São Paulo – The future of the Brazilian textile industry is in Asia and the Middle East. This statement is by the superintendant director of the Brazilian Textile and Apparel Industry Association (Abit), Fernando Pimentel, who bets, in the long-run, on non-traditional markets to increase sector foreign sales, which presented a reduction of 37% in the first five months of the year when compared to the same period in 2008, according to figures disclosed yesterday (18) in a press conference.
From January to May, Brazilian textile sector exports generated US$ 465 million, against US$ 740 million in the same period last year. The reduction in exports was greater than that of imports, which dropped from US$ 1.5 billion to US$ 1.26 billion in the same comparison.
"This reduction was higher than that of imports as our main market, Argentina, has imposed a series of barriers to the entry of foreign products, and the second main market, the United States, has suffered a great slowdown in terms of consumption," said Pimentel.
According to him, this has caused the textile industry to start diversifying markets. "The Arab market is undoubtedly an important market for Brazil and is included in the Apex strategic actions alongside the TexBrasil program, for development of Brazilian fashion," said the director. He also said that there are already many Brazilian companies participating in events in the Middle East, "be it because the region is a hub, shipping products to other markets, or because it has a local market that boosts demand."
According to Pimentel, supplying or covering a gap left by the North American, European and Japanese markets, which together represent 85% of the global garment imports, is very hard, "but looking further and in the longer run, the future is more for Asia and the Middle East than for the traditional markets," he said.
Apart from exports, sector production has also been dropping. From January to April, textile production dropped 11.6% in comparison with the same period last year, and production of garments dropped 14.5%. "It will be very hard to recover this loss before the end of the year," said the director.
Last year, Brazilian production in the textile sector reached 5.5 billion items, sector sales reached US$ 30 billion in the year and investment in the sector was record, US$ 1.5 billion. From January to April, investment has already totalled US$ 216 million. "Brazil has a great potential for exports, but we have to recover the lost ground," said Pimentel.
Most of the Brazilian textile companies are micro and small. To simplify the growth of these companies on the market, Abit has been fighting to reduce the Brazilian tax burden and generating credit in the intensive labour productive chain to reduce cost, among other measures.
"If Brazil plans to be a global player we must have favourable conditions to compete abroad," said the director, who also spoke about unfavourable exchange rates for exports. The Abit target is to expand participation of companies in the foreign market by 10%.
Forecasts for this year, according to Pimentel, are complicated. "If we manage sales equal to last year, it will be a great victory," he said.
*Translated by Mark Ament
