AITE suggests measures to boost Ecuadoran textile industry

25 Apr '13

2 min read

Asociacion de Industriales Textiles del Ecuador (AITE or Ecuador Textile Industry Association) has pointed out concerns of the country’s textile industry and has suggested measures to boost the sector, in its latest monthly bulletin.

Giving an overview of the Ecuador textile industry, the article says there are five major concerns of the Ecuadoran textile sector. The first is the stagnation of the country’s textile industry, due to low investment made by companies.

The second concern is the lack of stable policy, which deters long-term investment by the companies. In the absence of stable taxation and labour wages, companies pull back from making new investments.

Job creation is another problem being faced by Ecuadoran textile industry. The number of people employed in the country’s textile sector has grown by less than one percent to 123,044 in 2012, from 121,850 direct workers in 2011.

Growing imports is another problem according to AITE. From textile imports of about US$ 400 million in 2009, they have grown to US$ 500 million in 2010, and US$ 785 million in 2011. In 2012, however, Ecuadoran textile imports dipped a little to US$ 741 million. Of this, fabric imports were worth US$ 223 million, apparel US$ 224 million, yarn US$ 54 million and home textiles US$ 75 million.

Tax evasion while importing textiles, especially from the neighbouring Panama, was cited as the fifth problem troubling Ecuadoran textile sector. AITE expects around 21 percent of all textiles imported into the country to fall under this category.

To overcome these problems, AITE suggests three solutions. First is greater participation by Ecuadoran companies in public procurement tenders. The procurement of textiles and apparels by the Ecuadoran Government has increased from US$ 69 million in 2009 to US$ 104 million.

Secondly, AITE suggests greater promotion of exports through ProEcuador or the Institute for the Promotion of Exports and Investments. For the purpose, it urges the Government to increase the agency’s budget.

Lastly, it advises the Government to sign trade agreements with other countries to facilitate entry of Ecuadoran products into various markets, especially the US and the EU.

Fibre2fashion News Desk - India