We have been invaded by Asian products, which have undermined the domestic production as well as return on investment.
In this interview at Face2Face with Fibre2Fashion Correspondent Cindrella Thawani, Filho mentions that the major problems in Brazilian industry are high interest rates, surge in imports etc. Further, he addresses its internal social growth.
Synopsis:
ABIT (The Brazilian Textile and Apparel Industry Association), founded in 1960, epitomizes the unification of Brazilian textile industry.
Besides, it sponsors companies of every segment in the textile industry, including cotton growing, synthetic raw materials, textile fibers, spinning, weaving, knitwear, dyeing, printing and clothing.
Aguinaldo Diniz Filho caters as the President of ABIT. He was elected, in 2007 as President of the Brazilian Association of Textile Industry for the period of 2008-2010 and re-elected in 2011-2013.
Moreover, he is Vice-President of the Minas Gerais Trade Association.
He completed his Bachelor’s Degree in Law and started his career in 1969, and completed his Industrial Technician course at the Technical School of Chemical and Textile Industry (Cetiqt) of Senai/RJ.
Excerpts:
The Brazilian textile industry is constantly growing due to the increase in modern equipment and technical development. Please explain which other aspects are applied for its tremendous growth?
The industry has invested more than $ 12 billion in equipment over the last decade. Only in the last three years, with the appreciation of our currency against the dollar, imports increased even more on machines, nearly $ 6 billion.
The domestic market is very large (193 million Brazilians) and purchasing power has improved for all, especially among the poorest who are rising and consuming more. But we have been invaded by Asian products, which have undermined the domestic production as well as return on investment.
Brazil is known as one of the best markets for foreign investment. How do you see the investment opportunities in the textile sector?
Most investors are focusing on the Brazilian consumer market. There are several brands in our industry that came to install stores and large retailers such as Top Shop, between last year and this year.
In the productive sector, no industry has moved here nor did we receive investors who want to invest in the Brazilian textile industry. Our production costs are among the highest in the world.
The Brazilian textile industry is growing at a great pace. However, which elements do you think can hamper its momentum?
The Brazilian fashion industry faces four major problems: excessive taxes on high production, high interest rates, exchange rates and the surge in imports. These are internal and external problems.
While we cannot overcome the bureaucracy that will modify internal matters of production, which require government interference, we are seeking to control imports that are predatory, entering the country below cost price of our products.
There are governments that control their currencies to promote exports and they are not even half as concerned about the environment and labor relations as we are. It is unfair and predatory competition.
With the expansion of the textile industry, coordination with the green footprint becomes essential. How will ABIT endorse sustainable growth for this industry?
The Brazilian fashion industry is recognized worldwide for its vocation for sustainability. The environmental and social laws in Brazil are very strict and companies know the weight of the fines, if they break these laws.
We have several certification programs for products that respect the environment, treating waste, re-using water, making production increasingly clean, not hiring informal or illegal labor and even campaigning for environmental education in business.
The sale of "eco-friendly" products is respected in Brazil and worldwide. Here, we do not use different types of chemicals that are still widely used in Asia.
ABIT is supported by APEX to promote textile products as well as by Texbrasil. Please explain their substantial role?
The partnership between ABIT and APEX-Brazil is called Texbrasil. Apex-Brazil is the arm of government that encourages and promotes Brazilian exports and also the attraction of investors.
This government agency established partnerships with various sectors of the economy, not only with textiles, but with coffee, shoes, furniture, fruit, liquor, cosmetics, etc.
Our Texbrasil program is the oldest. We are already 12 years old and, consequently, we have the largest volume of economic contribution. It is an essential support, because through Texbrasil we are increasing and professionalising our export base.
Do you think the brisk population of Brazil is a residual behind its domestic demand and global growth? Please elaborate.
In recent years, Brazil’s low-income population improved their quality of life and started consuming a lot. The numbers indicate that there was considerable social mobility between 2004 and 2010; 32 million people moved up to the middle classes (A, B and C) and 19.3 million were lifted out of poverty.
When added to the existing middle class, there are now 95 million Brazilians who make up the new middle class, which represents 50.5 percent of the population; it is dominant from an electoral and from an economic perspective.
Surely, this is also happening in other emerging countries such as the BRICS (Brazil, Russia, India, China and South Africa), Mexico, Turkey and Nigeria. Certainly the growth of Brazil and other countries is a result of internal social growth.
Brazil is the largest producer of Denim globally. How do you see the further scope of synthetic fibre?
Brazil is particularly strong in the cotton chain. However, the last crisis inflated prices for this fiber by more than 100 percent, and several manufacturers started to increase the use of synthetic fibers in blends of fabrics.
And there was a good market acceptance. We are preparing to use these more. Since the discovery of huge deposits of oil in the pre-salt shelf in the country, companies have already settled nearby, and this year they begin the production of artificial fiber.
Brazil should move from importer to a major producer and exporter of the fiber in a short time. And it certainly will be reflected in the new technologies of fabrics.
With the responsive stance, ABIT caters to the Brazilian textile industry and for the further development in textile; you organize special professional training programs. Will you please tell us what kind of programs they are?
We partner with international institutions to exchange knowledge, both in textile industry technology and in creation, innovation and design. They are renowned institutes in Spain, Portugal, Italy, France and Japan but in addition we also have over 100 schools of fashion and textile engineering in Brazil.
Some are internationally renowned such as Senai Cetiqt, which receives students from Latin America. ABIT has ongoing programs with the government to promote job training, from technical training to business management and promotions for export.
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