THAILAND MOVES TO UPGRADE APPAREL INDUSTRY

Byline: Eric Wilson

NEW YORK — Taking a cue from companies that focus on building a brand as a crucial business strategy, the Thai government is embarking on its own branding plan, seeking to establish the country as synonymous with diverse and quality apparel production.
The move is part of an overall bid to improve Thailand’s competitive position in the global sourcing marketplace that also includes an initiative to improve the technology and infrastructure of its garment center, said Goanpot Asvinvichit, deputy minister of commerce, during an interview here as part of a weeklong trade mission undertaken last month that included visits to manufacturers like Tommy Hilfiger Corp.
Thailand launched a joint program of industry, government and education as part of a strategy to be more competitive with the impending phaseout of apparel quotas by 2005 and increasing pressure on price and performance, as well as the consolidation by major American apparel sourcing firms.
The strategy includes programs to improve Thailand’s engineering, certification programs and apparel industry infrastructure, Asvinvichit said.
“Thailand is on the path to reach that destination,” he said. “This trip is to kick off the starting point of how to landscape the whole textile industry in Thailand.”
Among the plans on the table, the Thai Garment Manufacturers Association is considering industrial principals, technologies and employee incentive programs that could reduce direct labor costs by 20 to 40 percent, he said. TGMA initiated a yearlong training program with assistance from Thailand’s Department of Commerce and U.S. consultants that is expected to be expanded next year throughout the Thai garment industry using a central association intranet training site. Computer software is also being installed to develop accurate time standards for the garment industry that will be maintained through a master database, he said.
The Fashion Institute of Technology here is also developing a distance learning program to prepare technical courses in industrial engineering principles, principles of production and quality control and cost accounting systems that will be presented over the Internet to Thai university students and apparel factory personnel as part of new certification programs being developed for the industry, Asvinvichit said.
Additionally, the Philadelphia University School of Textiles and Materials Science is developing a model fashion degree program for Thai universities, designed to help the industry develop a more competitive product development and merchandising capacity.
Thailand currently employs more than one million people in the apparel and textile industry in 2,742 factories. The U.S. accounts for about half its apparel exports and about 12 percent of total exports from the country, where apparel manufacturing is the second largest industry for exports after computer products.
In a bid to demonstrate that Thailand views apparel as an important developing business, its cabinet passed a resolution on Aug. 10 to lift a 5 percent import tax on cotton.
Additionally, under a new constitution passed a year ago, Thailand requires a minimum compulsory education of 12 years to combat the use of child labor and allows employees the right to associate and unionize.
The TGMA is also recruiting an independent monitor involved with worldwide standards to police the industry.
“There won’t be any child abuse, as many other countries have complained about Thailand,” Asvinvichit said. “Things have changed dramatically. We have to improve the environmental conditions as well as the labor and human rights. That is a very important factor when we try to landscape the industry to meet a world standard.”
The government also set aside $800 million for the industry to borrow at special interest rates to overhaul and modernize their factories, said Chavalit Nimla-Or, president of the TGMA and secretary of the Thai Garment Development Foundation.
The industry is also working to develop certification standards in quality assurance, productivity, human rights, Quick Response and EDI, he said.
Thailand’s infrastructure initiatives include establishing an action committee of management specialists from the Thai textile and apparel industries through the Thailand Textile Institute to develop fabrics that meet styling and quality requirements of sourcing apparel firms and that provide Quick Response. Other possible developments include establishing a video conferencing network through the Thai Department of Export Promotion, and a shipping strategy to develop air freight capabilities that are competitive with ocean freight pricing in a bid to speed up delivery times.