Top-spin to the textile story: David Bowen visits a new Japanese plant in Britain that could turn the tide

LAST Wednesday, a vast pounds 50m Japanese-owned factory was opened near Mansfield, Nottinghamshire. Built in the shadow of a slag heap, in an area hit hard by the pit closures, it has created 200 jobs already, and will generate another 200 by the end of next year.

While this is encouraging, and a nice change from the normal replacement of coal mines with shopping malls or theme parks, this plant is more than just another of the growing British colony of Japanese-owned factories. It has special significance because it is a textile plant, and could mark a turning point in an industry in decline for most of the past 100 years.

Industry experts can think of only one other green-field textile factory (a bedlinen plant in Northumberland) that has been built in living memory. Closures, by contrast, have come by the hundred. The message from Mansfield is that there are still businessmen who believe it possible to make textiles and money at the same time in the industrialised world.

This factory belongs to Toray, one of the biggest textile groups in the world, and makes ultra-fine textured polyester fabric, mainly for blouses and skirts. It will export half its pounds 80m turnover and, as all such fabric had to be imported before, there should be a net benefit of at least pounds 50m to the UK's balance of trade (the yarn will still be imported from Japan).

Katsunosuke Maeda, president of Toray, said the factory had been built for two reasons. First, Japan had become too expensive as a manufacturing base for all but the most technically advanced products. Second, Toray has a close relationship with Marks and Spencer, and wanted to supply it with sophisticated new designs at short notice. Both reasons suggest there could be more investment in British textiles, observers say. Where one Japanese company goes, others tend to follow: Sony moved into south Wales in the early 1970s; now almost every Japanese television manufacturer has a factory in Britain. Nissan started up in Sunderland in 1986; Toyota and Honda followed last year.

But the second point is more powerful. Until recently, only producers of high fashion items could avoid being slavishly dependent on cost, and particularly on the roller-coaster of the currency markets: because competition comes mainly from dollar-based Asian countries, the dollar-pound rate was particularly important. When strong sterling and a consumer slump coincided, as in the early 1980s and in 1990-92, the textile industry was hit harder than any other. Output fell 40 per cent in the first recession, and 20 per cent in the second.

In between, as sterling sank towards parity with the dollar, there was talk of a great revival, and textile companies spent pounds 4bn on new equipment designed to reduce costs and increase flexibility. Although retailers, led by Marks and Spencer, were already insisting on quicker response, much of the investment was made in products that were at root commodities. Courtaulds Textiles had 23 mills, many with state-of-the-art technology, by the late Eighties; then sterling started to appreciate, and the UK factories could not compete with those in Asia. Now the company has just three spinning mills left.

Colin Purvis, secretary-general of the Apparel, Knitting and Textiles Alliance, believes Toray has avoided making the same mistake. 'It is pointing the way,' he said. 'There are clearly advantages in being close to the customer, giving rapid service and having very innovative fabrics.' Toray has great expertise in producing flawless lightweight material, and has done all it can to minimise its wage bill. The shop-floor workers earn an average of pounds 13,000 to pounds 14,000 a year (good for the textile industry, if low by coal-mining standards), but there are only 50 in the factory at any one time. Much of the cavernous plant, full of vast banks of spindles, looms and other equipment that generate mile after mile of shimmering yarn and billowing cloth, can be operated with the lights off, saving energy costs.

Although the textile and clothing industry is still one of the biggest employers in the country, with 380,000 people working in it, it has closed so much capacity that the standard of the remaining factories is relatively good; few of them make commodity products, moreover.

'We've probably gone further in rationalisation than most of the other textile industries in Europe,' Mr Purvis said. A report in the mid-1980s by the National Institute of Economic and Social Research compared British womenswear factories very unfavourably with German ones. Richard Gilmore, director corporate development at Coats Viyella, says this is now out of date. 'I wouldn't like to be making clothing in Germany at the moment,' he said.

The two giants, Courtaulds Textiles and Coats Viyella, have done much to improve standards. Coats Viyella's clothing operations have borrowed from Japanese car factories by scrapping batch production, whereby one person would make collars, one would make cuffs, and so on, and replacing it with teams responsible for complete garments. Although it is impossible to automate garment-making to any great degree, this does enable the company to produce in very small batches and to switch designs at short notice. This gives it a critical advantage over Far Eastern manufacturers.

At the other end of the industry, the sweatshops of the East End of London and the Midlands are in a good position to flourish in the quick-response climate because they are light on their feet. Mr Purvis's organisation hopes to bring the little and the large together to swap expertise. He points out that the success of the Italian garment industry owes much to the link between giants such as Benetton and its thousands of tiny suppliers.

(Photographs and graph omitted)