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THAILAND: Garment industry has strong business potential

BANGKOK: Dej Pathanasethpong, president of the Thai Garment Manufacturers Association while speaking at a seminar for exporters hosted by Bangkok Bank yesterday, has said that the industry, considered “old and un-sexy” by many, still offered strong business potential but growth rates would slow sharply from past years. He further said that Thailand remains a key player in the world textile and garment trade, although future growth will be contingent on productivity gains.

Garment exports this year are expected to come down 4% to 5% in US dollar terms, compared with declines of 2.7% to 2.8% in 2006. If textiles are included, exports are expected to decline 1% to 2% this year from last year.

“The world garment market is marked with fear. Buyers are afraid of buying goods at high prices and are pushing prices down. Sellers are afraid of losing market share and are willing to dump prices to maintain their orders,” he said.

He further said that it could take a year before uncertainties in the global garment clear up. But he noted that Asian countries, excluding Japan, Hong Kong, Macao and Korea, had seen increased market share in recent years.

According to the United States Department of Commerce, suppliers from developing Asian countries, including Thailand, held a 59.83% market share of the US clothing market in 2005, up from 48.25% in 2001. Asia also recorded a 57.91% market share of EU garment imports in 2005, up from 51.67% in 2001. Thailand is now the ninth largest US supplier, up from 11th last year. Mr Dej said the figures showed that Asian companies continued to gain market share and had strong potential.

Thai garment exports average $6,000 per worker per year, higher than $5,600 for Vietnam, $4,433 for China, $4,692 for Indonesia and $5,490 for Laos.

He said future growth would depend on close co-operation between the public and private sectors in terms of capital, skills training and technology.

“What Thai entrepreneurs should do is implement 'lean' production practices, adopt genuine partnerships with customers, look to smart outsourcing and continue to monitor opportunities in the regional market,” Mr Dej said.

Source: Agencies • News Courtesy: BharatTextile.com