Cambodia, growing clothing and footwear exports

Many people thought that economic globalization could actually promote more peaceful relations between states, involved in a dense network of exchanges. In fact, wars have been seen, but none have had any effect on globalization as the one unleashed by the invasion of Ukraine is likely to have. Uncoordinated de-globalization can also entail the risk of new forms of protectionism and market reduction, always harbingers in history of dangers of new tensions and political conflicts.

2022 August, 16th update

Cambodia, growing clothing and footwear exports. Cambodia’s garment, footwear and travel goods industry has seen a 40% rise in exports in the first half of this year, according to a report from the General Department of Customs. The Regional Comprehensive Economic Partnership (RCEP) Free Trade Agreement has contributed to this growth [Cambodia’s garment, footwear, travel goods exports up 40 pct in H1 of 2022 – Xinhua]. (Read more)

2022 August, 2nd update

Development project of the leather sector in Zimbabwe and Tanzania, in the SADC area. The final beneficiaries are around 2 500 workers of the leather tanning and leather product manufacturing companies in Tanzania and Zimbabwe. The initiative is sponsored through funding from Sadc (Southern African Development Community), ZimTrade and Solidaridad; it should stimulate job creation, reduce the environmental impact of leather processing, and create market links for leather products at national, regional and international levels. [Bulawayo launches leather industry support project– The Chronicle]. (Read more)

Pakistan is approaching insolvency, while exports and remittances in connection with Italy become a lifeline. @FT reports Pakistan’s worsening economic situation “Pakistan’s rupee collapses rapidly as fears of default intensify.” [Pakistan’s rupee falls fast as default fears intensify – FT]. A light in the dark: ” Exports to Italy and remittances to Pakistan has crossed $2b, mainly in the sectors of food processing, chemicals, construction and leather, recording the highest annual growth ever” [Times Pakistan’s earns $2b from Italy in exports and remittances in FY22 – Daily Times]. (Read more)

Indonesia: FGD Forum for The Competitiveness of Textiles and Footwear. Economic growth in Singapore, the United States, China, Japan and Korea as export destinations for apparel and footwear from Indonesia, experienced a slowdown. As a result, the demand for Indonesia’s export market weakens. This was stated by the Director of the Textile, Leather and Footwear Industry, Elis Masitoh at the Group Discussion Forum (FGD) held by the Directorate General of Textile, Leather and Footwear Industry, in Bandung.  [Daya Saing Industri TPT dan Alas Kaki Harus Ditingkatkan – tubasmedia.com]. (Read more)

Global footwear market is suffering a bit, also due to the Russian war on Ukraine. Shoe Intelligence reports that in 22.Q2, footwear stocks declined significantly in line with global markets. In this context, a research by “Confindustria Moda” shows that sales of Italian footwear are slowing down due to the war in Ukraine, because for 9% of exporters, Russia, Ukraine and Belarus accounted for more than half of their revenues, for 11% between 20 and 50% and for 20% between 10 and 20%. On the contrary, @WTPfootwear informs that the production of footwear in Spain, not ballasted by CIS customers, has recovered well in the same period of 2022. (Read more)

2022 July, 27th update

The global footwear market has yet to recover from the severe COVID-19 pandemic. Global footwear market – explains fibre2fashion.com – was unprecedentedly dented during the COVID-19 pandemic years, as lockdown and new normal of Work from Home (WFH), and deeper penetration of e-commerce reduced need for people to step out. Around 14 per cent of the footwear market wiped out due to the effect, and the market is not expected to cross the 2019 level before 2023. (Read more)

Pakistan is benefiting from Chinese relocation. In an interview with @Shoe IntelligenceAhmed Fawad Farooq, secretary general of the Pakistan Footwear Manufacturers Association (PEMA), has outlined how Pakistan is benefiting from a transfer of production out of China and is seeking to beef up its footwear industry to meet growing demand. (Read more)

2022 July, 15th update

The Russian footwear market could face a 15-20% slump in sales in value and a 25-30% drop in volume. Foresees it Anush Gasparyan, commercial director of the Russian consultancy Fashion Consulting Group. The average price of shoes is set to rise by 30 percent year-on-year, pushing consumers to focus on cheaper models. [Low-cost footwear to increase market share in Russia this year – Shoe Intelligence]. (Read more)

2022 July, 7th update

International trade will shrink in the transition from globalization to Friend (and Allied)-shoring. U.S. Treasury Secretary Janet Yellen has proposed friend-shoring as a means of isolating global supply chains from external disruptions or economic coercion. It is the decoupling that is likely to lead to short-term supply shocks and higher prices, developments not unlike those produced by the turbulence of recent years. In the long run, the outcome is likely to be lower economic growth due to loss of efficiency, higher costs and supply bottlenecks. [What ‘Friend-Shoring’ Means for Trade in a Less …  – The Washington Post]. (Read more)

European manufacturing slows down. Growth in Europe’s two largest economies slowed sharply as manufacturers suffered from a dearth of demand, increasingly strained supply chains and surging prices. With the initial boost from a loosening of Covid-19 restrictions in Germany and France wearing off, gauges of activity fell more than expected in June. Manufacturing output contracted in both countries. This was reported by Bloomberg, commenting on the surveys of S&P Global. (Read more)

U.S. imports of footwear are increasing again, especially from Vietnam. Strong consumer demand continues to fuel high import growth rates. China remained the top footwear manufacturer for U.S. brands and retailers, but its rate of imports slowed in April. Increases were seen by all Top 10 footwear suppliers. Most notably, imports from No. 2 supplier Vietnam were back in the black. Rounding out the Top 10, Indonesia and Cambodia continued to see their shipments grow, as did India, Italy, Mexico, Brazil, Bangladesh and Germany. [Vietnam Footwear Shipments Back on Track – SJ]. (Read more)

2022 June, 29th update

USA, “Our sector” (consumption, clothing, etc…) worsens. The stock market is collapsing, inflation is rampant and scarcity is affecting supply chains, against the backdrop of Covid and the war in Ukraine. It is a terrible self-perpetuating cycle. The question for the apparel and footwear industry is: Will consumers continue to buy? Robert P. Antoshak’s answer in this article (Staring at an Economic Precipice? Just Wait, It Gets Worse) in the Sourcing Journal is that for a while they will, but not for long. (Read more)

2022 June, 23rd update

“Decoupling” supply chains could lead to a 5% decrease in global GDP, according to the WTO. The WTO chief warns against the economic cold war: Ngozi Okonjo-Iweala tells POLITICO that now is not the time to withdraw from global trade and warns that the division of supply chains for political reasons would be detrimental to the world economy. A recent study shows that dividing the world into two separate economic blocs could “lead to a 5% decrease in global real GDP in the long term,” she said. “This is a really staggering number”. (Read more)

Globalization is changing, offering new opportunities for the Mediterranean area. “Asia is losing weight in the role of the world’s factory; production and retail must be recalibrated. The Mediterranean will be the dock of long-haul maritime trade,” writes the Catholic-inspired newspaper Avvenire. The transport crisis, with the considerable increase in costs, pushes to redraw the maps of world trade”, writes Reuters. (Read more)

2022 June, 8th update

Geoeconomic fragmentation leads to reduced trade and disruption of value chains. Tensions over trade, technological standards and security have increased for many years, undermining growth and confidence in the current global economic system. This is confirmed by a research by the IMF. Only international cooperation can address urgent global issues such as remedying shortages of food and other products, removing barriers to growth, and saving our climate. [Why We Must Resist Geoeconomic Fragmentation—And How – IFM]. (Read more)

2022 May, 30th update

Footwear prices rise due to raw materials, but consumption resumes moderately. Footwear prices will increase by an average of 8.4% in the coming months, from +9.8% in Europe to +5.7% in North America, according to the World Footwear Business Condition Survey conducted by APICCAPS, Associação Portuguesa Ind. Calçado Componentes Artigos Pele Sucedaneos. Moderate recovery in consumption: North America +2.5%, Europe +5.2%, South America +7% and Asia +8.9%. (Read more)

Bolivia, a craftsman-industrial ecosystem disappears in La Llajta, 90% of shoe factories are closed. Before the pandemic there were at least 300 shoe factories, now only 30 are working. The artisans of the department seek their reactivation by awarding municipal contracts., because here the risk is not only of the disappearance of a way of working, but also of a way of life. [La Llajta ya no es centro calzadista de Bolivia; cerraron 90% de talleres – Opinión Bolivia]. (Read more)

The Egyptian government will exit 79 sectors in 3 years. The Egyptian government is expected to exit 79 sectors within three years and maintain investment in 45 sectors, writes Al-Masry Al-Youm in Egypt Independent. For manufacturing industries, the government plans to exit most industrial sectors, announcing that it will leave about 63 industrial areas in ten industrial sectors. Among the most important activities that the government plans to abandon completely according to the draft are leather and tannery products, clothing, furniture, industrial fibers and slaughterhouses. (Read more)

2022 May, 24th update

Q1 2022 footwear stock performances fell dramatically, except for India and Brazil. In the first quarter of 2022, shoemakers’ stock prices fell sharply, following the decline in global stock markets. However, the Indian and Brazilian companies monitored quarterly by ShoeIntelligence had very positive performances. (Read more)

Global footwear consumption grows by 6% in 2022. Apiccaps presents the document with the projections of the latest Business Condition Survey. World Footwear’s panel of experts believes that the largest growth (8.9%) is expected to be recorded in Asia, followed by South America (7%) and Africa (6.8%). In Europe the growth forecast is 5.2% and in North America 2.5%. (Read more)

2022 May, 18th update

Weak growth in Chinese exports, at the lowest since 2020 due to lockdowns, causes metal prices to fall. China’s exports growth has tumbled to a two-year low, as the curbs introduced to battle Covid has hit factory production, disrupted supply chains and weakened domestic demand too. “The weakest level since June 2020,” says SCMP. And metal prices fall (Global Market Headlines – Reuters). (Read more)

2022 May, 9th update

Recovering, the Brazilian footwear sector is expected to grow between 1.8% and 2.7% in 2022. Footwear production is expected to be between 820 million and 828 million pairs this year. The results will be driven by exports, which are expected to close 2022 with a growth of 8.4% to 10.2% compared to 2021 (between 134 and 136 million pairs). The screenings were announced at the Analysis of Scenarios, a digital event of Abicalçados. The Market Intelligence report by Priscila Linck and Marcos Lélis is available at the link on YouTube. (Read more)

2022 May, 4th update

The Russian financial crisis and creditors: an unprecedented situation. Reuters deals with the economic aspect with an analysis: while Russia faces a potential default, investors evaluate legal options. 30-day grace on $649 mln debt payments due April 4. U.S. Treasury banned use of frozen funds for debt payments. Moscow says Western sanctions blocked US$ payment. Litigation can be costly, lengthy. [Analysis: As Russia faces potential default, investors weigh legal options – Reuters]. (Read more)

FN interview with Steve Lamar, President, and CEO of the American Apparel & Footwear Association (AAFA). 2022 is proving to be another year of unprecedented challenges and opportunities for retailers and brands. Steve Lamar, CEO of AAFA, talks about inflation, supply chain, sustainability and metaverse with Footwear News (FN)“. (Read more)

2022 April, 27th update

Visit of a delegation from Uzbekistan to India opens up new trading opportunities in the leather sector with the CIS countries. To enhance India’s exports and exploring possibilities of bilateral trade concerning leather and leather products segment with the CIS countries (Commonwealth of Independent States: Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, and Uzbekistan), the Council for Leather Exports (CLE) had organized visit of Uzbekistan delegation to India mainly for Agra and Kanpur region. [Uzbekistan team keen for joint ventures with Indian leather cos – Times of India]. (Read more)

Japanese companies prefer Bangladesh to relocate. Referring to a survey entitled “2021 Jetro Survey on Business Condition of Japanese Companies operating in Asia and Oceania with a focus on Bangladesh”, the Foreign Trade Organization of Japan (JETRO) explains that about 65% of Japanese companies operating in Bangladesh plan to make good profits in 2022 as the coronavirus situation has improved, according to BSS. (Read more)

2022 April, 19th update

Poor slaughter globally in March and rising prices of beef and by-products. In March, world food prices rose by 12.6% and the FAO Meat and Slaughter By-Products Price Index averaged 120.0 points, up 5.5 points (4.8%) from February (the all-time high). Prices of beef slaughter products have risen as low slaughter has persisted in some key producing regions, while global demand has remained solid. (Read more)

Foreign companies make a beeline to Vietnam industrial zones. Many European and Asian headquartered multinational giants are rushing to invest in Vietnam’s industrial parks. In Hoang Mai I Industrial Park, in the north central Nghe An Province, HuaLi will build a footwear factory that will have an output of 25 million pairs of footwear a year, creating jobs for about 16,000 workers. In Nghe An’s WHA Industrial Park 1, HuaLi will build a factory to produce 13 million pairs of footwear a year.(Read more)

2022 April, 11th update

The potential of Bangladeshi leather export along the belt and road initiative. Bangladesh has a great deal of prospects to increase its leather exports to the countries of the Belt and Road Initiative (BRI). This article of the Dhaka Tribune argues that the leather sector could boost Bangladesh’s exports diversification strategy to reduce the country’s overdependence on the ready-made garments (RMG) sector. (Read more)

2022 April, 4th update

Brazil, export of footwear components is recovering and growing even compared to before the Coronavirus. Exports of footwear components – chemicals (adhesives), uppers, soles, insoles, synthetic laminates, etc. – increased by 37% in the first two months of the year, compared to the first two months of 2021 and increased by 13% compared to the first two months of 2019, that is, before the Covid-19 pandemic. [Exportações de componentes para calçados crescem 37% no bimestre – Assintecal]. (Read more)

2022 March, 29th update

The conflict in Ukraine is a major blow to the global economy that will hurt growth and raise prices. Beyond the suffering caused by the Russian invasion of Ukraine, an IMF analysis explains how the entire global economy will feel the effects of slower growth and faster inflation: rising commodity prices increase inflation; disrupted supply chains and refugee crises produce poverty; investment crisis causes capital outflows from emerging markets. (Read more)

Mexican shoe factories reorganize after Covid. The footwear sector is in a process of recovery, both in jobs and in factories. In January 2022, the shoe factories of Guanajuato recovered 8,000 of the 15,000 jobs lost at the most critical moment of the coronavirus pandemic. [México: la industria del calzado está saliendo del túnel – Puntodincontro]. (Read more)

2022 March, 23rd update

We are starting to obtain estimates of the economic impact of the Russian invasion of Ukrain. Shoe Intelligence writes it. The war hits the German shoe industry after a strong 2021. The Russian footwear market faces a perfect storm. Following the G7’s announcement regarding Russia sanctions, US imposes Russia import/export ban on luxury goods, including footwear, with extension to any transaction in USD for these goods. (Read more)

Adidas warns that Russian invasion of Ukraine could impact business in 2022 as it disrupts sales in the region. Adidas is one of many retailers expecting sales repercussions due to the impact of the conflict between Russia and Ukraine. The risk is to lose 1% of Adidas’ overall growth. [Adidas Warns That Russia Conflict Could Impact 2022 Business as it Halts Sales in the Region – FN]. (Read more)

Seven things worth knowing about the Portuguese footwear industry. There are small numbers that make the difference, such as the growth in exports of 0.24% in the last quarter of last year, the best ever in the history of the sector, writes The Expresso, also informing that a Hugo Boss plant will be established on the national territory. (Read more)

2022 March, 21st update

Impacts of the invasion of Ukraine on fashion supply chains. Rising commodity prices: negative impact of 2-3% on luxury. Shoe price in Russia +15-25% in 2022, due to increased production costs and depreciation of the ruble. The Russian government intends to allow repayments in rubles to counterparts in “hostile” countries. [Sources: Shoe Intelligence and CNBC]. (Read more)

Collateral economic damage of the war in Ukraine: the example of the leather sector of Jalandhar, India. According to The Tribune, in Punjab’s Jalandhar leather district, “raw materials become expensive and export orders are canceled.” Enterprises in the leather supply chain were hit hard after the start of attacks by the Russian army. The most affected are manufacturers of sporting goods, utensils, tanneries, and leather products. (Read more)

2022 March, 8th update

The Italian prime minister expects “vigorous growth” in the leather sector. The prime minister of Italy, Mario Draghi, paid an official visit to the leather manufacturing cluster at Santa Croce sull’Arno in Tuscany on February 24 as part of a wider tour of the region. He also visited a number of finished-product factories near Florence [Leather sector poised for “vigorous growth”, Italy’s prime minister insists – Footwearbiz]. (Read more)

2022 February, 26th update

Supply disruptions add to inflation and undermine recovery in Europe. With the COVID-19 Lockdowns, “consumers have reduced spending on services and bought more artifacts“ (IMF-Blog), accelerating the rebound in manufacturing production, but the logistical crisis of the “Supply Chain” (NY Times) and the tail end of the pandemic have put global trade even more in crisis. Europe risks another energy crisis (Bloomberg) due to the soaring cost of gas, driven by the Ukrainian crisis. Agenda against inflation. (Read more)

LHCA: US Leather Export Balance 2021 and Outlook 2022. The Leather and Hide Council of America has shared data for leather exports in 2021. Cow hides values rebounded in 2021, after falling to their lowest levels in May 2020. The COVID-19 impact has decreased, but the leather industry continues to deal with weaker demand, the escalation of replacement products and logistical problems. Slaughter declining in 2022. LHCA Defends the image of leather: “Real Leather. Stay Different”. (Read more)

Kazakh fashion manufacturers, overprotected by subsidies in state tenders, are not competitive with private consumers. During the first three quarters of 2021, clothing and footwear produced in Kazakhstan accounted for only 10% of domestic sales, 4.6 percentage points less than in the same period of the previous year, according to estimates by the Kazakh Committee for Industrial Development. [Kazakh fashion manufacturers lose market share – Shoe Intelligence]. (Read more)

The Mexican Leather-Footwear sector will grow by 15%. Growth will be subordinated to the fight against illegality, warns Alejandro Gómez Tamez, executive chairman of the Chamber of Footwear Industry of the State of Guanajuato (CICEG). El Sol de Léon reports that data at the end of 2021 indicate a growth of 17.4% for the leather-footwear-leather goods supply chain, compared to 2020, still 21.3% lower than in 2019. (Read more)

Consumers and exports in textiles and leather at the base of the expansion of manufacturing in Indonesia. Manufacturing is expanding. The PMI index at 53.7 exceeded the PMI of ASEAN countries (52.7). Manufacturing exports account for 76.49% of the total. Footwear recorded the highest growth (+33.42%), in pairs, from 793.8 million to 1.05 billion. They drive foreign companies, which absorb most of the labor. PT Shoes Bata Tbk (BATA) plans for 2022: a mixture of local market and exports. (Read more)

2022 February, 23rd update

Bangladesh, footwear Industrial Park shaping up. A top footwear manufacturer is setting up a shoe industrial park, the first of its kind in Bangladesh, to supply import substitute raw materials and accessories to producers, boost exports and attract foreign investment. [First industrial park for shoes shaping up – The Daily Star]. The industrial zone sits on 35 acres of land that could house 24 factories. (Read more)

With the footwear business down 70%, in Agra Indian nationalism is in crisis. GD Ramani, President of Agra Shoe Factories Association, said the association of 5000 traders in the city feel that GST increase on shoes from 5 to 12 per cent has broken the backbone of the industry. [UP Polls: Agra shoe business down by 70 per cent but traders to vote for nationalism pitch – The New Indian Express]. (Read more)

The crisis of the Tunisian leather and footwear industry. The National Federation of Leather Goods and Footwear has recently called on the authorities to intervene urgently to come to the aid of the sector, while the Federation denounces the informal import, informal trade and sale of second hand shoes, while the landlords crush entrepreneurs operating legally under the helpless gaze of the authorities [Les rentiers signent l’arrêt de mort de l’industrie du cuir et chaussures en Tunisie – TN]. (Read more)

February 17th, 2022 update

OTE calls for the revision of trade agreements that disadvantage Tunisia. The Observatoire Tunisien de l’Economie (OTE), as reported by Footwearbiz, says that the worsening of trade deficits with China and Turkey is having a serious impact on the country’s leather and textile sectors. Worsening trade deficit with China and Turkey contributes to the hemorrhage of foreign exchange reserves and severely threatens local production according to OTE [bilaterals.org]. (Read more)

Turkish footwear exports exceed $1 billion for the first time in 2021. Turkish footwear exports +22.9% in 2021, for the first time at 1 billion dollars. Exports of leather and leather products reached $1.73 billion (TL23.6 billion), or 0.8% of total exports (Anadolu-AA data). Footwear’s share of leather and leather goods exports was 58.3%, according to Daily Sabah, and although the increase in footwear exports remained below average, the sector’s weight on total exports did not change. (Read more)

Bangladesh, companies discouraged due to “Covid Economy”. According to the “Business Confidence Index” survey, conducted by South Asian Network on Economic Modeling (SANEM), general business confidence between January-March falls compared to October-December 2021. There are 7 manufacturing sectors observed (+8 service sectors): RMG, textiles, leather goods and tannery, pharmaceutical and chemical, food industry, electronics, and mechanics. (Read more)

2022 February, 9th upload

Bursa Leather Specialization and Mixed OIZ (BURSA DİKOSAB) closed 2021 with growth, but aims to increase the tanning capacity of leathers to 500 tons. The OIZ will have an area of 355 hectares. DİKOSAB will expand the effluent treatment plant and open a solar power plant. Background: Footwearbiz data from Turkey shows leather sector export values of more than $1.75 billion in 2021, an increase of 29% over the previous year. (Read more)

The Union Budget would provide impetus to the domestic textile industry, according to FW, because despite increasing import duties for certain fabrics that can be produced domestically, exempting customs duties on the import of embellishments, finishes, fasteners, buttons, zippers, upholstery material, specific leather and packaging boxes needed by exporters of handicrafts, textiles, leather, leather clothing and footwear. (Read more)

2022 February, 3rd upload

Driven by a wind of recovery, writes Les Echos, the “cuir” sector saw its exports grow by 24% last year and by 9% compared to 2019. Many challenges will have to be faced, including training and recruitment. 2021 marked a clear recovery, particularly in exports. These have increased by 24% compared to 2020, a year strongly marked by the Covid-19 pandemic. And they are also up 9% compared to 2019. (Read more)

Brazil exported sqm. 172.3M leather, for $1.41B, in 2021. Compared to the previous year, the increases are 0.5% in volume and 44.9% in revenues. The data come from the Secretariat for Foreign Trade of the Ministry of Economy (Source: Exclusivo.com) and are presented in the document Exportações Brasileiras de Couros e Peles, by CICB – Centro das Indústrias de Curtumes do Brasil. (Read more)

Annual revenues for the U.S. sports footwear market grew by about 20% compared to 2020, although growth slowed to an average figure in the fourth quarter due to poor execution, supply chain delays, the end of stimulus payments and the lack of news in the market, according to The NPD Group. (Read more)

2022 January, 29th upload

Pakistan, thrown into crisis by the economic consequences of the pandemic, had been in talks with the International Monetary Fund (IMF) for several months to seek an easing of the terms and conditions of the aid package, but this month asked the IMF to postpone a board meeting set to consider the country’s sixth review because it has so far been unable to approve recommended fiscal tightening measures tied to the release of funds. Among those already enacted is the imposition of an import tax on textile and leather machinery imported into export processing zones. (Read more)

India’s small footwear manufacturers make up the largest slice of the industry, but footwear has become more expensive in the new year as a result of a higher goods and services tax rate and higher raw material prices. (Read more)

Vietnam, the second-largest player in U.S. footwear imports, thanks to a resurgence in purchases by U.S. consumers, should benefit from a huge rebound with significant growth in its overseas shoe shipments, which, however, is not as noticeable due to the continuing pandemic and the aftermath of last summer’s sudden lockdown. (Read more)

The executive president of Abicalçados, Haroldo Ferreira, emphasizes that the indices point to the consolidation of the recovery of Brazilian footwear manufacturers in the international market. “This year, exports have been the main responsible for the recovery of activity,” he assesses, emphasizing that the exchange rate and the increase in shipments to the United States have played a key role in the growth of shipments. (Read more)