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 23 June 2008


Asean textile hub to compete with China, India

Asean textile producers have come together to create a blueprint for a regional global production hub to compete with China and India, an Indonesian daily reported.

The making of the blueprint, under the umbrella of the Asean Federation of Textile Industries (AFTEX), is to be finished by the end of July, reported The Jakarta Post.

"It would be a step towards improving the region's competitiveness against Asia's rising economies such as China and India," AFTEX chairman Lee Quoc An of Vietnam said Wednesday.

Speaking on the sidelines of a meeting with regional textile industry representatives in Jakarta, Lee said Asean must be able to integrate its supply chain links, foster regional brands and promote its fashion industry.

"We are currently identifying which country is good at what. For example, Vietnam is very good at making garments, but Vietnam doesn't have the fabrics. Indonesia on the other hand has excellent fabrics. If we cooperate, both our textile industries will be stronger," Lee said.

Asean's textile industry is under pressure from the rising level of illegal imports. Last year in Vietnam, domestic consumption of illegal fabrics was at 5 percent, while illegally imported garments accounted for 20 percent of sales. In Indonesia, illegal imports account for 70.6 percent of the country's textile market.

When asked about the smuggling of textile products into ASEAN markets from China and elsewhere, Lee said ASEAN governments must be tougher on smugglers.

"I think the most important thing is to teach law enforcement agencies the exact brand names and tags of each producer, so they can identify smugglers better," he said.

Benny Soetrisno, president of the Indonesian Textile Producers Association, said Indonesia's producers could benefit more from having garments made in Laos.

"In Laos, electricity only costs 3 cents per Kilowatt-hour. So some textile producers can supply them with fabric, and then buy the garment back for less than it would cost to make here," Benny said.

"Of course this is all voluntary. It's business as usual but for the benefit of our members; they will be able to tell which textile company in the region can help them best," he added.

Textile exports from Asean countries continue to grow despite the global economic slowdown. Between January and March, the United States' total imports of textile products fell by $2.62 billion, but the country's imports from Asean countries rose to $5.3 billion this year from $5.04 billion last year.

"This is an opportunity for us to raise demand for our products. Asean has already signed a free trade agreement with Japan. Meanwhile, China is having difficulty in supplying products, so it'll give us a chance to catch up," Benny said.




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