Blog: Leonie BarrieMonsoon rains threaten Thai makers

Leonie Barrie | 24 October 2011

Three months of heavy monsoon rains have left Thailand battling its worst flooding in decades, with the capital Bangkok currently under threat. As the country tries to contain rising water levels, the garment manufacturing industry has not been spared, just-style learnt last week, with at least four large clothing factories being forced to halt production.

The Thai Garment Manufacturers Association is working to source goods from other suppliers and move pending orders for November and December elsewhere, but warns it continues to watch the situation carefully.

A key figure in the Egyptian textile industry, meanwhile, has called on his government to invest in the two companies that have recently been re-nationalised after a court decision ruled their privatisation by the deposed Mubarak regime was illegal. Judges said the Shebin El-Kom Textile Company (which has major international clothing sector clients), and the Tanta Company for Linen and Derivatives were both sold off without sufficient due process - and restored their ownership to the state. 

In the US, regulators have voted in favour of new trading rules designed to curb speculation in a range of commodities including cotton - which is believed to have contributed to high and volatile cotton prices in recent years. The latest forecasts, however, suggest cotton prices will continue to move sideways in the coming months, as higher stocks in the year ahead are likely to be offset by rising demand in emerging markets and Chinese buying interest. And cotton growers are hoping to regain market share after volatile prices over the past year led apparel manufacturers to switch to man-made fibres.

Retailers and brands are increasingly enticed by the rapid growth of the middle classes in a number of emerging countries as they seek top and bottom line growth at a time when many developed markets are stagnating. But instead of focusing on China, opportunities are more likely to lie elsewhere, according to the chairman and CEO of investment banking group Financo. 

Likewise, footwear retailer Collective Brands is developing its presence overseas, despite recent plans to shutter almost 500 stores in the US - and agrees the BRIC countries are likely to be more challenging than other emerging markets. CEO Michael Massey also told just-style that online is set to play a major role in the company's growth plans.


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