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 2010 -
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
CONTENT The Industry and the Confederation 3
The German Textile and Fashion Industry: FACTS 1,300 SME 400,000 staff (130.000 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
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
The German Textile and Fashion Industry: TURNOVER GENERATE ABROAD Textile Industry Clothing Industry 42% 38% 30% 26% 1997 2009 1997 2009 6
The German Textile and Fashion Industry: PRODUCTION VALUE Trend: Clothing / Home Textiles 50 40 Trend: Technical Textiles 30 20 10 0 2002 2004 2006 2008 2010 Bekleidung Heim- und Haustextilien Technische Textilien 7
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
Aircraft Engineering 9
Automotive engineering 10
Textile machinery Karl-Mayer Textilmaschinenfabrik GmbH 11
Health care, medical application 12
Smart Textiles 13
PPE - safety 14
Energy production, renewable ressources 15
Architecture 16
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: 506 17
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 1.500 2. Daun-Gruppe 895 3. Freudenberg Group 531 4. Borgers-Gruppe 384 5. ERWO Holding AG 328 6. Wirth-Gruppe 260 7. Ideal Automotive 210 8. EuroComfort Holding 168 9. Sandler AG 168 10. Heimbach 155 11. Textilgruppe Hof 147 1. Adidas Adidas, Reebok, 4.663 2. Esprit Esprit, edc, de.corp 2.580 3. Hugo Boss Boss, Hugo 1.518 4. Multiline Textil Multiline Germany, 1.407 5. S.Oliver Group S.Oliver, QS, Comma,.. 893 6. Puma Puma, Tretorn, 853 7. Miro Radici AG Apanage, Erica Rössler, 840 8. CBR Holding Street One, Cecil, 700 9. Gerry Weber Gerry Weber, Taifun, 594 10. JCK Holding Private Label 415 11. Holy-Gruppe Joop!, Strellson, 400 18
The Confederation: OFFICES Moscow Shanghai 19
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
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
CONTENT The Raw Material Challenge 22
Challenges: STEEP INCREASE IN RAW MATERIALS / POLYESTER 1,8 1,6 Preise Polyesterprodukte Nov 10 10 Nov 10 10 Mai 10 10 1,4 1,2 Mai 09 09 Mai 10 10 Dez 08 08 Mai 09 09 Mai 10 10 Nov 10 10 US$/kg 1,0 0,8 Dez 08 08 Dez 08 08 Mai 09 09 0,6 0,4 0,2 0,0 Polyester Stapelfasern Polyester Filamentgarn Polyester Chips 23
Challenges: STEEP INCREASE IN RAW MATERIALS / NYLON 6,0 Preise Nylonprodukte 5,0 Nov 10 4,0 Mai 10 US$/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
Challenges: STEEP INCREASE IN RAW MATERIALS / ACRYLICS 3,5 3,0 Preise Acrylprodukte Mai 10 Nov 10 2,5 US$/kg 2,0 1,5 Dez 08 Mai 09 1,0 0,5 0,0 Acryl Stapelfasern 25
Challenges: STEEP INCREASE IN RAW MATERIALS / VISCOSE 7,0 Preise Viskoseprodukte Nov 10 6,0 5,0 Nov 10 Mai 10 US$/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
Challenges: STEEP INCREASE IN RAW MATERIALS / CHEMICAL RAW MATERIALS US$/bl (Rohöl) 90 80 70 60 50 40 30 20 10 0 Rohöl Naphta Dez 08 Mai 09 Mai 10 Nov 10 900 800 700 600 500 400 300 200 100 0 US$/to (Naphta) Source: Yarns & Fibres Exchance 27
Challenges: STEEP INCREASE IN RAW MATERIALS / COTTON (in USD per Ib.) Increase of 150% during the last 24 months!!! Source: Yarns & Fibres Exchance 28
CONTENT Major Trade Partners and Trends 29
CONTENT Pan-Euro-Med Framework and Proposals 30
Reform of the Pan-Euro-Med Agreements - State of play EU, EFTA, Turkey and Med-Countries launched a revision process in October 2009 1st 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
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
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
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
CONTENT Trade Fairs and Exhibitions 35
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
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
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
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 25.000 Visitors 39
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
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, 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: 3.100 Located on the outskirts of Berlin 42
FASHION CPD Düsseldorf Next Show CPD Signature, 6 8 February 2011 / 24 26 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. 24.000 visitors Traditional order fair Lost grounds to Berlin 43
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. 2000 exhibitors Approx. 60.000 visitors 44
CONTENT Conclusions 45
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 20.000 EUR 30.000 to sound out a new potential supplier. And most importantly. 46