Morocco and Tunisia's textiles sectors expand
Textile manufacturers in Morocco and Tunisia sell different products on different markets. But they have one thing in common: the need to bring more value added to their offer to try and resist the big Turkish and Chinese textile producers and their cut price competition.
Source : https://www.marocafrik.com/english/Morocco-and-Tun...
Once large companies like Courtaulds and Dewhirst have fallen vistim to this competition and Morocco which used to supply large contracts for ready made garments which were trucked in bulk from Morocco to Great Britain fo supermarkets like Marks and Spencer's. Many British companies had opened textile plants in Morocco, most like Dewhirst in Tangier have now closed.Tunisian companies have found that some former customers have ceased operating or taken on cheaper products. Recently the "fast fashion" trend working on a high turnover rate and tight deadlines with increased high value added has been cited as the way ahead. An article in Jeune Afrique examines the way ahead for the textile sector in Morocco and Tunisia.
Amith the textile association in Morocco recognises the need to merge operations into larger groups to meet international and local demand and generate more value added. The Tunisian Textile Centre, Cettex mentions declining profits from established manufacturers in Tunisia like Levis,Ralph Lauren, Benetton and Guess.All the experts agree on the need for Tunisia and Morocco to improve the quality of their production and fabric treatment under treated. Even if the industries of both countries represent 3% to 4% of GDP, it does not apply to the same markets.
Tunisia has made specialty out of lingerie, swimwear and t theextile business,while Morocco is known for its expertise in the ready to wear for women and tailored pieces (suits and coats).They are competing in the European market with the Turks and the Chinese. Apart from the French market,Tunisia and Morocco diverge.Morocco naturally turns to Madrid while Tunis works in the Italian market.
The article asks whether Morocco and Tunisia act as rivals or whether their textile sectors are complementary. It concludes that they are more complimentary which has its advantages.When principles choose tehir subcontracters they are looking for big importers of textiles in the global market and proximity which is where Turkey, Morocco and Tunisia score. The complimentary nature of the textile industries meant that the disruption caused by the Tunisian revolution which saw textile principles moving operations to Morocco during the turmoil of the Arab Spring so at least they remained in the Maghreb and did not go further a field.
Industrialists from both countries need to have a strategy to apply to hold their own in the global game seeking more services to be able to buy raw materials according to specifications and achieving better grading and selection procedures. Sartex in Monastir in Tunisia invested more than a million dolars to acquire laser cutting and brushing machines which are controlled by computers.
Faced with intensifying competition, Tunisia and Morocco have also responded by adapting a strategy for international brands, such as Zara, which prefer to control small components with a very short delivery deadline, favoring the geographical proximity of very active partners with production deadlines sometimes as short as eight days between ordering and completion.Morocco is the main supplier to Inditex (owner of Zara and Massimo Dutti). However they face the risk that short turnover business leaves them vulnerable to unforseen crises.
The Maghreb has an advantage as regards lower labour costs as wages rise in China and it tries to satisfy its own vast internal market. Orders form the United States are the largest and most easily achievable and offer real opportunities for the Maghreb region, not least because trade relations between the US and China often face difficulties because of the large chinese trade deficit with America.
Tunisia and Morroco can enjoy a productive relationship because of delivering quality at acompetitive price, the average monthly wage in the
textile industry for a company relocating in the two countries is between 150 and 160 euros, a cost lower than that of Eastern Europe East,Turkey and China. An asset that has been preserved even after the salary increases granted after the revolution in Tunisia and Morocco with the minimum wage increase in 2011 which lasts until 2013. The article does not raise the question of continued a continued low wages policy by the major textile companies for workers will eventually be counterproductive because international opinion and human rights organisations are turning against underpaid labour and exploitation of work forces. The strikes in Tunisia are evidence that the Arab Spring has unleashed a popular demand for fair treatment of wokers which the government has to deal with. Whether these factors will cause global textile principle to review their policy on low wages for workers remains to be seen. The word recessionary trend encourages cost cutting but has major social implications for newly democratised governments.
Exports from Morocco and Tunisia have risen despite the economic crisis in Europe and disturbances during the Arab Spring. Thanks to this dynamism the two countries have generally resisted the crisis. Exports of Tunisian textiles and ready made garments rose from 5.1% in 2011 to 2.7 billion euros.On the Moroccan side, they registered a 5.5% increase, amounting to 2.7 billion euros in late November.
However,since 2008 and the end of the Multifibre Agreement which introduced import quotas on Chinese products in Europe, the market shares of Tunisia (3.6% in 2011) and Morocco (3.2%) are slowly eroding face under pressure fom Turkish and Chinese textile industries. The Maghrebian businesses remain small size (71% of Tunisian firms in the sector have less than 100 emplyees) and cannot invest heavily. In Tunisia a number of textile businesses had assets frozen duing the revolution which has constrained investment.
For the Maghreb countries it would be difficult to the right to use Chinese raw materials while maintaining their exemption from customs duties for exports from the EU, as does Turkey. The question is on the table and could move forward in the coming months. "" We are still vulnerable to cheap price Chinese competition and Turkish production of high quality and very reactive. This is a somewhat uncomfortable position. "
Turkey has made a success in developing "fast fashion" and despite the eurozone crisis the Turkish textile sector represents 20 per cent of the country's exports. In 2011 Turkey exported 18.5 billion euros in fabrics and ready made garments and increase of 2 billion euros more than in 2010. It has concentrated on high value added segments to counteract the prevalence of cheap Chinese textile exports. They have become expert operators in "fast fashion" which refers to a concept of small collections produced very rapidly for Europe,US and Japan.In Europe many textile manufacturers have lost ground .
The Turkish textile achieved this success by a massive investment in state of the art textile machinery and the large Turkish textile companies have not hesitated to relocate operations overseas in Egypt where Turkey has a free trade agreement where some 20 companies have relocated such as LC Waikik and Aksa. Some have moved to Asia like Soktas in India and Zorlu in China. Not all Turkish companies are involved in "fast fashion" and the majority of Turkey's 2 million textile workers are working in small companies many in the informal sector.
The textile sector in Tunisia and Morocco therefore faces the challenge of allocating sufficient investment to produce the high quality value added collections on a regular basis. They need to achieve greater flexibility of operations and even better quality control. Small inadequately funded operations are unlikely to succeed and the Turkish experience suggests that not all textile manufacturers will be able to operate "fast fashion." As well as the merging of manufacturing units nationally, hopefully an enhanced Arab Maghreb Union will also permit some regional integration of the textile sector as well.
Amith the textile association in Morocco recognises the need to merge operations into larger groups to meet international and local demand and generate more value added. The Tunisian Textile Centre, Cettex mentions declining profits from established manufacturers in Tunisia like Levis,Ralph Lauren, Benetton and Guess.All the experts agree on the need for Tunisia and Morocco to improve the quality of their production and fabric treatment under treated. Even if the industries of both countries represent 3% to 4% of GDP, it does not apply to the same markets.
Tunisia has made specialty out of lingerie, swimwear and t theextile business,while Morocco is known for its expertise in the ready to wear for women and tailored pieces (suits and coats).They are competing in the European market with the Turks and the Chinese. Apart from the French market,Tunisia and Morocco diverge.Morocco naturally turns to Madrid while Tunis works in the Italian market.
The article asks whether Morocco and Tunisia act as rivals or whether their textile sectors are complementary. It concludes that they are more complimentary which has its advantages.When principles choose tehir subcontracters they are looking for big importers of textiles in the global market and proximity which is where Turkey, Morocco and Tunisia score. The complimentary nature of the textile industries meant that the disruption caused by the Tunisian revolution which saw textile principles moving operations to Morocco during the turmoil of the Arab Spring so at least they remained in the Maghreb and did not go further a field.
Industrialists from both countries need to have a strategy to apply to hold their own in the global game seeking more services to be able to buy raw materials according to specifications and achieving better grading and selection procedures. Sartex in Monastir in Tunisia invested more than a million dolars to acquire laser cutting and brushing machines which are controlled by computers.
Faced with intensifying competition, Tunisia and Morocco have also responded by adapting a strategy for international brands, such as Zara, which prefer to control small components with a very short delivery deadline, favoring the geographical proximity of very active partners with production deadlines sometimes as short as eight days between ordering and completion.Morocco is the main supplier to Inditex (owner of Zara and Massimo Dutti). However they face the risk that short turnover business leaves them vulnerable to unforseen crises.
The Maghreb has an advantage as regards lower labour costs as wages rise in China and it tries to satisfy its own vast internal market. Orders form the United States are the largest and most easily achievable and offer real opportunities for the Maghreb region, not least because trade relations between the US and China often face difficulties because of the large chinese trade deficit with America.
Tunisia and Morroco can enjoy a productive relationship because of delivering quality at acompetitive price, the average monthly wage in the
textile industry for a company relocating in the two countries is between 150 and 160 euros, a cost lower than that of Eastern Europe East,Turkey and China. An asset that has been preserved even after the salary increases granted after the revolution in Tunisia and Morocco with the minimum wage increase in 2011 which lasts until 2013. The article does not raise the question of continued a continued low wages policy by the major textile companies for workers will eventually be counterproductive because international opinion and human rights organisations are turning against underpaid labour and exploitation of work forces. The strikes in Tunisia are evidence that the Arab Spring has unleashed a popular demand for fair treatment of wokers which the government has to deal with. Whether these factors will cause global textile principle to review their policy on low wages for workers remains to be seen. The word recessionary trend encourages cost cutting but has major social implications for newly democratised governments.
Exports from Morocco and Tunisia have risen despite the economic crisis in Europe and disturbances during the Arab Spring. Thanks to this dynamism the two countries have generally resisted the crisis. Exports of Tunisian textiles and ready made garments rose from 5.1% in 2011 to 2.7 billion euros.On the Moroccan side, they registered a 5.5% increase, amounting to 2.7 billion euros in late November.
However,since 2008 and the end of the Multifibre Agreement which introduced import quotas on Chinese products in Europe, the market shares of Tunisia (3.6% in 2011) and Morocco (3.2%) are slowly eroding face under pressure fom Turkish and Chinese textile industries. The Maghrebian businesses remain small size (71% of Tunisian firms in the sector have less than 100 emplyees) and cannot invest heavily. In Tunisia a number of textile businesses had assets frozen duing the revolution which has constrained investment.
For the Maghreb countries it would be difficult to the right to use Chinese raw materials while maintaining their exemption from customs duties for exports from the EU, as does Turkey. The question is on the table and could move forward in the coming months. "" We are still vulnerable to cheap price Chinese competition and Turkish production of high quality and very reactive. This is a somewhat uncomfortable position. "
Turkey has made a success in developing "fast fashion" and despite the eurozone crisis the Turkish textile sector represents 20 per cent of the country's exports. In 2011 Turkey exported 18.5 billion euros in fabrics and ready made garments and increase of 2 billion euros more than in 2010. It has concentrated on high value added segments to counteract the prevalence of cheap Chinese textile exports. They have become expert operators in "fast fashion" which refers to a concept of small collections produced very rapidly for Europe,US and Japan.In Europe many textile manufacturers have lost ground .
The Turkish textile achieved this success by a massive investment in state of the art textile machinery and the large Turkish textile companies have not hesitated to relocate operations overseas in Egypt where Turkey has a free trade agreement where some 20 companies have relocated such as LC Waikik and Aksa. Some have moved to Asia like Soktas in India and Zorlu in China. Not all Turkish companies are involved in "fast fashion" and the majority of Turkey's 2 million textile workers are working in small companies many in the informal sector.
The textile sector in Tunisia and Morocco therefore faces the challenge of allocating sufficient investment to produce the high quality value added collections on a regular basis. They need to achieve greater flexibility of operations and even better quality control. Small inadequately funded operations are unlikely to succeed and the Turkish experience suggests that not all textile manufacturers will be able to operate "fast fashion." As well as the merging of manufacturing units nationally, hopefully an enhanced Arab Maghreb Union will also permit some regional integration of the textile sector as well.
Source : https://www.marocafrik.com/english/Morocco-and-Tun...