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Japanese apparel firms shifting production out of china

Japanese apparel firms shifting production out of china Source: ei.wtin.com
Date: 27-08-2013
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Some of Japan’s leading garment brands are moving their manufacturing supply bases out of China and into Southeast Asian countries and other areas.
 
AOYAMA plans to establish its first directly managed plant in Indonesia during 2014, with the capacity to produce 140,000 male suits in the first year. SANYO will significantly increase its output in Cambodia. AOYAMA claims they will reduce the percentage of its clothing produced in China from 70% to 50% before the end of 2014. UNIQLO is expected to continue to expand its production capacity in Bangladesh and cut the percentage of its good it produces in China from 75% to 60% before 2015.
 
Several factors have influenced the migration of production capacity out of China, including surging  land, labour and raw material costs in China. In addition, the sharp depreciation of the yen against the yuan has rendered it more expensive to import goods back into Japan from China. The Japanese government has announced an increase in domestic consumption tax from 5% to 8% from next April, a move that has prompted firms to seek to lower cost solutions as quickly as possible.
 
In the area of duck down, bird flu hit hard has had a major impact on China’s poultry industry and forced prices for down to rise 50% this year. This has been a further factor pushing Japanese clothing producers to relocate. Sanei International, a subsidy of TSI Holding Company, plans to expand their manufacturing capacity for down wear in Burma.
 
Data published by the Japanese External Trade Organization, indicate that exports from China to Japan during the first half of 2013 shrank 10%, compared with a year earlier. As a consequence, in Japan, the market share of clothing imported from China declined from the peak, 81.1% of 2005, to 71.4% in the end of this June.
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