Taiwan - Textile hub in Asia Pacific region

As the newly emerging technological industry becomes a mainaxis of the developing economy in Taiwan, the textile industry still plays animportant role among traditional industry. Not only has it provided a lot ofworking opportunities, but it has also brought a huge amount of export surplus. In the last five decades, the textile industryhas created an important position in exports, earning huge revenues of foreignexchange for Taiwan. Though, in the second half of the 1980s, many problemslike labor shortages, increasing overhead costs, prohibitive land prices andenvironmental protection forced many textile houses to relocate a part or allof their production to Southeast Asia and China in order to stay competitive.

Area: 36,000 square kilometers
Population: 23 million
Capital : Taipei City
Per Capital GDP：$16,000 ( PPP $ 26,679 ) 2006

Textile companies that stayed in Taiwan were forced toimprove. Small, family-run businesses have been transformed into medium-sizedor large companies, with cost-effective measures and new management practice toenhance quality and productivity. Since Taiwan does not produce cotton, wool,silk, linen, or other natural raw materials, the domestic textile industry hasdeveloped man-made fabrics, which have demonstrated to be outstanding optionsto natural products. Today, Taiwan's man-made fibers have gained an importantposition in the world's textile industry.

As a part of this report, a survey was conducted by analysts from fibre2fashion for getting the data along with the current market situation for textile industry in Taiwan. Some of the questions asked to experts along with their answers are quoted below.

What percentage of the Taiwans GDP is contributed by Textiles?

Taiwans textile and apparel exports in 2006 decreased 4.3% (in terms of value) compared with 2005. The export value was US$11.76 billion accounted for 5.25% for the national aggregates export value. The biggest export items were fabrics with a total export value of US$6.8 billion, which made up 58% of all textile and apparel export. Yarn export ranked the second with a total export value of US$2.27 billion. With the value of US$0.81 billion, apparel export decreased 14% when compared with 2005.

In terms of both volume and value, Hong Kong and China were listed the biggest export markets of Taiwans textiles and apparel, covering 20% and 18% respectively of Taiwans textile and apparel exportation. Other major markets were U.S.A. (12%), Vietnam (9%) and Indonesia (4%).

Textile and apparel imports to Taiwan in 2006 amounted to US$2.7 billion, an increase of 3.7% from 2005. Apparel was the major category, accounted for 42.6%. Overall, Taiwan enjoyed a US$9.06 billion surplus from its textile and apparel trade in 2006, making the textile and apparel industry still the contributor among Taiwans manufacturing sectors in terms of the foreign exchange earning.

China and Japan are the principal sources of textile and apparel imports. The textiles and apparel imported from China and Japan were US$588 million and US$261 million respectively in 2006. Other major sources were Hong Kong (US$243 million), U.S.A. (US$235 million) and Vietnam (US$180 million).

What are the main reasons for Taiwan becoming a textile hub in Asia Pacific region?

Taiwan has become a leading high-quality textile production center and one of the main gateways to the Asian and global textile markets. It has also become the new textile sourcing center in Asia.

Geographically, with an area of 36 thousand square kilometers, Taiwan is a tiny nation. Taiwan does not produce cotton or wool, and the production of silk and linen in Taiwan is only insignificant. However, in terms of textiles and man-made fiber, Taiwan has become a leading producer and exporter worldwide.

Taiwan had also created an economic miracle which drew close attention from the whole world, and Taiwan's textile industry has been the supporting pillars for the creation of Taiwan economic miracle. Even up to now, textile industry is still one of the most important export industries in Taiwan. It has earned more trade surplus than other important industries annually.

From January to October 2007, Taiwan's production of polyester filament texturized yarn reached 618,626 tons, ranked second in the world. Taiwan ranked third in the world in the production of man-made fiber (2,039,344 tons), and ranked second in polyester fiber (1,487,704 tons), as well as polyester filament (1,027,753 tons). As to the production of nylon fiber (322,953 tons) ranked third in the world. Taiwan has also started to mass production of polyacrylonitrile fiber, carbon fiber, spandex fiber and viscose fiber. An expansion in variation of fiber productions is expected in 2008.

Taiwan's textile industry has successfully transformed after years of persistent endeavors in R&D. To develop high class fibers, yarns, fabrics and apparels is the core value of the industry. High value-added functional textiles, such as flame resistance textiles, moisture absorbing and quick drying textiles, anti-static textiles, far infrared textiles, water repellency textiles, electromagnetic shielding textiles for apparel and home, breathable-waterproof textiles, even as Nano textiles, have been the pillars of Taiwan's textile production and export.

Taiwan has maintained not only a world leadership position in textile production quantity, but also in quality. Its industries have provided excellent textile products in exhibitions and to international buyers.

List out the Textile products in which Taiwan has a leading edge over its neighboring countries? Why?

When it comes to clothing and furnishing appliances, there are two trends that consumers nowadays emphasize. The first one is functional textile, which is highly regarded by consumers not only in the aspects of fashion, but also ergonomics, comfort, safety and health. The second one is eco textiles, which emphasize low pollution, low energy consumption, and recycling, and without any negative impact on the environment. Thus many countries contribute to developing functional and eco textiles.

Many renowned firms in Taiwan have devoted to researching and producing functional textile products. As functions of textiles cannot be seen or touched, buyers and consumers must have the textiles tested and verify the acclaimed functions. Therefore Taiwan promotes actively the functional textiles certification system. There are already 14 criteria of functions in the certification system including antibacterial, antifungal, electromagnetic shielding, moisture transferring, quick drying textiles, and etc. The Label of functional textiles is now duly registered in Taiwan, the US, the Europe Union, Japan and Mainland China.

Taiwan textile is competitive in the man-made fiber textile market in the world. With the sound base of man-made fiber textile industry, combining the experience and ability of fashion design, Taiwan has become the best resource for functional textile materials. Some of Taiwan textile manufacturers focus on attaching new functions in the fiber materials, and some focus on dyeing process or post-processing to meet the consumers requirement for health, comfort, and safety on textile products.

For keeping the market share in the global market, Taiwan textile industry has devoted itself to developing new materials, doing R&D on composite functional textiles. Taiwan has taking the leading position on functional textile products in Asia. According to the research on global high-Tec textile market made by UK Textile Strategy and Marketing Consultants David Rigby Associates, Taiwans outdoor textile has grown with double-digit annual growing rate, revealing our tremendous strength on developing sport, leisure, functional as well as other technical textiles.

Emerging of leisure trend and the elevation of standard of living make people need functional textiles more eagerly. Consumers are not satisfied the single function textile, and thus composite functions textiles has become the main stream. Taiwan textile industry adds the new element of environment-protection into the primitive functional textiles. Brands confidence in Taiwan shows the opportunity of Taiwan in developing eco-functional textiles, and reflects that the corporate social responsibility is highly regarded by enterprises nowadays.

Source: Judy Yang (Taiwan Textile Federation)

The Bureau of Foreign Trade (BOFT) wants to turn Taiwan into a textile hub in the Asia-Pacific region by applying the integration model it used to propel Taiwan's auto parts industry on to the world stage. According to the officials, the BOFT under the Ministry of Economic Affairs are planning to nurture "professional" textile trading companies which are capable of integrating designers, product developers, manufacturers and marketers to churn out first-class products and sell them to global markets.

The BOFT based its strategy on its successful experience in integrating small auto part manufacturing companies with trading firms and catapult them into worldwide automakers' supply chains beginning in 2005. The board believes that the local textile industry -- Taiwan's fifth largest trade sector and third largest foreign exchange earner -- will be another superstar in terms of manufacturing and exports, the officials said.

According to BOFT, Taiwan's textile industry has generated US$9 billion in foreign exchange each of the past five years. The industry's exports amounted to US$10.6 billion in the first 11 months of last year. With some 80 per cent of output being exported, the textile industry is a highly export-oriented business sector.

Source: BOFT

Taiwan Nonwoven Fabrics Statistic-2006

Table.1 - Nonwoven Production by Technology:

Table 2 - Production Capability

Table3 - 1996~2006 Output and Import

Source: Taiwan Nonwoven Fabrics Industry Association

In an Interview with Mr. Justin Huang, Secretary General, Taiwan Textile Federation, they revealed that in the last 10 years, Taiwan textile industry has invested a lot of resource in textile technology innovation. Currently, Taiwan has been nick-named as the source of functional textiles. Such as fabrics with functions of Far Infrared, Anti-bacteria, Water Repellent, Moisture Transferring, etc. can be developed and produced in many Taiwan textile mills. TTF initiated a certificate/verification system of functional textiles for international retailers and Taiwan textile mills in order to help both of them effectively identify appropriate functional textiles. The System has developed 14 functional textile standards and the relevant testing methodologies. This is why almost all the big names of sportswear and outer wear retailers usually sourced functional textiles from their Taiwanese suppliers.

In 2006, Taiwan was ranked as the No. 6 largest textile export nation in the world. On the whole, Taiwan textile industry, 10 years ago, realized that a product differentiation strategy must be developed and carried out when the global market has been in mess of price competition. A series of innovation program on functional textiles were thus taken by the industry for the purpose.

He also added that textile and apparel industry in China was no doubt a huge pressure to Taiwans apparel firms as well as all the other countries in Asia. Almost all spinners, weavers, knitters, and apparel makers in China have made huge investment in expanding their facility between 1995 and 2005. However, the global markets growth was not large enough to apatite all the new capacity. Then, price competition followed to decrease all the possible benefits of textile mills and apparel firms. Nowadays, China announced a series of new policy for slowing down such competitiveness resulted by the low cost of Chinese industry. The appreciation of RMB, the deduction of tax refund rate, the strict regulation on environmental protection, the new law to strengthen labor benefits and rights etc. are more or less decreasing the pressure of price competition. Asian textile and apparel business people still wonder whether the newly developed economies, such as India, Vietnam and so on would take place of China and then cause the price competition worse.

Conclusion:

Analysts from fibre2fashion could come out with some of the advantages for Taiwan to be the Textile hub for Asia pacific region from their personal conversation with industry, associations and consultants. Focus for industry shifting towards high quality textiles with strong back up by investing in R&D. Taiwan is a leading producer and exporter of manmade fiber worldwide. Moreover the strategic location for the country gives it a competitive advantage over other countries in Asia pacific region.

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