If every crisis is an opportunity, the textile industry is another clear example of resilience. According to a study of KEYS Competitive Informationthe sector in Argentina is experiencing this year “a recovery of production” to pre-pandemic levels, with a projected annual investment of US$200 million in capital goods, while facing cost increasess (as a consequence of the fact that a large part of the inputs are imported and of freight prices for fuel) and a drop in the consumption of clothing.
The crack occurred, logically, in March 2020. “The greatest decrease in production was registered at the beginning of social, preventive and compulsory isolation. After two years of decline, the textile industry is working above 47% of its capacity. To recover production levels, the sector was working on the supply of raw materials, conditioning of machinery, and protocols for coronavirus, ”says the survey. The diagnosis is shared by other benchmarks in the industry. For example, for Luciano Galfionepresident of the Pro Weaving Foundationan organization that promotes the interest of the agro-industrial textile chain, “the sector was able to react and reconvert quickly, readjusting factories, reformulating processes and incorporating machines for the production of basic necessities and quality at lower prices than imported ones and in a context of global scarcity and production restrictions”.
Be reborn. The impact of the pandemic seems to have been left behind. “He left us an important lesson in terms of rebuilding productive and technological capacities. We were one of the few countries that, thanks to a strong textile tradition, were able to reorient production towards medical supplies and health care for the population, achieving a virtuous process of coordination between the State, the scientific and technological system, and the productive sector. private”, underlines Galfione.
According to Luciano Ferraritextile director of Carrefour Argentinaduring the pandemic there were two pivotal moments regarding consumption habits: “On the one hand, fashion went towards the home: people spent more time at home and that made them prefer more comfortable and quality clothes. Garments such as jumpsuits, jumpsuits, pyjamas, jogging pants and slippers or blankets in the TEX Home sector began to be the most chosen”. On the other hand, he recalls that there was “a change in purchasing habits where the search turned to online stores, making purchases and clothing converge in the same destination: home,” he adds.
If an X-ray of the local internal market is carried out, it is observed that the industry has 5,600 companies and employs more than 300,000 workers directly. “In the last two years, the sector has been recovering a certain level of employment lost due to the effect of the opening of imports. However, there is still no strong rebound,” says CLAVES.
The diagnosis coincides with that of Galfione: “Production is growing. The textile link has already recovered the levels of 2019, while clothing has not yet managed to reverse the fall of 2020, but it is showing strong dynamism in recent months, a clear indication of its recovery”, he points out. In the sector they observe that, although there is a bottleneck in clothing, “it is expected that the offer will continue to grow in the heat of the important investments that the textile chain is carrying out,” adds Galfione. And he expands: “On the consumption side, it is also recovering, although more timidly. In terms of the volume of clothing sales in supermarkets and shopping centers, we are still below 2019. The rise in the purchasing power of income will be one of the keys to boosting sales, as well as policies such as the Now 12”.
Dollars. The reality shows that Between 50/60% of production costs are dollarized, which, logically, has effects on prices and on the domestic market, which led the Government and the chambers to implement a kind of “care prices” in some sales channels, adds the survey of KEYS. What are the prospects for the immediate future? “The sector projects a good year, sustaining the recovery of 2021. Given the low starting base in annual imported values and the shortage of foreign exchange faced by the Argentine economy, it is expected that 2022 will close with values similar to those of the last two years. , indicates KEYS. Companies took note of this restriction. “Today, most of our production is of national origin and, of that percentage, 85% are SMEs. A fact that drives us to go for more, since it allows us to strengthen the industry and bring local products closer to the more than 500,000 customers who visit us daily at our branches”, explains Ferrari. This is reflected in Carrefour’s sales volume which, so far this year, has increased by 12%.
Another case is that of Bowens, company that announced an investment of more than $100 million to boost the volume of its national production and modernize its management. 95% of its collection is manufactured in Argentina and it digitized its operation for a new stage. It directly employs 120 collaborators and generates approximately 1,300 indirect jobs throughout the country, including trade, services and supplies.. “We had a growth of 45% of the volume of garments, to meet a growing demand: today the brand manufactures more than half a million garments per year and the prospects for this 2023 are of a similar rise”, closes Peter Chirou, one of the founders of Bowen. Projections of one of the players in a business that wants to dress up in optimism again.
by Marcelo Alfano
