I am sorry but I will not answer the part of your question relating to textiles. Mr. Penner will.
As for apparel manufacturers, those who are left are the ones who found a niche. To me, this is very clear. You're talking about covering fabrics. Mr. Penner will deal with that. In the apparel sector, those who make clothing with a Canadian content produce in small lots and have a very diversified stock. They use streamlined and just-in-time production techniques. If we're still in business, it's because we did that. However, the challenges are still the same. We managed to survive since 1979 and this is quite an achievement. We were able to change and to open up the largest world market to 40% of our production. I'm very proud of what has been achieved.
However, for a number of years, we've had the Perfect Storm. From 1979 to 2001, things weren't that bad, but we now have the Perfect Storm: there's the value of the Canadian dollar, energy costs, a flood of foreign imports and competition in our largest market, the United States. There was tremendous modernization in our industry but whatever we do doesn't seem to be enough.
I don't know if you will find my answer satisfactory. Yes, it's now a niche market. Yes, we are specializing in small orders. Yes, we have a very large assortment of products. This is why we can do business with medium-sized customers in the US who cannot buy from China because their minimum salary is higher.
If I may, Mr. Chairman, I would say I always look on the bright side of things. Presently in China – and I really hope my crystal ball is working – 600 million Chinese are rising to the middle class. They want consumer goods, they want to get dressed the American or the European way. These 600 million Chinese represent a market twice as large as the US market that we worked so hard to penetrate. If they start spending, it will take the whole Chinese manufacturing capacity – at least I hope so – to meet domestic needs. Canada has a population of 35 million but not a single Chinese manufacturer will be selling anything here. This is true but it will take another four or five years to happen.
I'm trying to look at the bright side of the emergence of a rich China. Here, with our small niche, we will perhaps be left alone because we will be insignificant. This has already started for some major Canadian buyers who are having trouble finding suppliers because their orders are not as large as our Chinese competitor would like them to be. This is only an aside. Maybe it's hopeful thinking.