Some garment-making countries are taking an increasing share of the worlds apparel business

Some garment-making countries are taking an increasing share of the world's apparel business

2015 was a mixed bag for many garment-making countries. While some saw exports and investments increase in a critically competitive environment, others were burdened by ongoing industrial unrest, allegations of poverty wages and labour violations, sanctions and currency effects.

WINNERS

Myanmar

Economic and political reforms, as well as skills programmes and foreign investment appear to be paying off for Myanmar, with a 20% increase in the number of factories producing shoes for export every year since 2011, according to industry representatives, and a 37% hike in garment export earnings to US$2bn targeted for the 2015/16 fiscal year. In September the first minimum wage for garment workers was approved at MMK3,600 (US$3.2) per day – around $70 a month – and the country is set for big changes ahead, with the landslide victory in its first general election in 25 years by the National League for Democracy party, headed by Aung San Suu Kyi. Although generally supportive of Myanmar's new political direction and anticipated opening to foreign trade, some operators have expressed concern that cheap imports will harm the fledgling domestic industry going forward.

Ethiopia

Textile industry analysts have given Ethiopia the thumbs up as one of the best emerging sourcing hubs in Africa. Competitive labour costs and government support as well as duty-free access to the United States market for another 10 years under the African Growth and Opportunity Act (AGOA) and to the EU-market under the Everything but Arms (EBA) arrangement have given Ethiopia an edge over its competitors. Foreign investment has poured into the country. Reports claim that the world's largest integrated manufacturer of polyester, the Singapore-headquartered Indorama Corporation, is looking to set up Africa's first polyester plant in the country; while the country also has its first fully-integrated denim facility.

Kenya

Other African nations under the spotlight include Kenya, which is attracting foreign interest and investment as an emerging sourcing hub. The US Agency for International Development (USAID) has funded an East Africa Trade and Investment Hub in Nairobi, and companies such as Turkey's CherryField Sesby, Hong Kong's Li & Fung Limited, and the US-based PVH Corp are all sourcing apparel and textiles from Kenya, according to Cyrille Nabutola, CEO of Kenya's Export Processing Zones Authority. China's Jiangsu Lianfa Textile Co Ltd, meanwhile, signed an agreement this year with the Kenyan government to open a multi-million-dollar factory in Naivasha, near the Great Rift Valley.

Jordan

Meanwhile, despite the turmoil and forced migration that continues to rock the Middle East, Jordan's garment sector continues to expand, with growth forecast to reach 10% this year. The sector focuses on higher-end garments such as engineered fibres and sportswear and surged to a value of US$1.34 billion in 2015, largely on the back of the US-Jordan free trade agreement that came into force in 2001. Around 90% of garment exports are to the United States, according to the country's garment industry data.

Vietnam

With Vietnam already taking an increasing share of US business, all eyes are on the country's textile and apparel sector as a key beneficiary of the recently agreed Trans-Pacific Partnership (TPP) pact. It is also expected to benefit from the just-finalised free trade agreement (FTA) with the European Union. Textile investments have been flowing into the country, and Vietnam expects its garment and textile exports to grow on average by 11.5% per year to 2020. But questions are being asked over Vietnam's capacity to cope with the opportunities arising from both the EU FTA and its participation in the TPP.

LOSERS

Cambodia

Apart from the difficulties it has faced this year instituting a minimum wage, Cambodia has been tipped as the southeast Asian country with the greatest increase in risk of extreme heat stress over the next 30 years, according to the Heat Stress (Future Climate) Index released in October. Rising temperatures and extreme heat stress could cause significant productivity losses and the necessity for environmental adaptation of workplaces, according to the report. Cambodia's garment and footwear industry has already seen mass fainting of up to 300 workers at a time due to malnutrition and heat stress. That said, first-half garment and footwear exports reached $3bn, a rise of 12.7% on the same period last year.

Pakistan

Competition with India has seen Pakistan's textile businesses struggle to keep afloat, and the industry has warned the government there will be wide-scale closures unless it steps in to help. According to a senior government official, factories have already shut down in Faisalabad, Karachi and Lahore. Despite its beneficial status under the Generalised Scheme of Preferences (GSP+) for exports to the European Union (EU), unreliable power suppliers, power cuts and high electricity prices have hampered growth in Pakistan's textile sector.

Bangladesh

Agreement over worker safety remains deeply problematic in Bangladesh, with ongoing tensions between the Bangladesh Accord on Fire and Building Safety and the Alliance for Bangladesh Worker Safety – which represents Western brands who source apparel and textiles in the country – and the local industry. Matters came to a head in July when Atiqul Islam, the president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), resigned from the Alliance board amid growing tension over factory safety compliance. Islam had been openly critical about the Accord on worker safety, calling it a 'big problem' for the industry. Bangladesh has also said it will not let the two groups extend their inspection periods beyond the five-year term that ends in 2018.

Turkey

Turkish clothing businesses have found it a challenge to maintain margins with the euro's fall against the dollar this year. Some of Turkey's major markets in the Eurozone continue to struggle out of recession, causing a significant drop in Turkish apparel exports, which were down to US$8.2bn in the first half of the year from US$9.4bn in the same period last year with export volumes down 13.3%, according to the Istanbul Textile and Apparel Exporter Associations (ITKIB). Exports to the important Russian market were hit especially hard, dropping by 43.3% in the first half of 2015, as international sanctions over the Ukraine crisis, falling oil prices and depreciation of the rouble made an impact. Frosty relations following Turkey's shooting down of a Russian warplane near the Syrian border are unlikely to help.

United Kingdom

While a recent University of Leicester report released in February showed that apparel manufacturing in the United Kingdom increased 11% between 2008-2012, this reshoring by local brands has been criticised for workplace deficiencies. Leicester particularly has been singled out as the site of "widespread and severe violations of work and employment laws" at apparel factories, according to the researchers. Their research showed a majority of workers in the sector were earning less than half of the national minimum wage with an absence of legal contracts and serious breaches of health and safety standards.

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