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    Polarization Of Global Bottom Garment Manufacturing Industry

    2014/9/15 9:55:00 13

    Bangladesh Garment FactoryClothing And Garment Manufacturing Industry

    Bangladesh in early August

    Garment factory

    1600 workers hunger strike for wages, demanding payment of arrears of wages and bonuses.

    Earlier, the clothing industry in Kampuchea also continued to strike and protest.

    On this side of the show, the fashionable dress is beautiful and attractive. On the other side, few people pay attention to the tears and struggles of the bottom workers.

    Over the past few years, China has been fidgeting in the position of "the world's first garment manufacturing plant". Orders from the apparel industry in third Southeast Asian countries have been largely lost, and Britain and the United States have begun to develop their own garment workers.

    Behind this series of changes, what exactly has happened in fashion industry?

    China's domestic manufacturing costs rise: "labor shortage" and "wage surge", China's labor force is no longer cheap.

      

    Dongguan

    In April this year, the biggest wave of strikes broke out since China's reform and opening up. About 30 thousand workers took part in the strike action, most of which came from Yuyuan, the largest shoe processing plant in the world.

    Before the strike, these workers were commissioned by the world's more than 30 well-known footwear brands, including Adidas and NIKE.

    Shoe factory employees said in an interview with the media that the suspension was due to the fact that the shoe factory did not fully buy workers' social security.

    Finally, a 12 day strike resulted in a total loss of $27 million for Yuyuan, and Adidas directly reduced orders.

    This incident has made the public realize that the awareness of rights and interests of Chinese workers is growing, and that the days of garment enterprises are no longer as good as before.

    The manufacturing industry, which is extremely sensitive to cost, has long been aware that China's processing advantage is disappearing.

    Since 2008, the RMB exchange rate has been rising. When people are buying foreign products with a smile on their faces, the profit margins of the garment processing industry dominated by low value-added products are getting smaller.

    The appreciation rate of the textile industry will be 1%, and the export profit margin of the textile industry will decrease by 2%-6%.

    To ensure profits, clothing brands must exchange more dollars for clothing of the same value, and the cost increase is obvious.

    On the other hand, with the population of 1 billion 300 million, the number advantage of workers in China is gradually disappearing with the end of demographic dividend.

    The Chinese have called for more than thirty years of family planning, but the aging is coming ahead of schedule.

    In the five years from 2008 to 2013, employment opportunities in the industrial sector increased by 30 million, but the 15-39 year old labor force in China has shrunk by nearly 33 million.

    The absence of the labor force directly led to the outbreak of "labor shortage" after the long holidays in the Pearl River Delta and Yangtze River Delta in recent years.

    According to experts' expectations, the total number of young labour force will decrease by 20 million in 2015 and 22 million by 2020.

    With the intensification of "labor shortage", the "pay rise" has also sprung up in the garment manufacturing industry.

    With the shortage of workers and rising demand, the working hours of garment processors have to be extended.

    More than 47% of the front-line workers who work 6.3 days a week are unwilling to work overtime.

    The improvement of the quality of life and leisure needs of the post-80s workers prompted the garment factories to improve their living conditions and improve their living conditions in order to retain skilled workers.

    More than half of the textile and garment factories raised the salary range between 10-20%, and 12.5% of the enterprises chose to rise by more than 20%.

    China's cheap labor is no longer cheap.

    With the rising cost, foreign enterprises only choose to withdraw.

    In March 2009, NIKE halted its sole footwear factory in Taicang and disbanded more than 1400 workers.

    In July 2012, Adidas shut down the Suzhou plant because of its strategy of re integrating global resources.

    In the same year, Yu Yuan's parent company, Baocheng, closed 51 production lines in China, accounting for 20% of its mainland production line.

    Throughout the country,

    vancl

    Transferring part of the order to Bangladesh, Ningbo Shenzhou Knitting Group invested $30 million to set up a textile factory in Kampuchea. "Testing water overseas production" has gradually become a new trend of large and medium-sized textile and garment enterprises in China.

    Those small employers who are attracted by the preferential tax rate and cheap land policy find that the central and western regions are not paradise.

    There may be some workers willing to work closer to home, but the immature supporting industry chains in the mainland lead to logistics, distribution and pfer processing of raw materials, printing and dyeing processes.

    The quality and duration of production are not guaranteed, and the labor shortage will result in a wage increase for workers (the average wage of factory workers in Henan has increased by 110% over the past five years).

    Taken together, the actual cost of relocation is not significantly reduced, and logistics is worse than a nightmare.

    As a result, the Southeast Asian region with low labor cost has naturally become the next destination of China's garment industry.

    But is the situation really as good as expected? Southeast Asian countries are losing investment trust: Factory accidents and strikes, protests are frequent, and policy risks are high.

    Beginning in 2008, consumers gradually found that the words "made in Vietnam" and "made in Bangladesh" were more and more on H&M, ZARA, NIKE and WAL-MART's clothes and shoes labels.

    Behind the small label is that the whole Southeast Asia has split 30% of China's processing orders. Bangladesh is growing to be the second largest garment producing area after China, and the low labor cost is one of the important factors to enhance their competitiveness.

    According to the Japan Trade Promotion Council report, the average monthly salary of factory workers in Guangzhou in 2012 was 352 US dollars.

    Vietnam?

    The average monthly salary of workers in Hanoi, Phnom Penh and Dhaka in Bangladesh in Dhaka is only $111, $82 and $78, respectively.

    The garment manufacturing industry, which needs a lot of cheap labor, is seeing the dawn again here. Investing in Southeast Asia has become a hot topic for foreign businessmen.

    Over the past 5 years, Vietnam's foreign investment has increased by more than two times, and foreign investment in Kampuchea and Bangladesh has increased by 85% and 43% respectively, reaching 892 million US dollars and 1 billion 100 million US dollars.

    With the entry of foreign capital and the pfer of garment processing industry, the economic dependence of Southeast Asian countries on garment export has made some progress, but the problem also arises.

    In November 2012, 121 people were killed in the fire at the clothing factory in the tower of Dhaka in Bangladesh. In April of next year, a 8 storey building collapsed in the suburbs of the capital, causing many people to be buried. The death toll was over 1000.

    Bad working environment, rampant gangsters, corrupt government officials, rising prices...

    Every social problem is the last straw to crush the poor. The poor clothing industry workers can not maintain their daily lives, and discontent is accumulating.

    In September 2013, for the minimum wage of $104 per month, Bangladesh

    clothing

    Workers took to the streets to protest. The protests lasted for three days, and 400 factories shut down.

    By the end of the year, angry workers set fire to a ten storey large garment processing plant.

    In early August of this year, 1600 workers were fasting for wages, demanding payment of 3 months' wages and 41 million 300 thousand Tat cards.

    The situation in Kampuchea is not optimistic.

    In 2013, the Kampuchea fabric production association (GMAC) recorded a total of 130 strikes, the most frequent year in the past ten years.

    At the end of that year, 300 thousand Kampuchea clothing workers staged a strike March. GMAC called on members to shut down factories and stop production for three days.

    It resulted in a loss of about $200 million and an investment delay of $70 million.

    In Vietnam, foreign businessmen are facing more problems.

    The instability of the social environment and polity; the exchange rate crisis erupted at the beginning of the year; the lack of professional skills training and low productivity of local workers; the production of raw materials only met the 30% production demand of the textile industry; most of the middle and high grade fabrics were heavily dependent on imports; in May this year, even violent incidents against foreign investors occurred, which had cast a shadow over Vietnam's business environment.

    Garment manufacturers gradually find that although the cost of labor is low, the hidden risks and policy risks of Southeast Asian countries are even higher.

    The lack of infrastructure facilities and the uncertainty of policy changes is undoubtedly a test for enterprises. This has also shaken many foreign investors' confidence in Southeast Asia, but there is nothing else to do.

    Brand perfunctory: avoid moral condemnation, avoid labor agreements, and avoid financial compensation.

    Factory accidents and strike parades in Southeast Asian countries have been reported to the press, pushing Western garment giants to the forefront of public opinion.

    On the one hand, they need to bear economic losses.

    Law

    Litigation also faces moral criticism from consumers.

    How will these tycoons react?

    Last April, a garment factory building in Rana square in Bangladesh collapsed, killing 1127 people.

    The accident involved 10 clothing brands and retailers, including GAP, MANGO, Benetton, Carrefour, WAL-MART and so on.

    After the accident, the parent company of H&M and ZARA signed a "Bangladesh clothing industry safety agreement" with the local labor union. Messi's department store, JC Penny, Martha general store, MANGO, Benetton and so on subsequently joined the agreement.

    Disney also announced the cancellation of clothing orders in Bangladesh, which will never be made here.

    Even GAP, who refused to join the agreement, announced that it would make safety plans on its own.

    WAL-MART hired a professional company to check the structure, fire and electrical safety of the supplier's factory, and announced that it would provide $1 million 800 thousand for the safety check after fire safety training for factory managers.

    Under the joint efforts of crisis management experts and public relations, the brands responded positively, as if they had avoided the moral accusations of the Western consumers and reduced the negative impact to a minimum.

    But justice has not yet been heard.

    Donors in Rana Plaza

    trust

    The foundation raised funds publicly after the tragedy. By the end of August 4th, it was expected to raise less than half of the 40 million dollars.

    Retailers who should have taken up responsibilities are now losing their voice.

    This is not the first time they have experienced such incidents. Their minds are very clear that the labor environment can hardly be improved in Bangladesh or even in China.

    The only way to avoid financial compensation is to avoid the signing of labor agreements.

    Britain and the United States regain manufacturing: developing their own garment workers in their own country

    Retailers in the clothing chain weigh the causes of every increase in cost: raw material prices and protracted ones.

    Customs

    Formalities and not

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