SBA Management Consultancy

Explore Business Opportunities in Egypt

2024-03-04T05:51:17Z

As SBA Consulting we are committed to being your trusted partner in your journey towards becoming a global brand.

We would like to invite you to explore business opportunities in Egypt, whether it is moving a certain part of your production capacity or investing in new facilities. Through our 18+ years of experience and local prominent partners within Egypt, we are able to assist in strategy development, market expansion, feasibility studies and more.

Please contact us for more information.

Recycling Used Textiles into Non-Textile Industries

2023-05-18T06:48:30Z

Collecting and recycling second hand clothing is increasing worldwide in line with increasing awareness and a push from relevant legislations, to decrease waste and to efficiently use natural resources.

Circular solutions where textiles are recycled into textiles are imperative, however they have limitations due to the nature of clothing. Blended materials or multicolored garments sometimes limit the mechanical or chemical recycling of textiles with current technologies. With R&D projects carried out around the world, recycling into non-textile industries constitutes a practical alternative solution.

We have analysed some companies and their solutions for recycling used textiles into insulation, filling materials and more:

Le Relais – Metisse® Metisse® was developed by Le Relais in 2007 to use post-consumer cotton textiles for acoustic and thermal insulation. Metisse Eco baffle sound insulation provides 95% sound absorption and is ideal for meeting rooms, schools, open spaces and more.

.PLANQ Planq is a Dutch sustainable furniture brand, that works with innovative materials such as recycled textiles and biobased resources. Their brand Rezign® is a recycled veneer made of textile residues such as old denim, army clothing, suits, and biobased fibers such as flax, hemp and jute coffee bags, that can be used in furniture to reflect contemporary design and environmental consciousness.

Isocoton Isover is an insulation company owned by Saint Gobain, France, that focuses on sustainable solutions. Isover has created Isocoton which is a high-performance, biobased insulation material made from locally recycled textiles.

FabBRICK FabBRICK is a French company that turns companies’ textile wastes such as production scraps, work clothes, prototypes, defective products etc and uses these to produce bricks of different shapes and colors, furniture or wall coverings. Their technology can be adapted to all types of textiles and it was patented in 2019.

Kvadrat really is a Danish company upcycling textile waste into premium quality engineered materials such as textile tabletop, textile board and textile felt for interior and industrial scale products.

SK-Tex SK-Tex is a textile recycling company from Slovakia, active for 23 years and that processes 3,500 tons of textile waste annualy. The company recycles second hand clothing into insulation materials for automotive, furniture and construction businesses.

Manifattura Maiano The Italian company processes textile fibers to produce felts, wadding and insulation for furniture, footwear, insulation, automotive and more. 70% of the companies raw materials are from recycled materials

Werner International New Twist – Recycling of Second-hand Clothes

2022-03-22T07:19:50Z

There are different methods of recycling and regenerating textiles from textile waste. This process is however strongly influenced by factors such as high prices, volumes and availability of virgin raw materials. For this reason, this line of work has not been fully integrated into the overall textile supply chain and it still has challenges for sustainable and economically feasible operations.

Processes such as trimming industrial and post-consumer waste, pulping cotton and linen, and producing non-woven materials have existed for centuries. Recently, there has been great interest in the growth of the reuse and recycling of textile waste, further developing the recycling processes, due to a greater awareness of the impacts of the current supply chain of fashion industry.

There are many research and development projects focusing on chemical recycling methods and machinery. Below are some examples:

Infinited Fiber

The Finnish company Infinited Fiber (a VTT Technical Research Centre of Finland spin-out) has revealed that it is recycling cotton into a novel cellulose carbonate fiber. The cellulose is modified before the dissolution step by the addition of urea. Heat is applied to break the urea down to form isocyanic acid, which the hydroxyl groups on the cellulose react with to form carbamates. This is then dissolved, and the resulting pulp is regenerated into fibers using the viscose production process.

The industrial process developed make possible to use the old viscose production plants, but without the negative aspects for the environment such as the use of carbon disulfide. The consistency and strength of the fibers obtained are comparable with those of virgin cotton. Its fiber has been tested by global brands including H&M and VF Corporation.

Blend Re:wind – Mistra Future Fashion

Blend Re:wind is a new process (developed only at laboratory scale) to recover and recycle cotton and polyester. The technology is the result of a Swedish research program called Mistra Future Fashion supported by The Chalmers University of Technology in Gothenburg.

The technology is based on an innovative chemical recycling process that produces new viscose filaments starting from polyester and cotton fibers. The separation of the fibers takes place by alkaline hydrolysis with the addition of a catalyst which avoids the degradation effect of the polyester. The process generates three circular flows of outgoing products: cotton pulp extracted can be regenerated in high quality viscose, polyester filaments are transformed into two new “pure” monomers that can be rebuilt in new and reinforced fiber. The filaments have the same quality as those obtained in a standard way used in the production of existing viscose.

The new recycling technique was accepted as a circular solution for both materials, as well as a development key for future global textile recovery systems, to allow the circularity of fashion and close the circuit for textile production.

PTF-COLDPLAST – Next Technology Tecnotessile

PTF-COLDPLAST is a technology, developed by Next Technology Tecnotessile, that allows, thanks to a non-invasive process, to separate thermoplastic fibers from other fibers, in other words it is possible to separate polyester, nylon, elastomers from natural or artificial fibers (wool, cottons, viscose, hemp and others). The advantage of this new technology is that thermoplastic materials are recovered and supplied directly in the form of granules that can be easily re-used in industrial molding processes. Natural or artificial fibers, still in the same form of the input waste stream, however must be processed mechanically before obtaining a fiber that can be used in new textile processing cycles.

PTF technology can be defined as a “thermal process in fluid”, which has the purpose of separating synthetic textile materials by type with a high degree of purity (Nylon 6 66 – Polyester PET PBT, acrylics – polyurethane elastomers – Polyolefins in general from fibers artificial (Rayon / viscose) and / or natural (wool, cotton, linen and others). Products obtainable at the end of the process are:

-plastic pellets (granule for molding);

-flakes of artificial and natural fibers for further mechanical recycling process

DEMETO – GR3N

Gr3n is an innovative technological company, which has developed a chemical recycling process for some types of plastics, in particular for PET (mainly used for the production of packaging: beverage bottles and food trays) and for polyester (the most used fiber in the world for the production of fabrics).

The technology developed by Gr3n is called DEMETO (Depolymerization by MicrowavE TechnolOgy) and is based on the application of microwaves to the depolymerization process, functioning as a catalytic agent and improving the efficiency of the reaction. This makes the whole process sustainable not only from an environmental point of view, but also from an economic one. The core of technology is DEMETO (DEpolymerization by MicrowavE TechnolOgy), a patented technology, able to depolymerise, in continuously, a wide range of PET manufactures (e.g. color bottles, food containers, polyester textile). DEMETO technology reduces the reaction time from 180 to 10 minutes, making easier the industrial implementation.

The technology developed by gr3n is self-sufficient from the point of view of the chemical reagents used for the process, which are recycled on site, without any production of hazardous waste. The process requires only electricity and water for its operation, in addition of course to the plastic waste to be treated.

Econyl – AQUAFIL

Nylon is more difficult to recycle, because, it needs a large input of the same kind of nylon for it to be feasible. However, Aquafil, a leading company in the production of Nylon 6, has developed the Econyl Regeneration System, which produces Nylon 6 from nylon waste such as fishing nets and carpet fibres. The ECONYL® yarn can be regenerated infinitely without any loss in quality, using the following process:

-fishing nets and other nylon waste (e.g. carpets) is collected and sorted;

-a cleaning and shredding process creates small pieces of nylon;

-depolymerization occurs through a series of chemical reactions that convert nylon pieces into nylon monomers;

-Econyl® is created by polymerizing the monomers back into nylon.

Re:newcell

Founded in 2012, Re:newcell is a Swedish company that recycles garments using a chemical process. The process, initially developed by the Royal Institute of Technology in Stockholm, is developed as follows:

-collection of pre- and post-consumer textiles made out of cotton or cellulosic fibers from textile collecting and sorting companies, retailers and textile manufacturers.

-textile waste chopping to equal size, de-dye and de-finish the textiles

-pre-processed textile dissolution to molecular level and separation of cellulose from other materials such as polyester;

-cellulose drying: the dried cellulose is called dissolving pulp, of which viscose and lyocell products can be made.

Worn Again Technologies

Worn Again Technologies, a London based technology licensing company, is developing unique polymer recycling processes that will be able to recycle used polyester and cotton clothing. To recycle both the polyester and the cotton components of this blend, the recycling process must first separate them. This isn’t easy mechanically but can be achieved chemically by playing on the different physical properties of the two fibers.

The first steps in Worn Again Technologies’ process are similar to those developed for cotton-only chemical recycling: non-woven materials removal and de-dyeing. Polyester fibers and other polymers, such polyurethane and cellulose acetate, are also washed out during this stage.

All that remains after washing is solvent saturated pure polycotton. Subsequently, this is heated at high temperature, the polyester dissolves and goes into solution. Cotton and polyester are then separated by filtration.

Subsequently, they separate the solvent from the polymer, restore the polymer in the correct chemical structure for re-use in the textile market. The process output is exactly the same as a virgin PET pellet that would come out of a polymerization plant.

The solid cotton fibers are then dissolved using an ionic liquid to produce a pulp, equivalent to a wood pulp, which can be used as a raw material for the spinning processes of existing cellulosic fibers.

Werner International New Twist – Second-hand Clothes Shops

2022-03-14T15:25:43Z

The upcoming and trendy way of selling and buying second-hand items are through e-commerce sites. There are many rising companies around the world that are operating in this industry, positioning themselves either on the luxury or mass market segments.

An interesting example is Thredup.com, which is an online second-hand shopping site operating in the USA, with many well-known brands sold for up to 90% discounted rates. Authenticity and the shape of the product are checked and audited by the company, and special designers and stylists are curating the collections for the consumers to enjoy shopping fashionable items for great prices.

According to the Thredup 2021 Resale Report, conducted by GlobalData, the total second-hand apparel market is expected to double within the next 5 years, reaching 77 billion USD. This major growth is expected to be driven by resales as it is becoming easier for the consumers to sell their second-hand items online.

From 2017 to 2019, the resale market has grown 21 times faster than retail apparel market. Although there has been a stagnation period in 2020, the figures of 2021 clearly show the sharp increase in the resale of second-hand items. This trend is expected to follow in the upcoming years to record a growth 11 times faster than retail clothing sector by 2025.

On the consumer side, the company is predicting that the sales of second-hand clothes will increase, as the “Instagram generation” is looking for both new looks and more sustainable products. There are also other factors such as affordability and being able to choose from a variety of products and to be able to re-sell and re-buy without creating huge masses of garbage.

Especially the millennials and Gen-Z are expected to be the leading customers of re-sold items of apparel, footwear and accessories as they assess their purchases with a different mindset. It is estimated that Gen Z is 165% more likely than Boomers to consider the value of resale value of clothing before buying it.

The post-pandemic consumer is also adopting a similar mindset: to save money on new purchases, to choose more sustainable products and to reduce the waste. Sustainability has become more of a priority and an increasing number of consumers are more conscious about the waste generated as a result of consumer habits.

According to an article published in Forbes magazine in 2019[1], the major 5 resale platforms in Europe are Depop from (UK), Edit Secondhand (UK), Rebelle (Germany), Verstiaire Collective (France), and Vinted (Lithuania). The online resale platforms have started operating in early 2000s and the number of platforms and the number of visitors is booming in the past decade.

Sweden based Sellpy is an online platform selling second-hand clothing, promoting the idea of living circular, and reducing the impact of our shopping behaviors by making second-hand clothing shopping easier and more accessible. The Fitzroy from Canada is another rental service mainly for wedding and party dresses. Gwynnie Bee Inc. is offering rental services for a wider selection of products for every-day use.

Rent the Runway, from the USA, is a similar platform for renting medium to high-end clothing, established in 2009 and is considered one of the pioneers in this industry. The company is focusing on the impact of consumer purchases that is reflected on the environment and aiming to disrupt the industry by renting second-hand clothes.

USA based The Real Real is a resale company focused on the circulation of luxury items, they carry high-end apparel and jewelry brands such as Gucci, Chanel, Hermès, Louis Vuitton, Cartier, Tiffany and Co., etc. According to their calculations, since the founding of the company through September 2021, consignment through The RealReal has kept 21+ million luxury items in circulation, while saving 1.07 billion liters of water and 21,801 metric tons of carbon. The company has generated a total revenue of approximately 300 million USD in 2020, with over 3,000 employees in 2021.

In addition to the online platforms and retail stores that are specifically focusing on the resale of second-hand clothing, more and more brands such as Banana Republic, Urban Outfitters, Levi’s, Ann Taylor, Reebok, Bloomingdale’s have also launched their rental programs, whether it is directly operated by their own company or outsourced to third parties to handle the dry-cleaning, logistics, packaging, etc.

It is estimated that the business of rental services of clothing and accessories are valued at 1 billion USD, and it is expected to reach 2.5 billion USD by 2023, according to GlobalData. When combined with resale, it will account for 13% of the total 360 billion USD clothing market in the USA within the decade, up from 7.3% today[2].

Adidas has introduced the Take Back programs in its various stores worldwide (first one in Brazil in 2012) where customers can bring their Adidas footwear or sportswear to the store, and these goods will then be sent to I:CO for sorting, with the aim of re-sale or recycle. In 2000, Adidas was listed in the Dow Jones Sustainability Indices, and since 2001 the company has been preparing an annual sustainability report. In 2015, Adidas showcased an innovative footwear concept, where the footwear was produced from ocean plastic, by 2018 Adidas has produced 5 million pairs, and by 2019 the company has produced 11 million pairs of shoes with recycled ocean plastic.

[1] https://www.forbes.com/sites/victoriapavlova/2019/08/31/ethical-fashion-online-5-clothing-resale-platforms-making-waves-in-europe/#8f1410d2da37

[2]https://www.foxbusiness.com/markets/bloomingdales-banana-republic-urban-outfitters-clothing-rentals

Werner International New Twist – International Trade of Second-Hand Clothes

2021-12-07T08:59:24Z

The adventures of clothing – from second-hand clothes to recycling

History

Secondhand clothing collection and reuse has a long history. In mid and late 19^th century, London, Paris and Netherlands were centers for trading of secondhand clothes and the sales were mostly to Europe or Americas. The industry has fluctuated over the 20^th century with the evolving economic and political milestones. The end of World War I and II resulted in an oversupply of army clothing which was exported to Africa. Collection of second-hand clothes and small sized exports have long been present but the supply to the collectors grew the most in the 1980s for disaster relief to Africa and other regions with the increase in the humanitarian aid concept. Red Cross and other organizations donated clothes after wars or natural disasters. In the following years, the fall of the Berlin Wall and opening up of the old communist countries brought about a new wave of demand from Eastern Europe for second hand clothing. With growing globalization and less limitations on the world trade the supply and demand further increased to become a 4 billion USD industry globally.

Charitable organizations have been taking part in this industry since the end of the 19^th century in Europe and US, however, their share in the industry increased in the 1950s. The charity shops became very active in the 1960s and 1970s and were joined later by other second-hand shops and thrift stores in the 1980s. Towards the end of the 20^th century, with the growing consumption of clothing, charities started receiving more supply than they were able to manage so they increased exports and started cooperating more and more with corporations. It is an interesting industry as the collection process is still dominated by the charities and some recycling companies and has economic, social, and environmental aspects to consider.

International Trade of Second-hand Clothes

Giving used clothes a second life and keeping them out of the waste stream is gaining more and more attention and focus in the world. Some countries with higher per capita spending on textiles and apparel are disposing of secondhand clothing in growing amounts and are trying to come up with solutions to stop the environmental affects and the burden on the landfills while other countries with lower per capita spendable income or less local investment in textiles are interested in purchasing secondhand clothes. At the same time, there are textile producer countries that are investing heavily in recycling and need the secondhand clothes or trims to be used as raw material.

The world exports of secondhand clothes totaled 3.9 billion USD as of 2020 with the main exporting markets; US, China, UK, Germany and South Korea making up almost half of the total amount. The importing markets are more fragmented, African imports make up 33.5% (mainly Ghana, Kenya, Tanzania, Cameroon, Congo), European imports 27.7% (mainly Ukraine, Netherlands, Russia and Poland), Asian imports 23.1% (mainly Pakistan, UAE, India and Malaysia), and American imports 9.8% (Guatemala, Nicaragua, Honduras, El Salvador and Canada).

World Exports of Second-hand Clothes

In 2020, The USA was the largest exporter with a total of 622 thousand tons exported, amounting to 613 million USD. The USA exports constituted more than 15% of total world exports in 2020.

Source: ITC calculations based on UN COMTRADE and ITC statistics

In 2020, China was the second largest exporter with 382 million USD followed by UK, Germany and South Korea with 320 million USD, 293 million USD, 289 million USD, total exports respectively, making up almost 50% of the total world exports. Pakistan, Poland, Netherlands, Belgium and Italy follow the lead with 3-5% market shares each. Export prices reflect the quality, usage amount and the careful sorting of the second hand clothes and show differences accordingly.

World Imports of Second-hand Clothes

While the origins of exports of second hand clothes were concentrated at certain geographies, the final destinations are diversified across many countries in the world; 35 countries make up 73% of total imports.

As of 2020 Pakistan is the largest importer of second hand clothes with a share of almost 5%. Pakistan imports totaled 483 thousand tons and 204 million USD in 2020. It is followed by Ghana, Ukraine and UAE with imports of 181 million USD, 157 million USD and 146 million USD and total shares of 4.8% 4.1% and 3.8%, respectively.

Source: ITC calculations based on UN COMTRADE and ITC statistics

At the import destinations around the world, the second-hand clothes are resold through intermediaries for reuse or for recycling.

In the following articles, we will be exploring more on these topics. For more on Werner International New Twist editions please visit https://wernerinternational.com/

Werner International New Twist – How to minimize waste in the fashion industry

2021-12-06T06:29:29Z

In today’s world, both producers and consumers are aiming to minimize waste from clothing and fashion, and there is a lot of work to be done. While producers are exploring new ways to include more recycled fiber content, make clothes more durable and design for reuse or recycling, consumers are becoming more aware, want to give used clothes a second life and keep them out of the waste stream.

Werner International is working with clients worldwide to assist in their strategies to design, produce and sell more environmentally friendly and sustainable collections. In the upcoming New Twist edition, we explore international trade of second hand clothes, resale trends through second hand stores and innovations and trends in recycling.

WERNER INTERNATIONAL INC.

Mexico – Business and Trade Opportunities

2021-02-12T07:12:54Z

Istanbul Chamber of Industry organized another successful event, on the business and investment opportunities in Mexico. Through this event we had the opportunity to listen to the experiences of Totomak Automotive and Kros Automotive in Mexico. The presentations and information shared by the Board Member of ISO, Consul General of Mexico in Istanbul, Turkish Commercial Attaché in Mexico and the President of DEIK Turkey-Mexico Business Council were very fruitful and insightful.

Mexico, being a part of the United States-Mexico-Canada Agreement (USMCA), which entered into force on July 1, 2020 replacing the NAFTA agreement, has close trade relations with the USA and Canada. Many US and European brands and companies have production facilities for spare-parts or final products in Mexico.

There is currently no free trade agreement between Turkey and Mexico however both countries are working on building a strong base for such an agreement. Currently import tax is between 10-25% for finished goods and 0-10% for semi-finished goods.

The geographical distance and language barriers can create a challenging business environment. Nevertheless, introduction of direct flights by Turkish Airlines has shortened the travel time. At the same time cultural similarities make it easier to do business between the two countries as both have a culture of open and friendly communication and even similar cuisines.

All in all, it was advised that finding a local partner or consultant is crucial when developing a new business in Mexico, whether it is a direct investment and setting-up of a factory, or whether it is setting up a sales channel for semi-finished or finished products. Visiting fairs is always a good idea as well.

For companies thinking of a direct investment in Mexico, it was advised to work with a local head-hunter company or a local consultant to select the most qualified and suitable personnel. It is even better if the management team is selected prior to the selection of the remaining personnel, with whom they can handle all hiring.

There are various incentives for labor, training and technological infrastructure costs with different terms and conditions per state. Inflation has been recorded between 3-5% in the last years while the minimum wage has seen a large hike in the last two years with 16% in 2019 and 20% in 2020. Once a proper training program is implemented, Mexican employees are eager workers, and they manage the operations well.

Consumable materials are not easily accessible, and the pricing is not competitive, it was mentioned that the cost of purchasing in Mexico is sometimes 2-3 more than in Turkey. Turkish companies operating in Mexico advised companies to keep higher stocks of their spare parts due to higher local costs and the longer delivery times.

E-commerce is rapidly expanding in Mexico, parallel to the global trend in the world after the pandemic. According to Statista the e-commerce market was 10.6 million USD in 2018, 14.3 million USD in 2019 and 18.8 million USD in 2020 largely composed of electronics and media and fashion. E-commerce is largely dominated by marketplace providers such as Mercado Libre, Amazon and Walmart. Other significant players include Aliexpress, Asos, Soriana and Sears. One key factor to consider is that payment terms and conditions are different compared to Turkey. In Mexico credit card ownership rates are low.

——-

On a special note, we would like to also mention our personal experiences in Mexico and attest to its beauty and potential. SBA Consulting co-founder and partner Ful has studied in Morelia Michoacan, Mexico, as a Rotary Exchange Student, learning Spanish and becoming a fluent speaker within months due to the warm-hearted Mexican friends and family, and graduating from high school. Ful still has very close ties with family and friends in Mexico.

Our co-founder and partner Nur was a key-note speaker at the 38th Textile Symposium organized by Canaintex in Mexico, representing Werner International, where she presented a speech on Public Policies and spoke about Incentive Programs applied by various countries towards the textile industries.

In addition to the business potential it provides with its high population and ease of access to both North and South American countries, it is a beautiful country with warm-hearted people, amazing food and remarkable sites to be visited. For this reason we are always delighted to work on new projects related to Mexico.

Singapore – Business and Investment Opportunities

2021-01-27T09:27:53Z

We had the opportunity to listen to the business experiences of Alvimedica, Atlas Marine Valves, Altıparmak Gıda and Rapsodo Spor Teknolojileri in Singapore at the conference organized by Istanbul Sanayi Odası in Turkey. The presentations and information shared by the Turkish Ambassador in Singapore, Singapore Ambassador in Ankara, Turkish Commercial Attache in Singapore and the Region Director of Singapore Enterprise were very fruitful and insightful.

Singapore, located at the heart of Asia, with easy access to sea and air transportation and having free trade agreements with more than 30 countries around the world, is one of the fastest growing hubs in the region. Singapore ranks high in ease of doing business, IP rights protection, transparency in regulations and has a stable economy and lower tax rates. Singapore provides a well educated and trained white collar employee base while the cost of production, service and employment are higher than world averages, and companies need to keep in mind cultural differences. During the seminar it was mentioned that Singapore is a global leader in key commodity sectors, currently being the 4th largest trading hub for energy and 2nd largest trading hub in metals and agriculture.

Singapore has a free trade agreement with Turkey since 2017 and the country poses great opportunities for Turkish companies both looking to invest in Singapore and for aiming to grow their business in the ASEAN region and the close by geographies. Currently, the top exports from Turkey to Singapore are iron and steel bars/rods, petroleum oils, articles of jewelry and precious metals, while the top imports from Singapore to Turkey are pharmaceuticals, turbo jets and propeller parts, aluminium and electronic integrated circuits.

The 10 ASEAN countries are made up of a population of 647 million and a total GDP of more than 3 trillion USD. Singapore is also a part of RCEP (Regional Comprehensive Economic Partnership) which was signed in November 2020 and is the world’s largest trading bloc. RCEP was signed between ASEAN states, China, South Korea, Japan, Australia and New Zealand with members making up a third of world’s population and almost 30% of global GDP.

SBA Consulting 2019 Highlights

2019-12-27T09:34:09Z

With warmest appreciation we extend our best wishes for a prosperous new year!

Check out our video clip on 2019 Highlights

Werner International – New Twist 2019

2019-05-20T07:39:37Z

MESSAGE FROM THE PRESIDENT of WERNER INTERNATIONAL,
Mr. CONSTANTINE RAPTIS

Dear colleagues and friends,

Welcome to our latest newsletter, the NewTwist, all of which we hope will keep you informed on our latest news and provide you with vital information for your textile and apparel businesses. For over 80 years, Werner International has provided professional management consulting services to well over 5,500 organizations in more than 75 countries. We are the undisputed leader of management consulting practices that specialize solely in the textile and fashion industries – our commitment to our clients is unrivaled.

I would like to begin by making the following exciting announcement – Werner has signed an agreement in Egypt with CTIHC (Cotton, Textile Industries Holding Co.) This contract has been signed with the Chairman of Egypt Textile Holding Company, Dr. Ahmed Mustafa, and in the presence of HE Dr. Hesham Tawfik, Minister of Public Enterprise in Egypt.

Through this new agreement, Werner International will be responsible for the project management of the foreseen 1.1 Billion USD investment which includes planning, monitoring and evaluation of the project implementation over a two-year period.

Werner International will support the Holding Company with technical assistance in manufacturing, financial, information technology, sales, product development and human resource development through introducing the Werner training methods and applying the Werner A.M.P.S (Analytical Method and Productivity System).

Speaking of our A.M.P.S training methods, training is the biggest and most important requirement for the future. A perfectly trained operator is an assurance for the consistency of the quality and the overall productivity (hence the financial results) of the plant. Werner is the only firm in the world that has developed and perfected the A.M.P.S which has proven to be the best of any training methods. In fact, we are proud to say that our A.M.P.S system has been successfully installed in over 700 mills worldwide. We are currently applying our systems within several large companies in India, including Ramco and JayaShree.

The understanding of the complexity and the organization of a modern textile unit equipped with state-of-the-art technology, is crucial for the competitiveness of this challenging industry. Werner International is the ideal partner to provide detailed feasibility studies, elaborated by international consultants with many years of experience in areas going from ginning, spinning, weaving, knitting, dyeing, finishing, printing, making up, IT management, HR management, Financial, Marketing and Strategy.

Werner International has the organization, competence and capacity to provide first-rate feasibility studies, including conception of production unit and ancillary services, detailed layouts, organizational and manpower requirements, product mix selection and marketing development, quality control systems, IT management and business plan. Werner is currently in the process of assisting several large confidential companies with this type of assistance. Werner also has successfully provided Marketing and Strategic assistance to such long-term clients as Miroglio and Monti.

I am pleased to announce the following promotions within Werner International:

Mrs. Beth Govoni Marshall: Executive Vice President
Mr. Lieven Verraest: Vice President, as well as Director of D&F Department
Mr. Stylianos Moraitis: Director of Spinning Department
Mr. Ivano Cazzaniga: Director of Weaving Department
Mr. Joao Barros: Director of Knitting and Making Up Department
Mr. Nicola Mentore: Director of Marketing & Strategy
Mr. Mahesh Ranpariya: Area Manager, India

I thank you for our past and future collaborations and look forward to the years ahead, changing the face of the textile and apparel industries.

With my best regards,

Constantine Raptis
President

~ ~ ~ ~ ~

INDUSTRY 4.0

During the end of the 18th century, manufacturing has undergone a transition through industrialization with the introduction of water and steam powered machinery. We now call this Industry 1.0. It was followed by the introduction of electrically powered mass production machinery in the late 19th Century, which would be referred to as Industry 2.0.

As technology developed and the needs of the consumers evolved, Industry 3.0 was introduced in the late 1970s through more complex usage of electronics and information technology and systems to further automate the production process. In this way, companies were able to meet the increasing demands of the consumers for accurate, high-quality, wide range of products in a speedy way.

For some years now, we are experiencing the transition towards Industry 4.0 where cyber systems, enhanced software, mechatronics and automation are the key elements in the entire production life cycle.

When we look at the various processes involved in the textile and fashion industry, the effects of Industry 4.0 can be seen starting at product design through the usage of CAD systems, automated machinery in all aspects of production and RFID tracking systems in logistics, warehousing and retailing.

In the textile and ready-to-wear industry, we see many applications all throughout the production processes, such as virtual reality technologies used in product design and communication between parties, 3D printing in prototype and sample production to optimize time used, digital color management and digital printing for flexibility and speedy response, robotic aids to transport goods within the production facility, etc.

On the retail and consumer side, with the aid of digital platforms and data centers, companies are able to collect data, and segment and analyze their customers in a more effective way and present product and services that match their requirements, thus gaining a competitive advantage over their competitors.

Our industry is already dominated with the fast-fashion cycle and production companies are looking into ways of improving their speed to market as well as attaining a specific level of quality. Through the automation of various processes and the usage of artificial intelligence these targets are more attainable and come at a lower cost. By using these technologies, companies can reduce the amount of waste and defects occurred during production and increase customer satisfaction.

It is evident that with each development and transition the complexity increases incrementally. Therefore, it is not possible to talk about a complete transition all at once. Companies need to analyze their current operations and identify areas for improvement and development. They also need to take a close look at their organizational structure and make gradual cultural changes and shift towards a more technology-based one.

In today’s world, the needs and expectations of the consumer, their request for speedy service and product, and simpler and user-friendly access to information and product characteristics are increasing. In order to be able to keep up with these increasing demands, companies need to focus their attention on constant improvement of their operations.

But does this mean that every company has to digitalize all of their operations? Or shall they adopt a phase by phase approach to transition into Industry 4.0?

This is a question that needs to be answered separately by each company. What is concrete is that each company has to think about this transition and has to create a Road Map for this transition if they want to keep up with the everchanging technology and its implications.

~ ~ ~ ~ ~

E-COMMERCE AND FASHION

E-commerce is an essential part of today’s retail market. Globalization and digital advancements have paved the way and global consumer trends have shaped the e-commerce market from a small segment to a vital part of any brand’s success.

Fashion industry makes up the largest segment of e-commerce revenues worldwide. The industry has helped shape e-commerce sector as a whole and in turn also has shaped itself according to the ever-changing needs of e-commerce.

Increasing e-commerce revenues and fashion leading the way

The share of e-commerce is steadily growing in total retail revenues; according to eMarketer Report published in Jan. 2018 e-commerce sales made up 10.2% of total retail sales worldwide in 2017, in contrast to 8.6% in 2016.

In 2017 e-commerce revenues were recorded at 1,560,787 million USD and Fashion segment made up almost 29% of the total. According to Statista, the total market is expected to grow with a CAGR of 8.9% from 2018 to 2023. Fashion segment is expected to generate revenues of 524,871 million USD in 2018 and grow faster than the total market with a CAGR of 9.8% from 2018 to 2023.

According to Statista, China has the largest e-commerce market with 740 billion USD, followed by the US (560 billion USD), UK (93 billion USD), Japan (87 billion USD) and Germany (76 billion USD).

US is one of the biggest e-commerce markets in fashion and it is expected to grow further in the near future. According to Internet Retailer Online Apparel Report 2018, in the US online apparel sales made up 27% of total apparel sales and 266 of the top 1000 online retailers were sole apparel retailers and this figure excludes online retailers such as Amazon or Walmart. Macy’s is the largest apparel retailer and 6th on the overall list.

The US Fashion e-commerce retail revenues were estimated to be 93 billion USD in 2017 according to Statista. The growth trend is expected to continue with revenue estimates of 139 billion USD in 2022.

US Fashion and accessories e-retail revenue (2016-2022)

Fashion e-commerce to benefit both consumers and brands

E-commerce is an essential part of the consumption habits in clothing and accessories. Fashion brands and consumers all benefit from e-commerce. Consumers can browse through products, choose colors, learn about sizing, care and composition, compare prices, read reviews and make their choices considering all the possible alternatives. The e-commerce sites also enable the consumers to contact the brand and companies with questions, returns and comments. When done right, an e-commerce site for fashion retailers provides the perfect customer service.

There are many benefits to fashion brands as well. E-commerce sites enable the brands to follow the consumer preferences and buying patterns instantly and provide useful data to further connect with the consumers. E-commerce also lets brands test new markets with minimal initial investments.

There’s always room to grow more and be better in e-commerce

Main inducers for growth in e-commerce are increasing online access and smartphone penetration. For fashion industry another factor influencing growth is the variety of products and prices offered and the consumer experience offered. Increase in sharing economy will also further induce growth in e-commerce as marketplaces gain share.

In e-commerce the most important element is customer engagement; the consumers look for visually attractive sites that provide a seamless shopping experience, provide detailed information on the product and customized aspects for users. In the fashion segment information on the sizes, fitting and product composition as well as visuals from a 360 angle are vital.

Personalization is becoming even more important both in product offers and also in promotions directed to the consumer. As e-commerce infrastructures can provide data to the fashion brands on the consumer preferences and their decision patterns, brands can analyze this data and come up with personal recommendations or relevant online site architecture.

Needless to say, the technology behind e-commerce is also vital for success. The download speed, quality of images, search engine and criteria all affect the customer experience and the brand image in return.

Multi-channel management is another tool to increase e-commerce sales and fashion brand sales in total. Companies can be offering sales through many channels but omni-channel management, which defines how the multiple channels are managed in synchronization is of greater importance. Offline stores, e-commerce sites, marketplaces and social media all need to be working in connection with each other to attract the consumer and turn the interest into a buying pattern. Companies can measure clicks, analyze past purchases and calculate the accuracy of their targeted promotions. It is important to understand where the consumer’s decision to buy is made, be it social media, offline store or e-commerce site, to efficiently serve the customer. For example, if the decision to buy a certain brand or brand’s product is made on social media, the e-commerce site needs to provide a quick check out instead of showing more options.

Of course, another important factor for success is always following innovations such as internet of things, image recognition, virtual fitting rooms, e-commerce in offline stores, wearable technology and more.

It is easy to observe the success of e-commerce worldwide and estimates for further growth are very clear. Many major fashion retailers worldwide are investing on improving their e-commerce sales and some even estimate that a third of their sales will be generated through e-commerce in the near future.

~ ~ ~ ~ ~

WERNER LABOR COST COMPARISON 2018 – Request for Submissions

Once again, we are in the process of compiling a new set of labour cost comparisons and you are invited to participate in this worldwide study which is a useful tool utilized globally throughout the textile and apparel industries.

The results will be published on our web site under the name “WERNER LABOR COST COMPARISON 2018”

Your participation will guaranty that you will receive the study before it is published.

Please contact Beth Govoni Marshall at bgovoni@wernerintl.com for the form that may be filled out by someone in your payroll or accounting department. We have tried to make the form as simple as possible so that only the basic data is required.

Your data will be kept confidential.

~ ~ ~ ~ ~

Management consultants to the world textile, apparel & fashion industry Werner International is a management consulting practice specialized exclusively in the fiber, textile and fashion industry
globally active since 1939.

Werner’s services range from industrial and technology support
for setting-up, improving and restructuring
textile and clothing manufacturing operations
to strategy and marketing services for new market entry,
new product development, supply chain management,
branding, retailing, partner search
and future strategies build-up.

Werner is unique among world leading consulting companies
in being able to combine specialized expertise
in the technical areas with global marketing and
strategy know-how and supply chain integration.

Werner International, Inc.
13800 Coppermine Road
1st, 2nd, 3rd Floors
Herndon, VA 20171 USA
Phone + 1 703 871 3938
Fax + 1 703 871 3901
www.wernerinternational.com
info@wernertex.com