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Document 29 of 320.

August 28, 1998

SECTION: Nationwide Financial News

LENGTH: 997 words

HEADLINE: PROFILE - AUSTRALIA'S TEXTILE/CLOTHING INDUSTRY (AUG 1998)

BYLINE: the year 2000 the ongoing tariff reduction program will

BODY:

A PROFILE OF AUSTRALIA'S TEXTILES/CLOTHING/FOOTWEAR INDUSTRY

PREPARED BY ASIA PULSE ANALYSTS (UPDATED AUGUST 1998)

OVERVIEW:

The textile, clothing and footwear (TCF) industry in Australia has undergone a major restructure in the past ten years.

The industry has been forced to compete with cheaper overseas imports. The impact on the sector has been dramatic with many company closures and larger organisations making the decision to invest offshore rather than remain in Australia. mean that further cuts will be made on imported products.

This will expose clothing to a 25 percent tariff instead of the present 37 percent. Tariff on footwear will drop from 27 percent to 15 percent.

PRESENT SITUATION:

The TCF sector provides 96,000 Australians with full and part time employment (8.5 percent of the total manufacturing workforce) and has an annual turnover of $ A10 billion ($ US5.75 billion).

Australia is the world's largest producer of wool and is the fourth largest cotton producer. Further processed products made from these commodities are rapidly growing in importance and offer the benefit of higher returns from value added.

The TCF sector covers a wide range of manufacturing activities from spinning (producing 66,000 tonnes of spun yarn each year), weaving, fashion, medical and industrial apparel, household textiles, carpets, outdoor and industrial textiles.

At the retail level, the TCF industry turns over $ A15.3 billion ($ US8.80 billion) annually.

OUTLOOK:

A survey of 33 members of the Council of Textile & Fasion Industries of Australia (TFIA) in early 1998 showed renewed interest in the textile clothing and footwear industry of more than $ A130 million ($ US74.79 million) over the next few months.

TFIA president Robert Hershan said the survey indicated the TCF sector's undertaking to the Federal government of annual investments of $ A400 million ($ US230.12 million) was well on track and could be exceeded with results showing investment and exports would continue to increase over the next few years.

"Between 1998 and 2003, the 33 TCF companies surveyed are set to invest more than $ A370 million ($ US212.86 million) in capital investment, training, machinery and factory and technology upgrades. The sector is focussing on continually improving the value-added in our TCF industry and taking the initiative in capitalising on opportunities within the government's new policy framework," he said.

"Our TCF companies recognise the importance and value of having an outward focus, and they are now concentrating on investment, export initiatives, jobs, world's best practice, and the development of long-term strategies to continue to build a sustainable and profitable TCF industry in Australia."

GOVERNMENT POLICY:

The introduction of the Import Credit Scheme (ICS) in July 1991 helped the sector by providing the necessary incentives to penetrate the markets of other countries. It has enabled Australian TCF manufacturers exporting their locally produced goods to earn import credits at a calculated percentage of the actual export price of the goods.

Australian manufacturers have used the ICS as a springboard into high-tech and high-quality TCF products.

In September 1997, the federal government announced a new TCF package to provide a practical transition, designed to promote investment and innovation in the TCF sector in the lead up to the free trade environment beyond 2010.

The key features of the package include:

the current schedule for TCF tariff phasing will continue through to the year 2000. TCF tariffs will be maintained at the same level from 1 July 2000 until 1 January 2005

The government will introduce legislation to implement a reduction in TCF tariffs on 1 January 2005

establish a TCF investment programme designed to build gloablly competitive capacity in the industry

establish a new Market Development Programme with funding of $ A2.5 million ($ US1.51 million) annually to develop and implement firm based strategies to increase export capabilities

an expanded overseas assembly programme to enable increased use of Australian textiles

examine removal of anomalies in TCF by-laws and tariff concessions

The TCF industries, as a result of the government's plan, expect to see $ A400 million ($ US241.40 million) annually in new investment.

KEY INDICATORS:

The TCF sector comprises about 3,500 companies employing 96,000 people or 8.5 percent of the manufacturing workforce.

It has an annual industry turnover of $ A10 billion ($ US5.75 billion) (retail turnover of $ A15 billion) ($ US8.63 billion).

It accounts for $ A4 billion ($ US2.30 billion) or 8 percent of the country's manufacturing value-added.

The sector has annual exports of $ A1 billion ($ US580 million) with a year 2000 target to exceed $ A2 billion ($ US1.15 billion) and $ A3.5 billion ($ US2.01 billion) by 2005.

MAJOR PLAYERS:

Major players in Australia's TCF sector include Calum Textiles (Tel: 613 9465 9733), Merino Gold Australia (Tel: 613 9383 4822), Driza-Bone (Tel: 617 3807 1555), Seasuits Australia (Tel: 618 384 1466), Bradmill Undare Group (Tel: 9274 6290), Shaw Industries (613 9316 4332), Rocklea Spinning Mills (613 9428 9887), Sheridan Australia (Tel: 612 9321 6100) and Clarks Shoes (Tel: 613 9484 9500).

INDUSTRY CONTACTS:

Department of Industry, Science and Tourism

Textile, Clothing and Footwear Branch

3rd Floor, 84 William Street

Melbourne Victoria 3000

Australia

Tel: (613) 9268 7922

Council of Textiles & Fashion Industries of Australia Ltd

Level 4, 380 St. Kilda Road

Melbourne Victoria 3004

Australia

Tel: 613 9698 4460

Fax: 613 9698 4459

(Sources: Australian Bureau of Statistics, Council of Textiles and Fashion Industries of Australia Ltd)

ASIA PULSE

LANGUAGE: ENGLISH

LOAD-DATE: August 28, 1998