Birnbaum: The New Thai Garment Industry

October 27, 2009 - 08:41 — admin

Thailand has always played the role of the dysfunctional relative in the global garment export family — very nice, but never quite lived up to its great potential.

The country always had a lot going for it. Thailand is one of the very few Asian countries with an indigenous fashion culture. Thailand manufacturers not only offer very good clothing design, but also jewelry, porcelain, home furnishing and the widest variety of craft skills. The Thai government and particularly the Royal family have invested money, time and most importantly prestige to encourage and update these skills. However, efforts to boost Thailand as a centre for Asian fashion have had only limited success.

Thailand is home to a well established, modern, and competitive textile export-industry, producing both woven and knitted fabrics in both cotton and synthetic. The Thai silk industry is world renowned with people flying from all countries to shop at companies like Jim Thompson. Yet for the longest time that industry had little interest in selling to local garment factories.

Thailand’s garment industry dates back to the 1960s and 70s with a wide product base at all price levels. Yet that industry has been flagging for many years.

The Thailand garment manufacturing industry is well placed with first class logistics. It is the most important airline hub between Hong Kong and Europe. Bangkok, despite its reputation as home to the largest traffic jam on the planet, has changed. The combination of the new BTS sky-train above and metro below, together with its modern highway, have tried to address the problem.

For years garment customers have been waiting for Thailand to develop something they wanted, while the Thai garment industry has been waiting for the customers to show up. Everybody was waiting, but nothing was happening.

Times have changed. The global industry has changedand global garment customers are discovering Thailand’s assets. Those qualities that were previously ignored are now very much in demand. Much of the credit falls to the great global recession.

U.S. and European brand importers and retailers have finally recognized the need to move their product development off-shore. In these difficult times, the cost of carrying out the entire pre-production process in New York or London is simply too high. The big problem has been finding a location where local professionals understand current fashion trends and have some style sense. Welcome to Thailand. The big players, such as VF and Benetton, are either expanding their Bangkok offices or setting up product development centers.

The recession has forced the local textile industry to develop relationships with local garment makers. Textile mills are now offering not only the materials but also the services which will make Thai garment factories competitive with the rest of Asia.

The same recession has brought consolidation to the garment industry, making surviving factories more competitive. At the same time large U.S. producers, such as Hanebrand, fed up with working in DR-CAFTA are moving operations to Thailand where local mills are more cooperative, able to provide necessary materials and where the government is offering real and practical incentives. Paired with the previously mentioned logistics, means Thailand is becoming extremely attractive to the global garment industry.

However, Thailand’s greatest asset is invisible. People like going there. This counts for much. Ask a London or New York based designer to spend two weeks in Shenzhen or even Shanghai; one week Mumbai; or even thirty minutes in Dhaka or Chittagong and you will hear the most amazing and imaginative excuses. Tell the same designer that they have to travel to Bangkok for a month and their first words are, “My bags are packed. When do I leave?”