Set up in 1975, the Taiwan Textile Federation (TTF) under the guidance of the government was established to maintain the interests of Taiwan’s textile industry in the European market and represent the government to negotiate with the EU. Justin Huang, Secretary General of Taiwan Textile Federation (TTF), shares his views about the  Taiwan industry and global textile scenario.

How is the Taiwan textile industry positioned?

in 2015, our performance will be better than 2014.  The world economy has three engines: US, Europe, China.  China is slowing down; Europe has not recovered;  the US is getting better. Innovation is our driving force. Sportswear and outer wear brands are using innovative textiles. In the last two years, Taiwan’s textile mills are working hard. They have become upstream suppliers. We are trying to improve the performance of functional fabrics and help clients get better competence in the market. Brands like Nike work closely with our fabric brands. They want better materials.  We have many investors in Southeast Asia especially in Vietnam.

The US is promoting the Trans Pacific Partnership and looking for strategic supplying countries for their market. We can offer total solutions for their products to our clients in the US.  We cater to materials innovation and clothing manufacturing. We expect 2016 to generate a strong demand for innovative winter fabrics.

What’s your global export business?

Last year we did exports worth $11.5 billion.  It was almost the same as 2013.  This year, we should do better at around $11.8. Finished fabrics are 63 per cent of our export value; yarn and filament 18 per cent; fibers 10 per cent and the rest are apparels and accessories.

China is getting into performance fabrics. Do you think this will affect Taiwan’s competence?

The Chinese are smart. Chinese fabric mills are doing similar things. But I think this the right direction for the Chinese textile industry. They need more technology input, more engineers to help them. This will prolong the technology’s value in the market.  They need more designers to design fabrics and apparels.  Right now they need to build up confidence in their clients. If their clients are not happy, they may not get enough business opportunities.  And we are feeling the pressure from China. But it is a free economy.

How do you plan to face the challenge?

We offer similar products at lower prices. But quality is as important as price. The price has to be competitive. We have a strategy for facing the competition, nationwide as well as for industries. We work strategically with international organisations. This will build up textile performance standards. We work with clients to build up a unified code of conduct for product safety and sustainability.

What are the new trends evolving in global business?

Climate change is playing an important role. Earlier the coldest month was January but now it’s shifting to February. Even in the beginning of March, there is snow at many places. This disrupts activities of textile mills. Longer winter means more consumption of our fabrics. So 2016, will see strong demand for innovative winter fabrics.

What do you think of treaties and free trade agreements?

We will focus on niche markets.  We don’t have cotton, wool or linen. Functional chemical fiber is our business. Treaties may influence Taiwan’s textiles but may not takeover our business.

What is your relation with Japan?

We are the first choice for Japanese retailers.  Earlier, they used the Chinese supply chain. Now they use our supply network.

Who is your biggest business partner?

The US followed by China, Japan and Europe. In Europe, Germany is important for us.

How Asean’s the apparel export business growing?

China can benefit by exporting fabrics and textiles to Asean countries. But not many apparel makers export back to China. So China has a trade surplus with Asean. But there may be anti-dumping safeguards.

What’s the major trend in global business?

Textiles should be lighter to keep the body warmer. We focus on the high end market. People are ready to pay for what we have. So we are confident.

Have you associated with any global body for functional or performance textiles?

We have associated with the Japanese, Germans, Dutch, Americans. We are with big chemical companies.  

Due to volatile exchange rates, Thai garment manufacturers are struggling to find new markets in Asia and some countries in Europe, while focusing more on channeling trade in sportswear and uniforms through poorer neighboring countries that still have tariff privileges. The ‘Export Garment Fair’, a three-day event in Bangkok, saw Thai exporters sharing similar views. According to the President of the Thai Garment Manufacturers Association (TGMA), Thavorn Kanokvaleewong, China, countries in Europe outside the euro zone, and Asean markets could fit the bill, since they have high demand and relatively stable currencies. With rising cost of labour, China has to import more garments. Emerging ASEAN countries are also seeing increased demand for garments, and Thailand is one of major suppliers to those countries. Moreover, despite slowing business Japan’s policy of reducing imports from China will brighten Thai garment makers chances.

Thai garment exports this year could face a contraction of 2-5 per cent because of the sluggish global economy. Since Thai garment exporters had relied heavily on traditional markets, mainly the United States and the EU, a contraction was likely. Garment exports declined by 9.4 per cent year on year to $435.43 million. Export to the US declined 7.9 per cent, to the EU by 17.12 per cent, to Japan by 5.29 per cent, to China by 1.7 per cent, and to ASEAN by just 0.08 per cent.

TGMA figures show that the US was Thailand’s major garment export market, with a 35-per cent share, followed by the EU (21 per cent), Japan (15.4 per cent), China (5.4 per cent), and ASEAN (5 per cent). The US and EU shares have dropped continuously over the past five years, while those of China and ASEAN have gone up considerably.

India’s cotton yarn export is estimated to have declined by 15 per cent during 2014-15, with a steep fall in shipments to China, which normally takes 40 per cent of the total. In the first nine months of the financial year (April-December 2014), data compiled by the Union textiles ministry showed a six per cent fall in the export, at 891 million kg as compared to 946 million kg in the same period a year ago. The fall accelerated afterwards. In 2013-14, cotton yarn export was 1,303 million kg.

Falling exports has meant excess supply with spinning companies. Recovery is not expected soon. Domestic and export demand from non-conventional markets must pick up for that. Yarn export to China declined by 20 per cent due to a slow down in textile industry. Exporters have tried to compensate from elsewhere and there has a been a slight rise in yarn exports to Sri Lanka, Bangladesh and Vietnam in recent months. India has signed a $300 million export deal with Vietnam, which includes cotton yarn.

Efforts are on to raise cotton yarn exports to other countries. If one large order clicks, India will be able to achieve last years figures, feels Kiran Soni Gupta, Textile Commissioner, Ministry of Textiles. Import from China has slowed over the past two years, due to shifting of labour from manufacturing industries like textiles to service industries like engineering, for higher remuneration. Import has risen to other countries but the decline in export to China will be difficult to compensate. Hence, the expectation is of a overall decline.

Industry experts estimate yarn export in 2014-15 to fall 15 per cent to 1,150 million kg. With massive buying at the minimum support price by Cotton Corporation of India (CCI), prices of cotton have risen 10 per cent in two months. However, yarn prices are flat. The benchmark 40-comb has been quoted at Rs 218 a kg for a little over three months, with a minor volatility of Rs 1-2 a kg, despite relatively high prices in global markets.

Textile makers' margins are expected to remain under pressure due to elevated cotton prices. Apparel exporters have used the opportunity from lower yarn prices to raise export. This is estimated at $16.75 in 2014-15, as compared to $15 billion a year ago.

Leading exporters of readymade garments in Bangladesh are now eying the domestic market as local consumption of global-class wear holds a great potential. According to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) more than 60 local exporters are now making dresses to cater to domestic market. Data available with the apex trade body in the clothing sector show the domestic market size for apparel products stands at around Tk 200 billion and local brands have less than 10 per cent share. Locally manufactured apparels with no brand value now occupy the most part of the domestic market.

Local makes of clothing are gaining popularity in the domestic fashion industry as the youth is now attracted largely to homespun global-quality products. According to Md Atiqul Islam, President, BGMEA, the domestic market has huge opportunity as there are more than 160 million people living in the country. He further stressed that for local customers’ interest entrepreneurs are expanding their business on the local market.

Local customers used to demand foreign brand clothes some years ago but now they are turning to local brands as the stuffs is better than foreign ones.