During the 1980s, the cotton-textile-apparel sector grew considerably. Mauritian exports focused on cut, make and trim operations, which were further processed in East Asia, before being exported to the United States of America.
During the 1990s, expansion of the cotton-textile-apparel sector resulted in almost full employment. However, at the end of the 1990s, the local textile industry faced declining production, exports and employment and closure of several companies. Many Mauritian enterprises moved their production sites to Madagascar, where labour costs were lower. Higher costs of labour compared with Asian competitors have led to the erosion of price competitiveness of Mauritian textile and apparel exports.
Higher labour productivity, technology upgrading and greater focus on higher segments of the apparel value chain are crucial to compete with Asian competitors. The Mauritian textile sector has to focus on product differentiation, as the local industry can no longer compete on prices. In order to build on competitive advantage in product differentiation, local companies have to invest in new information and communication technologies, production management systems, marketing facilities and market research. Further, companies need to establish a fully integrated and efficient logistics management system. Moreover, focusing on industrial clusters could facilitate the production of higher value added products, the provision of better quality and lead-time reduction. Future strategies should focus on innovative practices, value creation, regional trade promotion and strategic alliances.
Erosion of Price Competitiveness