Enhanced
competitiveness of ASEAN textile industry
through regional integration
By Jon Fernquest 
Enhancing the competitiveness of Asean
textile industries is the goal of a US government-backed NGO named Asean
Competitiveness Enhancement (ACE).The idea is that in order to become more competitive in the world economy ASEAN economies must integrate and work more closely together (similar to the EU).
An extract from a Bangkok Post article last week follows the vocabulary:
Asean Competitiveness Enhancement
(ACE) - a
US funded project to make Southeast Asian (ASEAN) countries more
competitive in international export markets, partner with ASEAN
Federation of Textile Industries (AFTEX) in SASFA project
Source Asean Full Service Alliance (SAFSA) - a three year program to promote ASEAN as a full-service location for textile production (See website)
NGO - any non-profit, voluntary citizens' group which is organized on a local, national or international level, perform a variety of service and humanitarian
functions, bring citizen concerns to Governments, advocate and monitor policies and encourage political participation through provision of information. Some are organized around specific issues, such as human rights, environment or health (Source: ngo.org also see Wikipedia)
enhance - strengthen and improve
integrate (verb) - join together, unify, so that all parts work together
integration (noun)
extract - a small part taken from a larger article or text
Source Asean Full Service Alliance (SAFSA) - a three year program to promote ASEAN as a full-service location for textile production (See website)
NGO - any non-profit, voluntary citizens' group which is organized on a local, national or international level, perform a variety of service and humanitarian
functions, bring citizen concerns to Governments, advocate and monitor policies and encourage political participation through provision of information. Some are organized around specific issues, such as human rights, environment or health (Source: ngo.org also see Wikipedia)
enhance - strengthen and improve
integrate (verb) - join together, unify, so that all parts work together
integration (noun)
extract - a small part taken from a larger article or text
(Photo on right of a nice piece of fabric in the painting "Venus Rising from the Sea - A Deception (After the Bath)" by Raphaelle Peale, 1823 From Wikipedia)
Sewing up a Better Future
US funds plan to integrate Asean textile industry.26-Oct-09
Nanchanok Wongsamuth
...Crisis in the 21st Century Garment Industry, written by the American industry expert David Birnbaum, later sparked an idea that became an action plan that Mr Gurley believes will put Asean at the cutting edge of the industry.
The core of the strategy is a fairly simple idea for a goal that seems hard to achieve.
Instead of buyers taking responsibility for more than 80% of garment production, Asean's textile mills will form a partnership that takes care of the whole production line. "Not only will intra-Asean trade increase through the partnership, but we will also see things done at a much faster speed," said Mr Gurley [R.J. Gurley is the current director of ACE].
sewing up a better
future - making
sure the future is better
integrate - bring together and combine (so it all works together as a whole)
integrate Asean textile industry - bringing together textile companies in different countries to work together as a whole (one unified ASEAN textile industry)
garment - clothes
sparked an idea - suddenly come up with a new good idea
action plan - a plan to do things to solve a problem
cutting edge of the industry - the most advanced part of an industry
strategy - long-term plans to achieve goals
core of the strategy - the central most important part of the strategy
intra-Asean trade - trade within the ASEAN region, between ASEAN countries
integrate - bring together and combine (so it all works together as a whole)
integrate Asean textile industry - bringing together textile companies in different countries to work together as a whole (one unified ASEAN textile industry)
garment - clothes
sparked an idea - suddenly come up with a new good idea
action plan - a plan to do things to solve a problem
cutting edge of the industry - the most advanced part of an industry
strategy - long-term plans to achieve goals
core of the strategy - the central most important part of the strategy
intra-Asean trade - trade within the ASEAN region, between ASEAN countries
Problems from quota system
Part of the solution, however, is in understanding the problem. The low competitiveness of the Asean garment industry is a result of the quota system, which was implemented by the United States 40 years ago. The system ended four years ago, but both buyers and producers are still struggling with its after-effects.All the factories did were the easy tasks from cutting until trimming, while buying countries such as the US supplied upstream elements such as fabric.
"This resulted in buyers that know nothing about garments, as they were doing the job of finding fabric for the factories. So buyer countries want to go back to before the quota system," said Mr Gurley.
Meanwhile, the "cut, make and trim" process, which lies in the hands of the garment factory, also faces problems as it represents only 6% of the retail value of the product.
According to Mr Gurley, Asean can no longer compete on labour cost with countries such as Bangladesh, which has a minimum wage of $25 per month, compared with $67 in Laos and $54 in Cambodia.
quota - the limited
quantity officially allowed
quota system - from 1974 to 2005 the Multi-fibre agreement governed world textile trade, it set "quotas" limiting the amount of textiles developing countries could export to developed countries (See Wikipedia)
after-effects of Y - the effects of Y that continue to exist after Y ends
cut, make and trim process - steps in making clothes
upstream elements - parts that are used in a product (as a product moves from upstream to downstream parts are added to it until complete)
fabric - material used to make clothes
X lies in the hands of Y - X is the responsibility of Y (X is the task that Y must do)
retail value of the product - the price of the product when sold in a store
can no longer compete on labour cost
minimum wage - the lowest amount of money that can be paid to a worker by law
quota system - from 1974 to 2005 the Multi-fibre agreement governed world textile trade, it set "quotas" limiting the amount of textiles developing countries could export to developed countries (See Wikipedia)
after-effects of Y - the effects of Y that continue to exist after Y ends
cut, make and trim process - steps in making clothes
upstream elements - parts that are used in a product (as a product moves from upstream to downstream parts are added to it until complete)
fabric - material used to make clothes
X lies in the hands of Y - X is the responsibility of Y (X is the task that Y must do)
retail value of the product - the price of the product when sold in a store
can no longer compete on labour cost
minimum wage - the lowest amount of money that can be paid to a worker by law
"To succeed, Asean must move up the value chain and compete on services. The most basic service is sourcing the fabric. But there is still a problem. Cambodia, for instance, has more than 300 garment factories that account for 85% of Cambodia's exports. However, it has no textile mills," he said.
"The garment factories in Cambodia don't know these fabric companies because for the past 40 years they didn't establish a relationship with these textile mills."
move up the value chain
- produce more complicated and
more profitable products (that don't just rely on cheap labour)
compete on services - offer variety of services to meet customers' special needs (not just place for cheap labour)
sourcing the fabric - searching for the best place to buy fabric
textile mills - factories that produce fabric
establish a relationship with - start doing business with regularly
compete on services - offer variety of services to meet customers' special needs (not just place for cheap labour)
sourcing the fabric - searching for the best place to buy fabric
textile mills - factories that produce fabric
establish a relationship with - start doing business with regularly
Therefore, Mr Gurley set up the Source Asean Full Service Alliance (SAFSA) early this year. "It won't just make you competitive. It will change the way businesses are done in the industry," he said.
The programme is currently in the process of accepting applications from 20 garment factories and 20 textile mills to form a partnership. Together, they will form a vertical supply chain. Cross-border partnership are preferred for the initial 20 applications.
Source Asean Full Service
Alliance (SAFSA) -
a three year program to promote ASEAN as a full-service location for
textile production (See website)
form a partnership - join together to do a business
vertical supply chain -
cross-border partnership - when companies from two different countries do business together
X is preferred - like X more
form a partnership - join together to do a business
vertical supply chain -
cross-border partnership - when companies from two different countries do business together
X is preferred - like X more
With intra-Asean trade consisting of only 9.6%, or US$3.3 million, of Asean's total textile and apparel trade according to Trademap, ACE aims to resolve the issue of finding a partner and help the figure reach 15% within three years.
There has also been the launch of SourceAsean.com, an electronic market place linking Asean suppliers as well as global buyers, with which 400 to 500 manufacturers in Asean are registered...
intra-Asean trade -
trade within ASEAN
resolve the issue - solve the problem (issue)
electronic market place - buying and selling things over the internet with computers
registered - officially recorded as a business with the government (and given permission to operate)
resolve the issue - solve the problem (issue)
electronic market place - buying and selling things over the internet with computers
registered - officially recorded as a business with the government (and given permission to operate)
(Source: Bangkok Post, 24-10-10, Nanchanok Wongsamuth, no link: not on Bangkok Post website)
