STATEMENT FROM THE DELEGATION OF TAIWAN AT THE 71 st PLENARY MEETING OF THE INTERNATIONAL COTTON ADVISORY COMMITTEE

Transcription

1 STATEMENT FROM THE DELEGATION OF TAIWAN AT THE 71 st PLENARY MEETING OF THE INTERNATIONAL COTTON ADVISORY COMMITTEE Overview Following the liberalization of the global textile market in 2005, textile production has shifted substantially to emerging economies. The lifting of textile quotas as part of the Uruguay Round outcomes also spurred rapid growth in textile and apparel trade. According to the World Trade Organization (WTO), global exports of textiles and apparels grew at an annual average rate of 7.1% and 8.0%, respectively, from 2001 to Growth of Textiles and Apparels Exports (US$ billion) Product Year 2001 Year 2005 Year 2010 Growth of Value Growth Rate Avg. Annual Growth Rate ( ) Textiles % 7.1% Apparel % 8.0% Total % 7.6% Source: WTO Export Value of Textiles and Apparel (US$ billion) Source: WTO 1

2 Functional textiles and eco-friendly textiles categories have both gained in demand in the clothing and household textiles markets. In recent years, the cotton-spinning industry has focused its R&D on improving manufacturing processes, thereby achieving equipment automation and production efficiencies. Taiwan's textile producers are successfully combining the advantages of natural and chemical fibers, with the aim of developing new high-performance, functional and high value-added products that meet consumer demands. Organic cotton has also attracted investment interest as the textile and apparel industries seek more ecologically sustainable operations. For example, several cotton-spinning mills in Taiwan have joined together to produce organic cotton textiles. The production processes used by these companies have been organic-certified, and their organic products have been successfully commercialized. It is expected that textiles using organic cotton and eco-friendly fibers will become important export items for Taiwan in the future. Taiwan s textile industry is also considering ways to develop more eco-friendly functional textiles. This combination of advanced functionality and environmental sensitivity is making the industry even more competitive and socially responsible. Background on Taiwan s Textile Industry Textiles: Taiwan s fourth-largest trade surplus industry Over the years, Taiwan s textile industry has steadily upgraded its operations from processing imported raw materials and exporting finished goods, to developing synthetic yarns and using imported raw cotton yarn and man-made staple yarns. Over this period, Taiwan s industry has also become more vertically integrated. Since the 1950s, Taiwan s textile industry has steadily invested in new machinery and has developed innovative products to meet changing global 2

3 market demands. These efforts have positioned Taiwan as a major supplier of textile products to the world. In 2011, Taiwan had 4,303 textile manufacturers and related companies employing a total of 147,121 people. In 2011, their production reached NT$500.8 billion (US$17.0 billion) in value. That same year, the gross export and import values for Taiwan s textiles and apparel were US$12.72 billion and US$3.57 billion, respectively. Also, Taiwan s textile industry recorded a total trade surplus of US$9.15 billion, making it the fourth-largest sector to accrue a lucrative surplus. Taiwan is one of the world s major suppliers of high-quality man-made fabrics. Taiwan s textile industry is heavily export-oriented. In the past decade, for instance, the export value of Taiwan textiles and apparel accounted for more than 70% of Taiwan s total textile production value. At the same time, the textile industry has been shrinking over the same period. The production value of textiles in Taiwan was NT$500.8 billion (US$17.0 billion) in 2011, down 3.6% from NT$519.5 billion (US$15.03 billion) in Between 2002 and 2011, the sector lost 826 manufacturers, a decline of 16.1%. During the same period, employment in the textile industry fell from 197,562 to 141,121, representing a 25.5% drop. The average production value per person increased to NT$3.4 million in 2010 from NT$2.63 million in Year Taiwan s Textile Production Value, Manufacturers and Employees Change % Change % Change % Production Value (NT$ billion) Current Manufacturers Employees Textiles % 3,804 3, % 146, , % Apparels % 1,325 1, % 50,866 30, % Total % 5,129 4, % 197, , % Source: Department of Statistics, MOEA. (The annual average exchange rate was USD1:NT$ in 2011, and USD1:NT$ in 2002.) 3

4 Background on the Cotton Spinning Industry in Taiwan Raw Cotton Imports Taiwan depends on imports for all of its raw cotton needs. Imports of raw cotton in 2010 amounted to 243,186 tons, with a value of US$ 429 million. However, in 2011, cotton imports fell to 209,965 tons, while the value increased to US$ 568 million. The decrease of 13.7% in weight was somewhat offset by the 32.5% increase in value from the previous year. The United States was the largest supplier of raw cotton to Taiwan in 2011, providing 33% of the total imports by value, followed by India (17%) and Brazil (14%). Spinning Equipment The number of operating spindles in Taiwan has shrunk to under two million since reaching its peak of 4.5 million in Estimates put the number of ring spinning machine spindles currently in operation island-wide at 1,269,898, and that of open-end spinning machine spindles at 57,844. The Status of Installation & Operating Spindles in Taiwan between Year Equipment Installation Change from previous year(%) operation Change from previous year(%) operation / Installation (%) Ring 1,786, % 1,491, % 83.52% Open-end 72, % 67, % 92.45% JS 3, % 3, % 97.53% Acrylic ring 62, % 56, % 89.87% Ring 1,623, % 1,486, % 91.59% Open-end 69, % 69, % 99.69% JS 3, % 3, % 94.31% Acrylic ring 55, % 46, % 82.84% Ring 1,590, % 1,450, % 91.21% Open-end 76, % 73, % 95.50% JS 3, % 3, % 94.31% Acrylic ring 33, % 18, % 54.43%

5 Ring 1,540, % 1,339, % 86.95% Open-end 70, % 62, % 89.36% JS 3, % 2, % 79.14% Acrylic ring 16, % 16, % % Ring 1,358, % 1,259, % 92.69% Open-end 68, % 65, % 94.90% JS 3, % 2, % 76.05% Acrylic ring 15, % 13, % 91.43% Ring 1,399, % 1,269, % 90.74% Open-end 59, % 57, % 97.65% JS 3, % 2, % 77.50% Acrylic ring 14, % 14, % % Source: Taiwan Spinners Association, July, Analysis of Cotton Yarn Production and Sales The production of cotton yarn (excluding CVC yarn) was 882,361 bales in 2010, an increase of 6.6% from Domestic sales accounted for 465,785 bales of the total, down 2.04% from 2009, while the export volume rose to 431,872 bales, up 3.79% from Ending inventories were 45,874 bales, a decrease of 18.8% over Year Taiwan Cotton Yarn Production and Sales (unit: bales) Annual 5 Domestic Sales Export Volume Ending Inventory ,220, , , , ,194, , ,369 69, ,104, , ,925 84, , , , , , , ,105 56, , , ,872 45,874 Source: Taiwan Spinners Association; Note: 1 bale=400 pounds=181kg The total production of spun yarn was 2,115,778 bales in 2010, an increase of 19.1% from Domestic sales of spun yarn accounted for 1,419,721 bales, up 10.4%, and the export volume thereof increased to 753,327 bales, up 13.8%.

6 Ending inventories for the year were 166,951 bales, a decrease of 17.4% over Production and Sales of Spun Yarn Unit: Bales Product Year Production 1.Cotton (incl. CVC blended yarn) 2.Man-made fiber yarn Total Domestic Sales (incl. for Self-use) Export Volume Ending Inventory ,743,099 1,256, , , ,670,621 1,034, , , ,592,731 1,060, , , ,424, , , , ,126, , ,791 84, ,349, , ,602 79, ,580,463 1,316, , , , , , , ,004, , , , , , , , , , , , , , ,725 87, ,323,562 2,572, , , ,574,447 1,812, , , ,597,654 1,821, , , ,368,327 1,551, , , ,776,226 1,285, , , ,115,778 1,419, , ,951 Source: Taiwan Spinners Association; Note: 1 bale=400 pounds=181kg Analysis of Cotton Yarn Trade The export volume of cotton yarn was 103,385 tons in 2011, down 13.8% from the 119,897 tons shipped in During the same period, the value of exports increased 19.4% to US$369 million. The import volume and value of cotton yarn for this period were 24,382 tons, down 21.7%, and US$113 million, up 9.7%, respectively. 6

7 The Export & Import of Cotton Yarn in 2011 Volume (thousand tons) Change % Value (million USD) Change % Unit price (USD/KG) Change % export import Source: Taiwan Customs Service Shaping Sustainability in the Cotton Value Chain The Situation of "Sustainability" in Taiwan in Recent Years As the global environment continues to deteriorate, consumers worldwide are becoming more and more eco-savvy and governments in a number of countries have begun to implement environmental regulations and standards. When environmental regulations and market demand coincide, brands and retailers adopt a positive response to green sourcing policies and are willing to set mandatory guidelines for their suppliers. Such a shift in trade symbolizes the advent of the eco-economy. The 2010 sustainable textiles global market report of Textile Exchange pointed out that many brands and retailers have doubled the use of organic cotton. Textile Exchange forecasts that the global organic cotton market will grow by 20%, to US$6.2 billion, in 2011, and further to US$7.4 billion in The organic textile market has gradually taken shape in Taiwan after years of promotion. Organic cotton production in Taiwan has a long history. The year 2008 marked a milestone, when the Organic Cotton Pavilion was established as part of the Taipei Innovative Textile Application Show (TITAS). Companies having their organic cotton products certified, such as Far Eastern New Century Corporation, Formosa Taffeta Co., Ltd., Tai Yuen Textile Co., Ltd., Eclat Textile 7

8 Co., Ltd., and Chia Her Industrial Co., Ltd., as well as organic certification bodies, such as the Institute for Marketecology (IMO) and Control Union, were invited to showcase their organic products and services. In subsequent years, organic cotton was promoted in a special area of the TITAS show each year, and companies which produce organic cotton products participated in the promotion. After many years of effort, the organic cotton market is expanding and organic cotton products are gradually being accepted by consumers, and thus attracting more investment than might ordinarily be expected. The Role of Taiwan Government in Facilitating "Sustainability" of the Sector Taiwan has implemented the VPC (Voluntary Product Certification) for organic textiles. In recent years, the importance of sustainability in economic and development work is widely recognized internationally. The innovation of manufacturing products to meet ecology demands as well as environmental protection goals is the trend in both the textile and apparel industries. The government has been requested by consumer groups to establish an organic certification mechanism as a way to manage production of organic textile products. The range of materials included in the certification system includes organic cotton, organic wool, organic hemp, organic silk and organic leather. The products cover yarn, fabrics, clothing and household textiles categories. The validation process includes product testing and factory inspection, and is divided into four grades: (A) The first level: the product contains more than 95% organic material or organic transition material. (B) The second level: the product contains more than 70% organic material or organic transition material. (C) The third level: the product contains more than 45% organic material or organic transition material. 8

9 (D) The fourth level: the product contains more than 5% organic material or organic transition material. Conclusion Taiwan s textile industry is utilizing novel technology to produce high value-added and top quality products. In doing so, we not only raise the high-quality image of Taiwan textile products, but we also widen Taiwan s competitive lead over neighboring countries. Taiwan s textile industry is trying to develop all kinds of high value-added materials as a means of creating product differentiation. Facing the twin effects of over-supply and higher energy prices, the industry acts prudently by concentrating its innovation efforts on developing functional applications, including promoting the use of eco-fibers, as well as developing attractive, high-quality products. With the aim of assisting Taiwan s textile industry to upgrade and transform, our government has screened the mid-term textile strategy of 2020 with the goal of increasing the value of production to NT$600 billion in 2020 from NT$482.3 billion in 2010 by structural adjustment. In order to help the textile industry achieve the goals set for 2020, three plans have been drafted by the government, namely the Double Production Value for Industrial Textiles Plan, the Alliance for Developing and Promoting Functional Textiles Plan and the Taiwan Fashion Promotion Plan. The three plans aim to promote Taiwan s textiles in the international market and help the textile industry develop more high value-added products so that the industry may develop in a sustainable manner. A brief description of the three plans follows: l Double Production Value for Industrial Textiles Plan: The goal of this plan is 9

10 to encourage new investment and to increase production value. l The Alliance for Developing and Promoting Functional Textiles Plan: The plan aims to assist industry in inventing new applications for functional textiles by integrating raw materials and technology of whole supply chains in the functional textile industry, and to promote functional textiles by establishing 25 strategic alliance programs. l The Taiwan Fashion Promotion Plan: The purpose of the plan is to coordinate the resources of the textile industry, government and academic institutions in order to encourage enterprises to create their own brands, and to put effort into design innovation and joint marketing. Taiwan and mainland China formally signed the Economic Cooperation Framework Agreement (ECFA) on June 29, 2010, and it took effect on September 12, The agreement will help keep Taiwan from becoming marginalized as the Asia-Pacific continues to undergo the process of regional integration, thereby lessening the likelihood of trade disruptions. This agreement also enables Taiwan s textile industry to compete on equal terms with ASEAN countries in the mainland China market and puts Taiwan s industry in a more favorable position when compared to other major international competitors. In addition, with the ECFA s duty-free concessions, Taiwan textile producers should be able to remain highly competitive, making it possible for manufacturers to continue to use Taiwan as their base of operation as they seek to expand their exports. In the end, the ECFA should increase the willingness of both Taiwanese and foreign traders in mainland China to source goods from Taiwan, attract greater investment by multinational corporations to Taiwan, and generate additional employment opportunities in Taiwan. Taiwan is honored to be a member of the ICAC and to play an active role in 10

11 ICAC-related programs and activities. The Taiwan Textile Federation (TTF) is honored to hold the International Seminar of the International Cotton Advisory Committee (ICAC) covering the theme Textiles and Clothing Trade Potential in Asia. The seminar coincides with the Taipei Innovative Textile Application Show (TITAS) and Taipei IN Style (TIS), also organized by TTF, to be held October 16-18, Also, we are pleased to take part in the 71st Plenary Meeting of the ICAC. As an active member of the ICAC, Taiwan is always willing to share its development experience with the other members, and looks forward to working with ICAC members in pursuing the goals and targets set by the organization. 11