ASEAN set to lure bigger apparel manufacturing markets

13 Jul '10

2 min read

ASEAN nations are in the eye of some of the world's leading fashion brands, to manufacture their apparels.

Many industrial segments have dreamed of ASEAN integration for long. But in the apparel business, planned relationships amidst different parts of the supply chain could probably turn the region in to an attractive place to do business.

Key fashion brands such as Guess, Polo Ralph Lauren and Marks & Spencer, along with five more brands, total for US $32 billion in international sales. Just last month, these brands inked a Memorandum of Understanding (MoU) in Singapore with the Sout-East Asian suppliers.

The three-year debut program, named SAFSA or Source ASEAN Full Service Alliance is aimed to capitalise on efficiency along the supply chain. Although, competing with strong competitive markets like China is difficult, cooperation amongst ASEAN nations can together sharpen the regions capacity and efficiency.

Explaining the cooperation, RJ Gurley, Director of ASEAN Competitive Enhancement Project said that, basic and practical concept of integration across all nations is very simple. For instance, consider an apparel factory from Cambodia and partner this factory with a textile firm from Thailand. Then the integration will provide the buyer with the basic service of sourcing fabric.

Gurley further added that, in this kind of integration deals, the apparel factory will be a partner of the textile firm in Thailand, instead of a customer. Hence, linking different stages of the supply chain from different ASEAN nations is the main focus and this will surely take time to happen.

Switching from customer oriented supply chain to partnerships, between textile mills and apparel firms or virtual vertical factories (VVFs) will be aimed at establishing global standard for production quality, value-added service and speed to market.

These aspects are important for a buyer, who prefers to develop a long-term relationship with suppliers. Most of the apparel producers are contractors.

Fibre2Fashion News Desk - India

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