KUALA LUMPUR: The multinational textile makers are relocating parts of their China operations to Malaysia and are ramping up production to take advantage operations ahead of the signing of the Malaysia-US Free Trade Agreement (FTA), industry sources said here on January 22.
The Malaysian Textile Manufacturers Association (MTMA) pointed out that the foreign direct investments (FDIs) in the textile industry are shifting back to Malaysia from China.
The textile exports from country stands at RM10.3 billion worth of textile products in 2005, with more than 20 percent of them going to the US.
The trade agreement would have a huge impact on the industry, as Malaysian textile products to the US were currently slapped with a tariff of between 12 percent and 32 percent and are set to abolish after the signing of FTA.
However, the Malaysian Knitting Manufacturers Association (MKMA) said that the textile industry would benefit the most from the FTA and compared with other industries, knitting industry was mostly involved in the negotiations.
During the first and third rounds of negotiations held in Penang and Kuala Lumpur respectively it was seen that textile industry was the only sector which sent representatives to monitor the second round of negotiations in Washington DC.
The textile exports grew 6.2 percent year-on-year in 2005 despite stiff competition from countries such as China and looking at the sub-sector, there was already an increase of 13 percent for the export of apparel between January and September (2006).
MTMA is the national body representing all sectors of the textile and apparel manufacturing industry, with its members accounting for more than 80 percent of the total equity of the textile industry in Malaysia.