Avery Dennison, world’s largest UHF RFID partner in the retail industry, has recently commissioned a high speed hot melt adhesive coating line at its manufacturing facility in Bangi, Malaysia. The line will serve its customers in Southeast Asian countries, Australia and New Zealand. This has been announced in a statement issued by the company.
Anil Sharma, Vice President and General Manager of Avery Dennison’s Label and Graphic Materials Business for South Asia Pacific and Sub Saharan Africa said, “This investment enhances our capacity to serve the growing Southeast Asian region and to sustain our strong hot melt portfolio for Australia and New Zealand’s markets. The commissioning of the coating line marks a significant milestone in our company’s history. The facility can now offer a total solution to our customers, affirming our position as their partner of choice.”
Headquartered in Glendale, California, Avery Dennison began operations in Malaysia 20 years ago. It may be noted that Bangi facility is the first site of the company in Southeast Asia to have this high speed, hot melt coating ability.
With operations in more than 50 countries and more than 25,000 employees worldwide, Avery Dennison serves customers in the consumer packaging, graphical display, logistics, apparel, industrial and healthcare industries.
Waiting for the finalization of the Trans-Pacific Partnership (TPP) agreement between Malaysia and the United States, the International Trade and Industry Ministry of Malaysia said that there won’t be a trade pact implementation or a re-negotiation if US does not ratify it.
International Trade and Industry Ministry Secretary General Rebecca Fatima Sta Maria said that if the situation comes to that, the remaining 11 signatories to the TPPA would discuss the possibility of a different form of cooperation, asserting that the negotiations were beneficial to the Malaysian Government in addressing sensitive and critical issues of the country’s economy.
Meanwhile, a panellist on TPP discussion, SME Corporation Malaysia Chief Executive Officer Dato’ Dr. Hafsah Hashim, said the pact would benefit the small and medium enterprises in the country largely from the textile, apparel, automotive, electrical and electronics industries, while expressing that the issue currently is how to increase productivity in order to gain from the trade pact.
Malaysia and 11 other nations – the US, Canada, Mexico, Australia, New Zealand, Vietnam, Singapore, Brunei, Chile, Japan and Peru signed TPP in February after years of negotiations.
Indonesian Vice President Jusuf Kalla recently announced that Vietnam and Cambodia support Indonesia’s proposal for setting a minimum wage standard, which will be followed by all the ASEAN member states. Kalla said this on the sidelines of the World Economic Forum on ASEAN, which recently took place in Malaysia, and also expressed the need for this standardization as it would prevent ASEAN workers from getting exploited.
“Competition is good as long as it does not harm us with regard to pressure on wages because their raw materials and factories are the same,” explained Kalla. This step is expected to eradicate comparison between different ASEAN member states in terms of minimum wages by multinational companies. The ASEAN General Secretary will soon be invited to discuss the matter with Cambodia and Vietnam. “Indonesia, Vietnam and Cambodia have many workers. We will likely ask Bangladesh. The minimum wages in Malaysia, Singapore, and Thailand are already high,” averred Kalla.
According to the Vice President, wage standardization is important also because international garment manufacturers are relocating their plants from Indonesia to Cambodia and Vietnam because of lower wages in the later countries, which is harmful for all the ASEAN members, in the long run. “Indonesia, Vietnam and Cambodia have many workers. We will likely ask Bangladesh. The minimum wages in Malaysia, Singapore, and Thailand are already high,” concluded Kalla.
The recent order by the Malaysian government to freeze intake of foreign workers is expected to have devastating effects on the business in many sectors including textiles. In response to the government’s decision, Indian business operators in Malaysia have expressed concern that if the freeze stays, then their business will be severely affected.
According to Malaysian Indian Textiles and General Stores Association Secretary Datin Maheswary Moorthy, it would be cheaper to employ local Malaysian workers, but most companies are forced to rely on Indian workers due to lack of option. If they were to lean on the local workers, their business would be literally “choked to death”.
“Textile shops have local employees, but the numbers are small. Only local women are interested in working in textile and saree shops, but not the men, because of the long working hours.”
Voicing a similar opinion, Kuala Lumpur and Selangor Indian Chamber of Commerce’s Klang Chairman N P Raman said, “We will face serious problems if the freeze stays.”
Malaysian Deputy Prime Minister Ahmad Zahid Hamidi announced his government’s decision on Friday (February 19). According to Hamidi, “The government has taken the decision to freeze intake of all foreign workers, including those from Bangladesh. And we appeal to all employers to hire only domestic workers.”
According to a study conducted in Malaysia, the workers in a textile mill are at three times higher risk of developing rheumatoid arthritis, an immune system disorder that causes weakening, swelling, and pain in the joints.
The findings of the study suggest that the environmental factors play a major role in triggering the disorder, which in a textile mill, is breathing textile dust. Other than that, a commonly known risk factor for the disease is smoking. It has been found out that textile dust might cause changes in the lung tissues, which may trigger the immune response that leads to rheumatoid arthritis in individuals with genetic risk factors for the disease. While more research is needed to prove direct connection between textile dust and the disorder, use of respiratory protections that prevent inhalation of textile dust can benefit the textile mill workers. Textile dust might contain nanoparticles of carbon which have the potential to alter the environment inside the lungs and trigger an autoimmune response that leads to rheumatoid arthritis.
The study was conducted on 910 women with rheumatoid arthritis and another 910 similar women of the same age, without the ailment. Women were chosen for the study as they are less likely to smoke than their male counterparts. Out of the women with rheumatoid arthritis, 4.5 per cent had been exposed to textile dust at work, while only 1.7 per cent had been exposed to dust among the women without the disease.
The Malaysian government has been asked by the Federation of Malaysian Manufacturers to ratify the Trans-Pacific Partnership (TPP) deal, since it gives access to a huge duty free market.
As per the TPP deal, tariffs will be removed on 85 per cent of Malaysia’s trade with its new free trade agreement (FTA) partners — Canada, Mexico, Peru and the United States, and help save US$1.2bil (RM5.3bil) in tariffs for Malaysia. This will, in turn, boost the economy of the country and have a positive impact on the trade and investment sector.
According to a cost-benefit analysis, Malaysian textile sector, which contributed to only 1.4 per cent of total exports in 2014, will register the largest gains in exports within the first decade of the implementation of the Trans Pacific Partnership agreement. This has been said assuming that all tariffs are eliminated and non-tariff measures (NTMs) are reduced by 25 to 50 per cent across the prospective 12 member countries, revealed in a study released by the PricewaterhouseCoopers’ (PwC), ‘Potential economic impact of TPPA on the Malaysian economy and selected key economic sectors’.
Moreover, the textile industry in the country is expected to increase its exports by 20 per cent with the elimination of duties on textiles in the TPP countries.
It may be noted around 62 per cent of Malaysia’s trade is covered by seven bilateral FTAs with Japan, Pakistan, New Zealand, India, Chile, Australia and Turkey and five regional FTAs through ASEAN (ASEAN and China, Korea, Japan, India and Australia-New Zealand).
Speaking on the issue, Datuk Seri Saw Choo Boon, President, Federation of Malaysian Manufacturers said, “Textile and apparel, automotive, machinery and equipment, electrical and electronics (E&E) products, rubber products are among the products to benefit from duty free access.”
Boon further added, “We call on all parties, especially the government to take the important step in becoming part of the TPPA. Malaysia has benefited from the FTAs signed till date and there was ample evidence that liberalising economies like Chile, China and South Korea have performed better than more inward-looking ones at comparable stages of development.”
Meanwhile, Malaysia will do away with the import duties for several sensitive products like E&E, petroleum and chemicals that helps manufacturer to procure better quality raw materials.
Malaysia is the fourth most trade-dependent nation after Hong Kong, Singapore and Vietnam with total trade accounting for 1.5 times of the gross domestic product.
Identifying the limit Boon said, “We recognise the confines of the domestic market and know that we can only generate new and additional sources of growth and investment by expanding our boundaries to the rest of the world, a promise that the TPP and other FTAs hold.”
According to a recent cost-benefit analysis deliberating the pros and cons of Malaysia’s participation in the TPP released by PricewaterhouseCoopers’ (PwC), Malaysian textile sector can make largest gains in exports in the decade 2018-2027 if included in the TPP agreement. The observation has been made on the assumption that the all tariffs are eliminated and non-tariff measures (NTMs) are reduced by 25 per cent to 50 per cent across the prospective 12 member countries.
If included in the league of TPP nations, Malaysia’s apparel and textile exports will rise from 0.54 per cent to 0.9 per cent by 2027. The sector is also set to attract investments worth US $ 136 billion to US $ 239 billion over 2018-2027. Moreover, the cumulative gain in GDP is pegged to be between US $ 107 billion to US $ 211 billion over 2018-2027. PwC says more than 90 per cent of the cumulative gains would be attributable to the reduction in NTMs because an elimination of tariffs without any reduction in NTMs, would reap a cumulative gain of only US $ 12 billion over 2018-2027. Due to the Yarn Forward Rule, higher demand for yarn produced in TPP countries is also expected to spur textile companies to expand their upstream yarn operations in Malaysia, which are higher value-added than downstream garment production, the firm said.
In contrast, Malaysia’s non-participation in the TPP agreement is projected to incur a cumulative GDP loss ranging from US $ 9 billion to US $ 16 billion over 2018-2027. Malaysia’s non-participation in the TPP agreement can also effect a diversion of foreign investment away from Malaysia and a projected decline of US $ 7 billion to US $ 13 billion over the discussed period.
