• Linkdin

Interview with Cem Altan

Cem Altan
Cem Altan
President
International Apparel Federation
International Apparel Federation

‘Real time fashion’ will rapidly gain further market share in 2022
The International Apparel Federation (IAF) is the world’s leading federation for apparel manufacturers, SME brands, their associations, and the supporting industry. IAF’s membership now includes apparel associations and companies from more than 40 countries, a membership that directly and indirectly represents over a hundred thousand companies and over 20 million employees. In a talk with Fibre2Fashion, IAF President Cem Altan discusses the challenges and opportunities for the textile-apparel industry in 2022.

What are your key takeaways from the textile and apparel industry developments in 2021?

For the textile and garment industry, 2020 was the year in which everything changed. A huge crisis in demand caused a majority of companies to lose money. 2021 showed a hugely diverse picture, marred on the one hand by pandemic related uncertainty but also affected by major supply shortages caused by rapid rebounds of demand. The pandemic has accelerated trends that were already in force before 2020. Primarily it has compounded the demand for all things digital, which in turn has enabled innovation, efficiency, and new ways for business to scale up. 
     But we have also seen a turning point in the relations, on a macro scale to start with, between buyers and suppliers. Following a massive loss of trust in their clients caused by large scale cancellations at the start of the pandemic, a heightened sense of solidarity among manufacturers has created a starting point for a joint effort by groups of brands/retailers and manufacturers to improve the relations in the supply chain. This collaboration of manufacturers on a global scale has taken the shape of the Sustainable Terms of Trade Initiative (STTI), of which the IAF is co-initiator. It has become clear in 2021 to buyers and their suppliers alike that in order to meet a multitude of major challenges the entire apparel supply chain must pull together. 
 

Does 2022 seem to be as uncertain as 2021? Which factors would you rank as of topmost concern?

Unfortunately, the pandemic is not letting us out of the woods yet. And with the threat of new variants potentially causing new lockdowns causing new demand shocks, this is one of the biggest factors of uncertainty that our industry will face in 2022. Material and service prices are of course another major source of uncertainty, which is partly related to the pandemic situation. On a macro-economic level, rising inflation is also causing uncertainty about interest rates and in some cases about exchange rates. Other government policies, such as the potential EU mandatory human rights due diligence rules, if actually passed, will have an effect on global apparel supply chains.

By when do you expect the challenges of shipping industry to ease?

We must separate the incidental from the structural. Currently, the sky-high shipping prices and also some labour shortages have been sparked by a supply-demand imbalance. With the COVID-19 situation still causing major uncertainties about restrictions to business, we will face some yoyoing of demand and therefore continuing imbalances. Structurally, in the shipping industry we face a situation where a few major shipping companies have a de facto global oligopoly and perhaps when shipping prices remain structurally high, this is a moment for industries that rely on global supply chains to challenge this situation. 

How pressing could be the labour issues for the textile and apparel industry in 2022?

On the labour side, we argue that before the pandemic our industry already faced a major challenge attracting enough skilled personnel. Of course, the exact nature and extent of labour issues differ per country, but overall, with the industry in transition, the demand for certain new skills is greater than the supply coming into and out of our fashion schools and universities.

Following the recent COP26 meeting and given the textile industry’s influential role in climate change, what major developments do you expect in 2022?

COP26’s major agreements were on the reductions in using coal as a source of energy and financial help to poor countries to aid them in the transition to less CO2 emissions. Parallel to this, our industry can only succeed in making major reductions in CO2 emissions quickly if an industry wide, global approach is taken. All participants in the supply chain, including consumers have to do their bit. Take for example the construction of an extended producer responsibility system (EPR) in a European country. This would allow brands in that country to put a small premium on every garment sold to be invested for example in circular textiles, reducing CO2 emissions. However, it must be done in such a way that the final consumer really does pay the premium rather than that competition causes the additional costs to be absorbed by the supply chain. If this happens often, these costs are pushed up into the supply chain, where there often is insufficient financial ability to make the large investments needed in sustainability. So, it’s time for a holistic and realistic approach.

Related to this, will we see brands increasingly start focusing on sourcing with sustainability/ethics as a factor?

Yes, but this may not be the right question to ask. From the IAF point of view, the question is whether supply chains will be able to actually transition to more sustainable operations. This requires more than brands focusing on the issue and asking their suppliers to present them with more sustainably produced products. Sustainability improvements require investments. Investments cannot be made out of thin air. They require consumers to pay more and/or they require businesses to transition to models that generate better returns and a better distribution of risks and rewards.

Will we also see greater technology adoptions in 2022 to solve transparency and traceability issues in the supply chain?

Yes, we certainly will. Some legislations are already in place, and some are being developed as well as investors and consumers now demand the industry to increase transparency and improve traceability. This requires a large-scale employment of technology requiring investments which in turn require significant supply chain collaboration to be effective. The technology is important, but not enough. Implementation of the technology needs people to be trained across the supply chain. And implementation must be a joint task for the supply chain, not a component of a list of compliance issues that is pushed upwards in the supply chain only.

Energy prices are currently a major concern across the world. How do you see them continuing and what business strategies can we expect to cope with them?

Interestingly, the only way to cope with structurally higher energy prices, if that were to be the case, is to use less energy and/or to use energy from renewable sources, which aligns perfectly with the sustainability agenda. So, in theory, these processes reinforce each other. However, in practice, it all comes down to the actual ability of the garment and textile manufacturers that use the energy to invest in production processes that use less energy.

Do you expect any changes in the textile and apparel business model in the New Year?

Most certainly there are numerous new business models emerging and this trend will continue and accelerate in 2022. Borrowing clothing, or loaning clothing rather than owning it, buying it second hand, paying a premium for customised clothing, or for locally produced clothing, clothing differentiated by its specific (environmental) performance—all added together already have quite a substantial market share and this will continue to grow rapidly. ‘Real time fashion’ as a successor to ultra-fast fashion (which itself succeeded fast fashion) will also rapidly gain further market share in 2022. (RKS)
Published on: 11/01/2022

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.

This interview was first published in the Jan 2022 edition of the print magazine