The following research report contains market research, analysis, statistics and business intelligence relating to research on Textile Fabrics In Australia.

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ABSTRACT
The textile fabric industry encompasses the manufacture and conversion of fibers into yarns and fabrics (spinning, weaving, knitting, tufting, dying, printing and finishing) and the cutting and hemming of fabrics into finished products, other than clothing (i.e., linen, awnings, upholstery, etc). The sector also includes a non-woven textile sub-sector, which consists of a number of niche product lines, each of which entails specific technical expertise. These products include acoustic/flame retardant liners and disposable medical apparel.

The total annual output of the textile, clothing, and footwear (TCF) industries in Australia is estimated at US$4.75 billion, employing some 87,000 people. The textile sector accounts for 26 percent of establishments within the industry, 33 percent of employment, and 41 percent of value added. Companies in the textile sector are likely to be larger, more concentrated, and more capital intensive than those in the clothing and footwear sectors. Textile fabrics is a significant sub-sector of the textile market, accounting for US$1.2 billion in market output. The textile fabrics market is expected to grow by four percent annually from the period of 2002 to 2004.

A significant share of total Australian yarn usage is imported, in particular polyester/cotton and polyester/viscose types. Australia continues to supply the lion's share of knitted fabrics and woven woolen and worsted fabrics, but the bulk of cotton and man-made fibers are imported. Only about 10 percent of cotton and 25 percent of man-made fibers are produced locally.

The U.S. holds a 10 percent market share of the total textile fabric market. The other significant suppliers are China, Taiwan, and South Korea.

Prospects are promising for U.S. suppliers of industrial fabrics. Future growth is forecast for the import of U.S. textile fabrics, in particular, specialized textiles for industrial use, a sector in which the U.S. excels.
The following harmonized tariff codes are covered in this report:

Woven vegetable textile fabrics HS 53
Man-made filaments
HS 54
Man-made staple fibers HS 55
Wadding, felt and non-wovens; special yarns HS 56
Carpets and other textile floor coverings HS 57
Special woven fabrics, tufted textile fabrics, lace, tapestries, trimmings, HS 58
embroidery Impregnated, coated, covered or laminated textile fabrics; textile articles of a HS 59
kind suitable for industrial use
Knitted or crocheted fabrics HS 60 Other made-up textile articles HS 63

Market Profile

Market Demand

The value of the Australian textile fabric industry in 2001 totaled A$2,210 million in 2001, a real increase of six percent over the 2000 figure of A$2,073 million. Annual growth of the textile fabric market is expected to average four percent into the foreseeable future. Growth in textile fabrics is due, in particular, to the continual growth in the industrial fabrics industry. The industrial textiles industry, which is very strong in Australia, has experienced significant growth in the past ten years. Some of the factors influencing this growth include environmental concerns, which are leading to an increased demand for filtration products; technical textiles are becoming more prevalent in automobile manufacture; and the medical industry increasingly utilizes disposable medical products.

Prospects are particularly promising for specialized textiles for technical use, which encompass a number of industries like automotive, medical, agricultural, building, sports, and aerospace. The market is continually evolving, as end uses are found for newly-developed textile products. Opportunities exist for the importation of niche industrial fabrics, an area in which the U.S. is currently quite successful. U.S. suppliers continue to maintain a constant market share of 9 to 10 percent of the total textile fabric market in Australia.

STATISTICAL DATA

MARKET SIZE (US DOLLARS/MILLIONS)
Projected

Avg. Annual

Growth Rate

for Following
2000 2001 2002 (est.) Two Years (%)

Import Market 1,219 1,164
1,206 4
Local Production 305 279 288 4
Exports 298 268 269
Total Market 1,226 1,175
1,225 4
Imports from the U.S. 127 111
115 4
Exchange rates 1.69 1.88 1.88

Estimated Future Inflation Rate: 4.00

Last Year's Import Market Share (Percentages for U.S. and Major Competitors):
U.S.: 10.5%, China: 12.3%, Taiwan: 9%, South Korea: 8.5%

Source: Australian Bureau of Statistics

Best Sales Prospects

Future growth is forecast for industrial fabrics. Success is forecast for establishments that have the ability to offer technologically advanced fabrics and/or the ability to invest in new product design. Given the current exchange rate of US$1.00 = A$1.88, successful firms entering the market will be those who compete generally on non-price factors, such as technology. Technological innovation will most certainly determine market prospects.
B. COMPETITIVE ANALYSIS

Innovation is the key to successful marketing practices in the textile fabric industry. Informing the purchaser of a product's capabilities and differentiating it from existing alternatives is crucial for success. The performance and superiority of the goods are particular factors in the decision to purchase. Any new products in the market must be innovative to ensure success. These industrial fabrics have applications for industries beyond the conventional textile markets. End uses cover numerous industries, including agriculture, automotive, engineering, environmental, medical and transportation.

Domestic Production

Local production accounts for a market share of approximately 20 percent. Textile fabric production and design was valued at US$305 million in 2000. Domestic production in 2001 totaled US$279 million, representing an increase (in real terms, aside from exchange rate allowances) of four percent. Australia produces knitted fabrics and woven woolen and worsted fabrics, along with some industrial fabric products, including insulation cloths, industrial apron fabrics, woven polypropylene fabrics, carpet backing fabrics, geotextiles, and knitted shade cloth.

Major domestic producers of woven textile fabrics include Bruck Textiles and National Textiles. Bruck Textiles specializes in the manufacture of woven fabrics in cotton and man-made fibers; dyed, finished, printed and coated fabrics. Bruck is the largest man-made fiber weaver in the Southern Hemisphere, with an annual revenue of US$53 million. National Textiles is a manufacturer of woven fabrics that distributes to the workwear, apparel, and home furnishings markets. The annual revenue of this company is US$70 million.

The non-woven textile sub-sector is dominated by one major player, Geofabrics Australasia, and is supported by various smaller players in the market that specialize in particular fabrics. Geofabrics, which has annual revenues of US$17 million, manufactures and distributes a range of synthetic geotextiles for industrial purposes. Bruck Textiles also manufactures industrial fabrics, in particular, coated fabrics. The smaller suppliers in the non-woven textile market include Lantor of Australia, The Speciality Group, and Melba Industries (a division of Austrim Textiles).

Lantor Australia produces a wide range of non-woven industrial fabrics. The Speciality Group produces and distributes non-woven fabrics, including waterproof fabrics, flame retardant fabrics, and medical barrier fabrics. Melba Industries is Australia's leading supplier of high performance fabrics to the industrial textiles market, includingthe automotive, defense, safety and rescue, building, power generation, and transportation industries.

Australian textile fabric exports in 2000 were valued at US$298 million and in 2001 totaled US$268 million. Some exported textile fabrics are not entirely produced in Australia, i.e., exported woven fabrics which include fibers that are imported and then dyed and/or printed and finished domestically, before being re-exported.

Third-Country Imports
Imports comprise a very high percentage of the total market. In 2000, imported textile fabrics, accounting for a significant 80 percent share of the total market, were valued at over US$1 billion. In particular, Asian-based manufacturers maintain the lion's share of the import market, with China, Taiwan, and South Korea being the most significant sources of imports from Asia. China has developed a market share of 12.3 percent, with Taiwan and South Korea maintaining market shares of 9 and 8.5 percent, respectively. In line with overall industry growth, third-country imports are expected to continue to increase by four percent.

In 2000, the United States accounted for more than ten percent of Australia's total textile fabric imports. Both U.S. and local companies experience considerable difficulty in competing against companies in Asia, which utilize less costly labor inputs. New entrants in the textile fabrics market will face intense competition from these low-cost suppliers, whereas competition from these suppliers is not as strong in the technical fabrics sub-sector, where prospects are certainly brighter for U.S. suppliers.

U.S. Market Position

The U.S. is one of the major foreign suppliers of textile fabrics in Australia, with a ten percent share of the total textile fabrics market. Shipments of U.S. textile fabrics amounted to US$127 million in 2000 and US$111 million in 2001. Imports for the next two years are expected to grow by an annual rate of four percent, as reflected in the total market growth rate.

U.S. manufacturers are currently major suppliers in the categories of industrial, furnishing, and craft fabrics. The main factor contributing to the increasing success of U.S. suppliers in the industrial fabric sub-sector is technology, where imports from Asian and other countries represent only modest competition. Furnishing fabrics from the United States are very competitive and supply the needs of an impressive 50 percent of the furnishing market.
C. END-USER ANALYSIS

The textile fabrics industry is diverse, encompassing an extensive range of products and processes. A non-exhaustive list of end uses includes the apparel, upholstery, furnishing, and industrial materials sub-sectors.

As in other developed countries, the demand for clothing is actually falling as a result of a shift in preferences and rising incomes. Australians currently allocate five percent of their total final expenditure to clothing and footwear. Employers, in some cases, provide workwear and career apparel, which are purchased directly from workwear manufacturers or wholesalers. Other significant textile fabric markets include governments, hospitals, and other institutions that require uniforms, linens, and carpets.

End users of industrial fabrics include the aerospace, marine, transportation, medical, and safety industries. Some examples include automotive manufacturers/assemblers (upholstery, carpets), hospitals (disposable medical garments), air conditioning/heating unit manufacturers, and trucking companies (tarps). The industrial fabrics sector also shares interests with other material industries, including plastics, films, membranes, metals, glass, composites, and paper.

Australia's industrial market is mature, offering extensive opportunities for the importation of industrial fabrics. This, together with a well-developed manufacturing base, ensures an increasing need for specialized textiles for technical uses. Demand for industrial fabrics is quality-driven, with prospective customers requiring cutting-edge technologies.
D. MARKET ACCESS

Import Climate

The textile fabrics manufacturing industry in Australia is in a period of transition. Historically a protected industry, the textile fabrics industry is undergoing significant restructuring. Import protection has been reduced significantly in recent years.

By means of reduced tariffs and assistance measures, the Australian Federal Government aims to improve TCF industries' international competitiveness and efficiency, and reduce their dependence on historic high levels of government assistance. To reach the Australian Federal Government's target of free trade by 2010, reductions in tariff protection have been gradually implemented. The tariff on clothing and finished textiles has been reduced from 34 percent in 1997 to 25 percent currently, and is further scheduled to decrease to 17.5 percent in2007. To aid firms in restructuring, the Federal Government has offered assistance arrangements in the form of grants, infrastructure support, and export incentives. The main support program of the Federal Government is the TCF Strategic Investment Program (SIP), which began on July 1, 2000, for a five-year period, whereby A$700 million (US$350 million) is being allocated towards investment in the textile, clothing, and footwear industries.

TCF tariffs will be maintained at the same level from July 1, 2000 until January 1,2007. Tariff rates will then decrease, the rates of which follow:
20002007
Clothing and finished textiles
25 17.5
Cotton sheeting and fabrics
25 17.5
Sleeping bags, table linen*
10 7.5
Carpet
15 10
Other (yarns, leather)**
5 5

*Except for cotton, hand-embroidered table linens, and hand-appliqued table linens, which are imported duty free.
**Rawhide is imported duty free. Tariff rates vary depending on the size and preparation of the hide.

To obtain further information, the contact details of the Australian Customs Service are:

The Australian Customs Service
414 Latrobe Street
Melbourne, Victoria 3004
Australia
Tel: 61-3-9244-8000
Fax: 61-3-9244-8680
Website: www.customs.gov.au

A Goods and Services Tax (GST) of ten percent was implemented in Australia on July 1, 2000. The GST, which replaced the wholesale sales tax, is a 10 percent broad-based tax on the sale or provision of most goods and services. Under the previous wholesale sales tax, basic textile items were generally exempt from the tax, and made-up textile articles were subject to a wholesale sales tax of 12 percent. The GST introduction led to retail price increases of approximately six-to-eight percent for basic textile items, due to the initial elimination of some existing taxes (e.g., FID and VAD) and then the application of the ten percent GST on the reduced cost base. The retail prices of made-up textile items are increasing to a lesser degree. For further information on the GST, U.S. firms should contact:

The Australian Taxation Office
P.O. Box 470D
Melbourne, Victoria 3001
Australia
Tel: 61-3-9275-2397
Fax: 61-3-9285-1284
Website: www.ato.gov.au

It is an offense to import goods that have a false trade description applied. Moreover, the importation of goods which do not have a prescribed trade description applied, in accordance with the regulations, may be seized by the Australian Customs Service. All listed goods require marking as to the country in which the goods were made or produced. In addition, some goods are required to be marked with a true description and/or a weight or quantity qualification. Such markings are referred to as part of the trade description.

Textile goods require marking for both country of origin and material composition. The consumer must be able to immediately refer to the prescribed information (country of originand composition) without the need to search the inner garments or unpack the goods.

Care labeling standards apply to textile products to ensure that consumers, drycleaners, and launderers have information about care procedures and warnings. The standards authority in Australia is:

Standards Australia
P.O. Box 1055
Strathfield, New South Wales 2135
Australia
Tel: 61-2-9764-4700
Fax: 61-2-9746-8450
Website: www.standards.com.au.

Distribution/Business Practices

Typically, manufacturers or importers undertake distribution responsibilities. Most local manufacturers sell directly, without the aid of a wholesaler. Distribution from the manufacturers/importers to non-retail markets is often also direct. Large firms requiring industrial fabrics purchase directly, as do hospitals and other government bodies (usually via a tendering process). Specialist wholesalers cater to the needs of the smaller industrial markets.

The retailing structure has a strong influence on the marketing of consumer textile fabric goods, in particular bed linen, towels, and table linen. Retailers play a significant role in the consumer's choice of product, as the major retailers are not only a customer of local suppliers, but also in many cases, their competitors. This is due to the existence of store or 'house' brands. Many retailers attempt to differentiate themselves from their competitors by creating their own brands for particular merchandise lines. The consumer's choice of store is, in some cases, more important than the decision to purchase a product by a particular manufacturer or country of origin. Advertising strengthens the store image.

Financing

Financing practices are comparable to U.S. practices. Terms of payment are negotiable, with methods of payment including Irrevocable Letter of Credit, standard Letter of Credit, and cash in advance.

Trade Promotion Opportunities

TCF International, Giftware International and Homeware and Furnishings International May 6-8, 2003
Melbourne Exhibition Centre
Melbourne, Victoria
Organizer: Australian Exhibition Services
Illoura Plaza, 424 St. Kilda Road
Melbourne, Victoria 3004
Australia
Tel: 61-3-9261-4500
Fax: 61-3-9261-4545
E-mail: shows@ausexhibit.com.au
Website: www.ausexhibit.com.au

Key Contacts

For key contacts in this sector, please contact the author of this report, Ms. Annette Ahern, Commercial Assistant, U.S. Commercial Service in Melbourne; e-mail: annette.ahern@mail.doc.gov; tel: 61-3-9526-5915; fax: 61-3-9510-4660.

DISCLAIMER
Information in this report relies on sources including Government Publications, Opinions of industry experts and other public sources. Infomat can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. All prices subject to change without notice.

$3500 USD
For the 2008 Edition

Published: 2006 August
Market: Mens Womens Childrens
Region: Australia
Industry: Textiles
Pages: 45
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