Interview with Fernando Capellan

Fernando Capellan
Fernando Capellan
President & Founder
Grupo M
Grupo M

Occupational health and safety has to be the corner stone in every business today.
Fernando Anibal Capellan Peralta, Founder and President of Grupo M, talks about how technological advancements and trade incentives have shaped the garment industry over the years, in an exclusive interview with Fibre2Fashion Correspondent Ilin Mathew. Synopsis: Grupo M is a textile/apparel corporation located in Santiago, Dominican Republic, and has been engaged in apparel manufacturing business since 1986. The company is completely vertical on knitwear from yarn forward and produces garments in a variety of fabrics. Responsible for building a new business culture in the free zones of Dominican Republic, Fernando Capellan was awarded “Leader of the year” by ‘La Bobina’ international magazine in 1996. He is Past-President of the Dominican Association of Free Zones (ADOZONA) and Free Zone Industries Association of Santiago. Currently, he is also Director of the Association of Industries of Dominican Republic (AIRD). Excerpts:

First of all, congratulations to Grupo M for completing 27 years of success in the apparel industry. What are some of the most significant shifts that you have witnessed in the garment manufacturing sector over the years?

We have witnessed how the apparel industry has matured in many aspects. It has reached technological engineering and methods knowledge that permits it to compete on every level in the global arena. We have seen the transformation from basic cut-sew-finish production to full package service enabling retailers and brands to increase their focus on marketing rather than manufacturing. On the sustainability and social responsibility areas, we have far exceeded US requirements and created a positive and healthy work environment as well as contributed to improving the quality of life of all employees.

How, according to you, are technological advancements shaping the clothing sector?

Technology is critical to the progress of the industry as it is creating a quick-to-market response that is setting us apart from the rest. Systems, controls, and software platforms permit the manufacturers and customers alike to control inventories and deliveries transparently and on time.

Being located in a Caribbean country, you are nearer to the US compared to several other countries of Africa and Asia. Do you see it as an advantage? Why?

Grupo M has apparel manufacturing operations that include both countries on the island, Dominican Republic and neighboring Haiti. Our co-production model is an example of trade preferences in action. Haiti is rising again thanks to a combination of trade legislation to stimulate US exports, the continuing expansion of its textile and apparel sector, which now employs over 30,000 persons as well and rising interest from retailers seeking local sourcing partnerships. The potential is huge when you leverage and consider the strategic location (two days from Miami), competitive pricing, and reduced lead-times. This all contributes to a very attractive landed price. All this is also possible by making the most of the Haitian Economic Lift Program (HELP) Act, which allows apparel buyers and manufacturers alike a good reason to build their businesses in Haiti. It offers duty-free access for some knit and woven apparel products exported to the US until 2020, but uniquely its duty-free benefits apply to apparel articles wholly assembled or knit-to-shape in Haiti, yet made from yarns, fabric, components, sourced from any country, including Asian suppliers such as China.

Some of the leading apparel retailers in the US are outsourcing production to other countries or regions. How do Caribbean countries like Dominican Republic and Haiti benefit from this?

The co-production model and location help Grupo M respond more quickly to customer demand for lower inventories and shorter cycle times. In addition, this also offers an important advantage for US brands and retailers that are looking for new sourcing partners to counterbalance the increase in production costs including labor wages and the ever increasing pressure from local demand, such as in China and India. US firms are definitely looking to source closer; we are seeing many of them coming in to see the operation. Grupo M is increasingly working on items like men’s briefs and ladies’ panties that use high duty synthetic fabrics. This is logical due to the high duty of 29-30% into the US. This is all duty-free in Haiti. It still remains clear that the main competition is China, India and Vietnam, but there is room for co-production in Haiti and the Dominican Republic to feature in a “China-plus” sourcing mix.

How supportive are the policies of the Dominican Government for domestic textile and apparel sector companies?

The Government agencies exist and are lending all the support to retain the industry’s competitiveness.

Can you point out any one factor that negatively affected exports form the Dominican Republic? How do you see the future outlook for the country’s textile and apparel sector?

It is important to point out that the appreciation of the currency in 2005 negatively affected all exports from the country. Nevertheless, the future outlook for the country is much better as the conditions continue to improve.

The provisions of the DR-CAFTA facilitate and authorize joint-production in DR and Haiti. How do you see the bilateral trade relation with Haiti, especially in garment and textile industry?

Textiles constitute about 60 percent of the DR exports to Haiti. Fabric mills in the DR are all assembling their production in Haiti.

Grupo M is the largest employer in the Dominican Republic. What do you think is the role of occupational health and safety in sustainable apparel production?

Occupational health and safety has to be the corner stone in every business today. It is the right thing to do and needs to be embedded into the core culture of every company. Any and all initiatives that address negative impact to the environment and positively impact the well-being and quality of life of our associates is actively embraced and put into place.

In today’s noisy world, what will be your best advice for emerging entrepreneurs?

Focus and measured objectives all the time.
Published on: 10/10/2013

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of