Textile aspects of Argentina
As we are all aware, the textile and apparel industry of Argentina is heavily subsidised and there are protectionist measures in place against imports. Additionally, special loans with low interest are available for investments
The basic data
Argentina had 2011 an estimated population of 40.9 million and a GDP General Domestic Product of EUR 312.6 billion and a per capita income of EUR 7643.6. The real GDP growth was 2008 6.8 %, 2009 0.8 %, 2010 9.2 % and 2011 8.0 %. The inflation rate has been increasing from 8.6 % in 2008, to 6.3 % 2009, 10.5 % in 2010 and 11.5 % in 2011.
The textile relevant facts
The Argentinean government has outlined a master plan on strategic industries and the annual rate of growth for the two textile sectors is earmarked at 7.5 % up to 2020. The two branches of industry benefited in the past of the marked devaluation of the ARP, particularly in 2002. These advantages are no longer valid, since the outside value of the currency devaluated a lot less and this is why the government turned to protective actions against imports. Anti-dumping measures are mostly directed against Chinese imports having had a share of 44 % of all apparel imports. A special agreement was concluded with Brazil to limit trade imbalances.
Domestic production grew 146 % from 2002 to 2010 and local consumption of fibres increased from 8 to more than 13 kg per capita. In 2011, textile production increased only by 1.3 % and during the first half of 2012 it declined by 1.8 %.
Textile export aspects
In 2010 Argentina’s total exports amounted to EUR 51.4 billion and imports to EUR 42.4 billion. In 2011 the EU imported textiles from Argentina in the amount of EUR 1.8 million (rank 62 of supplier countries) and exported to Argentina EUR 55.3 million (rank 43). The EU apparel imports were EUR 4.6 million (rank 66) and exports EUR 22.6 million (rank 59). A glance at statistics reveals that textile and clothing EU imports from Argentina were decreasing from 2007 to 2011, whereas exports grew, with the exception of 2009.
Textile related investments
Brazilian investors are very active in Argentina, for instance Vicunha Têxtil started to manufacture jeans fabric and the company invested USD 60 million into the acquisition and modernisation of three mills. Also Brazilian Coteminas invested ARP 96 million in the Argentinean production of home textiles in order to lower imports from Brazil from 1500 to 600 t annually. Santana extended its local Argentinean yarn production with an investment ARP 77 million in order to substitute an import volume of 70000 t. Actually footwear manufacturer Crocs Brasil is establishing a production in Argentina.
Argentinean Vesuvio is producing for brands like Lacoste, Cacharel and Penguin is actually investing ARP 7 million to extend its production means in its plant in the province San Juan. VF Jeanswear Argentina is licensed to manufacture the brands Lee, Wrangler and UFA and will soon open a third factory in Argentina and invests ARP 5 million in upgrading two existing plants. Nike will spend USD 5 million in the development of its local suppliers.
Conclusions
The challenges to meet by domestic Argentinean manufacturers are increasing wages. According to Banco Ciudad the wages of the textile and apparel sector rose nominally by 48 % during the first quarter of 2012 as to 2011. This was much more than the average increase of 32 % of the total Argentinean manufacturing sector. Consumer prices for apparel added 24 % in 2011 and an estimated 18 % in Mai 2012.
A glimpse on clothing and textiles of Turkmenistan
The clothing and textile industry of Turkmenistan forms, jointly with the oil and food sector, the backbone of the manufacturing industry and cotton production has been steadily growing in the last 15 years
The basic data
Turkmenistan had 2011 a population of 5.5 million and a GDP of EUR 17.3 billion and the per capita income amountrd to EUR 3134.0. The real GDP growth rates were in 2008 14.7 %, 2009 6.1 %, 2010 9.2 % and 2011 9.9 %. The rate of inflation was in 2008 14.5 %, in 2009 there was a deflation of 2.7%, and again inflation in 2010 of 4.5 % and 6.1 % in 2011.
The textile relevant facts
Turkmenistan ranks among the ten largest cotton fibre producers in the world. In the Soviet era the CIS republic cotton fibre production was sold via the Moscow central office to mills in the European Part of the Soviet Union, and to foreign customers.
Also the use of domestically used cotton has risen from 3 % in 19900-91 or around 10000 t to around 60 % in 2010-11.
Meanwhile, the production of cotton yarn has been growing eightfold in the last 15 years or from 1995 11324 t to 2000 49100 t and 92400 t in 2010. In 2011 the output increased by 13.3 % to 104700 t, but is still below the target of 112500 t.
Cotton fabrics increased during 1995 to 2010 from 24.1 million m2 to 145.0 million m2, and more than two thirds of the production is for exportation to the USA, Canada, Russia, Western Europe, Turkey, China, the Baltic States and the Ukraine. Customers include the firms IKEA, Sears, Wal-Mart, Levis, Zara, Miss Erika and Foot Locker.
The textile trade situation
The EU has been importing in 2011 textiles from Turkmenistan for EUR 14.6 million (rank 43) and exported EUR 1.6 million (rank 120). The EU clothing imports amounted to 8.7 million (rank 61) and the EU exported for EUR 3.1 million (rank 108). When analysing statistics, EU textile imports declined, whereas clothing imports doubled from 2007 – 2011 and EU textile and clothing exports improved steadily.
The textile investments
Since the independence of Turkmenistan in 1991 an amount of USD 1.7 billion has been invested in construction and modernisation of textile and clothing factories. USD 0.2 billion was earmarked for the import of German textile machinery. The majority of the investment however went to around 30 large and medium sized textile complexes and companies with an annual capacity to process more than 150000 t of cotton fibre.
Alone in the first half of 2012, the influx of FDI Foreign Direct Investment amounted to USD 157.9 million. FDI’s are responsible for 25 % of investments in place. Most investors are from Turkey and by 2020 it is expected that another USD one billion will be invested in renovation and development of the textile and clothing industry, according to a state industry sector programme 2012 – 2016.
The actual state of textile investment
Actually, several programmes are in the implementation phase. The textile mills and clothing factories constructed to date are equipped with the state-of-the-art machines from Switzerland (suppliers: Rieter, Benninger, Sulzer, SSM and Itema group), from Germany (Trützschler, Oerlikon Schlafhorst, Terrot, Brückner, Textile Technologies, Hacoba/SSM (CH) and Monforts), from Italy (Marzoli, Savio, Vouk, Rimac and itema (Somet) and Ariolo). From Turkey (Balkan Textile and Cotton Gin Machinery, Dilmenler ) and from Belgium (Picanol). Recently there are also supplies from Chinese companies.
The Ministry of Textile Industry is keeping the thread in its hands in view to the textile and clothing industry, and it reigns over planning, steering and controlling the acquisition of raw and auxiliary materials and production and distribution of the manufactured goods. Thus, most companies of the two sectors are under control of the Ministry with the exception of foreign owned companies who are allowed to establish their own contracts with customers. Therefore, the majority of companies has tied hands and is unable to react to changing demands and they can’t deploy their potential to the full extent and are also lacking behind the set targets. There remains a lot to be achieved in the next four years to make the procedures leaner and to allow the companies more freedom in order that the two sectors reach a higher efficiency.