Mon, Jul 27, 2009 page12

• FEATURE : Singtex redefines the world through textiles

  • By Elizabeth Tchii / STAFF REPORTER
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  From cotton picking to textile nanotechnology, Singtex Industrial Co (興采實業) founder Jason Chen (陳國欽) has seen it all. From a family of three generations of textile makers, Chen’s ultimate goal is to “revolutionize the way people think about fabrics.”

  “We’re doing this one step at a time, starting with public awareness on the need to protect the environment through its purchasing habits. Slowly but surely, we’re pushing them toward high quality, value-added and eco-friendly apparel,” Chen said in a recent interview with the Taipei Times.

  Earlier this month, Singtex announced its latest invention — the S.Cafe, which weaves waste coffee grounds into interlaced fibers to create textiles that offer fast drying properties, ultraviolet shielding and odor control.

  

  Singtex Industrial Co founder Jason Chen gestures during a recent interview with the Taipei Times and its sister paper the Liberty Times.

  PHOTO: LO PEI-DER, TAIPEI TIMES

  With four core technologies and more than 30 patents constituting the bulk of its business operations, the Sinjhuang, Taipei County-based company is now among the leading functional textile suppliers in Taiwan and is spearheading the high-end textiles with organic components business.

  Singtex also manufactures ready-made garments for global brands and runs a textile-testing lab to certify fabrics made by international suppliers. Last year, the firm grossed NT$650 million (US$19.73 million) in revenue with a gross margin of more than 25 percent.

  But success wasn’t immediate. In 1989, Chen and his wife moved from Changhwa County to Taipei to start their business. They had little money and were propelled only by strong entrepreneurial spirit and Chen’s just-obtained degree in textile engineering from the Oriental Institute of Technology in Taipei.

  “The first four years were rocky. We didn’t know if we were going to sink or float. Through perseverance, attention to quality and a few loyal clients, however, our small business started growing,” Chen said.

  Before 1994, Singtex was just like dozens of other domestic textile contract makers, whose business relied primarily on producing for large US retailers like Wal-Mart Stores Inc and Kmart Corp. Facing cutthroat price competition from India, Chen also went the low-cost route and spent three years in China to replicate his business using cheaper labor there.

  With other companies facing a similar challenge, Taiwanese textile contract makers relocated en masse to China.

  “In the early 1990s, it was the ready-to-wear makers who first left the country. However, at the time, they were still buying fabrics from Taiwan to make garments,” Frank Hsu (許文正), deputy secretary general of the Taiwan Textile Federation (TTF, 台灣紡拓會), said by telephone.

  Over time, downstream apparel manufacturers decided to relocate textile factories to China as well, to reduce costs and transportation. “About 90 percent of companies in both sectors left Taiwan — and to this day, there is no sign they’re considering coming back,” Hsu said.

  Hsu has observed first-hand the growing capacity of Taiwanese firms in China over the years.

  “It’s not just double-digit growth, but triple-digit growth,” he said.

  Aside from China, Vietnam and Cambodia are also popular destinations for manufacturing, he said.

  Singtex, however, had a completely different experience in China. The technical fabric company did not benefit from inexpensive manpower and instead suffered from poorly made products by Chinese workers who were not trained properly and did not abide by the same quality standards.

  “The quality of the finished fabrics made in China was very shoddy at the time. Even though I kept making demands on local factory workers, they simply couldn’t deliver and I could not accept delivering substandard goods to my customers,” Chen said.

  Around that time, Chen began attending textile exhibitions worldwide and soon became aware of the unlimited possibilities in the age-old textile industry.

  Rather than go low-cost, therefore, he went down another path and upgraded his business model, focusing on contributing to a more comfortable and healthy future for mankind through textiles.

  “It was no longer about making fabrics or making money. It was about what I wanted to achieve in life through my work,” Chen said.

  In a sense, Singtex “1.0” gradually turned into Singtex “2.0,” with its founder focusing on eco-friendly, fashionable and functional quality fabrics used by sports brands worldwide.

  In 1994, the company made its first breakthrough with its proprietary non-porous hydrophilic polyurethane film to make waterproof, windproof and breathing garments.

  The company broke onto the international scene when it received a Certificate of the Supplier-Pool of the Steilman Group and became a member in 2001. This recognition gained Singtex multiple orders from both US and European athletic brands.

  At the time, demand for sportswear was at an all-time high in those regions.

  “In 2003, I gave China another chance and tried to use Singtex’s new technology in the labor-rich market. But after three months, my technology was stolen. My Chinese employees ran off with my ideas and founded their own companies,” Chen said.

  After being burned a second time, Chen is now fully committed to staying in Taiwan.

  “Taiwan is best because it is my home and because we have the complete supply chain in place, with more than 50 years of textile history. Although manual labor and engineering talent may be costlier, at the end of the day, it’s all worth it,” Chen said.

  For his part, Hsu is optimistic about the signing of an economic cooperation framework agreement (ECFA) between Taiwan and China and appreciates the government’s proposed cash subsidies to assist 3,000 local clothing, knitted socks and other ready-made fabric makers to transform their businesses in times of uncertainty.

  “In terms of technology transformation, it probably won’t happen quickly, but previous government efforts to help the local towel industry were very successful. The companies learned about branding, new sales and marketing channels and increased their visibility at various exhibitions,” Hsu said.

  Government statistics showed that a total of 168,644 people were employed in 4,521 factories operating in the textile sector in Taiwan last year, or 6.6 percent and 5.8 percent respectively of the entire local manufacturing sector.

  Although the scale of the local textile industry appears to be small, it remains the country’s No. 1 foreign exchange contributor, with US$8.2 billion in trade annually, accounting for 55.4 percent of the entire manufacturing sector.

  “Contrary to popular belief that information technology is the nation’s primary contributor, textiles have been No. 1 for decades,” Chen said.

  For Hsu, Taiwan has become a producer of high quality textile goods. While Taiwan does not mass-­produce on a scale such as that in China, it has invested heavily in R&D to distinguish itself.

  “There is no other way to survive,” Hsu said.

  Singtex has come a long way, from a small fabric maker to one of the major functional textile suppliers, competing with Formosa Taffeta Co (福懋興業) and Everest Textile Co (宏遠興業), while becoming a global leader in organic textile.

  But Chen isn’t sitting on his laurels.

  “After S.Cafe, anything is possible. Hot coffee, cold coffee, fabrics with cooling and warming properties, you name it,” he said, refusing to reveal what project is in the pipeline.

  Singtex’s clients are spread across the globe: Europe accounts for 55 percent of its business, the US 40 percent, Japan 4 percent and the rest of the world 1 percent.

  The global financial crisis may have caused “obvious declines in the US market,” Chen said, but Singtex’s business is balanced out by “small pickups across Europe.”

  Moreover, as the company deals exclusively with high-end sportswear brands such as Nike Inc, Adidas AG and Puma AG, as well as China’s Li-Ning Sports Goods Co (李寧) and Taiwan’s Giant Inc (巨大), the elite sports apparel business has rosy expectations about its future, he said.
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