Opportunities and Challenges in the Development of Textile Industry in 2014

With the continuous increase in the cost of raw materials and labor in China, in recent years, some European and American manufacturers have begun to find more price-advantageous destinations in markets other than China, and have attempted to discover the “next China”. From Africa to the Americas, from Myanmar to Bangladesh, the industry’s discussion of the next procurement hotspot seems to have never stopped. It is foreseeable that in 2014, the manufacturing shift driven by production factors will continue to surge, and Southeast Asian countries will continue to be the protagonists of the topic with their low labor cost advantage.

Judging from the reality, the rise of Southeast Asian countries has indeed promoted the continuous evolution of the global economic and trade pattern, and even affected the rebalancing of the relationship between the manufacturing and market of the textile industry. Under this background, understand the opportunities and challenges that the textile and garment industry in these countries will face in the new year, and explore feasible cooperation modes and development space such as investment production and marketing, which will promote mutual benefit between China and other Southeast Asian countries. Winning multilateral trade relations are of great significance.

Opportunities and Challenges The Indian textile and apparel industry is the most important manufacturing industry in India, accounting for about 12% of the total manufacturing industry in the country. According to India's 12th Five-Year Plan, from 2012 to 2017, the total planned investment in India's textile and clothing industry will increase by $29.5 billion and direct employment will increase by 3 million.

End-user warming India's retail market is still underdeveloped, but for the apparel and textile industry, this situation is changing. Indian consumers will use about 9% of their household budget for clothing, and 70% of consumers say they like to buy clothing. In all major product categories, the men's clothing market is showing a rapid growth and its compound annual growth rate will reach 9%. In 2014, the Indian menswear market is expected to reach 16.4 billion U.S. dollars. In addition, the country's luxury goods market will also show a rapid growth trend, achieving sales of $10 billion in 2014.

Online marketing mechanism is not perfect In 2013, the global apparel industry recognized the importance of e-commerce and social networking sites. However, in India, online sales data for apparel products have remained flat. Mehta, a creative lifestyle company, said that the development of e-commerce in India will face a series of challenges. Indian consumers are still highly vigilant against cyber fraud and crime. Therefore, the sales of the website will not increase significantly. In the new year, Indian apparel companies need to rely on a standardized platform to make gold in the online marketing market.

Vietnam In Vietnam, the textile industry has provided employment opportunities for 2.2 million people across the country. The per capita monthly income of employees is close to 5 million VND. Thanks to the professionalization and modernization of production equipment and the influx of foreign investors, the textile and garment industry has become Vietnam’s largest economic industry, with a total of 4,000 companies and an annual turnover of US$20 billion, equivalent to Vietnam. 15% of GDP.

The TPP Agreement to Advance the Development Opportunities in Vietnam's Textile Industry is inextricably linked to the Trans-Pacific Partnership (TPP). According to the current growth rate, Vietnam’s textile and apparel exports to the United States will reach US$13 billion by 2020. However, with the implementation of TPP, the export value by 2020 may actually reach 22 billion US dollars. This means adding millions of jobs. TPP is considered not only to bring economic benefits, but also to bring social benefits.

Supply of raw materials and accessories is difficult to satisfy Vietnam's domestic production of raw and auxiliary materials can only meet 30% of the textile industry's production needs, so it is difficult to increase the trade surplus of the industry. Taking fabric imports as an example, Vietnam's apparel export processing industry needs 6.8 billion meters of various fabrics each year, and its domestic production is only 800 million meters. It is based on ordinary fabrics, and most of the medium and high-grade fabrics rely heavily on imports. Although the industry's self-sufficiency rate has increased by 3 to 5 percentage points year-on-year, reaching 49% in 2012, it is still far below 90% in India and 95% in China.

Indonesia United States is the main exporter of Indonesian textiles and clothing. As the U.S. economy gradually recovers, its demand for Indonesian textile products will also increase. In addition to the United States, the Southeast Asian market has not been severely affected by the global financial crisis and is therefore also a potential market for Indonesian textile products.

Import restrictions on cotton fabrics were removed In June 2014, the Ministry of Trade of Indonesia will remove the restrictions on the import of cotton fabrics, which will promote the overall development of the Indonesian textile industry and create more investment opportunities. Cotton fabrics, especially White Fabrics, are indispensable for Indonesia's textile and apparel industry. Relevant restrictive policies have been implemented since May 1, 2012, and have stipulated that the tariff on imported cotton fabrics should be raised from 2.5% to 7.5%, which is a great challenge to Indonesian textile and clothing industries.

Low sales in the domestic market With Indonesia's minimum wage and energy prices rising, textile prices in the domestic market have risen, and sales in the domestic market have been sluggish. Sales in 2013 are expected to decline by 10% from 2012. These rising production factors include electricity bills and wages. The Indonesian Textile Association pointed out that in the coming period, rising production costs will continue to weaken the competitiveness of Indonesian textiles in the domestic and international markets.

Pakistani textile industry is a pillar industry of Pakistan's exports, accounting for 55% of its total exports, and provides 39% of industrial jobs. In fiscal year 2012~2013, Pakistan’s textile exports accounted for 53% of its total exports.

Obtaining the EU Generalized System Plus Status On December 12, 2013, the EU Parliament voted to approve the GSP+ status of Pakistan. According to the resolution, since January 1, 2014, more than 600 kinds of textiles in Pakistan will be duty-free access to the market of 27 EU member states, and the total value of tax-free products will exceed US$1 billion. Industry insiders pointed out that the plan will hopefully greatly promote Pakistan’s exports to Europe, especially textiles and clothing.

Energy supply is still tight Since 2013, the supply of natural gas to the textile industry in Pakistan's Punjab province has become increasingly tight, and tighter energy sources have led to the closure of more than 30% of companies. Some companies are facing problems of layoffs and cancellation of export orders. Severe power and natural gas supplies have caused a significant drop in capacity in the textile industry in Punjab Province, causing huge economic losses. It is estimated that the province’s average daily loss is US$25 million. Although the Pakistani Ministry of Energy has introduced a solution, it still cannot guarantee the normal energy supply of all factories.

Cambodia has benefited from relatively low labor costs and favorable policies for exporting to the United States. In the past two years, Cambodia’s garment industry has seen a significant increase in its export volume, and the ability of the industry to attract foreign investment has also continued to increase. In 2012, Cambodia exported 1.217 billion U.S. dollars to EU clothing, which was a year-on-year increase of 32.4%. It ranked ninth among the EU's major apparel suppliers. In the same year, U.S. apparel exports reached US$ 2.534 billion, ranking seventh among its major suppliers. .

The ability to attract foreign investment has continued to improve for the past two years. Cambodia has attracted more and more foreign investors' attention because of its labor costs and preferential export treatment. According to the situation of foreign capital introduction, according to the statistics of the Cambodia Development Council (CDC), in 2012, US$499 million was approved for the construction of 82 garment factories in Cambodia. In February 2013, the British Trade and Investment Agency opened an office at the British Embassy in Phnom Penh to assist British companies in their trade in Cambodia.

The fact that wage disputes are frequently in contradiction with the increase in exports is that the effect of the standard processing of workers on garments has been deteriorating, causing more and more workers to become **. According to the statistics of the Cambodian Garment Manufacturers Association (GMAC), from January to July 2013, there were a total of 83 incidents in the apparel industry, and this situation continues. The Singapore factory SL's factory in Cambodia has been turbulent since August. The factory has now dismissed 720 workers and another 5,000 workers are suspended. Ath Thron, the Cambodian union of garment workers, said that wages need to be guaranteed. The interests of workers are the starting point. The current minimum monthly salary has risen to 80 US dollars, but such salary levels are still far below workers' expectations. Under this situation, the salary of Cambodian garment workers in 2014 is expected to continue to rise.

There are 5,000 textile and garment factories and 4 million textile workers in Bangladesh Bangladesh. The garment industry has created 19 billion U.S. dollars in exports each year, accounting for 80% of the country's total exports. Among them, the EU is an important export market for Bangladesh.

Cotton self-sufficiency rate may increase Currently, Bangladesh's self-produced cotton can only meet the country's 2%~3% cotton demand. According to reports, agricultural experts are developing a new type of cotton. This new type of cotton fiber has a length of 25 to 30 millimeters. The fiber is uniform in quality and easy to dye. According to the Bangladesh Textile Association, Meng currently needs to import 4 million bales each year, and each bale of about 400 pounds of cotton is used for textiles. Latif, a member of the Bangladesh Cotton Development Committee, said that Meng had planted 12 cotton varieties since the founding of the People's Republic of China. At present, this new breed has the highest yield and highest quality in history. If the cotton planting area of ​​this species can reach 2 million hectares, In 2021, it can meet domestic demand for 50% of cotton.

Production safety falls into a crisis of confidence On April 24, 2013, an 8-storey commercial building in the town of Sawar, a suburb of Dhaka, the capital of Bangladesh, suddenly collapsed. There are hundreds of shops, several garment factories and a bank in the building. According to the China News Agency on May 6, 622 people were killed in the accident and more than 2,500 people were injured. This is the worst collapse of a state-owned building in Bangladesh. After the incident, the UN’s International Labour Organization officials urged Bangladesh to strengthen supervision and close the garment factories that lack safe production conditions. The European Union said that they are considering appropriate actions, including through the GSP policy, restricting Bangladesh's duty-free and quota-free garment exports to the EU, in order to promote the garment industry in Bangladesh to improve its production environment.

Strategy and Layout Malaysia Focuses on Printing, Dyeing and Finishing Technology In the coming period, the Malaysian textile and apparel industry will focus on three key areas: the high value-added fashion garment industry; the upgrading of printing and dyeing and finishing technologies; and the study of industrial textiles with a view to Maintain industry advantage in low-cost competition with other Asian countries. Among them, the improvement of printing and dyeing technology is considered by the Malaysian industry as the cornerstone of the development of the textile industry. At present, more and more professionals in Malaysia are engaged in the printing and dyeing industry. There is ample labor force in this area to upgrade the industry. In addition, the Malaysian government is working hard to promote consumer awareness of the batik process and let people know that batik garments are not only wearable garments suitable for the elderly, young people can also wear it, in an effort to realize batik garments among young people. Popularize.

In Myanmar, the establishment of a centralized production industrial park will be a new year. The objective factors such as the environmental turmoil in the rural areas in Myanmar and the backwardness of industrial supporting facilities will still restrict the development of the industry. The main reason for the weak competitiveness of Myanmar garment manufacturing industry in the global market is that production facilities still lag behind Vietnam, Cambodia and Bangladesh. In order to solve this problem, the Myanmar government began to plan the rapid follow-up service for exporting textiles and garments and strengthen the construction of supporting facilities. It is understood that the Myanmar Foreign Investment Committee will set up an industrial park in Daxie Township, south of Yangon. For foreign investors in Myanmar, the park will provide one-stop service. Concentration of the administrative services required to open a factory, such as obtaining ownership permits.

Sri Lanka focuses on China's high-end consumer market In 2014, Sri Lanka's garment manufacturers have their eyes locked on China's high-end consumer market. According to the plan of the Sri Lanka Garment Association, the goal of the garment industry in Sri Lanka is to achieve an annual export volume of 5 billion U.S. dollars by 2016. In recent years, the clothing industry in Sri Lanka has gradually changed its direction of development. The country has significantly reduced its supply to the low-end market. Sri Lankan industry insiders believe that the new opportunity for the Chinese market comes from the expansion of high-consumption consumers. In order to open up this part of the market, Sri Lankan textile companies either directly become manufacturers of high-end brands in China, or in their customer base, look for international brands that have penetrated into the Chinese market and use their channels to deepen market development.

Thailand Consolidates ASEAN Fashion Center Status In 2013, Thailand's retail market sales are expected to reach US$52 billion, an increase of 15% to 20% over the same period of last year. New investments in the retail sector will come from local brands and international brands. In 2014, Thailand's textile and clothing industry will focus on developing into a fashion center in the ASEAN region. By strengthening infrastructure construction and training of design talents, Thailand's position in the distribution center in ASEAN will be further consolidated. Thailand’s major export markets in Asia include China, South Korea and Japan. At present, exports to these countries account for about half of Thai textile and apparel exports. Among them, exports to ASEAN account for 23%-24% of its total exports, and exports to China account for 12%.