The spreading of Covid-19 is having an impact on the global fiber, textile, garment and tanning industry. SI has asked some of its players their opinions about how the business is changing. Read the second part here:
Andreas Kelsch, sales director Europe, Be Ma, Turkey:
“The coronavirus has a direct impact on the industry. Be it at past trade fairs, which had significantly fewer visitors, but also in our discussions with customers. There are some customers who have problems with production in the Far East and of course some delivery bottlenecks. We are now seeing the opportunity to bring some of these customers back to Europe. For me, the advantages are obvious. Turkey has always been one of the most important locations for production in Europe.”
“The measures imposed by Italian government to contain the spread of the virus are hitting hard the retail and wholesale sector which, in the country, employs nearly four million people, accounts for about 15% of jobs and contributes about 12% of gross domestic product.
We expect the retail slowdown to gradually have an impact on the rest of the value chain–from garment making to sales of chemical auxiliaries. The new situation has forced Hub 1922 to adopt new ways of working which are obviously and largely based on technology. The upswing in all this might be the adoption of new, regular and exciting B2B digital and communication channels with customers that would actually be beneficial to the environment as well.”
“As with every major crisis, the impact will be harder on the most fragile players of the supply chain, that are bound to single markets and strongly dependent on a limited source of income.
On the other hand, the longer the pandemic lasts, together with the enforcement of restrictions, the harder will be the hit on retailer and brands (and the productive system that supports them). It would take a crystal ball to foresee the sales for next seasons, but with the slowdown of cash flow in retail the forecasts are not too optimistic.
What we think will happen–or, what we would like to happen–is ‘safe-shoring’, meaning a more thoughtful consideration of the overall quality of the supply chain build-up, which has been mainly a price-driven process so far. We believe that reliable, efficient, sustainable and stress-tested supply chains should be one of the key factors for the future success of brands.”
“As China is the fashion market’s biggest supplier, we have to expect some consequences from this virus outbreak. I think it will affect in the form of delay or air freighted the full garments or fabrics and accessories. Though its entity will depend upon the duration of this overall situation. Considering how the virus has started most hurt areas will be those which are nearer to the epicenter it has more risk. Instead on Guangzhou which is far away from the epicenter it will have less effect. I don’t think that coronavirus will change consumers’ purchasing habits despite in mainland China sales have fallen dramatically.”
“On the plea of coronavirus, brands and retailers are postponing the delivery of completed garments from the current orders which have already been produced by apparel manufacturers. Furthermore, buyers are telling the manufacturers not to cut fabrics and process other raw materials which the manufacturer has already imported or stored for the current orders placed by them.
Most factories are trying to cope with this situation but are facing production shortfalls and run the risk of having to suspend production lines. The situation gives rise to the real risk that, in order to reduce immediate costs, manufacturers may start by reducing the number of workers they employ or may start reducing the hours of their shifts. Both possibilities would result in a loss of income for the workforce that in Bangladesh count for four million workers.
So, real partnership between retailers and manufacturers is now more important than ever. The apparel industry at present needs to be supported both by the governments of the buyers and the governments of the manufacturers to withstand this unprecedented situation. International financial organizations such as World Bank, IMF, ADB should come forward, take measures and formulate policies for the survival.”
“Having tanneries set up in Europe, USA and Asia, Isa Tan Tec has minimized the impact of coronavirus outbreak thanks to its geographical diversification. In fact, Trans Asia TanTec, our group’s second tannery in Vietnam and fifth in the world started trial production a few weeks ago, it employs more than 100 employees and will reach a monthly capacity of 1.5 million sq. feet after the trial production is completed.
In the meantime Isa TanTec in China reports 100% of its headcount is in place, which enables operations to return to full capacity. In anticipation of strong demand during the peak season, the company built a large inventory position in the last quarter 2019. Isa Tan Tec continues to strictly follow various safety protocols in its facilities in order to protect personnel and ensure the stability of supply during the time of Covid-19 coronavirus.”
“With coronavirus we are forced to look at our roles differently. Do we really need to travel? We will figure out new ways to work using digital means. Do we need to diversify sourcing? We will need to look at other supply chains. We will start to develop contingency plans. Now it is sourcing gridlock and will result in unfulfilled orders and delayed shipments. Consumers will see less inventories. Will see an ever greater advantage.”
“The Lycra Company continues to be fully operational. As the only spandex/elastane producer with production in every major region of the world (North America, South America, EMEA, and Asia), all of our plants are fulfilling orders and making shipments, and there are no interruptions at this time. Also our China team is now fully back to work and we are applying the knowledge and learning from our Asia operations to our EU and American assets.
As most of our customers are temporarily working remotely, more of our business interactions will take the form of virtual meetings. We are ramping up our digital resources to facilitate such connections while also investing in digital media to drive awareness and promotion of our innovations and technologies.”
"Coronavirus is definitely having a strong impact and the industry is expecting a significant slowdown. During this period consumers, obviously, don’t consume. And this is happening throughout the world therefore with a strong repercussion.
This will lead to a reorganization in production, towards flexibility and swiftness, which in turn could lead to more nearshoring. We hope that in the recovery, people, consumers, and all of us will have a positive momentum to start again with new ideas and greater values.”