Truong Van Cam, Deputy Secretary General of the Vietnam Textile and Apparel Association (Vitas) feels, many textile & garment companies are leaving the market because of unstable policies. Speaking at a workshop held by the World Bank (WB) and the Vietnam Chamber of Commerce and Industry (VCCI), he recalled how a garment company wanted to import a printer to make products for export and it took them six months to obtain import license.

Cam said on Thoi Bao Kinh Te Saigon, that this was because the Decree 60 stipulated that business owners must have junior college’s degree to be able to import printers. A business in Nam Dinh province, which employs 2,000 workers, said it has to pay VND40-50 billion additionally every month because of the required higher minimum wage and trade union fee. The State’s policies need to be designed in a way to encourage investors to do business and stay in the market, commented Cam.

Anther analyst speaking at the workshop observed that the government seems to be too optimistic about opportunities to be brought to the textile and garment sector by TPP.

Pakistan lags behind competitors in reliability, political stability and lack of diversity, despite low prices in most apparel product categories says a World Bank (WB) report. The report titled, ‘Apparel employment, trade, and economic development in South Asia,’ states many buyers avoid Pakistan because of the security situation and hence entrepreneurs have to travel to Dubai to meet them, which complicates sourcing.

The report observed that Pakistan is cost competitive in most product categories, but it is not a top performer in any of the export categories. One major problem is a lack of product diversity, with the country almost entirely dependent on cotton products and trouser exports. Other problems are reliability, compliance, and political stability and safety, especially Foreign Direct Investment (FDI). Pakistan also has a large labor pool, but productivity is hurt by the limited availability of good sector-specific training institutes and gaps in technical, design, and middle management skills.

The report maintains that Pakistan has a fast-growing apparel sector that accounts for 19 per cent of its exports, and firms are competitive with global exporters in terms of prices. The country ranks fourth in terms of value ($4.2 billion) with the same global market share (1.2 per cent) as Sri Lanka.

"A BSI Global Supply Chain Intelligence Report cites increasing number of terrorism incidents as major supply chain risk. The report is based on data from BSI’s Supply Chain Risk Exposure Evaluation Network (SCREEN), which provides continuous evaluation across 22 proprietary risk factors and 204 countries. BSI’s 2015 SCREEN data and analysis reveals a clear picture of the changing global threat landscape and how this varies by country, continent, and industry sector."

A BSI Global Supply Chain Intelligence Report cites increasing number of terrorism incidents as major supply chain risk. The report is based on data from BSI’s Supply Chain Risk Exposure Evaluation Network (SCREEN), which provides continuous evaluation across 22 proprietary risk factors and 204 countries. BSI’s 2015 SCREEN data and analysis reveals a clear picture of the changing global threat landscape and how this varies by country, continent, and industry sector.

BSI’s report noted a number of cross-border issues that threatened supply chains across the world in 2015. This include: damages caused by cargo theft; increased number of terrorism incidents contributed to billions of dollars in losses to global shipping companies; an influx of migrants in Europe that harmed supply chain integrity across the continent; economic downturns in Argentina, Brazil, and China; and issues of political transparency that drove social unrest in Africa and Central America. Extreme weather events, including many attributed to the El Nino phenomenon, caused supply chain disruptions and threatened business continuity in multiple regions. There were also several industries that were plagued by poor enforcement of labour regulations, allowing for significant rates of child or forced labour in Argentina and India, among other nations.

Security concerns

The report said, nearly AUD$30 billion was lost due to cargo theft worldwide in 2015 from a variety of supply chain threats, predominantly driven by security concerns. South Africa has seen a 30 per cent increase in cargo truck hijackings over the last year, with thieves using high levels of violence and switching from targeting only high value goods to also targeting lower value items. Daring vehicle shipment thefts have become increasingly commonplace in China, with a recent series of in-transit vehicle thefts occurring along the busy G45 highway. More sophisticated attacks were observed in India throughout 2015, where criminal gangs masterminded new techniques to steal goods without breaking customs seals to avoid detection – a major risk for companies participating in international supply chain security programs.

Terrorism and supply chain

It further said, in Europe, disruptions in trade caused by the ISIS terrorist group clearly highlighted the link between terrorism and the supply chain. Border controls in France following the November attacks in Paris are estimated to have cost the Belgian shipping industry AUD$4.6 million. Terrorist-linked smuggling rings were also identified to be colluding between Spain and the Middle East, the groups illegally transporting shipments of stolen electronics, drugs, weapons and other contraband. Elsewhere, the Jordanian trucking industry suffered AUD$990 million in lost revenue since conflict began in the Middle East in 2011.

In addition to theft, business continuity-related threats such as extreme weather events and political and social unrest, led to significant losses for individual companies and national economies last year. 2015’s top five natural disasters caused a collective AUD$33 billion of damage to businesses. In 2016, BSI has identified emerging health crises, such as the Zika virus, could also pose a significant threat to the global supply chain and may lead to work stoppages and protests similar to the supply chain disruptions seen in conjunction with the Ebola epidemic.

Labour issues

Coupled with labour unrest and factory strikes have also caused considerable financial damage across the world. Factory strikes in China increased by 58.3 per cent from the previous year due to pay disputes, as factory owners struggled to pay workers due to a slowing economy, leading to protests. The withholding of wages was cited as a major cause in 75 per cent of protests and generated losses of up to AUD$35 million in the footwear industry. Labour unrest is likely to continue in China in 2016, regardless of whether the economy improves.

Numerous cases of child and forced labour were exposed in 2015, highlighting the need for visibility into corporate supply chain to mitigate the risk of human rights abuses. Nearly 80 per cent of Argentina’s textile industry was found to be sourcing from unregulated facilities, where forced, child labour and poor working conditions are common. BSI also noted an increase in the risk of child labour use in India due to the existence of loopholes in labour reforms approved in 2015. In response to these and other recent concerns, European countries and the United States last year moved to pass laws mandating reporting on corporate social responsibility issues in corporate supply chains.

Threat potentials in 2016 include:

The study also listed out certain threat potentials for 2016. These include: Global cargo theft cost estimated to grow by a further AUD$1.3 billion in 2016; increased concerns in China, Germany, India, Mexico, South Africa, and US; continued tensions in South China Sea predicted to lead to further protests and disruptions; conflict in Syria; migrant crisis in EU to lead to port disruptions; EU/Schengen border controls predicted to have far-reaching impact; labour unrest in China, as a slowdown in the economy continues; La Nina and other weather phenomenon; health crises due to Zika and Ebola etc.

Bangladesh is drawing the attention of global buyers for high-end denim. Rising costs in China have created an opportunity for Bangladesh to grab a share of the denim segment. Bangladesh now produces more value-added products. It targets denim exports worth $7billion by 2021, when the country's total garment export is expected to cross the $50 billion mark.

Price is the advantage of Bangladeshi denim makers that helps them retain the top exporting position in the EU and maintain the third position in the US. Global brands have started exploring the sourcing potential of handloom denim fabrics dyed with natural indigo from Bangladesh.

In recent years a few companies in Bangladesh have started cultivating natural indigo and this indigo is mainly used in dyeing high quality, handmade products for high end and luxury markets. Denim made on handlooms is softer than mill made denim, has a unique texture and breathes well and helps feel cool in summer and retain body warmth in winter. Organic cotton and natural indigo dye are used for producing the handloom denim fabric.

Sustainable fashion companies in Germany are working with a company in Bangladesh to produce hand-woven indigo denim fabric.