Blog: Leonie BarriePakistan floods hit industry hard

Leonie Barrie | 16 August 2010

The most serious floods in Pakistan for decades have not only caused a humanitarian crisis but they've also hit the country's textile and clothing industry hard. Millions of hectares of cotton crops have been washed away and the local infrastructure, roads and bridges destroyed - in turn causing problems for raw material supplies and garment shipments.

Pakistan is the world's fourth-biggest cotton grower, and cotton traders believe that 30% of the country's cotton crop has been ruined, with the damage hitting around 1.5m bales (255m tons), worth around PKR50bn (US$560m). Worryingly, the disaster is still evolving, with continued rainfall, more areas at high risk of flooding, and hundreds of thousands of people on the move.

Comparisons are being drawn with Haiti, whose textile and clothing industry was destroyed by another natural disaster after a powerful earthquake struck in January, killing 300,000 people and destroying countless factories and jobs in the process.

The good news is that in just six months production has neared pre-earthquake levels, and the country last week opened its first job training centre for garment workers. The new Haiti Apparel Center (HAC) will train more than 2,000 people a year to help meet the industry's need for skilled workers. However, industry executives have also told just-style that reconstruction efforts remain slow and pose a threat to future competition.

For suppliers in India, the industry has been rocked by yet another scandal over excessive overtime at two garment factories making clothing for retailers including Gap, Next and Marks & Spencer. All three have launched investigations after a newspaper found workers were sacked for refusing to toil extra hours or unpaid for the overtime they put in.

Meanwhile, sourcing giant Li & Fung continues to shore up its business, with two acquisitions in the last week aimed at boosting its footwear capabilities as well as expanding its business in China to offset the sluggish economic recovery in the US and Europe. The plans to buy US footwear maker Jimlar Corporation, and distribution company Integrated Distribution Services Group, came as the company posted a 55% hike in first-half profit and a 12% rise in revenues.

The apparel industry is also edging closer to an eco-index that will allow companies to assess the environmental impacts of individual products along their supply chain. More than 200 outdoor businesses are already involved in the industry-wide scheme, which last week unveiled a beta version of its Eco Index web-based software tool.


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