Sector expects 10% growth next year

The Thai textile and garment industry is expected to grow at least 10% next year with reduced exports from China, its main competitor, said Dej Pathanasethpong, president of the Thai Garment Manufacturers Association.
China's textile and garment shipments are expected to grow only 1% this year, down from 20% annual growth from 2002 to 2008, as Chinese manufacturers focus more on domestic consumers to capitalise on China's growing economy and economic stimulus measures, he said.

The world's garment industry is estimated to be worth about $700 billion this year, with the US and EU representing 55%. Asia supplies between 75% and 78% of the world's demand - 35% from China, 20% from Asean, and 17-18% from India and South Asia.
Exports to the EU are also expected to increase next year, as the region's textile and garment factories have started relocating investment to Asia to obtain lower production costs, said Mr Dej.

He expects European firms to invest more in textiles and garments in Thailand next year, as several EU investors have consulted the Board of Investment about Thailand's investment privileges.

Japan will also offer a promising market next year, as Japanese importers are now buying from Asean instead of China to get higher-quality products and benefit from tax privileges, especially under the Japan-Thailand Economic Partnership Agreement (JTEPA), he said.
The free trade agreement between Asean and China, which takes effect in 2010, will also improve Thai garment exports.

The FTA, which was signed in 2004 and will come into effect on Jan 1 2010, will gradually reduce import duties on products including textiles and garments, footwear and leather products, ceramics, food and beverages, iron and steel products, petrochemicals and electronics.

Thai textile and garment exports will shrink by 10% this year - to US$7.22 billion from $7.5 billion last year - mainly due to the world recession, he said.

The US is currently the largest market for Thai textile and garment exports, providing 45.6% of the market, followed by the EU at 30%, Japan at 6% and Asean at 2.4%.

In the first eight months of this year, exports of garments were valued at about $4.2 billion, down 14.65% from the same period last year.
But Mr Dej sees a labour shortage as a major challenge for the industry, which employs 400,000 people, as recent increases in the prices of agricultural products have made workers shift from the garment sector to farming.

"Right now, we have a shortage of 30,000 people in the industry, and it should definitely increase next year," he said. "The labour shortages may prompt the industry to relocate investments to other countries in Asean with cheaper labour for producing exported goods."

Source: bangkokpost.com
Date   : 20-Oct-09