Textile, apparel industry expected to stay competitive

 MALAYSIA''s textile and apparel industry is expected to maintain its competitve edge by keeping the quality of its products even in a liberalised trade environment after January 1 2005.
 
The Malaysian Textile Manufacturers Association (MTMA) said the high-quality Malaysian textile and apparel products will give the local industry an edge even over countries with lower production costs.
 
With the liberalisation, the whole world will be a level playing field. With a stable world economy and spending patterns, Malaysia'' better quality products will enjoy a slight premium, its executive director Andrew Hong told Business Times yesterday.

 MTMA, in fact, said local exporters stand to benefit from the quota removal which will result in easier access to other markets, provided that the industry players are competitive.

The new system, which excludes non-World Trade Organisation (WTO) member nations, will also mean a more saturated local market with the anticipated entry of foreign players into the country.

The Government has urged the local industry to focus on exporting more to the non-quota markets by introducing product innovation techniques. 
 
Malaysia is a WTO member since 1995. As of April 2004, the WTO has 147 member nations with another 30 countries holding observer status, which include Vietnam and Cambodia. 
 
The Multi Fibre Agreement, which was established in 1975, allocates quotas for clothing and textiles that developing nations with cheap labour can export to rich countries.
 
It has given guaranteed markets in the US and Western Europe for countries such as Mexico, and Asian and Eastern European nations.
 
It has also harnessed China? expansion potential in the textile and clothing industry, but experts said with the leash taken off in 2005, the nation will quickly dominate the export market.
 
Hong expressed optimism on the local industry? growth this year although more local players are expected to set up manufacturing plants in countries with cheaper labour.
 
Although they go overseas, their operations in Malaysia will remain,?he said.
 
Local players have made their presence in Cambodia, Vietnam, China, Sri Lanka and several African nations.
 
Last year, the industry ranked among the top five export earners with overseas sales reaching RM8.5 billion from RM8.4 billion in 2002.
 
The industry also contributed 2.4 per cent to the country? total exports of manufactured goods and employed over 70,000 workers.
 
Hong said to meet the new challenges of liberalisation, besides migrating from being original equipment producers to original design and brand manufacturers, local players will have to shorten their production lead time.
 
He said it will enable their buyers to introduce their products faster to the retail shelves. 
 
On market development, Hong said local players are eyeing non-traditional markets such as Japan and West Asian nations, and making inroads into established markets such as the US, the European Union and Canada.