Syria is looking to build on its already extensive textile sector in an effort to become an increasingly global player in raw materials and processed products.
However, Syria faces numerous difficulties both at home and abroad to lift its cotton production and processed materials output and quality, with massive investments needed to bring them up to international standards and make them competitive in the cut-throat world market.
Syria’s textile and apparel sector accounts for 30% of the country’s industrial employment. While figures for employment levels in the primary production of the main raw material, cotton, are seasonal, they do represent a sizeable proportion of the 25% of those engaged in agriculture.
The government has been pouring money into the cotton and processed materials sectors, improving irrigation for primary producers and spending on new plants to enhance milling, weaving and apparel production.
These efforts have met with some success, with the production of unprocessed cotton seed breaking the one million ton mark, giving 350,000 tons of cotton lint for processing, with the number of ready-made garments turned out topping 55 million, up from 35 million in 2000.
However, downstream industries still suffer from a lack of investment, with local spinning and weaving facilities only able to process 150,000 tons, the balance available for export. This lack of processing capacity has prompted the government to cut back on planting for the coming season, reducing seed cotton production to 900,000 tons for the 2007 harvest.
Gloves come off
The cotton sector has long been given a high level of government protection, with the importation of raw cotton, yarn and fabrics banned except in special cases. At the end of 2005, under international pressure, Damascus agreed to allow imports of cotton-based clothing, though with a near prohibitive 47.5% tariff. Over the past few years, there have been accusations that Syria has been dumping both processed textile products and cotton onto the global market at below cost in order to increase sales and support the industry at home.
Given that the government looks upon the cotton and textile industries as being of strategic importance to the country, the sectors have seen fewer developments in the economic reform program, with most elements, barring the ready to wear segment, still dominated by the state.
However, this too may be set to change. There have been a number of reports in the state-owned media highlighting losses and the drain on the budget. Similar reports have in the past flagged reforms in other sectors of the economy, meaning there could be a shake-up on the way for the textile industry.
The drive by Damascus to modernize and expand the sector, however, may be too late, given that most of the brakes have been taken off China’s massive apparel juggernaut. Clothing and textile producers around the world have been feeling the pressure of competition from cheap Chinese exports after the lowering of trade restrictions.
Stiff competition
Closer to home, Syria has to compete with the well-developed Turkish and Egyptian clothing and fabric production sectors, both of which have built up extensive links in existing markets in Europe and the US, and have modernized their facilities to meet the most up to date trends. Both the growing strength of China in the world’s markets and competition in the country’s neighborhood may explain the reluctance of overseas investors to put money into Syria’s textile industry.
Even with the concerted efforts of the state, Syria managed to boost its export revenue from yarn and cloth by only $2 million in 2005, bringing in a total of $96 million for the year.
However, according to Jamal al-Omar, the director-general of the Syrian Textile Industries’ Establishment, domestic sales showed a significant increase, coming in at $385 million, a 14.5% improvement on the previous year’s figures.
More significantly, al-Omar said that the industry as a whole had managed to turn a profit this year, for the first time in its history, though he added that further support would be required to allow it to compete in overseas markets.
