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The Evolution of Textile and Apparel Industry in Asia
1
Dr. Gordon YENExecutive Director & Chief Financial Officer
Global Supply Chain
Major cotton
suppliers
Major yarn
spinners &
fabric mills
Major garment
manufacturers
Major
retailers
Global Supply Chain
Major cotton
suppliers
Major yarn
spinners &
fabric mills
Major
retailersMajor garment
manufacturers
Global Supply Chain
Major cotton
suppliers
Major yarn
spinners &
fabric mills
Major garment
manufacturersMajor
retailers
Global Supply Chain
Major cotton
suppliers
Major yarn
spinners &
fabric mills
Major garment
manufacturersMajor
retailers
Global Supply Chain
Major cotton
suppliers
Major yarn
spinners &
fabric mills
Major garment
manufacturersMajor
retailers
2000-2011: Domination of China
The World’s Largest Exporter
of Textiles and Apparels
2001
Officially Joins WTO
2005 Abolition of
Textiles Quotas
Stage 1: Domination of China
16.913.510.510.38.76.65.41.9T & AExports
Vietnam
25.8%27.5%2.5%18.0%31.4%22.8%184.2%N/AChanges
4.13.12.53.02.72.72.20.6T & AExports
21.516.913.412.09.79.87.64.3T & AExports
Bangladesh
27.2%26.2%11.7%23.3%-0.7%29.2%76.7%N/AChanges
22.1%14.0%-1.0%9.2%6.0%8.0%43.7%N/AChanges
India
29.424.121.121.319.518.417.111.9T & AExports
Cambodia
20.1%23.7%-9.8%8.2%18.9%25.2%117.0%N/AChanges
China
Changes
T & AExports
(in US$billions)
24.7%
206.5
2010
-19.0%
167.0
2009
12.9%
185.2
2008
19.0%
144.0
2006
0.6%
171.2
2007Year 2000 2005 2011
53.0 115.0 248.0
N/A 266.7% 33.3%
Notes: T&A refers to Textile & Apparel(Source: World Trade Organization)
2012 & After: Rebalancing in Asia
Industrial development• Improvement in infrastructure
• Industrial zone
Currency against USD / EUR
Cost of labor
Inflation
Trade policies; Duty policies
Improvement in skills and quality
2012 & After: Rebalancing in Asia
All changes are based on comparison over the same period in 2011* Data of India is up to Jun 2012; Data of Cambodia is up to Jul 2012
9.20%2,362*Cambodia7.80%11,524Vietnam
-12.4%5,250Thailand0.50%14,207*India
-10.4%8,151Pakistan0.70%15,296Bangladesh
-8.1%8,461Indonesia-0.8%162,186China
ChangesJan - AugRegion/CountryChangesJan - AugRegion/Country
Exports of Textiles and Apparels in 2012(in US$ millions)
(Source: Official statistics from different regions)
2012 & After: Rebalancing in Asia
India
- Cat 341
W/G COT. SHIRTS/BLOUSES,N-KNIT
Textile & Textile &
ApparelApparel
Industry in Industry in
AsiaAsia
Specialization in Asian countries (based on US Imports)
2012 & After: Rebalancing in Asia
US Imports of 2010 / 2011 / 2012– Cat 341 W/G COT. SHIRTS/BLOUSES,N-KNIT(Quantity)
(Source: Office of Textiles and Apparel, US Department of Commerce)
in ‘000 Doz
Year
12,863
7,184
4,210
316 343 176
1,154
2,548
1,8952,515
4,069
5,594
2,595
1,217
2,368
1,4461,075
716
0
2,000
4,000
6,000
8,000
10,000
12,000
2010 2011 2012
China
Bangladesh
India
Indonesia
Vietnam
Sri Lanka
Notes: Data is up to Aug 2012
Unit Price in US$/Doz
59
72
72
42
53 55
66
76
7872 817949
7758
92 56 101
Confirmed Leadership
Behind China
2012 & After: Rebalancing in Asia
IndiaCat 341
W/G COT. SHIRTS/BLOUSES,N-KNIT
Indonesia- Cat 342COTTON SKIRTS
Textile & Textile &
ApparelApparel
Industry in Industry in
AsiaAsia
Specialization in Asian countries (based on US Imports)
US Imports of 2010 / 2011 / 2012– Cat 342 COTTON SKIRTS (Quantity)
(Source: Office of Textiles and Apparel, US Department of Commerce)
in ‘000 Doz
Year
3,192
2,684
124 136
3,744
695692 713962
1,3141,244
971 1,0131,0361,015826
945
192
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2010 2011 2012
China
Bangladesh
India
Indonesia
Vietnam
Sri Lanka
Notes: Data is up to Aug 2012
56 60
56
39
6248 45
4471 52
55 4176
5446
Unit Price in US$/Doz
Surpassed
India
80 8692
2012 & After: Rebalancing in Asia
Bangladesh
- Cat 340 M/B COTTON SHIRTS, NOT KNIT
- Cat 347 M/B COT. TROUSERS/BREECHES/SHORTS
India-Cat 341W/G COT. SHIRTS/BLOUSES,N-KNIT
Indonesia- Cat 342COTTON SKIRTS
Textile & Textile &
ApparelApparel
Industry in Industry in
AsiaAsia
Specialization in Asian countries (based on US Imports)
India-Cat 341W/G COT. SHIRTS/BLOUSES,N-KNIT
Indonesia- Cat 342COTTON SKIRTS
Bangladesh
- Cat 340 M/B COTTON SHIRTS, NOT KNIT
- Cat 347 M/B COT. TROUSERS/BREECHES/SHORTS
India-Cat 341W/G COT. SHIRTS/BLOUSES,N-KNIT
Indonesia- Cat 342COTTON SKIRTS
Bangladesh
- Cat 340 M/B COTTON SHIRTS, NOT KNIT
- Cat 347 M/B COT. TROUSERS/BREECHES/SHORTS
India-Cat 341W/G COT. SHIRTS/BLOUSES,N-KNIT
Indonesia- Cat 342COTTON SKIRTS
17
US Imports of 2010 / 2011 / 2012– Cat 340 M/B COTTON SHIRTS, NOT KNIT (Quantity)
(Source: Office of Textiles and Apparel, US Department of Commerce)
in ‘000 Doz
Year
9,023
3,443 3,332
2,023
908 836531
5,488
10,902
5,837
8,627 8,705
1,468
2,5482,492 2,5702,890
1,491
0
4,000
8,000
12,000
2010 2011 2012
China
Bangladesh
India
Indonesia
Vietnam
Sri Lanka
Notes: Data of 2012 is for the previous 8 months
77
50
8666 63
94
95
6362
9892
81
877677
Unit Price in US$/Doz
88 110 118
Surpassed
India
(Source: Office of Textiles and Apparel, US Department of Commerce)
in ‘000 Doz
Year
9,477
14,106
17,061
12,525
19,04519,481
1,2131,5721,6912,690
1,8833,039
4,5173,974
3,451
8601,1771,435
0
5,000
10,000
15,000
20,000
2010 2011 2012
China
Bangladesh
India
Indonesia
Vietnam
Sri Lanka
Notes: Data is up to Aug 2012
US Imports of 2010 / 2011 / 2012– Cat 347 M/B COT. TROUSERS/BREECHES/SHORTS(Quantity)
6677
78
54 62
71
78 82 8654 61 72
61 75 70
92 112 114
Unit Price in US$/Doz
Leadership
2012 & After: Rebalancing in Asia
Vietnam
- Cat 338/339 COTTON KNIT SHIRTS
- Cat 638/639 MMF KNIT SHIRTS
- Cat 647/648 MMF TROUSERS
Textile & Textile &
ApparelApparel
Industry in Industry in
AsiaAsia
Specialization in Asian countries (based on US Imports)
Bangladesh
- Cat 340 M/B COTTON SHIRTS, NOT KNIT
- Cat 347 M/B COT. TROUSERS/BREECHES/SHORTS
India-Cat 341W/G COT. SHIRTS/BLOUSES,N-KNIT
Indonesia- Cat 342COTTON SKIRTS
US Imports of 2010 / 2011 / 2012– Cat 338/339 COTTON KNIT SHIRTS(Quantity)
(Source: Office of Textiles and Apparel, US Department of Commerce)
in ‘000 Doz
Year
74,991
66,310
41,745
33,15130,907
10,797
17,772
14,037 11,982
20,19622,334 21,635
25,296
36,747
42,354
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
2010 2011 2012
China
Bangladesh
India
Indonesia
Vietnam
Notes: Data is up to Aug 2012
4753
48
23
2724
37 43
42
35 40
37
36
42
38
Unit Price in US$/Doz
Confirmed
Leadership
Behind China
Confirmed
Leadership
Behind China
US Imports of 2010 / 2011 / 2012– Cat 638/639 MMF KNIT SHIRTS(Quantity)
(Source: Office of Textiles and Apparel, US Department of Commerce)
in ‘000 Doz
Year
28,774
24,520
6,036
7,989
5,909
9,812
13,04911,504
628 803
30,479
1,0011,496 1,780
708895794 1,097
0
4,000
8,000
12,000
16,000
20,000
24,000
28,000
32,000
2010 2011 2012
China
Bangladesh
India
Indonesia
Vietnam
Sri Lanka
Notes: Data is up to Aug 2012
44 46 42
32 33 3358
51 52 5850
51
51
58 56 766758
Unit Price in US$/Doz
Extended Lead
against othersExtended Lead
Against Others
US Imports of 2010 / 2011 / 2012– Cat 647/648 MMF TROUSERS(Quantity)
(Source: Office of Textiles and Apparel, US Department of Commerce)
in ‘000 Doz
Year
15,417
9,816
5,9586,323
2,768
7,076
8,376
5,714
406 502 332
15,758
2,911
4,5825,250
316514521
0
4,000
8,000
12,000
16,000
2010 2011 2012
China
Bangladesh
India
Indonesia
Vietnam
Sri Lanka
Notes: Data is up to Aug 2012
Unit Price in US$/Doz
5159
60
39 42
51
85 95 94
4950
65
61
6370
68 85 87
Extended Lead
Against Others
Vietnam
- Cat 338/339 COTTON KNIT SHIRTS
- Cat 638/639 MMF KNIT SHIRTS
- Cat 647/648 MMF TROUSERS
Bangladesh
- Cat 340 M/B COTTON SHIRTS, NOT KNIT
- Cat 347 M/B COT. TROUSERS/BREECHES/SHORTS
India-Cat 341W/G COT. SHIRTS/BLOUSES,N-KNIT
Indonesia- Cat 342COTTON SKIRTS
Textile & Textile &
ApparelApparel
Industry in Industry in
AsiaAsia
Specialization in Asian countries
Sri Lanka
- Cat 652 MMF UNDERWEAR
(based on US Imports)
2012 & After: Rebalancing in Asia
US Imports of 2010 / 2011 / 2012– Cat 652 MMF UNDERWEAR
(Quantity)
(Source: Office of Textiles and Apparel, US Department of Commerce)
in ‘000 Doz
Year
23,266
18,666
842 1,222 9551,426 1,5792,670
24,593
1,5211,917 1,684
1,7972,0402,822
0
4,000
8,000
12,000
16,000
20,000
24,000
2010 2011 2012
China
Bangladesh
Indonesia
Vietnam
Sri Lanka
Notes: Data is up to Aug 2012
1214 14
12 16 1320 13 13 1522 22 211920
Unit Price in US$/Doz
Highest in Value and Quantity
Except China
Textile & Apparel Industry in Sri Lanka
- accounts for around 40% of total export
earnings in 2011
Case Study: Ocean Lanka in Sri Lanka
• Weak raw material base
• High cost of energy source
(electricity, water, etc.)
• Higher labor cost
Weaknesses
• Strategic location
• Good infrastructure conditions
Strengths
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…
Case Study: Ocean Lanka in Sri Lanka
Case Study: Ocean Lanka in Sri Lanka
ChallengeDuty 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
ChallengeAfter removal of GSP+ in 2010
Factories forced to add value to supply chain
by building design centers for customers
Taking cost out of UK
Improving flexibility and speed
Case Study: Ocean Lanka in Sri Lanka
OPP
(Opening
Price
Point)
Intimates Market
Case Study: Ocean Lanka in Sri Lanka
Strategy of Ocean Lanka & sewing factory partners
Being part of development of speed solutions
SPEEDSPEED & &
QUALITYQUALITY
LOW COSTLOW COST
Case Study: Ocean Lanka in Sri Lanka
Strategy of Ocean Lanka & sewing factory partners
Flash Programs
Less than 1 week for dyedprints garments
Industry lead time21 – 28 days
Industry lead timeIndustry lead time
21 21 –– 28 days28 days
Flash ProgramsLess than 1 week
for dyed printsgarments
Flash ProgramsFlash ProgramsLess than 1 weekLess than 1 week
forfor dyeddyed printsprints
garmentsgarments
Case Study: Ocean Lanka in Sri Lanka
• “Read and React”
• Allow partial buy
• Avoid buying based on gut instinct
Reduction in mark downs at store level
Increased business
Benefits for retailers
Beyond Price Competition
Some countries are improving their value
proposition beyond price
SpeedSpeed InnovationInnovation CSRCSR
(Source: Vietnam News)
Environmental Protection
(Source: The Times of India)
Environmental Protection
(Source: Lanka Business Online)
Environmental Protection
Thank you!