Current Affairs

Current Affairs




Gov't shifts garment focus to local manufacturing, marketing
Monday, March 04, 2002

MCLEAN...we have to be satisfied that they have the capabilities to carry through the export order
THE government will be restructuring the garment industry, with a shift away from the 807-type operations to the manufacture and marketing of local apparel.

Pamela McLean, managing director of the Import Export (Ex-Im) Bank, said the government will be making an initial sum of $100 million available on a revolving basis to spur production in the sector.

McLean said assessments will be done by technical persons from JAMPRO's Business Development Centre who would be looking at the plants to ensure that the layout was satisfactory. The Ex-Im Bank will do the financial analysis.

"We have to be satisfied that they have the capabilities to carry through the export order to produce whatever designing is to be done, and financial statements are in place so we can get proper reading as to what is the state of their company," McLean said.

She noted that a preliminary assessment of the industry has shown that financing would be required for several areas of operation, because manufacturers and designers in the sector have limitations relating to finance and management capabilities.

"We will be picking winners because we are not saying that everyone is going to succeed at this. After we do our analysis, we will be picking who can deliver the goods from the start to the finish and the plan is to give them all the assistance they will require, whether it is in the area of proper funding or training, to afford them the highest level of expertise," said McLean.

"The aim is to try to see what products we can produce with the highest value-added, because that is the only way we can make something of the industry. We realise that our designers and manufacturers can find a place in the international market for our Caribbean and tropical designs," she added.

Industry, commerce and technology minister, Phillip Paulwell, announced the implementation of this assistance programme in parliament recently. He said that the aim was to assist the apparel industry to reposition itself to take advantage of new trends and opportunities.

Paulwell noted that the apparel sector was a key sub-sector in the manufacturing industry, employing 7,000 persons in 2001 and contributing 25 per cent to the country's total value of exports with a value-added component of approximately 24 per cent.

The decision to place emphasis on local manufacturers came out of the Modernisation Action Plan for the Apparel Sector, a blueprint for moving the sector forward from 807-type operations into the higher full package cash industry, where there is integration from the point of designing through to production and marketing.

The plan was developed by JAMPRO, in collaboration with the Garment Industry Advisory Council.

Government's effort to spur growth in the garment industry dates back some five years with the institution of a special programme to help companies involved in 807 operations, which suffered from high production costs and the migration of jobs to destinations such as Mexico due to the advent of the North American Free Trade Area (NAFTA).

To stem the deterioration in the sector, the government provided grants to help companies get their financial statements up-to-date, hire auditors, and accountants and pay for security, and provided a pool of working capital funds amounting to $100 million to help companies take care of labour and raw material costs.

The money was made available to the sector on a revolving basis. Under that pool of funds, short-term loans of approximating $470 million were made available to the sector. Part of the package of benefits also involved debt restructuring, which was undertaken by the National Investment Bank of Jamaica (NIBJ) and other public sector institutions.

But despite the government's efforts, the industry still suffered the loss of hundreds of jobs and the closure of several companies.

McLean said that it was in recognition that the 870 operations "are not going to suit our purposes for the future", that the government has placed emphasis on local designers.

"They are footloose and they get up and migrate. They also do not give us the avenue to be creative and innovative in our designs and the jobs are largely repetitive and we feel it is time to move to the higher end of the market and encourage local designers," she said

She told the Jamaica Information Service that the government was confident that Jamaican designs can succeed on the international market. "A lot of them have been doing it for years. We just have to now get them fully on board," she added.

McLean also said a technical team has been going through trade statistics to see who the local exporters are, what they have exporting and to what destinations, what the international market wants and where there is room for expansion.

And she has invited local garment manufacturers to visit the bank Ex-Im Bank "to share our perspective and to let them know what we have in mind". -- JIS