The Evolution of Textile and Apparel Industry in Asia. Dr. Gordon YEN Executive Director & Chief Financial Officer

Transcription

1 The Evolution of Textile and Apparel Industry in Asia Dr. Gordon YEN Executive Director & Chief Financial Officer 1

2 Global Supply Chain Major cotton suppliers Major yarn spinners & fabric mills Major garment manufacturers Major retailers

7 : Domination of China The World s Largest Exporter of Textiles and Apparels 2001 Officially Joins WTO 2005 Abolition of Textiles Quotas

8 China (in US$ billions) Year T & A Stage 1: Domination 144.0of China Exports Changes N/A 117.0% 25.2% 18.9% 8.2% -9.8% 23.7% 20.1% India T & A Exports Changes N/A 43.7% 8.0% 6.0% 9.2% -1.0% 14.0% 22.1% Bangladesh T & A Exports Changes N/A 76.7% 29.2% -0.7% 23.3% 11.7% 26.2% 27.2% Vietnam T & A Exports Changes N/A 184.2% 22.8% 31.4% 18.0% 2.5% 27.5% 25.8% Cambodia T & A Exports Changes 0.6 Notes: T&A refers to Textile & Apparel (Source: World Trade Organization) N/A 266.7% 19.0% 0.6% 12.9% -19.0% 24.7% 33.3%

9 2012 & After: Rebalancing in Asia Cost of labor Inflation Currency against USD / EUR Trade policies; Duty policies Improvement in skills and quality Industrial development Improvement in infrastructure Industrial zone

10 2012 & After: Rebalancing in Asia (in US$ millions) Exports of Textiles and Apparels in 2012 Region/Country Jan - Aug Changes Region/Country Jan - Aug Changes China 162, % Indonesia 8, % Bangladesh 15, % Pakistan 8, % India 14,207* 0.50% Thailand 5, % Vietnam 11, % Cambodia 2,362* 9.20% All changes are based on comparison over the same period in 2011 * Data of India is up to Jun 2012; Data of Cambodia is up to Jul 2012 (Source: Official statistics from different regions)

11 2012 & After: Rebalancing in Asia

12 2012 & After: Rebalancing in Asia Specialization in Asian countries (based on US Imports) India - Cat 341 W/G COT. SHIRTS/BLOUSES, N-KNIT Textile & Apparel Industry in Asia

13 US Imports of 2010 / 2011 / 2012 Cat 341 W/G COT. SHIRTS/BLOUSES,N-KNIT (Quantity) in 000 Doz 12,863 12,000 10,000 Confirmed Leadership Behind China 8,000 6,000 4,000 2,000 0 Year 7, , , ,069 2,548 2, ,368 2,515 1, , ,075 1,154 1, Unit Price in US$/Doz China Bangladesh India Indonesia Vietnam Sri Lanka Notes: Data is up to Aug 2012 (Source: Office of Textiles and Apparel, US Department of Commerce)

14 2012 & After: Rebalancing in Asia Specialization in Asian countries India Cat 341 W/G COT. SHIRTS/BLOUSES, N-KNIT Textile & Apparel Industry in Asia (based on US Imports) Indonesia - Cat 342 COTTON SKIRTS

15 US Imports of 2010 / 2011 / 2012 Cat 342 COTTON SKIRTS (Quantity) in 000 Doz 4,000 3,744 3,500 3,000 3,192 2,684 Surpassed India 2,500 2,000 1,500 1, Year ,244 1, ,015 1, , Unit Price in US$/Doz China Bangladesh India Indonesia Vietnam Sri Lanka Notes: Data is up to Aug 2012 (Source: Office of Textiles and Apparel, US Department of Commerce)

16 2012 & After: Rebalancing in Asia Specialization in Asian countries (based on US Imports) India -Cat 341 W/G COT. SHIRTS/BLOUSES, N-KNIT Textile & Apparel Industry in Asia Indonesia - Cat 342 COTTON SKIRTS Bangladesh - Cat 340 M/B COTTON SHIRTS, NOT KNIT - Cat 347 M/B COT. TROUSERS/ BREECHES/ SHORTS

17 US Imports of 2010 / 2011 / 2012 Cat 340 M/B COTTON SHIRTS, NOT KNIT (Quantity) in 000 Doz 12,000 10,902 9,023 8,627 8,705 Surpassed India 8,000 4,000 0 Year 77 5,4885, , ,332 2, ,492 2,548 2,570 2,023 1,468 1, Unit Price in US$/Doz China Bangladesh India Indonesia Vietnam Sri Lanka Notes: Data of 2012 is for the previous 8 months (Source: Office of Textiles and Apparel, US Department of Commerce) 1 7

18 US Imports of 2010 / 2011 / 2012 Cat 347 M/B COT. TROUSERS/BREECHES/SHORTS (Quantity) in 000 Doz 20,000 19,045 19,481 Leadership 17,061 15,000 14,106 12,525 10, ,477 Unit Price in US$/Doz 5,000 0 Year 71 4,517 3, ,451 2,690 3,039 1, ,435 1, ,883 1,177 1, China Bangladesh India Indonesia Vietnam Sri Lanka Notes: Data is up to Aug 2012 (Source: Office of Textiles and Apparel, US Department of Commerce)

19 2012 & After: Rebalancing in Asia Specialization in Asian countries (based on US Imports) India -Cat 341 W/G COT. SHIRTS/BLOUSES, N-KNIT Vietnam Textile & Apparel Industry in Asia - Cat 338/339 COTTON KNIT SHIRTS - Cat 638/639 MMF KNIT SHIRTS - Cat 647/648 MMF TROUSERS Indonesia - Cat 342 COTTON SKIRTS Bangladesh - Cat 340 M/B COTTON SHIRTS, NOT KNIT - Cat 347 M/B COT. TROUSERS/ BREECHES/ SHORTS

20 US Imports of 2010 / 2011 / 2012 Cat 338/339 COTTON KNIT SHIRTS (Quantity) in 000 Doz 75,000 70,000 65,000 60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Year 74, ,151 42,354 66, ,747 30,907 41, ,296 22,334 17,772 20, , , ,797 11, Confirmed Leadership China Behind China Unit Price in US$/Doz China Bangladesh India Indonesia Vietnam Notes: Data is up to Aug 2012 (Source: Office of Textiles and Apparel, US Department of Commerce)

21 US Imports of 2010 / 2011 / 2012 Cat 638/639 MMF KNIT SHIRTS (Quantity) in 000 Doz 32,000 28,774 28,000 24,000 20,000 16,000 12,000 8,000 4,000 Year , ,520 13,049 11,504 9,812 6,036 7, , ,496 1, ,097 1, Extended Lead Against against others Others Unit Price in US$/Doz China Bangladesh India Indonesia Vietnam Sri Lanka Notes: Data is up to Aug 2012 (Source: Office of Textiles and Apparel, US Department of Commerce)

22 US Imports of 2010 / 2011 / 2012 Cat 647/648 MMF TROUSERS (Quantity) in 000 Doz 16,000 15,758 15,417 Extended Lead Against Others 12,000 8,000 4,000 0 Year ,816 4, , ,076 5,958 6,323 5,714 5, ,911 2, Unit Price in US$/Doz China Bangladesh India Indonesia Vietnam Sri Lanka Notes: Data is up to Aug 2012 (Source: Office of Textiles and Apparel, US Department of Commerce)

23 2012 & After: Rebalancing in Asia Specialization in Asian countries India -Cat 341 W/G COT. SHIRTS/BLOUSES, N-KNIT Sri Lanka - Cat 652 MMF UNDERWEAR Vietnam Textile & Apparel Industry in Asia - Cat 338/339 COTTON KNIT SHIRTS - Cat 638/639 MMF KNIT SHIRTS - Cat 647/648 MMF TROUSERS (based on US Imports) Indonesia - Cat 342 COTTON SKIRTS Bangladesh - Cat 340 M/B COTTON SHIRTS, NOT KNIT - Cat 347 M/B COT. TROUSERS/ BREECHES/ SHORTS

24 US Imports of 2010 / 2011 / 2012 Cat 652 MMF UNDERWEAR (Quantity) in 000 Doz 24,000 23,266 24,593 Highest in Value and Quantity Except China 20,000 18,666 16,000 Unit Price in US$/Doz 12, ,000 4,000 0 Year 2,670 1, ,426 1,7972,822 2,040 1,684 1, , , China Bangladesh Indonesia Vietnam Sri Lanka Notes: Data is up to Aug 2012 (Source: Office of Textiles and Apparel, US Department of Commerce)

25 Case Study: Ocean Lanka in Sri Lanka Textile & Apparel Industry in Sri Lanka - accounts for around 40% of total export earnings in 2011 Strengths Weaknesses Strategic location Good infrastructure conditions Weak raw material base High cost of energy source (electricity, water, etc.) Higher labor cost

26 Case Study: Ocean Lanka in Sri Lanka Introduction of Established in 1994 The largest manufacturer of Weft Knitted Fabrics in the island Staff no: around 1,600 JV subsidiary of Prestigious customer base comprising Victoria s Secret, Tommy Hilfiger, Marks & Spencer, Nike, Next, Gap & more

27 Case Study: Ocean Lanka in Sri Lanka Challenge Duty reduction benefits from GSP+ in 2005 after hit by Tsunami GSP+ (Generalized Scheme of Preferences Plus) EU's special incentive arrangement for sustainable development and good governance Grants tariff concession (around 6-7%) for apparel exports to the EU

28 Case Study: Ocean Lanka in Sri Lanka Challenge After removal of GSP+ in 2010 OPP (Opening Price Point) Intimates Market Factories forced to add value to supply chain by building design centers for customers Taking cost out of UK Improving flexibility and speed

29 Case Study: Ocean Lanka in Sri Lanka Strategy of Ocean Lanka & sewing factory partners Being part of development of speed solutions SPEED & QUALITY LOW COST

30 Case Study: Ocean Lanka in Sri Lanka Strategy of Ocean Lanka & sewing factory partners Industry lead time days Flash Flash Programs Programs Less Less than than 1 week 1 for dyed week prints for dyed garments prints garments

31 Case Study: Ocean Lanka in Sri Lanka Benefits for retailers Read and React Allow partial buy Avoid buying based on gut instinct Reduction in mark downs at store level Increased business

32 Beyond Price Competition Some countries are improving their value proposition beyond price Speed Innovation CSR

33 (Source: Vietnam News) Environmental Protection

34 (Source: The Times of India) Environmental Protection

35 Environmental Protection (Source: Lanka Business Online)

36 Thank you!