GENEVA — Multinational textile and apparel powerhouses from China, Taiwan, Hong Kong and South Korea will strengthen as the companies increase their global production, a U.N. report said.
In anticipation of the end of quotas this year, 275 foreign direct investments related to textiles and apparel manufacturing were registered worldwide. China ranked first with 48 projects, followed by India, nine, and Vietnam and Thailand, eight each, according to the study, "TNCs [transnational corporations] and the Removal of Textiles and Clothing Quotas," by the U.N. Conference on Trade and Development.
The reform economies of central and Eastern Europe, given their proximity to the European Union market and the entry of some of them into the EU last year, were also major destinations for foreign investments, with 80 projects, the report said. Bulgaria was the most popular in this group with 18 projects, followed by Hungary, 13, and Poland, seven.
Asia's 108 projects accounted for 38 percent of foreign direct investments; central and Eastern Europe's projects accounted for 29 percent; Latin America and the Caribbean had 36 projects for 13.1 percent, and Africa had 16 for 6 percent of the global investments, the report said.
North America, with 20 investments, accounted for 7.3 percent of the total share and Western Europe, with 14, had 5.1 percent.
The study said the top two foreign investors in textiles and apparel were Japan's Toray industries, with 11 projects, followed by U.S.-based DuPont, which had five. They were followed by Hyosung of South Korea, four projects, and Hytex Integrated of Malaysia and Zorlu Holdings of Turkey, with three projects each.
The report said that to cope with the increased demand, Asian multinationals such as Hong Kong-based Top Form — the world's largest producer of bras, which has operations in China, Thailand and the Philippines — has expanded its production facilities in Jiangxi, China, where labor costs "are much lower than in Giangzhou or Shenzhen."
Similarly, Hong Kong-based Esquel Group, which in 2003 had sales of about $500 million and a global workforce of 47,000, has integrated textile production in China and also apparel plants in China, Malaysia, Mauritius, Sri Lanka and Vietnam. Esquel manufactures for brands such as Hugo Boss, Brooks Bros., Nike, Lands' End and Muji.Other prominent Asian corporate players listed in the survey include Taiwan-based Nien Hsing — the world's biggest jeans manufacturer, with plants in Lesotho, Mexico, Nicaragua and Swaziland. The company produces jeans for Wal-Mart, J.C. Penney Co. Inc., Gap Inc., Sears and Target.
The U.N. Conference on Trade and Development said the breadth and variety of China's apparel production "is unmatched anywhere else in the world," bolstered by a strong raw-materials base for its textile industry. China has the world's largest production capacities for cotton, silk and man-made fibers such as flax and ramie.
In 2003, the report noted, the number of foreign-invested enterprises in China's textiles and apparel sector increased by 5,856 companies, bringing the total to 20,000 enterprises.
Based on industry and Chinese government data, in 2003, the largest Chinese textiles and apparel exporter, according to the U.N. group's rankings, was Guangdong Silk Corp., with shipments valued at $1.17 billion, followed by China Worldbest Group, $1.15 billion; Youngor Group, $521 million; Shandong Weiqiao Pioneering Group, $432 million, and Hong Kong-based Dongguan Fu'an Weaving, Printing & Dyeing Co., $409 million.
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