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Philippines supplier profi lesDetailed profi les of 20 suppliers with verifi ed manufacturing and export credentials

Product gallerySpecifi cations and full-colorimages of 171 top-sellingexport products ranging from rompers to dresses

Industry trendsCoverage of current issues,plus insights into supply centers, products and pricing

August 2013US$150

Essential sourcing intelligence

Global Sources is off ering this series of Developing Country Sourcing Reports as part of its corporate social responsibility undertakings in partnership with the Hinrich Foundation, a philanthropic development organization whose mission is promoting sustainable global trade.

The aim is to give international buyers new sourcing opportunities from experienced exporters, generating orders and creating lasting jobs in developing economies.

Garments

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GARMENTSSupplier capability in the Philippines

Surging demand from traditional markets is driving the growth of the garments industry in the Philippines. Exports in recent years have been gradually expanding as a result of the recovery of the US market from the global financial slowdown. In addition, the sector is seen to gain momentum in the EU as the association and the Philippines have started discussions to smoothen trade further.

The US is expected to remain the single-largest market for locally made apparel over the next few years. A number of prominent fashion brands are customers to several domestic manufacturers. Most of them source locally produced clothing aimed at the high end.

A number of competitive advantages benefit the garments industry in the Philippines. Foremost of these is a deep labor pool with high English language proficiency.

Objective, methodology & scope

1. The majority of garment suppliers expect prices to remain unchanged over the next six months to keep existing clients. An almost equal number, however, are inclined to raise quotes due to higher expenditure on labor and production.

2. Most manufacturers forecast export revenue to increase in the next 12 months as sales to the US and the EU are predicted to stay strong. Furthermore, a number of companies plan to bolster their presence in these markets to improve profitability.

3. The most critical challenge affecting the segment is the increasing value of the peso versus the US dollar. The strengthening of the local currency adversely affects

Key findings

Executive Summary

In this report• 18 in-depth company profi les• 2 short company profi les• 171 top-selling export products• Supplier demographics• Supplier survey• Industry statistics and charts

This Philippines Sourcing Report is part of a series designed to provide buyers with information on new products from export manufacturers in supply markets that specialize in handmade merchandise.

The Developing Country Sourcing Report series is part of Global Sources’ corporate social responsibility initiatives. It is offered in conjunction with the Hinrich Foundation, whose mission is promoting sustainable global trade. One of its objectives is to help create jobs in developing Asia through export promotion.

To produce this report, large, midsize and emerging manufacturers, all with substantial export experience, were surveyed. The selection of suppliers is designed to reflect the composition of the industry in the Philippines in terms of geographic location, materials used and range of products offered.

For in-depth profiles, our researchers visited the facilities of each company and interviewed senior executives who discussed their recent performance and provided forecasts for the next 12 months. All other makers in this report were either visited or contacted by phone.

In each case, companies were required to answer specific questions designed to verify their manufacturing and export credentials, including a breakdown of exports by product type and market. Suppliers also participated in a survey designed to provide insight into the industry.

This report covers different types of garments available in the Philippines, including casual, formal and sports apparel, and baby and children’s wear. Each product category has its own price guide that describes features of the low end, midrange and high end.

The Industry Overview section discusses key issues affecting export manufacturers. It provides insight on the composition of the industry and elaborates on the important supply centers within the Philippines.

The Products & Prices section details the features and price ranges of garments. It also examines the design and manufacturing processes, main materials used, and sourcing centers where components are procured.

the competitiveness of domestic enterprises compared with those from other low-cost sourcing hubs such as China and Vietnam.

4. In contrast to models from other supply zones, which commonly incorporate native motifs and design techniques, garments from the Philippines are typically designed to feature modern fashion trends. Some of these are asymmetrical hems, layers and vintage effects. Comfort is also highlighted as items are usually made of soft and lightweight textiles.

5. The country’s sourcing centers for apparel are concentrated in the island of Luzon, particularly Metro Manila. Provinces surrounding the metropolis also host many suppliers because costs are normally lower in these locations.

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4 Philippines Sourcing Reports

CONTENTS

Disclaimer: Any recommendation contained in this report may not be suitable for all investors or businesses. Moreover, although the information contained in this report is obtained from sources believed to be reasonably reliable, the accuracy or completeness of such information cannot be guaranteed. The author and the publisher of this report (and the publisher’s affi liates, agents, sales representatives and service contractors) do not make any representation or warranty whatsoever (whether express or implied) in relation to any of the contents of this report (including any information, opinion, recommendation or conclusion contained in this report) (collectively, “Contents”), whether as to the accuracy, completeness, quality, fi tness, suitability or reliability of such Contents (or any portion thereof ) or otherwise, and shall not be liable under any circumstances whatsoever for any error, omission, defect or defi ciency in, or for any use of or reliance on, such Contents (or any portion thereof ).

All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. Products that are not the specifi c topics of editorial articles are shown for illustrative and/or demonstrative purposes only. We, our affi liates, and our affi liates’ respective directors, offi cers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof ) which infringe on any intellectual property or other rights of a third party.

Copyright 2013 Trade Media Limited. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Trade Media Holdings Limited and Trade Media Limited is prohibited.

Published by Publishers Representatives Limited (on behalf of Trade Media Limited)4th Floor, Century Yard, Cricket Square, Elgin Avenue, P.O. Box 32322 SMB, George Town, Grand Cayman, Cayman Islandsc/o 22/F Vita Tower, 29 Wong Chuk Hang Road, Aberdeen, Hong Kong

ISBN 978-988-15981-5-8

Contents

EXECUTIVE SUMMARY 3 Key fi ndings Objective, methodology & scope

INDUSTRY OVERVIEW 9 Exports

Products & prices 11 Production & export statistics Typical parts & components Price guides

Supplier survey 18 Export prices Export sales Export markets Major challenges R&D focus

SUPPLIER PROFILES 21 Supplier matrix: Comparison of supplier location, sales revenue & export capability Profi les of 20 verifi ed suppliers

PRODUCT GALLERY 65 Casual wear Formal wear Underwear & sleepwear Sportswear Baby & children’s wear

CONTACT DETAILS 97

Sample page only18

agparison of supplier location,of supplier location& export capability t capability

verifi ed supplierssuppliers

DUCT GALLERY DUCT GALLE ppCasual wearual wearFormal wearormal wearUnderwear & sleepweUnderwear &SportswearSportswearBaby & childrBaby &

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Industry Overview

Industry Overview

The garments industry in the Philippines is benefitting from the resurgence of orders in key markets in light of the improving financial climate in the West.

Although outbound shipments fell in 2009 due to the global economic crisis, exports have been steadily rising over the past three years and are expected to continue an upward trend. Data from the Department of Trade and Industry show that overseas revenue in 2012 grew 15 percent to $1.5 billion from the period before. This was after the line posted a 12 percent jump in 2011. For 2013, income from clothing is expected to expand by as much as 7 percent.

The growth is primarily driven by renewed interest from the US, which accounted for approximately 69 percent of exports last year. Shipments totaled $514.9 million from January to May this year, up 2 percent from the same period last year. The Philippines has been lobbying for the passage of the Save Our Industries Act, a US bill providing duty-free or preferential access to imported garments that adopt US-made fabrics. The enactment of the proposed law, which was first introduced in the US Congress in 2009, is projected to boost total exports between $2.7 and $3 billion by 2017. It is also expected to generate 450,000 jobs in the sector over the next five years.

The Philippines continues to attract buyers from the US. Gap, Ann Taylor, Polo Ralph Lauren, Victoria’s Secret, Tommy Hilfiger, Levi’s and Jones New York have been boosting their sourcing activities in the country over the past years. The development is attributed to the quality of labor in the country, which is visible in high-value items.

Locally made clothing is also gaining strong interest in the EU, which

absorbed about 18 percent of shipments last year. The majority of buyers in the association are based in France, the Netherlands, the UK and Italy. The Philippines is seeking to avail the bloc’s Generalized Scheme of Preferences Plus, an arrangement that will allow countries to enjoy further tariff reductions in various product categories, including garments and textiles. The two sides have also started negotiations for a free-trade deal.

Competitive advantagesOne of the industry’s strongest suits is the widespread availability of skilled manpower across the archipelago. Aside from being proficient in different manufacturing steps such as weaving and sewing, workers in the Philippines are known for their good English literacy. They can also operate computers and large-scale machines.

Foreign investors are attracted to the strict adherence to ethical and labor standards of factories in the country. A number of major fashion brands have pulled out from Bangladesh, the world’s second-biggest clothing exporter, in the wake of the controversy surrounding the safety of garment workers there. China is also being criticized due to the alleged presence of sweatshops.

The availability of indigenous materials such as Manila hemp, ramie and bamboo is another advantage enjoyed by the sector. Manila hemp is mixed with cotton or polyester to create denim fabric, while ramie is used as an alternative to linen. Apparel made of these fibers is gaining popularity among overseas buyers because they are perceived as sustainable.

The sector receives ample support from various trade associations. The Confederation of Garment Exporters in the Philippines and Garment Business Association of the Philippines regularly conduct seminars and training to support its members. They also lobby for laws and policies that will benefit the line.

ChallengesSuppliers consider the appreciation of the peso against the US dollar as the main difficulty affecting the industry. Due to the strengthening of the currency, companies are pressured to adjust export prices, making it harder to compete with low-value items from other sourcing hubs.

The soaring cost of labor is also identified as another stumbling block. Workers in the sector earn between $180 and $240 per month, the highest rate among ASEAN members. The

ExportsValue$ billion

Casual wear markets

North America71%

Europe (non-EU)

1%

Asia-Pacific12%

EU12%

Middle East2%

Other 2%

Source: Department of Trade and Industry

Includes HS codes 6103, 6104, 6105, 6106, 6109 & 61102012 export dataSource: International Trade Centre

2010 2011 2012

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22 Philippines Sourcing Reports

Supplier Profiles

SUPPLIER MATRIX

Company Year established

Head office location

Factory location(s) Ownership Full-time employees

Part-time employees

In-depth profiles

Alexander’s 1956 Manila (Metro Manila)

Manila (Metro Manila)

Locally owned

500

Armina 1986 Caloocan (Metro Manila)

Caloocan (Metro Manila)

Locally owned

52 72

Arthread 2007 Lipa (Batangas)

Lipa (Batangas)

Locally owned

4 9

Basicwear 2004 Makati (Metro Manila)

Santa Maria (Bulacan)

Locally owned

200

Cinderella 1948 Quezon City (Metro Manila)

Quezon City (Metro Manila)

Locally owned

30

Crismer 1992 Pasig (Metro Manila)

Pasig (Metro Manila)

Locally owned

65 35

Eco Fairies 2010 Quezon City (Metro Manila)

Quezon City (Metro Manila)

Locally owned

15 45

Fashion Textile 21 2007 Mariveles (Bataan)

Mariveles (Bataan)

Foreign-invested

150

Games and Garments

1982 Quezon City (Metro Manila)

Antipolo (Rizal)

Locally owned

200 25

HN 1989 Pasig (Metro Manila)

San Rafael (Bulacan)

Locally owned

110 30

Jenton 2009 Victoria (Laguna)

Victoria (Laguna)

Locally owned

300

Knit Trends 2012 San Juan (Metro Manila)

Santa Maria (Bulacan)

Locally owned

200

Mybro 2011 Lipa (Batangas)

Lipa (Batangas)

Locally owned

22 3

New Creation 1961 Makati (Metro Manila)

Parañaque (Metro Manila)

Locally owned

700

RK 1980 Pasay (Metro Manila)

Pasay (Metro Manila)

Locally owned

200 2,000

Salvation Garments 1998 Muntinlupa (Metro Manila)

Muntinlupa (Metro Manila)

Locally owned

10 20

Sportz Plus 1982 Quezon City (Metro Manila)

Quezon City (Metro Manila)

Locally owned

100 20

Western Garments 1977 Navotas (Metro Manila)

Navotas (Metro Manila)

Locally owned

174

Short profiles

D&A 1994 Rosario (Cavite)

Rosario (Cavite)

Foreign-invested

500 400

Signet Aloysian 2011 Trece Martires (Cavite)

Trece Martires (Cavite)

Locally owned

8 15

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26 Philippines Sourcing Reports

Supplier ProfileSupplier Profiles

Capability

Contact details

Alexander’s Wear International Corp.

Annual sales $6,000,000 Share of total sales 100% Annual export sales $1,500,000 Total monthly capacity 100,000 pieces Average monthly output 100,000 pieces Capacity utilized 100% Average monthly exports 30,000 pieces Export ratio 30% Major export customers El Machetazo (Panama), The Baby Shop (UAE)

Company facts

Year established 1956 Head offi ce location Manila (Metro Manila) Factory location(s) Manila (Metro Manila) Ownership Locally owned Full-time employees 500 Total annual sales (all products) $6,000,000

Sales & output: Garments

Alexander’s has 57 years of experience manufacturing garments. Total annual revenue reaches $6 million.

Close to one-third of the supplier’s output is sent abroad. The Middle East accounts for 65 percent of exports, with the UAE, Lebanon and Qatar as the key markets. Panama takes up one-quarter of shipments. The rest goes to Turkey, Malaysia, Indonesia and Thailand.

The majority of orders are under ODM basis.

The best-sellers are baby and children’s wear, which contribute more than two-thirds to foreign sales. Casual and formal apparel are also produced.

Prices are generally between $3 and $10. Boys’ sleeveless shirts are available for at least $4. Shorts are offered for $6. Cotton pants are quoted at $8.

The company sources cotton, polyester,

rayon and acrylic from mainland China, Taiwan and South Korea. It also buys fabrics from the Divisoria market in Manila.

Six designers release up to 200 models every year. Samples are often finished within 10 days.

The majority of manufacturing steps are performed in a 6,000sqm factory in Manila’s Tondo district. Embroidery and printing are occasionally subcontracted to local artisans.

Alexander’s has 500 full-time employees, 15 of whom serve as QC inspectors.

The supplier is a regular exhibitor at the Hong Kong Fashion Trade Show. It is a member of the Philippine Chamber of Commerce and Industry. The company will target the Middle East for market expansion in the year ahead. It will focus on models with modern styles over the next six months.

Materials used Cotton ✓

Polyester ✓

Rayon ✓

Acrylic ✓

Silk ✓

Other ✗

Exports by product Casual wear 20%Formal wear 10%Underwear & sleepwear –Sportswear –Baby & children’s wear 70%

Exports by market North America –EU –Europe (non-EU) 5%Asia-Pacific 5%Middle East 65%Other 25%

Business contact UY Robert

Phone (63-2) 253-0550

Fax (63-2) 253-1039

E-mail uyrobert56@alexanderwear.com

Address 809 Moriones Street, Tondo, Manila, Metro Manila, Philippines

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www.ChinaSourcingReports.com 27

Supplier Profile Executive Sum-Supplier Profiles

Popular export models

Model: N028MOQ: 1,200 piecesPackaging: Polybag, cartonDelivery: 90 to 120 daysPrice: $5Description: Boy’s hooded T-shirt; 60:40 cotton-polyester; sizes 2 to 14; in various colors

Model: N029MOQ: 1,200 pairsPackaging: Polybag, cartonDelivery: 90 to 120 daysPrice: $6.70Description: Boy’s shorts; 100% cotton; with adjustable waistband; sizes 2 to 14; in various colors

Model: N026MOQ: 1,200 piecesPackaging: Polybag, cartonDelivery: 90 to 120 daysPrice: $4.50Description: Boy’s T-shirt; 100% cotton jersey; sizes 2 to 14; in various colors

Model: N025MOQ: 1,200 piecesPackaging: Polybag, cartonDelivery: 90 to 120 daysPrice: $4.35Description: Boy’s sleevelees shirt; 100% cotton jersey; sizes 2 to 14; in various colors

Model: N031MOQ: 1,200 pairsPackaging: Polybag, cartonDelivery: 90 to 120 daysPrice: $8Description: Boy’s pants; 100% cotton twill; sizes 2 to 14; in various colors

Model: N030MOQ: 1,200 pairsPackaging: Polybag, cartonDelivery: 90 to 120 daysPrice: $6.70Description: Boy’s shorts; 100% cotton twill; with adjustable waistband; sizes 2 to 14; in various colors

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ehooded T-shirt; 60:40 shirt; 60:40 cotton-polyester; sizes 2 to 14; polyester; sizes 2 to 14;in various colorsus colors

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