Local garment sector stymied by low-wage regional players

DOMESTIC garment manufacturers are facing an uphill task to penetrate regional markets in face of stiff competition from low-wage foreign competitors.

Garment manufacturers in countries such as Myanmar, Vietnam and Cambodia are able to offer more competitive prices due to lower costs of labour.

"It is highly competitive because the cost of wages for labour in Vietnam and in Brunei is different and most of the garment manufacturers have moved there because it is much cheaper," said Mark Leong, the owner of MLWK Enterprise.

Brunei used to have a bustling garment industry, but investors from Taiwan began moving operations to Myanmar and Vietnam due to lower costs of labour, he said.

Kevin Lau, the sales manager of Aewon Garment and Embroidery, said that prices can be driven down by employing staff from Vietnam or Myanmar.

"Only by employing staff from Myanmar or Vietnam, can the pricing be competitive because of the minimum wage that they get," he said.

Jacqueline Cheong, the general manager of Bajoo Boutique, said that operation costs in Cambodia and Vietnam are also much cheaper in Brunei.

Most of the garment businesses in Brunei prefer to target local customers only, with their nearest foreign competitors mostly in neighbouring Miri, Sarawak.

Leong said that many customers would drive down to Miri to get quotations and compare them with prices in Brunei.

"In Brunei, for polo shirts and corporate uniforms there are less than five places that can get it done, and Miri is cheaper than these places by about 20 per cent, depending on the exchange rate," said Leong.

However, many customers still choose to make their goods locally due to distance and time constraints, Cheong said.

"A lot of the businesses tend to do their shirts and uniforms at the last minute and Brunei businesses are the ones that can deliver them in the short time frame," said Cheong.

In China, goods are much cheaper than in Malaysia, but most orders need to be booked at least a couple of months in advance, she said.

"Malaysia is still the bigger competitor for Brunei because it is cheaper. Language (may be) another factor (why Malaysia is a bigger competitor than China)," she said.

Lau said that although Brunei's market is small, there is rapid growth in demand for personalised garment products.

For example, corporate shirts for entities such as banks are growing in popularity, he said.

"Each individual would come into the shop with an idea for a design and change the pattern slightly," he said.

The majority of the garment industry in Brunei is primarily made up of tailor shops.

In a market breakdown provided by Aewon, they have found that there are more than 500 businesses in the garment industry. The company has estimated that the majority of the market demand comes from the government sector with 30 per cent, the private sector (30 per cent), individual consumers (20 per cent) while the "branded" segment make up for 20 per cent.

Tailor shops which normally cater to boutique customers also produce corporate uniforms for restaurants and so on, said Lau.

"So they still hold a certain market share out there. Because uniforms are still more fashionable than polo shirts ... this is when customers approach tailors," he said.

The Brunei Times