Sustainability has become the motto for European businesses - Arhive
Serge Piolat
President
Euratex
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Sustainability has become the motto for European businesses
Euratex focuses on genuine industrial policy, research and innovation support, free and fair trade and sustainable production across the European Union. Serge Piolat, President, Euratex discusses the highs and lows of the European textile and garment industry.
Source :
Q How is Brexit likely to affect the European textile and apparel industry? What will be the strategy ahead?
A The United Kingdom’s decision to leave the European Union (EU) brings a lot of uncertainty. We are seeing its negative impact already. Uncertainty will cause numerous challenges for European manufacturers, the business community and the economy in general. At this stage Euratex is closely monitoring the political debate among heads of governments, EU institutions and political leaders. In close cooperation with UK Fashion & Textile Association (UKFT), Euratex will address the most crucial factors potentially affecting our companies in the short and long terms. The consequences on trade and single market regulatory issues and the United Kingdom’s companies and organisations’ participation in European Union funded projects are specifically our focus.
Q Please provide us an overview of the European textile and apparel industry.
A The European textile and apparel manufacturing is a dynamic high-tech industry that makes considerable contribution to many sectors – automotive, medical, aerospace, building, protective equipment and others. It is an essential pillar of the local economy across the EU. Textile and clothing production accounts for 174,000 companies, mainly SMEs, ensuring 1.7 million jobs. In 2015, our enterprises reached a turnover more than €169 billion. The EU is the second-largest world exporter of textiles and clothing after China; more than 28 per cent of its sales are outside Europe.
Q What is the contribution of Euratex to the European apparel and textile industry? What is your agenda for the next two years?
A For many years, Euratex has been successfully working with the European institutions on a range of initiatives to boost textile and clothing manufacturing in the EU. We are committed to improving the proximity and mutual understanding between our companies and European institutions. In June 2016, Euratex General Assembly nominated Klaus Huneke as president from January 2017 for a two-year term. As an experienced industrialist, Klaus Huneke has an ambitious plan for his upcoming presidency. To meet the needs of the companies we represent, Euratex will continue its work organised in three priority areas – trade and industrial policy, innovative industry and responsible businesses. Euratex shall remain being a bridge between the companies of our sector and European institutions.
Q Which countries within the EU are the biggest manufacturers of yarn, fabric, machinery, apparel, accessories? What is the USP of each country? Kindly give a break up.
A Italy is by far the largest producer of textile and clothing goods, accounting for more than a third of the EU industry production. If we add Germany, France and Spain we reach more than 2/3 of the total EU output. Italian performance is driven by the high end sector, made possible by worldwide recognition of the innovative aspect and quality of products made in Italy. Besides leadership in garments, it produces almost 50 per cent of the total EU yarns and fabrics. Italy is the second-largest European producer of textile machinery, behind Germany. Germany is the EU’s second-leading producer of textile and clothing goods in the EU. The key driver of its performance is the output growth of technically demanding textiles and innovative products. It encompasses high quality, research-intensive technical textiles as well as fleece fabrics. Manufacturers of technical textiles in particular are benefiting from the increasing use of their products in new fields of application. Besides, the other main producing countries, listed in decreasing order, maintain leadership positions in certain sub-sectors of activities. These are: France (made-up textiles, technical textiles and garments), Spain (made-up textiles, garments), the United Kingdom (made-up textiles), Portugal (garments), Belgium (carpets), Poland (made-up textiles, garments) and Romania (garments). Outside the EU but very close to us, we should not forget that Turkey is another major producer of both textiles and clothing goods. Turkey and the EU are linked by a Customs Union agreement and we have a strong interlinked relationship with the Turkish industry.
Q What latest technologies and innovations are European textile and apparel players using?
A Europe is a recognised global leader in production of highly technological innovative textiles with applications in different sectors. Thus, smart and functional materials are produced for various markets such as high-performance sportswear or protective clothing. This also includes integration of sensors and other smart devices. Among the important developments are production of high-performance technical textiles and fibre-based composites for transport and construction markets. Digitisation both in production (e.g. digital printing) and in supply chain management is an important innovation area for greater efficiency and flexibility and to produce and market small, customised orders. The companies of our sector are as well involved in sustainability-related innovations such as energy and water-saving technology, textile recycling or bio-chemistry.
Q What kind of textiles and clothing does Europe export and to which countries?
A Woven fabrics are the major textiles exported by the EU. These represent 24 per cent of total textile and clothing exports. The NAFTA* zone and the Mediterranean countries are the biggest purchasers of textile goods like yarns, fabrics, knitted fabrics and special textiles. Technical textiles represent a substantial share of EU’s exports. The United States of America is the main customer in this category. It buys 19 per cent of exported goods. Regarding clothing, woven and knitted articles represent respectively 32 per cent and 17 per cent of total EU textile and clothing exports. These are of particular interest to developed countries. EFTA and NAFTA are two main buyers, both for woven items with 17 per cent and 18.5 per cent respectively and for knitted items, with 21 per cent and 15.5 per cent. In 2015, these market shares of clothing purchases were up sharply for NAFTA area. Demand was steady in emerging countries in Asia with a total share of 24.8 per cent purchase of made up garments. The group of autonomous countries were in decline because of fall in exports to Russia.
Q The European industry was facing crisis due to unacceptable price hikes in dyestuff. Please throw some light on the issue.
A The dyestuff market is rather concentrated in Europe in terms of distributors while China became the leading producing country of chemical intermediates and dyestuffs with India being the second-largest manufacturer. This situation is negatively impacting our SME-dominated industry. Since mid-2013, the EU industry is facing formidable price hikes (at two digits) and price uncertainties which impact EU competitiveness. This instability results from a combination of factors: High price speculation, lack of diversified market for sourcing raw materials, exchange rate evolution, further tightening of Chinese environmental policy and shortages of raw material. Furthermore, true chemical intermediates and dyestuffs producers are virtually absent in Europe as the result of enforcement of the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulation, among others. These circumstances are putting at risk the competitiveness of our companies and are of concern also for other industries. The actual impact varies at company level and depending on the market structure in different countries. Forecasts show that the price pressure will not diminish in a foreseeable future also considering the impact of the Chinese environmental policies on the market.
Q What challenges are European textile and garment manufacturers facing? What is Euratex doing to overcome them?
A Vigorous global competition is among the main challenges for the textile and clothing companies manufacturing in Europe. European entrepreneurs are taking substantial measures to keep production in Europe and remain competitive. Innovation became the companies’ business models. Manufacturers are opting for advanced know-how in production processes and increasing the variety of goods. The European textile and clothing industry is a highly technological and innovative sector. That is, unfortunately, not yet reflected in the overall image of our sector. Sustainability has become the motto for European businesses. Their products are manufactured with respect to the environment, consumer safety and labour standards. Euratex is taking significant efforts to boost communication about the excellence of European products and their innovation and responsiveness to social and environmental challenges.
Q What is Euratex doing to ensure the interests of SMEs in the textile industry?
A Euratex is a bridge between companies of our sector, especially SMEs, and European institutions. It is vital that European authorities, namely the European Commission and the European Parliament, take into account the specificity of our industry and design regulations and programmes affecting our sector. At the same time, Euratex, mainly via members, is providing the most relevant information to our companies on how to benefit more from initiatives designed at the EU level. Euratex, with all its members (national and branch federations) is making efforts to transfer the results of successful European programmes and projects among the SMEs to boost their competitiveness. One of the examples is our Energy Made-to-Measure campaign. This information campaign is running to empower over 300 companies, notably SMEs, to become more energy efficient. It collects outcomes of successful actions and brings this information to companies, enabling them to take actions for more energy efficient production.
Q As the voice of European T&C industry, how do you see the trade policy play a vital role to thrive in world markets?
A In the last six years, exports were the driving force behind our companies’ growth. In 2015, exports outside the EU reached 28 per cent of the European textile and fashion industry turnover. For this reason, an ambitious trade policy benefiting our companies is on top of our agenda. Our companies are expecting a level playing field when doing business with priority markets like the United States of America or Japan. The Free Trade Agreements negotiated with these countries should create a favourable climate for trade based on reciprocity, symmetry and market-oriented solutions. Via the same approach, Euratex is making every effort to facilitate access to textile and clothing products to third markets by eliminating regulatory barriers and protectionist instruments. Furthermore, to ease the internationalisation of our companies, Euratex is actively working on simplifying Customs rules and procedures.
Publilshed on: 13/08/2016
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.