Neither the Department of Trade, the Department of Industry nor HM Customs & Excise are aware of any complaints from the textile industry about the procedures for obtaining relief but they have said that they would be willing to consider any other suggestions for simplification with a view to taking them up with Brussels, as necessary. The Minister is being kept informed.
11 Therefore, given a satisfactory solution to the previous points, the industry should quickly enter into discussions with the major retailers/importers to determine the possibility of co- operation and participation in UK sourcing.
12 In the event that the outcome of such discussions is favourable, it will then become necessary to provide permanent representation based in Hong Kong since the attack must be two-pronged and it would be unwise to rely solely upon discussions and negotiations with the customer in the UK. In this connection, it is interesting to note that Mr R F Audsley has offered the suggestion that the Tootal trading operation in Hong Kong could be developed to give a specialised service to industry.
13 The members of the mission would, therefore, strongly recommend that industry should immediately make the required effort whilst recognising that success is unlikely to be immediate and that a lot of effort and hard work will be required to achieve a satisfactory result by end 1981 or early 1982.
14 Finally, it was identified that there is one area where the Hong Kong garment manufacturing industry sees a requirement from the British woollen industry, which is in the supply of yarns for the knitwear trade. This was a new opportunity which was identified by the mission, although it was not a primary objective of this particular exercise, and needs to be followed up.
15 Currently 29 million garments per annum are being produced from woollen yarns, and the switch from acrylic yarn to wool is continuing, with a 24 per cent increase this year. Hong Kong is losing acrylics to lower cost neighbours; and in fully fashioned knitwear, trading up means using more expensive yarn, whereas in the jeans or shirt business this may only mean adding more stitching.
16 Local spinning mills can only meet 30 per cent of the yarn requirement, and the bulk is supplied by Korea, Taiwan and Japan. As almost 40 per cent of exports go to the EEC, with 16 per cent to the United Kingdom, the manufacturers are aware of the political requirement to increase the amount of yarn bought from Britain, and the increase in woollen consumption creates room for this.
17 The feeling is that our yarn tends to have too high an oil content, as compared to Far Eastern suppliers; but in general they need to know much more about what we can make. The UK yarn manufacturers will need to give the market much more attention, with visits by sales staff and the appointment of good agents with a knowledge of knitwear.
housefagan.
L REGAN
December 1980
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