Sino-U.S. Joint Venture Formed To Capture Post-Quota Sourcing Market
China National Textile and Apparel Council (CNTAC), the national textiles federation of China, and its affiliate, China Textile Network Co. Ltd. (CNTEX), have formed a 50-50 joint venture with U.S.-based CNTextile LLC, in an exclusive agreement to conduct post-quota U.S. sourcing from China factories. In addition, the joint venture, CNTextile JV, will provide emarket trading and training services to the China fashion industry and a portal for Chinese producers to buy from U.S. suppliers.According to the partners, the joint venture will help transform a complex sourcing market into a one-stop, full-service e-market, using state-of-the-art sourcing processes. It covers 12 manufacturing sectors, including cotton, wool, silk, leaf-fiber textiles, knitting, yarn-dyed weaving, dyeing/printing/finishing, home textiles, industrial textiles, apparel, chemical fibers and textile machinery.The joint venture, headquartered in Beijing, will have offices in the United States and China. At its launch, which is expected in the first quarter of 2005, it will have about 45 merchandising specialists based in the main apparel centers of China.
Left to right: Thomas W. Eggleston,Warren Hartenstine, CNTextile JV directors; Du Yuzhou, CNTACT president.According to Warren Hartenstine, a principle at CNTextile LLC, the joint venture is expected to capture about 2 percent of the China sourcing market within the first three years of operation. ”Our mission is to increase the velocity of textile, apparel and home furnishing trade between the U.S. and China while decreasing the complexity, risk and cost,” he said. “Today, China supplies $2.5 billion in fashion products to the U.S. market, but observers generally agree that this figure will jump to $7.2 billion within months of the end of quotas.”CNTEX chairman Xia Lingmin said, “The textile, apparel and home textiles industry is China’s leader in employment, investment and growth opportunity. The CNTextile joint venture provides a formal bridge for CNTEX to provide our members with training, technology and other services to improve our ability to compete in the global marketplace and to customize our capabilities to meet the specific needs of the market in the United States.”