Textination Newsline

Every day, GTAI experts observe and analyze the development of the most important German export industries on the world markets. Here you will find summarized information on the textile and clothing industry in Asian markets.
 
GTAI Industry Check - Vietnam
Textile and clothing industry: Vietnam needs more than sewing
The textile and clothing industry is one of the most important pillars of the Vietnamese industry and accounted for around 6 percent of total exports in 2017 with exports amounting to USD 26 billion. For 2018, the industry is aiming for growth of 7 to 8 percent and exports are expected to rise to over USD 33 billion. In order to comply with the rules of origin of the free trade agreements concluded by Vietnam, the country must achieve a higher added value. Domestic companies such as the Vinatex Group or Garco10, but also foreign companies are increasingly investing in technical innovations and expanding processes such as spinning, weaving and dyeing upstream of pure sewing. In addition, the first companies are beginning to automate their production processes.

GTAI Industry Check - Uzbekistan
Textile and clothing industry: Investments of more than USD 2 billion planned
The industry program for 2017 to 2020 lists around 130 projects with a total value of USD 2 billion. About half of the planned investments are to be
accounted for foreign commitments. The aim is to double the annual output of finished textile products during this period. With an annual production of more than 3 million tons of raw cotton, Uzbekistan is one of the world's largest producers of the white gold. A second industry programme foresees the implementation of five projects for the production of raw silk, silk wadding and silk fabrics and finished silk products between 2018 and 2021. The minimum investments required are estimated at USD 26 million.
 
GTAI Industry Check – Myanmar
Textile and clothing industry: Export strength through low wages
The lifting of sanctions by the EU and the US has noticeably revived the investment climate in the sector, especially as this was linked to the reactivation of the EU's GSP import status (Generalized System of Preferences). Most investors came from China, Hong Kong, Taiwan or South Korea, and Western brands such as GAP, H & M, Primark or Marks & Spencer were also included. Currently, about 400,000 workers are employed in almost 400 factories, mostly geared to CMP (cut-make-pack), including 171 foreign investors and 22 joint ventures. According to the Myanmar Garment Entrepreneurs Association, exports are expected to have increased by 40 percent to over USD 3 billion by 2017. For the first time the largest customer was the European Union, primarily Germany, ahead of Japan and South Korea.

GTAI Industry Check – Georgian Republic
Textile and clothing industry: Several expansion projects planned
The apparel industry produces garments for up to USD 70 million annually. The main products manufactured are international brands for export. Several new projects in the industry are in preparation. For example, the Turkish jeans manufacturer Baykanlar Textil plans to build a factory for the production of brand jeans in Ozurgeti by the end of 2018. A total of USD 15 million will be invested in the project. The Romanian company MGMtex, a subsidiary of the Swiss company Ottorose, is planning to start production of branded clothing in Kutaisi in cooperation with a local partner. The investments for the first and second project phases amount to more than USD 1.5 million. For the procurement of equipment, the company benefits from subsidies from the state program Produce in Georgia.

GTAI Industry Check - Turkmenistan
Textile and Clothing Industry: Investments of around 300 million US dollars planned
The textile and clothing industry represents 20 percent of Turkmenistan's industrial production and 30 percent of its manufacturing industry. A good USD 300 million will be invested in 2018 to 2020/21. The project list includes the construction of a large textile complex for the annual processing of up to 5,000 tons of fine-fibred cotton into semi-finished and finished products. Start March 2021; contractor: Cotam Enterprises Ltd, British Virgin Islands/Turkey) and a factory for the annual production of 6,000 tons of cotton yarn (2019/20, Hilli yol), the modernization of a textile factory (Daschogus), a cotton spinning mill (Tachtabasar) and a factory for medical wadding and cosmetic cotton (Ashgabat; 2018/2019 each). The potential of medical textiles, cotton fabrics, man-made fibers and the processing of wool and cocoons is still little used.
 
GTAI Industry Check – Azerbaijan
Textile and clothing industry: Light industry business park attracts investors
Azerbaijan launched several projects to revive the industry (output in 2017: USD 100 million). An industrial park for light industry has been under construction in Mingachevir since autumn 2016. Nine new factories are planned for cotton, acrylic and woolen yarn, clothing, hosiery and leather shoes. The project is worth up to USD 150 million. The first factory for the annual production of 20,000 tons of yarn is under construction. Under the umbrella organization for the Azerkhalcha carpet weaving mill founded in 2016, ten further smaller factories will be put into operation in 2018. Gilan Textil Park, Sumqayit, wants to expand its exports of home textiles. In the medium term, the construction of a silk spinning mill with an annual capacity of 3,000 tons of yarn is also planned.
 
GTAI Industry Check - Armenia
Textile and clothing industry: interest from abroad increases
Rising exports of clothing to Russia and western markets lead to expect further investments in the textile and clothing industry in 2018. Italian investors are planning to build a large jersey factory in Kapan (Sjunik region). The company SASSTEX in Artik (Schirak region) invests in two factories for the production of fashion (ZARA brand) and workwear. The Egyptian Wassef Group is considering the production of cotton fabrics and products therefrom. Yerevan-based hosiery and children's apparel manufacturer Alex Textile will continue its USD 28 million investment program in 2018 to expand apparel and hosiery production at several sites in Armenia.

• Sudanese and Chinese investors want to secure raw material supplies

Nairobi (GTAI) - Ethiopia has further successes in attracting textile companies: One British company is planning to invest USD 100 million, one Chinese company even plans to invest USD 220 million. This means that the textile sector is increasingly becoming a self-starter, as donors increasingly want to supply domestic industry with pre-products. Meanwhile, those who invest should not only raise the financial means, but also the raw material cotton, according to market experts.

The Ethiopian textile and clothing market has two new entrants: the British Intrade Co. UK Ltd. and the Chinese Wuxi No. 1 Cotton Investment Co. Ltd, Intrade intends to build a textile and clothing factory in the Mekelle Industrial Park (Tigray Regional State), which was opened in July 2017. Initial cost estimates are around USD 100 million. Intrade is an offshore company of the Sudanese Mahgoub-Sons Group. The company has reached an agreement with the Ethiopian Investment Commission to invest USD 200 million in three projects. The textile project is to be completed in 16 months.

Security of supply for cotton is becoming an issue
The Sudanese group is not only interested in textile production, but also with lucrative supply transactions for its own cotton. They have the capacity to supply 500,000 tons of long staple quality cotton annually, Wagdi Mirghani Mahgoub, Managing Director of Intrade says. The supply of raw cotton has become an increasing problem for the emerging Ethiopian textile industry since some Asian countries ordered export stops for the raw material, including the PR China and India. The African Plantation, which cultivates 33,000 hectares of agricultural land in Sudan, also belongs to the Mahgoub-Sons Group.

However, Wuxi No. 1 Cotton Investment has announced the second and larger textile investment of 2018: a textile factory will be opened shortly in the Dire Dawa Industrial Park. In a first phase, USD 80 million are planned, followed by further investments totaling USD 140 million. The company intends to install state-of-the-art textile machines to produce and supply goods for the demanding markets in Europe, Japan, South Korea and Southeast Asia. According to their own statements, partners are leading world machinery brands. Wuxi is already pursuing a project in the Ethiopian city of Adama and also has plans to grow cotton in Ethiopia.

Ethiopia is considered the first textile address in Africa
"Clothing companies are nomads," an industry consultant knows, "they go where it is cheapest for them. If wages and ancillary costs rise too much in countries like Bangladesh or the PR China, the caravan moves on." South of the Sahara, only Mauritius has made a name for itself as a producer of high-quality clothing. Attempts to establish larger-scale textile and clothing companies in Namibia and Lesotho have so far been unsuccessful. Meanwhile, Kenya and Ghana have production conditions that are far too expensive.

Ethiopia offers several advantages at the same time: Wages and ancillary costs are extremely low and far below those in China. The US Centre for Global Development found out that a worker in Ethiopian sweatshops earns an average of USD 909 a year. In Bangladesh, however, it is US$ 835 and in Tanzania and Kenya even US$ 1,776 and US$ 2,118 respectively. Another advantage: Ethiopian seamstresses are considered to be extremely hardworking and reliable. In addition, there is a tradition in textile and clothing production as well as in leather processing and thus there is a basic pool of trained specialists.

Infrastructure is making huge progress
Meanwhile, the supply of domestic cotton and leather needs to be expanded, because in the drought years 2016 and partly 2017 the supply of cotton was insufficient. The government is cooperating and is increasingly listening to the needs of producers. The infrastructure is currently undergoing sustained improvement, in particular the transport routes to the neighboring seaport of Djibouti, from where Europe can be reached more quickly than from the Far East. And, last but not least, the Ethiopian capital Addis Ababa has a capable air traffic hub with a dozen direct flights to the EU, including Frankfurt and Vienna. In addition, there is a modern air freight center.

Just as important as the delivery routes are the comparatively modern production conditions in the newly emerging industrial centers throughout the country. Everything here is "Made in China": fences, access controls, roads, electricity and water supply, waste and sewage disposal, workers' settlements. From a European perspective, this may look like Chinese dominance, but from an Ethiopian perspective it creates jobs, feeds families and earns foreign exchange. Under better working conditions than in Bangladesh, experts mean.

According to the ideas of the Ethiopian government, the country is undergoing a transformation process: away from an agrarian-based economy and towards an industrial state. By 2025, the country is expected to reach middle-income status and to become Africa's largest industrial production hub. To achieve this, Ethiopia is investing heavily in roads, railways and power generation, health and education, urban and rural development and the creation of industrial clusters.

Customs advantages in the USA and Europe
Ethiopia has so far benefited from the African Growth and Opportunity Act (AGOA) of the USA, which, for example, allows savings of 16.8 percent in import duties on cotton trousers and 30 percent on synthetic shirts. Ethiopia also has duty-free access to the EU market under the Everything but Arms initiative. Fears that US President Donald Trump might stop AGOA have not yet come true.

Source: Comtrade

German exports can be expanded
German sales representatives of technology for the textile, clothing and leather industry are not yet well positioned in Ethiopia. According to preliminary figures from the Federal Statistical Office (SITC 724), only EUR 2.84 million of relevant technology where sent to Ethiopia in 2017, though 169 percent more than in the previous year.

Source: Comtrade

• Quality suppliers satisfied buyers with a wide range of sourcing needs
• Fringe programme brought insights to fairgoers

The 2018 Spring Edition of Intertextile Shanghai Home Textiles concluded last week with positive business outcomes generated. Being held during the peak sourcing season for home textiles finished products in China, the three-day show attracted 12% more buyers than last year. A total of 20,870 visitors (2017: 18,596) from 68 countries and regions came to source a wide range of finished products including bedding, towelling and table & kitchen linen. 232 exhibitors from 11 countries and regions (2017: 204, eight countries and regions) including well-known international brands such as Cotton Council International and Asahi Kasei as well as domestic big names like Ruyi, Sunvim and Yueda participated and praised the show as one of the most effective trade platforms at this time of the year for home textiles industry.

“Thanks to the revitalised market conditions in China and the increased number of buyers, our exhibitors have had a successful show. Not only did they receive onsite orders and make contact with new clients, but they also valued Intertextile Shanghai as a channel to build up their brand so as to expand their business network in China. Apart from the stronger Chinese market, another reason for the buyer increase this year was the large growth of the four concurrent fairs. This resulted in a more diverse buyer profile with increased demand from different textile industry sectors,” Ms Wendy Wen, Senior General Manager of Messe Frankfurt (HK) Ltd said.

Exhibitor opinions:

Mr Wang Si Qi, Representative of Fibers Sales Dept, Asahi Kasei Advance (Shanghai) Co., Ltd, Japan
“We came to the fair to gain exposure and to promote our brand. Since our products are rare in the market and are a perfect substitution for traditional materials, most of the buyers that visited our booth were interested. We succeeded in promoting our brand and letting more industry players know about it. We are really satisfied with the visitor number. People from different sectors with different products in different price ranges are all here. It does help increase our reputation in the industry.”

Ms Allisa Lau, Senior Manager, Chain Supply, Chain & Consumer Marketing, Cotton Council International, USA
“We are happy with the visitor number this year as we made contacts with a lot of manufacturers. Most of them are our target users. The fair has always been helpful for our Council as we can connect with existing clients and explore potential new customers at the same time.”

Mr Trevor Beuth, Managing Director, The Australian Alpaca Bedding Company Pty Ltd, Australia
“We exhibit in Intertextile Shanghai because I believe that it is the premier show in Asia at this time of the year, and it has a wide global reach too. We hope to establish our brand and reputation here at the fair and in China. Our products received very strong interest from Chinese buyers. Overall, we had a very busy show and we are satisfied. We have worked with some major Chinese companies and they came to see us again this edition, but nearly all of the visitors that have come to our booth this time are new to us.”
 
Mr Tetsuo Tosaki, Manager, Tamurakoma & Co., Ltd, Japan
“The reason we come here is that it’s the largest show in Asia at this time of the year, and the Intertextile brand is very famous in Japan. We met almost 100 customers every show day, including manufacturers, brand traders and wholesalers. This show helps us to know our customers better and expand our business in China. The Chinese market is developing rapidly in recent years, so attending this show is a good start for us and the result is beyond my expectation.”
 
Mr Sunwei, Marketing Manager, Shanghai Yueda Xiangyun Home Textile Co., Ltd, China
“Among our visitors, 80% are our existing clients who placed orders directly and the remaining ones are new clients who are interested to be our franchisees. It is surprising that we have received such a huge amount of orders in just two show days. Nearly 90% of our existing clients we met at the show placed orders, and we’ve met more than 10 potential franchisees. This is really a fruitful show as it helps us to connect with old customers and establish new business.”

Mr Gao Qi, District Manager, Sunvim Co., Ltd, China
“This edition we showcased towelling and bedding products especially designed for the 2018 spring season. Intertextile Shanghai is one of the most important platforms for us to launch new products for the year. On the one hand, many suppliers and brand buyers are looking for new items during this peak sourcing season. On the other hand, many quality buyers and decision makers are invited to the show. The visitor flow is high so we can both enhance our brand popularity and receive orders after the show.”

Quality suppliers satisfied buyers with a wide range of sourcing needs. While exhibitors were delighted about meeting new customers and receiving orders on the spot, international and domestic buyers also appreciated the wide range of products they discovered at the fair.
 
Buyer opinions:

Mr Anil Miglani, President, SawHill Intl Ltd (Toronto), Canada
“The show has always been a satisfying one as we can meet some interesting and potential suppliers every time. So far, we’ve found two to three exhibitors that we look forward to working with. As a Chinese fair, Intertextile Shanghai is highly recommended as the exhibitors, domestic ones in particular, are of good quality and friendly to foreign visitors. The product range on offer is getting wider and wider, so I come to this show every year to look for potential Chinese suppliers.”

Mr Abdelkrim Boussehra, Yiwu Mingyu Import & Export Co., Ltd, Morocco
“This is my first time attending this fair. I didn’t know any of the Chinese brands here beforehand, but I think the quality of their products is really good. I met two machine suppliers, TPET & Richpeace, and will place orders with one of them. I’ve been to several shows in China, and I think this one is an effective sourcing platform because I can find everything I want.”

Mr Paul Chen, Business Supervisor, Jiangsu Yueda Hometex R and D Co., Ltd, China
“Compared to the previous editions, there are more and more high level and innovative products. Big domestic brands like Mercury, Goldsun and Bermo are all here and we are interested to work with them. This is an excellent platform that facilitates our sourcing with these exhibitors all under one roof.”

Fringe programme brought insight to fairgoers
Apart from concrete business outcomes, the fair’s fringe programme, including the Intangible Cultural Heritage Zone and a series of forums, further enriched the three-day show. Fairgoers were fascinated by the presentation of unique and traditional textile production and processing techniques from Chinese ethnic minorities in the Heritage Zone. While the forums that discussed topics from consumption upgrade to the newest technology applications were another success as they provided extra opportunities for industry players to share their insights and learn the latest developments.

The next Intertextile Shanghai Home Textiles fair, the 2018 Autumn Edition, will be held from 27 – 30 August at the same venue. Intertextile Shanghai Home Textiles – Spring Edition is organised by Messe Frankfurt (HK) Ltd; the Sub-Council of Textile Industry, CCPIT; and the China Home Textile Association (CHTA). 

• Eports grow slowly
• Industry needs new concepts

Dhaka (GTAI) - The garment industry is the main industry in Bangladesh. The state of the companies has improved since 2013 - when a building with several factories collapsed. Domestic and foreign companies have invested in new processes. Government and associations want to further increase the security. Exports are growing slower. The international competition forces the companies to produce not only more sustainable, but also more efficient and innovative.

On April 24th 2013, north of the Bangladeshi capital Dhaka, the Rana Plaza building collapsed, housing five clothing factories. The disaster claimed 1,138 lives and more injuries. The disaster in-cised deep into the country's largest industrial sector. The massive problems with building and safety as well as violations of workers' rights became internationally visible at once and then vigor-ously tackled.

Foreign companies have invested heavily in the textile and clothing industry in recent years, with a record high in the year after the disaster. According to the Central Bank, foreign direct investment (FDI) in the textile and clothing industry in June 2017 reached a respectable USD 2.6 billion. Com-panies from South Korea have been the largest contributors with USD 766 million, followed by Hong Kong investors with USD 448 million and the United Kingdom with USD 243 million

      *) Financial year from July 1st to June 30th

Several successful programs for more security
Government and international organizations responded with many measures and initiatives at Rana Plaza. The International Labor Organization (ILO) launched programs to improve work-ing conditions. Buyers and industry representatives were looking for solutions.

International traders, trade unions and non-governmental organi-zations finally signed a binding agreement for more fire and building safety in 2013 (Accord on Fire and Building Safety). Employees of Accord have since reviewed more than 1,600 tex-tile and garment factories. Approximately 86 percent of the iden-tified deficiencies were eliminated according to an interim report dated January 2018. Accord will expire in November 2018 after five years. Some participants of the alliance have agreed an ex-tension of the program of three years.

In particular North American importers launched the Alliance (Al-liance for Bangladesh Worker Safety) program in 2013. The Al-liance has since reviewed 666 factories that, as of February 2018, have remedied approximately 87 percent of the deficien-cies. The program will expire also after five years in May 2018.
Representatives of industry and government, trade unions, ILO, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and international buyers want to co-ordinate the control and rehabilitation measures together. The BGMEA and the government rely on the NI National Initiative, which they developed together with ILO. The Department of Inspection of Factories and Establishments is responsible for NI controls. Under the NI program 1,500 factories have been inspected which are working for do-mestic customers. The program is to be extended to exporting companies and will replace Accord and Alliance.

Workers demand more rights and higher wages
The government made it easier to found and to engage in trade unions after the Rana Plaza disas-ter. According to observers, the approximately 4 million workers in the textile and clothing industry continue to have little formal organization and went repeatedly on strike for higher wages.

A government commission recently increased the monthly minimum wage in the garment industry from Taka 3,000 to 5,300 in 2013. This amount corresponds currently with EUR 52 only. (1 EU-RO = Taka 102.13, exchange rate of March 5th 2018). Trade unions demanded tripling of the minimum wage at the beginning of 2018, because unskilled workers are given this low pay when they are first employed, which is barely enough to survive. The reward grows only later with the skills and experience.

Employees often change their jobs. According to observers, the fluctuation should average be-tween 5 and 7 percent per month. Fair wages and good working conditions would give a good in-fluence on this issue in the companies concerned.

Bangladesh is the second largest exporter of clothing after China
The globally active clothing retailers are buying in Bangladesh on a large scale. Some have offices with hundreds of employees. Major clients include Inditex (Spain), H & M (Sweden), C & A and Tchibo (Germany).

Clothing exports, however, stagnated in the financial year 2016/17. One reason for the weak growth was the strengthened exchange rate. Taka's national currency increased against the US dollar, making exports more expensive and less competitive.

The government is targeting an export growth of 8.1 percent to USD 30.2 billion in 2017/18. The industry is on track indeed, reaching 7.8 percent in the second half of 2017 compared to the same period of the year before. The most important customers are the USA and Germany.

*) Financial year from July 1st to June 30th
Sources: Export Promotion Bureau, Bangladesh Garment Manufacturers and Exporters Association

Exports from this emerging country enjoy exemption from duty in many developed countries. The European Union grants duty-free and quota-free access. Australia and Japan grant preferential access to the Generalized Scheme of Preferences (GSP). , The USA however has suspended the GSP status in 2013 and imposed tariffs and duties on imports from Bangladesh.

Companies want to grow and become more efficient
The Association of Garment Export Companies BGMEA estimates that over 3,000 garment factories work exclusively for international clients. Another 800 to 1,000 companies sew for local retailers who sell clothing to the country's 160 million inhabitants.

There are no data on company sizes or on the companies with the highest turnover. Clothing companies are mostly registered as private companies and do not publish business figures. The larger ones belong to local conglomerates operating in different economic sectors.

The companies are investing in more modern production facilities to process larger orders faster and at lower unit costs. Imports of machinery and equipment for the textile and clothing industry totaled USD 1.4 billion in 2015. The BGMEA believes that the garment industry has increased its purchases of equipment since.

The added value along the local textile chain is expandable. Simple fabrics and materials are produced locally. The production capacities for fabrics however are not sufficient and need to be increased. The clothing industry is also switching to higher quality synthetic fiber products. Producers hope for higher margins, if, for example, they produce clothing made of elastic fibers or functional clothing made from mixed fibers.

Many pre-products are imported from China and South Korea. Imports however are difficult due to the limited handling capacities of seaports and airports. Logistics costs are high. The clothing sector still has some challenges to overcome.

• Industrial parks should enable a quantum leap
• Progress in infrastructure, Deficits in foreign exchange provision

The Ethiopian textile, clothing and leather industry scores not only with comparatively low wages and high-performing personnel, but also with modern industrial parks. In the meantime the technology has to be fully imported and the supply of materials needs to be greatly expanded. There is a great progress in logistics, but unfortunately not in foreign exchange procurement. German suppliers of relevant equipment should definitely consider Ethiopia in their acquisition.

So far, only Mauritius has made a name for itself as a producer of high-quality clothing south of the Sahara. Attempts to locate textile and clothing companies in Namibia and Lesotho in a larger style have not been very successful. Meanwhile Kenya and Ghana have far too expensive production conditions. "Clothing companies are nomadic,” says a consultant, who is specializing in the trade, "they go where it's cheapest for them."

Meanwhile, Ethiopia offers several advantages: Wages and additional costs are far below the Chinese ones. A worker in the Ethiopian factories earns an average of USD 909 a year, according to a survey by the US Center for Global Development, compared to USD 835 in Bangladesh, USD 1,776 in Tanzania, and USD 2,118 in Kenya. Another advantage is appreciated by employees: Ethiopia has a long tradition of textile and clothing production as well as in leather processing and thus at least an expandable base of skilled workers.

The supply of native cotton and leather meanwhile is considered strongly expandable. In times of drought, such as in 2016 and partly in 2017, the supply of cotton is insufficient. However, the government is cooperative and increasingly open to the needs of producers. Thus, the infrastructure has been currently sustainably improved, in particular the transport routes to the seaport Djibouti, from where Europe is much faster to reach than from the Far East. In addition, the Ethiopian capital Addis Ababa has a capable aviation hub with a dozen direct flights to the EU, including Frankfurt and Vienna. There is also a modern air freight center.

Modern industrial parks as a game changer

Just as important as the delivery routes are the "modern" production conditions in the emerging industrial centers all over the country, Made by China: pothole-free roads, guaranteed electricity and water supply, proper waste and wastewater disposal, workers' settlements in the vicinity. From the Ethiopian point of view, a great many jobs are created, families are fed and foreign exchange is earned.

According to its government, Ethiopia is in a transformation process away from an agrarian economy and towards an industrialized state. By 2025, the country should reach a "middle-income status" and become the largest industrial production hub in Africa. To achieve this, Ethiopia is investing heavily in roads, railways and power generation, in health and education, in urban and rural development, and in the creation of industrial clusters.

Ambitious export specifications

In July 2016 the Hawassa Industrial Park was officially opened, dedicated to the export of textiles and clothing, and is the largest industrial park in sub-Saharan Africa. As early as 2018, the park is expected to employ 60,000 workers and generate USD 1 billion in exports of clothing and textiles - a steep target given in a view of the current export figures. As early as 2030, Ethiopia wants to reach a total of USD 30 billion by exporting textiles and clothing - but it's still a long way off. At present, 15 in-ternational companies are already investing in Hawassa, including the US PVH Corporation (formerly Phillips-Van Heusen Corporation, prominent brands: Calvin Klein and Tommy Hilfinger) and Epic Group (Hong Kong), a supplier of, among others, Walmart , JC Penny, Levi Strauss, VF Corporation, Tesco, Sansbury's, Marks & Spencer and C & A. Epic wanted to go to Kenya first, but then decided for Ethiopia at the last minute, which, according to Epic boss Ranjan Mahtani, is "still unpolished," but has the most potential.

The challenges are considered to be high: "Our seam-stresses have never got a job before and have never seen a sewing machine," Mahtani says training therefore is a top priority. At the same time, however, his company also relies on state-of-the-art automatic machines, for example for attaching bags. The production halls are also all around computerized with RFID technology. The current efficiency Mahtani estimates at 25 to 30 percent. After experience with other production sites, results of 75 to 80 percent are possible after about ten years.

Wide range of new industrial parks under construction

In July 2017, another industrial park was opened in Kombolcha City. A whole range of other parks are in various stages of realization and all are focused on the apparel, textile, pharmaceutical and medical device manufacturing sectors. According to the Ethiopian Government, there is no shortage of interested investors from the PR of China, India, Turkey, the US, Hong Kong and South Korea. Ethiopia benefits from the African Growth and Opportunity Act of the United States, which, for example, reduces its import duties by 16.8 per cent on cotton pants and 30 per cent on synthetic shirts. In addition, Ethiopia has a duty-free access to the EU market under the Everything-but-Arms initiative.

Source: Comtrade, as of 18 October 2017

Note: The import figures mentioned above are based on Ethiopian data, which for various reasons are not considered particularly reliable. Equally not reliable are often the relevant export data of the partner countries, because all sea transports go via Djibouti and deliveries statistically are recorded often as exports to Djibouti.
Source: UN Comtrade, as of 18 October 2017

German exports expandable

German exporters of technology for the textile, clothing and leather industries are not yet well positioned in Ethiopia. According to the preliminary figures of the Federal Statistical Office (SITCM 724), in 2016 only EUR 1.06 mio of relevant technology went to Ethiopia, compared to EUR 1.05 mio in the previous year and EUR 5.02 mio in 2015.

• Production and Exports on a recreation Course
• Investments in Capacity and Modernization

Taipei (GTAI) - Taiwanese textile and clothing manufacturers see improved sales prospects in 2017 and 2018, following a weak development in the previous year. With its range of functional textiles in particular, the country occupies a position of great importance throughout the world. In order to maintain competitiveness, the sector companies invest in new equipment and product innovations. One of the most important machine suppliers is, among others, Germany in third place behind China and Japan.

Taiwan's textile industry is looking more optimistically on business performance in the current year as well as for 2018. This is attributable to the high level of consumer spending in the most important sales markets, price increases and major international sports events such as the FIFA World Cup and the Winter Olympics in South Korea. The island is the world's leading supplier of functional textiles used in sports and outdoor clothing.

According to the Taiwan Textile Research Institute, this textile sector accounts for about 50 percent of the world's production value of functional textiles. In order to maintain this position, the manufacturers are investing in capacity expansion, new technologies and the development of innovative textiles, while focusing on the diversification at production sites.

Production is recovering

Despite shrinking production development, the number of companies in the textile and clothing industry has risen over the last few years and, according to the Taiwan Textile Federation, at the end of 2016 to 4,361 companies. Of these, 3,205 (2015: 3,163) belonged to the textile segment and 1,156 (2015: 1,144) to the garment sector. The number of employees however is declining, as companies invest in automation.

According to the Ministry of Economic Affairs the production value of the sector fell by 5.9 per cent in 2016 over 2015. The development in the first half of 2017 however indicated that the weakness phase is declining. In particular textile production, which represents the most important area, showed signs of recovery. Here a more efficient utilization in the second half of the year was expected, as inventories are declining and orders are rising.

On the other hand the production of clothing and accessories and the production of synthetic fibers and yarns have shown a further shrinking trend in the recent years. Most of the industrial companies have moved their production towards abroad. At the end of the first half of 2017 the clothing segment accounted for only 4.9 percent of the total apparel segment.

Rising foreign trade expected

Export development also offers a better outlook. According to figures for the first six months of 2017 the export value of the textile and clothing sector shrank by only 0.3 per cent. For the full year 2016 the Taiwan Textile Federation statistics show a decline of 8.3% to USD 9.9 billion. The exports of textiles reached a value of USD 6.7 billion.

Exports of textiles and clothing are three times higher than imports. While exports are dominated by textile products with a share of 68%, imports of clothing accounts for 55%. Imports of textiles in 2016 were worth only about USD 427 Million.

According to the reports of at the stock market listed companies, it looks good on the orders received from existing as well as from new customers. As a result, the capacities are expanded, as at the Far Eastern New Century. The company is looking above all at Vietnam, where USD 760 million will be invested in the expansion of a supply chain for textiles and clothing over the next three years.

Other manufacturers such as Eclat and Makalot are also expanding their activities in Vietnam. It also will be invested in Taiwan, where, for example, Eclat Textile wants to spend between USD 26 million and USD 33 million to build new facilities for digital textile products. Makalot Industrial has announced plans to create smart production lines in Vietnam and Taiwan to increase efficiency.

With Shinkong Synthetic Fibers, another large textile producer on the island, wants to expand production. The company plans to increase the production of artificial fibers during 2018 from 50,000 tons to 110,000 tons. This is to serve orders from European and Japanese customers from the automotive sector.

Finishing equipment imports show little dynamics

The investment activities and plans of the textile and clothing manufacturers are expected to lead to increasing finishing equipment imports and exports. However, imports of textile machinery show an overall decline in the first six months of 2017. Only China and Japan, the most important suppliers, were able to boast high growth rates. Germany, the third largest supplier, was much less successful.

In the first six months of 2017, textile machine exports rose by 7.5 percent to USD 543 million. It is mainly supplied to the overseas production plants in China and Vietnam, to where in this period about USD 111 million was exported. At the third place follow the USA with USD 40 million.

• Japan replaces Germany as the most important supplier of textile machines
• Digitization is the trend of the future

Beijing (GTAI) - China, the largest apparel export apparel nation, is losing international market share due to rising personnel costs. The companies react with increased automation and production dis-placements. While imports of textile machines from Japan are gro-wing, deliveries from Germany are falling above average. The next wave of modernization will involve more digitization.

Internationally, the PRC is by far the largest exportation nation of clothing. According to UN Comtrade after decades of ascent the peak seems to have crossed in 2014 with a record share of global clothing exports of 39.3%. Since then things are developing slowly but continuously downwards. In 2016, the Chinese share was estimated to be 37.1% (compared to 3.8% in Germany).  China loses market shares particular in favor of ASEAN countries such as Vietnam, Bangladesh or India. 

1) from 2014 estimation of world export; 2) based on information provided by partner countries; Source: UN Comtrade

Domestic textile machine manufacturers catching up

In fact, the Chinese textile industry is under considerable pressure because of the increase in personnel expenses. According to a Euromonitor study, the hourly wages of Chinese workers tripled between 2005 and 2016 from USD 1.20 to USD 3.60. Thus the People's Republic not only left classic emerging countries like Thailand ( USD 2.20 ) or Mexico (USD 2.20) behind  - not to mention USD 0.70 in India - but is already approaching individual European countries like Portugal (USD 4,50).

More information (in German) on wages and salary costs in China can be found at:
http://www.gtai.de/GTAI/Navigation/DE/Trade/Maerkte/Geschaeftspraxis/lohn-und-lohnnebenkosten,t=lohn-und-lohnnebenkosten--vr-china,did=1718070.html

Many companies face the challenge by greater automation. The Chinese textile companies can increasingly rely on textile machinery made in the country itself. While in 2016, according to official statistics, investments in the sector rose by 8.5% year on year to Yuan 1,142.4 billion (RMB, around USD 172 billion, 1 USD =6.642 RMB, annual average price in 2016), imports of textile machinery fell by 12.5% to USD 2.8 billion. However, there are no statistics on the extent to which sales are distributed by purely local companies or to those with a foreign background.

The fact is that, for example, German textile machine manufacturers have invested heavily locally in recent years in order for being able to meet the needs of their local customers. Against this backdrop, Germany was still able to defend its top spot with an import share of 29.5% against Japan in 2016, but had to cope with a strong minus of 30.6%, while the Japanese increased by 5.8%. Italy, ranked third and the most important Europe an competitor recorded a drop of 16.1%.

Source: China Customs, GTAI calculation

In the current year 2017, however, the Japanese seem to take the rank of the competitor Germany with an increase of 51% in the first four months. The overall textile machinery import grew by a strong 19.7% after the weak previous year before. Import from Germany however did not benefit from this and fell by 8.9%. As a result the German share of machinery supply decreased from 29.5% (2016 as a whole) to 25.0% in the first four months of 2017, while Japanese companies increased their share from 26.9% to 31.9%.

Source: China Customs, GTAI calculations

Production shift continues

Many Chinese textile companies are also thinking about a dislocation production - either to cheaper foreign countries or to the more favorable Chinese hinterland. In 2016, the Autonomous Region of Xinjiang became the main destination for new settlements in the western part of the People's Republic. On average, two new textile factories were opened every day in Xinjiang.

The regional textile industry office in Xinjiang is expecting an even greater run for 2017, thanks to massive political and financial support. Many jobs however are not created there. On-site visitors report about state-of-the-art facilities operated by only a few specialists. The political message is clear: Chinese textile production should remain in the country, be of a higher quality and, if necessary, be reoriented in the direction of technical textiles.However, at least private fashion manufacturers are skeptical about whether the politically favored "Go-West" actually pays for them. Because there too, wages are likely to rise sooner or later, according to the justified Apprehension.

The fact that Vietnam, Bangladesh, South Korea and Cambodia have entered the league of important PRC purchasing countries within a few years is a result not least of the fact that Chinese (and other) manufacturers already have dislocated production capacities. They return their products from there for sale to China.Nevertheless, the very large displacement wave so far has not yet happened. In fact, certain limits are imposed on the shift, since the target countries often encounter their capacity limits. Added to this is the extraordinary advantageous network of the various production stages in China: from cotton harvesting to textile processing and final finishing.

Future theme digitization As part of the country-wide "Made in China 2025" strategy, the textile industry is trying to exploit the many and new opened possibilities of digitization. In view of the increasing individualization of consumption, more machines will probably be required in the future, which are, for example, able to knit sweaters according to the size, color and pattern of the individual customer. In principle, intelligent networking of production, real shops and e-commerce are seen as the challenge of the future.

• No longer just milk powder demanded 
• Internet important sales channel

The easing of the one-child policy in China will probably not bring the expected baby boom. Nevertheless, the market for baby products is very interesting for foreign suppliers. Because Chinese parents trust these more than domestic products and they are willing to spend money on imports. After this has been already the case with milk powder, now household appliances, furniture, care products for babies and expectant mothers are in the focus. The internet is very important as a sales channel.

Between 17.5 million and 21 million babies are expected to be born every year in China, according to the forecasts of the Hong Kong Trade Development Council (HKTDC) within the next five years. This provides a large market for products needed for baby care and for pregnant women. Also baby seats for cars, prams and furniture from abroad are being sought as well.

According to iResearch market research the total sales of products for pregnant women, mothers and babies amounted to RMB 2.3 billion in 2015. (approximately USD 360 billion; 1 USD = RMB 6.39 as an annual average). The growth rate of 25% is expected to weaken in the future, but the demand is still growing strongly. Despite the fact that the birth rates are hardly rising, the "little emperors" are pampered with pleasure. Quality and security promises are the decisive factor for foreign products in the urban middle class.

Quality and safety speak for foreign products 

The share of sales thru the Internet is steadily growing. More than 15% of purchases for the little Chinese are already made via the network. By 2018 the proportion is expected to grow to 23%. This is what market analysts have found out together with the second-largest Chinese online portal JD.com. Furthermore, the per capita purchases are highest in the prosperous coastal provinces. But, for example, mothers in Sichuan in the south-west also spend over RMB 1,000 per year for their offspring.

With China's size, new brands hardly can accomplish a successful market appearance. But the Internet provides a valuable platform and is used by expectant mothers to get information and also to purchase. Leading are the platforms of the Alibaba Group, for example Tmall and the competitor JD.com. There are also specialized shopping portals such as bleibi.com, mia.com and gou.com, as well as social media channels such as WeChat and Internet forums for expectant mothers (e.g. mama.cn or Babytree).

*) from 2016 forecasts
Source: iResearch, JD.com

Alibaba announced in its financial statement about cross-border Internet shopping for 2016, that baby products are already the third largest import category. In recent years this segment has grown considerably, in 2016 imported goods stood already for more than one-fifth of baby products sold on the Tmall and Taobao platforms.

Cross-border trade in baby products is booming

While in the past foreign milk powder brands were in high demand, now bottles, baby seats and care products for mother and child are now in the focus of online shoppers. Chinese milk powder still enjoys little confidence following a large scandal with contaminated milk powder in 2008.

The online trade however also was overshadowed in 2016 by scandals involving counterfeit products, mainly re-packaged milk powder came into circulation. The government therefore is watching the boom in overseas e-commerce with mixed feelings and consumers are becoming more cautious.

In recent years’ diapers, also have been ordered especially from abroad (especially from Japan). While these two categories continue to account for more than half of the sales, baby bottles and child seats experienced explosive growth in 2016. In addition, the mothers like to order cosmetics and personal hygiene, which will not hurt the growing life. This applies in particular to natural cosmetics.

In 2016 the leading countries of origin for online imports were Japan (19.3%), USA (18.3%) and Korea Rep. (13.6%). But Germany was already on fourth place with 8.0%. Particularly popular with "made in Germany" were kitchen equipment (including kitchen appliances), milk powder, baby food and food supplements.

*) HSPos. 9619 Sanitary napkins, tampons, diapers for toddlers;
Source: Chinese Custom

*) HSPos. 1901.10;
Source: Chinese Custom

Living in Space: special event at Techtextil showcases textile processing technologies for the space industry: Some four months before the start of Texprocess (9 to 12 May 2017), the leading international trade fair for processing textile and flexible materials reports the highest number of registrations in its history and thus continues its pattern of growth. Even now, more floor space has been booked than the previous edition had in total. “It is well worth our while continually developing Texprocess further, with regard to the technologies and processes on display, the hall layout and the complementary programme. With this fourth edition, Texprocess is now firmly established in the marketplace and is attracting other market leaders in the sector to Frankfurt,” says Olaf Schmidt, Vice President Textiles & Textile Technologies, Messe Frankfurt.

Texprocess reports growing numbers of companies signing up, particularly in the CAD/CAM and Cutting, Making, Trimming (CMT) product groups. Technologies and material for Sewing, Joining and Fastening are growing steadily, too.

Among the companies that have already signed up are: Amann, Astas, assyst/Human Solutions, Barudan, Brother, bullmer, Caron Technology, Dürkopp Adler, Epson, Filiz Makina, Gemini CAD Systems, Gerber Technology, Gütermann, Juki, Kuris Spezialmaschinen, MACPI, Malkan, Mitsubishi, Morgan Tecnica, Pfaff, Serkon Tekstil Makina, SMRE, Strima, Tajima, Teseo, Tetas, Veit, Zünd.
The range of products at Texprocess once again covers all stages in the value-creation chain for textile goods, from design, IT, cutting out, sewing, seaming, embroidery and knitting to finishing, textile printing and logistics.

Change in placement for CAD/CAM and Cutting, Making, Trimming
To make the profiles of Techtextil and Texprocess even sharper, the bonding and separating technology, CMT (Cutting, Making, Trimming), CAD/CAM and printing product segments will be concentrated together at Texprocess in hall 4.0. Thus, visitors will find Techtextil exhibitors from these segments at Texprocess. These product groups will be deleted from the Techtextil nomenclature.
Apart from this change, the overall concept behind the halls at the previous event will be retained: trade visitors will find Design, IT, CAD/CAM, CMT and Printing as well as the special IT@Texprocess section in hall 4.0. Exhibitors of machines and accessories for sewing and seaming will be presenting their products in hall 5.0 and 5.1; and hall 6.0 will showcase embroidery technology, together with finishing techniques and logistics for textiles.

The technologies of textile processing for space travel
Both exhibitors and visitors at Texprocess will, this year, have the benefit of a rather special experience at the show: under the heading 'Living in Space', Techtextil will be showcasing the wide variety of applications for technical textiles in space travel, together with the processing involved. This is a cooperative venture between Techtextil, The European Space Agency (ESA) and the German Aerospace Centre (DLR). Close to the location for, amongst others, exhibitors of functional apparel textiles in Hall 6.1, and based on the areas of application for technical textiles, a special, interactive area is to be built to display, with the help of four thematic sections, the high-tech textiles and textile processing technologies that have emerged from and for space travel. The highlight of this area is a virtual-reality experience in which visitors to Techtextil and Texprocess get to go on a virtual journey through the universe, where they will learn about the application of technical textiles in space travel and the processing required to make them.

Complementary programme with focus on Digital Printing and international Innovative Apparel Show
Digital Printing will be one the thematic focusses of the Texprocess complimentary programme. The sector's information service, the World Textile Information Network (WtiN) will, for the first time, be organising the European Digital Textile Conference at Texprocess. The conference will centre round technologies for digital printing on textiles and will be held on Wednesday 10 May in the Saal Europa in hall 4.0.
And digital printing on textiles will also be taken up as a topic in a dedicated series of lectures forming part of the Texprocess Forum. The forum offers, in hall 6.0, expert lectures on current issues in the sector, on all days of the trade fair. For the first time, the programme will have been designed jointly by three partners: the Dialog Textil-Bekleidung (DTB), die International Apparel Federation (IAF) and the World Textile Information Network (WTiN).

Following on from the success of its first edition, the Innovative Apparel Show is to be continued and set on an international footing. For the first time, there will be, as well as a German university, three European universities / colleges from outside Germany, showcasing, on the catwalk, their fashion designs from functional textiles and the processing stages that go into making them. The show will take place on all days of the trade fair. The participating universities / colleges are: Accademia Italiana, Florence / Italy; ESAD College of Art and Design, Matosinhos / Portugal; Esmod Paris/France, and the University of Trier / Germany. The young designers will be displaying designs relating to the three key themes of 'Textile Effects', 'Creative Engineering' and 'Smart Fashion'. Visitors will be able to vote for the public's award throughout the duration of the trade fair and the award will be presented at the last fashion show.

With the Texprocess Innovation Award, Messe Frankfurt seeks, for the fourth time, to honour the best new technological developments in the field. Submissions for the award may be made up until 20 February. The competition is open both to exhibitors at Texprocess 2017 and to other companies, institutes, universities, colleges and private individuals, who are not otherwise exhibiting at the fair. The awards in the various categories will be presented during the joint opening ceremony for Texprocess und Techtextil, on 9 May 2017. At the same time, there will be a special display area in Hall 4.0, showcasing all the prize-winning products at Texprocess.

Visitors will, once again, find many new IT solutions for the apparel industry in the IT@Texprocess section in Hall 4.0, where exhibitors will be presenting product life-cycle management systems (PLM), 'Cloud' applications and 3D CAD systems, which make it possible to create tailor-made clothes in real time and without the need for a Fitting.

Sewing and apparel-making technology record significant rise in Sales According to information provided by the Textile Care, Fabric and Leather Technologies section of the VDMA (Association of German machinery and plant manufacturers), conceptual partner of Texprocess, the German sewing and apparel-technology industry achieved an increase in turnover of 15.9 percent compared to the previous year in the period from January to October. “With export sales of € 523 million, Germany is in third place amongst exporting nations worldwide, behind China and Japan,” observes Elgar Straub, General Manager of the VDMA Textile Care, Fabric and Leather Technologies Association. “Our member companies are outstandingly well placed amongst the international competition. Above all, that is because they are continually developing and innovating. The individualisation of apparel, the digitalisation of the value creation chain and new technologies, such as digital printing and sustainable processing technologies, are currently at the heart of our members' planning for innovation.”

Texprocess will again be taking place in parallel to Techtextil, leading international trade fair for technical textiles and nonwovens (also from 9 to 12 May 2017). In all, 1,662 exhibitors from 54 different countries attended Texprocess and Techtextil in 2015, together with a total of 42,000 trade visitors. Over 13,300 of them came to see Texprocess. Added to that, there were around 7,600 additional visitors, who came across from the concurrently held Techtextil.

Large Companies focus on abroad and the Digitization 

Tokyo (GTAI) - Japan's machinery and facility manufacturers expect increasing orders again. An increase is expected, especially for the international business. They saw the slight financial doldrums of 2015 before. However, there were exceptions - for example at the robot technology. The big companies have a strong interest in the subject of Industry 4.0. Here are cooperation opportunities for German companies, also on third markets.

The Asian region remains high on the Agenda

Japan's economy is not yet in full swing. A new in August released stimulus package of the government is to ensure the recovery. In total Yen 28.1 billion (EUR 246.49 billion, in early September 2016: 1 Euro = Yen 114) amounts to the "package” which is funded to about 25% directly from the state treasury. The investment plans of the manufacturing industry are looking promising in the fiscal year 2016 (4.1 to 3.31.). They could rise by 14.5% over the previous year, according to the result of a survey of the Development Bank of Japan (DBJ) in July 2016.

This is confirmed by a survey of the business newspaper Nikkei with 1,140 participating companies. In the fiscal year 2016 they want to investment a volume of Yen 25.28 billion. This would be an increase over the investments made in the fiscal year of 2015 of 8.3%. If the expansion plans will actually be implemented, it would be the seventh consecutive increase year. Manufacturers of electronic machines have the most ambitious investment plans: Yen 3,64 billion, they have scheduled approximately 9.4% more than in the previous year.

Meanwhile lean foreign Business

According to the sector association JSIM (Japan Society of Industrial Machinery Manufacturers) in the fiscal year 2015 the incoming orders for industrial machinery remained below the expectations. Incoming orders came nearly to Yen 5.50 billion.  These were almost 10% less than the year before. Industry experts had already expected in advance that particularly the foreign business would suffer after the exceptionally successful year 2014. For the fiscal year 2016 the JSIM experts expect an increase of 4.6% to Yen 5.73 billion.

Not as positive as in the preceding years the situation looks in the machine tool segment. According to the industry association JMTBA (Japan Machine Tool Builders' Association) the orders declined in 2015 over the previous year by 11.4% and reached around Yen 1.40 billion. - This is justified by an overcapacity abroad. In fact it was the overseas business which fell by 22.1% to just under Yen 820 billion, while there was still an increase of 9.9% to Yen 579 billion yen domestically. With a view on the 1st quarter of 2016 the association has to state that the foreign business has not yet recovered. With more than one-quarter the orders declined compared to the same period last year.

The domestic market thus wins in importance for Japan's machinery builders. Generally, there is a need of modernization of the partly obsolete equipment at the local businesses. In addition, the reconstruction of the earthquake regions is required too. In addition, the hosting of the 2020 Olympic Games in Tokyo is considered quasi as a guarantor of business orders from the construction sector.

 
 ¹⁾ actual results; ²⁾ preliminary; ³) forecast; ⁴) also included in category: pulp- and paper machines, chillers, equipment for air- and water cleaning; ⁵⁾ among others: equipment for waste treatment, industrial washing machines
Source: Japan Society of Industrial Machinery Manufacturers, February 2016

A high importance is given to the field of environmental and energy technology for the machinery industry in Japan. Although reactors, that meet stringent safety regulations, are expected to enter the net again in the next few years, renewable energy will be pushed up. In addition, there are intelligent power networks (smart grids) in the focus. Especially in areas with high priority, such as the energy and environmental technology, German suppliers with innovative technologies and customized solutions can win the points.

Connection links by Industry 4.00

Digitalization and with it topics related to Industry 4.0 keep the Japanese machinery and factory builders now very much interested. In June 2015, the "Industrial Value Chain Initiative (IVI)" was launched. About 40 Japanese companies belong to this interest group – like as the branches of the German Bosch and Beckhoff Automation GmbH. End April 2016 the German Federal Ministry of Economics (BMWi) signed with the Japanese Ministry of Economy (Meti) a Memorandum of Understanding (MoU) for joint cooperation in the region.
Equipment manufacturers from abroad should observe under cooperation aspects with big business interests the international activities of the Japanese mechanical and plant engineering. The Japanese abroad generated production shares are not far from the 40% mark the Japan Bank for International Cooperation (JBIC) determined the end of 2015. This creates opportunities for third-market operations, which are often controlled by the parent companies in Japan.

In foreign projects the PRC stands not as strong in the foreground as it used to be. The focus is increasingly directed on the ASEAN countries („Association of Southeast Asian Nations"), while currently the general economic activities in the emerging markets are critically observed. In the longer term India has been planned as a manufacturing location. Single, large companies dominate.

According to preliminary data from the industry association JMF (Japan Machinery Federation) Japanese engineering companies manufactured machines worth of about Yen 13.55 billion in the fiscal year 2015. This was 2% less than last year. Important were cooling machines, (Yen 1.98 billion, 4.8%) as well as equipments for manufacturing of semiconductors and flat panel monitors -Yen 1.61billion, 2,8%. The manufacturer of metalworking machines had a production decline over the previous year by 5.9% to Yen 1.18 billion. Growth rates of just over 10% are registered in the robotics segment since several years.

In general the concentration in the individual equipment segments is high. According to the Yano Economic Research Institute in the fiscal year 2015, slightly more than two thirds of the NC milling machine production came from three companies: Makino Milling, Okuma and OKK. In general metalworking machines Amada, Kobe Steel and Kawasaki Hydromechanics (subsidiary of Kawasaki Steel) came on a market share of about three-quarters. Other important tool machine vendors are Yamazaki Mazak and Mori Seiki. Also in construction, textile, packaging and food processing equipment the three leading manufacturers account for at least 60% of domestic production for themselves.

¹⁾ actual results; ²⁾ preliminary; ³⁾ forecast
Source: Japan Machinery Federation (JMF), July 2016

Japan imports partly from our own production abroad

The Japanese imports of machinery and equipment continue to increase. It should be noted, that some of the imports are based on the foreign production of local companies. The largest share of supplies from abroad accounts for the category pumps and compressors. According to the United Nations Comtrade database this category reached on the basis of USD around USD 3.57 billion in 2015. This was 6.5% less than in the last year.

Just over 30% of the supplies came from the PRC; probably to a not inconsiderable proportion from Japanese production. The latter is also the case with electrical machines. According to Comtrade these reached in 2015 an import value of slightly more than USD 55 billion (-8%). More than a third of this was accounted for the PRC; about one-fifth to Asian emerging markets. In the import statistics Germany is especially noted in machine tools and food and packaging machines.

Despite displacements to abroad Japanese exports continue to play a role. In 2016 they are likely to suffer from the resurgent Yen. Moreover, the economic slowdown in the Asian emerging markets is becoming more noticeable.

Source: Japanese custom statistics

 
Commercial practice

Relevant provisions for machine and plant engineering in Japan will be supplied by the following institutions: Japan Customs, the Ministry of Economy, Trade and Industry (METI), the Center for Information on Security Trade Control Japanese Standards Association (http://www.jsa.or.jp), the Japanese Industrial Standards Committee , the Japan Accreditation Board for Conformity Assessment  and the Japan External Trade Organization (JETRO ). JETRO published in February 2010 the still actual report "Handbook for Industrial Products Import Regulations 2009", which contains the specific import requirements for some types of machines, especially for machine tools, food processing and packaging machines.

Detailed information on commercial and tax laws are available at http://www.gtai.de/recht and for import arrangements, tariffs and NTB under http://www.gtai.de/zoll

The series “Sector compact” provides analysis on important key sectors of German export economy.
Other country reports for machinery and plant engineering and other industries can be found at http://www.gtai.de/branche-kompakt .
Contact for engineering: Roland Lorenz; E-Mail: roland.lorenz@gtai.de