Walmart is in a period of unprecedented investment
Walmart, leading American multinational retailing corporation signs a deal with Renfro Corporation, one of the world's largest producer of socks, that anticipates creating about 440 jobs at Renfro's manufacturing facility in Fort Payne, Alabama, as part of Walmart's January 2013 US Manufacturing Commitment to buy an additional $250 billion of US products supporting American jobs over 10 years. Renfro Corporation is a long-time manufacturer of socks for Walmart under brands such as Fruit of the Loom, Russell, Dr Scholl's, Faded Glory, among others. With changes in energy costs and labour costs overseas, it is increasingly cost-effective and efficient to manufacture closest to the point of consumption, helping Walmart respond to trends and customer demand. Subir Ghosh spoke to senior officials from Walmart about the significance of the deal, especially keeping global trends and processes in mind.
The new Walmart-Renfro deal is expected to create 442 new jobs. How significant is this, considering that the number 442 is far too small to be of much economic significance. And, apart from the one with Renfro, which are the deals with other manufacturers that will create new jobs in the US?
Walmart's commitment to buy $250 billion in products supporting American jobs by 2023 is having a tangible impact on communities across America. In the three years since we launched our initiative we have seen factories opened, jobs created and American products added to our shelves in stores and online. We evaluated 1,300 categories and are pursuing opportunities across the business. We have hundreds of active initiatives under consideration and have shared many successful examples including:
California Innovations, producer of the Ozark Trail 'super cooler'. The Canadian company with US operations is moving production of the cooler from China to a factory in Atlanta, Georgia, creating 350 jobs.
Edgewell Personal Care, a maker of personal hygiene products, which is bringing production from Canada to Dover, Delaware, creating 272 jobs.
What percentage of products retailed by Walmart in the US are in fact manufactured in that country? How do you expect to maintain a balance?
According to data from our suppliers, items that are made, assembled, sourced or grown here account for about two-thirds of what we spend to buy products sold at Walmart US.
In January this year, six research and academic institutions were awarded nearly $3 million in grants by the Fund for their work focused on innovations in textile manufacturing. Could you elaborate on Walmart's plans and ideas w.r.t textile innovations?
In 2014, Walmart and the Walmart Foundation pledged $10 million over five years to fund the development of domestic manufacturing with a specific goal of advancing the production or assembly of consumer products in the US. This current round of grants will complete the $10 million commitment.
The Walmart US Manufacturing Innovation Fund is designed to provide grants in support of applied research projects advancing innovative solutions to key challenges that have the potential to lower the cost of making consumer products in the US. The fund is a collaboration between Walmart, the Walmart Foundation and the US Conference of Mayors who strive to find innovative ways to grow local economies.
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