Asia: top buyer of Swiss textile machinery
by
Dr. Noor Ahmed Memon

Switzerland has developed into one of the world's wealthiest industrial nations. Its industrialisation began in the textile industry, in the mid-nineteenth century. The global economic upturn has also reached the textile machinery industry, where its impact has been impressive.
According to the Swiss Textile Industry Association, export-earnings of textile machinery achieved a turnover of CHF 2.3 billion in 2001. About 84% of all spinning machinery orders were received from Asia, while the same continent was responsible for 94% of all texturing machinery orders.

India was the largest recipient of cotton spindles followed by China, Pakistan and Bangladesh. China was also the biggest investor in wool spinning machinery.

In the weaving machinery sector, 76% of all looms went to Asia with China, Taiwan, and Hong Kong the major destinations. Italy and Turkey accounted for the majority of the remaining 24%. However, shipments of large circular knitting machines fell 22% with 63% of all deliveries going to Asia and 20% to Europe. Those two regions also accounted for the vast majority of electronic flat knitting machines. Country-wise export of Swiss textile machinery is given in Table-1.

Swiss operations in Asia have always played a very important role, especially in the textile sector. As early as the 19th century Swiss companies were already well established in Canton and Shanghai. Today, over one third of Swiss produced textile machinery is exported to Asian markets. No doubt, the Asian economies are back with impressive growth rates.

Swiss entrepreneurs have always had to be internationally minded and geared to the world markets. This is also true of the textile machinery industry. Today, the Swiss textile machinery industry is recognised world-wide for its outstanding quality and innovative potential. With an estimated global market share of 33%, the Swiss play a leading role in the textile machinery world. Switzerland - together with its overseas holdings - is in first position in a world-wide ranking of textile machinery manufacturers. Region-wise export of Swiss textile machinery during 2001 is given in Table-2.

At present Swiss textile machinery holdings employ well over 28,000 people in over 100 companies and branch units around the world. In recent years, Swiss entrepreneurs have been able to extend their financial and technological share of the textile machinery industry.

Whereas the impact of the world-wide economic slowdown was quite pronounced in the American and European markets, the Asian markets have remained on an upward trend. Moreover, reports from Swiss textile machinery manufacturers indicate that new orders in that region remain buoyant. Today, the most important markets for the textile and textile machinery industries are definitely in the Far East and South East Asia.

However, the overall downtrend is expected to continue in the second half of 2002. The dominant feeling is one of guarded optimism, with expectations of stabilisation and recovery by the end of the year. By applying a forward-looking strategy, the Swiss textile machinery industry has successfully met the challenges facing it and further expanded its share of the global market.

In terms of rupee import of textile machinery from Switzerland to Pakistan decreased from Rs1.08 billion in 1997-98 to Rs.1.03 billion in 2001-2002, thus showing a decline of 5%. Import of textile machinery from Switzerland to Pakistan is given in Table-3.

Textiles and clothing manufacturing and trade has long been an engine of economic development throughout the world. In 2001 export of textiles and clothing accounted for over US$ 350 billion of trade world-wide. In terms of share of population employed and of total exports, it is particularly important for developing countries, especially for some of the least developed countries and a number of small countries, some of which have a very high dependence on textile and clothing exports.

Swiss textile industry is famous for fine cotton, embroideries and prints. As a result of innovation and creativity, Swiss companies have not only survived but also emerged with renewed strength and with unique new fabrics and products.

According to the WTO Trade Statistics, the Swiss textile and clothing industry achieved a turnover of US$2.35 billion in 2001. Out of this total, the textile industry turnover accounted for US$1.44 billion, and the clothing industry US$0.91 billion. Main contributors to the positive growth were the spinning mills, the commission processing industries, and the clothing industry.

During the past six-year period, the textile industry lost around US$ 1.1 billion in exports, mainly to EU countries and world share decreased from 2.45% in 1990 to only 0.93% in 2001. The clothing industry exports on the other hand increased by US$ 800 million, due largely to outsourcing of production. Export of textiles from Switzerland is given in Table-4.

However, import of textiles and clothing into Switzerland decreased from US$ 5.7 billion in 1995 to US$ 4.6 billion in 2001, showing a decline of 19%. Import of textiles and clothing into Switzerland is given in Table-5.

The US is the top non-European textile supplier (7th based on global ranking) followed by China and India which ranked 3rd and 6th largest clothing suppliers receptively. China, India, Hong Kong and Indonesia recorded double-digit growth rates in clothing exports to Switzerland.
The EU remains most important trading partner of Switzerland in textiles (export share 72.2%, import share 79.2%) and clothing (exports share 67.3% and import share 70.7% respectively). North America has a share of 7.3% for textiles and 15.6% for clothing and Asia 10% for textiles and 22% for clothing.

Pakistan is facing negative trade balance since 1996-97 with Switzerland mainly due to regular imports of gold from Switzerland. The balance of trade remained in favour of Switzerland. Trade deficit, however, decreased from US$ 314.8 million in 199-2000 to US $ 146.2 million in 2001-2002.

Pakistan exports to Switzerland declined from US $ 35.6 million in 1999-2000 to US $ 24.3 million in 2000-2001 and further fell to US $ 168.6 million in 2001-2002, whereas imports also decreased from US $ 350.4 million in 1999-2000 to US $ 230.7 million in 2000-2001 but fell to US $ 168.7 million in 2001-2002.

Main textile items exports from Pakistan to Switzerland are cotton yarn, cotton fabrics, readymade garments, hosiery, towels, synthetic textiles, knitted fabrics, raw cotton, bags of cotton, carpet and rugs. Export of textile and other products from Pakistan to Switzerland is given in Table-6.

For some years now, Switzerland has also been using new techniques in material and altered fabric structures to create "fashion innovation", particularly in the field of technical textiles. Today, individual Swiss manufacturers have become famous for highly differentiated materials as well as luxury fashion fabrics for haute couture. The Swiss textile and clothing industry is well positioned to face the third millennium.