Regional Performance Remains Sharply Divided

Across global regions, the picture was far from uniform. South Asia emerged as the strongest performer, registering a positive current business conditions reading of +13 percentage points, while Africa followed at +9 percentage points — making these two the only regions to report positive readings in the ITMF textile survey.

In contrast, North and Central America recorded the weakest regional reading at -56 percentage points. South America followed at -44 percentage points, and Europe posted a reading of -36 percentage points, underscoring the breadth of challenges facing manufacturers across developed and emerging economies alike.

Value Chain Performance Varies Considerably

Performance across the textile value chain also differed meaningfully by segment. Fibre producers stood out as the only segment to report positive current business conditions, with a reading of +67 percentage points. Spinners, however, recorded -33 percentage points, while finishers reported -42 percentage points. Textile machinery manufacturers registered -35 percentage points, which the survey attributed to companies’ continuing reluctance to commit to capital expenditure — a reflection of broader caution prevailing through the global textile market.

Six-Month Outlook Improves, Though Confidence Is Uneven

Forward-looking sentiment was more encouraging. The global expectations indicator for the next six months reached +19 percentage points. However, 46% of respondents expected no change in conditions, indicating that improved sentiment has not yet translated into broadly stronger trading signals on the ground.

Africa was the most optimistic region with an expectations reading of +59 percentage points, while East Asia at -20 percentage points and South-East Asia at -6 percentage points were the only regions to retain a negative outlook for the period ahead. Among industry segments, fibre producers again led with an expectations balance of +67 percentage points.

Order Intake, Demand Concerns, and Inflationary Pressures

Order intake improved only marginally to -24 percentage points, remaining in negative territory. South America reported a record low of -69 percentage points in this category, pointing to particularly difficult demand conditions in the region.

Weak demand remained the concern most frequently cited by respondents in the ITMF survey, with 56% of participants flagging it as a primary issue. High raw-material prices were cited by 42% of respondents, and energy costs were flagged by 41%. The federation noted that rising costs and inflation could limit the scope for a meaningful near-term recovery across the global textile market.

The survey also linked renewed inflationary pressure specifically to the war in Iran. Meanwhile, concern over geopolitics fell to 36% of respondents, down from 46% recorded in the July survey.

US Tariffs Prompt Varied Industry Responses

Companies have responded to US tariffs in a range of ways. Nearly three in ten respondents — 29% — said they were actively diversifying into markets outside the United States. A further 23% were investing in automation and efficiency measures, while the same proportion reported absorbing higher costs directly.

Order Backlogs, Capacity Utilisation, and Inventory Levels

Order backlogs shortened slightly to 2.3 months, remaining within the 2.0-to-2.5-month range that has been observed since mid-2023. The ITMF noted this reflects a prevailing tendency among companies to operate primarily against confirmed orders rather than building longer production pipelines.

Capacity utilisation increased to 71%, rising above the 68% low recorded in November 2023. Even so, it remained well below the levels of more than 80% reported prior to late 2022 — a gap that continues to weigh on the broader outlook for the global textile market.

Order cancellations held steady at approximately 2% on average, though finishers recorded increases for three consecutive survey periods. Inventory levels were generally lean, with South-East Asia reporting a record low. The Americas were an exception: relatively high inventories combined with weak incoming orders pointed to a build-up of unsold stock, according to the ITMF textile survey findings.

The government’s proposed package is wide-ranging. It includes cheaper financing for machinery upgrades, renewed tax holidays, an integrated production zone linking upstream and downstream operations, adjustments to import rules, VAT changes, and greater flexibility in hiring for seasonal orders. Broad as the package is, industry stakeholders are asking a more pointed question: does it go far enough to address the structural weaknesses that have long undermined the sector’s ability to compete?

The Machinery Problem and the Limits of Cheaper Financing

Productivity remains one of the most cited challenges within the Indonesia textile industry. Industry associations have long flagged ageing equipment as a significant handicap — old machinery raises operating costs, reduces efficiency, and limits a manufacturer’s capacity to fulfil increasingly demanding global orders.

The Indonesian Fibre and Filament Yarn Producers Association, known as APSyFI, which represents the upstream segment of the industry, has identified machinery restructuring as a measure with the potential to deliver near-term productivity gains. However, the association has also been clear that cheaper financing must translate into genuine modernisation. Simply providing financial relief to companies whose underlying business models remain uncompetitive would fall short of the sector’s actual needs.

Upstream Vulnerabilities and the Import Dependence Challenge

APSyFI has also made the case that machinery upgrades alone cannot resolve the sector’s deeper structural problems. The harder challenge, it argues, lies upstream. Indonesia’s textile supply chain remains heavily reliant on imported fibre, yarn, and other intermediate materials, creating a structural imbalance that has significant consequences for domestic production economics.

Government data highlight the scale of this imbalance. In 2025, textile raw-material imports were reported at approximately $8.4 billion, compared with exports of around $3.1 billion. Meanwhile, finished clothing exports reached roughly $8.7 billion, against imports of approximately $690 million. Indonesia, in other words, is a net importer at the upstream and intermediate levels even as its garment segment continues to export competitively.

For upstream producers, the concern is clear. If imported inputs become easier and cheaper to access while domestic producers continue to face high energy and operating costs, investment in local production capacity becomes a less attractive proposition. APSyFI has therefore argued that liberalising imports cannot be the sole response to the downstream industry’s raw-material requirements. The association has called for stronger domestic demand for locally produced inputs and deeper integration between upstream and downstream manufacturers.

APSyFI has also warned that low upstream utilisation — combined with the influx of imports and weak domestic demand — is compounding pressure on local production. The longer-term concern is that Indonesia could become increasingly dependent on imported inputs while remaining concentrated in lower-value, labour-intensive stages of the textile supply chain, which is a risk directly tied to the success or failure of the Indonesia textile revival effort.

Tax Holidays: A Supporting Role, Not a Centrepiece

Many industry stakeholders caution against allowing tax incentives to become the defining feature of the government’s rescue strategy. Fiscal incentives can help reduce investment costs, but they cannot compensate for expensive energy, logistics bottlenecks, weak domestic supply chains, or competition from low-cost imports entering the market.

APSyFI has previously noted that investment-based fiscal incentives have not been sufficient on their own to generate the scale of investment and capacity expansion needed to rebuild the sector. Tax holidays, the association argues, have a legitimate role to play — but they should support a broader competitiveness strategy rather than serve as a substitute for one.

Labour Costs, Productivity, and the Competitiveness Gap

Labour costs add another dimension to the challenge. Employers have raised concerns that wages in labour-intensive industries are rising faster than productivity, with recent minimum wage increases reported at roughly 5 to 7 per cent. If this gap continues, manufacturers face mounting pressure on margins and their ability to compete for international orders.

The argument from within the industry is not simply a call for lower wages. The position, rather, is that higher labour costs need to be matched by higher productivity — driven by technology adoption, automation, efficiency improvements, and better production systems. For an industry that competes on the global stage, productivity levels matter as much as the absolute level of wages when assessing textile sector competitiveness.

The Proposed State-Owned Textile Company: Catalyst or Complication?

The government’s consideration of a state-owned textile company has drawn a mixed response. APSyFI has welcomed the concept as a potential catalyst for investment and deeper industrial integration. At the same time, some economists and industry observers have raised concerns that a state-owned producer could emerge as a direct competitor to private manufacturers if public capital is deployed simply to add production capacity to an already pressured market.

The distinction, stakeholders note, is an important one. State capital could deliver greater value if directed toward helping viable factories modernise, financing technology upgrades, strengthening raw-material supply, developing shared industrial infrastructure, or attracting private-sector investment. The view among some stakeholders is that a state-backed entity can add value by helping to build a stronger industrial ecosystem — but would offer less benefit if it simply becomes another producer in a crowded market.

Recovery Signals Amid Uneven Progress

The Indonesia textile industry is not in uniform decline. Government data show that the textile and textile-products sector has returned to growth, with recent expansion reported at around 5.6 per cent, and factory utilisation has also improved. Export demand and new investment are showing signs of picking up.

However, industry observers suggest that these headline improvements mask significant variation across the sector. Newer, more competitive producers appear to be faring considerably better than older factories that continue to grapple with higher costs and outdated equipment — exactly the segment the government’s measures are most intended to support.

What Success Should Look Like

Many within the industry argue that the success of the government’s textile push should ultimately be judged by whether it materially improves the economics of production. Competitive manufacturers need the ability to modernise equipment, secure reliable and cost-effective inputs, raise productivity, and compete on both quality and price.

The objective, as stakeholders see it, should be sustained industrial upgrading — not repeated cycles of short-term relief. Tax incentives, cheaper financing, and revised import rules can each play a constructive role. But the longer-term goal, industry voices say, is to give viable producers a credible and durable path back to competitiveness — which is precisely the structural reset that the Indonesia textile revival effort, at its core, appears to be seeking.

The Hornwood Textile closure has sent a wave of concern through the local community, where generations of residents have built their livelihoods around the plant.

Community Leaders React to the Closure

Jamie Caudle, Chair of the Anson County Board of Commissioners, described the news as a shock to residents and officials alike.

“There are several people in the community who’ve retired or spent their whole lives working there,” Caudle said. “It’s going to be a change to the area and to the citizens.”

Hornwood, which manufactures various fabrics including athletic wear under the label Game Time Fabrics, cited its “financial position” as the reason it can no longer continue in business — a brief but telling explanation offered through an internal memo. Caudle noted that the company had held contracts with larger name-brand sporting attire companies, though he declined to identify them specifically.

“We used to be a stronghold for textiles in this county, and we’ve seen them dwindle over the years,” Caudle said. “We are actually pretty fortunate that Hornwood held on as long as they did.”

Efforts to obtain a comment directly from Hornwood leadership — in person, by phone, and via email — were unsuccessful. The company stated it had no comment on the closure.

Anson County’s Textile Legacy and What Comes Next

The Hornwood Textile closure marks yet another chapter in the long decline of textile manufacturing across Anson County. Despite repeated outreach, county officials remain focused on what the shuttered facility could attract next.

“Our whole focus is to recruit something back into that facility. What that looks like, I can’t tell you right now,” Caudle said.

Even amid the loss, Caudle pointed to signs of broader economic activity in the county.

“We’ve got a rock quarry, a slaughterhouse opening up. You’ve got another knitting mill that announced six to eight months ago, so there are several job opportunities in this county where employers will be looking to hire,” he said. “Employers are coming in, so there are opportunities here. We’re always wanting more, but there are opportunities here.”

Statement from Anson County Chamber of Commerce

Sandy Cox, President and CEO of the Anson County Chamber of Commerce, acknowledged the weight of the Hornwood Textile closure while expressing measured optimism about what may follow.

“The loss of a major employer is significant, and our first concern is for the employees and families who are affected,” Cox stated. “But I also believe we need to look ahead. Anson County has an opportunity to take a facility like this and turn a difficult situation into something positive for our community.”

Cox noted that any incoming business could potentially employ even more people, offer higher-paying jobs, and bring fresh investment into the area.

“The next company that comes into that location could potentially employ even more people, provide higher-paying jobs, and bring new investment into Anson County. We have a workforce, we have a location, and we have a community that is ready for new opportunities,” she said.

“This is certainly a change for Anson County, but I don’t believe it has to define our future,” Cox added. “Our Leadership Anson visits Hornwood each year and the tour is fascinating. We are grateful to Hornwood for the many years of service to our community and they will be sorely missed.”

Workforce Support Resources Available to Displaced Workers

For the roughly 150 workers facing unemployment as a result of the Anson County jobs loss, several local resources are available to assist with the transition.

The NC Works Career Center in Wadesboro provides free internet access and hands-on assistance with resumes and cover letters, along with interview preparation workshops.

South Piedmont Community College, located in Polkton, offers both short- and long-term educational programs aligned with local workforce needs. Its Human Resource Development program is specifically designed to help displaced employees build practical skills — including communication, problem-solving, and computer basics — while also supporting job search strategies.

Participants in the program can earn credentials such as the National Career Readiness Certificate or the Working Smart Credential, which are recognized by employers as indicators of job readiness. Additionally, the college’s SP Career Connector serves as a one-stop resource offering career services to students, alumni, and employers.

Tuition at South Piedmont is waived for students who are unemployed, underemployed, or have received formal notice of a layoff — a provision directly applicable to many of those affected by the Lilesville manufacturing shutdown.

The Hornwood Textile closure, with the facility expected to cease operations fully within eight to ten weeks, represents a significant shift for Anson County’s workforce landscape. County leaders, community organizations, and local institutions are working in concert to ensure that displaced workers have access to the support and opportunities they need going forward.

Against this backdrop, members of the Swedish Textile Machinery Association (TMAS) have had a notably productive 2026, with new facilities, product introductions, and technologies addressing automation, productivity, recycling, and more resource-efficient textile manufacturing.

Expanding Capacity and Opening New Facilities

Following a record-breaking 2025 and a series of bolt-on acquisitions, ACG Kinna has inaugurated a 1,000-square-metre expansion at its headquarters in Skene. The move comes in direct response to growing demand for the company’s complete textile and finished product line automation services.

Imogo, a pioneer in industrial spray dyeing, has opened a new showroom, test centre, and production hub in Kinnahult. The company introduced its first Dye-Max prototype in 2019 and completed its first industrial-scale installation in 2021. The newly opened facility now enables brands and manufacturers to move from laboratory development to validated commercial production within a single location.

Imogo’s Spray Application Technology

The centre features Imogo’s patented spray application technology, combining the Mini-Max laboratory system with a fully operational industrial-scale Dye-Max line. The line supports fabrics up to 2.4 metres wide and carries a production capacity of approximately 3 tons per day. Using as little as 0.7 litres of dye liquor per kilogram of fabric, Dye-Max delivers significant reductions in water consumption, energy use, chemical input, and wastewater output compared with conventional dyeing methods.

The latest TMAS member, ReSpin, will also see its technology installed at Sweden’s first industrial spinning mill dedicated to recycled textile fibres. The company has developed and patented RespinJenny, a mechanical recycling technology that transforms textile waste into fibres suitable for new yarn production — a development that places textile recycling at the centre of Swedish textile technology progress.

New Technologies Addressing Productivity, Automation, and Efficiency

Alongside these investments, TMAS members have introduced several new technologies during 2026, all focused on productivity, automation, and more resource-efficient textile manufacturing.

BW Converting’s Baldwin TexCoat® G4 and Corona Pure

BW Converting’s Baldwin TexCoat® G4 precision spray finishing system uses precision spray application technology to apply chemistry with pinpoint accuracy to one or both sides of a fabric. By replacing conventional bath-based methods with a non-contact spray process, the system reduces wet pick-up by up to 50%, significantly lowering water consumption and the energy required for drying while supporting a more consistent finishing process.

BW Converting will also showcase Corona Pure, its surface treatment technology designed to improve adhesion and enhance fabric performance. As mills transition away from C6 fluorocarbon-based water repellents towards fluorocarbon-free C0 chemistries, Corona Pure improves fabric absorbency and helps these formulations deliver stronger water-repellent performance — reflecting the company’s continued focus on helping mills adapt to changing chemistry requirements while maintaining product quality.

Automatex’s P12-PB Automatic Lock Stitch Quilting Unit

Automatex has developed the P12-PB Automatic Lock Stitch Quilting Unit, which doubles productivity compared with previous systems. The unit delivers continuous programmable quilting with reduced manual intervention in the production of bedding and padded home textiles, representing a clear step forward in textile automation.

Eton Systems’ AI-Powered Garment Sorting

Eton Systems has demonstrated its aUPS module for the rapid sorting of used garments. Built on the company’s established UPS material handling system and ETONingenious Factory 4.0 software, the system uses artificial intelligence to grade individual garments by colour, size, and style — and, where possible, by manufacturer. It can also identify damage, recommend possible repairs, and calculate a potential resale price, providing an automated approach to sorting garments for reuse.

TMAS Members Heading to ITMA Asia 2026 in Shanghai

The pace of activity across TMAS is set to carry through to the close of the year, with Vandewiele Sweden and Eltex both confirmed to showcase their latest technologies at ITMA Asia 2026 in Shanghai, running from 20 to 24 November.

Eltex at ITMA Asia 2026

Eltex will present its latest ACT-MULTI system at ITMA Asia 2026, bringing individual yarn tension monitoring and automatic control to the heat-setting process. The system helps manufacturers maintain consistent processing conditions across every yarn position. Heat-setting is a critical stage in the production of synthetic and blended yarns, stabilising yarn structures and locking in twist and bulk to ensure predictable performance during subsequent weaving, knitting, tufting, dyeing, and finishing processes.

Vandewiele Sweden at ITMA Asia 2026

Vandewiele Sweden will highlight its long-standing expertise in weft feeding and tension control at ITMA Asia 2026. By ensuring repeatable and predictable yarn delivery at increasingly high loom speeds, the company’s technologies enable weaving mills to operate closer to their technical limits while maintaining consistent fabric quality. The company’s continued development of data-ready weft feeders also reflects the growing digitalisation of textile manufacturing, embedding intelligence where it can deliver measurable operational benefits without adding unnecessary complexity to demanding production environments.

TMAS Secretary General’s Perspective

Therese Premler-Andersson, secretary general of TMAS — which, as a member of Cematex, is closely involved with the ITMA exhibition platform for the international textile machinery industry — commented on the year’s progress.

“This has been a very positive year for TMAS members so far, with investment in new facilities, new technologies reaching the market and further progress in areas ranging from automation and digitalisation to more resource-efficient production,” she said. “These developments demonstrate the breadth of Swedish textile technology and the very practical way our members are responding to the changing requirements of manufacturers worldwide. We expect that momentum to continue throughout the remainder of 2026 and into next year.”

She also addressed the broader competitive environment: “There is no question that the competitive landscape is changing. AI, geopolitical uncertainty, regulation and increasing competition from China will all influence our industry in the years ahead. For Swedish textile technology companies, the answer will be to keep pushing innovation, specialist know-how and customer value.”

The Machinery Problem at the Core

The most telling indicator of this capacity crisis is the utilization rate of existing equipment. In six out of every ten textile plants across the country, the majority of machinery remains idle. These machines are physically present on factory floors but are generating no economic value. This stark disconnect between installed capacity and actual production underscores a troubling reality: the Argentina textile industry’s theoretical output potential far exceeds the effective demand from either domestic or export markets. Alternatively, operational costs and a severe shortage of orders have rendered running this equipment financially unviable.

The machinery utilization gap has become one of the defining metrics of the sector’s current condition. Rather than being a reflection of planned maintenance or scheduled upgrades, idle equipment now signals a prolonged and deepening operational paralysis.

Shifting Production Logic

The operational consequences of this production output reduction are reshaping how facilities function at a fundamental level. Rather than expanding shift hours or maximizing line loads, plants are moving toward consolidation. Sections of production complexes are being placed into reserve, while logistics operations and human resources are being restructured to align with actual activity levels rather than projected capacities.

For companies across the textile manufacturing sector, this translates into halted production cycles, a push to identify new sales channels, revisions to product assortments, and efforts to lower unit costs through automation of the remaining active lines. The industry is no longer thinking in terms of growth — it is thinking in terms of survival and cost containment.

Investment Plans vs. Market Realities

There is now a visible and widening gap between announced investment plans and the realities on the ground. With a significant portion of the machinery fleet sitting in standby mode, the conversation has shifted entirely away from capacity expansion. The focus is now on maintaining the viability of existing production loops.

In this environment, industrial stagnation has redefined what efficiency means for the sector. It is no longer measured by the volume of installed technology or the scale of production infrastructure. Instead, efficiency is now judged by the ability to generate sufficient cash flow to sustain the approximately 40% of equipment that remains operational.

Conservation Mode Takes Hold

The Argentina textile industry has entered what can best be described as a conservation phase. Minimizing fixed costs has taken clear precedence over increasing output volumes. The sector is not in a position of managed decline with a clear recovery path in sight — it is in active preservation mode, where every operational decision is driven by the need to keep remaining productive capacity viable for as long as possible.

This structural industrial stagnation reflects a broader challenge: the gap between what the industry was built to produce and what the current market will absorb has grown too large to bridge through conventional adjustments alone. Whether through deeper automation, market diversification, or structural reform, the path forward will require more than incremental responses to what is now a systemic issue within textile manufacturing in Argentina.

A Sector Still Recovering From Its Own Peak

Export data tells a telling story. Sri Lanka apparel exports reached approximately $5.59 billion in 2022, before declining to $4.54 billion in 2023 and recovering partially to $4.76 billion in 2024. By 2025, exports had climbed back to around $5.02 billion, marking a return to pre-decline levels — but still well below the 2022 high. To reach the $8 billion target, the industry would need to grow its export earnings by roughly 60 per cent from current levels within the next five years.

What makes this challenge even more pronounced is the fact that the $8 billion target is not entirely new. Sri Lanka’s apparel industry had previously set the same goal — with a 2025 deadline. That target was not met, with exports remaining around the $5 billion mark throughout. The renewed 2030 ambition therefore brings with it a pointed question: what will be done differently this time around?

The Real Question Is Structural, Not Just Numerical

The arithmetic of the textile export growth target is relatively simple: add approximately $3 billion to annual export revenues over five years. The more complex question is where and how that growth will materialise. Industry stakeholders and analysts suggest that the path forward is less about broadening the geographical footprint of garment manufacturing and more about deepening the value chain.

Sri Lanka does have precedent for successfully deploying coordinated industrial policy in this sector. The 200 Garment Factories Programme, launched during the 1990s, effectively decentralised garment manufacturing beyond the capital Colombo, channelled investment into rural areas and widened the geographic base of the industry considerably. However, the nature of today’s challenge is substantially different.

Reducing Dependence on Imported Inputs

One of the most persistent structural constraints facing the apparel industry is its heavy reliance on imported raw materials — particularly fabric. Industry estimates place annual textile and apparel input imports at around $2 billion. Expanding domestic production of synthetic yarn, fabrics, trims, and packaging would strengthen local supply chains and increase domestic value addition.

That said, import substitution on its own would not be enough to close a $3 billion gap. The broader consensus among industry stakeholders is that meaningful progress requires combining greater domestic value addition with sustained growth in overall Sri Lanka apparel exports.

Productivity, Technology and Higher-Value Products

Industry leaders are placing increasing emphasis on automation, robotics, artificial intelligence, and digital production systems as tools for improving manufacturing efficiency and competitiveness. Alongside these productivity-focused measures, there is a growing push to move into higher-value market segments — including technical textiles, performance wear, and specialised products — where Sri Lankan manufacturers can compete on capability and craftsmanship rather than primarily on cost.

This shift toward higher-value production is seen as a key component of the apparel industry 2030 strategy, enabling manufacturers to generate greater revenue per unit and reduce vulnerability to cost-based competition from lower-wage economies.

Market Access as a Growth Lever

Domestic value addition and productivity improvements will only deliver results if Sri Lanka can maintain and expand its access to major export markets. Preferential market access remains a critical factor in the industry’s global competitiveness.

Recent changes to the United Kingdom’s Developing Countries Trading Scheme are one example of how policy shifts in importing countries can directly affect Sri Lankan manufacturers. The revised rules of origin under the scheme could potentially give Sri Lankan apparel exporters greater flexibility in sourcing inputs, while still retaining preferential access to the UK market — an important consideration as the industry seeks to diversify and grow.

JAAF’s Policy Calls

The Joint Apparel Association Forum (JAAF) has reportedly called for a comprehensive policy response to support the industry’s ambitions. This includes stronger investment incentives for upstream textile manufacturing, improved preferential market access, and better coordination among the institutions involved in the development of the textile and apparel sector. These calls reflect a broader recognition that reaching the $8 billion mark will require concerted effort across government, industry, and trade policy.

What Needs to Happen

The path to $8 billion in Sri Lanka apparel exports by 2030 is defined by several interconnected priorities. Industry stakeholders argue that the country must deepen its domestic supply chain, raise manufacturing productivity, increase value addition at each stage of production, develop higher-value product categories, and secure expanded opportunities in both existing and new markets.

Each of these elements individually contributes to apparel industry 2030 readiness. Together, they form the foundation of what would need to be a coordinated and sustained push to add $3 billion to annual export earnings — within a five-year window that has already begun.

Whether the industry can deliver on the 2030 target where it fell short of the 2025 one will depend on whether the structural reforms, investment incentives, and market strategies now being discussed translate into measurable action on the ground.

Vietnam textile exports now reach 137 countries and territories worldwide, with the United States alone accounting for approximately 40 per cent of total overseas shipments. Alongside the US market, the European Union, the Republic of Korea, Japan, China, and ASEAN nations continue to serve as well-established export destinations. Regions such as Africa and the Middle East have also emerged as promising corridors for market diversification, offering the industry additional avenues for growth beyond its traditional strongholds.

Flexible Strategies and Enterprise Adaptability at the Core

Vietnam Textile and Apparel Association (VITAS) chairman Vu Duc Giang credited the sector’s performance to a combination of flexible strategies, enterprise adaptability, and meaningful advances in both green and digital transformation. These factors, he noted, have collectively shaped the industry’s ability to navigate an increasingly complex and demanding global trade environment.

According to Giang, green and digital transformation have become essential pillars of the sector’s development roadmap for 2026–2030, extending further into a longer-term vision reaching 2035. Enterprises across the garment industry are progressively integrating automation, robotics, and artificial intelligence into both production processes and management systems. Notably, investment in infrastructure, artificial intelligence, and robotics now accounts for roughly 65 to 68 per cent of total investment at many enterprises within the sector — a clear indication of how seriously the industry is embracing technological modernisation.

Sustainability Investments Align With Vietnam’s Net-Zero Goals

Beyond digital upgrades, manufacturers have also been directing investment toward sustainability-focused initiatives. Rooftop solar power installations, upgraded wastewater treatment systems, and an increased reliance on environmentally friendly materials are among the measures being adopted across the garment industry. These steps are closely aligned with Vietnam’s national commitment to achieving net-zero emissions by 2050.

Giang emphasized the importance of supportive local governance in sustaining this momentum. He called on local authorities to develop specialised industrial parks equipped with centralised wastewater treatment facilities that meet international standards. Such infrastructure, he indicated, would play a vital role in attracting investment in textile and dyeing operations while also addressing persistent bottlenecks in the domestic supply of raw materials and accessories — a challenge that continues to affect the broader value chain.

Broader Value-Chain Integration Supporting Export Resilience

The sector’s recent progress reflects not only broader market access and technology adoption, but also the strengthening of value-chain linkages within Vietnam. Market diversification, combined with green transformation and digital upgrades, has enabled Vietnam textile exports to remain competitive despite shifting demand patterns globally. As the industry works toward its 2026 export target, the interplay between enterprise-level innovation and policy-level infrastructure development will remain central to sustaining that competitive edge in international markets.

The financing follows Spinnova’s September announcement of a non-binding agreement to acquire all shares in Tearfil. The proposed transaction has an initial purchase valuation of €500,000, with the consideration expected to be paid through cash and Spinnova shares. Completion is currently targeted for the first quarter of 2027.

Tearfil, a longstanding Spinnova development partner, is undergoing a court-supervised restructuring process in Portugal. The bridge financing is intended to support its working capital and ongoing operations during the restructuring.

The Spinnova Tearfil acquisition is aimed at bringing yarn development and spinning capabilities closer to Spinnova’s operations. The company expects this could give it greater control over converting SPINNOVA fibre into yarn and textile applications while supporting its commercialisation efforts.

“Tearfil has been an important partner for Spinnova, playing a key role in advancing SPINNOVA® fibre toward commercial applications,” said Janne Poranen, CEO of Spinnova. “Bringing these capabilities into Spinnova would strengthen our ability to support broader adoption of SPINNOVA® fibre and advance the commercial scaling of our technology”.

The Spinnova Tearfil acquisition remains conditional on due diligence, corporate approvals, the completion of Tearfil’s restructuring process and final transaction documentation.

The development comes as Spinnova also moves toward a proposed U.S. listing. The company is seeking a Nasdaq Capital Market listing alongside its existing Nasdaq First North Growth Market Finland listing, with completion currently expected in the fourth quarter of 2026, subject to regulatory and market conditions.

The company’s Management Board approved the equity offering with the consent of its Supervisory Board, following authorisation granted at an Extraordinary General Meeting on August 25, 2026. The transaction will be conducted through a cash capital increase with subscription rights for existing shareholders.

The offering has been fully underwritten by the participating banks based on commitments from Lenzing’s indirect majority shareholders, B&C Group and Suzano S.A., as well as Oberbank AG. Lenzing expects gross proceeds of approximately €300 million, providing additional liquidity and strengthening its capital structure.

New shares and subscription terms

Lenzing plans to issue 34,756,362 new no-par-value bearer shares, carrying dividend rights from January 1, 2026. The subscription price has been set at €8.65 per share.

Based on Lenzing’s September 30 closing price, the subscription price represents a 42.50% discount to the theoretical ex-rights price.

Existing shareholders will receive one subscription right for each share held at 11:59 p.m. CEST on October 1. Under the 10-for-9 subscription ratio, holders of 10 existing shares, or the equivalent number of rights, can subscribe for nine newly issued shares.

Unused rights will not qualify for compensation. However, the rights can be transferred and traded on the auction market of the Official Market of the Vienna Stock Exchange during the designated trading period.

Any shares left after the subscription process may subsequently be placed with selected institutional and other qualified investors through an international private placement. The price in that placement will not be below the €8.65 subscription price.

Major shareholders commit to participation

The Lenzing capital increase has received significant backing from its existing shareholders. B&C Group and Suzano currently indirectly control approximately 52.25% of Lenzing’s share capital and have committed to subscribe for 18,159,291 new shares in proportion to their existing holdings, subject to customary conditions.

As part of the arrangement, Suzano will transfer subscription rights covering 1,757,754 new shares to a B&C Group company, which has committed to exercise those rights.

Suzano is expected to invest approximately €22.5 million in the capital increase. Exercise of the syndicate’s subscription rights would generate around €157.1 million in gross proceeds.

Oberbank, which owns approximately 3.87% of Lenzing, has separately committed to subscribe for 1,344,168 new shares, representing approximately €11.6 million.

Following completion, B&C Group is expected to indirectly hold about 39.64% of Lenzing, while Suzano’s indirect stake would stand at approximately 12.60%.

Both the shareholder syndicate and Oberbank have agreed to six-month lock-up arrangements, subject to customary exceptions.

Subscription period begins in October

The Lenzing capital increase remains subject to publication of a prospectus approved by the Austrian Financial Market Authority.

The subscription period is expected to run from October 6 through October 20, 2026, with Erste Group Bank AG acting as subscription agent. Subscription rights are expected to trade from October 6 to October 14 under ISIN AT0000A3XCR6.

Lenzing shares are expected to trade ex-rights from October 2.

Subject to registration of the capital increase with the Austrian Commercial Register, delivery and settlement of the new shares and their trading under Lenzing’s existing ISIN AT0000644505 on the Prime Market of the Vienna Stock Exchange are expected to begin on October 23.

The company has reserved the right to terminate the offering.

A Sector Struggling to Stay Afloat

The Nigerian textile sector has been battered by a combination of forces over the years. Cheap imports, particularly from Asia, have undercut locally manufactured goods, making it increasingly difficult for domestic producers to remain competitive on price. At the same time, the cost of doing business in Nigeria remains stubbornly high, driven by unreliable electricity supply, rising fuel prices, and the ongoing challenge of accessing affordable financing.

Many textile manufacturing plants that were operational a few decades ago have since closed their gates. Workers who once formed the backbone of a thriving industrial workforce have been left without livelihoods, and the ripple effects have extended into cotton farming communities that depended on the sector for demand. The collapse of textile manufacturing in Nigeria has therefore not been an isolated industrial story — it has been a social and economic one as well.

The Cotton Connection

Central to any meaningful discussion of textile industry revival in Nigeria is the condition of its cotton farming base. Nigeria was once a significant producer of cotton, and the agricultural backbone existed to supply local mills. However, as mills closed and demand from the domestic industry dried up, cotton farmers lost a critical market. Many shifted to other crops, and the infrastructure supporting cotton production in Nigeria deteriorated significantly.

Reviving the textile sector without simultaneously addressing the cotton value chain would be an incomplete exercise. The two are deeply interlinked, and policies aimed at boosting one without the other are unlikely to deliver sustainable outcomes. Restoring confidence among cotton farmers and incentivising renewed cultivation requires not just market assurances but also access to improved seedlings, extension services, and reliable off-take agreements from manufacturers.

Smuggling and the Import Challenge

One of the most persistently cited threats to the Nigeria textile sector is the unchecked flow of smuggled and underpriced foreign fabrics into the market. Imported textiles, some of which enter through unofficial channels and bypass import duties, flood local markets at prices that domestic producers simply cannot match given their cost structures. This has created an uneven playing field that continues to undermine investment confidence in local textile manufacturing.

Industry stakeholders have repeatedly called on government authorities to enforce existing trade regulations more rigorously and to close loopholes that allow contraband textiles to enter the Nigerian market. Without stronger border controls and more effective customs enforcement, even the most well-intentioned industrial revival efforts risk being undermined at the market level.

Infrastructure as a Barrier to Growth

The wider infrastructure deficit in Nigeria poses a serious constraint to industrial policy Nigeria ambitions in the textile space. Power supply remains one of the most significant cost drivers for textile manufacturers, many of whom are forced to run diesel generators for extended periods to keep production lines moving. This alone adds substantially to the cost of Nigerian-made textiles, reducing their competitiveness against imported alternatives.

Transportation infrastructure also plays a role. Moving raw cotton from farming regions to processing facilities, and finished goods from factories to retail markets, involves logistical challenges that add time and cost to the supply chain. Investment in roads, rail links, and energy infrastructure is therefore not peripheral to textile industry revival — it is foundational to it.

Financing and the Investment Gap

Access to capital remains another major obstacle. Many existing textile operators and potential new entrants cite the high cost of borrowing in Nigeria as a significant deterrent to investment. Interest rates in Nigeria have historically been elevated, and the terms on which commercial credit is available are often incompatible with the long investment cycles that characterise heavy manufacturing sectors like textiles.

There have been calls for targeted intervention funds and development finance initiatives specifically structured for the Nigeria textile sector, with concessionary lending rates and longer repayment periods. Such instruments, advocates argue, would help bridge the investment gap and encourage both existing players to retool and new investors to enter the space. The success of similar targeted financing mechanisms in other manufacturing sub-sectors provides some basis for optimism, though the details of implementation remain critical.

The Role of Policy and Government Action

At the heart of any credible textile industry revival strategy lies the question of policy commitment and consistency. Operators in the sector have pointed out that policy uncertainty has historically made long-term planning difficult. When trade policies shift, when incentives are introduced and later withdrawn, and when enforcement of protective measures is inconsistent, it erodes investor confidence and discourages the kind of capital-intensive commitments that textile manufacturing requires.

Stable and predictable industrial policy Nigeria frameworks, backed by clear enforcement mechanisms, are seen as prerequisites for meaningful sectoral recovery. This includes not only the regulation of imports and the protection of local producers from unfair competition, but also a coherent strategy for supporting the entire value chain — from cotton farming through spinning, weaving, finishing, and retail.

Government procurement policies could also play a role. Mandating that certain public sector purchases — uniforms for schools, hospitals, the military, and civil services — be sourced from domestically produced textiles would create a guaranteed off-take for local manufacturers and help stabilise demand while the broader market recovery takes hold.

Skills and Human Capital

The decline of the Nigeria textile sector over the decades has also resulted in a significant erosion of technical skills within the workforce. As factories closed and experienced workers aged out of the labour market, the pool of skilled textile technicians, machine operators, and production managers has thinned. Any serious revival effort would need to account for this skills gap through investment in vocational training, apprenticeships, and partnerships with technical institutions.

Building human capital is not a short-term fix, but it is an indispensable part of putting the sector back on a competitive footing. Without workers who have the technical knowledge to operate modern textile manufacturing equipment and maintain production quality, even well-funded factories will struggle to deliver consistent output.

What Revival Could Mean

A genuine recovery of Nigeria’s textile industry carries significant potential across multiple dimensions. Re-establishing domestic textile manufacturing capacity would create employment, particularly for young Nigerians entering the labour market. It would stimulate demand for locally grown cotton, providing income for rural farming communities. It would also reduce Nigeria’s dependence on imported fabrics and the foreign exchange outflows that accompany such imports.

The conditions for textile industry revival are complex and interlinked, and no single intervention is likely to be sufficient on its own. Progress will require coordinated action across trade policy, infrastructure investment, agricultural support, financing mechanisms, and skills development. What remains clear is that the foundation for a competitive textile industry in Nigeria exists — the question is whether the enabling environment can be built and sustained to allow that foundation to support meaningful growth once again.