Technology, trade, climate: Orientation in disruptive times

Switzerland-based International Textile Manufacturers Federation (ITMF) is one of the oldest global organisations, which has been serving the world textile sector since 1904. This knowledge-based body is an international forum for the world's textile industries, dedicated to keep its worldwide members constantly informed through surveys, studies and publications, participating in the evolution of the industry's value chain and organising annual conferences as well as publishing considered opinions on future trends and international developments.
The recent ITMF Annual Conference 2017 has successfully brought forth the issues that have the potential to transform the dynamics of the global textile industry. Almost 300 professionals and business leaders representing 30 countries from almost all parts of the world, starting from the USA to China and Brazil to Indonesia, exchanged their views on technological innovation, the evolution of global trade, and the environmental challenges they are faced with. It shows that the industry is restructuring to echo new trends, which are appearing at an increasing speed. Reorganisation of the trading world, new buying habits of the millennial, evolving social and environmental responsibility to meet the expectations of the investors and customers - all are needs of the time. Technical innovation and digitalisation appear to be meant for coping with these challenges.
While every country and actor of the textile industry face ever-changing conditions, they are, however, unequal with regards to their capacity to react. Some actors currently invest in the state-of-the-art technologies while some others focus on traditional spinning, weaving, garmenting and retailing. To cope with the new market requirements, business entities need to be efficiently organised, focus on quality, and deliver sustainable products. This is their means to successfully supply the value-chain in their own competitive way.
Towards a new organisation of the fibre markets: The ITMF conference featured discussions on cotton and man-made fibres. The research on cotton looks at improving fibre properties or spinning methods and discovering new applications for cotton fibres. A review of the worldwide production trends shows that cotton competes with food crops for its area. Improvements in yields are highly necessary. The required technology exists, as proven by the Australian cotton farmers whose yields are three times higher than the world average. The long-term cotton consumption is, however, expected to stagnate. The growth of demand for fibre will be absorbed by the man-made fibre industry. This market is dominated by polyester, which is expected to grow further. Moreover, textile filament is taking the lion's share of growth rather than industrial filament or staple and altogether, man-made filament is likely to make up at least 50 per cent of world fibre mill consumption from 2025 onwards.
While the Australian cotton production is a worldwide example for good practice (with a 95 per cent reduction in pesticide use and a 42 per cent increase in water efficiency achieved in the last couple of years), sustainability remains a strong issue in the global cotton industry. Environment-friendly production method is a global demand and increasing rapidly. The man-made fibre market is also complying with the path. Efforts are made to reduce emissions, recycle, and eventually arrive at a circular economy. China's move toward such trends will have a strong impact on global fibre production because of its important role in cotton and man-made fibre production.
Using digitalisation to anticipate, predict, customise: The discussions on the value-chain and retail or e-commerce highlighted how individual improvements at the country level are reshaping the world of textiles/apparel. The shift to an Industry 4.0, trade liberalisation policies, or the boom in online retail will further redistribute the production forces across the globe. First signs are already observed with the opening of fully integrated production units in Germany and the USA (e.g. Adidas). These are not yet occurring on a global scale, but redistribution within Asia occurs in line with China's move to high-tech. This country's industrial transformation currently focuses on closing the gap between regions and generations, evolving in line with its national strategy of becoming an ecological civilisation, and creating an open economy with collaborative innovation.
Asia's opening to the world takes place at a time when many trade agreements are in turmoil. The number of regional and multilateral treaties is still on the up, but they are shaken by western protectionist trends. This is illustrated by the current changes induced by the Trump administration. The US textile and apparel-specific NAFTA objectives now need to conform to US "import sensitivities". The President might even impose new tariffs under six different trade acts with different scopes and scales. In contrast, most governments and business leaders across the world tend to favour free trade. Looking at the future, sourcing executives see their challenges in speed, transparency, and flexibility.
Although scepticism remains about automation's potential to drive reshoring, it already impacts the retail industry. In the last decade, traditional retail business models have been slowly replaced by new entrants such as Amazon. The new industrial era is represented by on-demand manufacturing systems, intelligent apparels systems, and green and recyclable products. Old retail stores constantly lose market shares. Physical retail remains a cornerstone but its role has changed. The focus on a user-experience, that surpasses the act of buying, is the key to success. Moreover, serving the modern customers implies offering diversity and renewability. Producers and retailers need to make quick decisions and have flexible production chains. The new guiding rules in the entire value-chain are anticipation, prediction, and customisation.
The path to eco-designed business models: The sessions on technical textiles and non-woven provided interesting insights into the increasing market for bio-based polymers and environment-friendly fibres. Efforts were made to increase sustainability along the textile value-chain and reduce the environmental impact of textile products. Big players such as Adidas or Decathlon have already taken the path to a circular economy and offer sustainable fashion wear. Non-woven is becoming an increasingly global business. The industry's transformation is driven by technological innovation at every step of the value-chain, in all fibre markets, and for all applications. This revolution affects production, trade, and retail at an increasing speed. The creation of flexible and sustainable business models are the success factors for the firms evolving in disruptive times.
Bangladesh RMG & textile industry needs to have global focus: A few visionary business leaders from Bangladesh participated in this year's ITMF Annual Conference. They included Salman Ispahani of Ispahani Group, Abdul Hai Sarker of Purbani Group, Mohammad Hatem of MB Knit Fashion and Shafiqur Rahman of HAMS Group, among others. Considering the importance of knowledge enrichment on the rapidly-growing global readymade garment (RMG) and textile industry, Bangladeshi businesses would be benefited immensely if it cooperates with ITMF activities, especially when Bangladesh is the world's 2nd largest apparel exporter. It is expected that the next Annual Conference of ITMF, to be held in Nairobi of Kenya from September 7 to 9 in 2018, would be attended by more business leaders from Bangladesh and they would draw lessons from global knowledge and understanding of the ever-changing RMG and textile industry of the world.

Olivier Zieschank is an ITMF Economist. [email protected]
Mehdi Mahbub is President of Bangladesh RMG Centre (www.rmgcentre.com)
[email protected]