Executive Q and A
Apparel: What are the key factors which make Brazilian textile and apparel exports unique?
Skaf: Brazil has a long-established industry clothing over 170 million home consumers. It has some of the most technologically advanced companies in the world, assimilates the entire supply chain and incorporates some very strong brand imaging.
The industry caters to all sectors of the domestic market from mass production of basic products to high added value quality niche markets, and it can do the same for the export market. It can offer high-end designer, brand and private label goods to basic unlabelled products, depending on what the market requires.
Apparel: Why are textile and apparel companies investing so much in their industry?
Skaf: Although there are no government grants of incentives to help companies invest, the incentive comes from the companies' own belief in the future of their country and their industry. They believe in the potential of its people, its good and reasonably low-cost work force (RS 600-700 per month with 100 percent on costs), and they see and understand the technological improvements, both in terms of quality and competitiveness, which come from investment.
They understand the advantages the industry has: Its strategic geographical location, its fertile land, its good industrial infrastructure, with strong technical training and education. There are over 50 colleges and universities offering training to the industry, ranging from technological and design degrees, to apprentice style training, SENAI being a prime example. Internally the industry operates the entire supply chain and incorporates the full gamut of skills and strengths required: design, creativity and innovation, quality, technical.
Apparel: What are the other advantages for the industry?
Skaf: The industry is already the country's largest industrial employer and as the clothing sector is a high labor intensive and growing industry, it has the ability to help address the country's main priority, that of reducing poverty and hunger of much of the population. By providing additional employment opportunities, it is likely to be given priority status within the new government.
From a buyer's point of view, the industry has a European, rather than South American, mentality. It produces medium- to high-end quality, offering superior design, particularly in intimate apparel, beachwear and ladies' wear, whilst children's wear is growing in its excellence.
Apparel: What are the disadvantages for the industry?
Skaf: The main disadvantages facing the industry are the high interest rates, which for industrial investment currently equates to around 15 percent. Tax reforms are also very necessary, and here we are talking about all the taxes which affect international competitiveness, from labor taxes to import/export taxes. ...Most manufacturers expect these taxes to be addressed reasonably quickly [by the new government installed in January].
However, one should remember that the disadvantages to the industry can be solved, whereas the advantages are intrinsic and will serve the industry for many years to come.
Apparel: Who are the main exporters?
Skaf: Although many of the designers and top brands have begun to export, 90 percent of the exports come from 10 percent of the manufacturers, and these tend to be the largest companies. These include children's wear manufacturer Marisol, jeans and shirts producer ONIX, Coteminas for T- shirts, Highstil for polos, Dudalina for formal men's shirts and Staroup for jeans.