Founder’s Letter: Supply Chains in Transition, Plus the Community Steps Up
It’s the end of another year and lots to consider.
The overriding reality is that many people in the supply chain are suffering for all sorts of reasons and the risk factor for buyers has never been greater in my career.
Specialty fiber companies can’t make a profit, and lots of denim mills are suffering —especially in China (not to mention Europe, Japan, Taiwan and Mexico). Because the US government has changed its “perspective” on trade from China, lots of people who were loyal and good suppliers are taking the brunt of the political decision. Jobs are disappearing and former friends and allies in business are hurt. I’m not sure people realize or feel empathy for these people when they say, “oh, our company no longer can buy from China.” It sounds simple, but it’s hurtful to the workers that were delivering orders a little while ago. What about the families of the people losing their jobs and income? What about the office staff all cut like some no-longer-useful football player? Next up!
Cotton farmers, especially in the USA, are finding it difficult to survive with global cotton demand dropping 1.6 billion pounds since 2018. Meanwhile, China’s polyester production has grown with Chinese polyester production up 17.5 billion pounds — that’s with the apparel industry, as a whole, showing minor — if any – unit growth.
The race to find the lowest-possible-priced jean or denim fabric denim rages and lots of people in the supply chain are suffering.
The fact is that too much fiber capacity was built and the only way to move it is to lower the price — which is right up the alley of jean brands, whose production mission is not to build loyalty but to find the lowest and cheapest vehicle for them to make more margin. As long as they make money, they consider the mills they abandon as just part of business.
And then politics has become very messy, if you wish to look under the hood. Bangladesh is in an active “revolutionary” status, where one regime has replaced another (I will not comment on whether this is right or wrong) while India houses the old regime and former Prime Minister as their personal luxury guest, plotting her return. It would seem that the US President and Indian Prime Minister are pals, which puts Bangladesh in a long-term “alarm” status with the worst potentially not over but about to happen, bit by bit. In the meantime, arrests occur (some valid), untrue stories are being planted in every direction and reality is hard (maybe impossible?) to grasp.
Pakistan and its military regime has a fat and, at times, painful thumb on their country causing citizens who supported the previous regime a lot of pain and discomfort. It might be an invisible reality to buyers who flock to Pakistan for the cheap prices, but for locals, it’s the current political reality.
Both countries are trying to market calm and air spray the scent “oh it’s cool here.. no real problems,” but truth is both nations present serious and deep political risk. Buying from China was peaceful for buyers. No worker human rights concerns ever really came up.
And now the big talk for the next sourcing regions is about Egypt and Vietnam. Seems calm there right? Leadership has their fat thumbs on peace, as well. So all fine right?
Going back to the Chinese polyester production growth, I seriously wonder how, as an industry, we can talk about environmental impact when the 2017 stat on Google is that 1 million plastic bottles are produced each minute, only a tiny portion of which is recycled. And if so much is recycled, how come so much fresh new polyester is pouring out of China? How come fresh polyester is so popular while cotton, which is biodegradable and once employed 26 million farmers, keeps losing market share? What is that I am missing?
Lastly, and on a happier note, I want to share a story of the lost samples at Kingpins Amsterdam. The Bitopi people, who make garments (a lot of them — and great garments from an amazing team) from Bangladesh arrived at the show in October, but their samples did not make it. Day one without samples, working (or trying to) in an empty booth was awful for them. But other exhibitors helped them fill their booth with samples the next day. It’s the spirit of Kingpins. I don’t like to refer to it as family (because if it was there would only be a need for one booth in the entire show), but I would call it a community. The Kingpins community rocks in sentiment — not only for themselves but for each other. This “can I help you?” feeling from all suppliers make us proud of our industry and all the exhibitors in Kingpins. Thank you.
Happy Holidays everyone and see you soon.
