TOKYO — Citing continuing competition from other Asian manufacturers and the ongoing weakness in the Japanese economy, Toyobo Co. said it plans to close three of its six domestic textile mills in June.

This story first appeared in the March 4, 2003 issue of WWD. Subscribe Today.

The closure of the three mills by Toyobo, one of Japan’s largest textile manufacturers, will reduce its spinning capacity here by 53.7 percent and its weaving capacity by 62.5 percent.

Like many other Japanese textile mills, Toyobo, has been moving its production to overseas markets in past decades. After the closings, the Osaka-based company will have two-and-a-half times as much spinning capacity, and six times as much spinning capacity outside of Japan as it has in it.

Imports of cotton textile products to Japan, which accounted for 87.5 percent of Japanese domestic market consumption in 1999, rose to 97.7 percent in the first half of 2002, Toyobo said.

Factors leading to the falling demand include the continuing drop in personal consumption, which stems from the prolonged slump of Japanese business; a continued decline in the percentage of household income devoted to apparel; the depression of prices from increasing competition from imports arriving from China and other Asian suppliers, and a diminution of competitiveness of Japanese products over imported products because of improvement in product quality and apparel-making techniques in other Asian countries, Toyobo noted.

“The business environment surrounding the Japanese textile industry is changing at a speed far beyond imagination,” said a company statement. “We must say that unless a further drastic structural reform is implemented, recovery of our country’s spinning and weaving industry will be in difficulty.”

Toyobo said it was compelled to close the three mills despite the strenuous efforts the company has been making since 1990 to restructure its natural fiber textile business operations, enhance its marketing power and cut production costs.

The mills to be closed are:

The Komatsujima mill works in Tokushima Prefecture on the southern coast of Shikoku Island, which has 129 workers, 32,256 spindles and 142 looms.

The Fuchizaki mill works in Kagawa Prefecture on the northern coast of Shikoku, which has 39,020 spindles and employs 70 people.

The mill works in Miyagi Prefecture northeast of Tokyo, with 27,696 spindles and 79 workers.

Some equipment from closed mills will be moved overseas, while the remainder will be scrapped, Toyobo said. A portion of 142 looms will be moved to the Shokawa mill works in the Japan Sea coast prefecture of Toyama, Toyobo said.

There will be no layoffs, Toyobo said, explaining that employees in closed mills will be relocated to other Toyobo facilities.

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