Malaysian exports of textiles and clothing have increased significantly over the years. What has helped Malaysia to achieve this success?
Malaysian exports of textiles and clothing have increased significantly over the years driven by a few factors:
•Increased market access after the phasing out of the export quota system under the Multi Fibre Agreements (MFA) in 2005;
•Improvements in delivery time due to the use of advanced technology and efficient supply chain management;
•Strong external demands from Malaysia's major markets particularly United States of America (USA) and European Union (EU);
•Quality textiles and apparel through the use of quality certified production processes;
•New and attractive apparel designer wears;
•Government assistance in the form of organizing trade missions abroad and provision of matching grants such as the Brand Promotion Grant and Market Development Grant;
•Aggressive marketing campaign through Industry participation in international apparel and trade fairs; and
•Enhancement of market access through FTAs.
Malaysian manufacturers produce for major world brand names, including: Adidas, Calvin Klein, Christian Dior, Gucci, Guess, Nike and others. What lacuna hinders it to produce original Malaysian brands or names? What steps have been mooted in this direction?
Malaysian brands have indeed been established such as John Master (men’s wear and accessories), Bonia (men’s wear and accessories/shoes) and Anakku (babywear). The way forward is to strengthen these brands and encourage the establishment of more Malaysian brands by enhancing production and management quality and increased marketing.
Among the measures taken or are in the pipeline are:• enhancing the skills of workforce in designing and production through dedicated training institutions such as MATAC and Limkokwing University of Creative Technology;
• promoting brands through collaboration with international fashion houses;
• improving international market presence of the industry through the setting-up of sales and distribution offices overseas for direct sourcing;
• encouraging greater participation in international textiles and apparel exhibitions such as the Hong Kong Fashion Week and Source it; and
• establishing a dedicated textiles and apparel portal to facilitate trading linking with major fashion centres and design houses.
How do you evaluate the repercussions post bilateral FTA with Pakistan, in January 2008?
The Malaysia-Pakistan Closer Economic Partnership Agreement will further facilitate and strengthen the two-way trade and investment as well as enhance bilateral economic and industrial cooperation on a long term basis between Malaysia and Pakistan. The Agreement will enable the Malaysian business community to use Pakistan as the springboard to also expand their business with Pakistan’s trading partners in the South Asia region. Malaysia’s major exports to Pakistan are textile yarn, fabrics and woven cotton fabrics. The progressive reduction or elimination of tariffs would enable greater market access for both countries.
Pakistan and Malaysia have considerable experiences in the textiles and apparel industry. By working together, textiles and apparel industries in both countries would gain from a wider market access to the more open global market brought about by the termination of the quota regime under the WTO agreement on textiles and clothing.
How will Malaysia compete against countries with lower labor costs such as China, Indonesia, Vietnam, and Thailand?
Malaysian textiles and apparel manufacturers are encouraged to move up the value chain into producing higher value-add products such as industrial and home textiles, functional fabrics with special features like anti-bacteria, water proof and ultraviolet protection. Skilled workforce in designing and marketing is also essential to provide quality designs and promoting Malaysian made textiles and apparel.
The Government provides assistance among others in the form of the Soft Loan Scheme for Automation and Modernisation:
• to encourage industries to modernise and automate their manufacturing processes including the utilisation of nanotechnology and biological processes for dyeing, printing and finishing; and promoting the application of advanced technology systems in production;
• upgrade production capability and capacity of the industries; and
• assist companies in:
-minimising dependence on labour-intensive activities and foreign labour;
-diversifying into higher value-added activities; and
-rationalising and streamlining their operations through mergers and acquisitions exercise.
The Malaysian Textiles and Apparel Centre (MATAC) run by the Malaysian Textiles Manufacturers Association (MTMA) is provided with funds to manage courses for the upgrading of skills of the textiles and apparel industry workforce.
For export market expansion, the industry can avail itself of the Market Development Grant provided by the Malaysia External Trade Development Corporation (MATRADE). The signing of FTAs also provide Malaysian textiles and apparel wider market access including the sourcing of cheaper raw materials from FTA partners.
Industry players are also encouraged to advance from original equipment manufacturers (OEM) to become original design manufacturers (ODM) such as the home-made John Master brand. Financial assistance such as the Brand Promotion Grant is available to help Malaysian manufacturers promote their own brands in the international markets.
Malaysia has been one of eight major non-woven textile producers and was expected to account for over 35% of worldwide non-woven fabric production by 2007. How is the sector faring? How do you foresee next five years for the non-woven sector of Malaysia?
The non-woven textile sub-sector has consistently demonstrated resilience. The increased exports for non-woven products in 2004 from RM203 million to RM344 million in 2006 bears testimony to the strong growth of the industry amid the intense international competition.
Producers in the sub-sector will need to move up the value-chain in producing quality products as well as continuously upgrade their capabilities in the areas of production processes and human capital development. The sub-sector will continue to fare well with greater market access due to the signing of more FTAs and encouragement from the Government.
On skilled manpower and technology front, what policies have been implemented to boost the performance of Malaysian Textile & apparel industry?
Under the Third Industrial Master Plan (2006-2020), several measures are identified to help enhance the skills of the textiles and apparel workforce in designing, production and marketing. These include:
• providing training programmes through internships and apprenticeship schemes, including facilitating industry attachment of graduates specialising in textiles and apparel designs;
• encouraging collaboration between local and foreign colleges and universities in providing twinning diploma or degree programmes in textiles science and technology; and
• promoting on-the-job training and industrial practical training.
How do you look at the coming decade for textile and clothing sector of Malaysia?
The future of the Malaysian textiles and apparel industry is dependent upon consolidation, upgrading of existing production and training facilities, reducing costs of production, improving efficiency and moving up the value chain.
Malaysian contract manufacturers are known for quality. They will need to capitalize on the experience gained through contract manufacturing to undertake own-design manufacturing as well as progressing into higher value-added activities such as branding, product planning and marketing.
To remain competitive, the application of advanced technologies to develop new designs, enhance product quality and expedite production processes will be required.
Training institutions will introduce new and upgrade existing courses in designing, marketing and production to ensure adequate supply of skilled workforce.
The industry will benefit from greater market access and sourcing of cheaper raw materials from countries with which Malaysia has Free Trade Agreements and also working closely together with its ASEAN neighbors to take advantage of the ASEAN cumulation in the different regional FTAs.
Rather than being a sunset industry, the textiles and apparel industry will be vibrant industry and ‘evergreen’ in the many years to come.
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
