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North Africa Gains Traction In Textile Market

Denim has continued to develop to Europe's south, political turmoil notwithstanding.

MILAN — Though the rivalry between Italian denim companies and their Turkish counterparts is well known, competition from North Africa — just across the Mediterranean Sea — is not to be underestimated.

This story first appeared in the October 30, 2013 issue of WWD.  Subscribe Today.

For key players in the denim and textile industries — Morocco, Tunisia and Egypt — working principally in tandem with companies in Spain, France and Italy, respectively — proximity to European shores is a major advantage. So is the swift progress many African firms have made despite recent political instability.

According to the European Commission’s statistics branch Eurostat, last year denim fabric imports by the EU-27 countries totaled 17.8 million euros, or $22.9 million at average exchange, from Morocco; 8.8 million euros, or $11.3 million, from Tunisia, and 4.8 million euros, or $6.2 million, from Egypt. Monthly averages through July of this year are 1.1 million euros, or $1.4 million at current exchange, from Morocco; 699,000 euros, or $963,000, from Tunisia, and 355,000 euros, or $489,000, from Egypt.

Alberto Candiani, global manager at Tessitura di Robecchetto Candiani SpA, a denim fabric production company outside Milan that prides itself on Italian craftsmanship, said numerous European brands had moved production to North Africa over the last decade. With a handful of exceptions, he said product quality there was “lower on average” than in Italy. Still, he acknowledged “swift progress in a short amount of time, and the improvements are visible every year.”

Ebru Ozaydin, marketing manager for Turkish denim company Orta Anadolu, said, “We have been active in this region for a long time, and for the last three years we have had an office in Tunisia. This is actually a sign of our belief in this region. We have also been working for a long time with Moroccan manufacturers who mostly produce for retail brands.”

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Marco Lucietti, global marketing manager at Isko, another Turkish denim powerhouse, said North African garment makers were no longer competitive solely on price and have begun to reveal other strengths.

“Today, thanks to a transfer of technology from Italian and Turkish companies, they’re more proactive,” Lucietti said. “At one time, [they] were just the executors of what brands asked for, whereas today the message has changed and they themselves make design proposals.”

Rachid Maliki, managing director at Blue Fingers, a Moroccan textile and apparel company specializing in denim and based in Casablanca’s eastern industrial zone, said about half of the firm’s estimated 800 employees are directly involved in apparel production. Blue Fingers offers a full range of services, with its own development center and laundering facility. Its client roster has grown to include Esprit, Biba, Lacoste, Paul & Joe, Pepe Jeans and Rockstar. “We make new collections each month, which we show our clients,” Maliki said. “They can choose to use a particular style or treatment exclusively.…Sometimes they pick a particular cloth or washing style and provide us with the exact silhouette they want.”

Maliki noted that Morocco “has a long-standing relationship with textiles, thanks to its cotton industry and connection to France,” which in 1912 established a protectorate there that lasted until the country regained full independence in 1956. An estimated 32 percent of the population speaks French, according to a recent International Francophone Organization report. “Another advantage of producing in Morocco is its proximity to Europe — with the economic crisis [there], many clients do not want to risk overstock,” Maliki said. “If you want to test a product with us, turnaround is fast and the Customs formalities will only take about a week.”

Morocco is part of the Euro-Mediterranean Partnership, or Euromed, which gives it duty-free access to the European Union.

Maliki cited Tunisia as an important partner and competitor for Morocco. “We work a lot with cloth suppliers [there],” he said.

Tunisia, too, has enduring ties with France: In the late 19th century, the French army established a protectorate there, which lasted until the African country asserted its independence in 1956. According to the International Francophone Organization report, more than 60 percent of the Tunisian population speaks French today, an advantage in many European business dealings.

Christian Rollandin, commercial director at Denim Authority, a denim company in Ras Jebel, Tunisia, specializing in finished products, said the firm handles everything from cutting and sewing, design research and pattern development to washing and dyeing, buying the bulk of its thread and cloth from Italy and Turkey. Denim Authority opened in 2010 when a 1973 Lee Cooper factory shut down and four former employees became owners, shifting the manufacturing focus from mass market to more sophisticated denim. The current client roster includes Tommy Hilfiger, Dutch brand Scotch & Soda and Sweden’s Nudie Jeans.

Rollandin emphasized Denim Authority’s multiple certifications for quality and employee safety — SA 8000, ISO 9001 and OHSAS 18001 — and said the company’s clients were “very insistent on standards.” With a staff of 2,200, the firm’s per-week production capacity amounts to 50,000 pieces.

“Tunisia has a good quality-service relationship,” he said. “It’s sort of historical. A number of Italian brands were the first to offshore production, and many of them came to Tunisia.

Morocco attracted the big groups focused on the mass market.…Tunisia offers quality and know-how in terms of cloth treatment and washing.”

Bahaa Raafat, chairman of the Egyptian Textile Development Association, said Egypt’s competitive advantages lie in its top-quality cotton, comparatively low labor costs and nearness to Europe: Thanks to the 2004 Association Agreement, products can clear Customs and reach the EU in six days, compared with about 24 days if they come from China. Although finished denim is not a major industry in Egypt, the country’s public sector counts 25 textile mills and about 2,000 private companies in the ready-to-wear business. The U.S. and Europe account for almost all Egyptian textile exports, which represent 24 percent of total Egyptian nonpetroleum exports, said Raafat.

Asked if the wave of demonstrations and period of political unrest in North Africa over the past several years had impacted business, Maliki said Morocco’s stable economy and political scene were an advantage to producing in the region.

“We did not suffer at all during the Arab Spring,” he said. “There were a few minor demonstrations, but those passed and there was no effect on our industry.”

In Tunisia, things were less rosy. “Last year some clients were hesitant — they didn’t want to put all their eggs in one basket with Tunisia,” Rollandin noted. “Now things have stabilized.” He added that reports today of demonstrations “make it seem like that’s all that’s happening [here], which isn’t true. It scares our clients, and also has an effect on taxis, hotels, restaurants, the whole tourism industry. People are afraid to come here. Morocco was largely spared this.”

In Egypt, “the political regime, not the unrest, affected the general economic situation greatly and textiles in particular,” said Raafat, adding that many foreign customers had canceled orders believing “that we had houses on fire and people fighting while in fact, the way of life was normal” and people continued to work.

A spokesman for the Denim by Première Vision exhibition in Paris said there had been no noticeable changes in the number of North African exhibitors in the past several years. He also said that some Tunisian exhibitors had seen clients withdraw temporarily from producing in the region, only to return once things had calmed down.

“Certainly the difficult sociopolitical environment and the general lack of stability scared away some brands, but the greatest manufacturing difficulties were tied to packaging and laundering rather than to textile plants,” said Candiani. “Considering the duration of this instability, I must admit that many [North African] companies continued operating very effectively, guaranteeing service, perhaps because many of them are located outside of large cities and the centers of ongoing turmoil.”