SARS & War Bring Orders Back to Malaysia

Unlike the tourism industry that is reeling from the impact of war and Severe Acute Respiratory Syndrome (SARS) outbreak, Malaysian textile and garment exporters, are believed to have enjoyed an increase in demand for its products, particularly from the US.

Many US buyers are said to have shifted their sourcing of garments to local garment manufacturers from those in India and Pakistan since the war in Afghanistan in 2001 and the recent US-led war in Iraq. The shift has helped to fill in the capacity left by the slowing global demand. The situation has helped to compensate for the loss in business to other manufacturers in China. Companies which receives orders from mainly US buyers representing major US brands, expects business to increase by some 20% given the additional orders. This helps to cushion the reduced orders from other buyers.

Malaysian garment makers can also tap into the opportunities to fill the gap given that the US or European buyers' marketing strategy to spread their order across several countries to minimise risks.

However, despite the positive outlook of the local garment manufactures, they lose out to countries like China in terms of cost advantage. To remedy the situation, some local manufacturers are moving to countries such as Vietnam and China to set up their manufacturing units due to their lower operating cost.

Still, many are hoping that some of businesses secured by manufacturers in southern China will land here following the SARS outbreak. However, it is too early to feel the impact now.

Back to Index of April 2003