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

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ABSTRACT
The total Australian market for furnishing fabrics is estimated to be approximately A$60 million. The market is small and very competitive. There are several local manufacturers, but the market is dominated by imports. Climatic variations over the Australian continent play a part in choice of fabrics and colors. The large population centers of Melbourne and Sydney account for the bulk of sales.
A. MARKET HIGHLIGHTS & BEST PROSPECTS

MARKET PROFILE

The Australian market for furnishing fabrics is mature. There is a small, yet solid, local manufacturing base, but the market is dominated by imports coming from countries worldwide. Although the furnishing fabrics industry is a fashion industry, the home furnishings market must cater for a variety of tastes. Color trends and textures vary. Chenille, jacquards and textured fabrics are popular at present. The demand for furnishing fabrics is steady, with irregular spurts occasioned by building activity - such as the recent spate of apartment buildings, hotel refurbishments in the lead-up to the Sydney Olympic Games in 2000, and a recent increase in home renovations. In general, Australians do not change their home decoration schemes as frequently as Europeans or Americans. The average Australian changes their dQcor every ten (or even twenty) years.

Market Demand

There are a number of different markets for furnishing fabrics ž households, hospitality (hotels/motels), automotive, aircraft, transport industries and the corporate sector. In recent years, there has been a boom in apartment building, with a consequent need for the latest in furnishing products. The home improvement market in Australia is now worth US$9 billion, according to a recent study by the building industry research firm BIS Shrapnel - nearly as much as Australia=s US$10.3 billion new residential housing industry. This activity is likely to increase further during 1999, as homeowners move projects ahead to escape paying for a Goods and Services Tax (GST) on materials, which the Federal Government plans to introduce in July 2000. The building industry remains steady at present, with a slowdown forecast for next year.

The furnishing fabrics market is also stable at present. There is a degree of refurbishment occurring in the commercial area, but this is expected to decline. The current exchange rate renders U.S. products more expensive than in the past and (to some extent) importers are looking towards Asia to fill the gap.

Australia has a population of approximately 18 million. Changing demographics, with the relative increase in middle-aged and older persons, has resulted in changed spending patterns. Middle-aged and older people tend to spend relatively more on travel, health, entertainment and the home (including home furnishings). The trend to an aging population is set to continue with the 45-54 age group growing fastest, followed by the over 60s. The population aged under 35 will grow at well-below average rates, while the rate of growth of the 35-44 age group also slowing down. The implications of these trends are that demand for consumer textiles and clothing (with certain exceptions, such as some household textiles) may not be expected to increase by more than 1.2%-1.5% annually. Source: (Michael Baston, TFIA Business Services Pty. Ltd.)

Statistical Data

There are currently no figures available for the furnishing fabrics market in Australia. The Australian Bureau of Statistics (ABS) does not differentiate between apparel and furnishing fabrics in their figures. The ABS Household Expenditure Survey on the estimated annual expenditure for textiles, clothing and footwear (TCF) products (1993-94) estimated the annual expenditure on household textiles at A$1,380 million. This figure includes bed linens, towels, curtains, etc. In addition to these figures would be indirect household products, which incorporate some textiles (e.g., upholstered furniture, cushions).

The market for furniture of all types is estimated to be A$7 billion. One supplier has estimated the total interior design market to be currently A$2.5 ž A$3.5 billion.

The following figures are taken from the Council of Textile and Fashion Industries of Australia Ltd.=s (TFIA) commercial division, TFIA Business Services Statistical Bulletin, 1997. They are included in this report as an indication of the total market for various types of fabrics. However, it should be noted that the figures are for all fabrics (that is, apparel as well as furnishing fabrics).

Australian Fabric Imports and Exports for the years ended June (A$ 000s):
1989 1994 1997

Curtains, furnishings
Imports 18,948 21,265 29,410 Exports 1,548 8,834 12,513
(The above figures are for soft furnishings only and do not include upholstery fabrics)

Woven pile fabrics
Imports 23,093 27,499 30,022 Expo 198 514 3,002
Cotton woven fabrics
Imports 344,757 279,252 275,678 Exports 3,473 38,489 99,257
Man made fiber (MMF) woven fabrics
Imports 307,757 406,873 375,041 Exports 19,562 59,748 86,606
Silk woven fabrics
Imports 27,533 23,620 17,783 Exports 333 1,147 460

Wool woven fabrics
Imports 21,864 29,579 43,929
Exports 2,941 5,958 8,612

Other woven fabrics
Imports 71,812 73,314 84,697
Exports 3,345 3,943 3,005

Total Flat Woven Fabrics
Imports 773,723 812,638 797,127
Exports 39,654 109,825 97,940
Best Sales Prospects

Best prospects are currently jacquards, chenilles and textured fabrics, which are now popular in Australia. Velvet is also coming back into vogue (although there are no velvet mills in Australia). There is a trend towards >earthy= colors - neutral colors such as cream, beige and brown. The market is moving away from prints, which were popular in recent years. Fashion taste is an important element in choosing furnishing fabrics. B. COMPETITIVE ANALYSIS

Domestic Production

The local manufacturing base is small, with a few state-of-the-art mills. With the reduction in import duty, the local industry is now facing strong competition from imports. Industry estimates of the locally-manufactured share of the market vary from less than ten percent of the total furnishing fabrics market to as much as forty percent. It is probably about 25 to 30 percent, and is mainly in the lower-to-middle end of the market. Local manufacturers include Bekaert, Bruck Textiles, Classweave, Macquarie Textiles, James Nelson, Yarra Falls, and Norwellan. Local manufacturers have the advantage of being able to deliver small orders with a rapid turnaround time. Bruck produces around 6.5 million meters a year in coated styles. Coated fabrics are sold in the mid-to-upper market ranges. Bruck also exports to the U.S. Third-Country Imports

Furnishing fabrics are imported from many countries including Europe, Asia, South Africa and the U.S. Less is being imported from the U.S. due to the current exchange rate of approximately A$1.00 equals U.S$ 0.63. Products at the top end of the market are mainly imported from Europe; the middle-to-lower end of the range comes from Asia. Voiles and sheers are imported from Europe; jacquard from Asia. Imitation suedes are imported from Spain and also Italy. In total volume terms, Asia is the main supplier.
U.S. Market Position

Industry estimates of the U.S. market position vary from ten percent to fifty percent of the market - it is probably closer to fifteen to twenty percent. U.S. furnishing fabrics tend to be in the mid-to-upper end of the market, while more expensive, have lower volume sales. The major U.S. mills are well-known in Australia. U.S. firms represented in Australia include Brunschwig & Fils, Blumenthal, Cyrus Clark, Schumacher, Valdese, and Milliken. Local firms describe the U.S. as being a strong player in this market. Due to the current exchange rate of approximately A$1.00 = US$0.63 (March 1999), some firms indicate they are importing less mid-range furnishing fabrics from the U.S., and looking towards Asia to fill the gap.
C. END-USER ANALYSIS

The end-user market comprises the domestic, commercial (offices, hospitality), and furniture manufacturers. Furnishing fabrics are sold in specialized retail outlets, chain stores (Spotlight and Lincraft), and department stores. Most retail stores carry samples only and provide the material on order. Upholsterers also carry a range of samples for clients. Prospective purchasers can obtain information on what is available from home decorating magazines such as House & Garden, Vogue Living and Belle (or the top-end of the market). Other magazines include Home Beautiful and Interiors. Some clients are now looking at websites on the Internet for information on designs available, then inquiring where the products can be purchased.

The bulk of the market is in the middle-to-lower end of the range. Importers generally prefer to receive FOB prices. To an Australian importer, FOB means the shipping vessel, not the >back of a truck outside the U.S. mill=. U.S. firms should be aware that Australia uses metric measurements. Products should be properly packed and clearly labeled. Some firms commented that U.S. firms design for the U.S. market only, and that they are not particularly interested in the requirements of overseas markets. The current fashion for earthy or natural colors in Australia has led to a decline in sales of some U.S. fabrics. C. MARKET ACCESS

Import Climate

In September 1997, responding to the Industry Commission=s final report on the inquiry into the textiles, clothing and footwear (TCF) industries, the Australian Government announced a new support package for the TCF industries. One conclusion was that the Government is committed to ensuring Australia will meet its APEC commitments to free trade by 2010.

In July 1998, the Australian Government announced an A$772 million support program for Australia=s TCF Industries, comprising investment incentives, research and development assistance, restructuring and training programs, and customs duty concessions. The package has five major components:

a) TCF Strategic Investment Program (SIP): A five year, A$700 million package aimed at encouraging additional investment in the wool, cotton, leather and fashion industries. It will commence July 1, 2000, and complements the Australian Government=s previously announced decision to hold tariff reductions at year 2000 levels through to2007. The SIP is a transitional assistance scheme that will encourage investments by firms in the TCF industries in order to achieve sustainable growth. The scheme will provide an incentive for the TCF industries to continue their progress toward global competitiveness, leading to further trade liberalization and globalization of the TCF industries. All firms engaged in textiles, clothing, footwear and leather manufacturing in Australia will be eligible to apply. Eligible activities covered by the SIP include:

I) Investment in new plant and equipment (including acquisition or lease);
II) Research and development activities;
III) Product development expenditures.

Under the TCF Strategic Investment Program, firms can claim, in accordance with the guidelines:
Up to 20% of eligible investment expenditure on plant and equipment;
Up to 45% of eligible research and development activities;
Up to 5% of the TCF value-added by firms in Australia to a total of the amount claimed in I and II above.

b) Regional Adjustment Package: Under this element of the TCF Strategic Investment Program, assistance for industry reconfiguration will be provided to selected firms operating in designated regional areas. This is aimed at creating jobs by making regional manufacturers more competitive.

c) TCF Technology Development Fund: An A$10 million fund has been established to encourage the development of new technologies which have the potential to enhance business competitiveness in TCF industries and result in a commercial benefit for Australia.

- National Framework For Excellence in TCF Training: A$10 million fund will be provided to strengthen education and training infrastructure servicing the TCF industries.

d) TCF Market Development Program: This is an A$12.5 million program that will develop and implement strategies to increase the export capabilities of Australia=s TCF industries. The main objective is a comprehensive export market development strategy to assist TCF industries to target markets and support an expansion of Australian production.
e) Expanded Overseas Assembly Provisions Scheme (OAP): This A$40 million scheme encourages the use of Australian textiles in the manufacture of clothing offshore by allowing duty-free entry for the Australian textile content.

Tariffs in effect in 2000 will remain frozen until January 1,2007. Proposed percentage tariff rates are:

1998 1999 20002007

Cotton sheeting & fabrics 19 17 15 10

Tariffs from developing countries are 5 per cent lower than the regular tariff rate.

Note: Tariff reductions occur on July 1 (annually). Reductions in2007 will apply from January 1.

For further information on duty rates, U.S. firms should contact:

Australian Customs Service
GPO Box 2809AA
Melbourne, Victoria 3001 Australia
T: 61-3-9244-8000
F: 61-3-9244-8010
Contact: Customs Information Centre
Website: http://www.customs.gov.au
SALES TAX

Most textile items are exempt from sales tax. Cloth on a roll is exempt from sales tax. Made-up articles, such as cushions, curtains and household drapery, attract sales tax of twelve percent.

For detailed information on sales tax in Australia, U.S. firms should contact:

Australian Taxation Office
PO Box 772
Moonee Ponds, Victoria 3039 Australia
T: 61-3-9275-4111
F: 61-3-9275-4203
Website:http://www.ato.gov.au STANDARDS

There are standards covering labeling requirements, which must include country of origin, composition of goods and care requirements. The information on the labels must be written in English. Signs or symbols are not acceptable. Pertinent standards include the following Standards Australia subsections:

AS 2663-1983 Textiles - Curtain fabrics for domestic use

AS 2663.1-1997 Textiles - Woven and knitted fabrics for window furnishings; Uncoated fabrics

AS 2687-1997 Textiles - Upholstery fabrics for domestic and commercial use (excluding face-coated fabrics)

AS/NZS 1957:1998 Textiles - Care labeling

AS 2001.2.22-1986 Method of test for textiles
Details on Australian standards may be obtained from:

Standards Australia
1 The Crescent
Homebush, New South Wales 2140 Australia
T: 61-2-9746-4700
F: 61-2-9746-8450
Email: mailto:sic@standards.com.au (&sic@standards.com.au'
Website: http://www.standards.com.au
CARE LABELING
Labeling of country of origin, content, and care instructions are necessary on most TCF goods.

Distribution/Business Practices

Furnishing fabric supplierstravel to overseas trade shows - the main ones being Decosit in Belgium and Heimtex in Germany. Some also visit trade shows in Shanghai, Canton, and Proposte in Milan. The International Home Furnishings Market, Highpoint, North Carolina is a U.S. trade event attended by some firms in the industry.

The main local trade event is Interior Designex, which is held annually and alternates between Melbourne and Sydney. Some furnishing fabric wholesalers do not find it necessary to participate in trade events, as they have showrooms which are located only a short distance from their clients in Melbourne and Sydney. Several wholesalers located in the Sydney area combine for market week in July.

Manufacturers may sell to wholesalers and manufacturers of other products, or direct to retailers and furniture upholsters. Importers operate as commission stockists (taking orders on behalf of the firms that they represent), and supplying goods on order. Overseas suppliers sell on a volume or cut-length basis to Australian importers. Air freight takes about two weeks. The budget-to-middle end of the market is mostly ordered in bulk; the premium end is sold on a commission basis, i.e. samples are used to obtain orders. Suppliers advertise their wares in home decorating magazines such as House & Garden, Vogue Living and Belle (for the top end of the market); as well as magazines such as Home Beautiful and Interiors for other segments.

Financing

Payment arrangements vary. Open account on 60-day terms is the preferred method for many importers. Telegraphic transfer (TT) on receipt of invoice; TT 30-60 days after bill of lading; and letter of credit are other methods used.
KEY CONTACTS

Manufacturers, Importers, Wholesalers

Bekaert (Australia) Pty. Ltd.
Abbotts Road
Lyndhurst, Victoria 3975 Australia
T: 61-3-9799-1202
F: 61-3-9799-1019
Email: mailto:email@bekaert.com.au Manufacturers of jacquard textiles. Subsidiary of Bekaert of Belgium.
Contact: David Blum, Sales Manager-Furnishing

Boyac Decorative Furnishings
234 Auburn Road
Hawthorn, Victoria 3122 Australia
T: 61-3-9818-5300
F: 61-3-9818-7077
Suppliers of furnishing fabrics - mainly woven fabrics, jacquards. Imports from the U.S.
Contact: Humbert de Lambilly, Managing Director

Bruck Textiles Pty. Ltd.
Level 2, 10-14 Waterloo Street
Surry Hills, New South Wales 2010 Australia
T: 61-2-9321-6000
F: 61-2-9321-6292
Email: mailto:jpuffett@bruck.com.au Manufacturers of apparel, workwear and furnishing fabrics. Company will consider licensing opportunities from U.S. firms.
Contact: John Torrens, General Manager-Furnishings

Caldwell Textiles
165A Eastern Valley Way
Middle Cove, New South Wales 2068 Australia
T: 61-2-9967-2177
F: 61-2-9967-2753 or 61-2-9975-1660
Email: mailto:cc1@cwelltex.com.au
Textiles Agent. Primarily sells flame-retardant fabrics for hospitals and hotels; jacquard fabrics.
Contact: Colin Caldwell

Classweave Industries Pty. Ltd.
85 City Road
South Melbourne, Victoria 3205 Australia
T: 61-3-9693-3366
F: 61-3-9693-3399
Email: mailto:jlederman@juillard.com Manufacturers of upholstery fabrics - 100% wool fabrics, polyester/cotton, polyester and polyolifin upholstery fabrics. Potentially interested in manufacturing under license for U.S. firms.
Contact: Jeffrey Lederman, Furnishing Director

Hoad Home Fashions
25 Trent Street
Burwood, Victoria 3205 Australia
T: 61-3-9809-1600
F: 61-3-9889-7377
Importer, wholesaler, stockist of middle range furnishing fabrics (mainly from Europe, but also from the U.S.).
Contact: Rodney Hoad, Director

Instyle Interior Products Pty. Ltd.
Unit 4, 147 McEvoy Street
Alexandria, New South Wales 2015 Australia
T: 61-2-9698-7255
F: 61-2-9699-3328
Email: mailto:michaelfitz@ozemail.com.au Wholesalers of mid-to-top end upholstery fabrics for the contract market (offices, hospitality, government and healthcare). Design some of their own products, which are manufactured locally. Imports from Europe andthe U.S.

Clifton H. Joseph & Son (Australia) Pty. Ltd.
391 Little Lonsdale Street
Melbourne, Victoria 3000 Australia
T: 61-3-9602-1222
F: 61-3-9600-0929
Email: mailto:chj@ozemail.com.au Textiles agent. Represents overseas mills including Blumenthal and Cyrus Clark of the U.S.
Contact: Peter Joseph

Lowsuma Pty.Ltd.
10/38 Wunulla Road
Point Piper, New South Wales 2027 Australia
T: 61-2-9328-1080
F: 61-2-9327-8853
Email: mailto:rosenbergbpj@msn.com.au Textiles agent. Represents U.S. firms.
Contact: Bert Rosenberg

Marco Fabrics
155 Auburn Road
Hawthorn, Victoria 3122 Australia
T: 61-3-9882-7238
F: 61-3-9813-1568
Importer, stockist and agent of mid-to-top end furnishing fabrics. Imports from the U.S. and U.K.
Contact: Peter Kent, Director

Metropolitan Weave
275 Swan Street
Richmond, Victoria 3121 Australia
T: 61-3-9428-1800
F: 61-3-9428-0053
Email: mailto:marti@metroweave.com.au Importers of mid-to-top end furnishing fabrics. Have agents throughout Australia.
Contact: Hans Marti, Director

James Nelson (Tasmania) Pty. Ltd.
3 Cato Street
Hawthorn East, Victoria 3123 Australia
T: 61-3-9822-4459
F: 61-3-9822-9116
Curtain manufacturers.
Contact: Jonathan Pila, Director
Charles Parsons & Co Pty Ltd
100 Chalmers Street
Surry Hills, New South Wales 2010 Australia
T: 61-2-9699-9444
F: 61-2-9319-5149
Email: mailto:cparsons@bigpond.com.au Importers and distributors of textiles, including furnishing fabrics. Converters.
Contact: Graeme Fewell, National Furnishing Director

Charles Radford Furnishings Pty. Ltd.
8-18 Glass Street
Richmond, Victoria 3121 Australia
T: 61-3-9429-6122
F: 61-3-9427-1587
Importers of mid-to-upper end (designer range) of furnishing fabrics from Europe and the U.S. Represent Clarence House and Peachtree of the U.S. Sells to both domestic and commercial markets. Only interested in exclusive designs.
Contact: Kim Andrews, Director

Rowe Fabrics Pty. Ltd.
Cnr. Powell & Young Streets
Waterloo, New South Wales 2017 Australia
T: 61-2-9319-3399
F: 61-2-9699-3116
Fabric wholesale company importing mid-range furnishing fabrics from U.K., South Africa, Asia and the U.S. Designs and works with mills in South Africa.
Contact: Marilu Shaw, Marketing Manager

Wilson Fabrics & Wallcoverings Pty. Ltd.
Level 1, 10-14 Waterloo Street
Surry Hills, New South Wales 2010 Australia
T: 61-2-9321-6222
F: 61-2-9321-6052
Division of Bruck Textiles. Importers and wholesalers of middle-to-top end furnishing fabrics. Imports from countries worldwide, including USA.
Contact: Greg Hoad, General Manager

G.J.M. Wilson Pty. Ltd.
30-34 Hilly Street
Mortlake, New South Wales 2137 Australia
T: 61-2-9736-3311
F: 61-2-9736-3362
Email: mailto:Jwdesign@ozemail.com.au Importers and wholesalers of furnishing fabrics. Sells to retailers, furniture manufacturers, and suppliers to hotels.
Contact: Mark Mansour

Trade Associations

Council of Textile & Fashion Industries of Australia Limited (TFIA)
Level 4, 380 St. Kilda Road
Melbourne, Victoria 3004 Australia
Tel: 61-3-9698-4460
Fax: 61-3-9698-4459
Contact: Nia Stavropoulos, Executive Director

Soft Furnishings Industry Association of Australia Inc.
PO Box 517
Lindfield, New South Wales 2070 Australia
Tel: 61-2-9415-6290
Fax: 61-2-9415-6267
Contact: Penny Broun, National Secretary

Textile Distributors Association
GPO Box 1429
Canberra, ACT 2601 Australia
T: 61-2-6247-0582
F: 61-2-6247-2053
Contact: Lorraine Rushton

Consultants

TFIA Business Services Pty. Ltd.
Level 4, 380 St. Kilda Road
Melbourne, Victoria 3004 Australia
Mailing address: GPO Box 1469N, Melbourne, VIC 3001
Tel: 61-3-9698-4460
Fax: 61-3-9698-4459
Email: mailto:TFIA@bigpond.com Contact: Tony McDonald, Customs and Trade Manager

Field Technologies
814 Hampton Street
Brighton, Victoria 3186 Australia
T: 61-3-9592-5003
F: 61-3-9591-0855
Contact: Don Campain, Managing Director

TRADE PROMOTION OPPORTUNITIES

INTERIOR DESIGNEX 99
Melbourne Exhibition Centre, May 13-16, 1999
Sydney, May 18-21, 2000
Show Organizer: Australian Trade Exhibitions Pty. Ltd.
PO Box 192
Camberwell, Victoria 3124 Australia
Tel: 61-3-9819-0211
Fax: 61-3-9818-8553
Email: designex@a-t-e.com.au
Contact: Jane Ford, Exhibition Manager
International commercial and residential interior design exhibition held annually. The venue alternates between Melbourne and Sydney. Attendees - designers and architects; twelve percent are retailers from many areas.
PUBLICATIONS

AUSTRALASIAN TEXTILES & FASHION
Bi-monthly business-to-business magazine for textiles and fashion industry, company features, product and technology information.
Australasian Textiles Publishers
PO Box 286
Belmont, Victoria 3216 Australia
T: 61-3-5255-5500
F: 61-3-5256-1668
Email: mailto:austex@bigpond.com.au Editor: W. Stan Boston
Advertising Manager: Rosemary Boston
An annual subscription to the Australasian Textiles and Fashion magazine includes a copy of the annual index. The index includes an overview of the TCF industry and a supplier directory.

FURNITURE RETAILING TODAY
Bi-monthly magazine for the furniture and furnishing trades.
Elite Publishing Co. Pty. Ltd.
Level 1/376 Heidelberg Road
Fairfield, Victoria 3078 Australia
T: 61-3-9481-4100
F: 61-3-9481-4200
Email: mailto:Elitepub@ozemail.com.au
Cathy Bromilow, Advertising Manager

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.

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Published: 2006 August
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