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Further evidence emerging in china of westwards migration of textile capacity

Further evidence emerging in china of westwards migration of textile capacity Source: ei.wtin.com
Date: 25-06-2013
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On June 15, Ruyi Group, China’s fourth largest textile and apparel firm by revenue, commenced work on a seven billion yuan investment on four projects in the Helan District of the Ningxia Eco-friendly Textile Industry Demonstration Park (NETIDP). The Park is located in the Ningxia Hui Autonomous Region in western China, a relatively underdeveloped area of the country.

The investment should see the addition of 1.2 million spindles, as well as capacity producing annually 206 million metres of fabric (including six million metres of cashmere fabric) and 3.5 million shirts.
                   
The company also revealed planned investment of a further 13 billion yuan.
                  
The Ruyi Group anticipate that the total investment will create 50 billion yuan in annual sales revenue and create new 20,000 jobs. A total of six billion yuan in tax revenue could be generated for the Autonomous Region.
                   
The local Ningxia government is seeking to develop an entire supply chain within the region, from fibre through to end product. To that end, efforts are under way to encourage investment from raw material producers. NETIDP officials are hoping to establish manufacturing capacity in purified terephthalic acid (with a target annual output of 1.0 million tonnes) and mono ethylene glycol (1.2 million tonnes). The Park has also apparently secured investment from six enterprises orientated towards dyeing and garment production.
                   
The story of NETIDP is yet another example of the westward migration of China’s textile and clothing sector, a migration spurred by rising production costs in coastal regions, but one which has also been facilitated by considerable incentives provided by both local and central government. The proximity of sources of raw materials such as cotton, wool and cashmere, is a further attraction, as is the lower cost of labour, and the increasing spending power of consumers in the west, an area of the country that is currently experiencing massive industrialisation and urbanisation.
                   
A similar sizeable textile park project is underway in nearby Shanxin province. The Xianyang Emerging Textile Park (XETP) should be completed by 2020 and is expected to contribute the equivalent of 35 billion yuan to local GDP, 350 million yuan in taxes each year and at least 60,000 new jobs, according to XETP officials.
                   
In Chongqing, a large city in the southwest of the country, another manufacturing base has been established, with investment from a number of companies (including Ruyi Group and Samsung) totalling 1.33 billion yuan.
                   
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