The German Textile and Clothing Industry: Sales and Sourcing Strategies

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1 The German Textile and Clothing Industry: Sales and Sourcing Strategies Sven Eriskat - International Cooperation and New Markets - Confederation of the German Textile and Fashion Industry - December

2 CONTENT The Industry and the Confederation The Raw Material Challenge Major Trade Partners and Trends Pan-Euro-Med Framework and Proposals Trade Fairs and Exhibitions Conclusions 2

3 CONTENT The Industry and the Confederation 3

4 The German Textile and Fashion Industry: FACTS 1,300 SME 400,000 staff ( at home + 270,000 abroad) Second largest consumer goods industry after the foodstuffs Turnover of approx. 28 billion (58% Textiles, 42% Fashion). 260 million p.a. Research and Development 16 Textile Research Institutes in Germany 4

5 The German Textile and Fashion Industry: STRUCTURE Application Technical Textiles Filter Producer Home Textiles Functional Textiles & Garments Fashion Garments Natural Fibre Producer Chemical Fibre Producer Spinning Company Fabric Producer Integrated Garment Maker SME! Garment Cleaning & Rental Company Garments Retailer Fibre/ Filament Production Spinning Weaving, Knitting, Nonwoven Dyeing, Finishing Garment or techn. Confect. Retail/ Distrib. Service Value Added Chain 5

6 The German Textile and Fashion Industry: TURNOVER GENERATE ABROAD Textile Industry Clothing Industry 42% 38% 30% 26%

7 The German Textile and Fashion Industry: PRODUCTION VALUE Trend: Clothing / Home Textiles Trend: Technical Textiles Bekleidung Heim- und Haustextilien Technische Textilien 7

8 The German Textile and Fashion Industry: TECHTEX SEGMENTS Protech 10% Packtech 5% Sporttech 12% Agrotech 7% Buildtech 10% Geotech 3% Indutech 18% Mobiltech 22% Medtech 13% 8

9 Aircraft Engineering 9

10 Automotive engineering 10

11 Textile machinery Karl-Mayer Textilmaschinenfabrik GmbH 11

12 Health care, medical application 12

13 Smart Textiles 13

14 PPE - safety 14

15 Energy production, renewable ressources 15

16 Architecture 16

(Number of top 73 companies by turnover)

100 companies by turnover) European Textile

17 Germany is Europe s leading textile and clothing country European Textile Industry (Number of top 73 companies by turnover) European Clothing Industry (Number of top 100 companies by turnover) European Textile Industry Turnover of the top-companies in 2009 in Mio. EUR European Clothing Industry Turnover of the top-companies in 2009 in Mio. EUR FR:

18 Some Heavyweights The German Textile Industry and Fashion Industry: SOME HEAVYWEIGHTS Clothing Industry Name Techn. Textil Sonst. Textilien Umsatz 2009 in Mil. EUR Name Labels u. a. Umsatz 2009 in Mil. EUR 1. AUNDE Gruppe Daun-Gruppe Freudenberg Group Borgers-Gruppe ERWO Holding AG Wirth-Gruppe Ideal Automotive EuroComfort Holding Sandler AG Heimbach Textilgruppe Hof Adidas Adidas, Reebok, Esprit Esprit, edc, de.corp Hugo Boss Boss, Hugo Multiline Textil Multiline Germany, S.Oliver Group S.Oliver, QS, Comma, Puma Puma, Tretorn, Miro Radici AG Apanage, Erica Rössler, CBR Holding Street One, Cecil, Gerry Weber Gerry Weber, Taifun, JCK Holding Private Label Holy-Gruppe Joop!, Strellson,

19 The Confederation: OFFICES Moscow Shanghai 19

20 The Confederation: STRUCTURE Industrial Policy Social Policy International Markets European Union RTD Environment Tax & Legals Trade Fairs Vocational Training Labour & Social Law Collective Bargaining 20

21 CONTENT The Conderation: MARKET SERVICES Market monitoring and identification (sourcing and sales) Detailed company database world-wide (QUESTIONNAIRES ARE AVAILABLE!) Match-making missions ETA offices in most important markets Trade dispute support Statistical information etc 21

22 CONTENT The Raw Material Challenge 22

23 Challenges: STEEP INCREASE IN RAW MATERIALS / POLYESTER 1,8 1,6 Preise Polyesterprodukte Nov Nov Mai ,4 1,2 Mai Mai Dez Mai Mai Nov US$/kg 1,0 0,8 Dez Dez Mai ,6 0,4 0,2 0,0 Polyester Stapelfasern Polyester Filamentgarn Polyester Chips 23

24 Challenges: STEEP INCREASE IN RAW MATERIALS / NYLON 6,0 Preise Nylonprodukte 5,0 Nov 10 4,0 Mai 10 US$/kg 3,0 Dez 08 Mai 09 Mai 10 Nov 10 2,0 Dez 08 Mai 09 1,0 0,0 Nylon Filamentgarn Nylon Chips 24

25 Challenges: STEEP INCREASE IN RAW MATERIALS / ACRYLICS 3,5 3,0 Preise Acrylprodukte Mai 10 Nov 10 2,5 US$/kg 2,0 1,5 Dez 08 Mai 09 1,0 0,5 0,0 Acryl Stapelfasern 25

26 Challenges: STEEP INCREASE IN RAW MATERIALS / VISCOSE 7,0 Preise Viskoseprodukte Nov 10 6,0 5,0 Nov 10 Mai 10 US$/kg 4,0 3,0 Mai 10 Dez 08 Mai 09 Nov 10 2,0 Dez 08 Mai 09 Mai 10 1,0 Dez 08 Mai 09 0,0 Viskose Stapelfasern Viskose Filamentgarne Holzfasern 26

27 Challenges: STEEP INCREASE IN RAW MATERIALS / CHEMICAL RAW MATERIALS US$/bl (Rohöl) Rohöl Naphta Dez 08 Mai 09 Mai 10 Nov US$/to (Naphta) Source: Yarns & Fibres Exchance 27

28 Challenges: STEEP INCREASE IN RAW MATERIALS / COTTON (in USD per Ib.) Increase of 150% during the last 24 months!!! Source: Yarns & Fibres Exchance 28

29 CONTENT Major Trade Partners and Trends 29

30 CONTENT Pan-Euro-Med Framework and Proposals 30

31 Reform of the Pan-Euro-Med Agreements - State of play EU, EFTA, Turkey and Med-Countries launched a revision process in October st stage: Focus on Regional Convention (legal framework) 2nd stage: Reform neg. on RoO (origin conferring list rules) will start in Spring 2011 Most important for our companies: List of all processing stage for conferring the origin! The European Textile & Clothing Industry is currently negotiating its position The German T&C industry is in full favour of flexible and liberal Rules of Origin 31

32 The current Pan-Euro-Med Rules of Origin are obsolete Restrictive Pan-Euro-Med Rules of Origin are conflicting with Changing market environment Complex supply chains Globalized trade and production patterns Technological Progress (new innovative production processes) Competitiveness = Ability to confer preferential origin 32

33 A competitive Pan-Euro-Med area needs modern Rules of Origin Overall Strengthening of the textile and clothing industry in the Pan-Euro-Med countries by promoting competitiveness A competitive regime granting origin to all companies operating along the VAC provided that sufficient production (added value) has been performed in Europe Process Orientation Flexible Rules 33

34 Not single countries, but preferential customs areas will compete in the future! LOOK WHAT OTHERS ARE DOING: ASEAN is already preparing for the future: Extreme flexible origin-conferring rules: 40% added-value OR Change of tariff heading i.e. single step (transformaiton ) T&C industry in the Pan-Euro-Med area is still handicapped by restrictive rules 34

35 CONTENT Trade Fairs and Exhibitions 35

manufacturers, retailers and designers Table / Bed / Bath / Window

36 TEXTILES HEIMTEXTIL FRANKFURT (12 14 January 2011) Largest international trade fair for home and contract textiles For manufacturers, retailers and designers Table / Bed / Bath / Window / Wall / Decoratives / Upholsteries /Carpets International shows: Russia and China 36

37 TEXTILES TECHTEXTIL FRANKFURT (24 26 May 2011) THE international platform for technical textiles!!! Mainly for manufacturers and institutes International shows: China, India, Russia, USA 37

38 FASHION Berlin is picking up! BERLIN FASHION WEEK Twice yearly (January and July), four major trade fairs take place in Berlin: 1. Bread and Butter Berlin 2. Premium Exhibition 3. Five Elements 4. Mercedes-Benz Fashion Week The city is thus an attraction for thousands of visitors attending the above exhibitions as well as the numerous accompanying events 38

39 FASHION BREAD & BUTTER THE Leading trade fair for Urban Street Wear Takes place twice a year: January and July Brilliant location: Former city airport (Tempelhof) Party atmosphere Returned from Barcelona to Berlin in 2009 with great success Approximately 600 brands exhibiting Approximately Visitors 39

FASHION Premium Fair Established in 2003 Trade platform for choice

trade platform for choice Takes place twice a year: January and July

exhibitors, buyers and representatives of the press. Approx.

40 FASHION Premium Fair Established in 2003 Trade platform for choice collections, international newcomers and exclusive trend products. trade platform for choice collections, international newcomers and exclusive trend products. Takes place twice a year: January and July Located in the centre of Berlin Open exclusively to trade professionals: exhibitors, buyers and representatives of the press. Approx. 900 exhibitors and 42,000 visitors 40

41 FASHION Mercedes Benz Fashion Week Established in 2004 Organiser: IMG Fashion show event focusing on new designers (approximately 150) Takes place twice a year: January and July Located in the centre of Berlin 41

FASHION Five Elements Trade fair exhibiting: lingerie,

beachwear, beach sport for men and women and accessories

42 FASHION Five Elements Trade fair exhibiting: lingerie, corsets, underwear, sleepwear, menswear, hosiery beachwear, beach sport for men and women and accessories wellness and yoga, sustainable products, towels cosmetics, accessories and sensual. Exhibiting companies: 91 Exhibiting brands: 184 Visitors: Located on the outskirts of Berlin 42

FASHION CPD Düsseldorf Next Show CPD Signature, 6 8

Outerwear, Young Fashion, Men's Outerwear, Fur Clothing,

Leisure Wear, Sportswear Approx. 900 exhibitors Approx.

43 FASHION CPD Düsseldorf Next Show CPD Signature, 6 8 February 2011 / July 2011 Product groups: Ladies' Outerwear, Young Fashion, Men's Outerwear, Fur Clothing, Leatherwear, Evening Gowns, Knitwear, Accessories, Jeans, Leisure Wear, Sportswear Approx. 900 exhibitors Approx visitors Traditional order fair Lost grounds to Berlin 43

FASHION ISPO Munich Next Show in February 2011 Main event

sports articles, Sportswear, Sports Shoes, Mountaineering

Fashion, Licensed Articles, Fabrics, Fibres, Ski Servicing

44 FASHION ISPO Munich Next Show in February 2011 Main event for outdoor sportswear in Europe Product groups: Winter sports articles, Sportswear, Sports Shoes, Mountaineering Equipment, Fitness Apparatus, Servicing Machines, Outdoor Fashion, Licensed Articles, Fabrics, Fibres, Ski Servicing DevicesAlso in China Approx exhibitors Approx visitors 44

45 CONTENT Conclusions 45

46 Conclusions Rapid evolution / change of global sourcing AND sales markets China s supply chain is tight (Domestic market competition, Raw materials, Environmental regulations etc.) but can the sourcing market really be challenged? Higher investments expected due to companies trying to consolidate their sourcing base Costs are rising (distance) in low-tech segments AND as pure sourcing business, alternatives are needed (e.g. PANEUROMED countries ) Price is important but not everything. To establish long-term projects, partners must invest in modernisation make available vertical integration including (raw-material) supply chain High customs duties (e.g. for Carpets into Lebanon = 20%) are inhibiting trade Non-tariff barriers are poison for trade e.g. ad-hoc pre-shipment inspection rule (Syria, Sept. 10) Usually our companies place a first order worth approx. EUR EUR to sound out a new potential supplier. And most importantly. 46

ICAC Research Associate Program. Poland Its Textile Sector and Cooperation with the ICAC. Risk Management in the Cotton Industry

ICAC Research Associate Program Risk Management in the Cotton Industry Washington DC, 10 April 20 April 2017 Poland Its Textile Sector and Cooperation with the ICAC Polish flag and national emblem Area: