SPEECH BY MR S. ISWARAN, MINISTER OF STATE FOR TRADE AND INDUSTRY, AT THE OFFICIAL OPENING OF AAMA-TEX 2007 (THE 7THASIA APPAREL MACHINERY & ACCESSORIES EXHIBITION), 20 MARCH 2007, 10:00AM, CONFERENCE HALL G–J, SINGAPORE EXPO

Ambassadors,

Mr Teo Kim Chuan, President of the Sewing Machine Traders Association (Singapore) and Chairman of AAMA-TEX 2007

Ladies and Gentlemen

Introduction

I am pleased to be here at the 7th Asia Apparel Machinery and Accessories Exhibition.

AAMA-TEX, which has been anchored in Singapore since 1989, is the leading event of its kind in Southeast Asia for Asia's garment and textile industries. Since its launch, the event has grown in scale with this year’s installment attracting about 250 exhibiting companies from 25 countries and 6,000 trade visitors from 60 countries.

The strength of AMMA-TEX 2007 lies in it being an excellent business platform especially for companies to reach out to the growing textile and apparel suppliers in Southeast Asia, which is an important sourcing base.In addition, Singapore boasts several strengths in being home to AMMA-TEX.First, the presence of about 70 international buying houses in Singapore which source about SGD$3.8 billion (US$2.5 billion) worth of apparel and textile products annually, making Singaporethe place to be in for both buyers and suppliers.

Second is the strength of our local apparel industry.Due to our strong manufacturing base, many of our local manufacturers are already vendors to major brand and fashion labels such as DKNY, GAP, Banana Republic, Nike, Adidas and Fila.Their strength in design and innovation also gives Singapore manufacturers an edge against very strong competitors from our region.I would thus like to commend the Sewing Machine Traders Association (Singapore) for successfully organising this event.

Importance of the Garment and Textile industry to Singapore

The fact that AMMA-TEX is such a major event underscores the importance of the textile and apparel industry to Singapore’s economy. Today, there are over 720 establishments employing more than 10,000 workers, making up three per cent of Singapore’s manufacturing jobs. In 2004, the textile and apparel manufacturers generated S$1 billion in sales and S$273 million in value-add.

The industry’s strength in design has also enhanced Singapore’s reputation as a leading fashion hub, and attracted trendy and well-heeled visitors here to do their fashion shopping.Shopping accounts for about half of visitor expenditure, which was about S$3.26 billion in 2005. Among their shopping items, fashion and accessories accounted for the largest share, or 32% of visitors’ shopping expenditure.

Competition from the region

However, Singapore faces rising competition from the region dueto lower labour costs and a ready supply of skilled workers. Indeed, the reality of the competition we face is vividly demonstrated in the strength of the Asian exhibitors we have in our midst right here at this year’s AAMA-TEX Exhibition.

The textile and apparel industry in Singapore has been resilient and undergone structural changes. Garment manufacturers in Singapore are changing their business model in response to the competition. Many manufacturers have set up production bases in other countries such as China and Vietnam to leverage on their low labour costs. At the same time, these manufacturers continue to retain their production bases in Singapore to carry out higher value-added activities such as design, prototyping, production planning and sourcing to leverage on our high quality standards and efficiency for a faster turnaround.

New Opportunities in the Global Market

For Singapore’s textile and garment industry to flourish even further, we need to expand beyond our shores and capitalise on the new opportunities in the international marketplace. Data from the World Trade Organization[1]shows that the world garment and textile trade grew in value by 5.3 per cent in 2005, with the total value of trade reaching S$732 billion (US$479 billion). The latest update from the Asian Development Bank (ADB) indicates that over the first four months of 2006, the performance of Asian producers for textiles and clothing improved significantly. The ADB affirmed that this strong performance of developing Asian clothing producers will continue. Trends have shown that South Asia and Southeast Asia have emerged as important sourcing bases for buyers from the US and EU, the two largest markets in the world.

Moving up the value Chain

Apart from capitalizing on Asia’s strength as a sourcing hub, there is potential for the garment and textile industry here to move further up the value chain and develop Singapore’s own-brand apparel. We can do this by leveraging on our knowledge economy and our strengths in areas such as innovation, design and technical developments, and technological expertise.

Already there are several Singapore fashion brands who have made their mark locally and abroad. While established labels such as Celia Loe and Daniel Yam have ventured overseas, younger designers such as Womb and Woods & Woods are also starting to export overseas. Local designers such as Baylene and Tan Yoong have showcased collections on international fashion design platforms such as the Mercedes Australian Fashion Week and World Fashion Awards.This is proof that we have designers who are creative, and have the support of agencies like IE Singapore, SPRING Singapore and DesignSingapore Council to bring their designs abroad.

For example, under the Promotion of Singapore Design Overseas Partnership Programme, designers are given assistance to increase their exposure and profile to the international audience through participation in prestigious international fashion events. A Productivity and Design Development Centre was also set up to promote productivity, enhance apparel design capabilities, and encourage the adoption of Virtual Sampling technologies to reduce lead time. Overall, this will help to drive cost down and improve response times.

Conclusion

To conclude, I hope that all of you will have an enjoyable time here. For our foreign guests from overseas, I hope you will take some time to experience Singapore’s other unique offerings, such as the Singapore Fashion Festival (SFF) and its fringe activities while in Singapore. On this note, I wish all exhibitors and participants a fruitful time networking and forging new partnerships.