Outlook of Textile and Apparel Industry in Malaysia Today

by Khadmudin Hj. Mohd. Rafik

The textile and apparel industry was at one time or specifically until the late 90’s, the largest manufacturing sector in Johor both in terms of numbers of establishments as well as total employment. The area of concentration being Johor Bahru, Batu Pahat and Kluang. However with the introduction of WTO the phasing out of MFA and Quota System in 2005, powerful emergence of China and the string of FTA’s being concluded across the globe brought about a significant decline in the industry forcing numerous industry players to relocate, close or face closure by banks. 

An industry which is heavily dependent on labour especially imported in constantly beleaguered by sudden and unprecedented Changes in Policies by the authorities governing imported labour, conditions imposed both by Importing and Sourcing Countries, Brand Holders, Buyers and the United Nations which is causing nightmare to the industry players. Uncertainties are prevailing thereby curtailing the growth of the industry whereby an industry which at one time contributed significantly to the exports of the nation is surely rapidly declining and dwindling. 

The Global Economic Crisis did not spare Malaysia and the Textile Industry which brought about further closures and failures in textile related companies. At the time of dire need authorities bled the wounds further by implementing “No Levy Deduction” from imported workers, which only saw more money flowing out of the country and an increase in financial burdens to the companies. 

With these conditions of uncertainty comes the reluctance of the industry players to commit and invest further into the industry thus bringing about:- 

         i.      Reluctance of establishing Buying Houses in Malaysia by foreign companies;

       ii.      Lack of investment in the areas of HRD and R&D;

      iii.      Lack of innovations and investment in new and latest technologies in the textile fraternity;

     iv.      Institute of higher learning scrapping textile related courses from their programmes;

       v.      Banks and financial institutions’ reluctance, limiting or totally denying financial assistance and banking facilities to the industry;

     vi.      Lack of FDI’s into Malaysia. 

Looking around us at our neighbours, there’s a clear indication of growth and success and maybe there will come a time when Malaysia will no longer be on the textile map of the world but instead merely domestic and cottage industry. The authorities should conduct a critical analysis of the current scenario and decide once and for all the fate of the industry.

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