Sourcing: the developing countries Pakistan, Ukraine and Ethiopia

The first thing to be said is that “Nothing is as constant as change”. This became abundantly clear once again, as over 70 participants of the DTB Sourcing Conference in Vienna on 14 September 2014 discussed the sourcing markets for textiles and apparel. At this convention of experts, organised for the tenth time by the Dialog Textil-Bekleidung (DTB), an industrial colloquium for textile and apparel producers, there was much discussion, specifically about the development of Pakistan. But Ukraine and Ethiopia also figured large on the agenda.

Pakistan experts from sourcing agencies and logistics companies take the view that the image of Pakistan presented in the media does not correspond to reality. Positive developments, e.g. in relation to the political situation, have not been adequately communicated. Pakistan, does, however, have very considerable potential, they say, as a sourcing country for the textile and apparel industries. Not least, because the country is one of the largest cotton growing areas in the world and the range of products they offer is extremely diverse. It is clear, however, that, in this respect, Pakistan is taken into consideration only to a limited extent. Just a few people in the audience reported that they had already established business contacts with Pakistan.

Why is it that the developments and progress in Pakistan over the last few years, which were described at the conference, have not really impacted on the sector yet? Is it perhaps also because of the way in which Pakistan sometimes positions itself at international trade fairs – as well as the impression given in the media? What is, however, clear is that the country does in fact make efforts to present itself as it really is, but somehow has not really managed it. Communication between Pakistanis and Europeans is, therefore, on the face of it, not as easy as it might be. So the experts recommend that agencies are used to act as a bridge between buyer and producer in the process of establishing business relationships with Pakistan. Direct sourcing does not, it seems, work there (yet?). The few participants in the group, who do already source ready-made – specifically denim items – there, work with sourcing agencies and, in that way, manage to get satisfactory quality. It is interesting, however, that hardly anyone has been there yet. Far too dangerous – as the media would have us believe? There is limited willingness to put the “assumptions” presented in media news bulletins to the test. Indeed, hardly anyone actually goes there and forms their own opinion at first hand of the circumstances that pertain. In the experts’ view, that would, however, be an extremely sensible thing to do.

And in the panel discussion on Ukraine, too, it became clear how strongly our perceptions are influenced by the media. The experts agree that the current political situation has “only” an indirect impact on the manufacturing locations in the west of Ukraine. Production continues as usual. This is something that hardly anyone, who does not manufacture there, expected. But, of course, nobody knows exactly how the country will develop in the medium term. It remains to be seen whether it will be possible to take advantage of the opportunities offered by the reconstruction after the present crisis. The proximity of the sales markets is undoubtedly a huge advantage. But initially, it was suggested, a degree of caution may well be in order.

And what of Ethiopia? It is constantly being mentioned as the new Bangladesh in Africa – but there is undoubtedly still a very long way to go – if indeed the path really is leading in that direction. At all events, there is plenty of available manpower; moreover, the Chinese are very active there and are busily investing. We need to keep it in our sights. Until we know more, however, there remains a question mark as to whether the Europeans will, in the medium term, want to be involved in the same way as the Chinese.

Birgit Jussen

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