Continuing our series of #Covidtimes talks , our next guest was Anatt Finkler – Creative Director , Global Denim Mexico . Global denim is a well known mill from Mexico and Sandeep Agarwal spoke to her to get a Mexican perspective in the current situation. It was an interesting talk which revealed that perhaps Mexico might come out with lesser damage in this crisis than many other countries. Here is the script of the talk :
Sandeep
Hi Anatt, How are you?
Anatt
Hi Sandeep, I am fine, How are you?
Sandeep
I am also good, how is Mexico doing?
Anatt
In my personal life, everything is good. We’re living inside and my family is also doing fine. As far as Mexico is concerned, we entered into the quarantine phase till June 01, we have over 6000 cases and more than 500 people have lost their lives. But there is a lot of uncertainty and we are not sure if the authorities are telling us the truth. All non-essential businesses have been closed and only a few essential businesses are allowed.
So far as the Mexican Textile Industry is concerned, when the government asked us to close the operations we offered that we can manufacture the protective suits and other apparel to help you to fight this pandemic but the Government said – NO. So that tells you that they are not understanding the problem, the Mexican textile industry is so powerful that it can produce the mask and other protective garments for the healthcare people because no one knows the scalability of this pandemic but the government said you have to close and whoever is not going to close, going to be penalized.
Sandeep
So then from where the government is getting all these PPE and protective masks?
Anatt
Well, 13% of the textile industry here involves manufacturing in such PPE which stay open during this time, apart from that we and other factories also urged to do the same to ensure the adequate production but we’ve been asked to shut.
Sandeep
How much is the % contribution of the Textile Industry in the GDP of Mexico and How big is this Mexico?
Anatt
The textile business in Mexico is one of the biggest industries in Mexico, we can say it is a very large part of the economy. As far as denim is concerned, we do a lot of denim and export a lot too and due to this pandemic, more than 400 thousand people are going to lose their jobs only in the Textile Industry so you can imagine how big it is.
Sandeep
We’d like to understand that is the Mexican market focused mainly on the USA market and exporting to the USA?
Anatt
Yes, If you’re creating a manufacturing facility in Mexico, you have to think to export to America. Therefore most of the supply chain which we create in Mexico goes mostly to America, South America, Panama, and Canada. And I must add that Nearshoring is the future and you’ve to think about sourcing close to home which also results in low carbon footprints and you’ve taken all the advantages of duty-free agreements which we have with America and therefore Mexico is going to be a very key player to the USA exports.
Sandeep
In the last few years, due to the dispute and trade war with China, some business got shifted to Mexico and it has been continuously happening, so in the last two months, have you seen any upward movement in business queries, I mean are the buyers from the USA inquiring more about doing business in Mexico?
Anatt
Yes, this has already started to happen since the times of trade war with China started. So we saw many major brands that used to source from Asia, primarily from China, were diversifying their supply chain. I am not saying that all the sourcing shifted from China to Mexico, but yes, they are considering various options and Mexico is one of them.
The entire sourcing base is not possible to shift from China or from Asia to Mexico but yes some parts they are considering to shift to Mexico. Let’s call GAP just an example, has moved some parts of its sourcing to Mexico which is a huge opportunity for all of us. So, yes it has been started and post-pandemic we are expecting some more to come.
Sandeep
Some destinations like Pakistan, Bangladesh, and China have been witnessing huge cancellations of orders by European and the USA buyers, so I wanna know if the same thing has happened in Mexico or not?
Anatt
No, we don’t have any cancelations so far, though we have some postponement of orders due to the global lockdown. The brands and retailers have been very supportive during this tough time. By postponement, I mean if any order which was supposed to be delivered in the month of May and June, they’re pushing it for July. We are not having any new orders because of this lockdown and of course, all of this depends on when the government opens economy.
For us, we did some weeks ago, we did supply an order that was meant to go to Nicaragua because they’re still open but then the entire supply chain there is so disrupted that, for example, if it takes 15 days to get my shipment from Mexico to Nicaragua for them to start manufacturing and in 15 days if the situation in Nicaragua changes and the manufacturing in Nicaragua closed, then there will be a problem as my fabric is already on the way.
This is a complete pause like situation, no one is producing anything and we really appreciate the brands that haven’t canceled the orders. I guess this is the time for the partnership.
Sandeep
In terms of products do you feel that there will be some changes in the character of Denim in coming near time because of this crisis
Anatt
Well I think, in my opinion, Denim is a timeless product, and that’s the beauty of denim and you’re going to see something different over the period of time. In the future, I don’t think you’re gonna see anything different from what denim is now but in construction, I guess there will be a lot of changes and we’re already in this path of change.
Denim Industry in general introduced new materials like hemp, linen, Tencel into the denim that changes the character of denim and also the level of comfort and maybe the introduction of technology to the denim change a lot of things and I think that change is already happening and due to the current situation it is going to accelerate with the new innovations.
For example Levis came up with their smart trucker jacket and we’re already seeing new changes but we’re going to be a fast forward in coming times as we’re gonna see more demands.
We have been manufacturing antimicrobial fabric with the silver quality for some years now when the market wasn’t there, so when all these innovations happened the price increases, so the market doesn’t demand that much because they don’t need it at that time but the innovation was already there, but as this pandemic extends, the market will start getting more interest and they’ll be willing to invest more into this kind of innovation.
But I don’t think the basic character of denim is gonna change, it will be as it is now like a pair of jeans, I love my jeans and I don’t want to change this. However I feel that two spectrums of trends are going to get popularity, there will be a segment represented by Millennials, they will have a different sort of demands and the rest have other kinds of demand. Handicrafts and nostalgic collections are also going to be popular in the coming times. People definitely are going to bet on Quality over quantity.
Sandeep
The definition of sustainability is evolving and post-pandemic do you think the definition of sustainability is going to be changed?
Anatt
As you said, the definition of sustainability is evolving, and first, when you’re talking about sustainability it meant bringing good raw materials, less use of chemicals but now it would be important to consider three important things when we talk about sustainability i.e, Economic, Social and Environmental. So we have to talk about Economic, environmental and social things about sustainability when this would be happening we’re going to start seeing like some sustainable business as a business that works for the betterment of employees, that’s the business would be considered as sustainable which pay to their employees a good salary, so it’s all interconnected.
So a business can claim to be sustainable if they’re employing people and they’re not forcing employees to do over hours without paying them or they are providing healthy meals to the employees. So sustainability has to be a whole simpler thing. So I believe this is going to be changed and going to be reinforced because as we know sustainability they highlight the top priority which they start focusing on right now.As I mentioned sustainability has to become the new normal, so it should be kept out of marketing efforts.
I have seen brands doing a lot of marketing for their sustainability and let’s say the 90 percent of their line is not sustainable and then they market their 10% as if they were all sustainable, so for example if a brand has only 10 jeans made with organic cotton, that would mean they are sustainable, I think Brands have to start being truth and taking their stories and their values and learn how to translate them back to their end consumer.
Sandeep
What are the positives things you see from the current situation?
Anatt
I guess that depends on how this virus plays out in the coming months. Nearshoring is one of the positives from this but that also depends on a lot of factors. For example, if China opens up first and the rest of the world remains closed then China is going to get more momentum.
So the possibilities of all the positives of Mexico on a short-term basis depending on when the Mexican economy opens. But in the end, people are going to start creating a more transparent supply chain, also I feel transparency in the disclosure of data of emission and carbon footprints are going to come.
These things are going to be the new normal and also the brands and retailers which we’re not hearing the voices would hear the voices and would take into their account with all seriousness.
Sandeep
It was a pleasure talking to you Anatt, thanks for your time.
Anatt
Thank you, Sandeep, and best wishes to everyone.
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