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Industry Still Measuring Disaster Toll

As the death toll mounted from the massive tidal wave that slammed nine Asian countries, the economic impact had just begun to be measured.

NEW YORK — Government officials, along with apparel and textile manufacturers, were struggling to measure the economic impact and the human toll of the most powerful earthquake in 40 years, which propelled tidal waves into countries across South and Southeast Asia and killed at least 22,000 people.

Officials focused on search and rescue efforts a day after the magnitude 9.0 earthquake struck beneath the Indian Ocean off the coast of Indonesia. It generated walls of water that obliterated coastal towns from Indonesia to Somalia on Africa’s east coast.

Manufacturers who source and produce branded and private label intimate apparel and textiles in the region had more questions than answers. Sri Lanka appeared to suffer the worst devastation, accounting for almost half of the deaths in the region. India, Indonesia. Bangladesh, Malaysia, Myanmar, Thailand, the Maldives and Somalia also reported thousands of dead.

“Most of the areas were along the coast,” said Vikram Mishry, political counselor at the Indian embassy in Washington. “Right now, we are counting lives lost and that is rising by the minute as fresh casualties come to light. We just don’t have a dollar figure at the moment.”

South and Southeast Asia are major apparel and textile producing regions. U.S. importers and retailers produce billions of dollars worth of garments in the countries hit hardest by Sunday’s earthquake. Damage to ports, roads, railroads and other modes of transportation and communication may have a major impact on international commerce.

“I would assume there will be some major disruption, but I haven’t gotten anything specific [from the ocean carriers],” said Hubert Wiesenmaier, executive director of the American Import Shippers Association, which negotiates contracts with 10 ocean carriers for 200 small and midsize apparel, textile and footwear importers. “This is not officially a peak period of apparel, but vessels have been full.”

Wiesenmaier said a “comparatively large volume of apparel” is shipped from the Indian subcontinent and southern Asia to the U.S. He said U.S. importers and retailers will closely watch all of the ports, particularly Bombay and Madras.

Many vendors said communications were nonexistent with the exception of sporadic e-mails from contractors and factories, as well as designers and merchandisers who were traveling in the region.

This story first appeared in the December 28, 2004 issue of WWD.  Subscribe Today.

Marcia Leeds, chief executive officer of Richard Leeds International, said her husband, Richard, who is the sleepwear company’s chairman, had just landed in Jakarta as the tsunami hit.

“I was very concerned because I couldn’t reach him right away, but he finally got through on his cell,” Leeds said. “He is in the city of Bandung, on the other end of the island, which was not affected. There’s a lot of manufacturing in Madras, India, and in Sri Lanka, but we don’t manufacture there. I would imagine if you’re a manufacturer in Sri Lanka right now, it’s tough.”

A spokeswoman for Victoria’s Secret, which makes goods in Sri Lanka, said, “At this point, we have not heard of any [manufacturing] disruption.”

Henry Warshaw, chairman and ceo of H. Warshaw & Sons, a textile concern, said, “We sell fabrics to an Australian company in Sri Lanka. Their factory on the coastline was pretty hard hit. But they have a second factory inland. They feel they can build up and increase production, but I don’t know when.”

Fears of aftershocks also worried executives regarding the status of international shipping and the longer-term impact on deliveries.

“The real question will be whether manufacturers will be able to deliver product and if product has been impacted by the water,’’ said Brian Lutt, president of the Asia/Mideast division of American President Lines. “At this stage, ports in Tutiron [India] and Colombo [Sri Lanka] were impacted. But operations will be back to normal in a short…time.”

Todd Demakos, ceo of intimate apparel firm St. Eve, said, “I was freaking out and I was concerned about the people we’ve worked with for many years in Bangladesh. The first thing I did when I heard of the earthquake was e-mail Bangladesh. We were told there were no problems in Chittagong, even though Bangladesh is under sea level. But we had one vessel that had a problem at sea. It hit a rock and got stuck. Luckily, we only had one container on board and it wasn’t damaged.”

Annamaria Golia, chief financial officer of Vandale Industries, said, “Our vessels from Bangladesh are being routed through Chittagong to Singapore and then to the U.S.”

An e-mail sent to Golia on Monday afternoon from American President Lines, said: “Authorities indicated that it is safe to resume operations at the Colombo Port. APL India will be berthing to start cargo operation. Total operation time expected to be 10 hours.”

Seven of the nine countries hit by the tidal waves and floods produce apparel and textiles that combined for $11.12 billion in exports to the U.S. for the year ended Oct. 31 and represent 15.4 percent of the U.S. apparel and textile import market, according to the U.S. Department of Commerce.

Three of the countries — India, Indonesia and Thailand — are among the top 10 apparel and textile suppliers to the U.S. They produce a variety of apparel products, including cotton and man-made fiber bras, cotton and man-made fiber woven tops and cotton and man-made fiber trousers.

India is the sixth-largest supplier of textiles and apparel to the U.S. Imports of the products from India totaled 1.63 billion square meters equivalent and were valued at $3.52 billion for the year ended Oct. 31, according to the Commerce Department. Indonesia is the eighth-largest exporter of textiles and apparel to the U.S., with 1.077 billion SME shipped in the same time period, valued at $1.24 billion.

For Sri Lanka, the impact on its textile and apparel manufacturing sector, which accounted for 63 percent of the country’s $73.49 billion Gross Domestic Product in 2003, according to the CIA World FactBook, could be among the biggest economic casualties.