Mauritius textile sector could survive competition

PORT LOUIS, Mar 24 (Reuters) Mauritius' ailing textiles sector will survive global trade liberalisation if it continues to modernise and tap into higher value niche markets, trade experts said on Friday.

The Indian Ocean island's once-thriving textile industry has been contracting since 2002, a process hastened by the end of global textile quotas in January last year, which has brought increased competition from low-cost producers like China.

The textile industry decline has slowed Mauritius economic growth to an average annual rate of 3.3 per cent since 2002, compared with 6 per cent over the last two decades.

Hundreds of factories have closed with more than 25,000 job losses while surviving firms face debts of more than 0 million.

''I believe the Mauritian textiles industry will survive this bad period,'' said a senior trade analyst from the World Trade Organisation (WTO), who was participating in a seminar to help Mauritius adapt to the new global trade environment.

''They are doing everything they should be doing -- restructuring, modernising and producing more for niche markets, moving them away from direct competition with China,'' he said.

Trade experts said Mauritius was ahead in adapting compared with other textile producing countries in Africa.

Turnover in the textiles and clothing manufacturing sector, Mauritius' main foreign revenue earner, shrank by 13 per cent in 2005, compared with 6.8 per cent the previous year.

But authorities predict a contraction of four per cent and the number of job losses to be less in 2006.

''The mood is actually bullish with nearly five billion rupees investment in the pipeline as some major textile and clothing enterprises are embarking on expansion programmes,'' Commerce Minister, Rajesh Jeetah said on Thursday.

The government says it will need funding to help support the industry and is relying on an ''aid for trade'' initiative for developing countries agreed by WTO members at the Hong Kong meeting in December last year.

The details of how the initiative will be implemented are still being worked out and discussions will begin later this year on how much funds will be made available and what the method and allocation of disbursements will be.

REUTERS SD PM1944