ABU DHABI, 7 Nov, 04 (WAM) - The UAE's garment and textile industry,which has grown remarkably since the formation of the federation underthe visionary leadership of the late president Sheikh Zayed bin SultanAl Nahyan, is set for a new phase of consolidation and vibrancy in theemerging global trade scenario.
The booming sector, a major contributor to the country's non-oil GDP,and currently accounting for nearly 40 per cent of the total GCC marketestimated at $7 billion, is gearing up for a dramatic transformation,thanks to the strong industrial infrastructure built under the pragmaticand far-sighted leadership of Shaikh Zayed, analysts point out,according to a report in +Khaleej Times.+ "The outlook has never been brighter for the industry. Both textile andgarment industries are getting into a take off mode after a brief periodof stagnation. The setting up of the Textile City in Dubai and the liberalisationof the global textile and garment trade augur well for these sectors andpromise to reposition them as key drivers of the nation's economic growthin the years to come," said a leading textile trader. "The imminent liftingof the US export quota restrictions, which for the past several yearshave been hampering the industry's growth, will be a sure-fire catalystto this drastic change." The Textile City promises to reinforce Dubaias the trade hub for textiles and garments not only for the Middle Eastbut also for the Indian subcontinent, China, Europe and even the US. Itsfree-zone status and tax-free nature will attract more major global playerswho will bring with them increased international goodwill and recognitionfor Dubai, industry sources believe.
Analysts believe that the country's $3 billion textile market, dominatedby Dubai, is now ripe for a major leap next year. Apart from the scrappingof stringent US quota rules and the launch of the $60 million TextileCity, they see the overall economic buoyancy in the Middle East actingas a spur to this upbeat mood. "In short, Dubai is set to further consolidateits position as the regional textile and garment trading centre whilebecoming a focal point of increased trade with China and India." The UAE,which has become a major garment-manufacturing centre in the Middle Eastduring the past two decades, is set to take advantage of the new globaleconomic order. Although the sector had its ups and downs over the years,particularly in 1997 when the industry suffered one of its worst setbacks,indications are that in the wake of fast growing regional market demandand the current price stability in the global fabrics and yarn markets,it is poised for a period of sustained growth, " a Dubai-based industryanalyst pointed out.
Dubai has never been short of strong re-export markets for its textilesand garment trade. When one market closes its doors, new markets seemto spring up to keep the trade afloat even during critical times. Whiledemand from traditional re-export markets such as the CIS, some MiddleEast and African countries continue to drive the sector's growth, occasionallyit is getting a shot in the arm with a sudden demand surge from new markets.
Traders expect a significant surge in demand once the Iraqi and Afghanmarkets open up.Recent estimates show the annual demand for textile products in the MiddleEast region at around $12 billion.
According to trade sources, there are at present some 150 ready-madegarment factories operating in the UAE with a combined capital of $75million while some 60 factories with a total investment of around $175million operate in the textile sector.
Although the scenario in general appears quite optimistic for the textiletrade and the garment industry, the sector has to undergo corrective phasesseveral times in the past, a garment maker pointed out. "While the textiletrade had been bedevilled by business failures and recurrent defaults,the labour-intensive garment industry, which once experienced a drasticgrowth in Dubai and Northern Emirates, suffered grave setbacks in thewake of new labour rules and other adverse market conditions that hadresulted in the closure of several factories amid unpaid wages and hugedebts," he said.
Analysts point out that all fundamentals are in place for a dramaticindustry growth from next year when several new garment manufacturerswill launch operations. "Given the abundant supply of low-cost energy,the Emirates is now a sought-after destination for investors. Coupledwith that is the country's efficient port facilities and tax incentivesand other investor-friendly rules."
