Thailand: textile industry 'needs supply chain'

textile industry 'needs supply chain'
By Petchanet Pratruangkrai
The Nation
Published on April 2, 2009


Thai garment

Thai garment and textile manufacturers must create a supply chain for the survival of the industry amid high competitiveness in the global market and slowing export growth.


Speaking at a seminar entitled "Winning the War under New Game Rules" organised by the Thai Garment Manufacturers Association (TGMA), participants shared the view that Thai manufacturers must integrate to ensure the industry's survival amid the global economic downturn.


David Birnbaum, a garment-industry expert with the World Bank, the United Nations and the World Trade Organisation, said the present crisis had decreased consumer demand for clothes by seven times from precrisis levels.


A TGMA report said garment and textile exports in the first two months of the year dropped 13.72 per cent year on year to just over US$1 billion (Bt35.52 billion). Garment exports fell 7.3 per cent to $532.2 million, while textile exports decreased 19.92 per cent year on year to $474.04 million.


To ensure the industry's survival, he suggested garment and textile manufacturers focus on seeking specific customer and importer demand through the creation of a supply chain with related industries, in order to produce high-quality goods at lower cost.


"Manufacturers should select factories that actually do the work rather than produce all items, because of better-quality production and lower costs," said Birnbaum.


Thai Weaving Industry Association president Somsak Srisuponvanit said all relevant businesses - spinning, knitting, weaving, bleaching, designing garment manufacturing - must group together to take orders and cooperate on producing goods that serve customer demand.


He said the Thai weaving industry faced high competition from neighbouring countries. One strategy to survive is to cooperate with related industries in taking orders and exporting as a whole package.


Also, the industry is trying to add high value to textile production, in order to avoid competitiveness with low-quality products in low-end markets.


RJ Gurley, director of the Asean Competitiveness Enhancement Project, said Asean members were highly efficient in cooperating with each other to develop the garment and textile industry into a major world supplier.


The project is aimed at doubling the value of exports of lightweight fabric among Asean countries from $17 million in 2007 to $34 million in the next five years.


TGMA director Patcharawan Boonnamsap said Japanese garment and textile factories were surviving the global economic slowdown because they had created a supply chain among related industries.


Cooperation among each manufacturer in related industries have lowered production costs for enterprises and helped related businesses survive, she said.