Garments Cluster

8/8/2019 Garments Cluster

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Strategy and actionplanto enhance thecompetitiveness of

the garment

industry in Jordan


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InternationalMarket Analysis

Jordan GarmentSector Analysis

Benchmarking &SWOT Analysis

GarmentIndustry Strategy


Global Imports

EU and US EUImportsUS

ImportsUS

MarketProduct

Segment.. Neighbours

The first eight importing countries ofknitted wear

Source: PCTAS / ITCGENEVA

Japan

10%

Germany

9%

France

6%UK

6%

Hong Kong

9%

Netherlands

2%

Italy

3%

Other

23%USA

32%

The first eight importing countries ofwoven wear

Japan

10%

Germany

10%

France

6%UK

6%

Hong Kong

7%

Netherlands

3%

Italy

3%

Other

23%USA

32%

Source: PCTAS / ITCGENEVA

EU countries and USA are:

The most importing countries

Their imports are increasing

Their Imports from Jordan are free of duty and quota

EU countries and USA are:

The most importing countries

Their imports are increasing

Their Imports from Jordan are free of duty and quota

GlobalExports


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EU and US Production and Consumption

GlobalImports

EU Production decreased during1995-2000 as follows:

-70

-60

-50

-40

-30

-20

-10

0 Belgium

/Lux.

France

Germany

UK

Italy

Spain

Portugal

The production is decreasing The Production price index is

increasing The consumption is stabilizing

The Retailer price index isdecreasing Imports volumes are sharply

increasing, with a moderateincrease in value

The consumption has known a slight increase in valueduring the 1990s and more importantly a rise in volume

Demand addressed to developing countries is driven bydelocalization The outsourcing of more labour-intensive operations in developing

countries The control over the management and the marketing operations.

EU and US companies are more and more specialized in highquality products

Demand addressed to developing countries is driven bydelocalization The outsourcing of more labour-intensive operations in developing

countries The control over the management and the marketing operations. EU and US companies are more and more specialized in high

quality products


GlobalExports EUImports USImports USMarketProductSegment.. Neighbours


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EU and US

Global Exports

The First Fifteen Exporting Countries of Knitted Articles (Market Share)

0%

5%

10%

15%

20%

25%

China

Italy

Hong

Kong

USA

T

urkey

M

exico

Korea

Ger

many

F

rance

Po

rtugal

Thailand

Indonesia

UK

Sing

apore

Netherlands

Source: PCTAS


GlobalImports EUImports USImports USMarketProductSegment.. Neighbours


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EU and US

Global Exports

The First Fifteen Exporting Countries of Woven Articles (Market Share)

0%

5%

10%

15%

20%

25%

China

Italy

M

exico

Hong

Kong

Germany

USA

F

rance

Indonesia

T

urkey

UK

Korea

T

unisia

P

oland

Netherlands

Source: PCTAS




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EU and US

Global Exports

Leading exporting countries are: Low labour cost countries such as China High labour cost developed countries Intermediate developed countries such as Hong Kong, Korea and

Singapore with high labour cost

Export prices: Garment export prices from developed countries are increasing This trend is due to:

Most imports from developing countries are cost sensitive products,whereas,

developed countries exports are constituted from high quality




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EU Imports

Imports from leading developing countries of knitted outerwear to the EU, 1998-2000(billion unit)

Source: Eurostat

0

500

1000

1500

2000

2500

3000

1998 1999 2000

0

100

200

300

400

500

1998 1999 2000

China Turkey

of Whichfrom


GlobalImports EU and US GlobalExports USImports USMarketProductSegment.. Neighbours


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EU Imports

Imports from leading developing countries of woven outerwear to the EU,1998-2000 (billion unit)

Source: Eurostat

0

100

200

300

400

China Turkey Morocco Tunisia Bangladesh India

1998 2000


GlobalImports EU and US GlobalExports USImports USMarketProductSegment.. Neighbours


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US Imports

0

10

20

30

40

50

60

70

1990 1995 1996 1997 1998 1999 2000

US imports of garments fromNAFTA Countries 2000 ($ billion)

0

2

4

6

8

10

From Mexico From Canada

US Imports of Garments ($ billion)

The leading exporting countries of woven and knitted wear to USmarket are Mexico, Canada, EU, China, South Korea, Hong Kong,

Taiwan, Singapore, Thailand, Indonesia, India, Malaysia, and thePhilippines.

The leading exporting countries of woven and knitted wear to USmarket are Mexico, Canada, EU, China, South Korea, Hong Kong,

Taiwan, Singapore, Thailand, Indonesia, India, Malaysia, and thePhilippines.


GlobalImports EU and US GlobalExports EUImports USMarketProductSegment.. Neighbours


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Product Segmentation

EU Market (billion unit)

0

0.5

1

1.5

2

1998 1999 2000

T-Shirts Jerseys, Pulovers Woven Cotton Trousers


GlobalImports EU and US GlobalExports EUImports USImports USMarket Neighbours


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Imports from EU countries and Canada cover the Luxury and the UpperMiddle segments

Imports from Asian industrial countries and Mexico cover the UpperMiddle and the Middle segments

Mass consumer products are imported from developing countries, mainlyChina, Indonesia, India and Philippines

US Market


GlobalImports EU and US GlobalExports EUImports USImports ProductSegment.. Neighbours


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Industrialized Asian Countries


GlobalImports EU and US GlobalExports EUImports USImports USMarketProductSegment..

0

1000

2000

3000

4000

5000

6000

7000

8000

1998 1999 2000

Singapore Korea Hong Kong

0

1000

2000

3000

4000

5000

6000

7000

8000

1998 1999 2000

Singapore Korea Hong Kong

Imports of Woven Wear (US$ million) Imports of Knitted Wear (US$ million)

Delocalisation from industrialised Asian Countries is steadilyincreasing

Delocalisation from industrialised Asian Countries is steadilyincreasing


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Neighboring Countries Analysis


GlobalImports EU and US GlobalExports EUImports USImports USMarketProductSegment..

0

100

200

300

400

500

600

700

800

1998 1999 2000

Saudi Arabia Israel

0

200

400

600

800

1998 1999 2000

Saudi Arabia Israel

Imports of Gulf Countries and Israel are importantImports of Gulf Countries and Israel are important

Imports of Woven Wear (US$ million) Imports of Knitted Wear (US$ million)


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Jordan Export Target Market The USA and the EU countries

Gulf countries, and Israel provided that bilateral free trade agreement willinclude tax exemptions for garments

Jordan Foreign Investment Target Market

South Korea, Taiwan, Hong Kong, and Singapore The EU countries and the USA

Gulf countries and Israel

Competitors/ Leaders In Jordan Targeted Market


I i l J d G B h ki & GI i l


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The Jordanian Competitors in Target Market EU and US countries in the luxury market, the upper middle segment, and in

a lesser extent the middle segment

Intermediate Developed Countries such as Hong Kong, Korea and Singaporein the middle and the upper middle segment

Growing labour cost countries such as Poland, Turkey and Tunisia in the massconsumer and the middle segment

Low labour cost countries such asChina, in the mass consumer segment


Competitors/ Leaders In Jordan Targeted Market

I t ti l J d G t B h ki & G tJ d G t


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Main Indicators

Contribution of the sector in exports & trade balance is interesting

8%18%%

0.3934345141351703Total Industry

0.92257996237007Textile and Garment

EXPORT/IMPORTIMPORT (JD 000)EXPORT (JD 000)Year 2001

Inte national Jo dan Ga ment Benchma king & Ga mentJo dan Ga ment


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Main Indicators

The share of garment in the whole sector

87%57%85%79%%

13610111243189412647Textile and garment sub-sector

1187863719,2160732083Garment Sub-sector

InvestmentProductionNo. of

employeesNo. of

enterprises


Year 2001

International Jordan Garment Benchmarking & GarmentBenchmarking &


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SWOT

Benchmark Analysis

Average Salary Ratio Compared to Jordan

0

2

4

6

8

10

12

14

USA

Germany

Canada

France

Singapore

HongKong

Mexico

Thailand

Jordan

China

(Shanghai)



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SWOT

Benchmark Analysis

Efficiency

25-30%70-75%45%6

0 %80 %85 %5

20%85 %65 %4

35-40%80-85%45-50%3

30-35%80-85%50-55%2

30-35%80-85%50%1

Possible improvementefficiency

Efficiency of a TunisianUpgraded CompanyEfficiency recordedCompany



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Benchmark

SWOT Analysis

Opportunities: EU & US imports of garment are

expanding

The clothing industries are themost extensive use ofdelocalization

Threats: Dismantling of the MFA in 2005

Leading exporting countries areimplementing upgradingprogrammes

The QIZ could be affected withany trouble in the region



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Benchmark

SWOT Analysis

Strengths: QIZ, FTA & EU Agreements offer duty free entry

QIZ & FTA are entry tickets to the international market

Garment industry does not require sophisticated technology & huge capital

Labour intensive industry will increase employment

Potential highly educated work force

The cost of labour is 10 times cheaper than Europe & USA

Availability of private banking system

The regulations are improving investment as well as exports

Positive attitude of businessmen

Institutional strong supports towards export oriented industries

Jordan is the most open economy in the region



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Benchmark

SWOT Analysis

Challenges to meet opportunities: Shortage of skilled labour and training resources

Clearance period, and inland transit time still high

Need of supporting incentives to investment in new technologies, andtechnical assistance

Need of supporting services in promoting export logistics

Need of exporting skills and marketing

Unskilled labour, and adverse attitudes towards the work of females Venture Capital is not available

Need of supporting industries


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International Jordan Garment Benchmarking & Garment

Garment


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Market Analysis Sector Analysisg

SWOT Analysis Industry Strategy

StrategyImplementation

UpgradingProgramme

InstitutionalStrengthening

ExportLogistics

HumanResources

Industry Strategy

ForeignInvestment

Export Development Plan

Diversification of exports through the promotion of Jordan exports toEU, USA and Gulf Countries

Improve the implementation of Jordan EU trade agreement throughBilateral Agreements with MEDA Countries (e.g. Aghadeer)

Implement an export oriented promotion programme:

Promote the image of Jordan as an exporter of Garments

The cooperation with EU & US Supporting institutions

Set-up a fund through donors to provide companies with needed support tomarket their products abroad:

market research, design collection, catalogue design and virtualexhibition

The implementation of a survey enabling to improve the sourcing offabrics and trimmings


Garment


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UpgradingProgramme


ExportLogistics

HumanResources

Industry Strategy

ExportDevelopment

Foreign Investment Development Program

Identify related and supporting institution of foreign investment in

targeted markets, and improve cooperation with them

Request special credit line for the upgrading and the restructuring of the

existing companies

Extend tax free trade agreement with neighboring countries to include

garment

Provide supporting institutions with additional budget

Set-up JIB representatives in targeted countries


Garment


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UpgradingProgramme


ExportLogistics

ForeignInvestment

Industry Strategy

Garment Human Resources Action Plan

Companies Human Resources Needs per year 17,000 operators:

7,000 to replace foreigners, train new operators, and

10,000 to cover new investment shortage 9,000 middle management staff

170 senior management staff

170 operator trainers in companies

Create a positive attitude towards work of female

Provide incentives, especially to females considering entering the

garment industry Raising awareness TV, radio, national press advertising

ExportDevelopment

International Jordan Garment Benchmarking & GarmentGarment


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Market Analysis Sector Analysis SWOT Analysis Industry StrategyIndustry Strategy


UpgradingProgramme


ExportLogistics

ForeignInvestment

ExportDevelopment


Training Needs 17,000 machine operators in cutting, finishing, maintenance and

repair

170 trainers in companies and 170 in VTCs

900 middle level staff (i.e. quality control, line supervisors,maintenance and repair managers, pattern making and cutting)

Create a Jordanian capacity in design, production planning,

productivity improvement, quality management, and costing

VTC strengthening:

Emphasize capacity building from 6,000 to 18,000 workers



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UpgradingProgramme


ExportLogistics

ForeignInvestment

ExportDevelopment


Educational and High School strengtheningNeeds:

170 garment senior staff

900 garment technicians Scholarships abroad

Enhance the training capabilities of the private sector

Provide incentives for investment in training centres, (i.e. 20% of thetotal cost of investment)

Facilitate formalities for hiring middle level staff

Provide incentives covering the cost of companies training schemesand technical assistance



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UpgradingProgramme


ExportLogistics

ForeignInvestment

ExportDevelopment


Training Events in UK and USA

Train senior level staff in design, pattern cutting and making, productdata, Quality Assurance Management, costing and pricing strategies

Organize study tours for senior level staff of MoIT, VTCs, and the MoE

to learn about garment training and education abroad

Start a dialogue of international co-operation with the specializedinstitutions and centers of excellence

InternationalM k t A l i

Jordan GarmentS t A l i

Benchmarking &SWOT A l i

GarmentI d t St t

GarmentI d t St t


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Market Analysis Sector Analysis SWOT Analysis Industry Strategy


UpgradingProgramme


HumanResources

ForeignInvestment

Industry Strategy

Export Logistics Action Plan

The competitive advantage of Jordan and Tunisia towards China, andneighbouring countries is:

the openness of their economy,

administrative facilities and

the dynamism of the private sector

Accordingly, the logistical facilities have to be

excellent

Accordingly, the logistical facilities have to be

excellent

ExportDevelopment

InternationalM k t A l i

Jordan GarmentS t A l i

Benchmarking &SWOT A l i

GarmentI d t St t

GarmentI d t St t


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UpgradingProgramme


HumanResources

ForeignInvestment

ExportDevelopment


Implementation of a survey enabling:

The enhancement of an IT comprehensive programme

The improvement of Aqaba port facilities

The improvement of post and airfreight facilities The improvement of the free zones

Facilitation and reduction of the number of procedures

Implementation of a program to enhance exporting companies,forwarding and shipping agencies and trading companies capabilitiesand techniques







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UpgradingProgramme


HumanResources

ForeignInvestment

ExportDevelopment


Supporting services enhancement:

Promote the creation of international trading companies operating asconverters for Jordan and neighboring countries

Provide special incentives on real estate acquisition; construction; and

training centres

Elaborate industrial areas master plan identifying the most costeffective industrial locations.







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UpgradingProgramme

ExportLogistics

HumanResources

ForeignInvestment

Industry Strategy

Institutional Strengthening

Enlarging the budget of the MoIT, the JIB, to strengthen thecurrent supporting activities

1- Investment Development program:

Create a One-Stop-Shop to facilitate companys creation

Promote the creation of Business Incubators

Facilitate the implementation of existing regulation governinginvestment

Create an upgrading program

ExportDevelopment







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Strategy

Implementation

Upgrading

Programme

Export

Logistics

Human

Resources

Foreign

Investment

Export

Development

Enlarging the budget of the MoIT, the JIB, to strengthen thecurrent supporting activities:

2- Investment and upgrading incentives:

Tax relief for the shareholders

Special fund to finance upgrading activities (Technical Assistance &Software)

Institutional Strengthening

Enhancing and strengthening financial support:

Create a special fund to improve financing of new SMEs projects

Promote the creation of Venture Capital facilities







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Institutional

Strengthening

Export

Logistics

Human

Resources

Foreign

Investment

Export

Development

Strategy

Implementation

Industry Strategy

Implement a Pilot Programme financed by EJADA to providebusiness appraisal for 60 companies and design a tailoredupgrading programmes

Upgrading Programme

Efficiency improvement Program:

The objective is to improve from 20 to 40% the work efficiency of thegarment companies, through:

Setting up a work efficiency recording system enabling to grantcompanys staff according to performed efficiency

Setting up software enabling, Production planning, cost analysis,

efficiency record







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Strategy

Implementation

Institutional

Strengthening

Export

Logistics

Human

Resources

Foreign

Investment

Industry Strategy

Upgrading Programme

Quality enhancement programme:

Set up a specialized laboratory enabling quality control of fabrics

Promote product and company certification

Promote private companies dealing with CAD/CAM Set up PDM (Product Data Management) in companies to enable to

record product specifications

Design a quality instruction manual, and quality inspection procedureand documentation

Support the establishment of a Center of Excellence in fashion design

Export

Development







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Upgrading

Programme

Institutional

Strengthening

Export

Logistics

Human

Resources

Foreign

Investment

Industry Strategy

Strategy Implementation

Setting up a task force as well as elaborating implementation plan, coveringthe:

Identification of documents and procedures to get rid of

Streamlining of needed regulations, policies, and organization

Sourcing of required financing

Schedule of all activities, and define the department(s) in charge ofthe implementation of each task

Implementing and monitoring the recommended surveys

Export

Development

Strategy and action


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gyplanto enhance thecompetitiveness of

the garment

industry in Jordan

Garments Cluster

Documents

Transcript of Garments Cluster