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The budget will be used to sponsor textile-manufacturers who want to do research and development (R&D) to enhance their products and services.

THTI executive director Virat Tandaechanurat said the institute encouraged local manufacturers to move into functional textiles, which can generate more value.

"Local manufacturers must not avoid this activity if they want to maintain their market in today's fierce competition. We are determined to make them more aware of the importance of R&D by providing financial support through this project," he said.

The project has won tax incentives from the Board of Investment (BoI), which has promoted the establishment of R&D in Thailand aggressively in the past few years.

The BoI's senior executive investment adviser Hirunya Suchinai said it would give full support to local textile-makers who became active in improving their competitiveness with innovative creations.

In the first eight months it has approved tax incentives to 12 applications in businesses with a combined investment of Bt1 billion. The approved projects cover R&D on plant seeds, animal feed, auto parts and innovative textiles owned by the Innovation Textile Research Company.

Meanwhile, THTI is also concentrating on creating textile clusters to strengthen competitiveness among small and medium-sized textile-makers.

"The establishment of the Phetchkasem Textile Cluster was very successful, reducing each company's production costs by 5-15 per cent as well as encouraging them to work together to make 'hydrotech' clothes," Hirunya said.

THTI has in cooperation with the Department of Industrial Promotion continued the second phase of this cluster. This phase will gather more than 30 textile-manufacturers on Phetchkasem Road and encourage them to create at least 10 different innovative products and improve the quality of their existing products.