The textile industry, often described by some experts as a “sunset industry,” began to lose its sheen decades ago following rising costs and fierce competition from China, Bangladesh and Vietnam.
But the ongoing US-China trade war has prompted some western buyers to look for alternative source, and this is where Malaysia can take advantage of the situation.
Hopes of reviving the industry in Malaysia — and other South-east Asian suppliers of home-textiles and other textile products — were visible at Frankfurt’s just-concluded four-day Heimtextil Trade Fair, the world’s largest event for home textiles and accessories.
While an abrupt switch by buyers representing the US and other western importing companies and houses to other supplying countries is not expected, the ongoing dispute between the two economic giants has caused what traders at the Frankfurt show call a “gentle panic.”
“I am pretty sure buyers in the US and elsewhere are aware of the perils of asymmetrical dependency on China as a source of textile products, coupled with the many problems which foreign importers face in that country, particularly in regard to quality and post-sales service, among others.
“Prices of Chinese products have also risen, no thanks to the soaring labour and production costs in that country. So, the ongoing trade war could, in fact, be the proverbial straw that will break the camel’s back,” said one US buyer who preferred to remain anonymous to Bernama at the Heimtextil show.
He said Malaysia could step in to fill the vacuum if US companies decide to quit China, adding Malaysia’s textile quality is definitely a plus, despite prices being slightly higher.
Meanwhile, Malaysian exhibitors offered testimony of the changing scenario in the home-textile trade.
Fernex Sdn Bhd’s marketing director Lee Kheang Lim said the company received many solid business enquiries from both existing and potential new buyers from around the world, including the US.
Wendy Tan, managing director of Nature World Manufacturing Sdn Bhd said the company, which manufactures home textile products, also received numerous enquiries.
“While our buyers have shown a keen interest in our Bio-Active Energy-based products, the increase in the number of enquiries may possibly be due to the ongoing trade war, with buyers trying to establish alternative sources of supply,” she said.
Organised by Messe Frankfurt, the Heimtextil show from January 7-10 boasted 3,025 exhibitors from 65 countries.
Olaf Schmidt, Messe Frankfurt vice-president of textiles and textile technologies said the number of US buyers at the show had increased, implying that the country was exploring opportunities in the international market.
“All the big US stores are here. There is, clearly, a shift to other countries and because of the emotional character of the ongoing problem, we should know in about six months from now what will happen,” he added.
However, he was unsure if other suppliers can quickly replace China as the world’s biggest textile supplier with its huge textile-manufacturing infrastructure.
Schmidt was upbeat about the Asean region’s potential, with Vietnam, Malaysia, Indonesia and Bangladesh expected to become key players in the global textile supply chain.
“I also believe fierce international competition will force suppliers to upgrade their production processes, adopt automation and devising faster and convenient modes of supplies. Technological innovation is the mantra of the industry’s future,” he said.
The textile exhibition saw participation from Asean exhibitors, including eight exhibitors from Indonesia, three from Malaysia, three from Thailand and eight from Vietnam.
The top two textile giants, China and India, had 559 and 394 exhibitors respectively, surpassing the host country Germany at 301.
According to the Malaysian trade commissioner in Frankfurt, Badrul Hisham Hilal, Malaysia’s total exports of textiles, apparel and footwear amounted RM13.69 billion in the January-November 2018 period.
The US is the biggest market for such products, accounting for RM1.78 billion (13 per cent) of total exports. ― Bernama
Source: The Malay Mail Online