Embed Size (px)
Citation preview
1
GLOBAL SOURCING STRATEGY
Courtney Gill Jordan Causey Madison White
Picha Choopojcharoen Teng Ma
2 3
ABSTRACT
“Simplicity is the ultimate sophistication” Leonardo da Vinci
At Ecru, we strive to provide the high quality, cutting edge
garments to our consumers. Our company is based solely on
social responsibility and code of ethics. Our basics line will be
available all year round and is perfect for the trendy customer
looking to make a smart addition to their wardrobe, while still
standing out of the crowd.
Through much research in sourcing and manufacturing we
have determined the values in what Ecru is specifically looking
for. In order to meet our margins and keep our costs down
we have spent much time researching facilities all across the
world in order to determine which will best suit our needs. These
countries include, India, China, Sri Lanka, El Salvador and the
Philippines.
As an up and coming company it is very important to
minimize our risks and ultimately increase our overall opportunities
for both our company and our supplier. We have developed a
placement strategy that includes many factors such as country
and supplier analysis and ranking, costing, negotiations, and the
evaluation and analysis of the strategy development factors. This
strategy will aid us in our ability to make the best decision when
it comes to the manufacturing of the Ecru Basics garments.
4 5
6 7
TABLE OF CONTENTS
INTRODUCTIONSTRATEGY DEVELOPMENT PROCESS
COUNTRY ANALYSIS
SUPPLIER ANALYSIS COSTING
Company Profile 8
Who We Are 10
Our Products 12
Target Market 14
Why Develop a Strategy? 16
Values 18
Sourcing Guidlines 21
Products, Volumes, & Seasons 22
Sales Plan 24
Countries’ Highlights & Textile Industies 27
Sri Lanka 28
El Salvador 42
India 52
Philippines 60
China 72
SWOT Analysis 79
Country Ranking 84
Suppliers’ Highlights & Textile Industies 92
Sri Lanka 93
El Salvador 99
India 104
Philippines 108
China 111
Suppllier Ranking 116
Preliminary Costing 122
Initial Costs vsPreliminary Costs 124
STRATEGY DEVELOPMENT
SOURCINGSTRATEGY
COMPARISON OF
FINAL COSTING CONCLUSION APPENDIX
Sales Plan 126
China 128
Sri Lanka 132
El Salvador 135
The Future of ECRU 139
China 141
Sri Lanka 144
El Salvador 147
Placement Strategy 150
Preliminary Costing vs.Final Negotiatiated Prices 153
Conclusion 157
Cost Sheets 161
Tech Packs 167
Sourcing Guidelines 213
Supplier Emails 220
Bibliography 234
8 9
Vision
Enhancing Life with Grace and Simplicity
Mission
To be the ultimate house of simple sophistication and style through the creation of
desire now and forever
Values
Aesthetic Competence Creativity Diplomacy
COMPANYPROFILE
Fairness Integrity Perseverance Teamwork
ECRU is a high-end women sportswear retailer with its
flagship boutique in SoHo, New York. We provide women high-
quality sportswear with minimal, natural, and sophisticated
aesthetics and styles to our customers. ECRU also has an
extension line called “ECRU Basics” which provides basic
yet high quality garments throughout the year.
ECRU incorporates its values throughout the company
and its products since the main proirity is to assure our
customers receive the best quality and fashionable outfits
that reflect their lifestyles and identities.
10 11
WHAT WE STAND FOR
ECRU is a French word for “unbleached“ or “raw”. It
also means a shade of light greyish-pale yellow or beige-like
tones. This type of color appears on raw and natural yarns
and fabrics. The name reflects the company’s philosophy
and core values in which we consider the pure quality and
rawness throughout the products. That is why our designs
and aesthetics are rather simple yet sophisticated in
craftmanship. Ecru is the signature color palette through out
our collections and packaging, which also makes us stand out
and distinguishes our customers from other leading brands.
ECRU also concerns about sustainability and corporate social
resposibility. We take serious agreement on transparency and
integrity with our partnerships from sourcing guideline to every
process of the production.
SInce ECRU values the importance of environment
and sustainability, the products are made of 100%
natural fiber yarns and fabrics such as cotton and
linen. The company has been trying to reduce carbon-
footprint by sourcing and utilsing fabrics within the
same countries. Our company is also working toward
more eco-friendly and organic fabrics in the future.
ECRU offers both fashion and basic collections. Our
products range from woven and knitted tops, bottoms,
dresses, and accessories. Though ECRU basics collections
have lower price range, we still maintain and assure our
customers the same level of quality of our products. ECRU
basics are offered throughout the whole year with new
several pieces added to the collections each season to
keep updated with current color trends for each season.
12 13
Style 1 - Latte
Retail Price - $120
Style 2 - Barley
Retail Price - $90
Style 3 - Ivory
Retail Price - $140
Style 4 - Bisque
Retail Price - $120
Style 5 - Desert Sand
Retail Price - $180
OUR PRODUCTS
ECRU BasicsWoven Tops
Spring/Summer 2014
14 15
TARGET MARKET
ECRU caters toward female New Yorkers within ages of 25-40. Our
customers are considered as young digerati living in the urban and afflu-
ent lifestyles around Manhattan and Downtown Brooklyn. They are sophis-
ticated, thoughtful, and stylish. With high level of education and career
success, our women are independent and confident with their lifestyles
and fashion choices. They are innovators and experiencers who always
look forward and keep up with new trends and styles, but yet don’t want
to overdress themselves. They want to dress well enough so that people
can appreciate their looks as well as their status. Their preference in styles
is considered clean, minimal, yet unique in design and aesthetic. Our cus-
tomer also value high quality and craftmanship.
ECRU Basics line serves as fundamental pieces that our women must
have and wear them in their daily lives no matter what occasions or plac-
es they go.
CUSTOMER PROFILE
Family Income: $308,721 (Personal - $97,000)
Education: MBA in Marketing at NYU
Competitive Stores/Brands: Stella McCartney, Chloe, and Bloomingdales
Fashion Cycle: Innovation Stage
VALS: Innovator/Experiencer
Buying Behavior:
• Expect great customer service / Enjoy shopping experience
• Best quality products
• High brand loyalty
Young Digerati
Grace SmithAge: 27
Marketing Consultant From Upper East Side,
NYC
16 17
STRATEGY DEVELOPMENT PROCESS
Ecru, meaning pure, simple and clean, is a luxury women’s ready to wear
brand with a mission to be the ultimate house of simple sophistication
and style through the creation of desire now and forever. Ecru has a
goal to create sophisticated and timeless pieces of women’s clothing
while valuing aesthetic, diplomacy, fairness and integrity, as well as
giving back philanthropically.
These five country profiles from El Salvador, India, China, the Philippines
and Sri Lanka is meant to overview the countries in all aspects from
their culture, to their economy to their manufacturing, to ultimately
determine which country is the best for Ecru to source their luxury
garments from.
When determining which country to chose for the manufacturing of
our luxury women’s woven tops Ecru’s looked firstly at the codes of
conduct for each of the manufacturers as well as the way the country
does business overall. Because ethics and overall conduct is such a
strong value for Ecru, it is very important that the manufacturers share
these similar goals. Our other considerations must obviously include
the overall cost of creating the garments, the export industry as well
as the over textile and apparel industry of each of the five chosen
countries.
Why Develop a Strategy?
Values
Sourcing Guidlines
Products, Volumes, & Seasons
Sales Plan
18 19
VALUES
ECRU is built upon several values we believe will allow our company
to grow and be successful. We aspire to be a brand that is looked up
to and respected by our competitors and customers alike. These same
values helped build ECRU’s sourcing guidelines as we are committed to
producing quality garments that will be worn with pride.
Perseverance
We believe in our company and its products and we will work hard to
overcome obstacles in whatever form they may take in order to deliver
apparel that lives up to our standards.
Fairness
We believe in equal opportunity and rights free from any form of
discrimination.
Diplomacy
Working with foreign companies can bring its own set of challenges, but
we are dedicated to resolving conflicts and finding common ground to
benefit both ourselves and our manufactures as we wish to successfully
grow our business as well as theirs.
Creativity
At ECRU we know the best solution isn’t always the most obvious and
believe in the power of creative thinking and play to be innovative.
Aesthetic
We strive to deliver garments that will be appreciated by our customer
for both the care that was put into its design and creation and for its
overall look. We believe in simple luxury and want our customers to
confident whether they are wearing our basic line or our fashion line.
Teamwork
ECRU is more than just a team; we are a family of people who all believe
in our product and are committed to working efficiently not only within
our company but also with our manufacturers in order to create the
best products.
20 21
Integrity
We stand by our beliefs and values and strongly believe in transparency.
We are dedicated to making sure that our employees are happy and
being treated fairly, especially those who are manufacturing for us.
We strive to give everyone a voice, free from worry, to ensure that our
standards are being lived up to.
Competence
At ECRU we strive to know our customer and her needs in order to meet
them. We pride ourselves on every piece of merchandise that displays
the ECRU name and go to great lengths to find manufacturers that are
knowledgeable and reputable in the products they create for us.
ECRU’s Code of Conduct is in line with values that are core
to its company. Fairness, teamwork, diplomacy and integrity are
some of the values that come across strongest in our code, as ECRU
strongly believes in fair treatment of workers as they are more than just
employees. They are people with their own families and needs, and
we want to ensure their safety and well-being as we value them and
the role they play in our brand. Our Code of Conduct is applicable
to all suppliers, their subcontractors and other business partners that
conduct business with Ecru. Our code can be found in the appendix
and strongly details our requirements in regards to the health and
safety of the work environment, worker’s rights with an emphasis on
basic rights, wages and restrictions on working hours, and monitoring
and enforcement which outlines transparency requirements, our right
to make unannounced audits in addition to our scheduled bi-annual
audits, our right to appoint an external auditor, should we see it fit and
the consequences of not taking corrective action should a violation
come to light.
SOURCING GUIDELINES
*See full sourcing guidelines in Appendix
22 23
Products, Volumes, & Seasons
Look 1: Latte
76,000 Units
Season: Year round
Loose fitting women’s 100% pima cotton
blouse with narrow, cowl neck and extended
sleeve openings.
Look 2: Barley
90,000 Units
Season: Year round
Loose fitting women’s 100% pima cotton
blouse with ¾ length folded sleeves.
Look 3: Ivory
105,000 Units
Season: Year round
Loose fitting women’s 100% pima cotton,
sleeveless, collared button-down.
Look 4: Bisque
85,000 Units
Season: Year round
Loose fitting, wide neck women’s 100% cotton
poplin blouse with cutouts on sleeves.
Look 5: Desert Sand
94,000 Units
Season: Year round
Women’s long-sleeved, 100% pima cotton,
high-low, button-down shirt with princess
seam, back detailing and right breast pocket.
Total Annual Volume: 450,000 Units
24 25
SALES PLAN
Because we are a high-end luxury company, our margins, princes
and sales are quite high. In the first year after the Ecru Basics collection
launches we are projecting to do over $59 million in sales. This number
is derived from selling 450 units divided between 5 garments and sku
numbers.
Our retail prices are going to range from $90 up to $180, due to
the fact that we are a luxury brand and retailer. We are selling these
garments online and in our own flagship store solely at this current
moment, which means will not have wholesale prices. This will reflect
highly on our margins, resulting in them being between 65% and 66%
for each garment. Our average cost for production is about $5 per
garment, making our total production cost for 450,000 units, 2,250,000.
26 27
COUNTRY ANALYSIS
COUNTRIES
Sri Lanka El Salvador
India Philippines
China
Countries’ Highlights & Textile Industies
Country Selection
Ratings Spreadsheet
Sri Lanka
India
El Salvador
Philippines
China
Our five countries, China, India, the Philippines, El Salvador and
Sri Lanka were selected by our professor, but have been selected
for a reason. During the duration of the strategy we have made
it our goal to determine which countries are the best sources of
manufacturing for creating our luxury, woven women’s tops. There
are many determining factors, but most importantly we have looking
into the business and textile climate and industry, the costs, the
logistics as well as the manufacturers reliability and code of conduct.
Each of these five countries has something different and special to
offer to the world of manufacturing and we have taken great time
and detail in assessing which of the five will rise to the top.
28 29
SRI LANKA
Country Introduction
Endless beaches, breathtaking ruins, flavorful food and teas, legendary
temples and oodles of elephants packed into over 3000 years of history
and culture on the island of Sri Lanka.
Sri Lanka offers incredible experiences stretching from the mountains
to the sea. The country is packed with rich history, diverse wildlife, a
variety of climates and eco-systems, cultural and religious heritage,
wide-spanning beaches and offers hundreds of ancient ruins to explore
and discover. It is Southeast Asia’s hidden gem that is waiting to be
traveled and charted by tourists, nature lovers and history enthusiasts
alike. (Data Monitor)
With all that this country has to offer, it has even more in manufacturing
and business practices and has been awarded in many areas of
“Green” business practices for their manufacturing facilities and
factories. This country is beginning to thrive and make a name for itself
on the map with tourists as well as import and trade businesses and
manufacturers. (Data Monitor)
Sri Lanka is an island country located of the southern most
tip of India. The country has a rich history documenting back over 3000
years ago. Sri Lanka has a very strong Buddhist heritage. The country
was very important during the time of the ancient Silk Road and has
continued to grow and expand their trade and exports, making
them the top contributors to Sri Lanka’s economy. Even though the
country is just starting to rebuild it self from a thirty-year civil war which
ended recently in 2009, Sri Lanka is beginning to thrive once again
in manufacturing and tourism, giving them a strong and growing
economy. (Data Monitor)
30 31
Sri Lanka, also known as, Ceylon, is an island in the Indian Ocean with
a population of about 20 million people. The highest concentration of
the population is located in the larger cities, particularly in Columbo,
the countries capital, main port, and industrial center and hub. Sri
Lanka is ethnically, linguistically and religiously diverse, with over ten
different languages cultures and religious beliefs being practiced.
(Data Monitor)
The flag of Sri Lanka is also known as the Lion Flag. It depicts a
gold lion holding a sword in its front paw, a dark red background, four
golden leaves, one in each corner and two vertical stripes, one green
and one orange. The lion represents the bravery of the Sri Lankan
Nation, while the other symbols represent the countries past history,
culture and religious beliefs. (Data Monitor)
Socio-Economic-political Analysis:
The Sri Lankan politics take place in a presidential representative
democratic republic framework. This is where the president of Sri
Lanka is both the head of the state and the head of the government.
The political make up also includes legislative power, which act under
both the government and the parliament. For many decades, politics
in Sri Lanka have been dominated by the Sri Lankan Freedom Party
and the Conservative United Nation Party. (Datamonitor)
The president Mahinda Rajapaksa was elected in November of 2005
and is part of the Freedom Party. The Prime Minister, Disanayaka
Mudiyanselage Jayaratne, who was elected in 2010, is also a member
of the Freedom Party. The President is elected for six-year terms and has
the power to hire and fire the Prime Minister. The day-to-day running
of the government lies to the prime minister and his cabinet, which is
drawn from the legislature. (Datamonitor)
In July of 1983 the Sri Lankan Civil War broke out and began an on
going conflict all across the island. The government rose to fight against
the rebellious Liberation Tigers of Tamil Eelam (LTTE), also known as the
Tamil Tigers. The Tamil Tigers are a military organization that formed in
order to break away from Sri Lanka and form an independent Tamil
state called Tamil Eelam in the north and eastern region of the island.
The war led on for 26 years when the Tamil Tigers were finally defeated
by the Sri Lankan military in 2009. (Datamonitor)
This war lasting almost three decades left Sri Lanka in a sheer state
of turmoil. Over 100,000 citizens were killed and even more were
injured. The country was hurt culturally as well as economically. Much
damage was done to the country physically which has detracted
tourists, investors and has damaged manufacturing facilities. With all
that being said, in the 5 years that the war has been over, Sri Lanka
and its citizens have done all that they can to revitalize the country
and restore it to what it once was. (Datamonitor)
32 33
The government figures in Sri Lanka have been stable for many years
as well as their representative democratic republic political system. The
country is swiftly able to make decisions that benefit the communities
and the people as a whole. However, the war has certainly affected
the country significantly and even though Sri Lanka is making all efforts
to restore and revitalize, it is still a potential drawback when looking at
prospective manufacturing locations.
Economic traits:
Sri Lanka has a world ranking of 90 from the 2014 Index of Economic
Freedom and a ranking of 16 in the overall Southeastern Asian
hemisphere. (IEF) The country is continuing to see strong economic
growth following the conclusion of the 26-year Civil War. During the
war there was much turmoil economically and the country suffered
greatly. It is now that Sri Lanka is making all efforts to
reconstruct and bring back one they once had. (CIA World Factbook)
The Sri Lankan governments very high debt payments have contributed
almost 100% to the country’s high budget and fiscal deficit. However,
the global 2009 recession and economic crisis actually caused a boom
for Sri Lanka and nearly balanced their debt payment crisis. This has
given Sri Lanka the ability to now focus on their greatest assets, being
their trade and exports, and agriculture. (CIA World Factbook)
The Sri Lankan governments very high debt payments have contributed
almost 100% to the country’s high budget and fiscal deficit. However,
the global 2009 recession and economic crisis actually caused a boom
for Sri Lanka and nearly balanced their debt payment crisis. This has
given Sri Lanka the ability to now focus on their greatest assets, being
their trade and exports, and agriculture. (CIA World Factbook)
The country is constantly looking for new ways to expand and improve
their most lucrative markets, apparel manufacturing and agriculture,
which combined employ over two thirds of the population and bring
in the majority of the revenues for the country. Because the main
revenues and income for the country do come from trade and exports,
particularly apparel but also tea, rubber and technology, there is a
large incentive for the country to constantly keep up to date and
advanced to beat out the competition across the world. Sri Lanka
is currently ranked at number four of the top apparel manufacturing
countries in the world and
has great potential to reach number one in the upcoming years.
(World Factbook)
Sri Lanka’s currency is the Indian Rupee; and as of April 2014,
the U.S Dollar is valued at .0077 of 1 Rupee. The current Sri Lankan
unemployment rate is at 4%, ranking #49 in the world. Revenues in
2013 reached $8.43 Billion, while expenditures were at $12.57 Billion.
34 35
The Sri Lankan inflation rate both increased and decreased significantly
over the past 10 years. In the past 3 years the rate of inflation has gone
from 6.11% in 2012, to 9.9% in 2013 and all the way down to current
4.2% that it is today. This is very unusually for the rate to fluctuate so
drastically, but the country has been in a serious state of turmoil after
the war, which directly influenced their economic structure. Looking
towards the future, Sri Lanka is making all the possible amends to
even out and steady the drastically changing inflation rate. (Trading
Economics)
Due to these high rates of fluctuation in both revenues and the
inflation rate, Sri Lanka does show potential risks when looking into
supply and manufacturing. The country is still in quite a high amount of
debt and is spending significantly more than they are bringing in. This,
and the drastically changing inflation rate may cause serious problems
and will be a great concern if Ecru business is done in Sri Lanka.
Labor and Labor Laws:
The Labor force in Sri Lanka is very strong and makes up a significant
amount of the population, of both males and females. About 48.2%
of the population works in labor, 67.2% being male and 31.3% being
female. The labor tasks in Sri Lanka include agriculture, industry and
services. In 2012 30.7% of the population worked in agriculture, 26.6%
worked in industry and 42.6% worked in services. (Labor Force Survey)
The unemployment rate has seen a significant decrease in the past
ten years dropping from 8.4% in 2003 down to 4.0% in 2012. The rate
of unemployment for men is at about half the percentage of that for
women. This is a significant decrease in a short period of time and is all
due to the ending of the Civil War and Sri Lanka’s ability to quickly start
rebuilding the country. (Labor Force Survey)
Sri Lanka’s main exports are apparel, rubber and tea. These
three categories make up a large percentage of revenues for the
country. Sri Lankan apparel manufacturing supplies a wide variety of
garments ranging from sportswear, lingerie, and lounge wear, to ready
to wear, bridal, swimwear and children’s wear. This gives Sri Lanka the
opportunity to supply to many different companies and with a wide
variety of style, quality and price points. (Labor Force Survey)
Since apparel manufacturing is such an important aspect to the
economy in Sri Lanka, many laws have been put in place to protect
the employees and their employers. Laws, codes of conduct and rules
of ethics are made very clear to the employees and are 100% geared
towards making their careers greater and more enjoyable. Companies
in Sri Lanka have very in depth laws regarding workers rights, women’s
rights, employee legal work rights and employee termination rights
and once again these laws and how they work are made very clear
to the apparel-manufacturing workers. Sri Lanka is currently close to
being the number one apparel manufacturing country in the world
36 37
and they will be chosen so because of their incredible ethics and
the amount of integrity with which they treat their employees, their
customers and of course, the environment. (Labor Legislations)
Sri Lanka is constantly making sure that they are treating their
employees and their customers with the utmost respect and integrity.
Because high integrity is one of Ecru’s top values, the way that Sri Lanka
manages their facilities is something that really resonates with us. The
ability to have respect in the workplace is something Ecru is certainly
looking for when reviewing countries and manufacturing facilities.
current Textile and Apparel Industry:
Sri Lanka’s textile and apparel export industry is the largest and
most significant contributor to the country’s economy. The industry
has seen sizeable growth over the past four decades and today the
apparel industry makes up 52% of the countries exports and economic
stimulus. This fast growing industry also provides over 300,000 jobs to
Sri Lankan men and women across the country. The 350 garment
factories and 16 textile and fabric manufacturers are privately owned
entities but do manage well with the Sri Lankan government, seeing
that they are bringing in the majority of the countries revenues. These
technologically innovative factories play a key role in the advancement
of the Sri Lankan apparel industry and are quickly paving the way to
be the top supplier country in the world. (EDB)
The apparel manufacturing industry is incredibly competitive,
but Sri Lanka has many attributes that make them stand out. Each
factory in Sri Lanka is 100% environmentally friendly and many have
won incredible awards including the world’s first LEED Platinum
certification. They operate under strict ethical principles and
guidelines that are made clear to the workers as well as the brands
and companies. The manufacturing facilities are also highly focused
on innovation, giving back to their country and maintaining a strong
reputation all across the world. (EDB)
Sri Lanka’s apparel categories include sportswear, lingerie,
lounge wear, ready to wear, bridal, swimwear and children’s wear
and the United States and the United Kingdom have been the
largest apparel buyers for many years. Longstanding relationships
with companies across the world, and a strong drive to make quality
pieces, keeps buyers and brands coming back again and again to
Sri Lanka. These relationships have made the apparel industry in Sri
Lanka even more reputable, stronger and more prosperous. (EDB)
Sri Lanka is a producer of Garments Without Guilt and the “Made
in Sri Lanka” label, both of which are synonymous with high quality,
reliability, social and environmental standards, code of ethics and
accountability. Each of these standards is made present in each of
the factories, the working environments, as well as how the garments
are produced. Within the past three decades the country has
evolved into creating high quality and sophisticated designs,
38 39
allowing the country to appeal to even more companies and brands.
(EDB)
Because the apparel industry makes up such a large percentage
of Sri Lanka’s economic stability and make up, all of the factories
and manufacturing facilities in the country take part in giving back
to the community. This is a very important aspect of these facilities
and shows a philanthropic side that will resonate with many different
fashion brands, again making Sri Lanka an ideal country to source
from. Businesses and manufacturers are always looking to grow
and expand and currently there are 10 new facilities being built. Sri
Lanka has recently been named one of the top three countries out of
the top 50 most important suppliers and has promise of becoming the
top supplier in the world in a few short years. (EDB)
Because the textile and apparel industry in Sri Lanka is one
of their top industries, they are constantly looking for new ways to
improve and expand. With that being said, the manufacturers are still
incredibly focused on building strong relationships and reputations
with customers. This in turn helps Sri Lanka keep their best customers
coming back and gives them potential new customers for additional
revenues. Ecru would be happy to manufacturer in a country that is
focused on giving the customer exactly what they are looking for and
making sure they have a great experience along the way.
Logistics and importation
Exporting goods from Sri Lanka into the U.S. has become a very simple
and quick task. There are many shipping and freight companies that
service Sri Lanka and a large majority of the goods are going back to
the Unites States. The routes are well established and there are multiple
to choose from depending if the goods are being delivered to west
coast or the east coast. Because the majority of the manufacturing
facilities are located in Colombo, the port city capital, or very close
by, getting the garments and apparel to the port is not an issue.
Hundreds of shipping companies travel from Sri Lanka to the United
States including ZIM Shipping Line, Maersk Line and Hapag-Lloyd. The
majority of exporting and shipping out of Sri Lanka is done through sea
and there are limited airfreight companies coming to Sri Lanka. ZIM
Integrates Shipping Services ltd. was established in 1945 and has grown
to be one of the largest container shipping companies in the industry.
The company is committed to providing their customers with reliable
shipping solutions around the world. An exporting container ship leaves
from Colombo, Sri Lanka every two days and takes approximately 3
weeks to arrive in New York, United States. The container ship takes two
routes: one from Sri Lanka through the Middles East and Mediterranean
into southern Europe. From there it goes on to the port in New York.
(ZIM)
40 41
Maersk Line is one of the top leading cargo-shipping companies in the
world and has been rising to the top of the market since 1928. Their
strong commitment to the environment as well as customer service
keeps people coming back. The ship leaves the Colombo port every
Friday at 12 pm and there is a one-day cut off period for canceling a
shipment. The vessel takes about 3-4 weeks to arrive in New York. The
line goes from Colombo to Rotterdam and then arrives in New York.
(Maersk Line)
Haypag-Lloyd is a container freight company operating in more than
300 locations across the world. The company has been in business for
over 165 years and continues to keep their values of environmental
protection, compliance and sustainability prevalent in their work.
Exporting a container from Sri Lanka to New York will take about 22
to 28 days on a Haypag-Lloyd ship. The ship leaves twice a week and
sails through the Middle East and Mediterranean, making one stop in
Halifax before then landing in New York. (Haypag-Lloyd)
42 43
EL SALVADOR
Country Overview
El Salvador is a small Central American Country that has been gaining
footing in the textile and apparel industries and is the closest country
to ECRU’s New York headquarters out of the five countries we have
been researching. This means that manufacturing in El Salvador gives
the advantage of a short lead-time. It is also the only country we
have researched which has established a free trade agreement with
the United States, through the Central American Trade Agreement-
Dominican Republic (CAFTA-DR). El Salvador was the first Latin
American country to sign CAFTA-DR which was implemented in March
2006 and would allow ECRU to import any garments we manufacture
there tariff-free, as long as the labor and all the materials originate
from one of the countries within the agreement. This is not the only
tie El Salvador has to the US, as El Salvador adopted the US Dollar in
2001 as its currency which gives control over its monetary policy to the
United States (Coleman 63; “Country Intelligence” 7). This has helped
to stabilize the country’s inflation rates which are now predicted to
increase steadily around a 2% change from the previous year in the
near future (“Country Intelligence” 5-6). The dollarization also has
eliminated the need to keep an eye on exchange rates between
the US and El Salvador. The United States is El Salvador’s main trading
partner, which receives half of El Salvador’s exports. The United States
has invested over $2.5 billion into the country to help boost industries
and infrastructure. In addition, approximately 1 in 5 Salvadorans lives
in the US, 1.2 million of which are immigrants (Meacham).
44 45
Political
El Salvador is a Democratic Republic that has been gaining stability
since it’s 12-year civil war. It has a president who is elected for a single
five year term. Current President, Mauricio Funes will be succeeded
by his Vice President, Salvador Sánchez Cerén in June; both of which
are left-wing members of the Farabundo Marti National Liberation
Front party, or FMLN (Meacham). Sánchez Cerén has proposed
“expanding rehabilitation programs, job training for convicts, and
increasing support for police” in addition to adding welfare programs
and development projects to help strengthen the economy and
reduce poverty (Meacham).
Social and labor
Nearly half of El Salvador’s labor force is employed in agricultural
and commercial activities while manufacturing accounts for 15.5%
(“Country Intelligence” 15). Men make up the majority of the workforce;
however, women have been gaining footing in recent years. As of 2010,
there were 4.13 million people who are of working age with a labor
force of 2.58 million (“Country Intelligence” 15). The population growth
has been slowing but remains positive at 0.7% per year; however, the
labor-force is predicted surpass the population growth rate until 2040
due to El Salvador’s age structure, as there are more people entering
the workforce then there are retiring (“Country Intelligence” 10). Both
male and female children typically attend school for 12 years with an
estimated 80.2% of the population over 15 years of age being literate
(Coleman 115). El Salvador will not lack for intelligent employees in the
years to come as literacy has been increasing and a strong amount
of the population is young. El Salvador is often listed as one of the
most dangerous countries, having a murder rate over 40 per 100,000
people in 2013, wide spread gang problems (particularly with the
Mara Salvatrucha and the Barrio 18), drug trafficking and corruption;
however, it often ranks among the top ten happiest countries (Klahn;
Meacham).
Economy
El Salvador has had a mixed economy since the 60’s and 70’s when
expanded into manufacturing and it is currently one of the most
industrialized countries in Central America. Agriculture employs half
of the country’s work force and includes the growing of sugarcane,
coffee and cotton. Currently El Salvador has a “sluggish economic
performance” with imports exceeding exports although the growth
rate has been taking a turn for the positive and is predicted to remain
so in the medium-term. The country has low investment rates resulting
in slow capital accumulation that “reflect a low national savings rate,
a weak investment climate and poor human capital development”
(Country Intelligence” 10). As El Salvador adopted the US Dollar as
its currency, it no longer has control over its monetary policy which
is dictated by the United States (“Country Intelligence” 7). Inflation is
46 47
clearance, port and terminal handling and inland transportation and
handling (“Doing Business”). Acajutla is El Salvador’s major cargo
seaport, followed by Puerto de La Union Central. The Cutuco Port had
been inactive since 1996 and underwent renovations in January 2005,
making it the most important port infrastructure project in over 30 years
as it would double the cargo holding abilities of Acajutla (“Puerto”). It
was inaugurated Puerto de La Union Central on June 21, 2008.
By ocean, ships can travel from one of El Salvador’s ports through the
Panama Canal and on to one of many U.S. ports where it can then
travel by train or truck to its destination. Cargo can also travel across
El Salvador to either Honduras or Guatemala as both countries have
sea ports along the Atlantic coast. Crowley is a shipping company
headquartered in Jacksonville, Florida with capabilities to transport
merchandise from El Salvador to ECRU’s New York City location.
Crowley would transport ECRU’s cargo from El Salvador to a port in
Guatemala where it would then sail to the Fort Lauderdale Port (Port
Everglades) in Florida. Next the cargo would ship via motor rail to New
York City. Ships travel from Guatemala to Fort Lauderdale 3 times a
week with a transport time of 5 days. Trains set out daily and cargo
will reach New York in 4 days. Crowley gave a quote of $5,755 for
the transportation of a filled 40ft shipping container of apparel from El
Salvador to New York City (Phone Interview).
predominantly driven by food, fuel and energy related wares and El
Salvador’s adoption of the US dollar has helped to stabilize inflation
which is expected to increase by 1.9% in 2014, a much lower rate than
surrounding countries (“Country Intelligence” 5).
Exporting
Exporting from El Salvador requires 7 documents including a bill of
landing, a cargo release order, a commercial invoice, a customs export
declaration, a packing list, a technical standard/health certificate
and terminal handling receipts (“Doing Business”). According to the
World Bank Group, it takes 13 days and around $980 to prepare a
container for export: this accounts for document preparation, customs
48 49
Textile Industry
El Salvador has built a vertically integrated supply chain and is the
only Central American country that has developed a full synthetic
cluster, producing nylon, polyester and microfiber fabrics which ECRU
may wish to utilize at a later date (“Specialized Textiles”). Apparel
production cost per minute in El Salvador is $0.10; which in line with
many of El Salvador’s neighbors including the Dominican Republic
and Guatemala. Mexico and Colombia on the other hand are more
pricy with costs around $0.12-$0.14 per minute. El Salvador’s textile
and apparel association, the Chamber of the Textile, Clothing and
Free Zones of El Salvador (CAMTEX), makes its mission “To promote,
represent and support the textile, clothing and free zones of El Salvador,
to strengthen their competitiveness,” and is a valuable resource when
sourcing and learning about the industry (CAMTEX).
The apparel and textile industry in El Salvador has been growing;
production saw an increase of 4.1% in 2013, while exports grew by 9%
to 2.394 billion (Melara). The industry accounts for 44% of the country’s
exports; broken down further, fabrics accounted for 64%, followed
by synthetic garments and fibers at 25% and woven apparel and
fibers at 11% (Melara). 73,795 direct jobs were created in the industry
during October 2013: a 3% increase from October of the previous
year (CAMTEX). El Salvador’s agency for Promotion of Exports and
Investments (PROESA) held a seminar in November of 2013 with aims
to identify new opportunities in the textiles and apparel industry with
a focus on how to utilize benefits of the CAFDA-DR trade agreement
(“Salvadoran Government”). Due to the textile and apparel industry
accounting for 16.3% of industrial GDP (2013) and 44% of exports,
it was identified as one of the sectors with strong growth prospects
in the short term (Salvadoran Government; Melara). As a result, the
government will develop training programs to shift human resource’s
focus to identifying new business opportunities in this sector.
Climate
A variety of natural disasters affect El Salvador typically causing the
evacuation of thousands, the destruction of infrastructure, homes,
buildings and land. These natural disasters could result in the destruction
of manufacturing buildings or the evacuation of employees that
would render them unable to work, affecting product production and
the ability for goods to be transported. El Salvador experiences two
seasons; the rainy season occurring between June and November,
and the dry season, between December and May. During the rainy
season, flooding and landslides have proven to be risky. Deforestation
has been a problem in El Salvador which increases its susceptibility to
these occurrences as roughly 85% of the country’s natural land-cover
has been removed: making 65% of the country vulnerable to landslides
(“Disasters Risk” 19). El Salvador has been called the Land of Volcanos
and has over 20 volcanoes, 3 of which have been active in recent
years and have resulted in the evacuation of thousands (“Disasters
50 51
Risk” 20). El Salvador is known for its vulnerability to hurricanes and
tropical storms as well as for earthquakes, as it is located on one of
Earth’s most seismically active regions (“Disasters Risk” 18-19).
52 53
INDIA
Social
India has the second largest population in the world with around 1.2
billion people in 2012. The social environment is very stable and people
live together harmoniously since many are religious and live their lives
under the doctrine of karma (over 80.5% are identified as Hindus)
Indian cultures have been perceived as diverse and exotic. There are
18 major languages in India. However, many Indians can speak English
since it is the second official language. Hierarchy is influenced by the
caste system and still important in Indian society. Younger people
respect the elders, and lower rank employees also have to respect
their bosses and higher executives.
India is still a male-dominated society where women have lower priorities
and wages than their male counterparts. Poverty and healthcare are
still major problems in India. Many water resources are contaminated
in India, and air pollution is almost the worst in the world. Many people
have diseases and are unable to obtain adequate healthcare (only
7-8% of the central budget is allocated for healthcare). Even though
the caste system was eliminated, people from lower caste ancestry
are still regarded as unclean and are given less priority and benefits
than higher-status people. There are still issues related to the large
wealth gap and disparities in the society that cannot be improved
within the short period of time (Marketline).
Economic
In 2011, India’s estimated GDP was $1.843 trillion with 7.8% growth rate.
India economy has been improving and growing steadily in the past few
54 55
years. Middle class populations are increasing in numbers and earning
higher disposable incomes. Foreign portfolio and direct investment
inflows also have risen significantly in the recent years. Proposals for
direct foreign investment are supported by the government and are
also considered by the Foreign Investment Promotion Board.
US-India bilateral merchandise trade in 2008 was almost nearly $50
billion. Major US imports from India include textiles, ready-made
garments, internet-enabled and IT services, gems, leather products,
and chemicals. The US is also India’s largest investment partnet with
a 13% share. India exports have also grown at a very fast pace
accounting for 23.9% of the country GDP in 2012 (Marketline)
However, India’s economic growth is constrained by inadequate
infrastructure (usually electricity), a cumbersome bureaucracy,
corruption in service sectors and governments, regulatory and foreign
investment controls, and high fiscal deficits. The rising fiscal deficits,
inflation, and external debt have resulted in depreciation of rupee
and negative credit rating (BBB-) India’s stage of economy has rather
been a mixed between positive and negative aspects.
Political
According to Globaledge, the Indian government is considered as
federal republic, however “ the central government has greater power
in relation to its states and also has adopted a British-style parliament
system; the parliament consists of Council of States (Rajya Sabha) and
House of People (Lok Sabha)”. “The President of Indian is elected by an
electoral collage of elected members from both houses of Parliament
and the legislatures of the states for a five-year term” (CIA). India has
28 states and 7 union territories. President Pranab Kumar Mukherjee is
the Chief of State, and Prime Minister Manmohan Singh is the Head
of Government (Global Edge). The current diplomatic representative
from US is Ambassador Nancy J. Powell (CIA).
Labor
India has the second-largest labor force in the world, which accounts
around 487 million workers. In 2013, India’s unemployment rate was 8.8%
with 29.8% of population below poverty line (CIA). Textile and apparel
industry employs over 35 million workers and is also the second largest
provider of employment after agriculture. Many unskilled workers
are well-trained in their sectors. The current labor cost in apparel
manufacturing sector is $0.51 per hour; the overall wage is still higher
than the same sectors in Bangladesh, Cambodia, Pakistan, Vietnam,
Sri Lanka, and Indonesia (Emerging Textiles). The growing number of
young population in India implies the potential and active workforce
in the world which looks positive for outsourcing for skilled and talented
labors; more than 70% of population will be working age in 2025.
Trade Agreement
India has no Free Trade Agreement partnership with the US. However,
56 57
the country has several bilateral trade agreements with other countries
and within WTO such as AIFTA (ASEAN-India Free Trade Area) which
allows tariff liberalization over 90% of products including textiles. The
trade agreement is however beneficial to the US companies in the
way that they can gain benefit from cost reduction if they decide to
use materials such as raw materials, fabrics, or components from one
of the ASEAN countries, which will be delivered to India to be made
into final garments. India also has SAFTA (South Asian Free Trade Area)
and with the new government recently has agree to start on bilateral
trade ties with the EU and Canada in the future.
Risks
Though India has a potential growth in manufacturing and labor
force. There are still some problem associated with poor infrastructure
and business protocol that might create risks to the production and
company such as punctuality and discipline issue.
There are high risks associated with late inadequate shipment and time
consuming process, which will tremendously cause the loss of profit in
the business. Inefficient implementation of regulations and Code of
Conduct is also another risk. Child labor, unhealthy and unsafe working
environments, and unfair wages are still considered major issues. Many
companies have a hard time identifying the transparency level of the
suppliers since the production is done oversea. It is a huge risk in losing
reputation of the company if any unlawful or inhumane practices are
discovered at the partnered suppliers
Textile and Apparel Industry
The domestic apparel market in India was worth about $38 billion in
2012. India is ranked as the sixth largest apparel exporter in 2013 with
the total estimated value of $14.4 billion. The apparel sector accounts
for almost 10% of the overall exports. India has been regarded as one
of the best producers of cotton fabrics (especially hand-loomed) as
well as raw cotton exporters (ranking #2 in 2013) in womens wear,
blouses and Indian ethnic wear comprise the largest segment with
75% share of the entire segment. The market is expected to grow at
9% for the next five years at the value of 22.3 $billion. The monthly
wages of a worker in the Indian apparel industry was approximately
$169.67 which was also the fourth lowest paying following Bangladesh,
Cambodia, and Haiti.
The overall apparel industry is expected to grow at a compound
average growth rate of 9% over the next decade. In 2012, there
was an introduction of 10% excise duty on branded apparel with
an abatement rate of 55%. There are also differences in tax rates
depending on the states; “the government in Delhi, Uttar Pradesh,
Punjab, and Rajasthan charge a VAT of 5% on apparel”, while other
states charge 4%. The service tax was also increased by 2% in 2012
(Gugnani) The rise in taxes resulted in increased average sales price of
58 59
apparel by 5-6% Most retailers had encountered a negative growth of
4-5% in sales during the fiscal year of 2012 (Gugnani).
According to Indian Ministry of Textile, the textile and apparel industry
in India have strong growth in demand and policy support, which
has resulted in government investment schemes (TCIDS and APES)
and commitment of both domestic and foreign investments ($140
billion in value) (IBEF). The Technology Upgradation Fund Scheme
(TUFS) provides budget of $0.5 billion for modernization of the power
loom sector and stress more on mechanization (IBEF). The FY14 union
budget also provides infrastructure support and tax sops and financial
packages that help reducing duty for imported textile and machinery
and eliminate excise duty for the cotton and manmade garments as
well (IBEF).
Why we didn’t choose India:
Even though India is known for cheap labor costs (in general),
ready-made apparel industry, woven and knitted cotton fabrics,
there are some factors that made us had to eliminate India over
other smaller countries like Sri Lanka and El Salvador. First problem
is poor infrastructure, especially electricity and roads; losing power
during the production process might create huge loss of time and
profits, and might also delay the production. Poor road condition
and environment also create problems with delivery as well. Second
problem is poor atmospheric and working environment; India is
known for having very high level of air pollution and contaminated
water resource, water is needed in production and it’s vital that it’s
clean before manufacturing into actual products. Dirty environment
and poor air condition will also affect the workers’ health which
might result with problems in the future. The third issue is about
sourcing guideline in which many places in India still don’t comply to
the code of conduct honestly and child labors and unfair payments
to the workers still happen everywhere. India also has no free trade
agreements with the US which means it is automatically subjected
to 15.4% tax over every product imported to the US. Though the
suppliers that ECRU contacted are very professional and have higher
rank scores on ECRU supplier ranking, their price quotes are very high
compared to ECRU initial estimated costs.
60 61
PHILIPPINES
INTRODUCTION
There is more involved in the design process of apparel than sketches
and swatches. After all of the designs and measurements have been
made, it is required to source a manufacturer who will be capable
of fulfilling production needs at the right price, in the right time,
and incurring minimal risk. The purpose of this report is to analyze
manufacturing opportunities in the Philippines to determine where
ERCU will entrust its designs. We want to keep rational feasibility in
mind while also not compromising our core values and ethics in the
creation, distribution, and lifecycle of our proposed products.
SOCIAL
The total population of the Philippines as of June 2012 was 103,775,002,
evenly divided between males and females with an average age of
23.1 years. According to philstar.com, about 40 million of these make
up the labor force while the unemployment rate stands around 6.9%
and the inflation rate as of May 9, 2013, was at 3.2%. Because of their
Spanish background, religion in the Philippines mostly consists of Roman
Catholics (81%) and Protestants (12%), followed by Muslims (5%) and
others (2%), which should not pose any serious restraints on conducting
business. It is also convenient that in addition to speaking their native
language, Filipino, the nation also lists English as their second official
language.
62 63
POLITICAL
In February 1987, the Philippines adopted a new constitution that
instituted the presidential-style republican form of democracy, which
resembles the U.S. model much more than the European parliamentary
system. One key difference between the Philippines and U.S. systems is
that the Philippines is a unitary republic, whereas the United States is a
federal republic, with significant powers reserved for the states. In the
Philippines, by contrast; the national government is not challenged
by local authority. The ratification of the 1987 constitution—the fourth
in the nation’s history—by national referendum signaled the country’s
return to democracy following the autocratic rule of Fernando Marcos
(1965–86). Politics in the Philippines is somewhat tumultuous. In February
2006, the president declared a state of emergency after quashing
the attempted coup staged by the political opposition. The current
president of the Philippines is Benigno Aquino and Philip Goldberg is
the current ambassador to the Philippines from the United States.
ECONOMY
The economy of the Philippines is an anomaly in the Asia-Pacific
region in that it has lagged behind other economies, such as those
of Singapore, South Korea, and Taiwan. From a position as one of the
wealthiest countries in Asia after World War II, the Philippines is now
one of the poorest. Since the 1970s, which were a relatively prosperous
decade, the Philippines has failed to achieve a sustained period of
rapid economic growth and has suffered from recurring economic
crises. This persistent underperformance has occurred in spite of the
Philippines’ rich natural and human resources.
The reasons are rooted partly in history, partly in policy. As a
legacy of the U.S. colonial period, oligopolies have dominated the
economy, particularly in agriculture, where farmland continues to
be concentrated in large estates. In the post-World War II period, the
Philippines pursued a strategy of import substitution industrialization,
whereby domestic goods are substituted for imports. This strategy
required protectionist measures, which led to inefficiencies and
the misallocation of resources. Although some trade protectionist
measures were relaxed in the early twenty-first century, the Supreme
Court continues to support restrictions on foreign ownership of land and
other assets in effect since the constitution of 1935. These restrictions,
plus widespread graft and corruption, have suppressed inbound
foreign direct investment. A historically low rate of taxation—only
about 15 percent of gross domestic product (GDP), partly as a result of
widespread tax evasion—has led to underinvestment in infrastructure
and uneven economic development.
Although trade barriers were scaled back, industrial cartels split up,
and limited reform measures taken in the late twentieth century,
political instability, continuing high levels of corruption, and resistance
to reforms by entrenched interests have prevented the Philippines
from pursuing a consistent and effective economic course. The
64 65
industrial sector continues to decline relative to services, an economic
bright spot in which the Philippines apparently enjoys a comparative
advantage, although some argue that services represent an employer
of last resort. As of April 13, 2014, one Philippine Peso (PHP) was equal
to $0.023 (USD). In 2005 the services sector accounted for about 53.5
percent of GDP; industry, 31.7 percent; and agriculture, forestry, and
fishing, 14.8 percent.
GEOGRAPHY
The Philippines are made of about 7,107 islands located off Southeast
Asia, between the South China Sea on the west and the Philippine
Sea on the east. The major islands are Luzon in the north, the Visayan
Islands in the middle, and the Mindanao in the south. The total area
is about 186,411 square miles including about 185,168 square miles of
land and about 1,243 square miles of water. The Philippines consists of
volcanic islands, including active volcanoes, with mostly mountainous
interiors surrounded by flat lowlands and alluvial plains of varying
widths along the coasts. Research on the Philippines by the Library of
Congress indicates that the islands are also prone to floods, landslides,
earthquakes, and tsunamis. This and the fact that the islands are
located along the typhoon belt which experiences 15 to 20 typhoons
a year, of which five or six may cause serious distraction and/or death,
makes the Philippines a very risky location to choose to manufacture
ECRU’s woven tops.
TRADE
The United States and the Philippines have had a very close trade
relationship for more than a hundred years. According to the Office of
the United States Trade Representative, the US meets regularly with the
Philippines under the auspices of a Trade and Investment Framework
Agreement (TIFA) signed in November 1989. Several additional
agreements have been signed under TIFA auspices, including a customs
administration and trade facilitation protocol (2010), a memorandum
of understanding to cooperate on stopping illegal transshipments of
textiles and apparel (2006), and a memorandum of understanding
regarding the implementation of minimum access commitments by
the Philippines (1998).
U.S.-Philippines Trade Facts
The United States is among the Philippines’ top trading partners, and
it traditionally has been the Philippines’ largest foreign investor. Two-
way goods and services trade between the United States and the
Philippines totaled to $22 billion in 2011. Exports totaled $9.9 billion;
imports totaled $12.1 billion. The U.S. goods and services trade deficit
with the Philippines was $2.2 billion in 2011. The stock of U.S. foreign
direct investment in the Philippines exceeded $5 billion.
Data from the United States Embassy in Manila indicates that the
Philippines is currently the United States’ 36th largest goods trading
partner with $17.6 billion in total (two ways) goods trade during 2012.
66 67
Goods exports totaled $8.1 billion; goods imports totaled $9.6 billion.
The U.S. goods trade deficit with the Philippines was $1.5 billion in 2012.
Trade in services with the Philippines (exports and imports) totaled $5.2
billion in 2011. Services exports were $2.2 billion; services imports were
$3.0 billion. The U.S. services trade deficit with the Philippines was $827
million in 2011.
Exports and Imports
The Philippines was the United States’ 33rd largest goods export market
in 2012. U.S. goods exports to the Philippines in 2012 were $8.1 billion, up
4.6% ($355 million) from 2011, but down 8.3% from 2000. The top export
categories (2-digit HS) in 2011 were: Electrical Machinery ($2.7 billion),
Machinery ($867 million), Cereals (wheat) ($618 million), Flour and
soybean meal ($511 million), and Aircraft ($453 million). U.S. exports of
private commercial services (i.e., excluding military and government)
to the Philippines were $2.2 billion in 2011, 8.7% ($173 million) more
than 2010 and 38% greater than 200 levels. The other private services
(business, professional, and technical services) and travel categories
accounted for most of U.S. exports in 2011.
The Philippines was the United States’ 35th largest supplier of goods
imports in 2012. U.S. goods imports from the Philippines totaled $9.6
billion in 2012, a 4.8% increase ($436 million) from 2011, but down 31.3%
from 2000. The five largest import categories in 2012 were: Electrical
Machinery ($4.0 billion), Machinery ($1.1 billion), Knit Apparel ($617
million), Fats and Oils (mainly coconut oil) ($532 million), and Woven
Apparel ($531 million). U.S. imports of agricultural products from the
Philippines totaled $2.3 billion in 2012. Leading categories include:
coconut oil ($531 million), raw beet and sugar cane ($107 million),
processed fruit ($131 million), tree nuts ($97 million), and fruit and
vegetable juices ($68 million). U.S. imports of private commercial
services (i.e., excluding military and government) were $3.0 billion in
2011, up 12.2% ($324 million) from 2010, and up 94% from 2000 levels.
Other private services (business, professional and technical services)
travel and passenger fares categories account for most of U.S. services
imports from the Philippines.
Investment
U.S. foreign direct investment (FDI) in the Philippines (stock) was $5.3
billion in 2011, a 1.1% decrease from 2010. Reported U.S. FDI in the
Philippines is mostly in the manufacturing sector.
Philippines FDI in the United States (stock) was $114 million in 2011, up
10.7% from 2010. The distribution of Philippines FDI in the United States
is not available. The Office of the United States Trade Representative
also indicates that sales of services in the Philippines by majority U.S.-
owned affiliates were $3.3 billion in 2010 (latest data available), while
sales of services in the United States by majority Philippines-owned
firms were $37 million.
68 69
US & PHILIPPINES TRADE AGREEMENT
The United States and the Philippines have had a close trade relationship
for more than a century. The two sides meet regularly under the
auspices of the TIFA, which is the coordinating mechanism for trade
and investment policy discussions between our two governments.
Total goods trade between the United States and the Philippines is
about $18 billion, up 41 percent since 2009. Services trade is growing
rapidly and exceeded $6 billion in 2012, also up 41 percent from
2009. U.S. foreign direct investment in Philippines is roughly $5 billion,
concentrated in manufacturing.
The United States and the Philippines today concluded a two-day
meeting under the Trade and Investment Framework Agreement
(TIFA), agreeing to a program of expanded engagement in coming
months on bilateral, regional, and multilateral issues. The meetings
were chaired by Assistant U.S. Trade Representative Barbara Weisel
and Philippine Undersecretary of Trade Adrian Cristobal. In addition,
senior officials from other agencies on both sides participated in the
meeting, including Philippine Agriculture Department under Secretary
Segfredo Serrano and Edgardo Albon, Chairman of the Philippine
Tariff Commission.
On bilateral issues, the United States recognized the considerable
efforts the Philippines has made to strengthen its intellectual property
regime and overall framework for protecting worker rights, two areas
of focus of recent U.S.-Philippine cooperation. The two sides agreed
to establish a new work program on labor affairs under the TIFA to
further our efforts. In addition, the United States and Philippines held
detailed discussions of agricultural trade, including related to rice and
meat, and these discussions will continue in the coming weeks.
In response to Philippine interest in the Trans-Pacific Partnership (TPP)
agreement, the United States briefed the Philippines on the goals and
objectives that the twelve TPP countries are seeking to achieve. The
two sides began a program of technical consultations to provide
the Philippine government the detailed information it will need to
consider whether to seek to join the TPP agreement. The Office of the
United States Trade Representative also found that the United States
and Philippines also agreed to intensify cooperation on U.S.-ASEAN
issues and on the trade and investment agenda for APEC, which the
Philippines will host in 2015.
70 71
CONCLUSION
There are many benefits to come of manufacturing in the Philippines,
however there are great risks, specifically the unpredictable nature
of their numerous natural disasters. The quality of their manufacturers
is still unclear as far as meeting the standards of ECRU, however, I
am very interested in the technology of creating eco-friendly and
sustainable fiber from pineapple and banana, which would certainly
coincide with the ECRU values. In closing, the Philippines may not
be a viable first candidate in our search for a manufacturer, but it
cannot be overlooked given it’s recent advances in technology and
sustainability.
Why we didn’t choose Philippines:
The Philippines was eliminated for many reasons. First, the political
environment is not very assuring. More specifically, the ease of
corruption makes for a disheartening business climate. If the
Philippines government is unreliable to their own business climate,
they surely will not be flexible to foreign businesses. Also, the textile
industry is not supported by the government and there are currently
no trade agreements in place between the Philippines and the
United States.
In addition, the natural disasters in the Philippines are numerous and
would not support ECRU’s need to have a steady flow of product for
our Basic’s line. There is a monsoon season that could be tolerable
as long as we manage the amount of product being manufactured
at that time, however there are also active volcanos, earthquakes,
and tsunamis that could make product investment more of a risk
than affordable for a small company like ECRU.
Finally, of the five countries researched, the Philippines had
great potential in their manufacturing facilities, however there
was little information to be found and contact was very difficult
to establish. The selection highlighted more disposable bag
manufacturers, weavers, and sports bag manufacturers. Of the
seemingly suitable manufacturers, none replied to ECRU’s emails.
The emails were either invalid or kicked back due to a full inbox.
When phoned, the manufacturers failed to answer. Of those who
had voicemails, none of the calls were returned - even when we
provided our country code in the telephone number and spelled out
our email address. All of these reasons, when compared to the other
four countries, presented us with a situation where we saw it best to
move on without the Philippines.
72 73
CHINA
Economic Climate
Economy Structure and History
• Market socialism economic system
• GDP-real growth ranked 14 and GDP-purchasing power ranked 3
• The economic development started since the economy reform in 1978
Currency
• Use Yuan /RMB as currency unit
• Current currency 1 USD= 6.25 Chinese Yuan
• Currency rate is controlled by the government
Inflation
•Inflation rate has a increasing tend
Unployment Rate
• Current unemployment rate is 4.1%
• Stable near 4% since 2008
Labor Cost
• Minimum monthly wage is $293, $0.085 per minute in Apparel
Industry
• Rising minimum wage for couple times in past years
• Labor cost will continue in growth
Reform and Promoting
• Reform in 1978, joined WTO in 2001, Free Trade Zone in Shanghai
2013
• Chinese governor state China rules out strong economy stimulus
74 75
Political Climate
Voice and Accountability
• Government controls over the freedoom of expression
• The Media is controled by the government as well
• Government lack of accountability
Political Stability
• Taiwan and Tibet Indpendence issue
• Xinjiang Violence against government
Government Effectiveness and Corruption
• Government effectiveness rated 60.7 (100 is highest) is at an
acceptable level
• Goverment is corrupted
• Some companies violate the regulation and bribe the governors for
avoiding punishment
Counterfeiting
• Chinese government lack of protection of Intellectual property
• Counterfeiting is a big isssue in Chinese Apparel industry
China's Free Trade Agreements
Name
Effective Date
Countries
Textile and Apparel Related Regulation
China-ASEAN FTA
January 1st 2005
Indonesia,
Brunei,Malaysia,Vietnam, Singapore, Burma,
Thailand,Cambodia, Phillipines,Laos
Using "negatvie list" method for FTA for goods. Goods not on the negative list are regarded as regular goods. ( woven apparel falls into the regular goods category) Tariff to the old members of ASEAN was removed since 2010 Jan 1st ( for regular goods) and Tariff to the new members of ASEAN will be removed in 2015.
China-Pakistan FTA
July1st 2007
Pakistan
Most of the woven fabric falls in the list of "Zero Tariff to Pakistan" Detail on fta.mofcom.gov.cn -"zero tariff list to Pakistan"
China-Chile FTA
Apirl 13th 2008
Chile
No tariff for apparel and textile
China-New Zealand FTA
October 1st 2008
New Zealand New Zealand will remove all the tariff for leather garment, knitting apparel, shoes in 2016 Jan 1st (part of them was removed in 2014 Jan1st) Since 2009 China has signed the preferential agreement for all wool and wool products imported from New Zealand and no tariff
China-Singapore FTA
January 1st 2009
Singapore
No tariff for goods export from China to Singapore since January 1st 2009 No Tariff for 97.1% goods import from singapore since January 1st 2012
China-Peru FTA
April 28th 2009
Peru
The goods were divided into 5 different categories and most of the apparel and textile products fall into the first two categories and the tariff would be removed within 5 years after the FTA signed.
Mainland-Hong Kong Closer Economic and
Partnership (CEPA)Arrangement
2003
Mainland-Hongkong
"One country, Two system" No tariff
Mainland-Macau CEPA Arrangement
2003
Mainland- Macau
"One country, Two system" No tariff
China-Costa Rica FTA
Nov-08
Costa Rica No tariff for 90% of the goods (both export and import) since August 1st 2011, Textile and Apparel falls into the 90%
China-Iceland FTA
April 15th 2013
Iceland
No tariff for 99.7% of the goods export from china to Iceland, and no tariff for 81.56% of the goods import from Iceland to China. Textile and Apparel falls into
these categories.
China-Switzerland FTA
July 6th 2013
Switzerland
Reduced the tariff for textile and apparel that export from China to Switzerland
The Asia-Pacific Trade
Agreement (APTA)
1975
China,Bangladesh, India, Republic of
Korea, Lao People's Democratic Republic
and Sri Lanka
1767 Tariff lines originating from Bangladesh and the Lao People's Democratic Republic are given conventional tariff rates for exports to China. These countries are trading with a preferential tariff 0.5% to 5.0% lower than the applied MFN tariff for 50-63 HS
Trade Agreeements
76 77
Textile Industry
The Apparel/industry was one of the industries that Chinese government
choice to start for the open door policy (the reform in 1978) and it
is one of the essence industry since then. The industry had a sign of
continuing growth since 1979, the average annual growth rate of
total value of textile and clothing output was 13.2%, the total industrial
value increase about 7% every year from 1997 to 2002 (except the year
Asian financial crisis,1998). And after 2002, the year China joined the
WTO, most of the products in this industry grow even faster. (See detail
in the image 4.7) Currently, China is the biggest player in producing
apparel and textile including cotton, yarn, wool fiber, cotton fabric, silk
fabric, garments, chemical fibers and knitted goods. (Detail data in
the size section) It has a trend of reduced employment in the apparel/
textile industry, however, it is a sign of development in productivity and
efficiency. The industry will be continuing in growth, and with the rise
of labor cost and advancing technology it has a trend of entering the
high-end market section.
The Chinese textile market has a total value of 161.7 billion dollars (2012)
and in the past five years the CAGR is 10.8 %. The Fabrics account
76.5% of the total and yarns account for 23.5%. In Asia-Pacific industry,
it accounts 41.0% of the total. (Marketline)
Position in the Country
Apparel and Textile industry is one of the pilar Industry in China since
the release of open door policy. Since then, China gained a substantial
market share in the international apparel and textile trade. In 1980,
China was accounting for 4.6% of the world’s total exports, and ranked
as number nine and then since 1995, it ranked number 1 in the world
and the growth steadily continued. (Qiu) From China National Textile
and Apparel Council statistics, the value of China exported garment
and textile products worth $42.4 billion in first two months of 2013 and it
was 34.1 percent higher than the same period in 2012 and 8.3 percent
higher than the general export growth in the country. (Xinhua) All
these data showed evidence of the importance of apparel/ textile
industry in China and its steadily growing trend.
Government Support &WTO
There are three major supports to the apparel/textile industry from
government, since the release of 11th 5-Year Plan for the Textile
Industry in 2006 by the State Development and Reform Commission.
These policies are, develop the innovation and building Chinese brand
to the world market, and improve the technologies and equipment
and restricting inefficient polluting. (Qiu) Another important action
made by the government was being member of WTO. Since WTO
allow Members to seek resource in WTO organization, it benefited
Chinese Apparel/Textile industry because of the limitation reduction
on exporting.
78 79
Reasons for Business
China is known as the biggest manufacturer in the world especially in
apparel industry. There are several reasons made China to be the first
choice of manufacturing for their garments. First, China has the biggest
textile industry, which is the nature advantage for manufacturing
apparel. China produces bulk amount of silk, cotton, and wool. Besides,
China has Free Trade agreement with Australia (known for best quality
wool) and could import wool from Australia without tariff and FTA with
Peru for high quality cotton, Thailand for high quality silk as well.
Second, China has abundant experience of exporting. China is the
biggest exporter and second largest importer. Since the revolution in
1979, Chinese government started to support international trading.
Nowadays, they are really experienced in trading internationally and
strong government support. Thirdly, Sophisticated logistic system and
various choices of suppliers are other advantages of manufacturing
our garments. China has more than 1500 apparel manufacturers and
many of them also provide P.O service and clear customs for customers.
This could bring convenience to us for avoiding extra process to bring
the merchandise into U.S
COUNTRIES - SWOT ANALYSIS
SWOT ANALYSIS
Strength
- Green Conscious
-Sufficient Labor Force
- Strong Connections with Customers
- High Standards For Quality and Craftsmanship
Weakness
- 30-Year Civil War Ended in 2009
- Sri Lankan People Lost Trust in Government
- Strict Business Etiquette to Follow When Conducting Business
Opportunity
- Becoming Number One Apparel Exporter in World - Political and Economic
Stability
- Leaders in Green and Sustainable Manufacturing
Threat
- High Amount of Debt
- Losing Revenues After War
- Much Competition Throughout the World
- Monsoon and Typhoon Season 9 Months/Year
SRI LANKA
80 81
SWOT ANALYSIS
Strength
- Dollarized
- Close ties to the US
- Stable labor force
- $0.10 /min manufacturing cost
- Government support for apparel and textile industry
- Part of CAFTA-DR
Weakness
- Gang violence - Corruption - Costly transportation - Weak accountability
of government - Apparel focus is
predominantly on knitwear and synthetics
Opportunity
- Elimination of tariffs with
CAFTA-DR - Government held conference to
identify opportunities in Apparel sector
- Close proximity could result in receiving product quicker
- Recently rebuilt port may become a hub for transportation
Threat
- Prone to natural disasters - Political uncertainty with
newly elected president
EL SALVADOR INDIA SWOT ANALYSIS
Strength - Skilled and specialized labors in apparel sector. - Second largest young workforce in the world - The largest cotton producer as well as cotton products. - Supportive foreign policy - Many English spoken professionals - Cost advantage
Weakness
- Poor infrastructure - Inadequate discipline and management - Corruption - Weak implementation on compliance in code of conducts - Unclean environment - Uncertain time management
Opportunity - Ease of investment - New government supporting Free Trade Agreements and other policies - Improving economy - Readymade garments dominate exports - Rising incomes and growing middle-class - Increase in exports
Threat
- Low proportion of high technology exports - Increasing air pollution - Recent terrorisms discourage investors
INDIA
82 83
SWOT ANALYSIS
Strength
-High growth potential
-Young & growing labor force
-Developing textile technologies
-Logistic convenience
Weakness
-Corrupt government
-Long lead times
- Limited product placement
-No Trade Agreements with the U.S.
Opportunity
- Free Trade Zone, remove trading barriers
- Continuing trend for industrialization
-‐ Opportunity for investment
Threat
-Natural Disasters
-High inflation rate
-Currency manipulation allegation
-Government Restriction
PhilippinesSWOT ANALYSIS
Strength
-High growth potential
-Sufficient Labor Force
-Leading position in the industry
-Government support for apparel and textile industry
-Logistic convenience
Weakness
-Unstable government
-Lack of Intellectual Property right protection
- Weak accountability of government
-High tariff
Opportunity
- Free Trade Zone, Remove trading barriers
- Continuing trend for industrialization
-‐ Huge market for investment
Threat
-Increasing labor cost
-High inflation rate
-Currency manipulation allegation
-Government Restriction
CHINA
84 85
The factors we took into consideration to compare the countries
for placing our products are listed in the chart. Overall, El Salvador
has the highest score, follow by China and India, Sri Lanka, and
Philippines was rated to be the lowest.
We broke down 6 factors, including communication convenience,
textile industry condition, labor cost, trade agreement, overall
atmosphere in trading apparel and location, to evaluate the benefits
for each country. Based on this evaluation chart, we rated China, India
and El Salvador to be the higher ones. China has the most sophisticated
textile industry and FTA with many other countries could with the textile-
supplying sources. India has the cheapest labor cost compare to other
countries, and communication convenience. El Salvador is the nearest
country to the United States and has assigned CAFTA with the U.S.
Philippines and Sri Lanka have fewer benefits.
COUNTRY RANKINGS
86 87
We evaluated countries’ business climate based on 5 aspects, the
logistic performance, lead time to export, ease of doing business,
government support, opennes to foreigners. China and Sri Lanka were
rated to be highest countries, India and El Salvador were slightly lower,
Philippines has the lowest score majorly because apparel industry is not
supported by government and people are more likely to make money
in other industries.
Cost
India has the lowest labor cost among these five selected countries,
which is $0.080 per minute for apparel industry, and $200 dollars per
month for general minimum wage. China is the second lowest, $0.085
per minute and $240/month minimum wage, however because of
the continuing growth of labor cost recent years, China was rated
the same as Philippines and Sri Lanka (around $0.10 per minute). El
Salvador was rated slightly higher than China, Philippines and Sri Lanka
because of the exemption of tariff that lower the total cost.
Government
Generally, these five countries’ government overall are not in positive
position, and each country has its own issues. The Chinese government
has a lack of accountability, over control of media, lack of transparency
and has some corruption issues as well. Sri Lanka just ended the Civil war
in 2009, the government lack supports by citizens and has corruption
issues as well. The Philippines’ government is heavily corrupted and has
many embezzlement issues. El Salvador has a newly selected president
with anti-US associates, and the government has foreseen instability
concerns. So, these four countries were all rated as 5. Comparatively,
India has a more stable government. India has a new government
with promising bilateral trade ties but some corruption issues still exist.
88 89
Location
India, Sri Lanka, and the Philippines are all located in southwest Asia
and have long lead-times for shipping merchandise to the U.S. China
is closer to the U.S and has a more sophisticated logistic system which
made China’s rating 1 point higher than the other three countries. El
Salvador, located in Central America, has the advantage of having
the shortest leading time.
The comparison factors of risks for selected five countries are listed
in the chart above and evaluated threats from these aspects. Each
country has its own issues and generally China, India and El Salvador
have fewer risks for conducting business.
Social Stability
Factors such as, the happiness of people in the country, uprisings, war,
gang violence, population growth were taken into consideration to
evaluate social stability of the selected countries. China’s biggest
concern for social stability is the internal terrorist threats, and the
Xinjiang violence. The Tibet independence issues are also influencing
90 91
the Chinese society in a very negative way. India has internal and
external terrorist as well. In Sri Lanka, citizens are not happy with the
new government that just established after the civil war. The major
concern for El Salvador’s social stability is the gang violence, and
the crime and violence is threatening the social development. The
Philippines has a more stable society with no big threats compared to
other four countries.
Sourcing Guidelines
Sri Lanka, the Philippines, and El Salvador companies all have
acceptable sourcing guidelines that match with ECRU’s, especially Sri
Lanka which known for green production. China’s sourcing guideline
is not matching international standard and had several issues while
trading, but the latest news indicate the government is enforcing the
labor laws and trying to improve the current condition. India has child
labor issues but the overall sourcing guidelines control is not as bad as
China.
Textile Industry
Among these five countries, China has the biggest strength in textile
industry with abundant raw materials like silk, cotton and wool. Besides,
the Chinese government has also invested large amounts of money
in purchasing high quality facilities with new technology. India is the
second strongest, it has abundant raw materials as well and the overall
industry is in a high growth condition. The supply for raw material in Sri
Lanka is not as strong as China and India, but they have many factories
and textile/ apparel industry is their biggest industry in the country.
El Salvador is specialized for producing knits and synthetic textile but
lack of raw materials and versatile for production. The Philippines was
rated to be lowest because of the textile and apparel industry, which
is not supported by the government and in a slow development pace
especially in infrastructure.
Trade Agreements
El Salvador is the only country that has a Free Trade Agreement with
U.S. The CAFTA-DR gives free trade if all parts of product are sourced
in a participating country. No quotas on imports to U.S. China has 12
FTA with other countries, like Australia, Peru, ASSEAN (south east Asian
countries) that could bring benefits for sourcing materials from other
countries with lower costs. India only has FTA with ASSEAN and
negotiation FTA with Canada and EU countries. Sri Lanka has FTA with
Pakistan and India. Philippines has no trade agreement could benefit
apparel and Textile industry
92 93
SUPPLIER ANALYSIS
Sri Lanka • Brandix Lanka Limited Pvt. Ltd.
• Hirdaramani International
Export Pvt. Ltd.
• Eam Maliban Textiles Pvt. Ltd.
El Salvador• Industrias Merlet S.A. de C.V.
• Picacho S.A. DE C.V.
• Vexsal, S.A. De C.V.
Supplier Selection
Suppliers’ Highlights & Textile Industies
Country Selection
Ratings Spreadsheet
India• Karle International Ltd.
• Mira Exim, Ltd
• Eves Fashion
Philippines• Reliance Apparel & Fashion Manufacturing, Inc.
• Hamlin Industrial Corporation
• Excellent Quality Apparel Inc.
China• SC International Garment & Accessories Ltd.
• Jiaxiang Jingle Fashion
• Hangzhou Ourun Fashion Co. Ltd.
Countries with Top 3 Suppliers
SRI LANKA - SUPPLIERS
Sri Lanka’s apparel industry is the highest contributor to the Sri Lankan
exports as well as the countries over all economy. The manufacturing
industry has grown significantly in the past three years and now employs
600,000 workers. Sri Lanka benefits highly from its positioning at the
intersection of the major trade routes between Africa, South and East
Asia, Europe and the Persian Gulf. The manufacturers and factories in
Sri Lanka have won numerous awards for their “Green” practices and
are setting the bar very high for other top manufacturers in countries
around the world. Sri Lanka manufactures apparel for companies
ranging from high end to low end, including Burberry, Fifth and Pacific
Companies, Ralph Lauren, Levi Strauss, Nike, Patagonia, Guess, Gap,
Banana Republic and many more. (Panjiva)
94 95
1) Brandix Lanka Limited Pvt. Ltd.409 Galle Road, Colombo 3
Sri Lanka
Phone: +94 11 4727222
Fax: +94 11 2575485
Email: [email protected]
www.brandix.com
Specialization: Woven, Knitted Garments, Intimates and Activewear
Brandix is the largest apparel exporter in Sri Lanka. The company
opened its first plant in 1972 and they now operate 42 plants across
the island and employ over 47,000 individuals. The company sends
about 80 shipments a month and they also create their own buttons,
thread, fabric and hangers in house. Brandix’s customers include Gap,
Old Navy, Lands End, Banana Republic, Lucy Active Wear and Diesel
USA. (Panjiva)
The company has very strong ties to creating green, environmentally
friendly factories and have created the worlds first even LEED
Platinum rated manufacturing facility. Brandix values integrity,
teamwork, customer service, learning and development, ownership
and commitment. The company’s values and commitment to the
environment match Ecru’s company make up seamlessly. The
fact that this company has worked with well known brands and goes
above and beyond to make the customer, as well as their employees
happy is something that certainly resonates with Ecru. (Panjiva)
(brandix.com)
2) Eam Maliban Textiles Pvt. Ltd.261, Siri Dahmma, Mawaatha
Colombo, Sri Lanka
Phone: +94 1268 6391
Fax: +94 1269 9513
Email: [email protected]
www.maliban.com
Specialization: Blouses, Shirts and Bottoms
Eam Maliban Textiles opened 38 years ago in 1976. The factory
delivers anywhere from 20 to 200 shipments each month and produced
a total of 1200 shipments in 2012. Their customers include Gap, Lands
End Joseph A. Banks, Banana Republic, Burberry, Brooks Brother and
Ralph Lauren. The company is part of the Garments Without Guilt
Organization and adheres to a strict code of ethical guidelines and
practices to develop their products economically. (Panjiva)
This manufacturer takes part in corporate social responsibility
and maintains sustainable levels of water, chemical and energy
usage, practices safe waste disposal and continuously acts to improve
their carbon footprint. Eam Maliban contributes much of its efforts
96 97
to improving the country, community and lifestyles of its employees
and offers them and their families many benefits outside of the work
environment. (Panjiva)
Eam Maliban is “committed to producing world class products”,
and again they would be a great manufacturer for us to work with.
They have supplied to top retailers, on the same level, quality and
price points of our garments. But, they also
have a strong social, economically and philanthropic commitment to
their country, their community and their workers, which is very important
to Ecru. (Panjiva) (maliban.com)
3) Hirdaramani International Export Pvt. Ltd.Level 23, West Tower, World Trade Center
Echelon Square, Colombo, Sri Lanka
Phone: +94 77 7744180
Fax: +94 11 2446135
Email: [email protected]
www.hirdaramani.com
Specialization: Woven Garments
Hirdaramani International Export has been in business for 120 years
and operates 28 factories in Sri Lanka, Bangladesh and Vietnam. The Sri
Lankan Factory opened in 1954 and has grown to reach a capacity of
1 million garments per month. The facility delivers about 250 shipments
each month. Their customers again range from high-end to lower end
but the facility mainly specializes in woven garments. Their customers
include, Levi’s, Patagonia, The North Face, Guess, Fifth and Pacific
Companies, Liz Claiborne, Ralph Lauren, Nike, Eddie Bauer and many
more. (Panjiva)
The company’s main focus has always been on fit, style and quality
and they have been called “the pioneers in the apparel industry”.
Hirdaramani has a high focus on corporate social responsibility and
has become the first carbon neutral factory in Asia. They are constantly
looking for new ways to cut back to improve their carbon footprint
and help the environment. Hirdaramani also adheres to a strict ethical
code of conduct and standards. The company offers free
healthcare to their employees and their families, they offer free training
programs
and leadership opportunities for staff members and are constantly
investing back into the community in local sports and schools to help
further the country as a whole. (Panjiva)
This manufacturer would be perfect for Ecru. Their amazing
sustainability act and their motivation to cut back on emissions and
help save the environment is something Ecru is very passionate about
as well. Creating a business that has strong integrity and gives back
to the community is what Ecru has made it our mission to do. Creating
garments with such a sustainable and philanthropic manufacturer
like Hirdaramani is exactly the right partner to have on our mission.
(Panjiva) (hirdaramani.com)
98 99
EL SALVADOR - SUPPLIERS
El Salvador has 62 suppliers that manufacture apparel, 15 of which
manufacture women’s apparel. Many of the manufacturers lack a
website and several show inactivity in recent years on Panjiva. Although
El Salvador produces both woven and knit apparel, the woven apparel
is predominantly for bottoms, children’s wear and men’s button down
shirting while knit apparel has greater diversity and is produced in
much larger quantities.
1) Industrias Merlet S.A. de C.V.Merlet was established in 1980 and specializes in knitwear, loungewear
and active-wear but also produces women, misses and juniors blouses
(Merlet). They are located at Industrias Merlet, S.A. de C.V. Calle
Why we selected these manufacturers:
When looking at these manufacturers it is clear that they are all very
concerned with the quality and craftsmanship of their garments as well
as their ethical standings in the workplace and with the environment.
Because both Sri Lanka and Ecru very invested in keeping the
environment safe, this country and its apparel facilities is a very strong
contenders for manufacturers Ecru’s women’s woven tops. Due to the
fact that not all of these manufacturers specialize in woven wear, we
have narrowed down the selection to the top three; Hirdaramani, Eam
Maliban and Trendy Wear.
100 101
Circunvalación, Polígono A #3, Urbanización Industrial La Laguna,
Antiguo Cuscatlán, La Libertad, El Salvador, C.A. and can be found
online at http://www.imerlet.com/. Merlet’s Vision is “To become
a leading international apparel company, providing integrated
production capabilities, design and commercialization services with
the highest quality standards; thus satisfying our customers’ demands in
a prompt, efficient and reliable manner, which permits us to enhance
and support the economic and social development of our associates
and Country” (Merlet). They are well developed in knit apparel
and capabilities include design, development, manufacturing and
distribution of fabrics and apparel. Customers include Levi Strauss,
Tailgate Clothing Co. and Carhartt. Merlet has experience with over
1,754 shipments and is able to produce 400,000 units/week, while lead
time varies between 2-12 weeks (“Technical Profile”).
Merlet’s values appear to be in line with that of Ecru’s as they practice
nondiscrimination and equal opportunities and value safety and
hygiene through the conduction of internal and external audits.
They do not employ anyone under the age of 18 and abide by all
government laws including hours of work, overtime compensation,
minimum wage and fringe benefits.
2) Picacho S.A. DE C.V. Picacho is a woven apparel manufacturing company located at
Km. 26.5 Carretera a Santa Ana La Libertad, El Salvador which was
established in 1992 with a mission to become the regional leader in
quality dress shirt manufacturing. In 2006 Picacho merged with BVM
which has their corporate headquarters in New York. Picacho’s
website can be found at www.picacho.com.sv/home.htm and more
information can be found at www.B-W-A.com under manufacturing.
Picacho’s customers include Ben Watcher Associates which has
ordered over 900 shipments primarily of men’s poplin shirts, Liz Claiborne,
LL Bean, Dillard’s, DKNY and Izod. The majority of their orders have
been cotton shirting although products include woven sport shirts
and blouses, high end security uniforms, sleepwear and loungewear.
Although their orders are predominantly men’s wear, they produce
women’s and children’s wear as well as their “main goal is to be
flexible, to respond quickly and efficiently, making sure that your order
is processed promptly and according to your exact specifications”
(Products and Services). Their capacity is 350,000 units a month and
50,000 units per week specifically in woven shirts (“Manufacturing
Specs”). Lead times for garment production are 30 days from date of
fabric received at the factory and garments are shipped FOB from El
Salvador or LDP from BVM public warehouses in Miami Florida (http://
b-w-a.com/manufacturing-2/ ).
Production facilities include a sewing room, a cutting room, a
trims warehouse, a fabric warehouse, a product development office
and an administrative building. The company strongly believes in in the
well-being of their employees and invests in them through the offering
102 103
of a healthcare clinic where employees and their families receive free
medical attention, a community school for the children of employees
ages 5 through 17, a free daycare open to the community as well as
employees staffed by trained nannies, a cafeteria and bakery and
a discount store in addition at having recreation facilities such as a
soccer field and volleyball court (“Social Responsibility”).
3) Vexsal, S.A. De C.V.Vexal is a manufacturing company which specializes in men’s woven
shirts. Of the 242 shipments that appear on Panjiva, 170 utilized cotton
fabric, while 53 included woven shirts. Clients include Wal-Mart, Nu
Image Fabrics, Paris Accessories Inc and Ben Elias Industries Corp.
Vexal is located at Carretera Panamericana Ote Km 15 San Martin and
although they lack a website, they were recommended to me by the
Vice President of Pro Dept, Ali Gitomer. In speaking to Roberto Bonilla,
I learned that Vexal has been in business for 22 years and produces
60,000 units/week with a 2.5 week lead time. The company values
their employees and only hires those ages 18 and above although
most employees hired are age 20 and above. Employees work 44 hour
weeks, earn minimum wage plus a bonus and are subsidized food. In
the same phone interview I learned that Vexel strives to be ecofriendly
and recycles bi-products and all cartons and gives left over fabric to
recycling companies for reuse.
While El Salvador has been making advancements in the
apparel and textile industry, it is knitwear and synthetic textiles that
they predominantly produce. Some woven apparel is made but it is
almost always for bottoms. In speaking with some of the manufacturing
companies, it became very apparent that El Salvador is not the place
for ECRU to manufacture it’s woven tops as they could only direct me
to 2 companies that produce woven tops, and one of them only makes
woven shirts for men. If for some reason none of the other countries ECRU
is sourcing are a better option, I would recommend manufacturing
with Picacho as they already work with several American companies
and their values seem align with those of ECRU. I would suggest visiting
the factory and talking to the owners and employees prior to making
any decision if ECRU does decide to manufacture in El Salvador.
104 105
India has almost 850 suppliers that manufacture and specialize in
woven apparels. Women apparel industry in India is very competitive
and many companies’ contact and information are available online
through individual and trade websites. However, many companies
don’t provide valid information about their customers, product
quality, and sourcing guidelines; some produce only knitted clothing,
some don’t have adequate services, and some don’t even do
businesses with the US companies. ECRU was able to find several
suppliers that meet the criteria in terms of ability in making quality
women’s woven cotton tops, valid customers, services, production
capability, and management. Among the 5 suppliers we initially
selected, we narrowed down to 3 potential suppliers that are able
INDIA - SUPPLIERS
to produce ECRU’s products. Not only these suppliers can make
women’s woven tops but also their customers are notable and high-
end US retailers that provide similar products to ECRU. They provide
other services and capability that will help ECRU grow as a company
in the future.
Ecru looks for suppliers who have these following criteria:
1) Karle International Ltd. This supplier can produce any type of garments from basic to
fashion. It can also manufacture casual wear, activewear (seam
sealed jackets, rain gear, jogging suits, swim shorts), and refined
collections. Products offered range from tops (shirts/blouses),
bottoms (pants/skirts/crop), and outer wears (jackets/blazers/
overcoat) The supplier not only specializes in womenswear but also
have abilities to make menswear and childrenswear as well. The
most important thing is that Karle International is able to produce
women woven tops from cotton fabrics for ECRU. The factory locates
in Bangalore where it’s known for IT hub and woven apparel area.
There are over 6500 employees working in four manufacturing
units. The company has annual turnover around $55 US million and
manufacturing capacity of 450,000 units monthly. Its customers
consist of notable retailers such as Ann Taylor, J. Crew, Esprit, Express,
Ralph Lauren, American Eagle Outfitters, Eddie Bauer, Nordstrom,
106 107
Superdry, and Coldwarer Creek. The supplier provides multiple
services from design development, raw material sourcing, sampling,
lab test, cutting, sewing, finishing, and washing. The company takes
approximately 90 days for the lead time. The factories are audited
and approved by nominated auditor for Compliance and Social
accountability. The company has participated in conservation of
Environment and prepare Environment policy, waste management
& rain water harvesting. The supplier is highly committed to new
innovation and creativity. Its core values consist of excellent quality,
corporate social responsibility, transparency, and sustainability. The
products are also very well constructed and professional made.
2) Mira Exim, LtdThe supplier are specialized in women’s woven and knitted
clothing. Its customers consist of high-end retailers such as JP Boden,
Sugartown Worldwide Inc, Stella McCartney, Nicole Farhi, Bebe,
Burberry, Diane Von Furstenberg. The supplier takes approximately 90
to 120 days for the lead time. The supplier offers the highest standard
of quality and punctual delivery at competitive prices. Mira Exim
Ltd is also an ISO 9001:2008 and SA 8000:2008 certified organization
in which it follows international standards and regulations. The
company emphasizes its sourcing guideline which include ethical
business practices, sustainability concern, safe and healthy
environment, as well as opposing child labor, forced labor, or any
unethical practices. All these qualities are relevant to Ecru’s business
practices and sourcing guidelines as well.
3) Eve FashionThe supplier is specialized in women’s woven tops, readymade
garments, and accessories. Its customers consist of notable retailers
like Benetton, DW Shop and Primark. The company has annual
turnover around $3 US million and manufacturing capacity of 125,000
units monthly with approximately 75-90 days lead time. The company
has adequate quality control such as fabric inspection, cutting
control, fabric process control, and In-house inspection. The factory is
fully equipped with updated technology and modern manufacturing
facilities. The company also operates with integrity and has concern
over social environmental responsibility and sourcing guideline
such as air cooled and well lit facilities, fire safety measures, water
treatment plant, prohibition of child labor, first-aid facilities, recycling
of resources, and energy efficient devices.
108 109
PHILIPPINES - SUPPLIERS
1) Reliance Apparel & Fashion Manufacturing, Inc.
Producing 200,000 pieces per month, Reliance Apparel seems to be
the most qualified and skilled manufacturer in the Philippines regarding
woven apparel. Reliance has a commitment to pursue excellence
and always invests in new machinery, upgrades their technology,
and improves processes, systems, and procedures in order to be in
the forefront of the industry. Out of the five manufacturers researched
in the Philippines, Reliance would be the best facility to entrust with
creating our products.
2) Hamlin Industrial Corporation
Hamlin offers various capabilities in product assortment and quality
for men’s and women’s contemporary sportswear. According to the
information available, they are able to produce about 50,000 items
per month. Hamlin has potential to be a good manufacturer for ECRU’s
woven tops.
110 111
3) Excellent Quality Apparel Inc.
Excellent Quality Apparel promises a lot in its name, however very little
is delivered as far as available information. Although EQ conducts
business with reputable brands, the lack of information available is
disheartening and may not be viable for ECRU to do business with.
CHINA - SUPPLIERS
1) Jiaxiang Jingle Fashion
112 113
Evaluation
The biggest advantage of Jiaxing Jingle is their high quality of
garments, as well as their specialization in tops. The company has had
much experience supplying to high-end brands such as Burberry, CK
and Guess. The only issue may potentially be the longer lead time.
Since we do not have sufficient experience with scheduling, the long
lead-time might pose a problem for the release of new collection.
2) SC International Garment & Accessories Ltd.
Evaluation
SC is not as experienced as other companies since it has only been in
business for 8 years. However, they do specialize in shirts and have a
great deal of experience in working with American customers such as
Tommy Hilfiger. SC may be a very good choice for our manufacturing
because they do accept small quantity orders. Furthermore, they
provide a very in depth code of conduct matching very closely to
that of Ecru’s.
3) Hangzhou Ourun Fsshion Co. Ltd.
Evaluation
Ourun could be considered as a very internationalized company.
According to their company introduction, they are able to produce
114 115
garments with consistent quality and in short lead-time in bulk. The
company has a significant amount of experience, especially for
international customers and language barriers will not pose problems
when conducting business. However, most of the products they make
are for mass-market or fast fashion, the quality control could be a
major issue.
In the initial process of selecting suppliers in China the first
factor we took into consideration are the sourcing guidelines from
the suppliers and their quality because these are the core value
of our company. China has a very negative reputation in the past
years following the government policy and obeying the sourcing
guidelines. The sourcing guidelines established by companies in
China are lower than the international standard. Even Chinese
government is trying to reinforce related labor laws and policies,
investigate suppliers’ sourcing guidelines is an important process for
selection.
Besides, as a high end store in NYC quality is our key competence
especially for our basic items (woven tops), which need to be worn
year round by customers. In order to avoid loosing customers, we
need to select the suppliers that have strict quality control on their
produced products.
One of the strategies we used to evaluate their code of conduct
and quality control is view their previous customers. Companies
and brands that have good reputation and abundant experience
sourcing manufacture internationally are more likely to build
relationship and conduct cooperation with reliable suppliers. In the
chosen 3 suppliers, especially Jiaxing Jingle, they all have a strong
customer list consists reputable brands like Burberry, Guess and
Adolfo Dominguez.
Besides the quality and sourcing guidelines of the suppliers we
also evaluated their capacity, lead-time, customers, experience,
focus, whether they could produce satisfactory level woven
garments. Based on these evaluations we selected Hangzhou Ourun
Fashion Co., Ltd, because of its shortest lead-time and high efficiency
customer service; SC International Garments and Accessories Co.
Ltd. since its code of conduct highly matches with ECRU’s, they are
also very experienced in producing woven garments and they have
work with Tommy Hilfiger for many years; Jiaxing Jingle is the best one
among three suppliers not only because of their excellent customer
portfolio but also their well-organized company management system
and great customer services.
116 117
The abilities of manufacturing are mostly based on the range and
variety of their products. For example, companies like Jiaxing jingle,
SC, Karle Int. Eam Maliban could produce both men and women’s
apparel, woven, knitting, tops, buttons and jeans..etc. In comparison
companies like Hirdaramani, Industrials Merlet, Vexsal have much
narrower focus, and some of them only provide knitting products,
SUPPLIER RANKINGS
In order to make a better selection for our final placement strategy,
we broke down the suppliers rating into 12 aspects to evaluate the 15
suppliers, 3 from each country selected earlier. And as the total and
average scores shows, Jiaxing Jingle from China, Karle Int. from India,
and Eam Maliban from Sri Lanka are the best suppliers among the 15
and where our final placement could be.
118 119
also willing to build relationship with different kinds of new companies.
Companies that tend to produce for mass market or lower level brand
were rated lower since ECRU is considered as a high-end brand in the
market position.
We evaluated the flexibility of a company by how fast the company
could turn from one category of products to another. Other factors
we took into consideration to evaluate the flexibility is how many
production lines suppliers have and the variety of categories they
produce. Based on the information provided by the suppliers, lead-time
for manufacturing generally ranges from 2 weeks to 120 days. Ourun
has the highest score because they could make sample within 24 hrs
and has the shortest lead-time compare to other suppliers. Vexsal was
rated to be the lowest since they need 120 days for manufacturing.
The way we evaluate the level of management for suppliers based on
how they organized the structures of their companies. Whether they
have sophisticated method to mange the producing chain and how
they organize the production teams. For example, companies like
Jiaxing Jingle, Karle Int. provide image and word description of how
the process of production was organized and function as a big team.
Besides, they are also vertical integrated could provide convenience
for sourcing fabrics.
which made them rated to be much lower than other companies.
We evaluated the capacity of suppliers by view how many pieces they
produce monthly. Industrias Merlet and Hirdaramani have the largest
capacity among 15 suppliers, Industrias Merlet produces around
1600,000 pieces per month and Hirdaramani produces 100,000 pieces
per month. Companies produce 100,000 pieces per month or lower
were rated to be comparatively lower.
We received price quotation from Jiaxing Jingle and Karle Int. and
Eam Maliban, the price offered by these three suppliers are all higher
than our estimated costs. Karle Int. is the company gave the highest
price offer, which almost doubled our estimation. Jiaxing Jingle and
Eam Maliban provided comparatively reasonable costs and Jiaxing
Jingle is lower than Eam Maliban. From the communication process
with the suppliers we evaluated and scored their customer services
based on their attitude of conducting business, whether they reply
emails on time and the information provided by their customer service
officers.
Companies such as Jiaxing Jingle, SC, Karle Mira Exim, Eam Maliban,
Reliance have a long list in their customer portfolio and they have been
worked with many reputable brands like Stella McCartney, Burberry,
Guess, Ralph Lauren..etc Besides, they are very versatile as well, they
have established long term cooperation with reputable brands and
120 121
We evaluated the suppliers’ quality based on the quality level of their
previous customers and how they organize the quality control team
and process. The companies offer other services after production are
evaluated to have higher score. And companies offer sewing and
cutting service only were scored to be lower. Jiaxing Jingle, and Karle
int. have their own mills and they have FOB destination, could cover
the freight, insurance and clear the customs for products importing to
U.S.
We compared companies’ sourcing guidelines to ECRU’s and evaluate
whether they match with ours. The companies have more strict control
of their sourcing guidelines and matches ECRU’s code of conduct
best were rated to be highest. The companies do not provide code of
conduct or with very limited info about it were rated to be lower. We
evaluated the strategic outlook of companies based on the direction
they are tending to lead their companies to, whether the companies
are looking for growth in the future and how much their growth space
is.
COSTING
Preliminary Costing
Initial Costs VS Preliminary Costs
122 123
countries. Overall, the cost ranged between $4.19 and $7.25 in China,
$4.16 and 7.25 in India, $4.33 and $7.74 in Sri Lanka, $4.41 and 8.04
in the Philippines and $3.78 and $7.04 in El Salvador. In all countries,
every look is expected to exceed an average margin of 94.98% when
looking at initial cost comparisons.
Style Name Style # Retail Price China Cost Margin% India Cost Margin% Sri Lanka Cost
Margin% Philippines Cost
Margin% El Salvador Cost
Margin%
Look1 (Madsion) Latte WS#3100 $ 120.00 $ 4.19 96.51% $ 4.16 96.53% $ 4.33 96.39% $ 4.41 96.33% $ 3.78 96.85%
Look2 (Courtney) Barley WS#3202 $ 90.00 $ 4.27 95.26% $ 4.23 95.30% $ 4.43 95.08% $ 4.52 94.98% $ 3.86 95.71%
Look3( Picha) Ivory WS#3400 $ 140.00 $ 4.92 96.49% $ 4.86 96.53% $ 5.20 96.29% $ 5.35 96.18% $ 4.59 96.72%
Look4 (Jordan) Bisque WS#3500 $ 120.00 $ 4.35 96.38% $ 4.30 96.42% $ 4.52 96.23% $ 4.61 96.16% $ 3.94 96.72%
Look5 (Teng) Desert Sand WS#3600 $ 180.00 $ 7.25 95.97% $ 7.11 96.05% $ 7.74 95.70% $ 8.04 95.53% $ 7.04 96.09%
Average Price $ 130.00 Average Cost $ 5.04 $ 5.00 $ 4.93 $ 5.24 $ 5.39 $ 4.64
Average Margin 96.12% 96.16% 96.21% 95.97% 95.86% 96.43%
ECRU Initial Cost Comparison by Countries
PRELIMINARY COSTING
In looking at initial costing figures for each country, El Salvador
offered the cheapest average cost with an average margin of 96.43%.
India and China were close behind with average costs of $4.93 and
$5.00 respectively. With an average cost of $5.39 and an average
margin of 95.86, the Philippines is by far the most costly country to
manufacture in and has the lowest average margin between the
Style Name Style # Retail Price China Cost Margin% India Cost Margin% Sri Lanka Cost
Margin% Philippines Cost
Margin% El Salvador Cost
Margin%
Look1 (Madsion) Latte WS#3100 $ 120.00 $ 4.19 96.51% $ 4.16 96.53% $ 4.33 96.39% $ 4.41 96.33% $ 3.78 96.85%
Look2 (Courtney) Barley WS#3202 $ 90.00 $ 4.27 95.26% $ 4.23 95.30% $ 4.43 95.08% $ 4.52 94.98% $ 3.86 95.71%
Look3( Picha) Ivory WS#3400 $ 140.00 $ 4.92 96.49% $ 4.86 96.53% $ 5.20 96.29% $ 5.35 96.18% $ 4.59 96.72%
Look4 (Jordan) Bisque WS#3500 $ 120.00 $ 4.35 96.38% $ 4.30 96.42% $ 4.52 96.23% $ 4.61 96.16% $ 3.94 96.72%
Look5 (Teng) Desert Sand WS#3600 $ 180.00 $ 7.25 95.97% $ 7.11 96.05% $ 7.74 95.70% $ 8.04 95.53% $ 7.04 96.09%
Average Price $ 130.00 Average Cost $ 5.04 $ 5.00 $ 4.93 $ 5.24 $ 5.39 $ 4.64
Average Margin 96.12% 96.16% 96.21% 95.97% 95.86% 96.43%
ECRU Initial Cost Comparison by Countries
124 125
cost which averages $4.64 per unit with an average margin of 96.43%.
The average margin when looking at the preliminary costs of ECRU’s
top countries is 95.88%. In looking at the preliminary costs, we believe
that ECRU has great opportunity for profiting due to the high margin
predictions. The high margins also allow ECRU to have some wiggle
room if it is necessary when conducting negotiations to settle on final
costs.
Style Name Style # Retail Price China Margin% China Margin% Sri Lanka Margin% Sri Lanka Margin%
El Salvador Margin% El
Salvador Margin%
Latte WS-3100 120.00$ 4.19$ 96.51% 4.81$ 95.99% 4.33$ 96.39% 5.20$ 95.67% 3.78$ 96.85% 3.78$ 96.85%Barley WS-3202 90.00$ 4.27$ 95.26% 4.69$ 94.79% 4.43$ 95.08% 5.53$ 93.86% 3.86$ 95.71% 3.86$ 95.71%Ivory WS-3400 140.00$ 4.92$ 96.49% 5.75$ 95.89% 5.20$ 96.29% 6.24$ 95.54% 4.59$ 96.72% 4.59$ 96.72%Bisque WS-3500 120.00$ 4.35$ 96.38% 5.00$ 95.83% 4.52$ 96.23% 5.65$ 95.29% 3.94$ 96.72% 3.94$ 96.72%Desert Sand WS-3600 180.00$ 7.25$ 95.97% 8.56$ 95.24% 7.74$ 95.70% 9.68$ 94.62% 7.04$ 96.09% 7.04$ 96.09%
130.00$ 4.96$ 5.00$ 5.24$ 4.64$ 5.62$ 5.76$ 6.46$ 4.64$
95.88% 96.16% 95.57% 95.97% 95.03% 96.43% 96.43%
Average PriceAverage Initial CostAverage Prelim Cost
Average Margin
ECRU Initial Cost V.S Prelim Cost
INITIAL PRELIM INITIAL PRELIM INITIAL PRELIM
INITIAL COSTS VS. PRELIMINARY COSTS
After sending tech packs to potential suppliers, we were able to
compare ECRU’s initial cost sheets with the manufactures’ preliminary
costs. China’s average cost grew by 15.2%, bringing its average
cost up to $5.76 and its average margin down to 95.57%. Sri Lanka’s
average cost increased by 23.28% decreasing its average margin
down to 95.03% and raising the average unit cost to $6.46. El Salvador’s
manufacturers did have yet to respond with their quote for ECRU’s five
looks, and so the preliminary cost is merely a reflection of the initial
Style Name Style # Retail Price China Margin% China Margin% Sri Lanka Margin% Sri Lanka Margin%
El Salvador Margin% El
Salvador Margin%
Latte WS-3100 120.00$ 4.19$ 96.51% 4.81$ 95.99% 4.33$ 96.39% 5.20$ 95.67% 3.78$ 96.85% 3.78$ 96.85%Barley WS-3202 90.00$ 4.27$ 95.26% 4.69$ 94.79% 4.43$ 95.08% 5.53$ 93.86% 3.86$ 95.71% 3.86$ 95.71%Ivory WS-3400 140.00$ 4.92$ 96.49% 5.75$ 95.89% 5.20$ 96.29% 6.24$ 95.54% 4.59$ 96.72% 4.59$ 96.72%Bisque WS-3500 120.00$ 4.35$ 96.38% 5.00$ 95.83% 4.52$ 96.23% 5.65$ 95.29% 3.94$ 96.72% 3.94$ 96.72%Desert Sand WS-3600 180.00$ 7.25$ 95.97% 8.56$ 95.24% 7.74$ 95.70% 9.68$ 94.62% 7.04$ 96.09% 7.04$ 96.09%
130.00$ 4.96$ 5.00$ 5.24$ 4.64$ 5.62$ 5.76$ 6.46$ 4.64$
95.88% 96.16% 95.57% 95.97% 95.03% 96.43% 96.43%
Average PriceAverage Initial CostAverage Prelim Cost
Average Margin
ECRU Initial Cost V.S Prelim Cost
INITIAL PRELIM INITIAL PRELIM INITIAL PRELIM
126 127
STRATEGY DEVELOPMENT
When looking at Ecru Basic’s sales plan one can see that it is
broken down by garment and then by month. Our top selling woven
tops are the Ivory and the Desert Sand. Ecru feels that these two
garments are going to be the most versatile as they do have a collar
they can be worn to work, they can also be dressed down, and even
layered to be worn in the colder months. We see these pieces to be at
or over 100,000 units over the course of the first year. Our other pieces,
while they are not the top sellers are still going to make up a large
portion of sales for the first year and range from 76,000 to 90,000 total
units for each look.
Of course, our garments are going to fluctuate with the seasons
and the holidays, making selling quantities higher between the months
of May, June and July and then again during December. However, this
is our basics line and we anticipate a steady sales flow all year round.
Ecru has very high hopes for this Basics line and we feel that is it just
what our loyal customers are asking for, which is why we are projecting
large volumes of sale.
128 129
CHINA
In the country-ranking chart, China was ranked second among 5
countries and China is known as world’s biggest manufacturer. For
a new company like Ecru choosing a sophisticated market to source
manufacturing is definitely a wise choice.
Overall, China has better socio-eco-political climate in general
compare to other countries, as well as business climate. China has
very flexible business etiquette and it is easy to conduct business.
China is the second biggest country in economic standing, after U.S.
In recent years it has tended to have a slower growing rate but it is still
in a positive shape.
However, the wage of employer is growing up as well which means
the cost of manufacturing in China will be drive up as well. From the
research, China has a tendency to switch from manufacturing bulk
products in low quality and low cost to high quality and the government
has invested large amounts of money to purchase upgraded
technologies and new facilities. This could benefits companies like us
aiming to source high quality products in the long run.
China is ranked No.1 for exporting especially apparel and textile,
which means China, is the one of the most experienced traders. Many
suppliers offer customer service in up to 15 languages and could cover
freight, insurance, and clear the customs for buyers. Since the reform
in 1979, the Chinese government started to reinforce laws and policies
to support international trading. The business etiquette is not hard to
follow as well, and since most Chinese people are atheist religion and
suspicion issues would not need to be taken into consideration like
many other countries.
China’s apparel and textile market size is ranked as NO.1 as
well. There are total of over 15,000 apparel manufacturers in China.
Because of this fierce competition Chinese manufacturers are more
likely to work hard on making deal and the high pressure from the
market could avoid them to overprice the manufacturing. China also
has the largest amount of workforce in the world. The majority of the
population in China is still at the working age, there are some concerns
for aging population in the future because of the one-child-policy,
however it will not influence the industry within five years.
China has and abundance of resources of raw materials. As we all
know, China produces the largest amount of silk every year and
they have wool, and cotton as well. The Chinese government has
signed 12 Free Trade Agreements including with Australia (where has
the best quality wools), Peru (well-known pima cotton productions),
and Thailand (ASSEAN) (world’s best silk). These could benefits buyers
to source high quality raw materials in a lower cost since the tariff is
eliminated. However, the inflation rate has a trend to going up, which
130 131
could lead the increase of cost for raw materials in the future.
Another major concern for conducting business in China
is government’s weak control over the labor laws and policies
reinforcement. Manufacturers are generally lacking awareness of
the importance of sourcing guidelines. In recent years, the Chinese
government started to focus on improving the market conditions,
however, Rome was not build in one day, Sourcing guidelines need to be
ensured to match with our company’s while selecting manufacturers.
After we went through the elimination process we selected three most
qualified suppliers for our companies. We analyzed the three suppliers
in depth by focusing on their quality, previous customer lists, customer
service, sourcing guidelines and service offered. Since our company
believes in quality over quantity, the capacity of manufacturers is not
our biggest concern and the selected manufacturers are all capable
of manufacturing our products within an acceptable time period.
Overall, the biggest strength for Ourun is their short lead-time. They
can manufacture the sample within 24 hours and finish the entire pack
of merchandise with 20 days. However, compare to other two, it lack
of brands with high quality products in their customer list. Most of their
previous customers were fast fashion brands such as forever 21, H&M
and ZARA, so that their standard of quality might not meet with ours.
Further more, the information they provided on sourcing guideline is
very vague and does not contain much information.
SC and Jiaxing Jingle has very similar strengths, both of them have
reputable brands in their customers lists, such as Ralph Laruen, Burberry,
Guess, Tommy Hilfiger etc. Jiaxing Jingle is much more flexible even they
have less employer but their capacity is much bigger than SC which
means their manufacturing process might be more well organized
and efficient. Jiaxing Jingle has more production lines as well so that
they could switch from one to another easier. Both SC and Jiaxing
Jingle are vertical integrated, they have own mills could provide dying
services, and weave the fabrics the way customers wanted. This could
highly reduce the lead-time and cost on sourcing fabrics and much
more convenient to the buyers.
In addition, Jiaxing Jingle is a full package manufacturer and could
provide FOB destination service, and will clear the customs for buyers.
They also have excellent customer services. All emails were replied
in one day and their customer officer called us to ask for detail of
the order. They provide step-by-step guides for customers to know
their manufacturers better large amount production pictures were
shown on their factory introduction brochure. SC is not as good as
Jiaxing Jingle in the aspects list above, however, SC has much shorter
lead time than Jiaxing Jingle (Jiaxing Jingle need 70 days and SC only
needs 30 days), and SC’s sourcing guidelines is more detailed, and
they took environment protection and intellectual property protection
into consideration for their company.
132 133
SRI LANKA
Sri Lanka’s textile and apparel industry generates the most
revenues for the country and for its government. The Sri Lankan
manufacturers are well renowned all over the world for their top
customer service, high quality garments and strong commitment to the
green manufacturing processes. At the end of 2013 it was announced
that Sri Lanka was on its way to becoming the top garment exporter in
the world in the next five years.
The manufacturing facilities in Sri Lanka have been evaluated
and ranked based on twelve different categories; abilities, capacity,
costs, customer service, customers, flexibility, lead time, management,
quality, service offered, strategic outlook and sourcing guidelines. It
was very important for Ecru to deeply look into each one of these
categories for potential manufacturing opportunities in Sri Lanka.
Each of these twelve categories had very strong ratings and Ecrus
top concerning categories such as quality, customer service, costs,
and current customers had very strong numbers and near perfect
scores making Eam Maliban the winner out of the top five proposed
Sri Lankan manufacturers.
Risks:
- Long distance from the U.S.
- Potential high lead times and freight costs
- Country is in a lot of debt
- Lower capacities than other larger countries are capable of
- Typhoons and Monsoons 9 months out of the year
Benefits:
- Over 100 years of apparel manufacturing experience as a country
- Top green manufacturer ranking country in the world
- Won LEED Platinum Rated Manufacturing award
- Well known, high-end, reputable customer base
- Apparel is the country’s main export and brings in the highest revenues
- Updated technology
- In depth code of ethics and conduct for factory workers
- Takes pride in the quality and craftsmanship of their work
After much deliberation and ranking it has been determined
that Eam Maliban is the top apparel supplier in Sri Lanka with many
benefits and attributes outweighing its competitors. These benefits
include there high focus on quality craftsmanship, their corporate
social responsibility and their code of ethics describing and showing the
fair and upstanding treatment of their workers. Eam Maliban focuses
much of its efforts on the well being of its staff as well as practicing
134 135
EL SALVADOR
Manufacturers were selected based on many factors, including
their abilities, flexibility, lead-time, capacity, customer service, value
added services, management, quality, customers, their values and
how well they align to ECRU’s sourcing guidelines, and their outlook
towards the future.
In evaluating manufacturers it was important to look at the range
of apparel that can be developed as well as the ability to product the
products we intend to make at the quality we find acceptable. As
a relationship develops, ECRU will benefit most from a manufacturer
that is flexible in its abilities and diverse so that ECRU can grow into new
product categories and lines. Capacities, lead-time and distance were
weighted against each other. The weighing of risks and benefits was
utilized to compare manufacturers. Looking at how long a company
has been in business and the clients that they work with will help to gain
insight into how experienced and knowledgeable a company is, how
secure their business is financially, the level of quality a manufacture
provides and the level of customer service offered. The location also
needs to be considered as different times of year bring different
weather patterns, some of which can cause devastating natural
disasters that could interrupt production if a factory is destroyed or if
evacuations are ordered.
green manufacturing techniques all throughout the facility. It is no
wonder that this facility has been ranked to high and is sought after
by many name brands clothiers.
Eam Maliban Textiles is known for their commitment to creating
world-class products. Customers include Gap, Lands End, Joseph A.
Banks, Banana Republic, Burberry, Brooks Brothers and Ralph Lauren.
Eam Maliban is also a major part of the Garments Without Guilt
Organization, which contains a group of manufacturers all adhering
to a strict code of ethics and conduct, who develop their products
economically and environmentally friendly. The customer and
company ethics align seamlessly with our luxury fashion brand, Ecru
giving us piece of mind knowing that Eam Maliban will provide us with
the quality and ethical standing that we are ultimately looking for.
Sri Lanka is a wonderful country to do business with; the people are
very friendly and welcoming and the manufacturing facilities are
very up to date and are able to produce a large variety of garments
and styles. There are many mills close by the Eam Maliban facility, so
outsourcing fabric will not be an issue. Even though Sri Lanka is quite
far from New York labor and freight prices are very competitive and
reasonable and Ecru feels very comfortable working with Sri Lanka on
their new Basics Collection
136 137
For El Salvador, Picacho ranked highest among the potential
manufacturers. Although Picacho has a lower capacity, producing
50,000 woven apparel units per week, its close proximity to the US
and 30 day lead-time from when fabrics are received at the factory
make up for the lower production abilities: as product will be received
more regularly and quicker than more distant manufacturers. Picacho
ranked highly in the category of meeting our sourcing guidelines.
The company puts such a great emphasis on the heath and safety
of its employees, providing them with a cafeteria that subsidizes its
prices, recreational areas such as volleyball courts and soccer fields
to encourage teamwork and a healthy lifestyle. Picacho also offers
employees and their family free, on-site medical care, free daycare
and free schooling for their children. In working with customers such
as Liz Claiborne, LL Bean, Dillard’s, DKNY and Izod, we can be assured
that Picacho produces quality garments that also meet sourcing
guidelines.
In evaluating future requirements, the company’s history, ability
to product an array of products, the machines utilized and the value
they place on their employees were taken into consideration. Picacho
which was found in 1992 has been around for over two decades, which
has allowed them to develop specializations in the woven apparel
industry. Picacho merged with the American company, BWA, in 2006
which benefited the company’s growth by strengthening and creating
connections with mills in other parts of the world and by creating a
-Risks
• El Salvador’s climate is a risk as it is prone to earthquakes, volcanic
activity, hurricanes, flooding and mud slides.
• Slow economic growth
• Corruption and gang violence, although no more risky than other countries
• Low capacity- 50,000 woven apparel units/week
• Uncertain political environment with a new left? Wing president
-Benefits
• Over 20 years’ experience
• Free trade with CAFTA-DR if materials are sourced for an included country.
• Short lead time- 30 days
• Close proximity to the US- quick transportation of goods
• Same time zone, conversations can take place in real time
• The US dollar is the official currency- no currency exchange fluctuations
• Democratic
• No terrorist threats
• Apparel is the county’s main export
• Well known customer base
• Takes pride in its employees
• Updated technology
• Versatile in product capabilities
138 139
stronger link between El Salvador and the US. The company is also
experienced in utilizing CAFTA-DT to eliminate tariffs. Picacho has also
expanded into the knitwear sector, allowing them to create a broader
range of apparel styles and now manufactures clothing for men,
women and children. Should ECRU decide to start a menswear line or
an intimate line in the future, Picacho would be a great manufacturer
to work with as it is well known in both areas and allows ECRU room to
diversify its products all in one location. Picacho also puts great value
on their employees and in doing so; they are investing in their trained
workforce, which allows for fewer mistakes and greater productivity.
THE FUTURE OF ECRU
The future of Ecru is very bright, with many possibilities for growth
and expansion. The brand plans to extend into accessory design and
production in the following year, as well as leather goods. Our goal
is to create a lifestyle for the customer and a brand where she feels
comfortable wearing a look from head to toe, as well as mixing and
matching with other pieces from her wardrobe.
We are currently in the works with creating a specialty line for
Bergdorf Goodman, giving our company a chance to grown and
expand even further. Ecru has had much press and industry exposure
in magazine and articles that has contributed largely to the brands
success and it is our goal to continue as much as possible down that path.
With 2014 projected sales at over $59 Million, we hope to see
over $85 Million in the year 2015. Our company has great potential for
high amounts of growth. With 40% of sales online, we plan to keep all
of our sales channels cohesive and user friendly to bring in as many
customers and sales as possible. The most important thing for Ecru now
and moving into the future is to be true to our brand, while making
our customers happy and satisfying our company’s strong ethical
standards.
140 141
For our final sourcing strategy, we decided to choose China to
be our number one supplier. In our country-ranking chart, China was
rated to be second and Jiaxing Jingle was rated to be the best among
15 suppliers.
Overall, China’s Scio-eco-political climates are in comparatively
stable position and China also has a very positive business climate
especially in Apparel and Textile industry. The suppliers are well trained
for conducting international business. Manufacturing our products in
China could provide our company, Ecru, several benefits.
First of all, since 1995 China was ranked Number one in exporting
and China also has world’s largest apparel and textile industry. Ecru
is a brand new company and lacks experience conducting business
in foreign countries, by placing products in China Ecru could reduce
the risk of countering some unexpected accidents. Besides, China’s
business etiquette is very easy to follow which could avoid the failure
caused by cultural gap.
SOURCING STRATEGY
#1
China
#2
Sri Lanka
#3
El Salvador
Placement Strategy
CHINA SOURCING STRATEGY
142 143
Second, China has abundant resources of raw materials and many
suppliers have their own mills could customize the fabric for buyers,
like Jiaxing Jingle where we decided to place our Ivory and Desert
Sand. We want to provide comfort for our customers and most of our
products are made in natural fibers, place the products in China could
avoid extra concerns about sourcing fabrics.
Besides, the price quotation offered by Jiaxing Jingle is acceptable
and we could maintain average margin around 95% and they have also
been worked with companies like Burberry, Guess, and BCBG, which
means the quality of products could be guaranteed as well. We place
our style WS#3400 (Ivory), and WS#3600 (Desert Sand) in China, Jiaxing
Jingle fashion. Since they provided the lowest price quotation, and
Ivory is planned to be our best seller with largest needed quantity our
cost could maximize the margin. WS#3600 has very similar construction
as WS#3400 could make the production easier if we place these two
styles in same supplier and could shorten the lead-time as well since
Jiaxing Jingle’s biggest weakness is their long lead-time.
One of the major risks for choosing China is the tendency of
increasing inflation rate and Chinese government has the control
over the currency. Even overall China’s Scio-eco-political climate
is comparatively positive compare to other countries, there are still
some future risks need to be aware. The increasing inflation rate could
increase the cost of raw materials and the increase the increasing
labor cost could drive up the overall cost to be high which could
directly lead to lower our margin.
Second, even Chinese government is supporting the apparel industry,
however lack of transparency and intellectual protection could be
influence the industry in a very negative way. We need to be more
cautious for conducting business with suppliers and make sure they
will not make counterfeits for our products, which could bring bad
reputation for our company and influence our sales performance.
144 145
however they are still pause for some concern. Sri Lanka is a long
distance for the United States and shipments take about 3 weeks to
reach our destination port in New York from Colombo. These lengthy
shipping times may result in high freight costs and loss of margin from
the lengthy lead-time. Sri Lanka’s facilities also have lower capacities
than other much larger and more established countries like China.
The benefits of the country and of its manufacturing processes and
facilities are certainly very striking and cause the ranking for Sri Lanka
to be quite high. Overall the country has had over 100 year of apparel
manufacturing and export experience, which has paved the way for
them to become such strong members of the current manufacturing
market. The country creates garments for hundreds of well know, top
brand name and high-end clothiers around the world, giving Sri Lanka
a reputation for quality craftsmanship.
Sri Lanka as a whole takes great pride in the way that their
workers are treated and make their code of conducts very clear
to their employees as well as any new clients. The treatment of
employees is all very ethical and safe, wages are fair, facilities are
clean and up to date and code, there are no children employed and
the health, safety and education of Sri Lanka factory workers families
is of the utmost concern as well. Sri Lanka is also the leader in green
and environmental manufacturing practices in the world. They have
paved the way for other facilities to follow in their footsteps and have
When looking further in depth at all that Sri Lanka has to offer it is
clear that they have the potential to be a top manufacturing country
for Ecru basics. Apparel manufacturing and export brings in the top
grossing revenues for Sri Lanka as a whole. It has also recently been
announced that Sri Lanka is on its way to becoming the number one
garment exporter and manufacturer in the world within the next five
years. Ecru sees a big opportunity with doing business with Sri Lanka
and is excited about the potential to work with top manufacturers in
the country.
We have ranked Sri Lanka in second place, just behind China
and just in front of El Salvador. While the country has so many positives
to offer our company they are still not as developed as China when
it comes to garment manufacturing, which results in us placing Sri
Lanka in second place. There are many positive attributes as well as
some limited risks that still may pose a concern when doing business.
However, the country has three very highly ranked manufacturing
facilities that Ecru would be happy to negotiate and work with.
The benefits of doing business in Sri Lanka certainly outweigh the risks,
SRI LANKA SOURCING STRATEGY
146 147
won numerous awards for the never-ending efforts to help save the
planet and the earth.
Although ranked number two, Sri Lanka is certainly a country that
Ecru would be happy to do business with. Their values and beliefs on
how business should be done are synonymous with that of Ecrus. Ecru
values ethical manufacturing practices and treatment of employees,
keeping the environment safe, and high quality garments above
all else, and that is just what Sri Lanka spends their time and energy
towards as well.
In evaluating El Salvador, it became apparent that El Salvador
has a lot to offer ECRU as a country to manufacture in. El Salvador has
one of the most developed apparel industry in Latin America and is
known for its synthetic branch and knitting capabilities, in addition,
apparel is the country’s top export. El Salvador is also in close proximity
to the US, shortening transportation time and also allowing for real
time communication and updates. One of the greatest benefits from
working with El Salvador is being able to enjoy duty free importing
into the US as long as materials are sourced from the surrounding
countries that are a part of CAFTA-DR. El Salvador has also adopted
the US dollar as its own currency eliminating the need to worry about
currency exchange.
We ranked El Salvador in third place, behind China and Sri Lanka.
Like Sri Lanka, El Salvador is a small country and not as developed as
China when it comes to manufacturing; however, El Salvador does offer
many benefits and high quality manufacturing facilities. Unfortunately
many of the manufacturers specialize in knit wear rather than woven
apparel, but a select few do exist and are highly reputable.
EL SALVADOR SOURCING STRATEGY
148 149
Certain risks and downsides do come with manufacturing in El
Salvador. The climate is risky as the country has a long rainy season
making it vulnerable to hurricanes, flash floods, and mudslides. Due
to its location earthquakes and volcanic activity also occur. Natural
disasters have proven devastating in the past and have caused large
scale evacuations and damage. Although El Salvador’s economy
remains in the positive, it has been growing at a decreased rate.
There are issues with corruption, laws not being strictly enforced, gang
violence and drug trafficking, but these things occur in the other
countries we sourced as well, although some countries are not as open
about it. There is also some politically uncertainty surrounding the new
president that will take office next month as he is very left wing and
has been affiliated with Cuban spies.
In choosing El Salvador’s manufacturer, Picacho has over 20
years’ experience with the woven apparel industry and a short lead
time of only 30 days. In addition, El Salvador’s close proximity to the
US allows for quick transportation of goods. Picacho has a strong
customer base, versatile product capabilities and state of the art
technology. The company also and puts great emphasis on quality
as well as on its employees well-being. Picacho also has introduced
knitting capabilities which allows for new product categories for ECRU
to grow into in the future.
150 151
Ecru has decided to place their five woven women’s tops
in manufacturing facilities in China, Sri Lanka and El Salvador. The
garments are separated into each of these countries based on style,
technicalities and quantities. We have also looked at the strengths
and weaknesses from each country to better create a final placement
plan for our products.
PLACEMENT STRATEGY
Two looks will be placed in China at the start of the manufacturing
process. These looks are both collared button up shirts. Ecru feels that
china is the best country to manufacture these garments as the country
is well established in the industry and is highly capable to creating a
well fitting, quality garment. We will be placing the full order of 94,000
units of Desert Sand and half of the Ivory order at 55,000 units. We will
#WS-3400 Ivory #WS-3600 Desert Sand #WS-3100 Latte #WS-3500 Bisque #WS-3202 Barley #WS-3400 IvoryTotal Units 450,000 55,000 94,000 76,000 85,000 90,000 50,000
Retail Price per unit 140.00$ 180.00$ 120.00$ 120.00$ 90.00$ 140.00$ Cost per Unit 4.52$ 6.95$ 3.96$ 4.00$ 3.55$ 4.22$
Margin 135.48$ 173.05$ 116.04$ 116.00$ 86.45$ 135.78$ % 96.77% 96.14% 96.70% 96.67% 96.06% 96.99%
Total Retail 59,040,000$ 7,700,000.00$ 16,920,000.00$ 9,120,000.00$ 10,200,000.00$ 8,100,000.00$ 7,000,000.00$ Total Purchase 2,073,360$ 248,600.00$ 653,300.00$ 300,960.00$ 340,000.00$ 319,500.00$ 211,000.00$ total Margins 56,966,640$ 7,451,400$ 16,266,700$ 8,819,040$ 9,860,000$ 7,780,500$ 6,789,000$
% 96.49% 96.77% 96.14% 96.70% 96.67% 96.06% 96.99%Avg Retail 131.20$
Avg Purchase 4.61$ Avg Margins $ 126.59
Avg Margins % 96.49%
Avg Cost/Unit 4.53$
El SalvadorSri LankaChina
ECRU FINAL PLACEMENT & MARGINS
#WS-3400 Ivory #WS-3600 Desert Sand #WS-3100 Latte #WS-3500 Bisque #WS-3202 Barley #WS-3400 IvoryTotal Units 450,000 55,000 94,000 76,000 85,000 90,000 50,000
Retail Price per unit 140.00$ 180.00$ 120.00$ 120.00$ 90.00$ 140.00$ Cost per Unit 4.52$ 6.95$ 3.96$ 4.00$ 3.55$ 4.22$
Margin 135.48$ 173.05$ 116.04$ 116.00$ 86.45$ 135.78$ % 96.77% 96.14% 96.70% 96.67% 96.06% 96.99%
Total Retail 59,040,000$ 7,700,000.00$ 16,920,000.00$ 9,120,000.00$ 10,200,000.00$ 8,100,000.00$ 7,000,000.00$ Total Purchase 2,073,360$ 248,600.00$ 653,300.00$ 300,960.00$ 340,000.00$ 319,500.00$ 211,000.00$ total Margins 56,966,640$ 7,451,400$ 16,266,700$ 8,819,040$ 9,860,000$ 7,780,500$ 6,789,000$
% 96.49% 96.77% 96.14% 96.70% 96.67% 96.06% 96.99%Avg Retail 131.20$
Avg Purchase 4.61$ Avg Margins $ 126.59
Avg Margins % 96.49%
Avg Cost/Unit 4.53$
El SalvadorSri LankaChina
ECRU FINAL PLACEMENT & MARGINS
152 153
be splitting up the Ivory piece because it is anticipated to be one of
our top sellers and we do not want to risk any malfunctions by placing
all of the order at one facility.
Two pieces will also be manufactured in Sri Lanka. Sri Lanka’s
manufacturing facilities have very high-end clientele and we feel that
it is the perfect place for Ecru to make their more fashion forward and
technologically made tops; Latte and Bisque. 76,000 units of the Latte
will be manufactured and 85,000 units of Bisque will be manufactured.
These pieces are going to be much more suited for a client who is
looking for a piece that is a little more fashion forward and out of the
box, which is why Ecru does not see the highest sales numbers for these
looks.
Finally in El Salvador we will be placing the second half of the
order for Ivory as well as our take on the “basic tee”, the Barley. 90,000
units of Barley will be manufactured as well as 50,000 units for Ivory.
These two pieces are anticipated to be our top sellers due to their
silhouette as well as their functionality in a client’s wardrobe. We will be
placing these looks in El Salvador because of the ability for incredibly
short lead-times of under two weeks. This may be very helpful for us as
orders grow and Ecru needs new pieces within a short amount of time.
Our final average cost per unit comes out to be $4.53. The
average retail price between our five luxury women’s tops is $131.20.
The average purchase price for each unit is $4.61. Ecru is very happy
to have such high margins at over 96%, which equates to $126.59.
COMPARISON OF FINAL COSTING
Preliminary Costing vs.Final Negotiatiated Prices
Preliminary Margins vs.Archieved Margins
154 155
All the prices quoted from suppliers are all higher than our estimation
and most of them squeezed the margins to be approximately 1% lower
than our planned cost. The final negotiated prices are actually lower
than we expected and drive up our margins about 0.5% higher for all
five styles.
Latte WS-3100
Latte is one of our basic items with high neck and were planned to
be comparatively sale in a lower volume since it might not be widely
accepted by majority. In both prelim cost and final cost, Latte has the
highest margin among 5 styles. The Latte will be manufactured in Sri
Lanka and the quoted price is $5.20 per unit, with 95.67% margin, and
the final negotiated price is $3.96 with 96.70% margin.
Barley WS-3202
Barley is planned to be one of our best sellers, because of its simple
silhouette and could be easily accepted by majority. It has short sleeves
and could be easily wear year round. Since Barley was planned to be
sale in large amount we planned our margin per unit to be lower so
that we could achieve the higher margin by selling larger amount.
Besides, in order to turn out the products faster we will manufacture
the Barley in El Salvador for the shortest lead-time. The prelim price
were planned to be $3.86 with 95.71% and the final negotiated price
is $3.55 with 96.06% margin.
Ivory WS-3400
Style Name Style # Retail Price
China Cost Margin% China
Cost Margin% China Cost Margin% Sri Lanka
Cost Margin% Sri Lanka Cost Margin% Sri Lanka
Cost Margin% El Salvador Cost Margin% El Salvador
Cost Margin% El Salvador Cost
Margin%
Latte WS-3100 120.00$ 4.19$ 96.51% 4.81$ 95.99% 3.83$ 96.81% 4.33$ 96.39% 5.20$ 95.67% 3.96$ 96.70% 3.78$ 96.85% 3.78$ 96.85% 3.45$ 97.13%Barley WS-3202 90.00$ 4.27$ 95.26% 4.69$ 94.79% 3.93$ 95.63% 4.43$ 95.08% 5.53$ 93.86% 4.08$ 95.47% 3.86$ 95.71% 3.86$ 95.71% 3.55$ 96.06%Ivory WS-3400 140.00$ 4.92$ 96.49% 5.75$ 95.89% 4.52$ 96.77% 5.20$ 96.29% 6.24$ 95.54% 4.78$ 96.59% 4.59$ 96.72% 4.59$ 96.72% 4.22$ 96.99%Bisque WS-3500 120.00$ 4.35$ 96.38% 5.00$ 95.83% 3.85$ 96.79% 4.52$ 96.23% 5.65$ 95.29% 4.00$ 96.67% 3.94$ 96.72% 3.94$ 96.72% 3.49$ 97.09%Desert Sand WS-3600 180.00$ 7.25$ 95.97% 8.56$ 95.24% 6.95$ 96.14% 7.74$ 95.70% 9.68$ 94.62% 7.42$ 95.88% 7.04$ 96.09% 7.04$ 96.09% 6.75$ 96.25%
130.00$ 4.96$ 5.00$ 5.24$ 4.64$ 5.62$ 5.76$ 6.46$ 4.64$ 4.59$ 4.62$ 4.85$ 4.29$
96.18% 96.16% 95.57% 96.45% 95.97% 95.03% 96.27% 96.43% 96.43% 96.70%
Average PriceAverage Initial CostAverage Prelim Cost
Average Margin
FINALFINAL
Average Final Cost
ECRU Initial Cost vs Prelim Cost vs Final CostINITIAL PRELIM INITIAL PRELIM INITIAL PRELIM FINAL
INITIAL COST vs PRELIMINARY COST vs FINAL COST
Style Name Style # Retail Price
China Cost Margin% China
Cost Margin% China Cost Margin% Sri Lanka
Cost Margin% Sri Lanka Cost Margin% Sri Lanka
Cost Margin% El Salvador Cost Margin% El Salvador
Cost Margin% El Salvador Cost
Margin%
Latte WS-3100 120.00$ 4.19$ 96.51% 4.81$ 95.99% 3.83$ 96.81% 4.33$ 96.39% 5.20$ 95.67% 3.96$ 96.70% 3.78$ 96.85% 3.78$ 96.85% 3.45$ 97.13%Barley WS-3202 90.00$ 4.27$ 95.26% 4.69$ 94.79% 3.93$ 95.63% 4.43$ 95.08% 5.53$ 93.86% 4.08$ 95.47% 3.86$ 95.71% 3.86$ 95.71% 3.55$ 96.06%Ivory WS-3400 140.00$ 4.92$ 96.49% 5.75$ 95.89% 4.52$ 96.77% 5.20$ 96.29% 6.24$ 95.54% 4.78$ 96.59% 4.59$ 96.72% 4.59$ 96.72% 4.22$ 96.99%Bisque WS-3500 120.00$ 4.35$ 96.38% 5.00$ 95.83% 3.85$ 96.79% 4.52$ 96.23% 5.65$ 95.29% 4.00$ 96.67% 3.94$ 96.72% 3.94$ 96.72% 3.49$ 97.09%Desert Sand WS-3600 180.00$ 7.25$ 95.97% 8.56$ 95.24% 6.95$ 96.14% 7.74$ 95.70% 9.68$ 94.62% 7.42$ 95.88% 7.04$ 96.09% 7.04$ 96.09% 6.75$ 96.25%
130.00$ 4.96$ 5.00$ 5.24$ 4.64$ 5.62$ 5.76$ 6.46$ 4.64$ 4.59$ 4.62$ 4.85$ 4.29$
96.18% 96.16% 95.57% 96.45% 95.97% 95.03% 96.27% 96.43% 96.43% 96.70%
Average PriceAverage Initial CostAverage Prelim Cost
Average Margin
FINALFINAL
Average Final Cost
ECRU Initial Cost vs Prelim Cost vs Final CostINITIAL PRELIM INITIAL PRELIM INITIAL PRELIM FINAL
156 157
Ivory is considered as another item would sale year round, and it has
the largest planned quantity, so we split the amount for manufacturing
into two countries. The unit price for Ivory in China was quoted to be
$5.75 with 95.89% margin, and negotiated down to $4.52 with 96.77%
margin.
Bisque WS-3500
Bisque is similar to latte, and was planned to be a more fashion items
with lower quantity and will be manufactured in Sri Lanka. The quoted
price for Bisque is $5.65 with 95.29% margin, and the final negotiated
price was lower to $4.00 with 96.67%
Desert Sand WS-3600
Desert Sand is a button up shirt and has similar construction techniques
to Ivory and it does not need to be turn out as soon as the best sellers
so that we decided to place Desert Sand in China for manufacturing.
The quoted price from China for Desert Sand is $8.56with 95.24% and
negotiated to$6.95 with 96.14%.
CONCLUSION
158 159
During the final strategy process we eliminated India and the
Philippines from our potential manufacturing locations. Each of these
countries presented risks that were very difficult for Ecru to overlook in
the process of manufacturing the Ecru Basics Collection. These factors
overall for both countries include unstable government and economic
positioning, the restricted size of the textile and apparel industry, high
manufacturing costs, low quality and craftsmanship and unethical
work and labor environments.
Due to the fact that Ecru focuses highly on their ethics, code
of conduct, craftsmanship and quality as well as the safety of the
environment, we have chosen to focus our manufacturing in three
potential countries, China, Sri Lanka and El Salvador. Prices are
very strong and competitive in these three countries and Ecru feels
comfortable working with each of them to negotiate a fair deal that
will benefit both Ecru and the manufacturer.
Our products will be placed in each of these three countries
to minimize our risks and to maximize our opportunity to protect our
products if something were to happen to the facility. This not only
benefits us but it also gives Ecru a chance to learn more about each of
these factories and potentially increase our quantities and ultimately
give the facilities more business in the years to come.
These manufacturers are looking to expand their portfolios and branch
away from their standard big name companies by adding luxury,
fashionable garments from a small privately owned brand to their
portfolio. Both Ecru and the manufacturers in China, Sri Lanka and
El Salvador have the ability to benefit from this new partnership and
grow with Ecru as it expands into new products and lines in the future.
160 161
COST SHEETS
Style 1 - Latte
Style 2 - Barley
Style 3 - Ivory
Style 4 - Bisque
Style 5 - Desert Sand
APPENDIX
Cost Sheets
Tech Packs
Sourcing Guidelines
Supplier Emails
Bibliography
162 163
STYLE 1 - CHINA STYLE 1 - EL SALVADOR
164 165
STYLE 1 - INDIA STYLE 1 - PHILIPPINES
166 167
STYLE 1 - SRI LANKA STYLE 2 - CHINA
168 169
STYLE 2 - EL SALVADOR STYLE 2 - INDIA
170 171
STYLE 2 - PHILIPPINES STYLE 2 - SRI LANKA
172 173
STYLE 3 - CHINA STYLE 3 - EL SALVADOR
174 175
STYLE 3 - INDIA STYLE 3 - PHILIPPINES
176 177
STYLE 3 - SRI LANKA STYLE 4 - CHINA
178 179
STYLE 4 - EL SALVADOR STYLE 4 - INDIA
180 181
STYLE 4 - PHILIPPINES STYLE 4 - SRI LANKA
182 183
STYLE 5- CHINA STYLE 5 - EL SALVADOR
184 185
STYLE 5 - INDIA STYLE 5 - PHILIPPINES
186 187
STYLE 5- SRI LANKA
TECH PACKS
Style 1 - Latte
Style 2 - Barley
Style 3 - Ivory
Style 4 - Bisque
Style 5 - Desert Sand
188 189
STYLE 1
190 191
192 193
STYLE 2
194 195
196 197
198 199
STYLE 3
200 201
202 203
STYLE 4
204 205
206 207
208 209
STYLE 5
210 211
212 213
CODE OF CONDUCT
This Code of Conduct is applicable to all supplier, their
subcontractors and other business partners that conduct business
with Ecru.
We require that parties which wish to conduct business with Ecru sign
a completed vendor compliance agreement to acknowledge and
abide by our Code of Conduct.
It is the responsibility of Ecru’s suppliers and other business partners to
inform any subcontractors about Ecru’s Code of Conduct to ensure
that the requirements are abided by in every factory and workplace
that contributes to Ecru’s merchandise.
214 215
1. Legal Requirements
1.1 All of Ecru’s suppliers and business partners must abide national
laws in all activities in the country of operation.
1.2 Ecru’s requirements may go beyond the national law’s
requirements
2. Child Labor
Ecru does not permit child labor and no person under the age of 16
shall be employed even if the legal age for employment is less than
16 years of age.
3. Health and Safety
3.1 Working Environment
Suppliers must adhere to all laws regarding health and safety.
Suppliers shall provide workers with a clean, safe and healthy work
environment. No exposed wires will be permitted.
3.2 Fire Safety
Ecru requires emergency exits be well lit and clearly marked on
every floor. All employees must receive training in regards to how to
respond to fire or other cases of emergency. Fire extinguishers must
be available for emergency use and their location made known
during training exercises.
3.3 Accidents and First Aid
First aid equipment must be available and its location know to all
employees.Textiles). The growing number of young population in
India implies the potential and active workforce in the world which
looks positive for outsourcing for skilled and talented labors; more
than 70% of population will be working age in 2025.
4. Worker’s Rights
4.1 Basic Rights
4.1.1 All workers are to be treated with respect and dignity, free from
humiliation, corporal punishment or abuse of any kind.
216 217
4.1.2 No discrimination of workers based on sexual orientation,
gender, religion, political opinion, race, ethnic origin, disability,
pregnancy or age will be tolerated. Employees have the opportunity
to anonymously report noncompliance with the Code of Conduct.
4.1.3 Forced labor is prohibited as is the use of illegal and prison labor.
4.1.4 All employees have the right to organize and join associations.
4.2 Wages
Wages are to reflect the experience, qualifications and performance
of an employee and are to be paid regularly and on time. Each
employee will be paid at least legal minimum wages as determined
by local government.
4.3 Working Hours
4.3.1 Ordinary working hours shall not exceed the legal limit and shall
never exceed 48 hours per week. Overtime must be both voluntary
and compensated and hours shall not exceed the legal limit and
shall never surpass 8 hours per week.
4.3.2 Each employee is allotted a 30 minute lunch break and 2 15
minute breaks each day.
4.3.3 Ecru requires that all its business partners and Suppliers
communicate the Code of Conduct with employees and supervisors
in their native language.
5. Housing Conditions
If employee housing facilities are provided by a company the health
and safety requirements under clause 3 must be followed.
6. Environment
Suppliers must comply with all laws regarding the environment in their
country of location, this includes having any relevant environmental
permits and licenses for its operations.
6.1 Water Management
Wastewater from wet processes must be treated before disposal and
meet requirements of local legislation when it comes to quality.
218 219
6.2 Waste Management
Waste and hazardous materials must be disposed of in accordance
with the law of the country in which the company operates.
7. Monitoring and Enforcement
7.1 Transparency
Ecru expects the companies it works with to keep accurate records
so that the company may be accurately assessed without the
falsification of documents. We expect all business partners and
suppliers to be transparent and to not purposefully mislead auditors.
7.2 Monitoring
7.2.1 Ecru will schedule 2 audits per year and reserves the right to
make unannounced visits for purposes of auditing to all parties
producing goods or services for Ecru.
7.2.2 We reserve the right to appoint an independent third party to
conduct audits in order to evaluate compliance with Ecru’s Code of
Conduct.
7.2.3 Suppliers may not coach employees on how to answer or
respond to inquiries from Ecru representatives during audits.
7.3 Corrective Action
Failure or unwillingness to correct violations of Ecru’s Code of
Conduct and local law with in an allotted amount of time would
damage the supplier’s relationship with Ecru and could lead to
reduced business or termination of business between the two parties.
220 221
SRI LANKA
SUPPLIER EMAILS & CALLS
222 223
EL SALVADOR INDIA
224 225
226 227
228 229
PHILIPPINES *None of the suppliers replied the emails, but we managed to call them.
CHINA
230 231
232 233
234 235
"About Us." Srilanka Apparel Sourching Association About Us Comments. N.p., 2014. Web. 20 Apr. 2014. "Business Climate." Sri Lanka. National Branding & Investment, 2010. Web. 12 Apr. 2014. Cultural Bytes Sri Lanka. Edith Cowan University, 2014. Web. 23 Apr. 2014. "Countries and Their Cultures." Culture of Sri Lanka. N.p., 2014. Web. 11 Apr. 2014. Data Monitor. Sri Lanka Country Profile. Data Monitor Asia Pacific, Jan. 2013. Web. Apr. 2014. "Eating and Drinking | About Sri Lanka." Rough Guides Eating and Drinking Comments. Sri Lanka Cuisine, 2014. Web. 19 Apr. 2014. "Fiscal Policy and Government Finance Chapter 6." Sri Lanka Fiscal Policy and Government Finance. Central Bank of Sri Lanka, 2012. Web. 12 Apr. 2014. "Geography of Sri Lanka." Princeton University. N.p., 2014. Web. 11 Apr. 2014. "Harmonized Tariff Schedule of the United States." Harmonized Tariff Schedule of the
United States. N.p., 2014. Web. 17 Apr. 2014. "Hirdaramani International Export (Pvt) Ltd." , Level 23, West Tower, World Trade Center, Echelon Square, Colombo, Sri Lanka. Hiradaramani Internantional Export (Pvt) Ltd., 2014. Web. 11 Apr. 2014. "Haypag-Lloyd." Services between North America and Indian Ocean. Products and Services, 2014. Web. 25 Apr. 2014. "India-‐Sri Lanka FTA." Department of Commerce, Government of India. International Trade, 2006. Web. 21 Apr. 2014. "INTERCULTURAL CONSULTING." Information on Sri Lanka. N.p., n.d. Web. 23 Apr. 2014. "Labour Force." Labour Force. Labour Force Survey, 2012. Web. 13 Apr. 2014. "Labour Legislations." Sri Lanka Labour Legislations. Department of Labour, 2014. Web. 13 Apr. 2014. "National Chamber of Exporters of Sri Lanka | Voice of the Exporter." National Chamber of Exporters of Sri Lanka Voice of the Exporter. N.p., 2014. Web. 20 Apr. 2014.
BIBLIOGRAPHY - Sri Lanka
"Pakistan-Sri Lanka FTA." Ministry Of Commerce. Government of Pakistan Ministry of Commerce, 2014. Web. 21 Apr. 2014. "Ramya Holdings." Ramya Holdings. Trendy Wear Ltd., 2014. Web. 11 Apr. 2014. "Routenet." Maersk Line. Shipping Services, 2014. Web. 25 Apr. 2014. "South Asia: Sri Lanka." Central Intelligence Agency. CIA: The World Factbook, 27 Mar. 2014. Web. 11 Apr. 2014. "Sri Lanka Age Structure." - Demographics. N.p., 2014. Web. 11 Apr. 2014. "Sri Lanka Apparel Exporters Association - Sri Lanka Apparel Exporters Association." Sri Lanka Apparel Exporters Association - Sri Lanka Apparel Exporters Association. N.p., 2014. Web. 20 Apr. 2014. "Sri Lanka Apparel - World's No1 Ethical Apparel Sourcing Destination." Sri Lanka Apparel - World's No1 Ethical Apparel Sourcing Destination. N.p., 2014. Web. 20 Apr. 2014. "Sri Lanka - Boundless Open Textbook." Boundless. Art History, 2014. Web. 19 Apr. 2014. "Sri Lanka Business Portal -‐ Exporters." Sri Lanka Business Portal - Exporters. EDB, 2014. Web. 11 Apr. 2014. "Sri Lanka." Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption. Index of Economic Freedom, n.d. Web. 12 Apr. 2014. "Sri Lanka Inflation Rate." TRADING ECONOMICS. N.p., 2014. Web. 12 Apr. 2014. "Sri Lanka: Introduction." GlobalEDGE: Your Source for Global Business Knowledge. N.p., 2014. Web. 11 Apr. 2014. "Trendywear Pvt Ltd.", 459/1, Kandy Road, Ranmuthugala, Kadawatha, Sri Lanka. Ramaya Holdings, 2014. Web. 11 Apr. 2014. "US-Sri Lanka FTA." Office of the United States Trade Representative. N.p., 2014. Web. 21 Apr. 2014. ZIM. "Overview." ZIM. Cargo Services, 2014. Web. 25 Apr. 2014.
236 237
“Apparel Made in El Salvador.” Tradegood. Tradegood. 27 September 2013. Web. 15 Apr.
2014. http://www.tradegood.com/de/viewpoints/apparel-made-in-el-salvador.html
CAMTEX: Chamber of the Textile, Clothing and Free Zones of El Salvador. CAMTEX. Web. 12
Apr. 2014. http://camtex.com.sv/.
Coleman, Denise Youngblood. El Salvador Country Review (2013) Business Source Premier.
Web. 9 Apr. 2014.
“Country Intelligence Report: El Salvador.” El Salvador Country Monitor (2014): 1-17. Business
Source Premier. 2 April 2014. Web. 9 Apr. 2014.
“Data.” World Bank. http://data.worldbank.org/indicator/SP.POP.TOTL
“Disaster Risk Management in Latin America and the Caribbean Region: GFDRR Country
Notes, El Salvador.” The World Bank. GFDRR. Web. 3 Apr. 2014.
“El Salvador.” World Factbook. Web. 9 Apr. 2014.
“Employing workers in El Salvador.” Doing Business. The World Bank. June 2013. Web. 13
Apr. 2014. http://www.doingbusiness.org/data/exploreeconomies/el-salvador/employing-workers
Klahn, Kirsten . "Top 10 Happiest Countries in the World." Wall St. Cheat Sheet. Wall St. Cheat Sheet, 20 Mar. 2014. Web. 26 Apr. 2014. <http://wallstcheatsheet.com/life/top-10-happiest-countries-in-the-world.html/?a=viewall>.
Meacham, Carl. "Elections in El Salvador: What to Expect and Why They Matter for U.S.
Security." Center for Strategic and International Studies. CSIS, 29 Jan. 2014. Web. 24
Apr. 2014. http://csis.org/publication/elections-el-salvador-what-expect-and-why-they-
matter-us-security.
BIBLIOGRAPHY - El Salvador
Melara, Gabrela. "Textiles recorded 44% of Salvadoran export industry." La Prensa Grafica.
Dutriz Hermanos SA de CV , 10 Apr. 2014. Web. 9 May 2014.
<http://www.laprensagrafica.com/2014/04/10/textiles-registraron-el-44-de-las-
exportaciones-salvadoreas-de-la-industria>.
PROESA: Export and Investment Promotion Agency of El Salvador, Government of El
Salvador. PROESA. Web. 10 Apr. 2014. www.proesa.gob.sv
"Puerto de La Unión Centralamericana History." CEPA - Puerto La Unión, El Salvador, Centro
America. Puerto La Union, n.d. Web. 10 May 2014.
<http://www.puertolaunion.gob.sv/index.php?articulo=1023>.
"Salvadoran Government Hosts Seminar For Textile & Apparel Sector." PROESA. PROESA, 12
Nov. 2013. Web. 6 May 2014. <http://www.proesa.gob.sv/latest-news/news/item/629-
salvadoran-government-hosts-seminar-for-textile-apparel-sector>.
"Specialized Textiles and Apparel." PROESA. PROESA, 26 May 2013. Web. 14 May 2014.
<http://www.proesa.gob.sv/investment/sector-opportunities/specialized-textiles-and-
apparel>.
238 239
Works Cited
CIA. "The World Factbook: India." Central Intelligence Agency. Open Government, n.d. Web. 13 Apr.
2014. <https://www.cia.gov/library/publications/the-world-factbook/geos/in.html>.
Corporate Catalyst India, ed. A Brief Report Textile Industry in India: March, 2013. New Delhi:
Corporate Catalyst India, 2013. PDF file.
Global Edge. "India." Global Edge. Michigan State University, n.d. Web. 13 Apr. 2014.
<http://globaledge.msu.edu/countries/india>.
Government of India, comp. Labour Laws And Other Labour Regulations. New Delhi: Government of
India, 2006. PDF file.
MarketLine “India Country Profile.” India Country Profile (2013): 1-96. Business Source Premier. Web.
13 Apr. 2014.
Ministry of Textiles, Government of India, comp. Annual Report 2012-2013. New Delhi: Ministry of
Textiles, Government of India, 2013. PDF file.
BIBLIOGRAPHY - India "Labor Codes." Department of Labor and Employment. Republic of the Philippines, n.d.
Web.
"Philippines." Office of the United States Trade Representative. The United States
Government, n.d. Web.
"Tax Incentives." Asia Regional Integration Center. Asian Development Bank, n.d. Web.
"United States and Philippines Commit to Intensified Engagement on Trade." Office of
the United States Trade Representative. The United States Government, Mar.
2014. Web.
"Why the Philippines?" Embassy of the United States Manila, Philippines. The United
States Government, n.d. Web. 13 Apr. 2014.
Magtulis, Prinz P. "Inflation Seen Declining to 3.2%." Philstar.com. The Philippine Star,
9 May 2013. Web.
"Philippines." The Library of Congress. The United States Government, June 2008. Web.
"Philippines." Office of the United States Trade Representative. The United States
Government, n.d. Web.
Thomasson, Sarah C. "The Philippines: Textile And Apparel Industry On The Mend."
Textile World Asia. Textile World Asia, Feb.-Mar. 2013. Web.
BIBLIOGRAPHY - Philippines
240 2411
BBC news “ Shanghai free-trade zone launched” September 2013 http://www.bbc.com/news/business-24322313
Bruce Kenney “China increases minimum wage rates”,CBSNews, March31, 2014
Website http://www.cbsnews.com/news/china-increases-minimum-wage-rates/
“China Country Profile.” China Country Profile (2013): 1-79. Business Source Premier. Web. 14 Apr. 2014. “China’s Free Trade Agreements “China FTA Network: http://fta.mofcom.gov.cn/
Chen Yang “US trade with China seen rising”, Global Times 2013 -12-11
http://www.globaltimes.cn/content/831580.shtml#.U1rVUK1dUYQ
“Customs Law of the People’s Republic of China”, Chinese customs official website, www.customs.gov.cn
Donna W. Reamy, Cynthia W. Steele, “ Perry’s department store, an importing simulation” Fairchild Publications, Inc. 2006 print
“Harmonized Tariff Schedule”, United States International Trade Commission http://hts.usitc.gov/
“Importing into the U.S” U.S Customs and Border Protection www.cbp.gov
International Textile Manufacturer Federation, October 2011, http:www.cotlook.com/userfiles/file/Uzbek2011/06.pdf
International Trade Centre (ITC) The Chinese Market for Clothing. Geneva: ITC, 2012. xi, 92 p. (Technical Paper)
Jian Yang (April 2006). “Learners and users of English in China”. English Today 22 (2): 3–10. doi:10.1017/S0266078406002021.. Quote: “What this suggests, it seems, is that Yan’s (2004) ten million may after all be a more informed estimate of the actual regular users of English in China.” (page 9)”
BIBLIOGRAPHY - China
2 !
Loan university “ Letter of Credit explained what is a letter of credit?” 2011 http://www.loanuniverse.com/letters.php#sthash.f7VW0HE3.dpuf
Matt Phillips , “�������������” Wall Street Journal, 2010 http://cn.wsj.com/gb/20100623/mkb082844.asp?source=article
Qiu, Larry D. “ Textile and Clothing Industry” HKUST 2005 http://s3.amazonaws.com/zanran_storage/www.bm.ust.hk/ContentPages/18112599.pdf
Tang Xiaoyang, “ Comparing Technological innovation of Textile industries in India and China” International Food Policy Research Institute 2011
Terence P. Steward, Esq. Stewart “China’s support program for selected industries Textiles and Apparel” Trade Lawyers Advisory Group LLC June 2007
The World Factbook 2013-14. Washington, DC: Central Intelligence Agency, 2013 .https://www.cia.gov/library/publications/the-world-factbook/index.html
“U.S Imports”, Trade Data, Office of Textiles and Apparel, http://otexa.ita.doc.gov
Xinhua “China’s 2013 urban unemployment rate at 4.1%” China org.cn January 24 2014
Website http://www.china.org.cn/business/2014-01/24/content_31297360.htm
Xinhua “China rules out strong economic stimulus”, China org.cn, April 24, 2014 Website http://www.china.org.cn/business/2014-04/24/content_32191351.htm
Xinhua “ China’s garment exports up 31.6%” China Daily, 2013 (http://www.chinadaily.com.cn/business/2013-04/03/content_16372693.htm) !
242
