A Reliable Source, Even in Uncertain Times

 

The apparel industry can be difficult to forecast, however the past year has been more unpredictable than even the most experienced executives could have imagined.

 

For many brands and retailers, having reliable supply chain partners has helped them survive. 

 

One of the most established and stable manufacturers is Thai Textile Industry Group (TTI), a fully integrated operation, from spinning to weaving, cutting and to ready-made garments.

 

The Bangkok-based publicly listed company produces woven fabrics in cotton and cotton blends, which they export worldwide, as well as selling to domestic garment makers.

 

What has put Thai Textile Industry Group (TTI) at the top of the industry is reliability.  Many competitors offer cheaper products, however in an industry where lead times keep getting shorter and quality standards are getting higher, buyers have come to place a higher value on the reliability of their suppliers.

 

“We use the yarns we produce in our own mills, they are not only for export.  So we are spinning yarn that meets our own standards, as well as buyers’ standards,” said Jan Lin, Sales and Finance Executive. 

 

 

“Efficiency is critical these days. The factory must run efficiently so we understand the real value of good quality yarns.  We want yarn that has the least amount of breakage and the lowest possible contamination.  Good yarns mean improved efficiency.  And that means better products, as well as savings in time and costs,” he explained.

 

Part of being efficient depends upon having state-of-the-art equipment.  TTI is a Toyota Industries Corporation textile machinery partner and operates a world class “showroom” utilizing Toyota's latest spindles.

 

TTI’s yarns and fabrics are exported to fabric and garment mills throughout the region.  Customers realize that yarns from TTI Group improve their efficiencies giving the company a key advantage in a very competitive market.

 

Creating better quality yarns and fabrics starts with the quality of the raw materials.

 

“Using US cotton gives us fewer issues to worry about because it has less contamination than cotton from other countries.  There’s more consistency. The color is cleaner, whiter. 

 

“In our spinning mills our engineers have requested that we use a certain amount of US cotton so that the machines can run efficiently without issues. 

 

We source yarn from several countries, but US cotton has always been the one we rely on from year-to-year,” said Mr. Lin.

 

 

Challenges in the Materials Market

The yarn business is a ‘safe’ business.  It’s a lot easier to move forward.  Buyers know the price of the fibers and so when fiber prices increase spinners adjust prices quite quickly.  The textile mills understand that when fiber prices go up, yarn prices will increase as well.

 

However fabric is very competitive.  Fabric is more downstream and doesn’t exactly follow fiber prices.  It’s hard for textile mills to raise prices because brands and retailers want to be able to sell the finished garments at the same price.  They want to maintain their price points.  This is especially true for the mass and even mid-tier brands.

 

So mills are often forced to sacrifice their profit margins if fiber prices increase to keep their customers.  By offering a high quality, reliable product, TTI is able to maintain a certain competitive advantage, even in very challenging market conditions.

 

Sunset to Sunrise

For decades people have been calling the textile industry a ‘sunset industry’ in Thailand.  However now people are starting to rethink that.

 

“I believe that the textile industry not so much a ‘sunset industry’, but it is evolving.  I expect that we will start to see a lot more consolidation within the industry, with the larger and stronger companies acquiring the smaller ones.  This will create greater efficiencies and economies of scale. 

 

“We will also see more automation.  It’s the companies that can adapt to the times, that can modify their equipment, and keep up with the market that will survive,” said Mr. Lin.

 

 

Staying Lean and Green

“Right now we are focusing on reducing our overhead.  Any company can buy the same type of equipment and have the same labor cost.  So it’s going to come down to how effectively a company can manage its own costs,” he said. 

 

“One of the things we’ve been working on reducing is our electricity usage.  Last year we started to add solar panels. This year we have expanded this and we will continue to do this in the coming year,” said Mr. Lin.

 

Looking ahead, TTI will continue to look for ways to achieve the dual goals of lowering costs and boosting sustainability.   This two-pronged strategy will ensure that the company continues to meet buyers’ demands for more environmentally friendly manufacturing, while also helping to keep