MIDA Report on Performance of the Malaysian Textile & Apparel Sector

The textiles and textile products industry comprises of four sub-sectors, namely primary textiles which cover activities such as polymerisation, spinning, weaving, knitting and wet processing; made-up garments; made-up textiles; and textile accessories.

Currently, there are 646 licensed companies in operation with investments of RM8.1 billion, of which:

  • three companies are producing polyester staple fibre;

  •  nine companies are producing yarn;

  •  thirteen (13) companies are producing woven fabrics, of which nine are for made-up garments and household products; three are for car seat cover and upholstery; and one for woven geo-textile fabrics;

  • one hundred and twenty (120) companies are producing knitted fabrics, largely involved in circular knitting;

  • seven companies are producing nonwoven fabrics, of which five are for disposable diapers, interlining and personal care products, while two companies are producing non-woven geo-textile fabrics;

  • thirty-five (35) companies are undertaking wet processing activities such as bleaching, dyeing, printing and finishing of yarn and fabrics;

  • thirty-five (35) companies are producing various types of made-up textile products such as bed linen, table linen, ropes and carpet;

  •  twenty-four (24) companies are producing a wide range of textile accessories such as zip fasteners, sewing thread, drawstring, elastic webbing and labels; and

  •  four hundred (400) companies are producing made-up garments.

The textiles industry continues to make significant contributions to exports and employment. In 2006 (January-November), the textiles and textile products industry was the seventh largest export earner, contributing RM9.7 billion or approximately two per cent of total exports of manufactured goods. In 2005, exports of textiles and textile products amounted to RM10.3 billion. The abolishment of textile quotas in January 2005 and the imposition of textile quotas by USA on China in July 2005, created opportunities for the Malaysian textiles industry to increase their exports globally.

 
                              RM million
                  Source: Department of Statistics

Malaysia’s major export destination for textiles and textile products in 2006 was USA, accounting for 27.8 per cent of the total exports. Other major export destinations were ASEAN countries (16.1%), Turkey (6.3%), Japan (4.8%) and China (3.8%).

   

Output of textiles and apparel increased by 7.3 per cent in 2006, led by apparels which expanded by 20 per cent. 

Sales of textiles decreased by 2.8 per cent to RM4.8 billion while sales of apparel declined by 12.0 per cent to RM 2.8 billion. The reduction in sales value was attributed to competition from imported textiles and apparel that resulted in lower prices for domestic products.

Employment in the textiles and apparel industry contracted by 1.9 per cent to 65,174 persons in November 2006 compared with 66,443 persons in November 2005, of which 41,131 workers or 63.1 per cent were in the made-up. The decrease was due to increased automation and the focus on the production of higher value-added products.

Projects Approved in 2006

A total of 30 projects were approved in the textiles and textile products industry in 2006 with investments of RM821.3 million compared with 35 projects with investments of RM373.9 million in 2005. Of these, seven were new projects with investments of RM614.7 million and 23 were expansion / diversification projects with investments of RM206.6 million. Domestic investments amounted to RM669.1 million (81.5%), while foreign investments totalled RM152.2 million (18.5%).

Of the 30 projects approved, seven projects (RM182.4 million) were for the production of primary textiles, 18 projects (RM91.3 million) for made-up garments, four projects (RM542.3 million) for made up textile products and one project (RM5.3 million) for textile accessories. These projects would generate a total of 2,863 employment opportunities.

Eighteen (18) projects were Malaysian owned, mainly to manufacture made-up garments. The other projects were for the production of geo-textiles, lace fabrics and integrated carpet manufacturing.

                            RM million
                Source: Department of Statistics

Investments in Projects Approved in the Textiles and Textile Products Industry by Sub-Sector, 2006

In the primary textiles sub-sector, of the seven projects approved, two were new projects with investments of RM54.5 million and five were expansion/diversification projects with investments of RM127.9 million. Domestic investments amounted to RM52.9 million (29%) while foreign investments totalled RM129.5 million (71%).

The major projects approved were:

  • a diversification project by an existing foreign-owned company with an additional investment of RM100.4 million for the production of cotton and cotton blended yarn. This company is currently producing Polyethylene Terephthalate (PET) resin. The company proposes to export 50 per cent of its production to People’s Republic of China, Australia, ASEAN countries and European countries;

  • a new project by a Malaysian-owned company with an investment of RM40 million. The company proposes to manufacture lace fabrics largely for the export market. The lace fabrics produced are of high quality and are mostly used in high-end undergarments and lingerie;

  • a new project by Chaudry Textiles (M) Sdn. Bhd., a Pakistani-Malaysian jointventure project with an investment of RM14.5 million. This company proposes to undertake bleaching, dyeing, printing and finishing of fabrics with special features such as anti-shrinkage and silky touch. The project would utilise state-of-the-art equipment for bleaching, dyeing, printing and finishing of fabrics. The project when implemented would service the garment industry in Malaysia; and

  • an expansion project by Advance Technical Fabric Sdn. Bhd., a Malaysian-owned company with an investment of RM12.5 million. This company proposes to produce geotextiles for construction and engineering applications. Twenty per cent of its production will be exported to Germany, Australia, India, the Middle East and ASEAN countries.

In the made-up garments sub-sector, 18 projects were approved with investments of RM91 million in 2006. Of these, four were new projects with investments of RM30.2 million while 14 were expansion / diversification projects with investments of RM60.8 million. Domestic investments amounted to RM76.2 million (83.7%), while foreign investments totaled RM14.8 million (16.3%)

Among the major projects approved were:

  • an expansion/diversification project by a Malaysian-owned company, with an additional investment of RM44.2 million for the manufacture of made-up garments. The company is currently producing high-end made-up garments mainly for ‘NIKE’ brand. The company proposes to export all its products to USA, Canada and Asia; and 

  • a new project by a Malaysian-owned company, Whitex Knitting Sdn. Bhd., with an investment of RM20.4 million for the production of seamless knitted garments. The project would utilize knitting technology from Italy. The entire production of this project will be exported to USA, Europe and Canada.

In the made-up textile products sub-sector, four projects with investments of RM542.3 million were approved in 2006. Of the approved projects, one was a new project with an investment of RM530 million, while three were expansion/diversification projects with investments of RM12.3 million. Domestic investments amounted to RM535.6 million (98.8%), while foreign investments totalled RM6.7 million (1.2%).

The new project approved was a wholly Malaysian-owned integrated carpet manufacturing project with investments of RM530 million. The company plans to export a significant amount of its production to ASEAN countries, USA, Europe, Australia and Japan.

In 2006, the expansion activities undertaken by existing companies mainly in the made-up garments sub-sector, indicate that Malaysia is still competitive in the global market for high end and specialty textile products. Over the years, the Malaysian textiles industry has established a reputation for high quality products and as a reliable source in terms of delivery and meeting international standards. This has enabled the industry to sustain its market share globally.

New growth areas in the textiles and textile products industry have been targeted for promotion in the IMP3. The growth areas include industrial and home textiles; functional fabrics; high-end garments; ethnic fabrics; and key support facilities and services. The investment target for this industry during the Plan period is RM13.4 billion. Investments are projected to increase in the primary textiles sub-sector, mainly for the manufacture of synthetic textiles which include functional and technical fabrics.

The industry is constantly challenged by the availability of textiles products from low cost producing countries. To remain competitive, Malaysian manufacturers must continue to strive for cost competitiveness by producing high value added products, enhancing product quality, emphasising on new designs and product differentiation as well as ensuring prompt response to market requirements.

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