ABIT (The Brazilian Textile and Apparel Industry Association) represents the integration of the Brazilian textile chain. Founded on the early 1960's, ABIT sponsors companies of every segment in the textile industry, including cotton growing, synthetic raw materials, textile fibers, spinning, weaving, knitwear, dyeing, printing and clothing.
ABIT is among the leading associations of the world that serves the interests of the industry in a big way. Can you talk about its history and core activities?
ABIT was founded in 1957 and is based in São Paulo, the main city in Brazil for business. The core activity is to promote the development of the production chain of textiles and designer clothing in Brazil. The textile and designer clothing sector comprises more than 30 thousand companies (from thread producers to designer clothing), which are scattered through many states throughout the Country, employing 1.5 million people and with a turnover of around U$ 25 billion annually, exporting around 10% of this amount. The association acts both in the internal market, promoting business activities, enabling companies and staff, promoting seminars and talks, acting with the governments, both federal and state and municipal, and also in the external market, participating in fairs and international events, attracting buyers, developing market research and participating actively on international negotiations.
Brazilian textile and apparel industry has been a vibrant industry, so far. What makes it so strong and dynamic that could help Brazil emerge economically strong?
Our industry is very competitive. We are placed among the six biggest textile poles in the world, we are the second largest denim producer and the third largest cotton knits producer. Our fashion is finding its space at the world's windows, thanks to the Brazilian identity which can be seen in all products. Our industry has developed with a focus on the internal market, which is wide and dynamic, and with a huge potential for growth. Although the textile and apparel sector is traditionally focused on exports, our participation in the global market is still small, though growing. The textile and apparel industry represents 5% of the national GDP and around 2% of the total exports in Brazil. The textile and apparel production chain has got a promising future and ABIT and ABDI, a development agency from the Brazilian government, are developing a new strategic plan to harness the production growth, both for the internal market and also to increase participation of Brazilian products in the international market.
Like any other country's textile industry, what are the problems that the industry members face while conducting their business?
The main problems at the moment are the high interest rates in the internal market, an exchange rate that is not attractive for exports and limited credit options for small businesses.
Turning to the world textile industry, how do you view the current global scenario and how is it affecting Brazil's domestic industry?
The world scenario of the production chain of textiles and apparel is being redesigned after the end of ATV, which has put an end to more that 40 years of regulated trade. The ascension of China as a great industrial power is putting pressure in the market as a whole and in this sense Brazil is focusing its efforts to compete in niche products with greater added value, exploring our design, creativity and ability to develop and market the Brazil brand.Our mission at present is to exploit differentiated products. We want the niche markets for the products which are acclaimed for their design, such as bikinis, jeans wear, fitness wear, lingerie, and also women's and men's fashion created by our talented designers. We are very competitive in the production chain of products manufactured with cotton and there are new investments being made at the chemical threads sector. We have been putting a lot of effort in trying to promote fair trade, fighting the unfair competition which comes from dishonest practices.
China is seen as a potential threat by not only Brazil, but other the entire world. How do you propose to overcome this threat and what are the steps your association has proposed to take in order to overcome this competition?
At present we are discussing with the Chinese the possibility of an agreement of voluntary restrictions similar to what's being done in the USA; at the same time we are requesting protection for the more vulnerable products.
Will limiting the China textile imports resolve the threat in any way?
On the long run no, but in the short term it is a right Brazil is entitled to, and it will be exercised fully.
Has Brazil made any effort to attract Foreign Direct Investment (FDI) in to the textile and apparel sector?
Yes. Recently an agreement between two big companies was made (one Brazilian and the other North American), creating the biggest home textiles company in the world. On the chemical threads sector, a large investment from an Italian company is under course and an initiative from another group, on the same area of chemical threads, has been announced. At the same time that we have been attracting investments, the local companies are also investing in other countries from South America, Europe and Asia.
Which are the potential sectors among Brazilian textile and apparel industries that you foresee as high growth sectors within the industry?
Many segments have a great potential, specially beachwear, jeans wear, lingerie, fitness wear, bed, bath and table (home wear) and designers with their own identity and finishing, representing the typical Brazilian crafts.
Do you anticipate business partnerships with South American Nations like Argentina, Chile, Peru and other Asian countries like Bangladesh, India, Pakistan and the Middle Eastern Countries?
Besides Mercosul we are negotiating with the European Union and we will probably relaunch Alca. Other agreements are in progress, such as with Mexico, apart from the existing ones.