Fashion, textile industry need to transform from OEM to OBM business model — MIDA
03 Nov 2020
The country’s fashion, textile and apparel industry needs to transform its business model from Original Equipment Manufacturer (OEM) to Original Brand Manufacturer (OBM) to remain relevant, creative and competitive amid the Covid-19 pandemic and its impact on businesses.
Malaysian Investment Development Authority (MIDA) chief executive officer Datuk Azman Mahmud said good sustainable branding would assume a crucial role in enhancing Malaysia’s image to the world and accelerating the country’s export value with the rapid changes in the fashion industry.
“As we forge through the pandemic, the businesses should re-evaluate its business models and strategies to encourage or to emerge as a game changers in the industry,” he said during his welcoming remarks at the virtual DesignDevt and Innovation 2020 conference, today.
As of June 2020, he said more than 1,800 textiles and apparels projects have been implemented and were in production in Malaysia, with an investment of RM22 billion that created over 240,000 jobs.
“However, our textile industry is still known by many to be a labour-intensive industry and highly dependent on contract manufacturing to offset the operation cost,” he said, adding that the government through MIDA is intensifying efforts to spur stakeholders to adopt higher value-added processes and technologies.
Hence, he said more efforts need to be done collectively as an industry to increase focus on automation, talent, skills and innovation to truly achieve tangible outcomes.
Meanwhile, Federation of Malaysian Fashion, Textile & Apparel (FMFTA) chairman Datuk Seri Tan Thian Poh said the OEM business model relies heavily on cheap labour, knowing that the industry does not have them at the moment .
“We also know that foreign labour will be phased out progressively in the medium to long-term and automation is the only way to replace foreign workers,” he noted.
Therefore, Tan urged the government to provide special automation grants or soft loans for the fashion, textile and apparel businesses, and set aside the foreign workers levy paid by the manufacturers to be utilised as automation funds.
Themed “Creating a Sustainable Fashion Brand”, the one-day conference is aimed at creating awareness on the importance of design, development and innovation in developing a sustainable fashion brand, as well as re-shoring the competitive challenges as the game changer.