survey of USA manufacturers found 28% already were selling nanotechnology products late last year. Another 15% expected to introduce commercial products within a year. In fact, fabrics and apparels infused with nano particles are already marketed to the public.
Warp knit fabrics are manufactured by preparing the equivalent of warp beam containing several hundred ends. Each end passes through its own needle and is formed into lops which intersect with adjacent loops. Thus, a flat looped fabric is knitted using only “warp yarns” without the necessity of “filling yarns” being interwoven.
The two major types of warp knits are tricot and Raschel. Based on the number of yarns and guide bars used, tricot knits are identified as single(figure 1.3-d), two bar(as in figure 1.9-a), three and four bar tricots.
Raschel knitting is suitable for making highly patterned, lacy, crocheted or specialty knits(figure 1.9-b). In general, Raschel machines are used for the production of knit structures for industrial applications. For increased structural support in the filling direction, additional filling yarns can be inserted as shown in figure 1.9-c.
The knitting elements required for a warp knitting machine include:
Stitch formation on warp knit machines differs from weft knitting is that a complete course of loops is formed by one circle of the needle bar(s) rather than individually acting needles forming loops within a course.
Tufting
A tufted fabric involves a system of yarns that are sewn into a fabric (primary backing) leaving yarn loops below the primary backing. Sewing is accomplished by a solid bar of needles extending the full width of the primary backing with each needle threaded with a yarn. Because the needles are spaced with a certain distance apart (called the needle gauge), the yarns will be aligned in the structure in precise vertical rows across the width (or horizontal direction) of the fabric. The rate of reciprocal up and down motions by the needle bar is referred to as “stitch per minute” or the speed of the needle bar in revolutions per minute (rpm). Spacing of these needle bar stitch is controlled by the feeding rate of the primary backing fabric resulting in a specified number of “stitch per inch” along the machine (or vertical) direction of the fabric. The primary backing fabric is supported by a bed plated which may be lowered or raised to control the depth of needle penetration through the fabric carrying the yarn loops to a desired distance below the primary fabric (the fabric is made upside down). The distance of the loops below the primary fabric constitutes the “pile height” of the yarn tufts. These surface tufts represent the face or use side of the fabric after the fabric is removed and finished.
Different type tufting elements are used to produce various surface effects. Fabrics may have surfaces of level loops, multi-level loops, level cut and uncut loops. These variations are made possible by the types of loopers, knives and yarn controls used. A uncut loop surface is produced as shown on figure 1.10-a with the loopers take yarns from the needles and hold the loop formed while the needles retract.
Notice that the looper is facing in the direction of fabric motion to allow the formed loops to move off the looper after forming. The cutted pile surface is produced by changing the type of looper with corresponding knives. As shown in Figure 1.10-b, the loops are formed on the looper and must progress through the knives and be cut free of the looper which points opposite the direction of fabric flow. In all cases of level loop surface, the feeding rate of yarns must be adjusted to accomplish the desired pile height, in conjunction with the bed plate setting and to obtain a secure (tight) backstitch between surface stitch.
Bonding, Nonwoven fabric
Opinions vary as to the range of fabrics to be classified as nonwovens. In general, they can be defined as textile structures made directly from fibre rather yarn. These fabrics are normally made from continuous filaments or from fibre webs or batts strengthened by bonding using various techniques; these include adhesive bonding, mechanical interlocking by needling or fluid jet entanglement, thermal bonding and stitch bonding. The controversial areas are:
There are two standard definitions:
Nonwovens are defined under ISO 9092:1988 as: A manufactured sheet, web or batt of directionally or randomly orientated fibres, bonds by friction, and/or adhesion, excluding paper. And products which are woven, knitted, tufted, stitch-bonded incorporating binding yarns or filaments, or felted by wet-milling, whether or not additionally needled. The fibres may be of natural or manufactured origin. They may be staple or continuous filaments or to formed in situ.
Nonwoven fabric is defined under ASTM D 1117-80 as : A textile structure produced by bonding or interlocking of fibres, or both, accomplished by mechanical, chemical, thermal, or solvent means and combinations thereof. Discussion: The term does not include paper or fabrics that are woven, knitted, or tufted.
Gap, Li & Fung Hike Orders from Philippine
On the other hand, Li & Fung Group has also increased the volume of its orders. Its annual order was pegged at only $100 million during the effectivity of the quota agreement.
Despite the increased orders placed posted a 10% decline in terms of price.
Wal-Mart & JC Penney To Boost Indian Sourcing
Wal-Mart is expected to source goods worth $1.2bn from India during 2005. Goods likely to be bought from the country include home textiles, apparel and jewellery.
The expected amount is a significant increase on last year’s figure, which stood at $300m worth of goods directly sourced from factories and suppliers. Wal-Mart expects this figure to increase to $400m during 2005, with a further $800m worth of products coming from third-party suppliers.
Another US-based retail giant JC Penney has decided to sharply increase sourcing from India. JC Penney is one of the world’s largest importers of garments with nearly 1,100 stores all over the US.
The company, which currently buys over $140 million worth of goods from India, hopes to increase it by nearly 30% in the next couple of years following the end of the textile quota regime Dec 31, 2004.
Other major outsourcing markets for JC Penney of India are China, Taiwan, South Korea, Hong Kong and Bangladesh.
~ Mr. Yong Kok Swee ~
Manufacturing Parameters
Special colour results, resign pattern and properties can be given to textiles by different manufacturing techniques such as dyeing. Printing, heat setting, coating, and application of different type of finishes.
The textile engineer can select each of the above variables to produce the best product for its intended use. The raw materials for the textiles processing can be in various forms such as fibres, spun yarn, monofilamant, muiltifilamant. Major textile manufacturing processes including spinning, twisting, texturizing, weaving, knitting, braiding, needle felting, bonding, tufting, laying, and knotting. The resulting textile products can be ribbon, felts, laid web, woven fabrics, knitted fabrics, scrims, belts, cord fabrics, mats, nets, laid-in fabric, lace stitch, needle-punched fabrics, narrow fabrics, ropes, screens, tapes, carpets wadding and cords. Dyes, pigments, auxiliaries, impregnating agents, and other chemicals can be added to these textile products to obtain specific colour effect and physical properties. Several chemical, physical and mechanical methods may be involved during the process such as scouring, bleaching, dyeing, printing, finishing, coating, impregnation, calendaring, pressing, punching, stretching etc are being process to reach the requirement.
1.1 Ecology and textile quality
Two trends have put on the textile industry in recent years for global quality in a safe environment: the demand for improved quality and product and production process control on the other hand, and the simultaneous demand for more ecologically and toxicologically beneficial processes and products on the other.
In this connection, the scientific committee made provision for a completely dedicated to ecology, in order to group together all those paper throw particular light on this subject. The numerous scientifically advanced papers treat all themes ecologically relevant to the textile industry. Many of the presented papers were devoted to the problem of textile effluent pollution by halogenated organic compounds (AOX).
1.1.1 Interaction: textile and people
In the individual industrial nations, legislation in the textile industry requires critical analysis of production processes, the dyes, chemicals and textile auxiliaries used in the processes. Many dyes, chemicals, and textile auxiliaries are strictly controlled, and even prohibited where possible. It is therefore necessary to introduce alternative processes based on ecologically less harmful products. A number of chemicals used in the textile industry are potential allergens. And, as far as others are concerned, it has already been shown that there are toxic or cancel inducing.
The interaction between a person’s skin and the chemicals on the finished textiles coming in contact with it is a complex phenomenon which is controlled by the natural condition of both systems, skin and textile, and by the conditions arising at the interface. It is especially important to understand the mechanisms which control the migration of the different chemical substances from the fabric to the skin, and their diffusion within the skin.
1.1.2 Internal and external factors
The migration of chemicals from the fabric to the skin is controlled by both internal and external factors. The external factors are: chemical composition, pH and the microflora of human perspiration and the presence of fats, surfactants, and cosmetics. As internal factors: we understand the interactions between the individual chemical substances found on the textile surface.
Assessment of the risk associated with contact between the skin and textiles comprises quantification of the migration and diffusion parameters of the individual substances and their sensitising potential and dermatological toxicity.
In assessing the toxicological and mutagenic potential of the chemicals used in the textile industry, interesting results are obtained with the in vitro biological test on bacteria for determining the genotoxicity of chemicals on textiles. (Ames test) Of 140 chemical substances subjected to the Ames test for mutagenic characteristics at the Germen Wool Research institute, five are positive. Mutagenic activity was practically only evident in connection with the presence of dyestuffs. In one case, the presence of benzidine, a dyes decomposition product, was indicated. The fact is that the Ames test has proved useful – in combination with other chemical analyses – in assessing potential textile mutagenic activity.
1.1.3 Environmental hygiene
Presented in the field of environmental hygiene were the results of production personnel are exposed to dust of complex composition in the textile industry. The dust can contain particles and fragments of different size and composition. The particles were measured and morphologically divided into different classes cuticular and contical cells, “skin flake” and fibre particles. Part icle size distribution was calculated to each class, providing reference points on their aerodynamic behaviour and their inter interaction with the human respiratory organs. Also determined were the amino acids, the protein fraction and the chemical composition of the inorganic fraction.
People professionally exposed to the above-mentioned dusts were medically examined in order to clarify the frequency and type or respiratory or allergic symptoms consequent upon dust exposure. This examination indicated that the risk of respiratory system diseases or allergies consequent upon dust exposure in the initial processing stages can be regarded as very limited.
There are sources of environmental pollution which cannot be eliminated by processing the raw materials during the initiate stage. They can be limited only at the effluent or exhaust air level. However, there are some sources of environmental pollution which can be limited or eliminated – with a more or less drastic change in processing technology or by using alternative products.
1.1.4 Economic benefits through savings
Textile firms can be encouraged to finance research with the aim of effluent recovery and recycling if sufficient economic benefit results from it through the saving of valuable materials, water and energy. They can be obliged to rationalize production processes for human and environmental protection by national or supranational legislation strictly regulating the immission of specific chemical substances into water courses, air and the soil.
The problem which arise from such restrictive legislation are complex, and affect a number of areas, like workplace hygiene, the toxicity of dyestuffs and auxiliary agents, the disposal of production process effluents and by products and atmospheric immission.
The answers, as the case may be, cannot be easy, since involved here are novel concepts and requirements which are gradually penetrating people’s consciousness. There are requirements which affect awareness of the relationships between manufacturer and the environment and manufacturer and consumer, thereby also affecting the manner of product presentation, which is now associated with global quality, the manufacturing processes and the finished product.
There is today close correlation between environmentally compatible industrial processes and the guarantee process and product quality. Modern textile technology enables the textile industry to produce qualitatively better and safer finished products using absolutely necessarily minimized quantity of water, energy, and chemicals, with recycling of a large proportion of the waste and with less polluting emissions, which require less costly disposal.
1.1.5 Ecological labelling
In recent years, projects and systems have been pushed through for the ecological labelling of textile in order to stimulate demand for “ecological quality”. However this is now spreading without planning and purpose, and often also little credibility. A number of labelling and brand name systems has in fact been proposed for certain textiles, all with consumer health protection as the declared goal. The individual systems can vary considerably from each other, both in the typology of the textiles included as well as in the individual parameters and tolerance limits. Textile producers must increasingly frequently “guarantee”, both for the finished product and all production stages, that their concept of high quality includes considerations in the field of environmental protection and human toxicological safety.
There is a debate as to whether the expression “human ecology” is sufficiently characterizing and comprehensible in connection with an ecological labelling system, for the concept of “ecology” always of course includes interaction with the environment! The subject of discussion is also whether this kind of labelling is really the expression of a genuine demand on the part of the consumers, or rather a trade and industry requirement, and whether the consumer is actually in a position to grasp the meaning of these labels. The problems arising here affect many areas:
Ø Analysis method testing;
Ø The demonstrability limits of the relevant substances on textiles;
The development of suitable analysis methods as a function of the tolerance boundaries used and of simulation methods for testing whether a substance which is toxic in air and water, its toxicity also releases its toxicity if it comes from a textile substrate in contact with the skin – this is a function of the complex chemical and biological interactions of different substances under different condition in use. Worldwide textile research is dealing with these problems.
The 6,000 member companies of the CCCT account for 70 per cent of China’s total textile exports. Along with another four industrial organizations, they represent virtually all textile exporters from both the Chinese mainland and Hong Kong.
The Chinese Government and the nation’s textile industry have moved to ease the concerns of foreign counterparts who fear Chinese textiles will swamp the world market in the quota-free era. To address these concerns, especially from developing countries, China began to collect export duties on some textiles from January 1 this year, to quell export growth.
An automatic licence system for textile exports also took effect. The automatic approval will step up the statistical analysis and monitoring of China’s textile export, to release timely warnings to traders on textile exports.
When the licence system finds a drastic surge in one category and issues an alarm, the category will be identified as a sensitive product and its minimum price will be announced.
In the first two months of this year, China’s textile exports enjoyed steady growth. For example, the exports of trousers to United States saw an eight-fold increase year-on-year while the average price dropped by 30%.
The Malaysia – Singapore Third Country Business Development Fund is co- founded and co-funded by the two countries. The Fund allows Malaysian and Singaporean Enterprises to cooperate and to jointly identify investment and business opportunities in “third countries”, outside Malaysia and Singapore.
The Fund aims to encourage Malaysian and Singaporean enterprises to expand their business operations in the global arena.
QUALIFYING ACTIVITIES
The fund covers up to 50% of all eligible expanses for:
For enterprises with a specific project in mind and are conducting a thorough investigation on the business viability of the project, up to a maximum grant of RM200,000.
For a general search in a specific market for potential investments or business opportunities, up to a maximum grant of RM100,000.
For enterprises participating in approved joint missions, up to a maximum grant of RM200,000.
CRITERIA FOR ELIGIBILITY
Applicants must be registered under the Business Registration Act or under the Registration of Business Ordinance or incorporated under the Companies Act
Be a Malaysian local company which has at least 51% equity owned by Malaysian citizens, and a local company in Singapore which has at least 30% equity owned by Singapore citizens or Permanent Residents.
Business associations or the appointed representative of the group of companies involved in organising joint missions may also apply.
ELIGIBLE EXPENSES INCLUDE
The validity of fund support shall not exceed 6 months and the Lead Enterprise / Business Association must submit a report to MIDA and IE Singapore within 1 month of completion of the project. Claims for reimbursement from the fund have to be submitted within 3 months of completion of the Joint Feasibility Study / Joint Mission.
APPLICATION - Malaysian Industrial Development Authority (MIDA)
The Canadian government has introduces new measures to increase the competitiveness of the textile and apparel industry.
The textile and apparel industry employs approximately 144,000 Canadians. About 600 textile companies are centered in Montreal, Toronto, Winnipeg and Vancouver with annual turnover of $5.69 billion is exported. The US is Canada’s main export market.
Three Key Canadian Strategies
~ Yong Kok Swee~
In recent years, almost every branch has felt increasing pressure from authorities, consumer associations, the press media and sensitised citizens. Firms in the textile chain in particulars must prove again and again that they do not overstep the limits, that they meet labelling requirement, that their products do not trigger eczema, and that company employees show positive environment consciousness etc.Growth is one of this century’s key-worlds. It is the discourse of economic growth, of increase GNP and growing information potential. At the times, the limits of growth, the growth world pollution, rubbish mountains and diseases brought on by civilisation are disquieting, adding to the fears and uncertainties of the populace, triggered last but not least by contradictory information.
After the secondary war, increasing pollution showed that the use of public property like air and water for example requires regulation. The best known control system, that is regulations and bans (limit) was offered as an initial step. The developed industrial nation legislations devoted themselves with varying degrees of haste the varies areas in air, water, noise, effluent, and floors. The serious disadvantages of this method of control were soon revealed however:
Additionally, regulations and bans rarely stimulate active cooperation as far as limits are concerned. Among other things, responsibility for liability was introduced in USA in the 20th century 80s because of these failings. Only in the 90s did various market economic instruments enter the scene.
Environmental management systems like BS 7750, EMAS, and ISO 14000 go far beyond the principle of bans and regulations, because companies have to set and meet their own environment-related targets in addition to complying with the laws. In addition to legal developments, pressure by sensitised citizens, consumer associations, and press media has also increased in recent years. Through these developments, companies in the textile chain are increasingly trying to develop of their own ecological efforts and products. As we known, these efforts go in different directions, from the dyestuffs and chemicals suppliers, textile machinery manufacturer, and to the development of the process management and control.
The Environmentally Harmful Manufacture of Textile Criticism
The “environmentally harmful manufacture of textile” as criticised by the sensitised citizens, consumer protection organisation and ecological institutes is as follows:
It should be duly considered the ecologically relevant criticism of the public of textiles and their reproaches to the textile chemistry by these organization is virtually neutralized by cost-intensive water and energy saving measures taken by the textile wet processing industries enforced by industry internal regulations and by anti-pollution laws applicable.
The costs of a continuous modernization of plants arising by efforts to comply to changing stipulations of authorities are absorbed by the textile wet process industries with a sense of responsibility even through this means a continuous impairment of the competitive position of trade in comparison with low-wage countries.
Environmental Regulations Interfere with the Textile Wet Process Industry
The unjustified charges against textile wet process industries and the textile chemistry cannot be simply ignored or sat out. Consequently, the producers of textile are more and more taking the initiative to rectify, to inform and, of course, to optimise both production processes and quality standards of their textiles with respect to ecological acceptability. Initiatives taken by the chain of the textile manufacturers and the marketing agency (end user) includes the joint informative pamphlets serve the purpose of ecological manufacturing processes.
The environmental regulations that are interfere with the textile wet process industries as follows:
1. Handling of dyes, chemicals and auxiliaries: (Law on chemicals)
(A) Regulations on dangerous substances;
(B) Classification and marking of dangerous substances and preparations;
(C) Caronogenic, genotype-damaging and telus-damaging dangerous substances;
(D) Toxic, caustic, irritating and chronically damaging dangerous substances;
(E) Certain burn-promoting, explosive and flammable substances;
(F) Medical check-up;
i) List of MAK values – maximum concentration at working place;
ii) List of BAT Values – biological tolerance value for working material
iii) List of TRK value – technical standard concentration
iv) Regulation on burnable liquids – VbF
v) Storage of chemicals and textile auxiliaries.
2. Danger for waste water
i) Water balance law;
ii) Regulation of water-damage substances;
iii) Law on washing and cleaning agents;
iv) Regulation on surfactants;
v) Law on duties for waste water.
3. Charge of leaving air and environment
– Immission protection law and protection: 1.) on air; 2.) on noise;
4. Disposal of residual liquors, waste and sewage sludge
– Waste treatment law; sewage sludge; executive order
5. Physiological effects of textile goods
i) Regulations on danger substances;
ii) Allergic effects, odour, skin compatibility, prevention – home textile;
6. Environmental liability law (liability for possible damages)
i) Law on liability for environmental damages and to the alteration of the water;
ii) Balance law and the immission protection law;
7. Environmental criminality law – Act on the environmental criminality law.
Bilateral free trade agreements (FTAs) are made between two countries. Throughout the world, many governments have signed, are negotiating, or contemplating new bilateral free trade and investment agreements.They are based on assumptions that free trade and the removal of regulations on investment will lead to economic growth, the reduction of poverty, increased living standards and employment opportunities. Like other free trade and investment agreements, they work towards removing all restrictions on business.
Malaysia is currently pursuing The Free Trade Agreements (FTAs) or
Closer Economic Partnership (CEP) agreements with selected countries.
Japan, Malaysia Agree To Expedite FTA Talks
Japan and Malaysia agreed to strive to reach a basic agreement on concluding a bilateral free trade agreement by late May.
Major stumbling blocks exist in talks to liberalize trade in auto parts, steel, and investment and services. Japan has been urging Malaysia to review its protective policy for the domestic automobile industry in past FTA talks.
Japan already has a free trade agreement with Singapore, and is negotiating similar accords with the Philippines and Thailand.
Malaysia-Pakistan FTA Will Be Sealed Year-End
Prime Minister Datuk Seri Abdullah Ahmad Badawi is confident the proposed Free Trade Agreement (FTA) between Malaysia and Pakistan will be sealed by the end of the year.
Besides trade, Malaysia also pledged to extend closer cooperation with Pakistan in various sectors, among others, in tourism, information technology, communication, science and technology and aviation.
Malaysia recommended for FTA talks with US
MALAYSIA is among five countries that the National Association of Manufacturers (NAM) has recommended that the US administration explore the possibility of FTA with. The other four countries are Egypt, India, New Zealand and South Korea.
In a report, NAM placed another five – Brazil, China, European Union, Japan and Taiwan – on the “FTA Watch List”, believing that it was not time yet to recommend them for active consideration.
The association, headquartered in Washington DC, is the nation’s largest industrial trade association representing small and large manufacturers in every industrial sector in all 50 states. It undertook a quantitative analysis of all countries to which US exported at least US$1bil in manufactured goods annually, and after eliminating countries that already had FTAs, found there were only 18 trading partners in this category.
The top 10 countries in this group were Brazil, China, Egypt, The European Union, India, Japan, Malaysia, New Zealand, South Korea and Taiwan.
NAM said Malaysia’s strong economic growth and large bilateral tariff disparity made it an interesting FTA candidate from a manufacturer’s view point. Malaysian tariffs on US manufactured goods average 6.6% – seven times as high as the 0.9% average US tariff on imports from Malaysia. The average US import duty on imported manufactured goods was 1.8%, and excluding textiles and apparel, was only 0.9%.
Trade and Investment Framework Agreement (TIFA) were signed on 10 May 2004. The TIFA provides a basis on which to enter into discussions of trade issues and on detailed discussions of a bilateral trade agreement.
Malaysia-Australia FTA on the Way
On 7 April 2005, Prime Minister John Howard and Malaysian Prime Minister Dato’ Seri Abdullah Ahmad Badawi, launched negotiations on a bilateral Free Trade Agreement (FTA). Negotiations are expected to be completed by mid-2006.
Australia is Malaysia’s 11th largest trading partner. Total trade in 2004 amounted to US$5.9 billion with exports valued at US$4.1 billion and imports valued at US$1.8 billion. Malaysia-Australia trade has been expanding at an annual rate of 12.4% during the period of 1994 to 2004.
The Australian Department of Foreign Affairs and Trade (DFAT) has been inviting public submissions and comment on issues for the negotiation of a Malaysia-Australia FTA. 60 written submissions were received from a wide range of industry, State Government and non-government groups
Malaysia-New Zealand FTA by End of This Year
MALAYSIA and New Zealand have rescheduled the signing of a free trade agreement to the end of the year, six months ahead of the June 2006 deadline.
The agreement is expected to lead to a progressive liberalisation of trade between the nations. It is also expected to see, among other things, a reduction and eventual elimination of all tariffs and non-tariff restrictions, simplification of Customs and Immigration procedures and promotion of joint investments.
This will mean cheaper goods for both sides besides greater opportunities to work together in education, construction, engineering, tourism and health.
Malaysia Looks Beyond FTA with India
India and Malaysia are on the verge of signing a comprehensive economic co-operation agreement by year-end. It will include free trade between the two nations. The signing may be done during a visit by Indian Prime Minister Dr Manmohan Singh to Malaysia in December.
Both Governments had agreed to fast track the agreement. The joint study is expected to be ready by September, when both sides would probably address the final draft of the agreement. Malaysia would make adjustments to suit the needs and circumstances of both nations.
Malaysia-Korea FTA to be Considered
A decision to pursue bilateral FTA negotiations between Malaysia and Korea was made following the Malaysian Prime Minister’s visit to Korea in August 2004.
Both sides expressed their hope that Korean investments in Malaysia will be increased and trade activities be expanded. PM Badawi said even with the FTA, Malaysia still supports efforts towards a strategic cooperation agreement between the RoK and ASEAN.
The past ten years have seen little consolidation among apparel retailers in Europe. The dominant retailers in the UK, France and Germany have lost market share, and, in the case of the largest UK and German retailer, reduced the number of countries in which they trade.Wal-Mart has increased its apparel sales significantly (though its US share is still lower than the UK’s two largest apparel retailers), so commentators globally assume apparel retailers are getting bigger everywhere.
The problem is that apparel retailers are really rather small by retailer standards. Apparel-intensive department store chains, like JC Penney ($41.4 billion sales), Sears ($41 billion), Daiei ($19 billion) and Marks and Spencer ($11.7 billion) are the largest retailers that are heavily dependent on apparel. But in total size they are dwarfed by:
Western apparel specialists will need to work very hard indeed to counter the threat, driven mainly by deeper and wider management skills and resource development, non-specialists now pose. And those non-specialists are probably far better placed than apparel specialists to work their way through the uncertainties of the post-2005 world.
Hong Kong’s textiles and clothing (T&C) industries are undergoing new changes as quotas have been eliminated from January 2005. However, protectionist undercurrent still prevails particularly from the United States, which is the largest textile and clothing (T&C) importer for Hong Kong. As example, the trade remedy by the US on the T&C products originated from China and also the Chinese government imposing export tariff on the T&C products destined to US as an anti-dumping measure.The mainland China used to be the major sourcing centre of T&C products to Hong Kong. In 2004, Hong Kong’s re-exports of T&C of mainland-origin to the global market represented more than 95% of Hong Kong’s total exports of T&C. The economic loss is foreseen if Hong Kong maintains to source in similar quantity from the Mainland China. In 2004, Hong Kong re-exported T&C products to the world were valued at US$15,349 million.
The Hong Kong government is now encouraging the local T&C traders and manufacturers to globalize their sourcing and manufacturing activities. Therefore, the local traders now begin looking for new oversea suppliers through recommendation by trade commissions in Hong Kong and by visiting international trade fairs in Hong Kong and abroad. Moreover, the Hong Kong manufacturers are encouraged to do more outward processing such as sourcing OEM products from overseas to avoid relying on their production in the Mainland China.
This development provides a good opportunity for Malaysian T&C suppliers to tap in Hong Kong market and through the Hong Kong traders to export their products to the European market. In 2004, Hong Kong imported T&C products from Malaysia valued to US$8.5 million. Malaysian suppliers could also participate in related trade fairs in Hong Kong to approach Hong Kong buyers such as Source It , Intersoff, HK Fashion Week etc.
The delegates from BGMEA also requested for the list of Malaysian yarn spinning factories and textiles suppliers from the Malaysia High Commissioner.
A. Companies Eligible to Apply for MDG
B. Additional Eligible Activities
The scope of eligible activities for MDG have been extended to include:-
i. Participation in trade mission
ii. Participation at international trade fairs
iii. Preparation of promotional items including brochures
iv. Promotion of brands overseas
C. Maximum Grant
Companies can now obtain a 50% matching grant on the approved cost of the eligible activities subject to a maximum of RM100,000 per company. The RM100,000 grant is however subject to the availability of funds.
For enquiries, please contact Ms. Susila Devi at MATRADE, Tel: 03-2616 3333.
The EU Commission has collected information on the trend of imports of certain textile products originating in the People’s Republic of China (the PRC) through the import monitoring system. The data indicates that imports may threaten to impede the orderly development of trade.
The Commission has concluded that there is sufficient evidence to justify the initiation of an investigation in relation to the product categories concerned. The Commission has therefore decided to initiate an investigation to determine whether the application of textile specific safeguard measures in relation to those product categories is warranted.
Product Categories Concerned
The European Commission will now launch an investigation to justify possible safeguard measures, which could be introduced within 150 days. Peter Mandelson, EU commissioner for trade, says he expects to get the results of the probe about 60 days after its launch. Shortly after that, the EU could decide to impose ceilings on Chinese textile imports.
Sharp Increase of Chinese Imports
European textile industry groups, which claim that the jump in imports is costing tens of thousands of jobs, has been lobbying hard for immediate action. Euratex, the European textile association, cautiously welcomed the EU decision to open investigations into textile imports from China. “The announcement by the commission is to be viewed as a first clear signal that the European authorities do not intend to remain inactive in face of the unprecedented growth in volume of up to 543% in certain Chinese product exports to the EU at prices which have fallen by up to 47%,” Filiep Libeert, Euratex president, said in a statement. EU Commission data showed member states imported 95.7 million T-shirts in the first three months of this year, a rise of 164% from the same period in 2004, while pullover and men’s trouser imports jumped 534% and 413%, respectively.
Divided Views
EU member states remain divided over the issue. Thirteen of the 25 EU member states, including France, Italy, Spain, Portugal, Greece, and Belgium, have called on the EU to skip the five-month process and instead impose restrictions within weeks. The Commission responded that such action could trigger a trade dispute with China at the WTO, but added that they were closely monitoring trade in eleven additional textile categories.
WTO Director-General Supachai Panitchpakdi, on the other hand, has said that countries struggling with a surge in Chinese textile exports should wait at least a year before taking any protectionist measures. After only a few months of evidence, he suggested, the final impact of the trade rules remains unclear. “The textile industry has had 10 years to prepare for the lifting of the quota. We don’t see any reason to introduce limits now,” said Swedish State Secretary urging EU textile firms to be more competitive. Denmark, Finland, the Netherlands and Germany shared Sweden’s position.
World trade in textiles and clothing amounted to US $ 385 billion in 2003, of which textiles accounted for 43% (US $ 169 bn) and the remaining 57% (US $ 226 bn) for clothing. The United States and European Union alone accounted for more than half of the almost $400 billion in world imports of textiles and clothing in 2003, and developing countries for almost two-thirds of world exports.
Import Trends in USA
In 1990, restrained or MFA countries contributed as much as 87% (US $ 29.3 bn) of total US textile and clothing imports, whereas Caribbean Basin Initiative (CBI), North American Free Trade Area (NAFTA), Africa Growth and Opportunity Act (AGOA) and ANDEAN countries together contributed 13% (US $ 4.4 bn). Thereafter, there has been a decline in exports by restrained countries; the share of preferential regions more than doubled to reach 30% (US $ 26.9 bn) of total imports by USA.
The composition of imports of clothing and textiles by USA in 2003 was 80% (US $ 71 bn) and 20% (US $ 18 bn), respectively. Asia was the principal sourcing region for imports of both textiles and clothing by USA. Latin American region stood at second position with a share of 12% (US $ 2.2 bn) and 26% (US $ 18.5 bn), respectively, for textiles and clothing imports, by USA.
Import Trends in EU
EU overtook USA as the world’s largest market for textiles and clothing. Intra-EU trade accounted for about 40% (US $ 40 bn) of total clothing imports and 62% (US $ 32.5 bn) of total textile imports by EU. Asia dominates EU market in both clothing and textiles, with 30% (US $ 30 bn) and 17% (US $ 8 bn) share, respectively. Central and East European countries hold a market share of 11% (US $ 11.3 bn) in clothing and 7.5% (US $ 4 bn) in textiles imports of EU.
As regards preferential suppliers, the growth of trade between EU and Mediterranean countries, especially Egypt and Turkey, was highest in 2003. As regards individual countries, China accounted for little over 5% (US $ 2.8 bn) of EU’s imports of textiles and over 12% (US $ 12.4 bn) of clothing imports.
Import Trends in Canada
Amongst the leading suppliers of textiles and clothing to Canada, USA had the highest share of over 31% (US $ 8.4 bn), followed by China (21% – US $ 1.8 bn) and EU (8% – US $ 0.6 bn). India was ranked at fourth position and was ahead of other exporters like Mexico, Bangladesh and Turkey, with a market share of 5.2% (US $ 0.45 bn).
Potential Gains
It may be noted that clothing sector would offer higher gains than the textile sector, in the post MFA regime. Countries like Mexico, CBI countries, many of the African countries emerged as exporters of readymade garments without having much of textile base,
utilizing the preferential tariff arrangement under the quota regime. Besides, countries like Bangladesh, Sri Lanka, and Cambodia emerged as garment exporters due to cost factors, in addition to the quota benefits. Thus, it may be concluded that these countries are likely to lose their market share in the future scenario.
Resource Based Advantages
It may be said that countries like China, USA, India, Pakistan, Uzbekistan and Turkey have resource based advantages in cotton; China, India, Vietnam and Brazil have resource based advantages in silk; Australia, China, New Zealand and India have resource based advantages in wool; China, India, Indonesia, Taiwan, Turkey, USA, Korea and few CIS (Commonwealth of Independent States) countries have resource based advantages in manmade fibers.
In addition, China, India, Pakistan, USA, Indonesia have capacity based advantages in the textile spinning and weaving. China is cost competitive with regard to manufacture of textured yarn, knitted yarn fabric and woven textured fabric. Brazil is cost competitive with regard to manufacture of woven ring yarn. India is cost competitive with regard to manufacture of ring-yarn, O-E yarn, woven O-E yarn fabric, knitted ring yarn fabric and knitted O-E yarn fabric.
According to Werner Management Consultants, USA, the hourly wage costs in textile industry is very high for many of the developed countries. Even in developing economies like Argentina, Brazil, Mexico, Turkey and Mauritius, the hourly wage is higher as compared to India, China, Pakistan and Indonesia.
Winners & Losers
From the above analysis, it may be concluded that China, India, Pakistan, Taiwan, Hong Kong, Brazil, Indonesia, Turkey and Egypt would emerge as winners in the post quota regime. The market losers in the short term (1-2 years) would include CBI countries, many of the sub-Saharan African countries, Asian countries like Bangladesh and Sri Lanka.
The market losers in the long term (by 2014) would include high cost producers, like EU, USA, Canada, Mexico, Japan and many east Asian countries. The determinants of increase / decrease in market share in the medium term would however depend upon the cost, quality and timely.
India and China
It is estimated that in the short term, both China and India would gain additional market share proportionate to their current market share. In the medium term, however, India and China would have a cumulative market share of 50%, in both textiles and garment imports by USA. It is estimated that India would have a market share of 13.5% in textiles and 8% in garments in the USA market. With regard to EU, it is estimated that the benefits are mainly in the garments sector, with China taking a major share of 30% and India gaining a market share of 8%. The potential gain in the textile sector is limited in the EU market considering the proposed further enlargement of EU. It is estimated that India would have a market share of 8% in EU textiles market as against the China’s market share of 12%.
Critical Factors that Need Attention
Apart from low cost labour, other factors that are having impact on final consumer cost are relative interest cost, power tariff, structural anomalies and productivity level. It is also noted that countries that would emerge as globally competitive would have significantly consolidated supply chain.
Manufacturers need to sharpen their competitive edge by lowering the cost of operations through efficient use of production inputs and scale operations. Besides, there are needs for rationalization of charges, levies related to usage of export logistics to remain cost competitive. Logistics and supply chain would also play a crucial role as timely delivery would be an important requirement for success in international trade.
Technology would play a lead role to improve quality and productivity levels. Internationally, trading in textile and garment sector is concentrated in the hands of large retail firms. Majority of them are looking for few vendors with bulk orders and hence opting for vertically integrated companies. This would also bring down the turn around time and improve quality. Industry players should also improve upon their soft skills, viz., design capabilities, textile technology, management and negotiating skills.
In addition, the industry needs to invest for creating brand equity, supply chain management and apparel industry education. The need of the hour therefore is to evolve a well chalked out strategy, aimed at improvement in the levels of productivity and efficiency, quality control, faster product innovation, quick response to changes in consumer preferences and the ability to move up in the value chain by building brand names and acquiring channels of distribution.
Conclusion
It is believed the quota regime has frozen the market share, providing export opportunities even for high cost producers. Thus, in the free trade regime, the pattern of imports in the quota countries would undergo changes. The issues that would govern the market share in the post quota regime would eventually be productivity, raw material base, quality, cost of inputs, including labour, design skills and operation of economies of scale.
It is believed that quotas, by limiting the supply of goods have kept export prices artificially high. Thus, it is estimated that there would be price war in the post quota regime, with competitive price cuts.
It is assumed that quota restrictions would continue beyond 2005 in various forms. There would be non-tariff barriers as well. Standards related to health, safety, environment, quality of work life and child labour would gain further momentum in international trade in textiles and clothing.
· Category 338/339 Cotton knit shirts and blouses
· Category 347/348 Cotton trousers
· Category 352/652 Cotton and man-made fiber underwear
On May 18 2005 CITA announced on plans to impose safeguard quotas by the end of May against four categories of textile and apparel goods from China:-
· Category 301 Combed cotton yarn
· Category 340/640 Men’s and boys’ cotton and manmade fiber shirts, not knit
· Category 638/639 Manmade fiber knit shirts and blouses
· Category 647/648 Manmade fiber trousers
This announcement came after CITA made affirmative decisions on the threat-based safeguard petitions filed last fall against these four categories. Goods that fall into any of these categories that are exported prior to the effective date (i.e., the date consultations are formally requested with China) will not be subject to these safeguard quotas. Goods exported on or after that date will be subject to the quotas.
Background: On April 4, 2005, CITA announced its decision to initiate safeguard proceedings on several categories of product. On May 5, 2005, CITA announced the resumption of consideration of twelve requests for safeguard action, based on the threat of market disruption, that were received from certain textile and apparel trade associations in October, November and December 2004. Besides the above 7 categories, requesters asked the Committee to investigate the following products:-
· Category 222 Knit Fabric
· Category 349/649 Brassieres and other body supporting garments
· Category 350/650 Dressing gowns and robes
· Category 447 Men’s and boys’ wool trousers
· Category 620 Other synthetic filament fabric
More cases seeking re-imposition of textile quotas are expected from the industry in the near future.
As a result, Malaysian exporters of garments are no longer burdened by the additional tariff fee for the weight imported, thus making exports to Peru subject to the normal tariff of 20% ad valorem rate and VAT of 19%.
Charleston-based Bamboosa is doing its part for mama Earth with a line of 100% bamboo clothing. Incorporated in January, Bamboosa offers women’s and men’s apparel as well as baby products online.
In a region where cotton used to be king, “Bamboo is a very up-and-coming fiber in the apparel industry,” said Bamboosa partner Morris Saintsing.
Saintsing said bamboo can survive droughts and floods — unlike cotton — and doesn’t need pesticides and harmful chemicals to extract the fiber.
The thermal-wet feature made bamboo clothing particularly suitable and comfortable to wear in summer. However, they are inadequate in piling property and must be modified. Improving this property of natural bamboo fiber is necessary and will be a research direction in future.
~Yong Kok Swee
An enormous quantity of chemical products, includes dyes, chemicals and auxiliaries, used for textile wet processing in respect of the high pollution of effluent and the need for expensive elimination of this effluent pollution, in view of the fact water treatment costs are in the end paid by the textile wet process industry causing the pollution and not from the petty cash. The necessary use of chemistry and disposal of the chemicals rather shows up enormously unfavourably in the book precisely in textile production countries where environmental consequences are of priority in view of the keen competition.
Responsible and thorough textile wet processing is impossible without chemistry. This is actually the conclusion which should be drawn. By the example of cotton, which includes high contamination of natural fibres with herbicides, pesticides and insecticides from germination to harvesting. The high contamination of natural fibres quite simply requires correct pre-treatment of the textile goods so that both the natural and necessary concomitant substances and also all the hazardous substances are removed cleanly from the fibres material. There should be no dyeing of the untreated goods and therefore transportation of pollutants as far as the washing machine of the final consumer.
Dyeing with the necessary high fastness properties so that non-bonded dyestuff does not get onto the skin is impossible without chemistry. And finally, only textile finishing by chemical and physical treatment methods guarantees the usability and easy care properties promised by the advertisement and expected by the purchaser, because in the end hardly anyone wants to dispense with the functional capacity and compliance with all the quality requirements in the form of a compromise between the idea and implementation. Unfortunately there is often a wide gulf between morality in environmental matters and personal actions. Anyone who rejects textile finishing must also accept the consequent compromises, and precisely these can also easily head off in the wrong direction. Prefect textile finishing using conscientiously chosen amounts and processes is better than textiles “left to nature”. The same also applies to the relationship between textile and the environment, which is control by complex environmental regulations which are almost completely foreign to many completing textile manufacturers in the developing countries.
The buyer expects quality features and the intended use to met. Textiles must be fashionable, chic in appearance and cut, function in wearing properties, optimum in use and easy-care, inexpensive in cost/benefit ratio and physiologically acceptable in wearing properties. This quality as the agreement between planning and implementation or “fitness for use” is only possible by proper skiful and conscientious textile wet processing – which must be accepted.
Aim of Textile Wet Processing: Gentle Chemistry in the Treatment of Textiles
When ecology is mentioned in connection with the textile production, definite stipulation or definition of the relevant ecology field is required. The ecological textiles production includes:
Production ecology: Ecological parameters which are relevant to textile production, such as effluent, exhaust air, dyes and chemicals usage, etc.
Human ecology: The potential effects of textiles on the human skin or in the human organism, e.g. by chemicals, dyestuffs, etc.
Disposal ecology: The fate of textiles after the wearing stage, such as disposal, burning, recycling, etc.
Since there is “no life without chemicals”, all matter, everything living, is based on chemical substances or on chemical processing cycles. Synthetic chemistry is generally perceived as so called “hard chemistry”, and condemned. Nature and its products are therefore the good, clean things to be aimed for, certainly a plausible but much too simple and one-side position. In this respect, current textiles ecological production trends lead to diverse conflict situation.
“Gentle chemistry” to all intents and purposes requires acquires the close attention in the treatment of textile goods as our 2nd skin as does careful cosmetic care of our skin. What is not expected of cosmetic care should also taboo for the textile goods worn directly on this skin, and that means chemistry only to the extent necessary in the sense of gentle, protection and caring.
The path of “gentle chemistry” fires and fabrics production, dyeing and printing, finishing, clothing production, marketing and final consumer affects all links in the textile production and marketing chain.
The path of “gentle chemistry” in treatment of textiles are tabled as following:
Fibre origin
· Selection of fibre consignments of low contamination by submitting requirement;
Production of yarns and threads
· Least possible contamination for reliable further processing;
· Selection of ecological lubricant and chemicals for yarns and threads finishing;
Production of fabrics
· Easily removable preparations and sizes;
· 60% of the effluent pollution in cotton wet processing occurs in desizing, to solves the effluent problems by ultra-filtration and to reuse sizing agent and water;
Pretreatment of yarns and fabrics
· Thorough pretreatment, purification, extraction;
· Selection of acceptable ecological auxiliaries and processes;
· Minimal chemical contamination;
· Removal of the reaction products by rinses;
· Increase used of biological treatment processes;
· Consistent rejection of ecologically unacceptable requirement;
· Single-stage scouring and bleaching, if possible;
Dyeing and printing
· Determination of substance – specific dangers by the producer;
· Selection of dyestuffs and pigments which can not be split into MAK A I and A II carcinogenic amines in reductive conditions
· Selection of effective and ecological dyeing and printing auxiliaries and processes;
· Liquor recycling – dyeing in standing bath;
· Increasing the fixation yield in dyeing and printing, especially reactive dyeing and printing;
· Minimal dyes and chemicals contamination;
· Removal of unfix dyes after dyeing and printing by thorough wash-off and rinses;
· Methods and techniques to reduce exposure;
Textile finishing
· Increasing use of biological and physical finishing process;
· Selection of new textile finishing agents and processes with the aim of easier application, optimisation of effects and optimum environmental compatibility;
· Statement of type of finishing and relative contents;
Clothing production
· Reduce the properties profile to ecological responsible and technically realizable;
· Choice of materials according to ecological quality and not cost;
· Use and properties “passport” according to the level of understanding of the normal consumer;
Textile marketing
· Correct choice of articles;
· Correct consultation;
· Correct clarification;
Final consumer
· Selection of textiles according to:
u Appropriateness, not only fashion;
u Ecological acceptability;
u Care treatment;
· Reduce expectations to the feasible
· Wash all textiles worn close to the body beforehand
If the dyes, Chemicals and textile auxiliaries used in wet processing of textiles are chosen properly, recipes are designed conscientiously in the choice and amount of components and the correct technology is used, textiles are neither unacceptable nor hazardous. Hazardous dyestuffs, chemicals and processes are still entirely common elsewhere, since there is still a considerable difference on ecological conscience, in legal regulations and in the state of knowledge, the longer the path of the textiles to the individual market.
Contamination limits or a type of ecological controlling seems necessary, but hardly feasible. The needs of fashion, the market and consumers cannot be met without chemistry. However, an ecologically awareness is possible and necessary for the operating staffs, resulting in reduction in the amount used and selection of products and processes and minimized the cost in effluent treatment.
The obviously again requires compromise, because expectations which have risen too high will be some drawback. Some textile product designer and the market demands, the clothing industry and the trader are not realistic, requires for unreasonable residue- free textiles goods, that is goods should be thorough rinse after final finishing. Although thorough rinse will remove some of the surplus chemicals, but total removal of contaminated chemicals still is cannot be total guarantee.
The path of “gentle chemistry” in the treatment of textiles is not only the concern of textile chemistry and the textiles wet processing industry, it is a task of all the links in the fibres production, textile production, dyestuffs and textile auxiliaries manufactures, marketing and consumer chain. What is to be understood here by the path of gentle chemistry in textile treatment is shown by the way, encompasses all the links in the long chain to the final consumer.
Following its examination in the Textiles Committee on 21 June, the EU Commission will be adopting a Regulation to implement the Memorandum of Understanding agreed between the Commission and China’s Ministry of Commerce, which reflects the outcome of the consultations held with China.
In agreement with the Chinese authorities, a “double checking” will be introduced, according to which EU authorities shall issue import licences upon presentation of a corresponding export authorisation issued by the Chinese authorities (and upon verification of the existence of the necessary quantities). This “double checking” system will be operational from 20 July.
The import of textile and clothing products originating in China to the EU will be subject to the following rules:
Import of products not covered by the MoU (i.e. textile and clothing products other than the ten product categories for which quantitative limits have been agreed): the regime will not change (i.e. import subject to the issuance of surveillance documents), until and unless a decision is made that such import surveillance is discontinued.
Products imported before the entry into force of the Regulation: remains unchanged.
From the entry into force of the Regulation and the products covered by the MoU, imports will be subject to the presentation an import authorisation (licence) requirement. The granting of such licences will be subject to the following rules:
a) Goods shipped before 11 June 2005: they will not be covered by the MoU or subject to any limitations, and import authorisations shall be granted automatically. However, such goods can also be released into free circulation upon presentation of the surveillance documents that may have been issued for them before the entry into force of the Regulation.
b) Goods shipped between 11 June and the date of entry into force of the Regulation: they will be subject to import licensing, that will be granted automatically without limitations. However, such imports shall be counted against the quantitative limits agreed for the rest of 2005.
c) Goods shipped from the entry into force of the Regulation and before the Chinese system of export licensing is operational (20 July): imports will be subject to import licensing (authorisation) and will be counted against the agreed quantitative limits. Import licenses can be denied in case the agreed quantitative limits had been exceeded in the meantime.
Goods shipped from the date when the Chinese export licensing system will be operational (announced for 20 July): import licences shall be issued only upon presentation of a valid export licence and verification of availability.
Europe and China agreed on a limit of 69 million pieces of such clothing through the end of the year, as part of a pact to limit certain Chinese textiles exports to Europe.
Retailers were caught off guard by the cutoff because of the speed at which imports reached the ceiling. On July 11, a month after Europe and China agreed on the limit, the E.U. had given permission to retailers to import 27 million cardigans and pullovers. By July 19, import applications had doubled to 55 million cardigans and pullovers.
The E.U. is now turning down import applications because experts believe the 69 million mark will be hit by goods already on their way to Europe.
That is affecting retailers that have placed orders in China for next season’s fashion without yet having permission from Brussels to import them. Retailers have paid for massive orders in China for the coming season. Now they can’t sell their products. Mail-order businesses can’t deliver the goods they’ve promised in their catalogues.
European import permits for other types of Chinese clothing may also run out in the coming weeks.
The E.U. has placed on its watch list 12 categories of Chinese textile products, including T-shirts, pullovers, men’s trousers and bed linen.
U.S. textile, apparel and fiber producing trade associations announced the filing of four safeguard petitions covering eight categories to limit the growth of U.S. textile and apparel imports from China on Monday, July 11. The industry also announced that it had refiled a petition on curtains on June 22 that the U.S. government rejected for technical reasons on June 21.
Combined U.S. imports in the 10 categories covered by the July 11 announcement totaled $6.4 billion in 2004, with imports from China accounting for $944 million.
The value of the Chinese imports covered by the petitions account for 5.3% of the $17.8 billion in textile and apparel imports from China and 1.05% of the $89.7 billion in imports from the world (including China) in 2004.
In terms of the $196.7 billion in U.S. imports of all goods from China in 2004, these petitions affect only about 0.48% of that trade.
The U.S. Government has 15 days to decide whether to accept the petitions for consideration and at least 90 days after that to decide whether to impose curbs.
“The U.S. textile industry will keep filing petitions until the United States and China reach a comprehensive agreement to moderate the growth of Chinese textile and apparel imports to a reasonable level through the end of 2008,” Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition
Bangladesh Knitwear manufacturers and Exporters Association is demanding the Government to withdraw the ban on yarn import through land port that the government imposed in March 2001 on the plea that it prompts smuggling through false declarations.
The Association also defended theri demand saying that local yarn price remained much higher than the imported one and there was lack of ships to import yarn through sea.
According to the industry insiders, the ban on yarn import through land port contributed to a lot of the growth of the spinning mills in the country as well as reopening many sick spinning mills.
~Yong Kok Swee~
It is still necessary to continue the intensive efforts towards optimisation the activities of both the textile wet processing industries and the textiles chemical industries (includes dyestuffs and textile auxiliaries). The strategies of the textile wet process industry to prevent environmental charge as in the following:
Ø Avoiding surplus;
Ø Minimizing risks;
Ø Cleaning what is polluted – waste water, exhaust air;
Ø Consistent industrial safety;
Ø Environmental hygiene:
It is not possible to do without chemistry but with reduction of charges and dangers in textile chemistry by means of:
Ø Mechanical treatment instead of chemistry;
Ø Biological treatment instead of chemistry;
Ø Increase of protective measure;
Ø Reduction of surpluses;
Ø Disintegration and reduction of auxiliaries range;
Ø Correction of recipe and process;
Ø Examination of old chemicals;
Ø Application of natural substances instead of chemistry.
To reach the target of: reduction of wet process recipes by 50%, and savings of textile auxiliaries 15% to cut cost in effluent treatment.
Nature of Wear and Tear of Textile in Use
Many textiles must reach the requirements of the end user. The dyed and printed textiles must withstand sever exposure to sunlight or to repeated washing. Thus curtains and fabric for outer garments must be fast to light, and fabrics for awnings and deckchairs must withstand sunlight and rain and require high weathering fastness; knitted wool goods should be fast to washing; cotton shirting and handkerchiefs must withstand hot washing conditions, and so on. Dyes chosen for a specific application must therefore take account of the requirements of that application.
Chinese clothing had been trapped on Europe’s docks this summer in the latest dispute over quotas re-imposed on China. Such quotas are scheduled to disappear by 2008. But due to the lengthy dispute over the trapped goods, textile buyers are intensifying their efforts to avoid becoming too reliant on Chinese suppliers.
The ‘Pan EuroMed’ partnership, planned in 2003 by trade ministers qualifies all the countries involved for tariff exemptions. The EU stated that the partnership agreement will be signed soon and will bring down costs by about 5%.
Meanwhile, the countries involved are already increasing their production ties under existing free-trade agreements.
The Mediterranean countries’ textile exports to the EU have been rising steadily, and last year outstripped China’s textile exports to the EU, which now is in danger of being eclipsed.
Turkish knitters, for instance, already import much of their yarn from Italy. Cotton-blend weavers in Portugal, Italy and Spain are expecting orders to come as contracts for dresses and trousers take place in Morocco and Tunisia in the wake of the re-imposed Chinese quotas.
Low-wage workers there and in Turkey, Bulgaria, Romania and Tunisia transform the material into clothes, sew on buttons and package the goods, before selling most of them back to the EU.
The new petitions cover the following products:
Facts on New Safeguard Filings
The combined value of total U.S. imports for the five categories covered by the September 22 announcement for year-to-date 2005 is $1.78 billion, with imports from China accounting for $487 million of that total.
The value of the Chinese imports covered by the petitions amounts to less than 4 percent of the $13.1 billion in textile and apparel imports from China and less than 1 percent of the $50.6 billion in imports from the world (including China) in 2005.
In terms of the $130 billion in total U.S. imports of all goods from China in 2005, these petitions affect only 0.4 percent of that trade.
US Industry leaders have been unwilling to replicate the EU-China deal because it only lasts to 2007, and because it does not adequately address growth levels and the ability of the U.S. industry to apply safeguards on products not included in the agreement.
China’s proposal is still unacceptable to the U.S. textile industry in terms of breadth of coverage and in length (number of years covered). The U.S. textile industry, which has called for a comprehensive textile agreement that would include a wide range of categories, the industry’s ability to utilize safeguard mechanisms on categories not covered by the agreement, and to have the ability to monitor China’s growth.
The United States is seeking to restrain annual growth below 7.5%, China has been seeking at least 12.5%.
The US Trade Act 2005, also known as Tariff Relief Assistance for Developing Economies Act, was tabled in the US Congress on January 26. It promises to provide 14 LDCs of Asia Pacific a duty free market access for 3,677 goods, ranging from ready-made garments to carpet to handicrafts to sugar, olive, milk and plastic products, among others.
Textile and few other items are currently considered import sensitive by the US government and are excluded from duty-free treatment under US Generalized System of Preferences scheme.
The bill argues that the US should grant some trade benefits to these poor countries to sustain their economic growth and political stability.
The Act currently is under discussions at Trade Committee of the House of Representatives and Finance Committee of the Senate.
At the manufacturers’ level, the garment entrepreneurs of 14 LDCs have already agreed to jointly push for the Act through an appointment of a lobbyist. Building a common strategy at manufacturers’ level, they have also committed to bring together the respective governments and mobilize diplomatic missions to voice out for the Act’s ratification. The garment entrepreneurs said that the Rules of Origin conditions may be flexible for the first seven years.
Nepal, Bangladesh, Bhutan, Maldives, Cambodia, Afghanistan, Samoa, Solomon Islands, East Timor, Tuvalu, Vanuatu, Yemen, Kiribati and Laos are the beneficiary countries of the Act.
According to facts disclosed so far, the Act is similar to the African Growth and Opportunity Act and would be effective till 2014. It prescribes specified Rules of Origin conditions for the beneficiary countries to enjoy duty-free entry in the US market.
Malaysia and Pakistan signed the agreement on the Early Harvest Programme (EHP) on 1 October 2005, ahead of the conclusion of its Free Trade Agreement (FTA) which is scheduled by mid-2006.
The EHP is based on the 2004 import statistics and the Most Favoured Nation (MFN) applied tariff rates of Jan 1, 2005 of both countries.
It covers products with MFN tariffs of 10% and below and upon implementation, products with MFN tariffs of five percent will be eliminated and 10% will be accorded a margin of preferences of 50%.
The EHP shall expire upon entry into force of the FTA or March 31, 2007, whichever is earlier.
Pakistan’s EHP offer to Malaysia covers 5.49% of import value (RM146.3 million) involving 125 tariff lines. The products include machinery, mechanical equipment and appliances, plastic products, chemical products, rubber, rubber products and timber products.
Meanwhile, Malaysia’s will waive or reduce duties on 114 Pakistani items covering import value of RM22.7 million or 10.97% of its total import from Pakistan. The products are textile, clothing, agricultural products and jewellery.
MITI said the Interim Rules of Origin (ROO) would be applied to the products covered under the EHP. A 40% local content rule will be applied on the EHP products while product specific rules will be applied to textile, clothing and jewellery. The EHP ROO will be replaced by a new set of rules under the FTA.
In 2004, total trade between Malaysia and Pakistan amounted to RM2.871 billion, heavily in favor of Malaysia. Malaysia’s export to Pakistan was valued at RM2.665 billion while imports from Pakistan amounted to RM206 million.
Malaysia’s major exports to Pakistan are palm oil, margarine and telecommunication equipment. Pakistan’s main exports to Malaysia are fresh, chilled and frozen fish, rice, textile yarn, fabrics and woven cotton fabrics.
The establishment of ASEAN-China FTA (ACFTA) scheduled on 2012 will see progressive elimination of tariffs and non-tariff barriers. For trade in goods, the FTA will be realized by 2010 for ASEAN-6 and China and 2015 for CLMV*.
Duties on all products in the Early Harvest Programme (EHP) will be eliminated on 2006. Flexibility is accorded for products in the sensitive List where duties will be eliminated by 2018 for Asean-6 and China, and 2020 for CLMV. For products in the Highly Sensitive List, tariffs will be reduced to 50% by 2015 for Asean-6 and 2018 for CMLV, after which there will be no further tariff cut commitments.
For textile and apparel items, there will be gradual phase out of duties through 2005-2012. Most items will be duty free by 2010 except some made up articles with 5% duties until 2011.
Full list of tariff schedule on textile and apparel items
* CLMV = Cambodia, Laos, Myanmar & Vietnam
The United States hopes to conclude any possible Free Trade Agreement (FTA) with Malaysia by June 2007, said Assistant US Trade Representative (USTR) for Southeast Asia and Pacific Affairs Barbara Weisel.Figures by the US Census Bureau in July 2005 ranked Malaysia as the 10th largest trading partner of the US with two-way trade totaling nearly US$40 billion during 2004.
The US law, Trade Promotion Authority (TPA), signed by President George W Bush in 2002 was to implement trade agreements that would encourage trade and investment between the US and its trading partners.
Under this authority, the US signed an FTA with Singapore in 2002, a trade and investment framework agreement (TIFA) with Malaysia in May 2004 and is currently in negotiations with Thailand for an FTA in 2006. If Malaysia were to gain the FTA, it would likely receive the FTA before the expiry of the Trade Promotion Authority legislation in the US by June 2007.
During the productive meetings, led by Weisel and secretary general of Malaysia’s Ministry of International Trade and Industry, Datuk Sidek Hassan on 10 October 2005 at KL, the two sides continued their detailed discussion on progress in addressing outstanding bilateral issues as well as co-ordination on regional and multilateral issues. The meeting is the third Malaysia-US joint council on trade and investment meeting under the TIFA.
The wide ranging bilateral agenda covered priority trade issues for both countries, including improving market access in the automotive, financial services and agriculture sectors, strengthening the protection and enforcement of intellectual rights, upgrading customs procedures and addressing investment concerns.
US free trade won the debate in each round, albeit sometimes by only a narrow margin. These successes are providing greater economic opportunity to Americans and allowing the United States to maintain its role as a leader in the international economic community.
Bilateral and Regional Free Trade Agreements
Congress has approved free trade agreements (FTAs) with Israel; Canada and Mexico (NAFTA); Jordan; Singapore; Chile; Australia; and Morocco. Most recently, it approved DR–CAFTA, which includes the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua. The gains to American families and business from these agreements have been significant.
America’s consumers now pay less for groceries and other consumer goods, allowing them to stretch their dollars into additional consumption or savings. U.S. firms have lower operating costs as a result of cheaper imported components for their products and face a brighter investment climate. Consequently, FTAs increase the potential for the creation of better, higher paying American jobs.
The U.S. signed an FTA with Bahrain on September 14, 2004, and recently concluded negotiations with Oman. It is currently negotiating FTAs with Thailand, Panama, and the United Arab Emirates. The U.S. is also pursuing regional agreements with the countries of the Southern African Customs Union, Andean countries, and 34 nations across the Western Hemisphere to create a greater Free Trade Area of the Americas.
FTAs and the WTO
Ideally, free trade should be achieved through multilateral trade negotiations across a large group of countries. However, the pace of such negotiations is slow, and consensus is hard to achieve. FTAs negotiated by smaller groups of countries are the next best thing to promote global trade librealization. .
Free trade agreements between countries can exist in harmony with the WTO. Legally, preferential trade agreements are permitted under the multilateral auspices of the WTO provided that:
Along with the European Union and NAFTA, some 215 FTAs and customs unions are in force. Over 145 regional trade areas have been reported to the WTO since 1995 alone.
FTAs with Small Economies
Finally, free trade agreements can assist developing countries to lock in and implement economic and political reforms effectively, to spur regional integration, and to enhance prospects for investment and economic growth. While some U.S. trade partners may be small now, over time they will mature into larger, more sophisticated markets more closely integrated with the U.S. economy. As these economies develop, they will demand more and more U.S. products. As the data demonstrate, America has experienced growth in exports to all of the countries with which it has formalized free trade agreements.
Thus, a country’s economic might is not the sole reason for attracting America’s interest in forming a closer trade relationship through an FTA. A 2004 General study reported that the process of assessing potential FTA partners is based on six criteria:
The FTA with Bahrain is an important step toward the President’s goal of creating a larger Middle East FTA by 2013. By forging stronger economic ties with U.S. allies in the Middle East, America strengthens its strategic position vis-à-vis countries in this important but turbulent region while promoting economic prosperity and opportunity.
During the Hari Raya holidays, I went for a free and easy tour to Philippines. Prior to departure, I bought air tickets and reserve hotels through internet. In addition, spent several nights browsing the web to gather information of the country including the landmarks, transport, locations, hotels, culture, comments etc. Upon arrival at Philippines, found that hotel rates are at least 60% lower through internet than walk in. Usage of internet and are very common over there.
85% of MKMA members possess an email account. However, some are not active. Mails were not checked resulted in quota exceeding. We urge all members to create a valid email account and use it as an effective as well as an economical means of communication especially with MKMA to receive our regular notices and news. Busy is not a good reason for neglecting important things. We cannot keep relying on telephone contacts and faxes to disseminate news which are not economical and a waste of human resource.
Email is just a basic step into the vast NET world. We are glad that more and more members are using Skype. Through Skype we talk with each other regardless of distance and duration at no extra cost. For those with children study or working abroad, Skype is an effective tool to chat and even to view each other with a webcam installed. Network meeting is another trend of doing business.
For those who were educated or even graduated in the last century, we were not taught on usage of computer and internet. We have to acknowledge our ignorance in this skill and humbly learn from our juniors, staffs or children. Ask and learn step by step to acquire the basic skills and knowledge in order to venture into the world of internet. For the younger generation, never be satisfied with your current computer skills. Adopt a continuous learning attitude so excel in the internet usages.
Once you make a fist step into the Net world, you will be amazed of its effectiveness, greatness, borderless, abundances in all sectors. Just a click, and you can perform duties without stepping out of the office. Globlalisation is realized though internet.