With full supply chains and innovative products, Thailand’s knitting industry is thriving, making the country a nucleus for fashion manufacturing in the Association of Southeast Asian Nations (ASEAN) region.
“Thailand’s strength lies in our full-value supply chains, starting from fibres to yarns and fabrics, then apparel and clothing within the fashion industry,” says Chartchai Singhadeja, executive director of the Thai Garment Manufacturers Association (TGMA).
The country is also making a mark for itself as a one-stop shop for knitwear products, both in a range of fabrics and ready-to-wear garments such as crocheted and knitted coats, suits, shirts, blouses, lingerie and accessories.
Singhadeja says that currently Thailand’s knitters contribute 50% of the country’s garment and fabric exports, which he values at between US$1.9bn and US$2bn per year.
He adds that there is real potential to increase overseas sales of knitted fabric. “The potential for Thailand to be a knitwear hub, especially in materials, is very high because neighbouring countries such as Cambodia, Laos, Myanmar and Vietnam import vast amounts of knitted fabrics from us to use for garment manufacturing in their country, especially for sportswear and innerwear.”
As for knitted clothing exports, the latest TGMA report lists key markets in 2017 as being the US (US$541.177m); Japan (US$262.927m); Belgium (US$117.887m); Germany (US$64.621m); and China (US$62.596m).
According to Thaitradeusa.com, an information resource run by the Thai ministry of commerce, 90% of Thai clothing and textile products purchased by the US comprises a wide range of apparel, with 10% of sales being in some specific segments – namely brassieres, stockings, leggings, tights, socks and cloth gloves.
In terms of fabrics, popular export items include single and double jersey, burnout, rib, interlock, piquet, fleece fabrics and others. Thailand’s top knitted fabric export destinations in 2017 were Vietnam (US$81.302m), Cambodia (US$58.946m), Indonesia (US$42.261m), China (US$15.354m), and Sri Lanka (US$16.674m).
Looking ahead, as Thailand embraces Industry 4.0, its blueprint for success for its apparel industry includes plans for energy-efficient green production; smart factories with enterprise resource planning (ERP) and digital workflow systems; high performance manufacturing such as 3D printing, automation and modular production; and development of new products. Such innovation will exponentially increase its manufacturing and production capabilities within the garment sector, according to a report by the TGMA and the Thai Garment Development Foundation.
Nan Yang Textile Group and Grand Knitwear Manufacturing Co Ltd are two of Thailand’s prominent players within the knitwear industry. Nan Yang, the bigger of the two, specialises in cotton yarn, knit fabric and knitwear apparel, and has a knitted product manufacturing capacity of 3,000 tonnes a month.
Nan Yang’s six factories, located in Thailand and Laos, have a collective production capacity of 31 million pieces of knitted apparel per year. The company’s sweater production is run out of four factories in Thailand, where it uses knitting techniques such as hand-flat knitting, intarsia and floating jacquard. It also has computerised operations, as well as offering semi-automated knitting.
Grand Knitwear Manufacturing, established in 1983, produces cut and sewn knit garments such as T-shirts and polo shirts, at a capacity of 26,000 pieces per month. The company exports mainly to France and Japan, a top client being Children Worldwide Fashion, in France. It also sells well domestically, for instance to the Jaspal Group, in Thailand.
Both these manufacturers use knitting machinery imported from Japan, Germany, Italy and Switzerland.
Thailand also has a number of knitted fabric specialists, such as Thai Interknit Factory Co, which produces cotton knit fabric.
As Thailand aims to set its position in the global knitwear industry, it must be ready to face tough competition from neighbouring countries, some with lower wage costs. Many Thai garment manufacturers have already expanded their production base abroad to countries such as China, Laos, Myanmar and Vietnam due to customer needs, including origin-linked import duty privileges, workforce specialisms and lower wages.
“In order to compete, Thailand must be strong in the development of manufacturing technology, R&D, design and marketing, and be a full-service manufacturer,” says Singhadeja. “It is also important that we expand abilities to create brands and add value to our products and services in both appearance and function of use. Since we are moving into Industry 4.0, we will use more technologies and automation in our business processes, not only in the production line, but in all business activities.”
A representative from Grand Knitwear Manufacturing says that for competitors such as Cambodia and Vietnam, “we cannot fight them on unit price because we have higher labour costs, but we have a strong back up from our upstream industry. Our product quality in general is also better than that of our competitors, plus we have a lower minimum order quantity.”
He adds: “The general trend of the knitwear industry is going towards fast fashion – very fashionable items produced in a small number that are sold in the shops for a short period of time – so that is what we are focusing on.”
Yuttana Silpsarnvitch, the TGMA secretary-general comments that focusing on niche products is important for the Thai knit industry.
“Thailand can’t compete with lower market productions in Bangladesh or high-end manufacturing such as Singapore, but we can focus on small and medium-sized customers who want higher value niche products, for example sports knitwear or designer brand markets, instead of competing with big volume quantity customers,” he says.
“The future of our knitting industry will rely on these markets, so we should aim to add more value to our products, create long-term partnerships with our buyers, and offer speedy processes and services to our clients.”
The government is supporting such moves. In its ‘Thailand 4.0 roadmap’, a broad set of policies designed to boost digitalisation, the government has outlined programmes to develop and expand the knitwear sector as part of its plans to boost clothing and textile production.
“The development of textile and garment clusters in terms of value-added supply chains will include creating more product value, streamlining industrial technology, and investment in people training programmes,” says Silpsarnvitch.
To attract investments in the garment sector, the Thai Board of Investment (BOI) administers privileges including corporate income tax reductions for investors in new machines for productivity and efficiency improvement; investment projects promoting environmental and social care good practice; innovative design products; and building new factories in promoted industrial zones or special economic zones.
“The Thai government also offers tax privilege to SMEs, creative, design and R&D companies, but it is based on individual projects which have to be submitted to the BOI or the SMEs board of development,” adds Silpsarnvitch.
Source: www.wtin.com