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                Location > HOME > Fibre&Filaments

                Kelheim Fibres ,Speech of Josef

                [ Size:L M L ]Data:2015-12-8 Edit: Hits:1343
                Kelheim Fibres is the only European manufacturer of viscose short cut fibres, but the Bavarians offer more than just fibres with the ideal properties: Kelheim's viscose specialities consist of 100% cellulose and can therefore be perfectly integrated in the wetlace process. After use, the fibres are completely biodegradable. Finally, you have a product which is conveniently disposable via the toilet without the danger of clogging it and which is not harmful to the environment.
                But Kelheim Fibres will also showcase speciality fibres for completely different applications at this year's INDEX, which once again proves the versatility and flexibility of the Bavarian fibre specialists: With the inherent flame resistant viscose fibre Danufil CS, Kelheim offers an environmentally sound raw material for flame retardant nonwovens which can - as a barrier layer - guarantee fire protection in a wide range of end products.
                As the flame retardant properties are built into the fibre matrix by the incorporation of silicate particles, further treatment with protective agents is not necessary. There is therefore no danger of toxic fumes being released during a fire: only the cellulosic part of the fibre burns, while the silicate matrix is left and protects the materials behind it from heat and flames.Danufil CS fibres are already used as barrier layers in mattresses and meet the strict demands of the US Federal Mattress Flammability Standard 16 CFR Part 1633. Kelheim sees more possible fields of use for the Danufil CS fibre in automotive or lightweight composite construction applications.Kelheim Fibres GmbH is the world’s leading producer of viscose speciality fibres and the most important supplier of viscose fibres forthe tampon industry.

                Approximately 90,000 tons of viscose fibres are produced and tested every year at Kelheim in South Germany. These are used in most diverse applications – from fashion, hygiene and medical products to nonwovens and speciality papers.Innovative products, flexible technologies and a strong customer orientation form the foundations of the company’s success.

                Speech of Mr. Josef Albert Beckmann 2006

                1. Expiring quotas and the corresponding impacts on supplying and importing countries 

                Since China joined the WTO, the People's Republic has benefited from the successive liberalisation measures as set out in the ATC. In this way, China's access to major textile buyer countries, such as the USA and EU, has increased considerably. 
                China is one of the few supplier countries subject to actually binding - i.e. fully exhausted - quotas. Following the liberalisation of some binding 
                quotas of this kind in 2002, Germany, along with the EU as a whole, saw a considerable increase in imports of the products in question. In this process, the third stage of liberalisation under the ATC, and the retrospective liberalisation required by China's accession to the WTO, has had an even stronger effect in the USA than in the EU. 
                In the EU, as in the USA, it can be seen that growth of liberalised imports from China has been considerably higher in terms of quantity than in terms of 
                value. The same is to be expected from the liberalisation of the largely exhausted quotas which remain, which is due in 2005. 
                With the gradual fall in quotas, import competition will further increase for the textile and clothing industry in the industrialised countries. But, 
                import development as regards quantity ought to remain within limits since these markets are, comparatively speaking, saturated in the area of standard goods. In Germany, for example, overall imports of textiles are stagnant, and figures for clothing even show a decline. In this situation, large additional quantities can only be offered successfully for sale by means of considerable price reductions, thus undercutting the competition. Thus, not so much the increase in overall imports, but, rather, the battle for market shares - above all in low-priced segments - will dominate the landscape after the falling-away of quotas. 
                In this way, some suppliers can be forced out of the market, leading to larger gains in market share for others. China, for example - Germany's third 
                largest supplier of textiles and clothing, after Turkey and Italy - has succeeded in expanding its market share of ready-made clothing, mainly at the expense of Turkey. 
                An argument frequently put forward in favour of a faster abolition of textile quotas is that the developing countries should no longer be robbed of their 
                comparative advantage in the manufacturing of textile products and the resulting export chances. In principle, there is nothing against this argument.

                However, the quota system enabled some countries to build up a comparatively strong position. Up to now, there are still certain advantages for some small suppliers: Either they are themselves not subject to quotas, or, they profit from the fact that larger competitors have to operate with relatively large quotas. If these advantages no longer exist, some suppliers will not be able to hold out against price competition. It will therefore depend on as to whether the supplier can also offer, besides price, further arguments in order to influence the buying decision. 
                Given the very limited potential for growing demand in the traditional buyer countries, smaller suppliers or even newcomers will have great difficulty in 
                gaining a foothold in the market. Instead, established, high-volume suppliers with a long tradition of textile manufacturing will be able to strengthen their position. Smaller countries will not be able to hold their own in competition with giants such as China, India and Pakistan - at least, not in a direct price battle. Therefore, they must place greater emphasis on quality, design and reliable deliveries. In many cases, infrastructure factors independent of the products, e.g., an inadequate transport system with associated delays in delivery, make it unattractive to buy in certain countries.

                Thus, many smaller countries have only a chance of keeping up with massive investments in technology and infrastructure. 
                As is generally known, consumer behaviour has changed noticeably in the world's highly developed countries. This phenomenon may, in the meantime, also be 
                observed in threshold countries, indeed, even in less developed regions. Not only luxury segments are expanding. The more strongly the living standards of emerging middle-class sectors grow, the greater their desire for differentiation via up-market consumption. Easier access to information speeds up this trend. Price no longer stands alone in the foreground. Values such as quality, fashion, innovation or brand name prestige gain increasingly insignificance. 
                The textile and clothing industry in the industrial countries can indeed therefore overcome the disadvantage of the expensive location in that it 
                uncouples itself from the pure price argument through qualitatively high-value products, innovative solutions, modern logistical organisation and technical know-how. Enterprises who continue to concentrate on the production of mass goods and labour-intensive products will, as against this, be exposed to even tougher competition than before. The relocation process of these segments to more cost-effective sites will thus continue. 
                However, no matter how competitive and innovative an enterprise may be - sales success finally depends to a decisive degree on the openness of potential 
                sales markets. Improved access to third markets which are up to now strongly protected must therefore enjoy highest priority in trade policy. A fair and level playing field is therefore our first objective in international textile and clothing trade.

                2. Current developments in Sino-German trade in textiles and clothing 
                China as the leading international textile and clothing manufacturer, is expanding its exports considerably, year after year. Mass production and an 
                apparently unending reservoir of cheap labour give China considerable cost advantages over its international competitors. In many product sectors the pressure on world market prices is already enormous. The successive abolition of quantity restrictions, as set out in the Agreement on Textiles and Clothing (ATC), is encouraging this development. No wonder that some German businessmen are extremely worried about this. 
                At the same time, however, China's importance is growing as an export market and location for investment - for the German textile and clothing industry, 
                too. Stable economic growth, the abolition of numerous regulations in the wake of China's accession to the WTO, and a constantly growing section of consumers with high disposable incomes, have all raised the prospect of potential sales. For two years now, China has been the Number One investment country for the German textile industry. Given the dismal economic situation at home and a subdued world economy, exports of textiles and clothing to China have shown an outstanding increase. 
                In the wake of its accession to the WTO, China itself has made large concessions to market access. By 2005, according to the reduction timetable agreed, 
                customs duties on textiles and clothing will be reduced considerably. Moreover, liberalisation measures also include the removal of major non-tariff barriers, such as quantity restrictions on the import of particular textile pre-products and the abolition of the state trading monopoly. This has substantially improved export opportunities for the German textile and clothing industry. 
                Given the strong economic growth seen in the most populous country in the world, an ever larger group of consumers with high disposable incomes is on the 
                rise, interested in high-quality clothing products and home textiles. Infrastructure projects, industrialisation and construction work in towns and cities are all leading to increased demand for technical textiles. How strong this demand is can be seen from China's relatively low export ratio, despite large increases in production: nearly 80 percent of production currently goes to the home market. 
                Particularly when it comes to technical textiles - which require high expertise and are capital intensive - German companies have a clear lead in quality 
                and technology over their domestic competitors. Increasing demand from automotive construction and in medicine provides good sales opportunities. Moreover, demand is being boosted by a growth in statutory regulations covering the protection of persons, goods and the environment, not to mention huge road and railway projects, and building plans for the Olympic Games in 2008. 
                Compared with Chinese exports to Germany, German textile and clothing exports to China are currently modest in their amount: they are no more than one 
                twentieth of what China exports to Germany. However, German exports are showing considerable growth: up 48% in 2002, and 38% in the first three quarters of 2003 - excellent figures, given the otherwise subdued nature of export business at the start of the year and the rather uncomfortable conditions in terms of exchange rate developments. 
                As a location for investment, too, the People's Republic has become distinctly more attractive. China has been, since 2000, the country attracting the 
                largest direct foreign investment by the German textile industry. Over the second half of the 90s, the annual growth of the economy averaged ten percent.

                Experts from international financial institutes forecast that China could be the fastest growing economy over the next ten years, thus encouraging further FDI flows. 
                These latter findings strongly indicate that a win-win-situation is indeed feasible.

                3. Nevertheless, with ongoing liberalisation in the tariff and non-tariff area, a trend to New Protectionism is visible. On the one hand, there are fears that, after the abolition of quotas, unfair trading practice will be increasingly applied in battle of market shares. On the other hand, one assumes that increased protective instruments could be adopted world-wide. 
                Efficient instruments are needed in liberalised world trade in order to put a stop to unfair trading practices. In so doing, one must take care, of 
                course, that the instruments cannot be abused for protectionist purposes. Otherwise there is a danger that the liberalisation success achieved is again annulled by the inappropriate application of protective instruments and that spiral of protective measures is set in motion. 
                The protocol on China's accession to the WTO contains provisory clauses for protection against imports from China over a transition period. Should there 
                be a disruption to the market caused by Chinese imports, or should a "significant trade distortion" take place, protective measures may be introduced for a limited period, in the form of customs duties or quantity restrictions. At the start of 2003 the EU enshrined these regulations in community law.

                Further WTO members, such as the USA, Canada, India and South Korea, have also incorporated these China safeguards into their own national legislation in an analogous way. Such safeguards may be applied especially for textiles and clothing up to the end of 2008. In addition, a "product-specific protection mechanism" was instituted, to which recourse can even be made up to the end of 2013. 
                Contrary to widespread belief, these safeguards are not a tool - as are anti-dumping regulations, for instance - to combat unfair trade practices.

                Safeguards are designed as temporary protection should fair competition lead to a jump in imports, thus threatening the existence of the home industry.

                The use of such protective clauses is normally only authorised by the WTO if they are non-discriminatory, i.e. if they are directed against all countries equally. The special regulation for China permits a deviation from this practice, and China agreed to it in the WTO accession protocol. 
                Given the strong growth of imports from China, the European Commission is currently subject to increasing demands to apply the existing safeguard 
                regulations. Many European companies see them as a tool to staunch unfair competition from the Far East. Those supplier countries which compete with China are naturally observing this with great interest, since restrictions for China would definitely improve their own position. 
                However obvious the use of the protective clauses may seem, the application of safeguards means interfering in a complicated web of trade relationships, 
                in the course of which a series of unpleasant side effects would be inevitable. To begin with, importing countries would certainly incur the charge of wanting to prolong the quota system through substitute tools - and with the intention of specifically disadvantaging an individual, particularly competitive country. After all, the China safeguards are not directed towards unfair pricing or restrictions on overall imports. Finally, use of safeguards could trigger an international chain reaction, since trade distortions increase the pressure on further markets. Therefore, the safeguards aretools to be used with great care. However, in their potential for negotiations at the diplomatic level, safeguards could play a major role in implementing market-access goals in a persuasive way. 
                Quota liberalisation is an irreversible process. China will further increase its dominant position in the German and other industrialised countries`
                markets. The German textile and fashion industry will find it increasingly difficult to maintain its position in its traditional EU markets, since international competition is growing in other member countries too. However, to be put on the defensive side in this situation, and to trust in measures of protection, does not seem to offer much hope of success. Such measures would provide no long term solution, would be politically difficult in their implementation - and could, above all, turn out to be a type of Trojan horse. The proper strategy for the future involves concentrating on the particularstrengths of the German textile and fashion industry and developing its international competitiveness. 
                Given the saturated home market, it is vital to have international markets for the sale of high-quality products. China is certainly one of the most 
                promising target markets. Sales and production in an expanded Europe can also continue to be managed in a promising way, since local advantages, such as geographical proximity, short delivery times and the traditional collaboration between suppliers and purchasers in Europe cannot be counterbalanced by the price benefits alone offered by Asian competitors.

                4. Building up Partnerships 
                Because German exports are being increasingly successful and because investment is growing, many businessmen consider it time to establish a partnership 
                with China, with the aim of improving market access, and thus gaining a lead over their competitors. It is against this background that the Confederation of the German Textile and Fashion Industry signed a memorandum in July 2003 with the China National Textile Industry Council on the subject of collaborative partnership. The core of this agreement is the encouragement of German-Chinese commerce in the textile and fashion area. Agreement coversregular exchange of ideas on questions of trade policy, as well as collaboration in trade fairs, investment, education and training as well as in fostering trade via New Media instruments. 
                To represent the economic interests of German textile and clothing companies in China even more effectively, the Confederation of the German Textile and 
                Fashion Industry is planning to open its own representative office in Shanghai. This office is intended to support companies interested in trade with China, or investment there, in their entry to the market, to act as a contact for German firms already working locally, and to provide general market information. A basic tasks will also be to maintain contact with the relevant Chinese authorities and government decision makers. 
                China is often described as the main winner in quota liberalisation. That does not mean that Germany must be on the losing side. Experience shows that 
                business collaboration and mutual opening lead to better results than a policy of barriers, a policy which seldom fails to create errors in economic development. This applies to our relationship with China, just as it does to our relations with all our other trading partners. The Confederation of the German Textile and Fashion Industry will therefore do what it can to encourage the further liberalisation of world trade and will emphatically support all further efforts to multilaterally dismantle restrictions on the textile and clothing trade within the framework of the current WTO round. For it isonly in an open world market that the real qualities of the German textile and fashion industry, and its competitiveness, will make themselves properly felt.

                5. To conclude, please let me add some words with respect to the significance of continued liberalisation. 
                Trade with textiles and clothing has, over decades, been distorted by massive trade-political interventions. Here, I do not only mean the quota system.

                ATC liberalisation is not an obligation for the industrialised countries alone. In Art. 7 ATC, all signatory countries undertook to dismantle entry barriers to their markets. Unfortunately, in several important supplier countries little has been done about improving conditions of access to their own markets. Up to today, some large textile exporting countries protect their own markets through high customs walls and further barriers. As long as this continues, completely false incentives are set up in international trade. Enterprises and consumers in these countries cannot decide freely on the purchase of certain products, competition in quality cannot take place and technology transfer is arrested. The protective walls thus injure not only

                those who would like to supply to these countries but also these countries' own economy. 
                My appeal to all international representatives present today is therefore to make use of the opportunity of the Doha Development Agenda in order to 
                massively push forward the world-wide opening-up of the textile and clothing market. Only in this way can we ensure that trade and competition develop in a sound manner after 2005.

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