Fibre Industry in Taiwan
Global demand of man made fibre
World demand for manufactured fibres is projected to increase 5.4 per cent annually to about 44 million metric tons in 2005, valued at US$120 billion. Manufactured fibres will continue to increase their market share at the costs of natural fibres expanding to nearly two-thirds of total mill fibre consumption in 2005 based on expanding applications in apparel and home furnishings, as well as continuing strength for synthetics in tufted carpeting and industrial applications.
Taiwan's man made fibre industry
In the last five decades, the textile industry has created an important position in exports, earning huge revenues of foreign exchange for Taiwan. Though, in the second half of the 1980s, many problems like labour shortages, increasing overhead costs, prohibitive land prices and environmental protection forced many textile houses to relocate a part or all of their production to Southeast Asia and China in order to stay competitive.
Taiwan's exports to China
In the first four months of 2005, Taiwan exported $9.22 billion worth products and services to the Chinese. Taiwan's mainland-bound exports for the January-April period saw a raise of 21.2 per cent over the same period in 2004. Major export products to China covered electrical equipment and parts, machine tools, plastics, steel, synthetic fibres, optical products, organic chemicals, industrial textiles and brass and bronze products. In the interim, Taiwan gained a trade surplus of $6.99 billion against the mainland in the first four months of 2005, up 23.4 per cent over the year-earlier level.
China's potent market
The stiff competition has persisted with China receiving further market shares. Now the Chinese polyester industry posses more than half the world polyester fibre and yarn spinning business. There was only one nation (PR China) with a growth rate in all polyester sub-segments in 2005. Against this, the industries in South Korea and Taiwan lost an aggregated production volume of 650,000 tons.
Local economic policy is another problem. There are many areas with a prospective future in China, but not all areas are simple to deal with and local policy is a huge obstruction. Juda came in to the China market following Taiwan's downstream textile enterprises and assistance by local enterprises. It set up itself in the local community, made business with local companies and offered to local patronage. This grovels to Juda with the community.
Another aspect that is normally ignored by companies entering China is correctly calculating all the costs of executing business.
For instance, an apparel factory was in problem after its set up in an eastern city of Guangdong province partly due to cost of transportation. It send more than half of its products to Europe and Middle East through Hong Kong, and the transport cost amounted to around $500 per container, greater than that of the center Guangdong cities which have greater labor costs. It is noted that the dissimilarity in labor costs did not pay off for the higher costs of shipping. Hence, it is a question of selection of locations, and was shown to be ill-advised, despite the area's comparatively lower labor costs.
There are various evaluations of the China's fibre market, but two major trends are clearly marked. Firstly, China's manmade fibre market will keep prospering. The split between the rich and the poor has been a main dilemma in China. Beijing has considered this as a nuisance to the regime and has initiated to solve the problem. Though the prospects are still in a mist, considerably more rapidly economic development in the rural parts, with a population of 900 million, can be estimated. Compelling the growth in local consumption of manmade fibres will be the sustainable economic development in the rural areas.
