Thailand Seeks to be ASEAN’s Fashion Hub

Faced with a fall in exports to the US and EU, Thailand’s textile and garment industry has set its sights on becoming a fashion hub for the ASEAN region. Slowing demand from the US and EU has been offset by a rise in Thailand’s exports to Asia – including China, Hong Kong, Korea and Japan – which now accounts for half the country’s total exports, according to Srirat Rastapana, Director General of Department of International Trade Promotion (DITP) at the Ministry of Commerce of Thailand. She said, “Some 23-24% of exports are within ASEAN and China takes up 12% and both are growing. Asia is a huge market with plenty of room for expansion; we will focus our attention and efforts on Asia.”

Rastapana points to Thailand’s advantages, including “its strategic location to become a distribution centre of ASEAN,” product quality, and an array of educati0l1al institutes producing potential personnel in textiles and design. However, the industry faces challenges too, explains Somsak Srisuponvanit, Chairman of the National Federation of Thai Textile Industries. “In order to maintain its position in the global apparel industry, Thailand must cooperate with ASEAN countries for sustainability,” he notes. He adds:

“Thailand’s younger generation is reluctant to enter labour intensive industries; they wish to work in the hospitality, entertainment and tourism, industries, which the Government is supporting and promoting.”

Yuttana Silpsarnvitch, Executive Director of the Thai Garment Manufacturers Association (TGMA), agrees that the “minimum wage is not the key problem; the shortage of workers is.” Workers who are now 40 years old will soon retire, but the younger generation is not keen to enter this industry. “As a consequence, some 20 of Thailand’s biggest garment manufacturers have moved part of their operations to Myanmar (Burma) and Cambodia and, to a lesser extent Laos, Indonesia, and Vietnam.

Changing times

To help the textile and garment industry cope with the changing times, an Overseas Trade & Investment Centre (OTIC) was established last September to support manufacturers in setting up off-shore operations, and to help OEM (original equipment manufacturer) companies move to ODM (original design manufacturer) and OBM (original brand manufacturer). “Starting this year, more projects will be introduced to achieve this goal”, Silpsarnvitch elaborated.

Thailand’s textile and garment exports fell 12.2% yearon-year in 2012 to $7.22bn, with textiles down 13.7% to $4.27bn, and garment shipments dropping 10% to $2.9bn. Among its major markets, declines were seen in exports to the US at $1.2bn (-14.08%) and the EU at $1.09bn (-24.27%). But records for January 2013 show a strong 12.8% rebound in textile exports, while garment exports grew by 9.1 %.

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