A British Business in Australia before World War II: J. & P. Coats, Cotton Thread Manufacturers
Authors:   Asia-Europe Perspective Association, Kim Dong-Woon 
Published: June 2018

This paper explores the ways in which, J. & P. Coats, the leading Brutish multinational enterprise manufacturing cotton thread, did business in Asia in general and in Australia in particular before the end of the Second World War in 1945.
The paper consists of five chapters. Chapter Ⅰ (Introduction) introduces how J. &. P. Coats had grown into a representative British multinational company by the outbreak of the First World War in 1914 and, thereafter, how the company had pursued more actively the policies of both export and foreign direct investments. Also, this chapter suggests how this paper could contribute to the study of the British business in Australia and, thus, Asia. Chapter Ⅱ (Australia’s major economic indicators) first suggests a brief history of Australia after the 18th century when the country became a British colony and then discusses the main factors for the demand for cotton thread such as the size of population, the level of GDP per capita and the development of the cotton industry. Chapter Ⅲ (the export of Coats’s cotton thread to Australia) and Chapter Ⅳ (the gradual involvement of J. & P. Coats in Australia) make an in-depth analysis, on the basis of the company’s internal documents, of how the company became involved in the Australian market. through both export and foreign direct investments. And chapter Ⅴ (Conclusions) concludes the preceding discussions.
Main points of the paper are as follows. Founded in Paisley, Scotland, in 1830, J. & P. Coats began to pay special attention to export to USA, the then emerging economy and, in 1869, implemented its first foreign direct investment to acquire local production facilities. Since then, the British company had pioneered in foreign direct investments for local production and sales and, by 1914, grew to become one of the most important British multinationals by carrying out a total of 53 fresh investments in 15 countries in Europe, North America, Latin America, and Asia. For the Asian markets, J. & P. Coats had exported its cotton thread to some 19 countries or regions from Near East to Far East. Of them, four countries-Australia, China, British India, and Japan-stood up and, together with two other countries, had one by one received fresh foreign direct investments, 10 in total, from J. & P. Coats between 1904 and 1942: three investments for Japan and one each for her colonies, Korean and Manchukuo; one for Australia; one for China; and, three for British India. Australia was a British colony from the late 18th century to the early 20th century and her population, though relatively small in size, largely consisted of British immigrants and their descendents. To that extent, the country served as a safe and easy market for Coats’s cotton thread, which began to be exported from Britain in the middle of the 19th century. Australia remained the largest destination of British made Coats’s thread until the 1920s, far surpassing the most populated countries such as China, British India, and Japan.
While pursuing the policy of export, J. & P. Coats also attempted to began local production and, in the late 1920s and early 1930s, every effort had been made to secure manufacturing facilities either by building a mill or by acquiring a local company. However, the idea of local production had been abandoned by the early 1930s, presumably because of the relatively small size of population and the underdevelopment of cotton and related industries in Australia. Instead, J. & P. Coats decided to strengthen the earlier policy of export by establishing a selling subsidiary solely in charge of Australia, called Central Agency (Australia) Ltd., in Britain. Furthermore, the British company opened depots in the major Australia cities such as Sydney in New South Wales, Melbourne in Victoria, Adelaide in South Australia, and Perth in Western Australia.