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Textile firms eye mainland mart

By Lu Haoting and Hu Meidong (China Daily)
Updated: 2009-04-24 07:48

It was a display booth that looked different from all the others at a recent textile fair in Fujian province. For, Wang Yanzhu had earmarked about half of the space in his booth to a Taiwanese fabric producer with whom he hoped to forge a close partnership very soon.

"If it were not for the financial crisis, Tex-Ray Industrial Co (the Taiwanese firm which has over 30 years of experience in producing high-end fabric) would not have been so determined to set up strategic partnerships with garment producers on the mainland. We are now one of their largest clients," said Wang, whose company, Gaiqi Group, is one of the largest producers of T-shirts on the mainland.

Tex-Ray had just sent several of its staff members to join Gaiqi's management team and the two companies also planned to hold stakes in each other in the near future, Wang, who is Gaiqi's president, said.

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"This year, our focus will be on the mainland-market oriented clothing producers," said Mason Ma, director at Tex-Ray's Shanghai office.

"As mainlanders' pockets get deeper, the market here promises huge demand for more sophisticated clothing. There are lots of opportunities for Taiwan companies, which have an advantage in producing mid- to high-end fabrics. You cannot just dump cheap products here," Ma said.

Tex-Ray's stable relationship with the mainland's leading clothing brands had caught Gaiqi's eye since around 70 percent of the latter's sales came from producing T-shirts for domestic brands such as Septwolves, Lilanz and Anta.

Which is why, despite the global economic downturn, Gaiqi is expecting 25-30 percent growth in sales this year. It has also signed a contract with the Shanghai 2010 World Exposition National Organizing Committee to produce 3 million T-shirts for next year's expo.

Tex-Ray is not the only one to think of deepening its relationship with mainland textile companies.

Faced with a grim economic situation, textile and clothing companies in Taiwan and the mainland have decided to realign their export-oriented strategy and focus on the mainland to stay afloat.

And, that was the one of the reasons why the 12th Straits Textile & Clothing Fair in Shishi (held from April 18-21) attracted as many as 60 Taiwanese companies, the largest turnout in the past decade.

The fair's organizing committee also shifted its focus this year to the domestic market. It invited more than 100 domestic buyers who represent 23 large shopping malls and clothing wholesale markets in major Chinese cities, to participate in the fair.

"We had never before made such an effort to ask domestic buyers to participate in the fair," said Qiu Yuzhen, deputy director of Shishi Economic Bureau. Shishi, a three-hour drive from Fuzhou in Fujian province, produces about one-quarter of the mainland's casual wear. The city is also a major export base for sportswear, lingerie and kids wear.

The four-day fair generated about 6.7 billion yuan in order intent, up 11.37 percent over last year. "Although we can still maintain the same amount of orders this year, the profit margin will be 10 percentage points lower than before," said Chen Jiaxing, general manager of Guanqi Co, a button producer in Shishi.