The ‘Other’ category comprises N.I. Teijin Shoji, carpet maker Carpet International, two famous zipper producers, YKK and Interface Modernform. This year, there is only one new textile company, Indorama Polyester Industries.
16 companies dropped out of TTIS list this year because their sales revenues fell below Bt1,000mn. This group includes East Board Industry Co., Ltd., Lian’s Group (Asia) Co., Ltd., SRF Technical Textiles (Thailand) Co., Ltd. (Thai Baroda Industries), Hua Thai Manufacturing Plc., Intimate Fashion Co., Ltd., Double Star Industry Co., Ltd., Erawan Textile CO., Ltd., Siam Knitwear and Garment Co., Ltd., Atlantic Mills (Thailand) Co., Ltd., Liberty Garment Co., Ltd., CNC International CO., Ltd., Central Garment Factory Co., Ltd., Siam Acrylic Co., Ltd., People’s Garment Plc, Indo Poly (Thailand) Ltd., Sin Heng Towel Ltd. Part.
TEXTILE & GARMENT SITUATION
Export
Total Thai textile and garment exports in 2009 worth US$6,443.8mn, a decrease of 10.5% from 2008, reflected 26.4% decrease in exports to the USA.
Total textile export worth US$3,482.8mn decreased by 5.7% compared to 2008. Textile export to ASEAN, Thailand’s primary market for textile products, totaled US$926.9mn, a decrease of 1.3%. Garment export to Vietnam, which accounts for 20.9% of total textile export to ASEAN, showed the highest growth rate as compared to other categories of textile export to the ASEAN region.
Total garment export amounted to US$2,961mn, a decrease of 15.5%, reflecting 26.5% decrease in garment export to the USA, Thailand’s largest garment market, valued at US$1,177mn.
All major markets for Thai textiles showed a decrease in export value in 2009 - with the exception of China, albeit constrained by a relatively low export value.
The USA, Thailand’s top export market worth US$1,421.3mn, showed 26.4% decrease in 2009, reflecting 27.8% decline in garment export. In contrast, garment export to Japan and China expanded by 4.3% and 9%, respectively. Garment export growth to Japan was also attributed to the inking of JTEPA with Japan
Export value to ASEAN in 2009 likewise showed marked increase in two categories, namely fabrics and yarn.
Import
Total value of textile and garment import in 2009 amounted to US$2,877.7mn, a decrease of 22.7% compared to 2008. China is Thailand’s largest textile supplier with 24.4% share of Thailand’s total textile import, decreased by 15.9% to US$931mn.
Total textile import in 2009 amounted to US$2,372.6mn, a decrease of 25.5%, reflecting across-the-board decrease for all categories of textiles. Fabric import totaling USD696.5mn (of which US$249.3mn represented import from China) decreased by 22.4%. Yarn import from the USA worth US$616.4mn decreased by 31.8%.
Garment import worth US$505mn decreased by 6%. Underwear and jackets which came mainly from China, the largest import item with total value of US$101.2mn, decreased by 0. 6%. Import of pants, skirts and other garments (coming from China) valued at US$63.6mn decreased by 3%.
Total textile and garment import (of which US$931mn came from China) decreased by 22.4%, reflecting 12.9% drop in yarn, fabric and garment imports from China.
Other categories of textile imports including yarn were mainly supplied by ASEAN, with total import value of US$105mn, a decrease of 25.9%. Yarn import from the USA valued at US$192mn also decreased by 37%.
Prospects for 2011
Exports are growing at a brisk pace as numerous buyers switched their sourcing from China to Thailand in Q3 and Q4 2010 to escape high prices, secure product quality and on-time delivery. Leading up to the advent of ASEAN Economic Community (AEC) in 2015, exports to Japan and other ASEAN countries also show strong growth trends following the successful launching of Source ASEAN Full Service Alliance or SAFSA. Under this project, upstream and downstream textile producers in the ASEAN region have formed virtual factory partnerships to provide one-stop service for global textile / garment buyers.
Total value of Thai textile and garment exports in 2010 (Jan-Dec) amounted to US$7,677.9mn. Of this amount, textile products worth US$4,472mn were 28.5% higher than the same period in 2009. Export value of fabrics, the fastest growing textile product, totaled US$1,454.4mn, an increase of 24.7% year-on-year.
Total garment export worth US$3,205.9mn was 8.3% higher than the same period in 2009. Of this amount, export of Ready-to-wear garment totaled US$2,780.8mn, an increase of 7% year-on-year.
Shortfall in world cotton production continues to exert pressure on cotton prices, pushing New York cotton futures up by 2 cents/lb, along with prices of other raw materials. The price of No. 14 cotton yarn shot up from Bt40 to top Bt100 while fabric prices increased by about 20-30%.
Fluctuations in raw material prices discourage upstream industries from embarking on long-term business commitments. Weaving factories that own spinning mills were well positioned to accept overseas orders but medium and small-sized producers are facing hard times. To solve current shortage of skilled labor, some garment makers are focused on staff training, with particular emphasis on multi-tasking, while others prefer relocation to neighboring countries.
On January 18, 2011, the China-City Complex project was officially launched. Situated on 250 rai of land, this 2 million sq.m. project will accommodate over 15,000 shops. Local entrepreneurs located at Bobae, Pratunam, Chatuchak and Sampheng will surely be affected by the influx of Mainland goods to be displayed at the new mega mall.
SECTORAL PERFORMANCE
Fiber
This year, 11 fiber companies that made the Top 66 list showed 0% revenues growth, -124% negative earnings, -3% ROE and -2% ROA backed by -2% average net margin. Despite decreased revenue size, five fiber producers made the Top Ten list by revenues, namely, Indorama Polyester Industries, Thai Toray Synthetics, Thai Acrylic, Thai Rayon and Teijin Polyester.
Notwithstanding negative revenues and earnings growth and 39% revenues/asset gearing ratio, Thai Rayon ranked No.1 by profit size and asset size on the strength of 7.4% net margin and 4.4% debt/equity ratio, to yield above average ROE (3%) and ROA (68%).
Ranking No. 1 by revenue size and No. 2 by asset, Indorama Polyester also topped the list by revenues growth (3190%), backed by 106% Revenues/asset ratio and 322% debt/equity. Declining net margin (-2.9%) also contributed to negative earnings growth (-107.5%), negative ROE and ROA.
Thai Toray Synthetics made the Top Ten lists by revenue size, asset and profit, backed by 105% revenues/asset gearing ratio, 2.8% net margin, 59% debt/equity ratio. Overcoming negative revenues growth (-24%), this company also achieved above industry average ROE (4.7%) and ROA (8%)
Thai Acrylic Fibre moved from No. 5 to No. 3 slot by revenue size and asset, but showed negative revenues growth (-0.5%), net margin (-10%) along with below industry averages for ROE and ROA.
Asia Fiber gained No. 3 spot by earnings growth (562%) and debt equity ratio (6.8%) on the back of 4.7% revenues growth, 126.7% revenues/asset gearing ratio and 1.5% net margin. This company also achieved 2% ROE and above average ROA of 31%.
Despite negative revenues growth (-23.5%) and net margin (-3.6%), Chiem Patana Synthetic Fibers made the Top Ten lists by earnings growth (60.9%) and debt/equity ratio (19%).
Working with 118% revenues to asset ratio and 1.8% net margin, Thai Indo Kordsa was included in the Top Ten list by debt/equity while achieving above average ROE (2.4%) and ROA (17%).
Textiles
Despite negative revenues averaging -5% and earnings growth averaging -168% calculated for 31 textile companies listed in the Top 66 list for 2009, 6 textile producers made the Top Ten list by earnings growth in 2009.
Luckytex (Thailand) made the Top Ten lists by earnings growth (186%), revenues, profit size and asset. Working with 96% revenues/asset gearing ratio, 68% debt/equity and above average net margin of 4.4%, the company achieved 3.8% revenues growth, above average ROE (7%) and 10.4% ROA.
Despite -24% revenues growth and 100% revenues/asset gearing ratio, Thai Toray Textile Mills came 2nd in terms of earnings growth (1602.7%), backed by 6% net margin and 20.5% debt/equity ratio, to yield above average ROE (7.4%) and 36% ROA.
Perennial star performer, The Thai Silk Co., topped the list in terms of debt/equity ratio and came 4th in the Top Ten list by profit size despite -15% revenues growth, and -13.7% earnings growth. Working with comfortable net margin (13.8%), the company managed to achieve above average ROE (6.6%) and 174.8% ROA.
Working with 154% revenues/asset, 34% debt/equity ratio and 3% net margin, T.U.W. Textile Co., bucked the industry trend with 14.8% revenues growth and 262% earnings growth while achieving above average ROE (6.5%) and 19% ROA.
Thai Kurabo made the Top Ten list by earnings growth (180%), backed by 6% revenues growth, 1.8% net margin, 63% debt/equity and 127% revenues/asset gearing ratio. This company also reported above average ROE (3.7%) and 5.8% ROA.
Despite -8.6% revenues growth, Tong Siang made the Top Ten list with at 293% earnings growth backed by 140% revenues/asset gearing, 1.6% net margin and 156% debt/equity.
Thai Industries Development also made the Top Ten list by earnings growth (225.6%) on the back of 1.9% revenues growth and 0.1% net margin, 112.6% debt/equity and 95% revenues/asset ratio. Positive ROE and ROA were relatively low at 0.2%.
Jong Stit and YRC Textile retained their place in the Top Ten list by revenues. Backed by 92% revenues/asset gearing ratio, 96% debt/equity and 2.4% net margin, YRC achieved above average revenues growth (3%), earnings growth (5.6%), 4.4% ROE and 4.6% ROA.
Ranking 3rd in the Top Ten list by asset, Far East Knitting and Spinning worked with 528% debt/equity ratio and negative net margin (-1.2%) to achieve 95.6% earnings growth, but revenues dropped by -13%.
In contrast, Thong Thai Textile made the Top Ten list by ROE (14.9%) and overcame -8.7% revenues growth to achieve 18.9% earnings growth backed by 205.7% revenues/asset ratio, 215.8% debt/equity and 2.3% net margin. The Company also reported above average ROE (14.9%) and 6.9% ROA.
Garment
Nine out of the Top Ten list by return on equity were garment companies, with 2009 ROE ranging from 12.5% to 76.6%. Four garment companies, namely HBI Manufacturing, Jaspal Co., Lim Line and Trax Intertrade, also made the Top Ten list by revenue growth, ranging from 5% to 34%.
HBI Manufacturing (Thailand) also topped the list by profit margin (14.3%) while ranking 2nd by ROE (47.7%) and 3rd by profit size, along with above average revenues and earnings growth. Working with 173% revenues to asset ratio and 92% debt equity, HBI achieved 34% revenues growth and 53% earnings increase, well above industry averages of -4% and 13%, respectively.
Despite -2% revenues growth, Thai Garment Export gained the No. 1 slot with by earnings growth with 2007% increase, backed by 185% revenues/ asset gearing, 3.5% net margin and 31% debt/equity ratio.
Despite -5.7% negative revenues growth and -16% earnings growth, Thai Wacoal took 2nd place in the Top Ten list by profit, backed by 11% net margin, 12% debt/equity ratio and top ranking asset size.
Other old hands, namely, Thanulux and Textile Prestige maintained low debt/equity ratios and allowed revenues and earnings growth to slide, thus securing positive ROE and high ROA, backed by 4-10% profit margins which outstripped industry average of 2%.
Working with industry average net margin of 2% and 249% revenues/asset ratio, Lim Line Apparel managed to increase revenues by 11.7% while topping the ROE list at 76.6% along with one of the highest earnings growth rates (153%), albeit at the expense of 1235% debt/equity.
Going with the flow, NK Apparel’s revenues decreased by -13.7% but earned a place in both the Top Ten lists by profit and ROE (31.8%) on the strength of 8% net margin, 61% earnings growth, 150% revenues/asset gearing and 163% debt/equity.
Jaspal Co., outperformed industry averages across the entire spectrum of financial indicators, with 17% revenues growth, 46% earnings growth, 4.8% net margin, 161.7% revenues/asset ratio, 221% debt/equity, to yield 25% ROE and 11% ROA.
Working with 1.8% net margin, 379% debt/ equity and 230.5% revenue/asset gearing, Chantasia made the Top Ten list by ROE (19.4%), notwithstanding 0.4% revenues growth and -43% earnings growth.
Backed by 7% net margin, 74% debt/equity and 146% revenues/asset ratio, Sheico (Thailand) made the Top Ten list by profit size and ROE (18%) despite negative revenues and earnings growth of -3% and -8.8%, respectively.
Hong Seng Knitting also reported negative revenues and earnings growth but secured top ranking ROE (14%) and ROA(7%) on the back 1.7% net margin, 282% revenues/asset gearing and 199% debt/equity.
Trax Intertrade made the Top Ten list by revenues growth (5.3%) and reported 139.6% earnings growth backed by 1.2% net margin, 188.5% revenues/asset gearing and 223% debt/equity to achieve above average ROE and ROA at 7% and 3.2%, respectively.
Backed by above average net margins and over 170% revenues/asset ratios, NC Apparel and Reno (Thailand) also made the Top Ten list by ROE, notwithstanding negative revenues and earnings growth.
‘Other’ Category
Carpet International made the Top Ten lists by debt/equity ratio, profit margin and profit size despite negative revenues and earnings growth. Also included among top ranking debt/equity and profit margin companies, YKK reported above average ROE and ROA at 9% and 47%, respectively. Interface Modernform made the Top Ten list by profit margin (6.6%), along with above average ROE and ROA at 9% and 37.4%, respectively.
Click to see 2009 Top Thai Textile & Garment Companies (Table)
Click to see 2009 Top Thai Textile & Garment Companies – By Subsector (Table)
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