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Global Investments Spiked in 2013

Greenfield investments in the global textile and apparel industry posted a sharp rise in 2013,

GENEVA — Greenfield investments in the global textile and apparel industry, spearheaded by major outlays in the retail segments in key markets such as the U.S. and China, posted a sharp rise in 2013 to reach a historic high in excess of $24 billion, more than twice the 2012 level, a United Nations report said.

New investment projects in the textile and apparel retail businesses globally totaled $17.7 billion, while new investments in textile and apparel manufacturing reached $4.5 billion, while logistics, distribution and transportation came in at just over $1 billion, according to the U.N. Conference on Trade and Development’s “World Investment Report, 2014.” Greenfield is a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. In addition to building new facilities, most parent companies also create new long-term jobs in the foreign country by hiring new employees.

The surge in retail commitments reflects a focus on “market-seeking investments focusing on consumers in big markets,” Richard Bolwijn, analyst at UNCTAD’s Investment and Enterprise division, told WWD.

 

The U.S. attracted the largest outlays in new projects with $6.7 billion, of which retail accounted for $5.8 billion, manufacturing $558 million and investment on headquarters $371 million, the report data show. New investment in the U.S. retail segment in 2013 included a $1 billion investment by the Saudi Arabian investor company Fawaz Al Khobar Group with 3,000 jobs created and $49 million by Australia’s Lorna Jane, generating 185 jobs, while similar funds were earmarked by U.K.-based Burberry, Topshop and J. Barbour & Sons.

New investments were also made by major French, Italian and Swedish brands. These included Yves Saint Laurent, Hermès International, Sandro, Alexander McQueen, Giorgio Armani, Prada, Valentino, Versace, Canali, Hennes & Mauritz, Acne Jeans and Zara.

 

Investment activity was robust in U.S. textile manufacturing by investor companies from around the globe. China-owned Keer America outlayed $218 million to create 500 new jobs, Canada’s  Gildan Activewear invested $200 million to establish 700 jobs and India’s ShriVallabh Pittie Group put in $70 million to create 250 jobs. 

China last year attracted $2.2 billion in greenfield investments in textiles and apparel, with retail accounting for nearly $1.7 billion; logistics, distribution and transportation $272 million, and manufacturing $255 million, UNCTAD said. Brands and global retailers that unveiled new investments in the country included Hollister, H&M, Marc Jacobs International, Prada, Valentino and Geoxx.

Large new investments were also made in the retail segments in France, worth nearly $1.2 billion; the U.K. $1.1 billion; Hong Kong $615 million; Canada $595 million; Japan $525 million; Italy $434 million, and India $330 million, the report said.

In textile and apparel manufacturing, the biggest outlays were made by Turkish-owned companies. This included a $900 million project in Algeria that will generate 3,000 jobs by Taypa Tekstil, a $700 million investment in Russia creating 3,000 jobs by Nergis Holdings, and a $500 million project in Egypt establishing 1,500 jobs by Eroglu Holdings.  

Overall, the UN report said global FDI rose 9.1 percent to $1.45 trillion in 2013 and projects that global FDI flows will increase 11.5 percent to $1.61 trillion this year. In 2013, the U.S. was the top host economy and attracted FDI inflows of $187.5 billion, up on the previous year’s $160.5 billion, followed by China with $123.9 billion compared to $121 billion in 2012.