More and more clothing companies want to leave Asia and produce in Europe again. How realistic is that? And what will happen to the previous production sites? The DTB dedicated an information day to the topic and came to quite clear conclusions.
There are numerous reasons why many clothing manufacturers are currently looking for ways to relocate at least parts of their production from Asia back to Europe. Some hope above all for more stable supply chains, others for shorter delivery times and more flexible logistics, and others for shorter transport routes and thus more sustainability. If so many clothing companies are currently aiming for the same thing, does it perhaps make it more realistic that we will produce our clothing in Europe again in the future? “I don’t think so,” says Susanne Paß, managing director of Dialog Textil-Beclothing eV (DTB), in which companies from the entire textile chain, educational institutions, institutes and industry-relevant committees are organized. The DTB has just devoted itself to the subject of nearshoring with a “DTB Infoday Sourcing” and drew a clear conclusion. Paß: “We cannot reproduce the amount of clothing that we currently have produced in Asia in Europe.”
Albania & Bosnia-Herzegovina: sourcing countries of the future?
But that doesn’t mean that there aren’t promising opportunities for clothing production in Europe for individual product groups, volumes and price ranges. For example in Albania. Matthias Fröhling from Fröhling Textilconsulting GmbH describes the EU member state, which is one of the poorest countries in Europe, as an “up and coming country for the clothing industry”. It is interesting not only because of its short transport routes, but also because of the young population. Fröhling: “The average age in the textile industry is 32 years, in Romania it is 54.” 827 companies are currently active in the Albanian leather, textile and clothing industry with around 70,000 seamstresses. About 40 percent of the products are exported to Italy, 16 percent to Germany.
The situation is very similar in Bosnia-Herzegovina. Muris Pozderac from the Bosnian Chamber of Commerce also describes the current situation in the Balkan state’s clothing industry as promising. The textile sector in Bosnia-Herzegovina has around 40,000 employees in over 400 companies and a long tradition in textile production. However, the country is still suffering from the consequences of the war. Pozderac: “Before the war, 100,000 people were employed in the textile sector, and we no longer have a preliminary stage; all fabrics and accessories have to be imported today.” Here, too, the main buyer of the goods is Italy, with an export share of 35 percent. 19 percent of the products go to Germany.
Turkey: High growth rates in recent years
Even before the pandemic, Turkey was an important production country that represented the entire supply chain of the textile and clothing industry, from cotton cultivation to ready-made clothing, with high quality standards and great know-how. Since the pandemic has shaken production in Asia in many ways, more and more manufacturers are interested in Turkey as a sourcing country. “In 2020/21 we will see growth of 15 to 20 percent, which is enormous for us,” says Deniz Dikmen, Vice President of the Turkish Textile Exporters and Employees Association (TIHCAD), which was founded just a few years ago. But the current recession can also be felt in Turkey. The aim of the association and the Turkish clothing industry as a whole is to continue to grow at a high level of quality. The TIHCAD and its members are therefore particularly committed to the areas of sustainability, digitization, women’s rights and education.
Ukraine: A beacon of hope after the end of the war
Textile companies are also numerous in Ukraine and many of them are still operating despite the war. The German company has been sourcing in Ukraine for many years and has been able to maintain the business relationship until now. n, such as Thomas Voss from Hinrichs Clothing Factory GmbH. “That’s a permanent risk, not just because of the war, inflation is now at 50 percent and energy costs are rising,” says Voss. “But we keep hearing the vehement request: stay there, don’t withdraw production.” According to current estimates, however, he sees a lot of potential in the country as soon as the war is over. Voss: After the war, Ukraine will certainly be a country that is very attractive for contract clothing. It is close to Poland and Slovakia, there is a lot of construction and investment going on. In addition, there is a will to move closer to the EU:
India is rising as a sourcing country
However, Asia also remains attractive, although various shifts are currently emerging there. The former sourcing superpower China is losing more and more orders to India, which is implementing a much looser Covid policy and imposing no lockdowns. Many of the risks of recent years have now been eliminated, such as child labor or poor infrastructure. When it comes to customs duties, there is also hope that the legal framework for India will soon improve and that customs duties will no longer have to be paid – as is the case today in countries such as Bangladesh and Sri Lanka.
Bangladesh: Factories are struggling again for their existence
The fact that Europe will again become the most important production location for the clothing industry is neither realistic nor would it be responsible for social reasons to give up the long-standing production locations in Asia, says Susanne Paß from the DTB. In addition, many Eastern European countries are now also struggling with a shortage of skilled workers. “Some member companies report that they are already bringing skilled workers from Asia to Eastern Europe because they can no longer find enough there,” she explains. Other product categories, such as functional clothing, are now almost exclusively made in Vietnam, for which there is no longer a production base in Europe.
And Christopher Veit, CEO of Veit GmbH and DTB Board Member, appeals to the industry to behave fairly in view of the current slump in consumption. Veit: “The current situation is a disaster for many factories in Bangladesh. Most brands and buyers don’t take their ordered goods now or delay delivery out. Some factories are already renting external warehouses to store the goods somewhere. And that while the costs are rising there too!” While public interest in the situation in the production countries was great during the pandemic, you hardly hear anything now. “The situation is just as dramatic, many factories don’t know whether they will survive the winter,” explains Veit.
The clothing industry in Bangladesh is showing great development and extremely high standards. The fear of Bangladesh is unfounded today, there are now many good companies. His recommendation: “Now is the perfect time to start in Bangladesh if you want to produce large quantities.”