Dubai: The UAE may have lost its status as a garment producer, but Dubai has gained as a hub for textile imports and re-exports.
Dubai's imports of textiles and related materials grew at an average of 11 per cent per year between 2002 and 2006, while re-exports registered an average growth of 13.3 per cent during the same period, according to an Emirates Industrial Bank study.
In 2006, the emirate's textile imports were valued at Dh13.79 billion and re-exports were Dh6.87 billion, Emirates Industrial Bank said in a report.
"The share of re-exports in imports is consistently rising and currently half of the entire business is for re-exports," it said.
The share of re-exports rose from 40 per cent of total imports in 2002 to half in 2006.
In another study last year, the bank had said that local garment manufacturers were losing their meagre market share to exporters from large production centres like China, India, Pakistan and Bangla-desh.
The rising cost of doing business in the UAE was seen as taking a toll on the industry as the labour-intensive sector employs about 180 staff per establishment. Most of UAE's garment-making units are located in Ajman.
"The country's importance as a garment producer has now almost vanished," the Emirates Industrial Bank's latest study noted.
Many garment factory owners have shifted their operations to India, Egypt and Jordan since the dismantling of the textile quotas in 2005. "The UAE had more than 100 garment factories before 2003, now there are just 10 left. It is the same situation in other Gulf countries," said Bilal Alwan, sales manager of Oubari Gulf, a leading supplier of machines to the garment industry.
He said the high cost of operations and removal of quotas made it difficult for the UAE garment producers to compete in the global market.
Dubai's textile trade is expected to receive a boost when Dubai Textile City gets ready towards the end of 2007.
Imports of both fabrics and garments are mainly from South Korea, Japan, China, India, Indonesia and Thailand.
Top destinations for re-exports are Iran, Iraq, Saudi Arabia, East Africa and former Soviet Union countries.
The bank study found expansion of the local textile market has been "relatively modest" in recent years compared to growth seen in other sectors.
"Growth in domestic demand is close to the rate of population growth, so there has not been any spectacular development in the trade," it noted.
Tourist spending
The growth in tourism has not made the expected impact on shopping of clothes by visitors.
The report suggested that earlier tourists from South Asia spent more on clothes, but now the market has changed in those countries.
Liberalisation of imports and increased domestic production have provided more choices for consumers in countries like India, while "demand from Western tourists for textile products is not very high," the study pointed out.
