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2011-02-07

Latin American textile companies call for an end to contraband

By Hugo Machín for Infosurhoy.com—07/02/2011

Chinese fabrics smuggled into the region and high cotton prices damaging industry.

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Industry leaders from several countries, including Brazil, Mexico and Portugal, attended the XXIII textile and fashion show dubbed “Colombiatex of the Americas 2011,” organized by Colombian textile company Inexmoda and held from Jan. 25 to 27 in Medellín. (Hugo Machín for Infosurhoy.com)

Industry leaders from several countries, including Brazil, Mexico and Portugal, attended the XXIII textile and fashion show dubbed “Colombiatex of the Americas 2011,” organized by Colombian textile company Inexmoda and held from Jan. 25 to 27 in Medellín. (Hugo Machín for Infosurhoy.com)

MEDELLÍN, Colombia – Representatives from Latin America’s largest textile companies are worried about the presence of illegal Chinese fabrics that have infiltrated the sector throughout the region.

Carlos Eduardo Botero, executive director of the Institute for Exports and Fashion (Inexmoda), said the fabrics smuggled into Latin America from China pose a threat to businesses operating within the law.

“We have a lot of illegality,” he said. “There’s a lot of smuggling, mainly from the Asian markets, through Panama. It may be that the Asians send [the fabrics] legally, but on the way here, they become contraband. [The fabrics] leave the country legally and arrive at another country illegally.”

Industry leaders from several countries, including Brazil, Mexico and Portugal, attended the XXIII textile and fashion show dubbed “Colombiatex of the Americas 2011,” organized by Colombian textile company Inexmoda and held from Jan. 25 to 27 in Medellín.

“[Colombiatex of the Americas 2011] had generated about US$119 million worth of business, which represents a 7% increase compared with last year, when we accounted for US$112 million in business,” Inexmoda said in a press release.

Negative impact from smuggling

Botero said the only way Latin America-based textile companies can reduce the negative impact from the smuggling of Chinese clothes and fabrics is by operating within the law.

“What’s going on with China is definitely worrisome – those Colombian companies that didn’t use to buy from that country are doing it now because of the great competition that exists within this sector,” he said.

Botero said he is optimistic about Colombia’s textile industry, even if some of the companies rely on fabric and fabric-related products smuggled from China.

“In Colombia we’ve had a readjustment process,” he said. “Business now is thriving. [We’re] more aware of consumers and innovation. I think what the future has in store for us in Colombia will be quite interesting.”

Colombia’s textile industry provides jobs for 250,000 and indirectly offers employment to another 750,000, Botero said.

The sector represents 8% of the industrial GDP (Gross Domestic Product) and 20% of all industrial jobs in Colombia. Fifty percent of the textile industry GDP is based in Medellín, capital of the department of Antioquia, Botero said.

Rafael Cervone, head of the Brazilian Textile and Clothing Industry Association (ABIT), which featured 23 stands at the trade show, said Brazil also is becoming increasingly concerned about the smuggling of Chinese fabrics.

“If you look at 2010 statistics, the Chinese themselves say they sent 70,000 tons of clothing to Brazil, while Brazil legally received only 30,000 tons,” he said. “The difference is explained by the smuggling.”

The Brazilian textile industry is spread over 30,000 companies that support two million jobs directly and eight million jobs overall, Cervone said. The textile sector in Brazil has 1.65 million employees, according to the Brazilian Association of the Textile and Clothing Industry (ABIT).

Cotton is the threat

Juan Pablo Pellón, director of the Mexican company Espintex, which specializes in combed cotton weaving, said the increased amount of illegal products smuggled from China and India has adversely affected the flow of Mexican products into the U.S.

In 2005, China’s share of U.S. textile imports was 27.61% (US$27.4 billion). But in 2010, the share had grown to 41.21% (US$37.6 billion), an increase of 13.6%, according to the U.S. Department of Commerce Office of Textiles and Fashion.

Pellón predicts 2011 will mark a strong demand for Mexican textile exports to countries like Colombia, El Salvador, and the United States.

Europeans do not appear to be as worried about the Chinese presence in the market.

Alfredo Rezende, president of the Selective Fashion Association, a unionized textile company from Portugal, said the problems facing the Latin America-based textile industry are rooted in the rising cost of cotton, not smuggling.

“[The price of cotton] is a disaster – this week it went up between 15 and 20%,” he said. “It’s crazy. We can’t forecast prices three months ahead of time.”

Pellón agrees with Rezende regarding the correlation between the rising cost of cotton and its impact on a company’s profits.

“It’s very difficult (the situation for the textile industry) because cotton rises every day, and the prices we quote vary daily,” Pellón said. “We don’t have fixed prices.”

Silky touch of growth

Other nation’s textile sectors are thriving despite a rise in cotton prices and increased competition from the Chinese.

Renzo Korch, who runs a textile business in Lima, Peru, said “today, the Peruvian textile industry is doing very well. Last year was good, too, and they’re expecting it to get even better.”

Due to the international financial crisis in 2009, more than 80,000 of the 266,000 who work in the textile sector lost their jobs, according to Peru’s National Federation of Textile Workers (FNTTP).

Koch said the region’s textile industry has recovered and is progressing at a steady pace.

“We’ve had it as good as always during the last five years we’ve been coming to Colombiatex,” said Korch, who manufactures fabrics and Pima cotton, a fabric “you can get only in Peru because of its natural sheen and silky touch.”

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  1. Lokesh Maingi 06/20/2011

    Buen artículo. A seguir escribiendo.

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