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    Reaching Out to Garment Manufacturers


    © International Trade Centre, International Trade Forum - Issue 4/2003

    Textiles and Clothing: What Happens After 2005? This article inForum's trade talks issue (2/2003) interested many readers. With quotas ending in 2005, many producers - and even countries - risk disappearing as garment suppliers in an oversupplied market. As a follow-up, we share a sample of your reactions, highlight ITC's recommendations for action and outline the technical assistance it can offer.

    Among the expected changes: the market will move from a sellers' to a buyers' market; prices will fall; buyers will reduce the number of sources; small firms will compete against large companies which enjoy economies of scale; and all firms will face new trade trends and additional market requirements, such as ecolabels and ethical trade requirements.

    To meet new market demands, garment manufacturers will need a comprehensive approach to meet buyers' requirements: vertical capabilities; supply chain management; full service from design to logistics; and low landed costs.

    ITC recommends

    • Adopting a sector/country strategy rather than an individual company strategy - major buyers will source from a country only if there is a critical mass.
    • Learning more about competitors - under the quota system there was a guaranteed market, but from 2005 competitors will come from everywhere.
    • Diversifying sourcing and developing supply management skills - fabric and accessory sourcing amount to two-thirds of the costs of a garment up to the free-on-board (FOB) point, and buyers ask manufacturers to take over this service.
    • Diversifying products and markets - in mass markets there is high competition, whereas in niche markets and in larger developing countries, new market opportunities emerge.
    • Introducing e-applications, as major buyers are linking the value chain electronically.
    Need help? In response to so many requests for assistance, ITC has created a tailored technical assistance programme. To help countries develop a sectoral strategy, it provides assistance in value chain analysis. To better understand competitors, it has developed a computerized benchmarking tool, "The Fit". To get information on sourcing and improve supply management skills, ITC has tailored trade information services for sourcing requirements and is adapting existing training materials for garment manufacturers. To understand changing markets and adapt products accordingly, it is upgrading its computerized, market analysis "P-Maps" for the garment sector. To introduce information technology into garment manufacturing, ITC is creating a Business Guide on E-applications in the Textiles and Clothing Sector, which will be published in 2004.

    Among those who have let us know that they reprinted this article: the Sri Lanka Financial Times Sunday edition, which featured it on its first page, on the eve of the Cancún Ministerial Conference; the Sri Lanka Daily Times; the Financial Express, Dhaka, Bangladesh; Entrepreneur magazine of the SME Development Authority of Pakistan; the Indian Ministry of Textiles web site home page; Dialog Textil, the only Romanian magazine for the textiles industry; the Mauritius Industry Focus, published by the country's Export Processing Zones Development Authority; and Apparel Online Magazine of India.

    We continue to encourage you to reprint this article or feature it on your web site.

    Matthias Knappe (knappe@intracen.org) is ITC Senior Market Development Officer responsible for the textiles and clothing sector.