IMPRESSIONS from a Cross-section

Cem Altan: For the textile and garment industry, 2020 was the year in which everything changed. A huge crisis in demand caused a majority of companies to lose money. 2021 showed a hugely diverse picture, marred on the one hand by pandemic related uncertainty but also affected by major supply shortages caused by rapid rebounds of demand. The pandemic has accelerated trends that were already in force before 2020. Primarily it has compounded the demand for all things digital, which in turn has enabled innovation, efficiency, and new ways for business to scale up. But we have also seen a turning point in the relations, on a macro scale to start with, between buyers and suppliers. Following a massive loss of trust in their clients caused by large scale cancellations at the start of the pandemic, a heightened sense of solidarity among manufacturers has created a starting point for a joint effort by groups of brands/retailers and manufacturers to improve the relations in the supply chain.

Faruque Hassan: 2021 was a challenging year for the Bangladesh readymade garment industry indeed. The massive impact of COVID-19 and shutdown measures to curb infections have plunged the global economy as well as our industry into a severe contraction. The first takeaway of 2021 is the learning of how to survive in this time of the pandemic since the virus is continuously unfolding challenges one after another. The global supply chain collapsed during the pandemic, and we witnessed so many unpredicted situations like non-payment, discounts, delayed payments, deferred shipments and so on. The weakness in trade terms and the vulnerability caused by a concentrated raw material supplier base, were some of the harsh realities exposed by the pandemic. The impact was particularly severe for small- and medium-sized factories.

Dr A Sakthivel: The year 2021 has been a learning year for the apparel and textile industry. Given the volatilities and changes in the global demand and supply patterns, 2021 was a year of revival and growth. The Indian apparel industry demonstrated its resilience by gradually inching back to the growth path. The month-on-month performance shows that the industry has gradually picked up from a double-digit decline in the first quarter (April-June 2021) to a 20.3 per cent and 13 per cent growth respectively in September and October months. 2021 has taught the industry to work under uncertainties and new challenges. As against the export target of $20 billion for fiscal 2021-22, $9.65 billion exports have been achieved during April-November 2021. During April-November 2021, apparel exports have recorded a growth of 37.8 per cent vis-à-vis the same period of 2020-21. But the exports are lower than the same period of 2019-20 by 3.9 per cent. This decline, as compared to 2019-20 is largely due to the decline during the April-June 2021 quarter. Exports have consistently picked-up from the 2nd quarter (July September). In September, October, and November, exports grew by 20.3 per cent, 13.0 per cent and 1.3 per cent respectively, vis-a-vis Sept 2019. Keeping similar rate of growth in mind, exports for FY 2021-22 are expected to be $16-17.5 billion. Industry is striving hard towards achieving the balance by the end of this financial year.

A Sukumaran: My key takeaway is that the industry’s resilience stemmed from our capacity to adapt and innovate our supply chains and products. Sri Lankan manufacturers adapted to the challenges of virtual work by leveraging 3D and digital product development technology to ensure that product cycles were not affected. Our strategic partnerships with clients, our reputation and the trust among buyers were critical this year. The impact of the pandemic on the industry could have been significantly worse if our relationships with buyers were transactional and the country’s offering was commodity-driven. One challenge that continues even today however is the impact on shipping. We have seen drastic increase in sailing times, coupled with steep hikes in freight rates adding both time and cost to an industry where these are two key drivers. That situation continues today, and we see no signs of a return to pre-pandemic levels anytime soon.

Dr. Christian Schindler: In crises like the pandemic, it is key to act quickly and with determination. Pro-active adaptation to new economic, social, or environmental circumstances can turn a challenge into an opportunity. The pandemic has also shown how important it is to have a sound balance sheet that does not only provide a company with the financial resources to overcome a crisis but that allows a company to emerge stronger by being capable to invest during and after coming out of a crisis.

Mohammad Ali Khokon: Bangladesh has come a long way since its inception and now it is considered as a miracle economy among the South Asian economies. The textiles and clothing industry is a mainstay of this economic success—84 per cent of the total export earnings comes from the textile & clothing sector where the contribution of primary textile sector is 64 per cent. However, COVID-19 pandemic has put a heavy toll on the sector’s progress and RMG export earnings declined to $27.83 billion in FY 2019-20 from $34.13 billion in FY 2018-19. But the government’s timely stimulus packages, ensuring the utility facilities for the sector, and keeping the textile and clothing factories open during the lockdown have helped the textile and clothing industry combat the challenges and regain its export growth which can be seen from the current increased export growth trend.

Frédéric Van Houte: 2021 showed a challenging business scenario. We saw global stress on supply chains through logistics issues and a surge in energy prices affecting all supply chains, resulting in raw materials and component shortages and price hikes, creating hurdles for global exports/imports. Mid-2021 business appeared to improve. Vaccination was a gamechanger in some countries.