Once Perceived 'Sunset Industry', Malaysia’s Textile Industry Has Potential To Bounce Back

By Manik Mehta FRANKFURT, Jan 15 (Bernama) -- Often described by some experts as a ‘sunset industry’, as it began to lose its sheen decades ago following rising costs and fierce competition from China, Bangladesh and Vietnam, Malaysia’s textile industry can possibly stage a comeback as the United States (US)-China trade war continues, prompting Western buyers of Chinese textiles to look for alternative sources. Hopes of reviving the industry in Malaysia – and other Southeast Asian suppliers of home-textiles and other textile products – were ubiquitous among Malaysians and other Southeast Asians at Frankfurt’s just-concluded four-day Heimtextil trade fair, the world’s largest trade fair for home textiles and accessories. Obviously, the US-China spat has unnerved many traditional buyers of Chinese products and while an abrupt switch by buyers representing the big US and other Western importing companies and houses to other supplying countries is not expected, the ongoing dispute between the two countries has caused what the trade at the Frankfurt show called a “gentle panic”. “I am pretty sure buyers in the US and elsewhere are aware of the perils of asymmetrical dependency on China as a source of textile products, coupled with many problems which foreign importers face in that country, particularly in regard to quality, IPR, post-sales service, etc. Besides, prices of Chinese products have also risen, thanks to the soaring labour and production costs in that country. “The ongoing trade war could, in fact, be the proverbial (final) straw that will break the camel’s back, Malaysia could step in to fill in the vacuum if US companies decide to quit China.  Malaysia’s quality is definitely a plus (factor) despite prices of its products being slightly higher,” one US buyer, preferring to remain anonymous, told Bernama at the Heimtextil show. Malaysian exhibitors – there were two directly from Malaysia and one was represented by a Chinese agent – offered testimony of the changing scenario in the home-textile trade.  Fernex Sdn Bhd of Kajang, Selangor, which also has a manufacturing base in China, received many “solid business enquiries” from both existing and potential new buyers from around the world, including America, according to Lee Kheang Lim, Fernex’s marketing director. While the number of enquiries had increased substantially, he said this could possibly be related to the ongoing trade spat between the US and China. “It may be so, but I do not know for sure.” Another promising home-textile supplier from Malaysia at Frankfurt was the Petaling Jaya-based Nature World Manufacturing Sdn Bhd, whose nature-protection emphasis is in alignment with the growing emphasis worldwide on environment protection and which attracted many potential buyers from the West and many other parts of the world. Nature World’s partnership with Bio-Active Energy (BAE) of Kuala Lumpur has helped the former achieve a high level of environment-friendly manufacturing of bedding products. “While our buyers have shown keen interest in our BAE energy-based products, the increase in the number of enquiries may possibly be attributed to the ongoing trade war (between the US and China), with buyers trying to establish alternative sources of supply,” Wendy Tan, the managing director of Nature World told Bernama. The Heimtextil show, with an incredible 3,025 exhibitors from 65 countries, has also become an international platform providing updated information and trends; it holds a myriad of important sub-events related to the global textile trade and industry.  The implications of the US-China trade war were widely discussed, and Malaysia and other Southeast Asian suppliers could be heard at this humungous event. Olaf Schmidt, the vice-president (textile/textile technology) of the organising Messe Frankfurt company and considered the ‘brains’ behind the Heimtextil event, was unsure of “what will happen in the coming days” resulting from the trade war. “There is, obviously, an increase of US buyers at this show, implying that the US is looking for opportunities in international sourcing. All the big US stores are here. There is, clearly, a shift to other countries. Because of the emotional character of the ongoing problem, we should know in about six months from now what will happen,” he said in an exclusive interview with Bernama at the Heimtextil. Indeed, he noted Malaysia could find opportunities from the trade tensions. Nevertheless, Schmidt was unsure if other suppliers could quickly replace China which is the world’s biggest textile supplier with a huge textile-manufacturing infrastructure. However, he was upbeat about the ASEAN region, with Vietnam, Indonesia and Malaysia becoming key players. “The ASEAN, and also Bangladesh, would play a significant role in the global textile supply chain. I also believe fierce international competition will force suppliers to upgrade their production processes, installing automation and devising faster and convenient modes of supplies. Technological innovation is the mantra of the industry’s future.” Other ASEAN exhibitors were also spotted at the show, with Indonesia (eight), Malaysia and Thailand (three each) and Vietnam (eight) showing growth in numbers. The top two textile giants, China and India, had 559 and 394 exhibitors, respectively, surpassing by far the host country Germany (301). According to the Malaysian Trade Commissioner in Frankfurt, Badrul Hisham Hilal, Malaysia’s total exports of textiles, apparel and footwear amounted to about RM13.6 billion in last year’s January-November 11-month period. The US was the biggest market for such products, absorbing some RM1.7 billion (13 per cent) of the total exports. -- BERNAMA