Taiwan Textile Makers Take Aim At Functional Textile Market

Textile manufacturers in Taiwan are working hard to develop functional textile products, and have boosted their efforts to an even higher level following the cancellation of the Multi-Fiber Agreement on global textile quotas this year.

The Industrial Development Bureau (IDB) of the Ministry of Economic Affairs (MOEA) hopes to encourage the island's manufacturers in this effort by mapping out a system of tax incentives—five-year tax holidays or investment tax credit—if they produce multifunctional products with automatic temperature/humidity adjustment functions.

The IDB defines "multifunctional textile products" as those with at least three of the following nine functions: maintenance of warmth, resistance to bacteria and odors, resistance to ultraviolet rays, fireproofing and flame-resistance, perspiration absorption and quick-drying, resistance to radiation, resistance to insects, the employment of nanotechnology, and having more than 300cc of negative ions before washing.

Manufacturers of products meeting this requirement will be able to take advantage of incentives for the encouragement of emerging industries.

The IDB has commissioned the Union Chemical Laboratories (UCL) of the government-funded Industrial Technology Research Institute (ITRI) to integrate up-, mid-, and downstream textile manufacturers in the joint development of "intelligent" textile products, high-end terephthalate (PTT) fabrics, and textile cloth for medical and health-care use.

UCL has invited domestic textile manufacturers to join in its development of functional textile products, for which it has set up four separate teams to handle development in four areas: health-care nano-functional products, light-sensitive color-changing fabrics, durable fabrics for sanitary products, and fabrics mixed with specially processed natural herbs. Zig Sheng Industrial Co., Kyoin Enterprise Co., Rich Chemical Co., New Prismatic Enterprise Co., Eclat Textile Co., and Jiggy Science Trade Co. are among the participating manufacturers.

Other leading textile producers in Taiwan, such as Far Eastern Textile Co., Formosa Chemical & Fiber Corp., Sinkong Synthetic Fibers Corp., Haojey Co., and Tri Ocean Textile Co. have also moved aggressively into the field of functional textiles.

Money for Development

Economics Minister Ho Mei-Yueh notes that the annual global production of industrial fabrics is worth more than US$100 billion, of which Taiwanese manufacturers account for only US$2 billion, or less than 2%. She believes that the island's suppliers have a lot more room for to tap niche markets around the world. To help them do that, the MOEA plans to appropriate a five-year budget of NT$2 billion (US$59 million at NT$34:US$1) for the Taiwan Textile Research Institute (TTRI), UCL, and other organizations to use in developing industrial textile products.

ITRI chairman Huang Yao-tang notes that the island's textile industry brings in foreign exchange in the amount of about US$10 billion a year; last year the figure was up 7% over 2003, to US$12 billion. But the demise of the Multi-Fiber Agreement is expected to boost competition in the global textile market; to win out in that competition, Huang urges, domestic textile manufacturers should put more emphasis on the development of high-end industrial cloth as well as becoming more intensely involved in the production of multifunctional textiles.

Kang Na Hsing Enterprise Co., a maker of industrial cloth as well as hygiene products such as sanitary napkins and diapers, plans to spend NT$600 million (US$17.7 million) in 2006 to build a plant that will concentrate on industrial cloth. Yai Yuen Textile Co., an affiliate of the Yulon Group, Taiwan's biggest auto manufacturer, is considering the development of industrial cloth for car seats and air bags for use in the group's own auto plants.

ITRI's Huang notes that industrial cloth accounts for a mere 10% of the island's total textile output, much lower than the figure of 35% in the U.S. and Western Europe. The chairman notes that industrial cloth can be used in a wide range of applications, including furniture, automobiles, medical and healthcare products, sports wear, environmental protection equipment, packaging, and building materials, among others.

In Taiwan's overall textile production mix, the MOEA plans to cut the ratio of garment-use textiles from the current 80% to 60% in 2008, and to boost the proportion of industrial textiles to 20% (up from 10% now). To encourage TTRI to work harder on the development of industrial textiles, the MOEA has heightened its subsidy for 2005 by NT$100 million (US$2.94 million), to a total of NT$700 million (US$20.5 million).