Textile industry moving production

A weakening dollar and rising costs were some of the main reasons for moving textile work abroad.

textile 88 224 (photo credit: Ariel Jerozolimski)
textile 88 224
(photo credit: Ariel Jerozolimski)
Local textile firms are transferring production out of the country as the continued weakness of the dollar and rising local production costs damage profits. "More and more companies in the textile industry are moving their production lines abroad," said Joseph Shiran, head of the textile and fashion division at the Israel Manufacturers Association, at a press conference in Tel Aviv on Wednesday. "About 25 of the large textile factories in Israel have transferred parts of their production activity to the Far East, Eastern Europe, Jordan, Egypt and other countries." "Our estimate is that over the past year international sales of local textile companies that are producing outside of Israel's borders passed $1.25 billion," Shiran said. Shiran expects industry exports to narrow by 5% to 8% in 2008, to $950m., and sales to the local market are forecasted to increase by 2% year-on-year to $1.4b. About 750 textile workers were laid off in 2007, the Manufacturers Association said. For 2008, Shiran estimated that 300 would be fired, bringing the total number of workers in Israel's textile industry to 18,500. More than 26,000 workers have been laid off since 1995. On the initiative of the textile and fashion division of the Manufacturers Association, 11 MKs, including Shelly Yacimovich are sponsoring a bill to amend the tender law to give preference to locally manufactured products. The bill would compel the security forces, including the Defense Ministry and the IDF, to buy textile products made in Israel. A weakening dollar and rising costs for water, electricity and municipal taxes, combined with the cheaper costs and proximity to target markets found abroad were the main reasons that the Israel Manufacturers Association cited for the growing trend of moving work abroad. "A weakening dollar against the shekel is badly damaging the textile and fashion industry, since 50 percent of the industry's exports are to dollar-linked countries," Shiran said. Last year, the textile and fashion industry lost $70 million in sales as a result of the dollar's weakness. This year the loss is expected to nearly double to $130m. Textile and clothing exports fell by about 10% in dollar terms to $1.02b. in 2007. During the same period, sales to the domestic market rose 17% in dollar terms, to $1.38b.