29 March 2024 | 04:48 am GMT +7
  • Home
  • Contact Us
    • Textiles and Apparels

      Where to invest?

      Textile and Apparels
      Clothing the world

      Towards stronger ASEAN vertical integration

      The ASEAN Economic Community’s (AEC) implementation of a “single-window” common market system by 2015 has pushed the countries in the region to innovate and forge more partnerships with like-minded investors to create a vertical production network for the textiles industry. An integrated regional production network allows each country to focus on specific components, creating one ASEAN supply chain. Vertical integration means less competition among countries as the markets work towards harmonized production.

      The ASEAN Federation of Textile Industries (AFTEX), a group of textile and garment associations of the 10 ASEAN member countries, has launched the Source ASEAN Full Service Alliance (SAFSA). SAFSA works on linking ASEAN apparel factories to create a virtual vertical supply chain between buyers, textile mills, and apparel factories, enabling businesses to offer a complete service package to international buyers.

      SAFSA has 45 members trading among themselves including 27 buyers with over US$ 50 billion in annual apparel sales. Some of the major brands that are SAFSA customers are the Benetton Group, Colombia Sportswear Company, Debenhams, Guess, Marks & Spencer, Polo Ralph Lauren, and Hermes-OTTO.

      ASEAN-wide exports 

      Textile is one of the largest export products from ASEAN, amounting to almost US$ 10 billion in 2011.

      Several ASEAN member states are benefiting from the industry’s export growth. In the first quarter of 2013 alone, Viet Nam’s garments and textiles exports have reached US$ 3.7 billion or a year-on-year rise of 18.3 percent. The country’s largest importer has been the ASEAN market itself, which contributed US$ 111.4 million to Viet Nam’s exports, a 44.4 percent year-on-year increase. This increase in inter-region trade of goods foreshadows the importance of ASEAN not just as an exporter but also as a market.

      Lao PDR has also improved their game attracting orders from investors who used to import from China. Comparing the years 2011 and 2012, Lao’s export to Canada and Japan increased by 34% and 60%, respectively.

      Thailand has around 4,500 textile and apparel factories employing almost a million workers. These factories range from man-made fiber plants, spinning and weaving, to dyeing and printing. Some of these are involved in ASEAN’s integrated supply chain such as Bangkok Weaving Mills Groups which delivers pre-dyed fabrics by road to Cambodia, where another factory cuts and sews them for Benetton.

      Establishing global standards

      Global Language Monitor 2011 ranked Singapore as the 8th fashion capital in the world, and 2nd in Asia, next only to Hong Kong. Singapore has become increasingly attractive to a rising number of inbound tourists for the variety of high-end international brands that can be purchased in the country. As Asian consumers become more affluent, Singapore engages in efforts to maintain its foothold as a fashion capital through events like the Audi Fashion Festival and the Asia Fashion Summit.

      The shift towards creating a vertically integrated supply chain has attracted DuPont Imaging Technologies and Huntsman Textile Effects, which manufacture specialist chemicals and dyes for finished textiles to open centers in Singapore.

      Meanwhile, Cambodia has established itself as a credible producer. The United Nations’ International Labor Organization independently monitors and reports on working conditions in the Cambodian textile factories according to local and international standards, which encourages companies like Levi’s, Gap, Sears, Wal-Mart, and Disney to choose Cambodia as their manufacturing hub.

      Cambodia has around over 300 garment factories. AFTEX data shows Cambodia opens one textile factory per week. Its textile industry employs around 280,000 workers and accounts for 85% of Cambodia’s total exports. The US and Europe absorbs the largest chunks of its exports at 66% and 22%, respectively.


      References include the ASEAN Federation of Textile Industries and Investing in ASEAN by Allurentis.  

    << PREVIOUS NEXT >>
  • Opportunities abound in the textile and apparel industry as ASEAN pushes for stronger integration. Countries in ASEAN can address every link in the complex supply chain of textiles and apparels. Some countries offer cost-competitive operations. Other countries excel in yarn production, fabric dyeing, and finishing while others focus on logistics, design, and marketing.

    SUCCESS STORIES

    AirAsia

    AirAsia

    AirAsia was launched in 2001 with the dream of making flying possible for everyone. Since then, AirAsia has swiftly risen to become the world’s best...

    > READ MORE