he Kingdom of Thailand’s modern textile and apparel industry, which began in 1936 when
the Ministry of Defense imported textile machinery to produce textiles for military applications,
has become a leading industry in that export-oriented country. According to the Ministry of
Commerce’s Department of Export Promotion, private textile mills were established shortly after
World War II as a result of textile shortages. In 1960, the Investment Promotion Act prompted local
and Chinese investors to buy and expand mills that were once military-owned. Soon after, some
Japanese companies joined Thai textile firms in joint ventures. Thailand’s modern textile industry
has since grown beyond its military beginnings and now plays a key role in the Southeast Asian
Textile Industry Today
Presently, Thailand boasts a fully integrated textile industry. In June 2005, the industry
consisted of 18 man-made fiber, 150 spinning and 1,300 weaving enterprises, according to Phongsak
Assakul, chairman, Federation of Thai Textile Industries and Thai Textile Manufacturing
Association, based in the capital city of Bangkok, reporting at a regional seminar sponsored by the
United Nations Economic and Social Commission for Asia and the Pacific’s (UNESCAP’s) Trade and
Investment Division. There were 400 dyeing, printing, and finishing firms, in addition to 2,500
apparel firms. Those mills employed more than 1 million workers, or 22.1 percent of the country’s
entire industrial labor force.
According to the US International Trade Commission’s 2003 report, “Textiles and Apparel:
Assessment of the Competitiveness of Certain Foreign Suppliers to the U.S. Market,” the sector’s
center is Bangkok. Many of the 1,885 textile producers registered with the Department of Industrial
Works (DIW) in 2000 were small or medium-size enterprises (SMEs), and none of those enterprises
were state-owned. Among textile producers, 677 firms were weaving enterprises, and 412 were
knitting. In the apparel industry that year, there were 2,672 factories registered with the DIW,
and, as in the textile subsector, none of those factories were state-owned.
With regard to production capabilities, the country’s installed spinning capacities in 2004
totaled 3.6 million short-staple spindles and 65,000 long-staple spindles, as reported in the 2005
International Textile Machinery Shipment Statistics report of the International Textile
Manufacturers Federation (ITMF), Switzerland. Those respective capacities were fifth — behind
mainland China, India, Pakistan and Indonesia, in that order — and ninth, when compared to other
countries in Asia and Oceania. Open-end capacity at 52,000 rotors also came in ninth among other
industries in that region.
Weaving capacities in 2004, as reported to ITMF, numbered 54,900 shuttleless looms and
74,600 shuttle looms. Respectively, those capacities were second — following mainland China — and
fifth — following mainland China, Pakistan, Indonesia and India — in the region. The country had
50,000 filament weaving looms — a capacity that tied with Pakistan and was behind only mainland
China, when comparing Thailand to other countries in Asia and Oceania.
In his presentation at the aforementioned UNESCAP seminar, Assakul noted the industry’s
impact on the country’s economy as a whole. The textile industry, he said, earned US$6 billion
annually in foreign exchange. That contribution made up 12.3 percent of Thailand’s gross domestic
Statistics from the Thailand Textile Institute’s (THTI’s) Textile Information Center,
Bangkok, offer further proof of the industry’s key role. From January to March 2006, the country
exported apparel and clothing accessories worth $868.3 million, which was an 11.3-percent increase
over the same period in 2005. The apparel exports with the greatest value during that period were
cotton apparel, worth $394.3 million, followed by man-made fiber apparel, $166.9 million; apparel
made from wool, silk and other textile materials, $166.4 million; and baby apparel, $56.1 million.
Exports of bras, corsets, and parts thereof were worth $68.7 million — a 13.2-percent increase from
the first quarter (Q1) of 2005. Exports of pantyhose, tights, stockings and socks dropped by 8.8
percent to $13.5 million in Q1 2006 over Q1 2005, while gloves exports, valued at $2.4 million,
grew by 9.1 percent. In 2005, exports of apparel and clothing accessories were worth $6.7 billion,
which was a 5-percent increase over 2004.
In Q1 2006, Thailand exported woven fabrics and yarns worth $448.4 million, a +5.6-percent
difference from the same period in 2005. The most valuable woven fabric exports, which as a whole
were worth $264.4 million in Q1 2006, were those made of man-made fiber, $142.2 million; cotton,
$100.2 million; and silk and other textile materials, $22 million. Yarn and man-made filament
exports during the first three months of 2006 brought in $184 million — a 1.2-percent increase over
Q1 2005. Exports of man-made filament yarns were valued at $145.5 million, while cotton yarn
exports were valued at $38.6 million. The value of woven fabric and yarn exports for all of 2005
was $1.8 billion — a 7.5-percent increase from 2004.
Household textile exports grew by 24.4 percent in Q1 2006 over Q1 2005, for a value of $63.7
million. Man-made filament and staple fibers, worth $116.3 million, grew 7.2 percent, while the “
other textiles” category, worth $112 million in Q1 2006, decreased by 2.2 percent over Q1 2005.
Another export category that saw a slowdown in Q1 2006 was shawls, scarves, mufflers and veils,
which dropped by 23.8 percent to a value of $1.6 million. Finally, embroidery and lace, worth $28.7
million; fishing nets, $16 million; and other made-up articles and dress patterns, $16.4 million,
rounded out the country’s top exports during the period.
THTI also outlined the major markets for Thai textile and apparel exports. The US market
received the greatest portion of those exports, $523.2 million or 31.3 percent of total textile
exports, during Q1 2006. That amount was 12.3 percent higher than in Q1 2005. The industry exported
textile goods to the United States worth $2.1 billion, or 31.5 percent of all sector exports, in
all of 2005 — a 1.8-percent increase over 2004. According to the US Department of Commerce Office
of Textiles and Apparel’s Feb. 8, 2007, Major Shippers Report, Thailand’s total textile exports to
the United States captured nearly a 2-percent share in square-meter equivalents (SMEs) and a
2.3-percent share in dollar value.
The second-largest market for Thai textiles and apparel during Q1 2006 was the European
Union (EU), accounting for 19.5 percent of those exports, or $326.3 million, according to THTI. In
all of 2005, Thailand exported textile goods worth $1.2 billion to the EU. The Association of
Southeast Asian Nations (ASEAN), of which Thailand is a member, was the third-largest market and
imported Thai textile and apparel goods worth $183 million in Q1 2006. Japan followed with Thai
textile imports during that period of $104.2 million. In 2005, ASEAN and Japan imported textiles
and apparel from Thailand valued at $779.2 million and $413.6 million, respectively. China was the
fifth-largest export market for the sector importing Thai textile goods worth $69.4 million during
Q1 2006 and $283.3 million in 2005. Combined, the rest of the sector’s markets imported Thai goods
worth $465.3 million and $1.9 billion in Q1 2006 and 2005, respectively.
In a February 7 press release from the Mass Communications Authority of Thailand, Atchaka
Sriboonruang Brimble, director-general, Industrial Economics Office, warned that Thai textiles
might face considerable competition in 2007 from low-cost textile producers, especially China,
Vietnam and India. In 2006, economic slowdowns in the key Thai markets of the United States, EU and
Japan caused textile and apparel exports to decrease by 5.3 percent and 6.2 percent, respectively.
In Q1 2007 orders for Thai garments were predicted to grow by 5 percent.
However, the industry’s rising oil and raw material costs and the uncertainty regarding
Thai-US and Thai-Japan free trade agreements (FTAs), both currently under negotiation, might
negatively impact the industry, Atchaka noted. Adding to the industry’s worries concerning the
strength of the baht, the country’s currency, and whether the United States would renew Thailand’s
preferential tax regime, the Generalised System of Preferences. She added in response to the baht’s
appreciation, apparel and textile exporters have appealed to the government and the Bank of
Thailand to control the currency’s strength and provide subsidy measures, according to the Thai
News Agency. The Thailand Investor Service Center also reported that Virat Tandaechanurat,
executive director and secretary, THTI, said the private sector urged the government to speed up
FTA negotiations with the United States and Japan.
As the country’s industry entered the quota-free environment, Virat said in a July 2005
article in the Thailand Board of Investment’s Thailand Investment Review that the US $45 million in
technology upgrades and value-adding enhancements made over the previous four years would boost and
help develop the textile sector and ensure its success in the new era. Those upgrades were made in
the fiber manufacturing, spinning, weaving, dyeing, printing and finishing sectors. As part of the
effort to boost the industry’s success, THTI launched in 2004 the “Trendy Fabric Manufacturing by
SMEs” project — aimed at improving smaller firms’ competitiveness and textile quality — and
established clusters of factories to provide one-stop shopping for buyers. Virat also pointed to
the Bangkok Fashion City project — a US $46 million undertaking to develop an international fashion
school, textile and garment industry development programs, and fashion road shows — and the
creation of the “Thai Textile Trend (T3) Style in Italy” brand, in conjunction with Italian fashion