Colombia’s apparel sector: High quality, just-in-time provider

Colombia’s textile and apparel sector is one of the nation’s key industries, accounting for nine per cent of the country’s manufacturing GDP, 24 per cent of manufacturing employment, and seven per cent of total exports in 2001. The sector has stagnated since the late 1990s, as it lost ground to countries that benefited from preferential access to the US apparel market, particularly Mexico and the Caribbean Basin countries. Although the Colombian government implemented economic reforms during the early 1990s to open Colombia’s economy to more foreign investment (such as tariff reductions, financial deregulation, privatization of state owned enterprises, and a more flexible foreign exchange rate), the resulting surge in imports of apparel caused a number of apparel producers to go out of business. In 2001, Colombia lost its place to Peru as the leading Andean supplier of textiles and apparel to the United States, the principal market for Colombia’s apparel exports.

Colombia has a strategic geographic location close to the United States, especially to Miami, and is at a midpoint location between North and South America. It is also the only South American country with ports on both the Pacific Ocean and the Caribbean Sea (Barranquilla is the main port on the Atlantic Coast, Cartagena is in the Industrial Zone along the Caribbean Sea, and Buenaventura is on the Pacific Coast). Colombia’s mountainous terrain, however, makes land transportation difficult. Thirteen highway projects are under way to alleviate this challenge.

Industry structure and performance

Colombia’s textile and apparel sector is concentrated in Medellin and Bogota, which account for almost one half and about 35 per cent of sector production, respectively. The government of Colombia reported that in 2000, the textile industry had 354 establishments and the apparel industry had more than 5,000 establishments, including 25 maquiladoras. Many of the maquiladors operate in Colombia’s free trade zones. In 2001, the Colombian textile and apparel sector reportedly produced an estimated 800 million square meters of fabrics and approximately US$ 1.1 billion of apparel.

Anticipation of enactment of the ATPDEA prompted the Colombian textile and apparel sector to increase export production capacity for the US market. Dyeing and finishing capacity that had been directed principally to the domestic market has been expanded to boost exports. Colombia’s textile and apparel sector has also been implementing programs to ensure compliance with labour, social, and environmental codes, criteria increasingly used by US companies in selecting foreign partners.

Colombia’s apparel industry is known as a high quality, just-in-time provider, particularly for women’s underwear, babies’ apparel, and swimwear. Recognising that global competition will intensify after quotas are eliminated in 2005, Colombia’s apparel industry has been shifting its focus from basic garments to higher end, fashion items at competitive prices and offering full package programs that involve much greater coordination between textile and apparel producers. Efforts to expand and strengthen the linkages between the textile and apparel industries have therefore become a priority. Colombia’s apparel producers are known for their dependability and quality control (their facilities meet ISO 9000 or ISO 9002-4 certification requirements). Colombian apparel products offer a 4-6 week garment production and delivery cycle and rapid transportation - three days by sea or three hours by air. Transportation efficiency may be boosted if the apparel industry implements plans to take advantage of the highly efficient and sophisticated airfreight infrastructure established by Colombia’s cut flower export industry.

Factors of production

Raw Material

Colombian textile fibre consumption in 2000 consisted almost entirely of cotton (50 per cent of the total, or 84,218 metric tons) and manmade fibres (48 per cent). Although Colombia has domestic supplies of cotton, internal crop and rural security problems coupled with growing international competition caused Colombia’s cotton production to decline during the 1990s. Consequently, cotton fibre imports now account for more than 65 per cent of Colombia’s cotton consumption. In addition, over 90 per cent of the synthetic fibers used by Colombia’s textile industry is also imported, primarily from the United States.

Labour

Colombia has an ample supply of highly skilled textile and apparel workers. Colombia’s apparel workers reportedly produce high quality needlework on par with Asian competitors such as Hong Kong. Worker training is a priority in the apparel industry and the Colombia government and private companies jointly hold permanent training programs designed to hone garment production skills. Employment in the textile and apparel sector totaled an estimated 600,000 workers, which includes direct and indirect jobs along the entire production chain. Managers of both textile and apparel companies are local. Because firms in Colombia’s textile and apparel sector range from small, family-owned firms to very large establishments hourly wage rates for apparel and textile workers vary widely. According to government officials, apparel worker monthly wages in 2001 were estimated to average between US$ 206.10 (the legal minimum wage for a 48 hour week, including health and other benefits) and up to 10-15 per cent more. Technology

Colombia had about one half of the total installed capacity of all the Andean countries in terms of short staple spindles, and the second largest capacity in terms of long staple spindles. Colombia’s apparel industry currently uses 75 per cent of its installed capacity. Colombia’s textile companies are actively seeking to upgrade their technology and production systems in order to raise their productivity levels.

Source: Texprocil