Thailand emerging as a new textile and garment hub

A select group of Italian textile machinery manufacturers led an institutional and trade mission in late April in Thailand, organized by the Italian Trade Agency and by ACIMIT, the Association of Italian Textile Industry Manufacturers.

The mission’s program included meeting with various local trade association representatives and industry training centers, as well as visits to textile companies and the Country’s universities with a textile vocation.

ACIMIT President Alessandro Zucchi explains the reasons of the mission: “We had a dual goal: to get to know the local textile manufacturing sector’s level of technology and its current needs, and to assess possible forms of collaboration and partnerships between Italy’s textile machinery industry and entities within the Country providing specific textile training.” Zucchi adds that “In Thailand, the textile sector is undergoing a deep rooted transformation. There’s a demand for machinery that can cut back not just on production costs, but also on the environmental impact of textile manufacturing.”

Indeed, the demand for machinery by Thai textile manufacturers is moving towards technologies capable of reducing production costs and increasing production capacity. In 2018, the value of Italian exports to Thailand amounted to EUR 8 million.

“I believe the outcome of this mission was on the whole very positive,” concludes ACIMIT’s president. “We allowed local entrepreneurs to become aware of the latest Italian technology in the sector, while at the same time laying the foundations for a more rewarding partnership with local authorities.” The visits to the Thailand Textile Institute proved especially interesting, a government body that manages planning, development and support for the textile industry, as well as at the Faculty of Industrial Textiles and Fashion Design of Rajamangala University of Technology in Bangkok.

Six ACIMIT member companies participated in the mission: Brazzoli, Ferraro, Laip, Ms Printing Solutions, Sicam and Stalam.

ACIMIT represents an industrial sector that comprises around 300 companies (employing roughly 12000 people), manufacturing machinery for an overall value of about EUR 2.5 billion euros, of which fully 84 % is exported. Creativity, sustainable technology, reliability and quality are the primary characteristics that have made Italian textile machinery industry leaders worldwide.

www.acimit.it

Thailand emerging as a new textile and garment hub

Several competitive advantages, often overlooked, are making Thailand a global production hub. The country is perfectly positioned to benefit optimally from China’s export problems. Besides, it also has an amazing demographic of young workers as against China who faces a chuck of ageing population.

Increasing tariffs and US recession to pose challenges

Although the US-China conflict offers many benefits to Thailand, the country also faces certain challenges. For instance, the increasing tariff rates is likely to impact industries that supply goods of intermediate nature as they are a part of the planetary value chain. To deal with this issue, Thailand needs to implement sound policies. A weakening of the US markets is likely to negatively impact new investments in Thailand. To avoid this, the country needs to diversify its exports. It is already increasing its trade with the world which helps it to have more diversity.

The Thailand advantage

As per well-established import and export companies it is a lot easier to move products around Thailand compared to China where there are Thailand emerging as a new textile and garment hub many restrictions and a lot of interprovincial tariffs which can make things complicated as far as exports are concerned. However, higher labour rates are a cause of concern as they make production at competitive rates difficult.

Another advantage that Thailand boasts of is, Bangkok is more exposed to Western influences and that influence is more evident every day. As far as advertising agencies are concerned there are many who claim that Thailand has a significantly more sophisticated marketing industry than China. Even basic things such as radio and the outdoor advertising seen on the streets is also a substantially higher quality in Bangkok compared to Beijing.

The nationalistic fervour is less forceful in Thailand. The country also offers superior quality of workmanship as against China, where though the labor is low, the quality of workmanship is also inferior.

A boost to the textile and garment industry

Thailand’s textile & garment industry, worth over USD 5 billion in exports in 2018, is expected to grow 5 % in 2019, spurred on by the US-China trade dispute. SUPA International based in Thailand is one of Asia’s largest garment manufacturers, with clients including Under Armor & Nike. It is benefiting optimally from Thailand’s skilled workforce and low labour costs in the garment manufacturing industry. This company has acted swiftly to benefit from the drastic move by President Trump – with a plan in place to expand its factory operations to ensure that it can benefit optimally from the situation. They will thus be able to accommodate many of the US clothing brands are looking to move production from China to Thailand.

Thailand’s sophisticated export facilities can handle a wide variety of export products such as electronics, machinery, motor vehicles and many other high-quality products. Also, the professional standards, service levels as well as education are of a better standard in Thailand, making it a preferred nation over China.

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