A MESSAGE FROM THE PRESIDENT
As we enter the New Year it is worthwhile to look back and consider our keynote
for 2012, and at the same time to look forward to what 2013 is likely to bring.
The year 2012 will enter into history as a year of economic turmoil and weak
consumer spending, caused by the Eurozone crisis and its impact on a worsening
financial and economic performance. For entrepreneurs and workers in the textile
and clothing industries, globalization was self-evident. The global impact of
the Eurozone and financial crisis now made very clear that also the financial
industry is a global business, affecting every layer of the economic system,
particularly globalised industries and consumer markets like the textile &
But every cloud has a silver lining and as we have experienced in the textile
industry for so long now, every crisis is bringing new opportunities. It was an
exciting year for Werner International, both on the technical and marketing
front. Werner International’s efficiency, quality and productivity programmes
were in high demand and our global marketing coverage has assisted many
companies in improving their supply chains and sales performance. We have seen
our presence grow substantially in several markets - including India, South-East
Asia, Argentina, Turkey and the USA.
In today’s global competitive environment, companies are looking for ways to
increase their market shares either through volume or value services, satisfying
the needs and demands of each segment and area of the market. Consumers are
getting more and more informed and conscious regarding their spending and styles
of life. Companies have the choice of reducing their manufacturing costs by
either increasing their efficiency and productivity, or through continued
re-location of their manufacturing bases. Important decisions are being made
every day by many companies around the world to choose alternative suppliers
according to the product characteristics, targeted quality levels and costs, and
service scope. These decisions are also supported by investments in Human
Resources, training of employees, and re-organization of existing structures. We
are also witnessing an era of consolidation of businesses, emphasis on
sustainable production and green manufacturing. Social and corporate
responsibilities remain important aspects for brands and retailers.
Included in this edition of the New Twist are several articles that I am sure
will be of high interest to you:
- The renowned Werner International Labor Cost Comparison 2012 edition
- Overview from the 38th National Textile Industry Symposium of Mexico, with
Werner International as key note speaker
- Sourcing from China and South East Asia: the Werner view
At the beginning of this New Year I wish to extend to you, your colleagues and
families, my very warm and sincere wishes for a year of happiness and
President – Werner International
~ ~ ~ ~ ~
We are excited to start off the New Year by attending the first tradeshows in
January 2013, including
- Pitti Uomo in Florence (8 to 11 January 2013)
- Bread & Butter in Berlin (16 to 18 January 2013)
To set up an appointment with one of our attending consultants, kindly contact
us at email@example.com and we will
arrange a meeting.
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WERNER INTERNATIONAL @ THE 38th NATIONAL TEXTILE INDUSTRY SYMPOSIUM OF MEXICO
Werner International was at the 38th National Textile Industry Symposium of
Mexico, organized by Canaintex, with the attendance of leading industry experts,
government officers, representatives of institutions and associations related to
The Symposium was organized by Canaintex, the organization supporting the
textiles and fashion industries in Mexico.
The 2-day Symposium brought out some interesting facts and created a fruitful
platform for discussion and possible industry solutions.
Some interesting points were:
Mr. Bruno Ferrari, the Secretary of Economy emphasized the topic of “innovation”
and that Mexico needs to produce in a different way, while also being
transparent and with a solid legal base.
The textile industry is an important one in Mexico as it generates a significant
portion of exports and creates a base for employment.
- Garment exports have increased by 8.4% last year
- Export of oil is approximately 16%
- A decline from 86% to 76% in the trade between Mexico and the USA
- 50% of the population is younger than 25 years old.
In 2012 :
- The GDP growth of Mexico was noted at approximately 4%
- The consumption growth was noted at 4% as well
- The installed capacity has increased by 6-10%
- The employment levels are noted as above the US levels
- Retail sales has increased by 4-6%
- Exports have increased by 10-15%
Among the discussions and speeches of various industry experts, it was also
agreed that the USA crisis had a very negative impact on the USA - Mexican trade
in the past four years and that the share of business with the USA has
It is now time to act as a unity with the NAFTA countries and establish market
entry strategies as a unified group towards other markets.
Among this global environment, China is a big influencer with cost competition.
It has already gained a market share worth 4 billion USD, taken from the share
of Mexico in trade figures towards the USA.
However, with the ever changing global environment, some of the cost advantages
of China are also starting to fade away, due to the increase in exchange rates,
increase in labor costs, increase in oil prices, and thus transportation costs,
etc. Therefore, the USA market has started looking for proximity suppliers
(“closer-to-home” solutions) to balance the cost of production, which would in
return positively reflect on the share of Mexican exports into the USA market.
Another important international development will be depending on the
Trans-Pacific Partnership agreement between the countries of Canada, USA,
Mexico, Peru, Chile, Vietnam, Malaysia, Singapore, Brunei, Australia and New
Zealand. As a result of this agreement, this group of countries will be having a
free trade agreement among each other and it will surely change the “rules of
the game” for the sourcing activities and supply chain organizations of major
retailers and brands around the world.
It has been pointed out how the Mexican industry as a whole, developing as a
"commission maker", has never been able or interested or lead to create a truly
Mexican brand. As It is a clear fact that Mexico cannot compete solely on price
anymore in the textile industry, it has now become evident the need to invest in
the manufacturing and creation of value-added products, as well as
technologically enhanced product segments to re-position - in order to survive
in the highly competitive global textiles and fashion industries. Hence a new
project has been presented, that will be implemented in the next few months,
aimed at the establishment of Innovation Centers to support the development of
the innovation, design and branding capabilities of the textile and fashion
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2011 LABOR COST COMPARISON REPORT IS NOW AVAILABLE
We are pleased to present the Werner International 2011 Labor
Cost Comparison, which is the only study comparing the hourly labor cost in over
40 countries worldwide. Our comparison covers all primary textile industry
sectors, consisting of spinning, weaving and dyeing & finishing.
As we did for previous editions, we would like to stress that the hourly labor
cost is one of the many factors impacting the competitiveness of the textile
industry. Nevertheless, it is the single most relevant driver in the continuous
process of global relocation of productions which has characterized our industry
in the last 30 years.
In an open global system less and less restricted (but heavily impacted) by
external factors such as exchange rates, important production flows will
continue to geographically reallocate in search of even temporary
The previous labour cost comparison of 2008 took place during the global
economic and financial crisis of 2008/9, with the global economy being struck by
financial instability and questions of bank regulation and financial sector
oversight. Now in 2011/2012, the public debt crisis has taken centre-stage, with
discussion focusing on cutting public deficits, including the raising of taxes.
After the financial crisis, markets now question public finance sustainability
even in countries such as France. Within Europe, stabilizing and even reducing
labour costs is part of the overall economic mechanism to reduce the impact of
the debt crisis. In North Africa and the Middle East, the Arab Spring is having
a severe impact on the economic performance and industrial fabric of countries.
In addition, the impact of exchange rates between the various countries is, as
usual, playing an important role in comparing labour cost data between
countries. And although the exchange rate between the US$ and the € has been
fluctuating heavily over the last years, the exchange rate difference for most
European countries is below 4% between 2008 and 2011. However for countries like
Australia, Turkey, and a range of Asian and South American countries, the impact
of the exchange rate difference can be as high as 45%.
We all realize that a new business era is in front of us. An era for which
textile and clothing companies must prepare themselves with a strategic effort
in order to adapt, improve and redesign their business models to fight the
global impact of the financial and debt-crisis, with the aim of sustaining
growth and enhancing profitability.
To receive a full copy of the 2011 Labor Cost Comparison Report or to find out
how your company can participate in the 2012 edition, please e-mail us at
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SOURCING FROM CHINA AND SOUTH-EAST ASIA : THE WERNER VIEW
In 2012, imports of textiles & clothing into the USA remained stable, estimated
at around 100 bn US$ - or the same level as 2011. The year 2011 however saw an
increase of almost 9% compared to the year before. The picture is similar for
the European Union. Imports into the European Union in 2011 amounted to 93.1bn
€, almost 10% up from 2010, but forecasted imports in 2012 will be again at
around the same level as 2011, or slightly less. Imports into the main Western
consumer markets are stabilising again in 2012, similarly as in the financial
crisis year 2009. All other years in the last decade have shown considerable
growth of imports.
Does this mean that the era of cheap imports and, in particularly cheap China,
may be drawing to a close? Many observers quote that especially China's coastal
provinces are losing their power to attract cheap workers from the hinterland,
due to increasing labor costs, taxes and regulations
Taking a closer look at origins of imports, China represents a staggering 40%,
both of imports into the USA and Europe. It is true that China has lost slightly
percentagewise, but that is also true for other competing countries in 2012. In
absolute value terms, imports from China increased more than for example from
ASEAN countries, percentagewise on the large volume of imports originating from
China, this is of course less.
It is true that Chinese labor costs are increasing at a faster rate than ever
before. To demonstrate this, the table below is showing the latest labour cost
comparison for 2011/12, from the Werner International Labour Cost Comparison in
the Textile Industry.
But labor cost is just one element of competitiveness. The most critical factor
of competitiveness is labor productivity. However labor productivity is being
influenced by a wide range of variables such as level of technology, workplace
design and layout, factory size, material handling, training, product
complexity, ratio direct/indirect personnel, efficiency management, etc.
Compared to apparel companies in Cambodia and Vietnam, and because of the fast
increasing labor cost, Chinese apparel companies are now paying much more
attention to efficiencies in their production and supply chain, applying
innovative technologies and optimizing costs Other external factors, like
infrastructure, logistics and diversification for risk management still make
China a preferred hub for sourcing.
Over the last six years, Werner International apparel experts have been
executing more than 500 factory audits and surveys in China, Indonesia, Cambodia
and other South-East Asian countries. We have experienced that training at both
the operator and supervisor levels is often unsatisfactory. In addition to
operator training, on-the-job training for supervisors and managers is essential
to understand management techniques and manage and control their departments
better. Improvements in productivity of 15 to 20 percent are not exceptional,
often coupled with improved quality of a more complex product mix.
For more information, please contact
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SPECIALIZED MANUFACTURING SURVEYS
Werner International’s world class technical interventions are generally
conducted after the execution of a comprehensive manufacturing audit, which
covers (but not limited to) the following areas :
- machine and labor productivity
- quality performance
- raw material utilization
- level of technology
- human resources and skills
- process suitability
- working cycles
- delivery times
- material flows
- planning procedures
- information management
For over 75 years, we have provided this invaluable service as we believe
that such an in-depth survey of the existing production technology, product mix
and human resources will draw a clear picture of the overall performance which
can be obtained at departmental level as well as for your company as a whole.
Each assessment has the sole purpose to lay the foundation for further
successful development of the company.
The findings of each audit are then elaborated and consolidated into an
invaluable report which thoroughly shows your company’s current operational
performance in terms of strengths and weaknesses (as well as future threats),
identifying key performance gaps as well as improvement opportunities while
suggesting the necessary intervention methodology.
Contact our USA Office Director, Beth Govoni Marshall (firstname.lastname@example.org)
to receive a full proposal for a specialized Werner International manufacturing
POSTING JOB DESCRIPTION
A pioneer in the textile and apparel industries, Werner
International is unique among world leading consulting companies in being able
to combine specialized expertise in the technical areas with global marketing
and strategy know-how and networking. Our extensive team of highly qualified
textile and apparel manufacturing experts provides world class assistance to the
Werner International consultants are continually involved and updated in the
development of technology, equipment, automation and processing methods.
The Werner International network is currently seeking qualified individuals in
the following sectors:
- Dyeing and Finishing (with experience in JD F-22 Continuous Dyeing Process)
Please submit your CV directly to our USA Headquarters at
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