2005 was a pivotal year for the Tunisian garment industry as Chinese export success took hold in European markets and the Tunisian government launched a series of measures to help the textile and clothing industry become more competitive. Jozef De Coster looks at their progress so far.

For the past few years there has been much talk between the Tunisian government and industry about the need to modernise businesses, focus on small production runs and quick delivery, and shift from CMT to co-production (including the sourcing of fabrics and accessories) and full package (including the development of own-brand collections).

But it wasn't until 2005, alarmed by Chinese export success in European markets, that many Tunisian companies took action, supported by a new three-year textile and garment programme launched by the government.

Industry model
The Tunisian garment industry model is almost totally based on offshore CMT in the context of European outward processing trade, and has served the nation well, from the early 70s until today.

Despite the post-quota pressures of Chinese competition, textiles and garment exports represented 33% of total Tunisian exports in 2005, and employed more than 200,000 people or nearly half of Tunisia's industrial workforce.

No other industrial sector in Tunisia has attracted so much foreign capital. Around 1,000 of the country's 2,100 textile and garment enterprises are fully or partly owned by foreign groups.

Apart from Coats, Marzotto, Miroglio and Swift/Sitex there are few foreign investors in the relatively small textile segment, but they abound in the much larger garment sector.

Appearing in the 20 top Tunisian garment exporters in 2005 are companies like Benetton Tunisia (the sector's number one exporter), the Belgian jeans manufacturers Demco and JBG, the French lingerie manufacturer Chantuni (a subsidiary of Chantelle) and the British group Lee Cooper.

In 2005, Tunisia lost its position as the fourth largest clothing supplier to the EU (after China, Turkey, Romania) to Bangladesh (number 4) and India (number 5). The European safeguard measures against China were unable to prevent Tunisia's total garment exports falling by 4.2% to 183.9m pieces.

Recent trade statistics reveal that even the sector's top export products - jeans, lingerie and workwear - are losing ground. During the first four months of 2006, the value of jeans exports decreased by 19.5%, workwear fell by 17.8%, and lingerie exports dropped by 1.7%.

Competitive measures
On 31 March 2006, the Tunisian Government embarked on a series of measures aimed at making the textile and clothing industry more competitive. These included more investments in education and training, financial help for the transition from CMT to full package, and the acceleration of some strategic public investments.

Among the strategic investments which are underway, three are worth particular mention:

• The new textile technology park in Monastir, where 170 companies and a number of supporting research centres and institutes could create 12,500 direct jobs.

• The new industrial area of El Fejja, where half of the available 100 hectares is designated for textile processing and finishing activities. Five European companies have allegedly shown interest in investing in finishing activities, an underdeveloped area in Tunisia.

• The future Mediterranean Fashion Institute which is due to open in Tunis in November 2006 and could give an enormous boost to Tunisian efforts to shift from CMT to full package. The Fashion Institute's mission, function and financing are outlined in an EU-sponsored report presented last month by Jean-François Limantour of the French consulting company Texaas. However, without efficient public/private cooperation, the Institute would be unable to start or survive.

Find a new balance
The Tunisian garment industry has to reinvent itself. It must find a new balance between its traditional focus on the EU-markets - four EU countries, France, Italy, Germany, Belgium, currently absorb 83% of Tunisian garment exports - and globalisation. It must redefine its role in European outward processing trade.

Without giving up its preferential status as an EU Euro-Mediterranean partner, Tunisia should enlarge its access to competitively priced fabrics and accessories, as is already the case for Turkish materials thanks to an agreement signed in July 2005.

The move to more fashionable, higher added value products 'designed in Tunisia,' which in 2005 resulted in increasing average export prices (in Euros) for city pants (+12.9%), jeans (+11.1%), lingerie (+10.5%), workwear (+2%), coats and jackets should definitely be continued. 

By Jozef De Coster.