Irish Linen Faces Global Competition

Guinness, shamrock and Roy Kean may be famous Irish exports, but this season's high street reveals another specialty - linen. Irish linen contributes three per cent of the world's linen, employing approx. 3000 people in the industry. Great Britain alone buys GBP 85m worth of Irish linen annually, and the estimated annual turnover of The Irish Linen Guild is GBP 150m. Purists insist that linen has to be woven in Ireland to be worthy of the Irish linen tag, with the high quality attributed to the clarity of the water.

Like most of the UK textile industry, linen has been massively affected by cheap imports from China. Eastern Europe also produces linen, and Italy is proving competitive because of currency rates and its reputation for design. Against its competitors, Northern Ireland is highly disadvantaged. Northern Ireland Textiles Association director Linda MacHugh says that electricity costs can be as much as 40 per cent higher than that of the UK mainland, and insurance costs have spiralled due to the growing litigious culture. The region's producers also face the introduction of industrial rates from 2005. Mark Windeband, marketing and sales director of Ulster Weavers, says: 'These external factors hit the bottom line and it is a disadvantage we have against China.'

Although high labour costs affect Ireland's competitiveness, it is not the only factor. The actual yarn is three-quarters of the cost of producing a meter of cloth, so only a relatively small part of the cost base is affected by where it is made. Upping production is one way to combat price deflation.

Innovation is another key tool for Irish linen to maintain a point of difference. Ulster Weavers, Northern Ireland's larger linen producer, has developed a new easy-care fabric for M&S adding fifty or sixty pence to a meter. The top end of the market where high quality linen can command up to GBP 15 per meter increasingly demands these innovations.

With UK retailers bringing back production to Europe from Asia, Irish-sourced linen can also cut lead times. Ulster operates a three-week turnaround for M&S to get fabric to Morocco for manufacture. The equivalent from China is about ten weeks. M&S have noted that sales of linen are up 100 per cent on last year.