0003233
G.F. 323
CONFIDENTIAL
- 5-
21.
Mr. Jordan wondered whether British finishers and converters would be pleased to see imports of sheeting from Hong Kong curbed. As Hong Kong prices were apparently so attractive (although he noted a Textile Council survey had considered Hong Kong prices to be as high as 90% of British prices), he imagined there would be a good market both in Britain and abroad for Hong Kong woven sheets finished in Britain. Mr. Stewart replied that opportunities for re-exports were severely limited as finishing processes were generally insufficient to confer British origin on fabrics woven clsewhere. He added that as far as the domestic market was concerned competition from Hong Kong was unfair to the extent that at whatever prices British manufacturers were able to offer their goods, Hong bong could always go lower. He even felt that this disparity would be enhanced as the Hong Kong industry improved its productivity.
22.
Unless a global ceiling for imports of wide sheeting was imposed
Since there was little future for this sector of the British industry. complaints had first been lodged with the B.C.T. in 1966, Lancashire's share of the domestic market had fallen from 72% to 56%. In the circumstances, H.M.G. had to ask major suppliers to assist in remedying the situation. The first approach was made to Portugal in March 1967 and Fortugal had limited exports of wide sheeting and sheets to 10.7 million square yards for the twelve months starting 1st March 1967; this represented a cutback of approximately 40% on a previous performance of about 17 million square yards. This agreement had been renewed for a further year in March 1968, and no growth had been allowed. Although Portugal had not complained about other suppliers benefitting from the restraint, Britain was under a moral obligation not to allow other
Both India and exporting countries to profit at Portugal's expense. Hong Kong had in fact secured a larger share of the market on account of
that restraint the limitation on Portugal. Now the problem was so acute requests to India and Hong Kong could no longer be delayed.
23.
Mr. Jordan said he would be interested to know whether U.K. importers bought from Hong Kong for reasons of price, or whether it was simply that the domestic industry was unable to satisfy demand. No doubt the answer to this question lay in the percentage of production capacity being utilised in the wide sheeting sector of the British industry.
The
24.
Mr. Stewart did not have the figures at hand, but believed that present production was running at some 86% of capacity. Capacity- utilisation statistics were not the only relevant consideration. fact of the matter was that unless British manufacturers could be guaranteed a reasonable share of the market they would not be able to re-equip and to expand their capacity. The unions would not agree to work three shifts without re-equipment.
25.
Mr. Jordan gathered that this reluctance to re-equip did not extend to all British firms. He understood that Courtaulds had recently installed 120 new wide looms capable of producing about 5 million square yards per year. No doubt they would be pleased to have a guaranteed
share in the market.
26.
Mr. Stewart said he could see nothing wrong in a company wishing to sell its products on the home market. However, any suggestion that the present British request had been engineered by a particular firm would be quite incorrect. He knew of no re-equipping by Courtaulds although Viyolla had recently installed 166 new looms and gone over to a seven-day week with three shifts a day. The problems of the British wide sheeting industry as a whole dated back to 1966, and in all probability manufacturers who were now re-equipping were simply taking
/advantage
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CONFIDENTIAL
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