What opportunities and challenges does Thailand’s textile industry face?
The Thai Garment Manufacturers Association (TGMA) was established in 1966. It can be said that in the 50 years of the development of Thailand’s textile industry, TGMA has witnessed almost all important nodes in the development of Thailand’s textile industry. What is the current situation of Thailand’s textile industry? How will it develop in the future and what opportunities and challenges will it face? With these questions, our reporter interviewed Yuttana Silpsarnvitch, executive director of the Thai Garment Manufacturers Association.
1. “Little embarrassment” in the development of Thailand’s textile industry: rising costs
The textile industry is Thailand’s largest manufacturing industry, covering all aspects of the entire industrial chain from fiber to garment production. However, from 2005 to 2014, the number of Thai textile companies has gradually decreased, and the Thai textile industry has also fallen into a state of “weak” development. The total number of textile companies has decreased from 4,440 to 4,041; the number of clothing companies has decreased from 2,541 to 2,167.
Why is Thailand’s textile industry lacking stamina? In this regard, Yutana pointed out that the “weakness” of Thailand’s textile industry is mainly due to the increase in labor costs in Thailand and the economic weakness of the EU and US markets. In recent years, wages in Thailand have increased significantly. The minimum daily wage for Thai workers has now reached 300 baht (approximately 59.4 yuan). “The rise in labor wages has led to a 20% increase in production costs, which has also led to an increase in overall costs. This is a big problem, and buyers have therefore chosen to place orders in other parts of Asia.” Yutana said that for this reason, Thailand’s 20 Large apparel manufacturers have transferred some of their operations to neighboring regions with relatively low labor costs, such as Myanmar, Cambodia, Laos, Indonesia, and Vietnam, in order to reduce production costs and seek better development.
However, relocating production areas and obtaining cheap labor must be the “panacea” to solve the problem of Thailand’s textile industry? Yutana gave us an account of this. Since 2011, foreign companies have gradually entered Southeast Asia to develop manufacturing industries, competing to raise prices to attract workers. Vietnam’s minimum wage has increased by 20%, Indonesia and Laos have increased by 0-22% respectively, and Cambodia’s labor costs have increased from US$50 per month in 2008 to It only took more than 2 years to make $120, and labor costs increased at an alarming rate. Although labor costs in Southeast Asia are still relatively low compared to the global market, the trend of continued growth in labor costs is inevitable and unstoppable.
2. Looking forward to the “first electric shock” with Suzhou, China
Gradually rising costs and stagnant prices are obviously not conducive to the long-term development of Thailand’s textile industry. The Thai textile industry must find another way to reduce production costs, so they set their sights on China, their long-standing “old partner”.
Currently, among ASEAN countries, only Thailand’s textile industry can carry out production in all upstream and downstream links, but Thailand does not produce related raw materials and accessories for the textile industry and clothing manufacturing industry. “TGMA has been committed to finding cheaper and better-quality raw material purchase channels to reduce production costs. No one can replace China in this regard.” Yutana believes that China’s status as the world’s factory is still very stable. Especially in the manufacturing of garments and fabrics, it is the world’s largest. Although the cost of Chinese factory workers is also increasing year by year, Chinese companies located in the production areas of textile raw materials still have strategies to maintain sufficient profit margins.
In April 2017, TGMA will lead 20 textile companies in the association to the Oriental Textile City in Shengze, Suzhou, China to participate in the China-ASEAN Textile and Apparel Development Seminar and ASEAN Tourism Shopping Festival (hereinafter referred to as the “Textile Seminar”). As an important carrier and benchmark market for the transformation and upgrading of China’s textile professional market, Shengze East Textile City in Suzhou, China, brings together massive brand resources and industry leading merchants. It is currently the world’s largest origin-based textile professional market and has become the first choice for global textile and apparel professional buyers. land. This is undoubtedly a good choice for Thailand, which has been craving for “high-quality and low-price” purchase channels for many years.
This trip to Suzhou will not only bring exports to the Thai textile industry to reduce production costs, but also provide a broad technology promotion platform for Thailand’s most famous and valuable textile product, Thai silk. It is understood that due to Thailand’s relatively comprehensive productivity and the increasing number of customers who require Thai silk, Thai silk production has become an important source of income for the Thai people and the country.
“We hope that while exploring more affordable and high-quality purchase channels, we can also open up channels for Thai silk to China, ASEAN and even the world.” Yutana hopes to use the platform provided by this textile seminar to cooperate with Businessmen from all walks of life contact and promote Thai silk production technology through China’s mature and advanced silk production and promotion experience, so that the whole world can appreciate the beauty of Thai silk and Thai culture.
Yutana believes that this textile seminar provides Thailand with an excellent opportunity to “bring in + go out”. “We are looking forward to the first electric shock with Suzhou, China. I believe this will bring huge development benefits to Thailand’s textile industry and manufacturers, and will play a significant role in boosting the development of Thailand’s textile industry and promoting Thailand’s textile industry to the world. important significance.”Thailand Textile Co., Ltd.What opportunities and challenges does the industry face?
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