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Bruce Philip Rockowitz
Group President & CEO Li & Fung
We have also come across a news that Li & Fung is planning to shift its focus from countries like Bangladesh and China to South America and Sub-Saharan Africa. What are the reasons for this?
What we’ve actually said is that China, Vietnam and Bangladesh are unlikely to be displaced as apparel sourcing markets any time soon. China is more than half of our business and Bangladesh is our second-largest sourcing country. We're very committed to our present sourcing structure for many reasons, ranging from critical mass of available workers, to adequacy of supporting infrastructure, local government policies and overall competitiveness. However, we remain watchful about the potential of countries in South America and Africa. In the belief that trade is better than aid, we encourage importing countries to give preferential market access, such as it happens for sub-Saharan African exporters under the African Growth and Opportunity Act of the United States.
Apart from recession, production cost and safety, which are the other factors affecting sourcing of textiles and clothing?
Number one is speed to market and, in particular, the efficiency of factories.
Moving on to sustainability and technological advancements, how are technological changes shaping the sourcing sector? To what extent do these changes help textile and apparel industries to practice sustainability in their production?
Technology is a major driver of change in manufacturing everywhere, including the textile and apparel industries. It could be from simple things like automated machinery for cutting and better sewing, to more sophisticated systems for monitoring a factory's energy and utility usage.
A factory's sustainability initiatives may touch on traditional environmental management, to developing human resource management systems to calculate proper wage payments, to lean manufacturing techniques which reduce wastage of materials. All of this should make good business sense to factory owners because it ultimately increases the profitability of their business. It's good for everyone involved - workers, retailers, us – when a factory's business is truly sustainable and grows as a result.
Li & Fung is considered as Walmart of purchasing. What do you think is the role of the company in connecting factories of poor countries with the affluent countries' vendors?
We don’t just connect factories in developing countries with customers in affluent markets; we also play a very important role in the economic development of the countries we produce in. We bring a lot to the table because we have customers ranging from low end, to middle, to upper. As we develop each factory we are able to give them better, higher-priced customers, so they can rise up the value chain. We did that in China. Factories we work with there were once all about cost. Now they are about quality, speed to market and higher value.
We also influence governments in sourcing countries to improve infrastructure, and the factories we work with to improve workers' conditions. So there's a lot that we have done to help society and there is a lot more that we will do in the future.
According to you, what are the biggest challenges faced by the sourcing firms of textiles and garments?
Most sourcing firms operate in developing countries where we face tremendous challenges every day, ranging from supply chain disruption because of flooding and other natural disasters, to civil unrest. While we are used to dealing with these, our biggest challenge is one we can do little to overcome - the recovery of the Western economies.
Can you talk about how you see bricks and mortar stores competing with e-commerce and m-commerce companies coming in? Is it viable in textile and garment sector?
Everything today is omni-channel - getting goods to consumers any way they want, whether through bricks and mortar, e-commerce or mobile apps. Bricks and mortar stores have an advantage over strictly e-commerce stores in that they can, and do, add on e-commerce as a component. People like to have both options – shopping in a physical store and pricing over the internet. E-commerce platforms are growing dramatically but omni-channel pressure will probably force them, eventually, into opening stores so they can compete.
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