NEW YORK — The big question for exhibitors at a trio of Asian textile trade shows in New York last week was what to do to prepare for 2005, when the nations of the World Trade Organization are set to drop quotas on fabric and apparel.
This story first appeared in the January 27, 2004 issue of WWD. Subscribe Today.
That event is expected to result in more intense competition and declining prices, with China seen as the nation most likely to gain market share. For textile companies in the greater China area, which encompasses Taiwan and Hong Kong, preparation often means expanding operations into China itself.
Mill executives in other countries are following a variety of strategies in preparing for the competitive onslaught.
At Istanbul-based Kaplan Tekstil — a mill that turns out more than 3 million square meters a year of cotton, linen and wool fabrics for the men’s and women’s markets — representative Serkan Hikmet Corum said his company’s approach to preparation has been “buying more looms.”
“If you can’t do 10,000 meters in three or four weeks, they can’t buy from you,” he explained. “That’s a must.”
Kaplan was among the 46 exhibitors at the Turkish Fashion Fabric Exhibition, which ran Jan. 20-21 at the Grand Hyatt Hotel at New York’s Grand Central Terminal. The show was sponsored by ITKIB, a Turkish textile-promotions group.
Other exhibitors at the event said they were taking the opposite approach and shutting down some of their looms, which would allow them to concentrate on smaller, but more profitable orders.
“The big quantities will go to China,” predicted Dogan Filiz, marketing coordinator at Bahariye Mensucat, which employs 450 people and primarily produces wool fabrics. He said his company expects to have to survive on fill-in orders and by attracting customers with distinctive fashion items and quick turnarounds.
The common theme in all of this, according to Tayfun Zorlu, who works in marketing at Istanbul-based Arsan Tekstil, was flexibility. For his firm, which makes woven and knit fabrics, that translates to allowing buyers to order “smaller amounts — instead of a whole container, a half container.”
At denim giant Isko Dokuma Isletmeleri, based in Bursa, marketing manager Mehemet F. Akgunlu said his company hoped to become more competitive by increasing the frequency with which it offers new merchandise. Right now, he said, it produces two collections a year. After the quotas are lifted, he continued, “We will be doing four collections, maybe six.”
The Turkish show — along with Innovation Asia and PanTextiles New York, which also ran last week — was intended to focus on spring-summer 2005 fabrics. That will mark the first season that quota will not be a factor in buying decisions.
However, exhibitors said most buyers weren’t quite ready to work on spring 2005.
“Some people are ready for spring now, some people are working fall but open to look at spring, and some people don’t even want to look at spring,” said Robert Caplan, a senior adviser to wool and cotton maker Holsa Inc.’s Bossa division, who is based in New York.
He noted that the increasing variation in what season a given apparel maker might be working on at any point in time makes running efficient mills more complicated.
“You’ve got some people who are looking for three week lead times and then more normal people looking for six to eight weeks,” he said.
The end of quotas was also a looming issue at Innovation Asia, which wrapped up a three-day run Thursday at Amuse restaurant at 110 West 18th Street.
Produced by lyocell maker Tencel, the show featured 23 exhibitors, each of which use Tencel in at least a portion of their offerings, and about 600 attendees.
Pauline Ning, sales and marketing manager of Hong Kong-based Active Sight Textiles, said buyers at the show were looking for novelty, echoing observations by other vendors at the venue. As for 2005, Active is taking the if-you-can’t beat-’em-join-’em approach by opening a Shanghai office and moving into selling garments, as well.
“For buyers, it would be better for them to negotiate for one price only,” said Ning.
Joan Cheng, special assistant to the chairman and sales manager for Taiwan-based Chyang Sheng Dyeing & Finishing Co., is looking to compete with Chinese imports with more specialized attention.
Cheng said of Chinese firms, “A lot of the time they focus on sales, not after-sales service.” Accordingly, the company is prepared to provide lab tests on the fabrics it sells and advise manufacturers on cutting and sewing methods that work best.
Robert Harrington, sales manager for Taiwan-based Be-Mode Textile Co., said he isn’t expecting any huge shifts in the firm’s business in 2005, since much of the weaving for Taiwan is already done in China.
“I don’t see as it will affect us,” he said. “As long as you stay in Asia, you’re OK.”
At PanTextiles, which ran Wednesday and Thursday at the Hammerstein Ballroom at 311 West 34th Street, many of the 17 exhibitors took a similarly sanguine view. The show was organized by the Taiwan Textile Federation.
“The market is moving toward China — maybe they will be 50 percent” of world production after 2005, suggested Amy Lin, a manager with Yeong Yueh Lace Co., based in Tainan, Taiwan.
Jimmy Tsui, sales manager with Well Success Textile (H.K.) Co., a knitter based in Hong Kong, said he was not worried about the coming end of quotas.
“We welcome it,” he said.
Still, for textile companies who are not positioned or inclined to move operations into China, 2005 remains a major challenge.
“It’s a difficult question,” said Isko’s Akgunlu. “We have a lot of plans, but it’s not clear what’s going to happen.”