New Twist, Newsletter Volume 1, March 08, 2006



In the past, Werner International prepared a newsletter called “New Twist” which was distributed to numerous companies and clients and was published over quite a number of years. It covered key topics in the textile and clothing industry and was an important reference point for company senior managers and for institutions worldwide.
After a few years of “silence”, we are pleased to announce that New Twist is back, with a fresh format and in a lively and readable style, and that we will be sending it to you directly by e-mail.

New Twist is not simply a source of information about the industry, but also gives brief and regular updates on Werner activities and services. In the first issue, for example, we publish the latest edition of the Labour Cost Comparison data – an essential source of comparison between all the key textile producing countries – along with detail of various projects in Turkey, India and China.

We sincerely hope you will enjoy it.

Constantine Raptis




The global competitive landscape is undergoing a major shift because of the introduction of A new series of international trade agreements. These trade agreements are already heavily affecting the global structure and distribution of the textile and clothing industries but their impact will become even more important with the full implementation of the WTO-agreements on textiles & clothing and the introduction of even more regional trade agreements. The global textile & clothing industry is currently experiencing a major shift in business patterns. The most evident elements of this are:

  • The rapid pace of transformation that is affecting North-American and European based industry through relocation and product repositioning.

  • Shifting global and regional sourcing patterns for supply of textiles & clothing

  • The rapid evolution of the apparel retail business, characterized by a concentration of large retailers and fast growing retail chains.

  • The effective removal of all textile trade barriers both in North America and Europe

  • Increasing fragmentation of the consumer base.

  • Quickly evolving consumption patterns.

  • The increasing access to, and use of, Internet technologies, which call for a technology driven, re-design of traditional business models.

A new business era is therefore 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 sustain growth, defend and improve market position and enhance profitability.
All the core activities of a textile or apparel company, ranging from the best utilization of its tangible assets to the development and deployment of intangible assets will have to be re-evaluated and aligned in a single, coherent, often revolutionary, winning strategic formula or better, portfolio of winning formulae.
Critically, winning business models must be developed in order to enhance coherence between market vision, short term tactics, production and sourcing (manufacturing strategy), sales and marketing (marketing strategy), IT, accounting and human resources. Now, more then ever, all areas of business must work in harmony to enact a unique and winning business vision for the future success of textile & clothing companies.

However, fundamentally all successful strategies are predicated on cost leadership. Cost advantages can be achieved in manufacturing as well as through effective sourcing and taking advantage of foreign investments. And it is within this perspective that the results of the new international labor cost comparison in the textile industry have to be seen.

The Winter 204/2005 hourly labor cost comparison in the primary textile industry covers 49 countries. It includes all the main textile producing countries of the world. The folllowing graph gives in summary form the total hourly labor cost in U.S. dollars (including social charges) for every country in the Winter of 2004/2005 (based on prevailing exchange rates on November 20th 2004).

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Switzerland is still in first place with the highest hourly labor cost in the textile industry, a position it has held almost continuously since 1987.

Amongst the top ten, European Union countries take seven positions, with only Spain, Greece and Portugal having a somewhat lower hourly cost.

Japan has dropped from the first place in 2000 to the third place in 2004.

Several of the positions have changed, most of this is due to changes in the exchange rate to the United States Dollar. The USA itself is occupying the 12th place. While in 2000 the USA still ranked higher than Italy, France and the UK, now with the strong Euro, this picture has changed.

There is not much movement in the lower part of the ranking: the lowest labor costs are noted in Asia, with Bangladesh, Vietnam, Pakistan, Sri Lanka, ...

Taiwan, Hong Kong, South-Korea have about similar labor cost levels as those of Portugal.

Within Eastern Europe, overall labor cost has been catching up fast, with countries like Poland and the Czech Republic reaching hourly rates of close to 4 US Dollars. Textile workers in Bulgaria and Romania on the other hand only cost about as much as workers in Mauritius or Thailand.

Latin American countries remain very competitive with labor costs between 2 and 3 US$, the same level as Turkey, Morocco and Tunisia.

The wage gap between developed and developing countries is increasing and the range from the lowest hourly cost to the highest hourly cost is showing an ever increasing expansion :

  • in 1989  2% to 150%

  • in 1998  2% to 186%

  • in 2004  2% to 224%.

It should also be noted that in some countries there is a substantial difference in hourly labor cost from company to company, from region to region, from spinning to finishing, from large to smaller company, etc.

As in the past, the variation in exchange rate of U.S.dollar is having a bigger impact in many cases than the actual increases in local currency. To illustrate this, we have deducted the increase in labor cost in local currency from the increase in labor cost in US$ terms. It becomes evident that a different currency policy is resulting in substantial shifts in labor cost over a short period of time.

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As in previous years, we would like to stress that the hourly labor cost is but one of the many factors which impact the competitiveness of the textile industry. A factor for labor productivity has to be introduced in each case to arrive at a more meaningful unit labor cost. But even then, it can only give a limited view of the total competitiveness of the primary textile industry since total competitiveness depends on other cost and non cost factors, such as raw material, energy, interest cost, inventory turn-over, throughput time, quality, styling, etc., etc.

If you would like to receive a full copy of the new Wage Report, please click here and request your full LCC report by email. We will e-mail you the Wage Report within 24 hours.

If you would like to contribute to the Wage Survey, please submit the LCC survey form. It will help us to have these facts upfront to better serve. All of the fields are not required, but the more information we have the easier it is to route this email to the right department.

If you would like to contact us, please go to the "Contact form on our website -"

The average labor costs shown in this report, might not always check with the official statistics of the respective countries for the textile industry. They are based on data collected and made available to Werner International and are a realistic representation of the actual labor costs. This service Werner International provides to its clients since 1968 and is based on data supplied by a panel of Werner clients in each of the participating countries.

Copyright © 2005



The post-quota scenario raises endless questions and uncertainties over the future of the global textile and apparel industry.

Everybody is in agreement with the anticipation that China will continue to strengthen its position and continue to expand its share of global textile and apparel trade.
However, the key questions are concerning the size and pace of such expansion such as; which markets and product segments will be most affected and, most importantly, what strategies are left for countries and companies throughout the world positioned on the “China path of growth?”

The impressive capacity build-up of many Chinese enterprises, most of the time un-matched by a clear strategic vision, is rapidly deteriorating market prices and transforming new product categories into commodities.
The limited visibility and understanding about the Chinese firms bottom line thinking makes it even more difficult to predict their sensitivity to classic business behavior.
For many textile and apparel companies throughout the world there is only way to react to such an unprecedented disruptive ‘new entry,” and that is to “get in the game.” It is vital to learn as much as possible about the Chinese way in order to transform the threats into opportunities.
With the announced extension of WFOE range of activities to trade (under WTO ruling, fully foreign owned companies will be soon allowed to carry out trading domestic activities), a new range of options will be available for apparel and textile companies interested in playing domestic in China.
Werner International has been directly present in China since 2002 and has been very active in providing assistance to foreign textile and apparel companies in their effort to understand this market. Werner has assisted these companies with developing their own approach, in several cases involving the set-up of a manufacturing operation.
Despite the fact that Chinese companies may enjoy “peculiar business rules” a number of weakness areas are present and tend to limit their ability to move up-market on the higher value segments.
Quality, own product development associated to a finely tuned industrial optimization formula, flexibility, long-term views on the market evolution are all relevant example of such limits.
As difficult as it is to win over in a cost-of-factors perspective, Chinese competition calls international players to find strategic approaches, which can leverage on their management skills and the ability to create value. No doubt a challenge, but as many repeat, no one can afford not to have a Chinese strategy.




Turquality: A branding program to “qualify” and promote Turkish excellence in Apparel production & marketing


At the end of 2004 Werner International was appointed as the sole management consultancy company in charge of providing strategic guidance for the set-up of the Turquality branding program.
This ambitious project, which is promoted by the Turkish Ministry of Trade and Industry, aims to upgrade the international image of Turkish-made products. It also strives to provide the industry with a strong stimulus to upgrade and re-position on the higher segments of the now global market.
In conjunction with ITKIB, the Istanbul Association of Textile and Apparel Exporters, the apparel industry has been selected as the “pilot” industry to develop the program and its procedures, then transferring them to other industries later this year.
Werner International was appointed as the mastermind of the industrial part of the program, thanks to both vast and international experience.
The Turquality program mainly consists of two complementing activities.
On one side, there is the development of a “quality manual and accreditation scheme” which defines the quality standards which applicants will be required to meet in order to be accepted in the program and for use of the Turquality logo and brand.
On the other side, an articulated auditing program is currently being implemented with the aim to “benchmark” Turkish companies with international best practices - building on Werner’s wide experience in this field all over the world.
This part of the project is particularly focused on each company’s organization and processes. The purpose is to provide each participating company with a dynamic tool to identify its weakness areas in the path towards excellence. This will be done according to each individual companies’ own, specific strategies.
Therefore, Turquality will be much more then a branding program. It will also become a very versatile platform for member companies to be supported while they strive towards excellence and to successfully compete with today’s highly dynamic international markets.
Werner International is particularly proud to be contributing to such an interesting project, which is such a complex mix of marketing, quality upgrading and strategic positioning, to be implemented for the first time in Turkey and, possibly, in the world.


Werner Quality Control system adopted in China

After a successful implementation of the Werner Quality Control System at their Jinhua plant in Sichuan, the China Resources Light Industries and Textiles (Holding) Co. Ltd decided to introduce the modern approach to six of their companies located in the provinces of Jinan and Shandong. The Werner testing plan, standard and tolerances and quality management were introduced in 10 plants. All these units, except one, are equipped with Uster Evenness tester 3 and 4 and are now ready to fulfill the quality requirements of the local and export markets.

Investments in India

Indian companies did not lose time to react to the elimination of quotas. Major investments were done to increase the capacity with the clear objective to serve the American market.
Werner is directly involved in the start-up of the Welspun India Ltd integrated manufacturing complex near Bhuj, northwest of Mumbai. The Welspun complex will be dedicated to the production of terry towels and bed sheeting fabrics and contains all the processes from spinning to the ready-made products. The terry towel dyeing and finishing plant is particularly interesting with a continuous preparation, dyeing and finishing range.
Werner International has been awarded the mandate to train all the production and supervision personnel. The Werner general management systems related to quality control, preventive maintenance and raw material management will be implemented in addition to specifically designed organization systems for each section.


Seminar for the SME Mexican Spinning Companies

Canaintex, the Mexican national chamber for the textile industry for the small and medium textile enterprise, organized a 5-day seminar. Senior representatives of 16 companies, many of them major players in the industry, participated in this 5-day exchange.
Mr. Alain Mathieu, of Werner International, lead the seminar with sessions dedicated to the optimum organization of a modern spinning mill, raw material management, preventive maintenance, human resources development and quality control.
“The interest, participation and the level of management were outstanding. The subject of training, in particular, really hit a sensitive cord so we dedicated an entire day to discuss the problems and the possible solutions,” mentioned Mr. Mathieu. The Werner AMPS© training system was in fact fully disclosed to the participants who were keen to note the simple, efficient and economic approach to the personnel selection and training.
More seminars will take place in Mexico City with Werner International experts in weaving, knitting and finishing.


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