General Aspects

Borders: shares borders with Panama, Venezuela, Brazil, Peru and Ecuador, and maritime limits with Costa Rica, Nicaragua, Honduras, Jamaica, Dominican Republic and Haiti.
Capital: Bogota.
Main cities: Bogota, Medellin, Cali, Barranquilla, Bucaramanga, Cartagena.
Population: 44,700,517
Currency: Colombian peso ( $ )
Language: Spanish
Inflation Rate: 7.67% (Dane)
GDP (Total 2008): US$ 340.771 billion (International Monetary Fund)
GDP per capita: US$ 7,653 (2008)

Textile Apparel Design and Fashion Sector in Colombia 

Description of the Sector in Colombia
Colombia is a textile country par excellence as it has shown one of the highest growth rates in its exports activity 
Since the beginning of the century the main textile industries appeared in the region of Antioquia, distributed in Municipalities such as: Medellin, Bello and Itagui. Throughout history the country developed its infrastructure as cotton grower and exporter of short and medium staple cotton in the regions of Atlantico, Meta, Valle and Tolima. The strengthening of the cotton sector allowed the development of the textile industry of Antioquia and Manizales.

 In Colombia, the pattern of development of the cotton-fiber-textile-apparel chain is characterized by a high presence of imports in intermediate consumption, low levels of chain and industry integration, which corresponds to the last fragments of the added value. It is also typified as being a growing substitute of national production, with in-bond assembly traits, without allowing the use of links backwards, which results in the progressive destruction of value in the first links (Espinal and others, 2005: 2-3).

Today Medellin is the center of the sector in Colombia, with a growing presence in other regions such as Bogota/Cundinamarca and Atlantico. The composition of the Textile, Apparel, Design and Fashion Cluster of Medellin/Antioquia by company size is comprised as follows: 90.4% are micro-businesses, 7.2% are small businesses, 1.9% medium business and 0.5% large businesses (Graph 1)

Source: Cámara de Comercio de Medellín para Antioquia, 2008

It is estimated that the business network located in this Cluster is comprised of 11,966 companies, with total assets for almost USD 2,765 million. Furthermore it is the center for apparel manufacturing of shirts and pants with cotton fabrics. Bogota is a younger industry, generating 36% of the textile industry and 33% of apparel.

Bogota is characterized for being the center for apparel manufacturing of shirts, men’s and women’s clothing. Cali is the third apparel manufacturing center specialized in formal shirts for men. Ibague has had an interesting development in its industry, tending to become one of the country’s most important textile and apparel centers.

The Colombian textile and apparel industry is one of the largest and most experienced in Latin America with application of cutting-edge technology in the process of production with manufactured fibers. 

Its quality has allowed it to successfully reach and grow in the United States, European Union and Andean Community markets, amongst others. The sector includes:

•  Cotton crops.
•  Fabric production.
•  Garment manufacture.
•  Commercialization.

Currently this industry is going through a crisis, which according to Trujillo 2009 has lost 60,000 direct and indirect jobs in the department of Antioquia, this being the most representative of the textile and apparel industry. However, thanks to the project of World Class Productive Sector Transformation promoted by the Ministry of Trade, Industry and Tourism the textile apparel sector was selected to participate in the promotion strategies for new and emerging sectors and more and better of what is good in order to transform the textile apparel sector along with other sectors into world class sectors.

A parallel work plan has begun for the eight sectors, in different phases, with different interactions to achieve the development of the business plan. For this study, a diagnosis was done of the sector in the world, in Colombia and the business plan was proposed. In total there were 24 initiatives that could generate at least US$14.3 billion in revenue by 2032 (4 times the income of 2007) if a long-term sector program is undertaken. 

In this first phase, carried out by the consulting firm McKinsey and Inexmoda, it was found that the textile apparel sector in Colombia has 6 main barriers for growth, which are

• 1. Informality: The informal businesses and employment have a large share of the entire apparel link.
• 2. Human resources: Low national supply of textile engineers and technical personnel in general and low national supply of researchers.
• 3. Associability: The participants of the value chain have different agendas, low cooperation between links for activities such as product development or international client negotiation.
• 4. Infrastructure: Colombia has an incipient infrastructure
• 5. Legislation: The existing regulations increase the costs in the long run of the productive chain (for example cotton pricing, or customs duties for the import of raw materials and machinery)
• 6. Structural factors: Factors such as the country risk, the volatility of the exchange rate and capital cost may negatively impact direct foreign investment and growth of the sector

Three global trends represent interesting opportunities for Colombia according to McKinsey & Company (2009). The importance of ethical issues such as climate change, the use of natural resources and child labor; equilibrium between cost, speed and price given that most players assure that everyone needs to improve their speed in the market to be successful, as the cost is not the only factor that affects profitability; subcontracting of tasks given that more and more clothing brands have changed to supplying finished goods, although it is possible that some of the main players are still only hiring production.

These trends were the result of the existing shortcomings within the sector, now there is a document with the main initiatives that aim to develop the Colombian textile apparel sector, such that through its implementation the increasing of productivity, exports, employment and formality will be achieved. These initiatives are divided into the following 5 categories:

• Human Resources: understood as the development of the aptitude (pertinent education) and the disposal of the labor force towards the sector and the skill in handling technical English by the same
• Legislation Framework: Includes but is not limited to: processes for export, taxing, labor regulation, among others
• Industry structure: they are initiatives related to associability and guilds of the industry, cooperation (for example joint purchasing of raw materials) and innovation within the value chain
• Infrastructure: they are initiatives related to the infrastructure of information technologies (for example internet access), telecommunications, roads, etc.  
• Promotion of the industry: Includes but not limited to: market identification, investment attraction, promotion of exports, among others.

Both public and private sector entities will be in charge of executing the action plan whose purpose, at the end, is that the sector undergoes a transformation that achieves an increase in the market at the national and international level. 

With the study carried out by the consulting firm, the public and private sector will implement the plan of action. The textile apparel sector will be recognized, by 2032, at a national level as a world class sector. However, currently it is highly threatened, both by the local and international markets. Thus the sector will generate abilities that will allow it to compete with international brands, diversify markets, increase its value added participation and take advantage of global trends. In turn, the conditions to compete equally, fighting informality and contraband, enabling access to capital and levels of competitive costs.

Employment

The Textile/Apparel activity in Antioquia represents 43% of the industrial employment of the Department and generates approximately 170,000 jobs. In the regional economy, the apparel activity represents one of the main lines of goods both for volumes produced and exported, and for the dynamics triggered during the last decade in the subject of business creation and employment generation. The region’s share in the apparel GDP at a national level is equivalent to 60%. (Textile apparel cluster, 2009) 

Exports
 

Fuente: DANE, 2008

Antioquia is the leader in apparel exports at the national level, with a market share of 50% of the total.

Colombian Exports of Textiles and Apparel
January -June 2009 VS. January - June 2008 (US Dollars)

Table 1 shows the main exported textile products

Textiles:

Source: DIAN-ANDI

Source: Own elaboration

Source: Own elaboration

The main exported textile products are cotton denim weaves, with different color threads, with a content of cotton, equal or greater than 85 percent in weight, with a weight in grams greater than 200gm2, simple threads of non hackled fibers containing cotton, equal or greater than 85 percent in weight, with title less than 71429 dtex but greater than or equal to 23256 dtex (greater to the metric number 14 but less than or equal to the metric number, unwoven fabric, even impregnated, coated, covered or layered, with synthetic or artificial filaments, of inferior or equal weight to 25mg2, the rest of the polyester discontinued threaded fibers, mixed exclusively or mainly with cotton, without condition for retail, simple threads of hackled fibers containing cotton, equal or greater than 85 percent in weight, with title less than 23256 dtex but greater than 19231 dtex (greater to the metric number 43 but less than or equal to the metric number 5, among others.

Apparel:

Source: Own elaboration


Source: Own elaboration

The main exported apparel products are: long pants, overalls, short pants (underwear) and shorts, of fabrics called denim, for men or boys, knitted fabrics of a width superior to 30 cm, containing threads of elastomers superior or equal to 5 percent in weight, without rubber threads, except the ones of the 6001 group, t-shirts and knitted, undershirts, of cotton, bras (bodice), even knitted, long pants, overalls, short pants (underwear) and cotton shorts, for women or girls, except knitted.  

Colombian Exports of Textiles and Apparel

The main destinations of exports through 2008 were: Venezuela (65.13%), Ecuador (10.12%), Mexico (5.13%), Peru (3.60%) and the United States (2.91%);

Fuente: ANDI

Fuente: Mincomercio (Abril de 2009),Crediseguro S.A.

Fuente: Mincomercio (Abril de 2009),Crediseguro S.A.

Conclusiones y tendencias del sector textil confecciones diseño y moda
Conclusions and trends of the textile apparel design and fashion sector

Textiles and apparel represent 92% of the value added of the value chain. The chain contributes 8% of the Colombian industry added value, 20% of employment and 5% of exports. Colombia is a net importer of textiles (only 15% of the production is exported) and net exporter of apparel (57% of the production is exported).

*Various players stand out due to their development of added value services integrating logistically with its clients abroad, commercially, among other activities.

*Several of the great textile companies have made important investments and efforts regarding innovation (fabric finishes, intelligent fabrics, use of natural fibers such as bamboo, etc.) and some have textile design teams. However, the country has a lack of specialized training programs (textile engineering, textile design, etc.) that may promote competiveness in the sector. According to a poll conducted among businessmen of the sector 40% of textile companies have personnel exclusively dedicated to research and development and 64% to design.

*As a success factor, the businessmen of the sector must focus on markets and products with greater added value. Have a clear sector aspiration and work as a chain in order to achieve their objectives. As a risk factor, there is a lack of motivation for businessmen to invest, transform and cooperate among themselves. 

*From here on the businessmen of the sector must face the challenges as a tight guild, increase their productivity and aspire to compete in a global environment that is more and more competitive.

In light of the current economic crisis, the sector is forced to explore new market niches in search of diversification of their markets in favor of the growth of the companies of the sector achieving the internationalization of our economy.

Thus it is necessary to have knowledge of the commercial treaties our country has like CAN, CAN-MERCOSUR, with Chile, Mexico, North Triangle (Honduras-Guatemala-El Salvador), GSP-EU. Also those being negotiated but waiting ratification as are Canada, EFTA and USA, and those negotiated as the European Union and in negotiation perspective as P4 (New Zealand, Chile, Singapore, and Brunei), Japan, China, India and Dominican Republic. 

Also know customs tariff preferences such as the APTDEA and the general system of preferences for the Andean countries (Andean GSP)

 Inexmoda, Proexport and McKinsey