HONG KONG — With the memory of the spring SARS epidemic still strong in this city, exhibitors and attendees at last week’s Interstoff Asia trade fair reported a solid pickup in traffic and business, as Asian manufacturers continued to jockey for position as the end of quotas in 2005 approaches.
In particular, exhibitors from across Southeast Asia at the three-day event that wrapped up Thursday, said they were looking for ways to stave off competition from China’s fast-growing textile industry.
At Bangkok, Thailand-based based Nan Yang Fabric Co., merchandiser Napat Khoosuwan said her company has focused on developing high tech products that won’t compete directly with China.
“We are trying to differentiate ourselves,” said Khoosuwan, whose 30-year-old vertical textile company currently employs about 2,000 workers. “We’re trying to add technology to more of our products…[to have] the sort of fabrics it’s going to be difficult for people to find in China.”
Nan Yang exhibited in the Invista Rendezvous section of the show, a group of 65 exhibitors backed by the Wilmington, Del.-based fiber maker formerly known as DuPont Textiles & Interiors. The area also promoted Invista’s Lycra Assured program that is intended to make it easier for buyers to quickly assess the skill and quality levels of textile factories.
Gregory Vas Nunes, vice president of apparel for the Asia Pacific region of Invista, said the goal of the Assured program is to give key mill customers a first crack at the firm’s new technologies. “It is a business strategy more than a supply-chain strategy,” he said.
Bill Ghitis, president of apparel for Invista’s worldwide operations, added that part of the company’s goal in boosting its promotional presence in Asia was increasing sales to local consumer markets.
“This is not just about building factories in China to export products to the West,” he said. “There is an Asian consumer that is just as important as consumers in Paris and New York.”
Vas Nunes noted that the company had recently been successful in promoting sales of long underwear made with Coolmax polyester and Lycra spandex, which proved competitive with the woolen version that had dominated the Chinese market. Many people in China commute by bicycle, which makes long underwear important in cooler months.Franco Lui, a Hong Kong sales representative for Daegu, South Korea-based swimwear fabrics maker Hyun Jin Knit Co., said his company has concentrated on rolling out new fashion fabrics more quickly and pointed to a glitter-printed run of fabric as something that could hold its own with lower-priced Chinese competitors.
Still, he acknowledged that Chinese competition is picking up quickly. Asked whether he thought the nation’s growing textile industry will catch up with more established competitors, he responded, “Yes, that is going to happen.”
Chinese competition was a major concern of the Taiwan Textile Federation, as well, which sent a contingent of 33 mills to the show, held at the Hong Kong Convention & Exhibition Center.
“China really majors in low-end fashions and fabrics,” said Jennifer Liu, section chief for Asia and Pacific affairs at the TTF’s market promotion department. “In Taiwan, we have to change our policy to get our companies to focus on function if we are going to compete.”
The Taiwanese contingent showed fabrics with special properties, including some that were flame retardant and others that were waterproof, all characteristics that exhibitors said they hoped would make them competitive after the 148 nations of the World Trade Organization drop their quotas on textiles and apparel in less than 15 months.
Some in the Chinese textile industry have taken a more subdued view on how the end of quotas will affect their prospects. There is a growing push in the U.S. textile industry for the Bush administration to restrict Chinese imports because of market disruption — something it’s allowed to do under the terms of the U.S.-China bilateral trade agreement that paved the way for China’s WTO entry. Sourcing executives have begun to speculate that Chinese apparel and textile exports may be facing significant restrictions until about 2008, when the bilateral agreement expires.
That possibility has caught the attention of many Chinese executives.
Xia Hua Jun, vice general manager for Zhejiang-based Zhejiang Nanyo Light Textile Co., a maker of polyester woven fabrics, said his company primarily exports to Dubai, Holland and Germany. He said he didn’t expect business conditions to change much in 2005, adding, “I don’t think it will make a big difference.”But some U.S. buyers at the show expressed confidence that quotas would be lifted in 2005.
“We were here last autumn for the first time and we liked what we saw — a lot of Chinese suppliers,” said Bill Grazzo, executive vice president of product development at Erin London, a Hallandale, Fla.-based misses’ resource. “We like them because the prices are good and we think the quotas will go.”
Buyers emphasized, though, that quality concerns trumped price demands in most purchasing decisions.
“Cost is important, but it’s not the first concern,” said Joyce Leung, a management assistant with Hong Kong fabric buying office H.D. Isler & Co., which primarily sells to German and other European clients. “The fabrics must be high quality and functional.”
According to organizers, the show attracted 12,003 buyers — a slight increase from last fall’s edition but well ahead of the soft attendance at the March show, which fell during the SARS outbreak. Concerns about SARS were evident across the show floor, where managers continued to take safety precautions such as taking the temperatures of attendees at the venue entrance and at random spots through the show. Fever, along with a cough and shortness of breath, is one of the key symptoms of SARS.
Among the 350 exhibitors, some executives said the memory of SARS had clearly influenced customers’ thinking on sourcing strategy.
“SARS also made people think about whether they can afford to have all their eggs in one basket,” said John Walker, president of Unifi Asia Ltd., the U.S. firm’s Hong Kong arm. “That made people realize they need to source in other places, that you need to have contingencies in Indonesia, Thailand, Vietnam.”
Unifi officials were promoting a new alliance with Unimatrix, an Emeryville, Calif. and Hong Kong-based sourcing company that focuses on athletic and outdoor apparel.
Overall, show officials said they were pleased with the turnout, particularly after the bleak spring edition.
Katy Lam, general manager of trade fairs with show organizer Messe Frankfurt, said the number of exhibitors was “less than we’re used to having in the winter, but the companies had to decide whether or not to come right after SARS and in a bad economic climate. But it seems to be that business is picking up in the industry, not just in Hong Kong.”In terms of fashion, pattern took a back seat among the fall 2004-winter 2005 goods on sale, with simple florals and traditional men’s wear-inspired looks the exception. Black-and-white suit fabrics played a big role, with herringbone, glen plaid, pinstripes and checks key trends. These materials, reminiscent of the Eighties, were matched with retro New Wave colors, including hot pink and turquoise.
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