MEXICO CITY — Colombian textile and apparel exports are expected to jump 10 percent to around $1.5 billion in 2013 on the back of increased U.S. demand and a free trade agreement with the European Union.
The FTA with the EU will come into force in April, opening up a market of 27 countries for Colombian textile and apparel firms.
Currently, Colombia exports 2 percent of textiles to Europe but hopes that number will increase sharply when the trade deal swings into effect.
Initially, the South American country will target Southern Europe where it sees the biggest potential for a string of fast-growing beachwear and underwear labels.
As part of a first marketing wave, Colombia will tap recession-stricken Spain, Southern France and other markets in the Mediterranean basin. Eventually, Turkey and Israel will also be targeted, according Carlos Eduardo Botero, president of textile export and fashion institute Inexmoda.
“We understand that entering new markets cannot be done from one day to the next but we want to begin crystalizing opportunities in Europe now where many countries are interested in doing business with Colombia,” Botero said during the Colombiatex textiles fair in Medellin, Colombia, last month.
While Spain’s consumption has dropped significantly, Colombian executives hope an eventual recovery will boost the fortunes of leading Colombian beachwear brands such as Agua Bendita and Touche.
As part of its European foray, the Andean nation is also targeting colder European markets such as Germany and the U.K., as well as Nordic countries including Finland and Denmark where it sees good opportunities to sell homewear, leathergoods, denim and casualwear.
Colombia hopes to begin FTA negotiations with Turkey in the first half of 2014 and it’s in early stages to do so with Israel, executives from top export promotion agency Proexport revealed.
Speaking about Peru, Botero said that while both countries signed the FTA with the EU together, each will pursue its own strategies. However, he said Colombia is willing to collaborate with its Andean neighbors to build a stronger textiles and trading bloc to better compete against China and Asia. Industry executives from Mexico and Peru pledged to work on the creation of such a bloc (by initially bolstering existing free-trade relations between Mexico, Peru, Colombia and Chile) during the Intermoda fashion fair in Guadalajara, Mexico, in January.
Mexican textiles lobby Canaive said it will fight to create a “Latam Mart” through which brands from the four countries would be able to sell their products to the international markets. The location for the mart could be Cancun, if Canaive can coax Mexico’s government to scrap plans to create a “Dragon Mart” in Cancun that would allow thousands of Chinese companies to sell their products to Mexico and the U.S. from the Mexican beach resort. Whether the Mexican government will acquiesce to Canaive’s requests or allow both markets to operate in Cancun remains to be seen.
For now, “it’s important for Latin America to unify itself to compete with Asian countries,” Botero said. “Colombia will definitely participate. I don’t know how exactly yet but this [the Latam Mart] could be a very important project for the region.”
According to Ricardo Vallejo, Proexport’s export vice president, 21 percent, 18 percent and 16 percent of Colombian textile exports go to the U.S., Venezuela and Ecuador respectively. Mexico, Peru and markets in Central America are also large importers and efforts are underway to expand in these markets, Vallejo said.
In the U.S. (with which Colombia signed an FTA last May) and Europe, Colombia hopes to carve a niche in the high-end beachwear market through brands such as Agua Bendita, Touche, OndadeMar and Retromarine.
Trademarks such as Leonisa, St. Even, Unico, Punto Blanco, Studio F, and Maaji are also expected to make a strong push in lingerie and underwear.
The same brands targeting the U.S. will also look to grow in Europe, in addition to sportswear and casual wear brands such as Sports World and Rose Pistol, Proexport executives said.
Regarding Asia, Vallejo said Colombia is working to sign an FTA with Japan in the medium term and enter South Korea. He said China will likely be a longer-term project.
Inexmoda’s competitiveness director Luz Adriana Naranjo said Colombia must work hard to research the Asian market before it expands there.
Besides that, she was confident about the textile and apparel industry’s five-year outlook.
“In five years the development of this industry is going to be very positive,” Naranjo enthused. “There has been a lot of investment to develop high-quality and design-oriented brands and this is something that’s expected to continue.”
China’s sourcing woes are also boosting full-package manufacturing opportunities for Colombian brands, especially with U.S. and regional retailers, Naranjo added.
“We are getting a lot of interest from Sears, Macy’s, Nordstrom and Falabella [Chile], all of whom want to being producing their clothes in Colombia,” Naranjo said.