Interview with Mr Jim Liaskos

The textile, clothing and footwear (TCF) industries are diverse and cover a range of different products including made-up textiles, clothing, carpet, footwear and technical textiles.

The latest official statistics (2008) for the industries show that they contribute around $2.8 billion in industry value-added, which is around 2.6 per cent of all manufacturing value-added.

In 2008, imports ($9.9 billion) were more than six times that of exports ($1.6 billion), up on the total manufacturing industry ratio of roughly 2:1. Australia's TCF industries have faced significant pressures to adjust to ever increasing global competition. Competition from Asia, in particular, has strongly affected the size and vitality of the industry over the last decade or so, particularly as the country has dismantled its tariff barriers to trade.

FACTS AND FIGURES

Source: ABS

*Business Expenditure on Research and Development

In addition to the direct employment in the sector, there are at least as many employed in service and support industries. The TCF industries in Australia continue to face significant global competition and have been undergoing structural adjustment for some time. Australian manufacturers have generally moved from producing commodity goods to manufacturing specialised higher value-add and niche market goods, for example, specialised textiles for emergency and defence services. International developments, such as Free Trade Agreements, continue to present both opportunities and challenges for the TCF industries in Australia.

The Council of Textile and Fashion Industries of Australia Limited (TFIA) is the peak representative body for the Australian textiles, clothing and fashion industries. It is a not for profit member driven organisation, our areas of activity are broad yet focused on always ensuring that relevant stakeholders (all those with an influence on the future direction of the local industry) are conscious of the demands and issues facing the Australian textiles, clothing and fashion industries. Throughout its history, the TFIA’s integrity and representative voice has been well recognised by both Government and industry. It maintains a robust and strong working relationship with its members, government and other key players in industry.

The TFIA’s mission is to provide leadership and membership services to assist excellence and innovation in local and international textile, clothing and fashion markets. The TFIA has played a lead role in developing working papers and government submissions, and always seeks widespread industry input including canvassing industry views from outside the TFIA membership in the form of structured workshops and calling for case studies.

The TFIA began its operations in the late 1940’s when the then Textile Council of Australia was formed as an umbrella organisation to provide a focal point for a number of sector-specific associations. In 1984 a formal merger with the Australian Confederation of Apparel Manufacturers and the Australian Knitting Industries Council resulted in a change of name to the Textile, Clothing and Footwear Council of Australia. In 1995 the Council, following its merger with the Fashion Industries of Australia, again changed its name to reflect its broader charter, to the current The Council of Textile and Fashion Industries of Australia.

In general, Australia is experiencing many of the difficulties that other global TCF industries are subject to, and particularly to changing spending patterns emanating from the reduction in consumer confidence. We are well connected to the rest of the world through liberalized trade and fiscal policies, which means that businesses are highly vulnerable to changes in trade parameters such as currency fluctuations, liquidity constraints & any change in consumer confidence and spending. The volatility of the market reinforces the need for flexibility at both Government and enterprise levels. The stimulus packages put in place by the Rudd Government have had some positive impact on demand however as these measures taper off, and because of the diversity of the sector, different market segments are likely to have varying experiences.

Typically Australia excels in high value added goods where its innovative capacity, flexibility and understanding of short run markets allow it to provide a competitive offer with compelling features including design and performance based user benefits.

The textiles, clothing and fashion industry in Australia continues to be a very diverse sector that undertakes a wide range of manufacturing, design and supply activities throughout the supply chain; from the processing of raw materials such as leather and fibres, through to intermediate production of fabrics and yarns, to the final design, manufacture and supply of finished textile, clothing and footwear products.

The last two decades have seen huge and ongoing structural changes in the TCF manufacturing industry as a result of changes in trade and industry policy (both domestically and internationally) and consequent increasing global competitive pressures. These pressures have seen many domestic manufacturers move away from production of commodity items. The downside of this appropriate strategic move is a dramatic reduction in volume production which is important to retain a critical mass of activity and ensure favourable scale economies. A consequent and not unexpected fall-out of this response to the structural pressures confronting the industry has been a large decline in the level of manufacturing employment over the past 10 years.

Currently in Australia there are a relatively small number of large well known players, which have a significant market presence, and a myriad of smaller businesses. There is also significant growth in small to medium sized design businesses many of which are not strictly manufacturers but remain an important part of the manufacturing supply chain, and who rely on domestic manufacturing to survive as a point of difference.

In order to remain competitive, the industry (with a few notable exceptions in carpets, woven fabrics and corporate and protective apparel) has reoriented itself from a largely domestic manufacturing sector, seeking scale efficiencies, to a mixture of smaller local manufacturing activities combining sophisticated design and niche marketing skills with a mix of local and imported components to their businesses to maximize the returns on local value added activities. Some sectors such as the yarn industry have been unable to compete due to the reliance on economies of scale and, to a large extent, are no longer locally produced.

Over the past 10 years in particular the manufacturing industry has very successfully diversified its operations into the less traditional TCF areas, such as performance based and industrial textiles with increasingly sophisticated functional uses, and niche clothing and footwear markets where product differentiation and high value adding are essential.

The carpet manufacturing industry in Australia continues to be a relatively strong individual sector employing roughly 3,000 people (mainly in Victoria), It is also the largest homogenous group within the textile sector. Geographic location and transportation costs are no longer significant natural barriers offering some protection and carpet manufacturers are ensuring continual investment in technological activities and are looking for competitive advantage through process and product innovation and actively seeking new markets for new innovative and quality product.

There has also been a growing trend that has seen many manufacturers source more products offshore, focusing their activities on supply chain management and in areas where Australia is more competitive such as design, branding and market development, innovation and customer service. As a result of this while many manufacturing specific areas have declined, these other areas have taken on increasing importance and focus and they have helped enhance the value of the remaining domestic manufacturing activities, ensuring a more competitive return for the industry where manufacturing is complemented by innovative design, marketing and supply chain management.

The TCF industries in Australia have become increasingly vertically aligned over the past decade, and as a result of this, whilst it is tempting to pigeon hole industry using a silo mentality, this is not the reality as the majority of companies no longer perform one specific function but have integrated themselves both up and down the supply chain (and often across different market applications and product lines). This strategy has been used to gain greater flexibility on product margins while at the same time increasing the level of control on the supply chain. Many manufacturers and suppliers who traditionally played an intermediate role have diversified into the retail space to seeking a direct link to the end consumer and many retailers have moved into the product development arena to gain greater control over quality management.

The Government in the last budget round May 09 announced a series of policy measures that will assist continued innovation and renewal in the Australian textiles, clothing and footwear (TCF) industries. The Government will invest $401.0 million in a retargeted TCF package from 2009-10 to 2015-16. This package directs $55.0 million specifically towards innovation.

The package recognises the importance of the TCF industries, which employ over 45,000 Australians directly, and many more in support activities, as well as underpins many regional communities around the country. It aims to make the TCF sector stronger and more sustainable by supporting the development of new products and processes, especially at the high-tech, high-value end of the market.

Under the package, the Australian Government will:

•introduce a new TCF Strategic Capability Program to support large projects that will boost innovation capacity and performance at the enterprise level;

•establish a Clothing and Household Textile Building Innovative Capability Program to support investment and innovation – based on the TCF Strategic Investment Program;

•establish a TCF Industries Innovation Council bringing together business, unions, researchers and government to champion innovation in the sector and provide strategic advice;

•establish a National TCF Innovation Network within Enterprise Connect to support collaboration between companies and between industry, researchers and educational institutions;

•retain the TCF Small Business Program, to improve business enterprise culture;

•commission the TCF Industries Innovation Council to provide further advice on the introduction of a voluntary ethical quality mark, voluntary national sizing standards for clothing and footwear, and a national anthropometric (human measurement) database; and

•proceed with the TCF tariff reductions already enshrined in legislation.

The TCF package responds to the recommendations of last year’s Review of the Australian TCF Industries by Professor Roy Green.

TFIA objects as per the constitution are to

• Represent TCF industry and facilitate links within the sector

• Advocate and make policy recommendations to Government

• Represent the industry in national and international forums

• Disseminate information for the benefit of industry

• Facilitate technology transfer from R&D to industry

• Engage in industry training programs

• Promote the importance of TCF in media & to consumers

Member’s needs are diverse and can range from simple requests for contacts to advanced workplace training in the latest technologies such as seamless knitwear. In recent times the TFIA has increased its focus on training in sustainability as well as building its Business Intelligence services to enable companies to tap into quality market research data. The TFIA acts on behalf of many other cluster groups, including the Australian Fashion Council (AFC). The AFC has a membership list of young designers who may be new to business or need assistance in particular aspects of business, and this instance the TFIA has developed a strong knowledge basis from which it can assist these individuals and businesses grow and prosper.

The TFIA plays a very strong role in distributing information from Government to the industry and vice versa. It acts as a conduit for trade delegations and technology transfer.

The TFIA does not organize trade fairs, as these are primarily undertaken as commercial ventures. Rather the TFIA concentrates on facilitating new ideas, innovation and opportunity for its members and the broader industry.

Throughout its history the TFIA has nurtured and spawned many iconic activities which are now highlights in the TCF calendar of events, but in which the TFIA no longer plays a part, that part taken over by others, and which is also a measure of the success of the organization as a mentor and facilitator for the industry.

One such event was the TCF Technet Technology network which over a number of years brought together small and large firms, equipment manufactures and both research and educational institutions to collaborate, innovate and develop new technology based opportunities. This highly successful program has now been adopted by the Government as its own.

The TFIA also facilitates trade missions for the Industry regardless of membership. In June 2009 the TFIA auspiced the Technical Textiles Trade Mission to Next Textile in Boras, Sweden and TechTextil, in Frankfurt Germany. This was an important initiative supported by the Victorian State Government and reflects its priority of strengthening the Victorian textile industry’s trade and economic relations with Western Europe. The Mission took place over a period of 5 working days, 2 days in Sweden followed by a weekend and 3 days in Germany. The event in Frankfurt coincided with a number of other conferences and exhibitions occurring at the same time as TechTextil.

These events included Avantex, the Natural Fibre Congress and the International Wool Textile Organisation (IWTO) conference all of which presented a unique opportunity to Victorian Trade Mission delegates. The State of Victoria is at the heart of Australia’s textiles industry with the bulk of companies operating in the technical textiles industry located in Victoria. TFIA’s head office is also located in Melbourne, Victoria. The Victorian companies who participated in the Trade Mission included LM Australasia, Lempriere, The Merino Company, Ramsay McDonald and Wilderness Wear. All of these companies are using advances in fibre development to differentiate their product. An emerging trend in the sector is the blurring of the traditional boundaries that used to define company activity and it is therefore important for TCF businesses to stay abreast of new developments in fibres and value added textiles.

The Council of Textile and Fashion Industries of Australia Limited (TFIA) lead the group of Victorian companies to explore opportunities for export or increased exports to Europe. The mission also served as a valuable mechanism for information and knowledge exchange to the benefit of both the Victorian delegates and their European counterparts. Today knowledge has a short shelf life and it is important to maintain relationships and communication channels that disseminate the rapid transfer of information. Trade shows, where industry, researchers, organisations and Governments converge for short periods of time, facilitate rapid exchange. The TechTextil fair was the pinnacle event in the global calendar. The companies who participated in the trip represent innovative Australian TCF businesses. Each of them contributed and gained much from the exposure to the European Technology platform as did the TFIA staff that organized and lead the Trade Mission. Attendance in 2009 at the German Fair totalled 1,209 exhibitors from 43 countries and 23,300 visitors from 80 countries.

TFIA is currently assisting with the Brand India Trade Fair which will take place in Melbourne on 12 & 13 November and Sydney on 16 & 17 November 2009 at the Exhibition and Convention Centre’s. This inaugural event will provide the Australian fashion and interiors industry with a rich source of premium quality product from some of the best textile manufacturers and exporters in India including: Alok Industries, Vijayeshwari Textiles, Premier Finelinen, Morarjee Textiles, Dicitex Decor Exports, plus offer informative seminars, interactive meetings and expert advice on establishing and maintaining successful and mutually beneficial business relationships.

The combined fashion and textiles show is being organized by the Cotton Textiles Export Promotion Council of India (TEXPROCIL) sponsored by the Government of India, of which only high quality, reliable manufacturers are invited to participate.

I recently traveled to India to attend the Techtextil and Heimtex fairs in Mumbai and was fortunate to have the opportunity to meet with officials of TEXPROCIL and SRTEPC to extend the hand of friendship and assist as may be appropriate with the Brand India Trade fair.

The TFIA recognizes the importance of both these requirements for success in global markets and is a strong advocate of the Australian textile industry which is also a leading example of ethical and environmentally sustainable practices and processes. The TFIA is actively working with the Department of Climate Change in Canberra to prepare the TCF industry for upcoming changes to legislation. The TFIA also runs training programs in the area of sustainability. The TFIA is also an equal partner with the TCFUA (Employee Trade Union) in the Home Workers Code of Practice Committee and has a important advocacy and vocational role to educate the TCF industry about ethical supply.

Pleasure!