Garment makers told to brace for tougher times ahead

Trade and Industry Secretary Manuel Roxas II urged local garment and textile manufacturers to prepare themselves for a hard year and more aggressive competition from other producers once the garment quota system is abolished by 2005.

"It is time our local garment firms realize that only those with carefully laid out business plans will make it through in an open garment market," Roxas said.

Roxas warned that "there is an oversupply of sewing capacity around the world and new low-cost suppliers have emerged."

"Also, the garment market is not growing as fast as the supply is growing," Roxas said, adding that "this year is going to be a hard year for the sector."

Roxas, together with Garments and Textile Export Board (GTEB) Executive Director Felicitas Agoncillo-Reyes, met with garments and textile industry leaders to discuss the challenges that face the industry in the next few years.

Roxas urged garment manufacturers to draw up an "action agenda cum survival plan" that would address operational inefficiencies and edge out other low-cost suppliers which have been aggressively eroding the Philippine share in the export market.

The country’s competitors include China, Vietnam and Sri Lanka which are able to offer lower labor cost and have raw material sources.

The local garments and textile industry is heavily dependent on imported raw materials.

During the discussion, industry leaders acknowledged the need for consolidation and mergers as a strategy to optimize resources and respond to increasing buyer demand for improved services.

It was also pointed out that most buyers nowadays prefer to deal with suppliers who can provide a wide range of products and services based on superior price-value ratios, consistent quality, flexible quantity and speed-to-market capabilities.

To mitigate the impact of higher labor cost and raw material inadequacies, it was suggested that productivity could be enhanced with technology upgrade, better work ethics, social compliance and the infusion of higher value-added inputs such as design, fabric sourcing and other services in the supply chain.