Overseas Bases Are Also Used for Developing Markets in U.S. & Europe
Japanese synthetic fiber producers are focusing on overseas sales of woven and knitted sportswear fabrics. Although the appreciation of the Japanese currency has decreased profitability in exports, the producers have been able to maintain or increase their export volume compared to the year before.
This is a sign that overseas sportswear brands appreciate Japanese high-function fabrics. The companies will continue to aim at expanding exports of unique Japanese high-function fabrics. At the same time, they will also strengthen foreign sales using their overseas bases with an intention of enlarging the scale of their business.
Sportswear is a field that makes full use of the functionality of synthetic fibers, and Japanese as well as foreign synthetic fiber producers position sportswear as one of their priority markets. For this reason, competition is intense among domestic and foreign companies.
Under such circumstances, important issues for Japanese synthetic fiber producers are having global sportswear megabrands use their fabrics and developing sales to new rising brands. In order to do so, Japanese producers are actively participating in overseas sports exhibitions, such as ISPO and Performance Day in Germany and Outdoor Retailer in the U.S.
At overseas exhibitions, an emphasis is placed on negotiations with current customers. Although there are differences such as some companies will have closed booths, while others will have open booths to develop new customers, what they have in common is they attach importance to overseas markets. Since it is expected that the Japanese domestic market is unlikely to grow significantly in the future, they have to look abroad, and this is the case even for sportswear fabrics.
In sportswear fabrics, a sector that is growing in Japan as well in other parts of the world is called “soft shell”. It is a product that can be worn as outerwear, or as intermediate wear replacing fleece or sweaters. It is being worn more as casual wear. Unlike “hard shell” that is made of high waterproof/moisture-permeable fabrics, etc., soft shell garments are light, have stretch, as well as windbreaking performance and water repellency. Soft shell is made with knitted fabric made of functional synthetic fibers. Unlike the general-purpose materials used for T-shirts and poloshirts, these are special-type fabrics knitted with Japanese specialty yarns and with improvements and modifications made in all processes up to dyeing. This market is said to be expanding.
A new lifestyle area that is appearing is commuter wear, and it has become a strong trend supporting sportswear materials, as high-performance sportswear materials are used. The Ministry of Supply launched by an engineer from Massachusetts Institute of Technology in 2012 is also one of the commuter wear brands. This brand uses synthetic materials for jackets, pants and shirts.
It is said that the most important factors for Japanese synthetic fiber producers to expand their exports of high-performance fabrics that make full use of their technology from yarn making, knitting to dyeing are providing an enriched line of items to global megabrands, and catering to new trends. Together with strengthening product development and sales strategies corresponding to new fields, the producers are actively participating in overseas exhibitions, and are endeavoring to obtain new customers including customers in commuter wear.
Toray FY 2019 Overseas Sales to Double Compared to FY 2016
In its sales of sportswear fabrics, Toray Industries, Inc. has hopes to nearly double its fiscal 2019 overseas sales volume including exports and external sales by overseas affiliates, as compared with fiscal 2016.
Fabric exports occupy nearly one-third of its sportswear fabric sales. Almost ninety percent of the fabrics are woven fabric, and the company is now focusing on exports of knitted fabrics, as it is targeting the growing soft shell sector including casual wear.
Since this sector requires stretch in addition to windbreaking performance and water repellency, Toray is introducing Primeflex, the unified brand for stretch materials. Primeflex is expected to expand in the future as knitted fabrics are particularly showing an upward trend.
In addition to expanding exports of high-performance fabrics that have devised ingenuity from yarn making to weaving, knitting and dyeing, Toray is strengthening high-performance sportswear materials toward lifestyle areas such as commuter wear.
According to a Toray official, there are numerous emerging apparel firms in this field, so proposals of consistent supply up to apparel are being strengthened in cooperation with Toray International, Inc. Furthermore, the company intends to take an offensive toward the middle zone, for which Korean and Taiwanese companies are good at producing fabrics, with an aim at expanding the scale of business. For this purpose, overseas production will be thoroughly used including apparel manufacturing operations in South and East Asia.
Teijin Frontier Successful Development of Global Niche Areas With Deltapeak
Sportswear fabric sales at Teijin Frontier Co., Ltd. are 40% to overseas apparel firms, indicating a higher dependence on overseas sales than Toray. The core product is Deltapeak, highly balanced woven and knitted fabrics made with special polyester textured composite yarn. Instead of general purpose applications, the company is aiming at “global niche areas” mainly with Deltapeak.
Developments are customized and undertaken in detailed ways for each customer. This is a factor for the recognition it has obtained as a supplier to sportswear megabrands amid intense competition among overseas enterprises.
Deltapeak first started as knitted fabrics and then came to be supplied as woven fabrics. It continues to evolve constantly, and developments will be continued with the use of Deltapeak technology.
Among sportswear fabrics centering on Deltapeak, knitted fabrics account for 70% of Japanese production. Conversely, overseas production at group companies such as Nantong Teijin Co., Ltd. in China and Thai Namsiri Intertex Co., Ltd. in Thailand are 70% woven fabrics. This is because the production levels from yarn processing to knitting and dyeing are extremely high and difficult for sportswear knitted fabrics, and this has been highly appreciated.
Although export profits have declined in fiscal 2016 due to the appreciation of the yen, exports of knitted fabrics, mainly Deltapeak, have been heading upward. Led by exports, the total sales volume including the domestic market is expected to increase by 5-10% over the previous fiscal year.
However, it is constantly difficult to forecast how foreign exchange rates would fluctuate. In order to maintain or expand the absolute amount of overseas sales, it is important to formulate a strategy while taking the balance of domestic and overseas production into consideration.
Direct Sales to Apparel Firms Are the Key
A common factor for sportswear fabric exports by Toray and Teijin Frontier is that business is not conducted through trading firms, but directly with apparel firms. In this way, it is possible to respond to the needs of customers in detail including areas other than product development.
Toray is endeavoring to capture foreign apparel firms through Toray International, and has an intention of strengthening the functions of Toray International’s bases in Europe and the U.S. As a result of business integration in 2012, Teijin Frontier has the combined functions of a manufacturer and a commercial corporation. This synergy is being used in the form of direct sales, and is linked to the expansion of Deltapeak.
Toyobo STC Starting the Development of European & U.S. Markets
Apart from Toray, Teijin Frontier and other synthetic fiber producers who have a high ratio of overseas apparel sales, other producers are also turning their eyes toward overseas apparel firms. Toyobo STC Co., Ltd. is one of them.
The company has been selling mainly in the Japanese domestic market or for the overseas sales of Japanese-affiliated sportswear firms, and is now moving to strengthen exports of sportswear knitted fabrics to apparel firms in Europe and the U.S. Last year, knitted fabrics were exhibited for the first time at ISPO in Germany.
The main product on exhibit was Technista 48, a pure polyester fabric that achieves outstanding stretch and kickback with a widthwise-lengthwise elongation ratio of 48%. Since this fabric is still not so well-known in Europe and the U.S., the company intends to raise its awareness by repeatedly exhibiting at shows and linking it to sales. At ISPO in February 2017, Toyobo STC present sportswear fabrics made with more characteristic Manard filament/staple fiber combined composite yarn in combination with comfort evaluation technology.