Tentac's overseas business was introduced by Senken Shinbun newspaper.
Cultivating domestic demand for sustainable materials in China
Vietnam expanding sales of transfer marks
Tentac's overseas business, which primarily revolves around its brand tags and packaging, is set to shift its focus towards developing the domestic demand market in China and catering to the needs of local production for local consumption in Vietnam. In terms of product offerings, Tentac aims to expand its sales of sustainable materials to meet the growing demand in China while also facilitating the transfer of marks in Vietnam. Additionally, the company is committed to promote cost reductions and shorter delivery times.
In China, Tentac has experienced robust sales to Japanese SPAs (specialty store retailers) and GMSs (general merchandise stores), with expectations of a slight sales increase in 2011. Ceremonial wear sales have been strong due to the resumption of events, and an uptick in uniform-related renewals has also contributed to this growth. There has been a notable rise in inquiries regarding sustainable materials, partially driven by the expanded range of recycled film products that maintain transparency and strength. Business negotiations for IC tags have also been brisk.
However, the timing of orders has been somewhat erratic, influenced by factors such as the earlier launch of store shelves due to climate change and the utilization of off-peak periods at production plants. Additionally, apparel companies are anticipated to reassess their materials in response to foreign exchange rate fluctuations, China's economic slowdown and soaring raw material prices, therefore the company's primary focus will be on reducing delivery times and cutting costs.
Apparel consumption is growing in Ho Chi Minh City, Vietnam, as the middle class expands.
(Courtesy of Tentac)
To achieve these goals, Tentac plans to consider and implement several measures, including (1) reviewing each production process and streamlining operations without compromising quality, (2) multi-skilling employees, (3) introducing automated equipment, (4) consolidating production facilities, and (5) outsourcing inefficient processes. Moreover, the two bases in China will collaborate to develop products that leverage the strengths of each base.
However, the company faces intensifying competition in catering to domestic demand as sewing bases for Japanese, European, and U.S. brands gradually shift away from China. While the company acknowledges the challenge of price competition, it remains committed to consistently appealing to customers by prioritizing environmentally friendly products, incorporating feedback from sewing factories into product development and reintroducing products with a positive track record.
Meanwhile, Tentac's operations in Vietnam continue to thrive. The company observes that the transfer of production from China remains active, with more companies relocating to the northern and central regions of Vietnam and these areas are particularly concentrated in the production of working and school uniforms. Tentac has also strengthened its local sales efforts, resulting in a steady increase in inquiries.
In addition to Thailand, where rising labor costs are a concern, other countries such as Cambodia, Bangladesh, and others within the Association of Southeast Asian Nations (ASEAN) are experiencing growth in their supplies from Vietnam. Conversely, sales to the Philippines, where there are limited advantages in exporting materials, and to Myanmar, where some Japanese companies are withdrawing due to the unstable situation, have been declining.
Tentac's Vietnam business will continue to focus on meeting customer needs. The company aims to fulfill local production requirements by manufacturing in Vietnam, and it has commenced transferring some of its operations from Japan and other overseas locations to Vietnam. Additionally, the company actively adopts new equipment to reduce costs by optimizing labor in the manufacturing process. Tentac also plans to intensify its sales promotion efforts for "transfer marks" produced at the Hanoi factory, with the goal of expanding its market share by emphasizing the company's strengths to customers.