The faces of the various people layoff in Melbourne due to Pacific Brands scaling
back its operations in Australia. Picture courtesy of SMH.com.au

Pacific brands the scion of the Australian textile industry and the maker of a dozen iconic Australian and global garment brands such as King Gee, Bonds, Holeproof, Playtex, Wrangler, Hard Yakka, Slazenger, Sheridan Sheets, Hush Puppies and Julius Marlow has virtually dried up overnight in the troubled economic seas of Australia.

Directly more than 1800 jobs have been disappeared and indirectly many more jobs that depends on Pacific Brand for its work such as textile contractors are all standing on knife age. It is really a sad day for the Australian textile industry and its workers. In this tough economic times many more jobs seem likely to disappear. I really feel sad for the dozen of workers that lost their jobs and hope that they will weather the current economic storm. Also at the same time I am now wondering how a company that claims to produce 100% Australian made garments can now claim to be Australian at all when their manufacturing base has move to Asia.

However despite the difficulties face by the Australian economy, we should all examine the root of the problem and by doing that we can just summaries the fact that the Australian textile industry is not that viable within the borders of Australia. The current economic slowdown clearly reveals that textile manufacturing in Australia just can't compete with cheaper countries in Asia.

The facts says it all:

1. Weaker dollar myth - Despite the current weakness in the Australian dollar that is touted has made its products 40% cheaper, it is still not as cheap if one compares it relatively to other similar products manufactured in Asia specifically China.

2. Operating Costs - Even right now manufacturers in China has become very competitive and many layoffs has occurred. Many factories in China has either shut down or working at less than half capacity. So seriously if all this is happening in a "cheap" region of China, what chance does Australia really have in this department.

3. Market Dominance - The Australian market for garments is heavily dominated by either large garment shops or the supermarkets themselves. This scenario of market dominance of Coles, Woolworths, Target, etc makes the distribution of textile products in Australia very narrow and to centralized. Without a large number of independent outlets selling and marketing Australian made textile products, the consumers will be force to head to the large chains for their shirts,socks,underwear and other garments, essentially making the market very uncompetitive. Also the notion of putting all our eggs in one basket comes to mind.

4. Atmosphere of No confidence - Right now the general consumer is living in an environment where they have no confidence in the state of the economy. This in turn forces them consciously to spend less and only on very essential items such as food. many are resorting to keeping their old garments during this time of economic uncertainty.

5. Cheaper imports - Once again the contentious issue of cheaper imports is contributing factor in the abysmal state of the Australian textile industry. Cheaper products from Aisa, Africa even South America are going to be a lot cheaper and in turn consumers around the world will be more incline to purchase such products. Tough economic times = buying cheaper products, who can really blame them?

The outlook for the Australian economy may not be as bleak as the rest of the world but lets face it its textile industry is. All I can do right now is hope and pray for the thousands of workers affected by this crisis and wish that the silver lining will show itself soon.

The article above is written by Daniel Lim and it is his reflection and opinion on the state of the Australian textile industry. The author takes no responsibility for any loss that results from the article above, after all this article is base on the opinion of a 1st year undergraduate commerce student who wrote this article base on his opinion and the reading of various articles around the internet.