Worldwide Responsible Accredited Production

WRAP on the Surge in Demand for Compliance Certification in Emerging Asian Markets

Editor’s Note: This article was written by Ronan O’Kelly for the Sourcing Journal on Tuesday, January 17, 2012 and is republished on the WRAP blog with the author’s permission.

Emerging Asian markets have seen a surge in demand for compliance certification, according to the world’s largest labor and environmental certification program for the apparel manufacturing sector.

Speaking with the Sourcing Journal, Director of Compliance Administration for Worldwide Responsible Accredited Production (WRAP), Avedis Seferian, explained that, although China remains the largest market for compliance certification, attention has recently begun shifting towards growing markets in Southern and Southeast Asia.

“Demand tends to track existing sourcing patterns,” he explained. “Southeast Asia is in ascendancy as China is starting to be seen as less competitive than it has been in the past.”

Bangladesh – a country that has been regularly criticized in the past for its sub-standard factory conditions – shows the largest rate of growth for WRAP certified factories, Mr Seferian said.

“This is a country that has become an increasingly popular sourcing destination for buyers in both Europe and the United States and is, in fact, second only to China as a sourcing destination for the apparel sector.

“It was therefore very logical for WRAP to enhance our presence in the country in the form of opening a local office, which we did earlier this year, in Dhaka, and engaging more directly on compliance issues there.”

India, Pakistan and Vietnam rank alongside China and Bangladesh as the countries containing the highest number of WRAP certified factories.

Demand from buyers seeking to work with WRAP certified factories is also on the rise, according to Mr Seferian.

While demand for WRAP certification has traditionally come from the United States and Europe, “as awareness of the importance of social compliance spreads around the globe, we’re also starting to see Asian brands as well as Australian buyers actively seeking out WRAP-certified factories to source from”.

The increase in demand for greater testing and compliance among brands comes despite growing difficulties in the global retail environment, including rising costs of goods and depressed sales.

Avedis Seferian explained that, even with the added expenses associated with compliance, WRAP certification can be a cost-saving investment for manufacturers.

“Any factory with good working conditions will see more motivated and therefore more efficient, workers, leading to increased productivity and, thus, profit,” he said.

“The other big benefit of a WRAP certification is that it allows factories to meet the compliance requirements of a large number of brands and retailers, thereby sparing them the need to have separate, individual compliance audits done by each one of those buyers.”

Posted on January 18th, 2012 by wrapadmin
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Flooding in Thailand: Effects and Aftermath

By: Matt Boyce, Online Marketing Specialist, TigerTrade

Editor’s Note: This is the first post from our friends over at Tiger Trade as part of a content-sharing partnership with our apparel, sourcing, and compliance industry peers.

This fall, Thailand has been in crisis due to relentless monsoon rains which resulted in massive flooding. Many have said that it is the worst flooding in the country in 70 years. The waters have taken a tremendous toll on the country, the people and the economy, but with reconstruction already underway, there is hope for the future.

Since the beginning of the monsoon season this past August, rain waters have been unstoppable. Monsoon rains in the north have caused flooding further south—even affecting areas of Bangkok. The disaster is blamed for several hundred deaths and more than 200 billion Baht (nearly 7 billion USD) in damage.

Flooding has also slowed Thailand’s growing economy. Although solutions are already being implemented, the Thai economy will feel the effects of the crisis in the next several months. Thailand is a major supplier of hard disk drives and automobiles. Reports have said 70% of Thai automobile production has been affected and a Honda plant was forced to shut down production until April 2012.

The apparel sector has also been hit as raw materials are hard to come by during the floods. The industry lowered its growth projections for the year and is lobbying the government to lower tariffs on textile imports to aid in supply chain reorganization.

There are also things suppliers can do to help their own recovery. It’s important for factory owners to review their buyer contracts and to see what options they have. If they’ve been affected, there may be clauses in their contracts that allow for halting production due to natural disasters, or that allow for changes in the supply-chain to ease burden. Manufacturers should also look into government-run programs introduced to support affected businesses in relocating machinery and raw materials.

The government has established the Strategic Formulation Committee for Reconstruction and Future Development and the Strategic Formulation Committee for Water Resources Management to solve problems and restore confidence in Thailand’s ability to manage crises in the future. Not only are these programs intended to optimize Thailand’s recovery, but also to build the irrigation systems and economy back better than before the flood. Successful implementation of these new policies will be vital to restoring investment interest and confidence in the country.

Despite the losses, there is good economic news for the future. Even though floods have rocked local business, Thailand’s economy still grew in 2011 compared to 2010. The projected growth of 4% was lowered to 1.5% but it maintains Thailand’s steady upward path of recent years. Recovery in exports is expected by the second quarter of 2012 as the factories are predicted to resume production by then.

The Thai restoration will count on foreign support as well as infrastructural support. The government has made it clear in the past months that Thailand remains an economically robust country and will rebuild even stronger.

 

TigerTrade is a proud partner of WRAP. TigerTrade is an online trusted partner network for global trade helping to support sourcing professionals connect to qualified manufacturers in Southeast Asia. TigerTrade works in the apparel, textiles, footwear, furniture and home decor industries and is headquartered in New York City with regional offices in Vietnam, Thailand and Indonesia. For more information, head to TigerTrade’s website and blog.

Posted on January 6th, 2012 by wrapadmin
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WRAP’s Avedis Seferian Gives Keynote Speech at BATEXPO

Last week, WRAP’s Director of Compliance Administration Avedis Seferian was a keynote speaker at the Bangladesh Apparel and Textile Exposition (BATEXPO) of 2011, held annually by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

Speaking to a crowd of 200 that included Bangladesh’s Secretary of Commerce Md. Ghulam Hussain and William Hanna, the European Union Ambassador to Bangladesh, Seferian focused on the challenges of compliance while exporting ready-made garments (RMG).

In his presentation, which took place during the afternoon session on December 11, 2011, Seferian covered the origins of compliance programs, provided an overview of social compliance and discussed general labor issues as well as specific issues facing Bangladesh.  Seferian also provided helpful information on what social compliance programs look for from suppliers.

WRAP's Seferian Giving His Speech

After enumerating all the export challenges, Seferian concluded with the ‘How’ and ‘Why’ of compliance.  Discussing the question “Why Comply?,” Seferian detailed the business case for a compliance, as it provides a return on investment, a systematic approach to management, more efficient production and lower worker turnover, among other benefits.

His speech drew numerous follow-up inquiries from the crowd.

“The questions from the audience made clear that compliance is becoming an increasingly important issue.  Those in attendance represented owners of factories and the leaders in this industry, and to hear them giving this issue the serious consideration that it deserves is very heartening.  The event reinforced my conviction that compliance is alive and well in Bangladesh and that factories are attuned to the challenges that need to be addressed,” said Seferian.

WRAP's Seferian with Hall-Mark Group at BATEXPO 2011

Later in the day, both special guests Hanna and Hussain emphasized the importance of compliance as the Bangladeshi apparel export sector continues to grow and spoke positively of the RMG industry.

Seferian’s keynote speech was part of the three-day BATEXPO Conference that featured 150 exhibitors—including several that were WRAP certified facilities —and was held at the Bangabandhu International Conference Center, in Dhaka, from December 10 – 12, 2011.

Posted on December 15th, 2011 by wrapadmin
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AAFA Product Safety & RSL Conference in Bangalore, India

On December 6, 2011, Director of Compliance Administration Avedis Seferian participated in the second American Apparel & Footwear Association (AAFA) International Product Safety & Restricted Substances Conference. Following the success of the first conference, held in Dhaka, Bangladesh, on November 30, Seferian headed to Bangalore, India, for another day-long conference on apparel manufacturing, chemical management programs, and restricted substances lists (RSLs).

The host for the event was the Clothing Manufacturers Association of India (CMAI), and Rajan Hinduja, a well-respected Indian industrialist and chairman of the Southern Regional Committee of the CMAI, was in attendance.

The conference, held at the Vivanta by Taj hotel, included the same panels and speakers as the Dhaka conference, including a kick-off keynote address from Commissioner Nancy Nord of the U.S. Consumer Product Safety Commission.

Seferian again moderated the panel on Corporate Sustainability, which highlighted how companies can make their manufacturing processes more sustainable and improve their bottom lines.

The most enthusiastic applause for the day came when Seferian rose for the panel, introduced himself to the crowd of 150 people and spoke warmly of his affection for India, all of which he did in fluent Hindi.

Seferian also closed the ceremony, addressing the question of sustainability—how we can continue to carry out our day-to-day business and personal actions without threatening our children’s ability to do likewise—in a thought-provoking address to the crowd.

Posted on December 7th, 2011 by wrapadmin
Filed under: Shows and Events | No Comments »

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