Fiji’s garment industry on road to recovery

22/03/2016

Fiji has a history of bouncing back from adversity and moving forward. Despite the devastation caused by Cyclone Winston in the past few weeks and two past political coups, Fiji continues to forge ahead.

[caption id="attachment_7802" align="alignleft" width="200"]<a href="https://pacifictradeinvest.com/wp/wp-content/uploads/2016/03/rsz_united2-660x356_c.png"><img class="size-full wp-image-7802" src="https://pacifictradeinvest.com/wp/wp-content/uploads/2016/03/rsz_united2-660x356_c.png" alt="Kaushik Kumar, Chairman of the Textile Clothing and Footwear Council (TCF) of Fiji and Managing Director of United Apparel: Clients were more concerned about safety and ourselves.&quot;" width="200" height="156" /></a> Kaushik Kumar, Chairman of the Textile Clothing and Footwear Council (TCF) of Fiji and Managing Director of United Apparel.[/caption]

<em>Pacific Periscope</em> spoke with Kaushik Kumar, Managing Director of United Apparel (UA) and President of the Textile, Clothing and Footwear (TCF) Industry recently, one of the navigators at the helm of Fiji’s garment industry revitalisation. The company United Apparel is located in Nasinu, near Suva, which was largely spared by Cyclone Winston.  UA suffered minimal damage and disruptions and one day after the clean-up, UA and other major apparel factories were back in production, keen to reassure customers --who were also understanding of any delays.

“Fiji will bounce back quickly,” Mr Kumar said. “With a tough road ahead, Fiji was rebuilding.” There was immediate response from the Fiji Government and a lot of support from Australia, New Zealand and other countries as well as NGOs, religious organisations and private companies offering assistance.

Meanwhile, the TCF industry is also gradually climbing its way out of a 12-year trough, with its eyes on growing markets closer to home in the Melanesian Spearhead Group (MSG) nations of Papua New Guinea, Vanuatu and Solomon Islands.

United Apparel is one of Fiji’s leading producers of quality apparel including corporate uniforms and school wear. It has now exported small volumes to Vanuatu, Tonga and Samoa.  And though not huge, it has a foothold there, Mr Kumar said.  The company is committed to the Pacific market and has two marketing staff working on growing exports to the region.

PNG is an untapped market they are now actively pursuing and promoting their products and services through an agency arrangement with a PNG company. The demand was steady, helped by PNG’s duty free benefit under the MSG agreement. Hopefully there will be another Government trade mission to PNG whereby the TCF sector can be promoted further. In the Solomon Islands it has also secured some uniform orders.

Seventy per cent of UA’s main market comes from Australia , whilst New Zealand was also a stable market. Fiji’s domestic market was also strong, he said.

The mantra that has helped revitalise the industry is based on specialised products, niche industries, producing smaller volumes with flexibility in delivery times and relatively competitive pricing and proximity to its main markets of Australia and New Zealand.

Reflecting back on Fiji’s apparel industry, Fiji has weathered its own “perfect storm” back around 2000 following a second political coup, the diminishing preferences of favourable tax and tariffs in Australia, New Zealand and US and the rising strength of China, Bangladesh and Indonesia’s clothing producers, nearly wiped out the industry.  At its peak, the TCF industries earned a cool $450 million dollar yearly, employing 18,000 workers, providing 5.8% of GDP between 2000 and 2006.  By 2005, many factory doors closed and income from the garment industry fell by 47%.  Employment figures plummeted and were around 5000 – 6000 in 2012, the industry earning just 1.3% of GDP.

Australia threw the industry a lifeline initiating a three-year Ausaid funded programme helping the industry to find its strengths and restructure the industry. The turnaround came when the industry found its clear point of difference from the production power houses in China and Indonesia.

The growth is based on consistency, reliability, quick turnaround and flexibility with small orders.

There are now about 8000 workers employed in the industry. The target is to have 12,000 workers in the next two years and one factory he says wants to go from 1000 to 2000 workers. UA has also increased its workers to 1000 and invested in new machines.

Fiji has also improved in other areas with the Make It In Fiji initiative (<a href="http://www.makeitinfiji.com">www.makeitinfiji.com</a>) that promotes fair trade and ethical manufacturing and the fair treatment of factory workers.  He cites 12 Factories that are audited by Australian auditors and given grades where a B grade is the minimum acceptable benchmark for social compliance.

Wage rates are comparatively higher compared to workers in some of the competitor countries he says with the minimum Government wage being $2.32 an hour. Costings in the garment trade are crucial said Mr Kumar but they pride themselves on ethical manufacturing, reliability, service and trust.

“If you want ethical manufacturing, Fiji is for you,” he said.

UA has an independent and internationally recognised certification for social compliance in ‘safe, lawful, humane and ethical manufacturing through the Worldwide Responsible Accredited Production (WRAP), a not-for-profit organisation head quartered in Virginia, USA (<a href="http://www.wrapcompliance.org">www.wrapcompliance.org</a>).

UA also exports to Australia under favourable Developing Country criteria meaning they have preferential export terms something that has benefited the company.

Mr Kumar knows where to direct potential customers to the right producer. “Come and talk to me, I am happy to assist customers find the right factory in Fiji to produce their clothing.”

It’s important to find the best source as “the cheapest source is not always the best source,” he says.

However, the biggest obstacle to building the industry is the lack of skills and a garment training school.  At present, the TCF have been in dialogue with the Fiji National University to re-establish a Garment Training Centre. There is a Government funded three-week basic sewing skills training through the Fiji Technical College but most new staff currently receive in-house training.

There are more than 40 apparel manufacturers in Fiji and with 30 years in the business, Mr Kumar knows what he’s talking about.

For more information please contact: Joe Fuavao, Trade Development Manager, PT&amp;I NZ. Email: joe.f@pacifictradeinvest.co.nz

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