WOLKITE UNIVERSITY Department of Garment Engineering B.Sc in Garment Engineering Program

1. WOLKITE UNIVERSITYDepartment of Garment EngineeringB.Sc in Garment Engineering Program

2. 2nd year GED INTRODUCTION TO GARMENT INDUSTRY BY TEWODROS.T

3. INTRODUCTION • Apparel is one of the three basic needs of the mankind. • Hence, textiles and apparel have retained an important place in human life starting from historical era to today's modern world. • Textile and apparel industry in today's contemporary market place is a truly global industry.

4. Most of the apparel industry, also known as garment industry, is a low-value added, labor-intensive using unskilled labor for a mass production of lower-quality and/or standard products such as t-shirts, uniforms, white underwear etc. • In this high-value added segment supply chain design, research and development (R&D) are important competitive factors. • The high end of the fashion industry uses human capital intensively in design and marketing, and in gathering information about the apparel standards, values and tastes, in various countries.

5. Outward Processing Trade (OPT) is a way of manufacturing and trading garments whereby the imported - mostly pre-cut - inputs are assembled and sewn and then re-exported to the country which firm has arranged the production without additional customs on the exported labor

6. CHAPTER ONE History of the Garment Industry. • The history of textile production can be traced almost up to year 2000 BC. • After agriculture, textile production became one of the first large-scale economic activities, providing significant employment centuries ago. • Textile &clothing industry has also played a crucial role in the economic development of most of the countries

7. This industry is quite unique as majority of the sub processes involved in textile & clothing manufacturing can be undertaken at various levels of technology and labor intensity. • The countries like the United States and England did benefit immensely with an early development and resultant socio-economic impact of this industry. • The development of textile sector is closely linked with the industrial revolution.

8. This industry was among the first few to transform England and then United States, during the 17th and 18th century, when establishment of large textile mills promoted the concept of mill towns creating intense employment opportunities for women and men. • In the sixteenth century, cotton fabric production in England was a cottage industry. In the later part of the16th century, cotton fabric of India, which offered whiteness, cleanliness and brightness gained popularity.

9. This increasing popularity of color full handloom Indian fabric led to restrictions on import of cotton fabrics from India in order to develop the British industry. Inventions during 1760 to 1780 supported large scale production of cotton yarn. • Even though handloom continued to be used for weaving fabrics, the power loom developed by Cartwright in 1795 found its wider application from 1810. Later half of the 18th and early 19th century witnessed major growth in textile industry.

10. By 1816 there were 170 textile mills in USA. American mill owners built boarding houses and dormitories to house younger women workers. • The workers had dawn-to- dusk work schedules. During 1830's, this work force started protesting against the exhausting work schedule, hence starting the struggle for the first ever labor reforms. • Apparel industry took one more century to develop after the growth of the organized textile industry. Tailors, who also started producing complete garments for the customers, helped the transition from home-produced apparel to ready-made apparel.

11. In the United States, the first known clothing manufacturing factory was established in Philadelphia in 1812 to produce uniforms for the War. • At this stage, women workers did the sewing at their homes by hand. By 1850, the US census reported that there were 4,278 establishments with 97,000 workers – 63percent of them women-in the ready-made clothing industry. • Development of mechanized sewing machine in 1847 improved the speed and efficiency of production. The later half of the 18thcentury witnessed massive immigration of Europeans to the United States who provided the much needed workforce for apparel factories.

12. Introduction of standard body size measurements further facilitated growth of ready-to-wear clothing. By 1920, most men wore suits that came from factory, compared to only 40% men who wore ready-made suits in 1879. • Working conditions in the garment factories were quite poor and similarto the textile industry. Garment factory workers also had to put up struggle to improve the working conditions and compensation. • Slowly but steadily garment industry employment out grew that of textile industry in the United States of America. Similar to USA other parts of the developed world alsoexperienced the growth of apparel industry.

13. In 1973 Rise of oil price affect the global economy, which marked a turning point for a global shift of Textile and apparel production. • From 1950s to the present time, Growth rate for textile and garment production in developed countries diminished. • From 1937-1987 growth in developed nations were dropped near to zero while production in less developed countries grew steadily • LDC’s began participating in assembly operations (CUT-MAKE-TRIM) while more developed nations deliver manufacturing and marketing assistance.

14. By the 1820s, however, an increasing number of ready-made garments of a higher quality were being produced for a broader market.

 • The production of ready-made clothing, which continued to grow, completed its transformation to an "industrialized" profession with the invention of a practical and commercially viable sewing machine in 1850s. • (Elias Howe patented the first sewing machine in 1844 although Isaac Merritt Singer, whose name is synonymous with the machine, added modifications and marketed the sewing machine for the first time to the mass public in the early 1850s.

15. Though Asia has become the major apparel producing region of the world, products from this area account for a decline share of both US and EU markets. The decline of the share is due to: • 1.Geographical locations to control on manufacturing and delivery deadlines • 2.Trade policies which encourage to use of domestic fabrics and other components

16. The Stages of Development in Textile Complex • The Embryonic Stage • This stage is found in least-developed countries where textile and clothing industry develops in the form of a cottage industry dependent on natural fibers, converting it into fabrics and garments mainly for domestic consumption and also attempting to export to earn some foreign exchange. • Early Export of Apparel • As the labor cost is low at this stage of the development of national economy, the most labor intensive part of the textile complex apparel manufacturing picks up momentum. The garments produced are of low quality and for the lower end of the export market.

17. More Advanced Production of Fabric and Apparel • After experiencing the benefits and the potential of apparel exports, the country develops advanced base for producing fibers and fabric. • As the countries also start investing in low wage countries for apparel assembly, thereby creating additional supplier countries in the international apparel trade.

18. Effect of Quota systems and Trade arrangements in Garment business • Quotas on apparel and textiles items are regulated by the Multi-Fiber Arrangement (MFA) of the early 1970s. It has been used by the United States, Canada and some European countries to impose quantitative limitson imports in a wide variety of products.

19. Although these were designed to protect firms in developed countries from a flood of low-cost imports that threatened to disrupt major domestic industries, the result was the opposite: protectionism increased the competitive capabilities of developing countries’ manufacturers, which learned to make more sophisticated and therefore more profitable products.

20. The Textile and apparel industry is a very global industry, with constantly increasing trade flows all over the world. • Globalization and ongoing liberalization expose industry to ever more competition from a large number of low-labor cost countries (especially from Asia), for which the sector constitutes one of the most important sources of income and employment.

21. In the light of the huge labor cost differential between many third countries and developed countries, the developed countries industry strives to remain competitive by means of higher productivity, and through competitive strengths such as innovation, quality, creativity, design and fashion.

22. Large number operations are carried out as outward processing transactions. Such OPT transactions involve basically the export of developed countries fabric, cuttings or semi-finished garments to neighboring low-wage countries, which make them up into finished garments for re-import into the developed countries.

24. Trade arrangements in Garment business • AGOA-( African Growth opportunity act) • AGOA was initially signed by President Clinton into law in May 18,2000, as part of the Trade and Development Act of 2000. • designating 34 countries in Sub-Saharan African countries as eligible for the trade benefits of AGOA. • objectives • To assist the economies of sub-Saharan African countries • To improve economic relations between the United States and the sub-saharan region

27. Source of imports of textiles to the USA

28. Source of imports of clothing to USA

29. Source of imports of textiles to the EU

30. Sources of imports of clothing to EU

31. Preferential Trade Area (PTA) • The objectives of the PTA are summarized as follows:- • To promote cooperation and integration covering all areas of economic activity, particularly trade and customs, industry, transport and communications, agriculture and monetary affairs • ii) To raise the standards of living of the people of the region by fostering closer relations among Member States • iii) to create a common market by the year 2000 in order to allow the free movement of goods, capital and labor within the sub region

32. iv) To contribute to the progress and development of all other African countries. • PTA strategy includes: • Reduction and elimination of trade barriers on selected goods traded within the area • Cooperation in customs through simplification and harmonization of customs procedures and regulations • Granting of transit rights to all transporters when coming from or entering other Member States or third countries

33. Cooperation to develop coordinated and complementary policies and systems in transport and communications • cooperation in the field of industrial development in order to promote self sustained industrialization within the PTA, • to expand trade in industrial products and • to bring about structural transformation of industry for the purpose of fostering the overall social and economic development of Member States

34. Cooperation in the area of agricultural development so as to raise production and supply of food to coordinate the export of agricultural commodities to harmonize programmers in agricultural production develop land and water resources share agricultural services, technology and marketing and stabilize the prices of agricultural commodities in the sub region • .

35. Organization (WTO) Agreement on textiles and clothing • This Agreement sets out provisions to be applied by Members during a transition period for the integration of the textiles and clothing sector into GATT 1994. • Trade Facilitation Agreements (TFA) • Participants noted that they need technical and financial assistance to support them in the implementation of the agreement.

36. They also encouraged each other to be in contact with transit countries to put in place transit measures that they will be legally bound to do by the TFA.

37. THANK YOU!!!!!

38. QUIZ • 1.What are The Stages of Development in Textile and apparel Complex? • 2.Why AGOA designed for? Explain it’s objectives