Feb 15, 2013

ASEAN - Asean apparel sector needs to integrate supply chain

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The textile and clothing chain within the ten countries of the Association of Southeast Asian Nations (Asean) needs to be vertically integrated in order to ensure the competitiveness of the Asean apparel industry.

This was echoed by various textile and apparel sector experts at the ‘Prime Source Forum –Focus on Asean’ held in the Indonesian capital of Jakarta last week.

Giving an overview of the Asean textile and garment market and its export potential, Mr. Ade Sudrajat, chairman of the Indonesian Textile Association (API), said the 640 million inhabitants of the Asean region themselves create a huge market for apparels. Secondly, the coming into effect of the Asean Economic Community (AEC) by 2015 will speed up the flow of capital, labour and goods within the ten-nation bloc.

Moreover, the free trade agreements (FTA) between Asean and other countries like Australia, China, India, Japan, New Zealand and South Korea, along with the proposed Trans-Pacific Partnership (TPP) will bring both investors and buyers into the region, he added.

In such a scenario, integrating Asean’s regional supply chain is essential to increase the competitiveness of the Asean apparel sector in future, he said.

Mr. Mark Lee, vice president of Singapore Textile and Fashion Federation, said Asean companies will have to further intensify the vertical integration of their textile and garment industry in order to increasingly benefit from a shift in production and sourcing base from China.

Speakers also stressed on the need for investing in raw materials production. For example, Vietnam imports yarn for its textile and garment industry from China and if it is available within Asean, Vietnam manufacturers could source their yarn from there and decrease costs, said one expert.

Mr. Prabakaran Kesavan from Source Asean Full Service Alliance (SAFSA), which links fabric mills and apparel manufacturing units across Asean, said South Korean and the US textile mills would set up their own spinning units in the Asean region if the TPP is agreed.

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