Dionne Rose, Business Reporter
David Walker of Walker's Apparel names China and financing as two of the sector's biggest challenges. - File
In the days when garment was king, the textile/apparel sector's value was priced above US$500 million per annum based on export earnings, while the number of jobs crested 30,000.
But in the 1990s, the sector hit its crescendo, and has been on a downward slope ever since.
Now all the foreign investors are gone - Jockey International, the last of them, will finalise its pull-out by December - leaving less than 20 active exporters, mostly small indigenous Jamaican companies that have maintained a tenuous hold despite garment's decline.
Another 10, who are members of the Jamaica Manufacturers Associa-tion, produce for the local market.
Remaining players
Some of the remaining players are The Uniform Centre, Heather Laine Limited, Ammar and Azar Manufac-turing Limited, Crimson Dawn Manufacturing Company, Lucy Lue, Just Kids, Walker's Apparel, J&E Industries and Apparel Export International.
The firms cite as continuing challenges, competition from cheap exports from countries such as China but also from big multinationals, high operating costs and expensive capital.
Crimson Dawn, a Jamaican-owned operation in existence for 33 years, exports sports wear and uniforms to some 17 countries in the region. Chief executive officer Paulette Rhoden says the company has managed to hold its own because of specialisation, the niche it has carved for itself.
But as Jamaica gains acclaim in international sporting arenas, the rules change.
The athletes, said Rhoden, are required to run under the signature of the Jamaica Amateur Athletic Association.
"So the Jamaica Amateur Athletic Association has bargaining power with international organisations and in that way they can get uniforms from the big organisations such as Adidas and Puma," said Rhoden.
"Before that, they would buy everything from Crimson Dawn."
The apparel sector within the last eight years has been steadily declining, hitting a low point of US$32.2 million in export earnings last year, a position expected to worsen as Jockey winds down production.
Within this decade, earnings hit a high point of US$360.5 million in 2000, but dropped to US$290.3 million a year later, and to US$229.4 million in 2002.
Earnings plunged
By 2005, the pace of the decline had gained momentum, with earnings then plunging to US$58.7 million.
As the earnings declined, so too have the jobs.
In its heyday, the sector provided nearly 30,000 jobs to mostly women in the 1990s at free zone manufacturing plants. Exports then reached more than US$500 million annually.
However, this changed after 2004. Jobs in the plants dropped to 6,577 persons in 2005, recovered slightly to 6,645 in the following year, but slipped again to 6,595 in 2007. Almost 600 of those jobs will be erased when Jockey locks down its operation.
Karl Samuda, minister of industry investment and commerce, has acknowledged the decline, but says he more intent on replacing the lost jobs with different employment
"We feel that there are other areas such as agro industry where the focus ought to be right now and not necessarily in the low-end jobs," said Samuda in a previous interview.
"We are looking for high-end jobs."
In the 1980s the apparel industry had more than 50 companies, whose business was buttressed by the quota-based Multi-Fibre Agreement (MFA) under which Jamaica and other Caribbean Basin countries were allowed hefty export quotas to the United States.
Cheap labour
Through the so-called 807 programme, the companies which operated under free zone status here, were allowed duty-free imports, had access to relatively cheap labour to assemble the garments, but faced other costs for rent, security and utilities.
By 2004, the MFA was phased out under World Trade Organisation rules, and China emerged as the place to look for cheap clothes.
The 807 companies also withdrew and headed for Mexico to take advantage of full tariff-free entry into the US market and cheap Mexican labour under the North American Free Trade Agreement (NAFTA).
Jamaica's exports under the 807 arrangements were virtually wiped out he same year. Only one of the 807 companies, Jockey International continued operating. But evidence of its eventual pull out came last year when it closed a facility in Sandy Bay, Hanover, displacing approximately 600 workers.
Company pulling out
Earlier this month the company, which has been in Jamaica for the last 24 years announced that it would be pulling out for good by year-end, displacing another 575 jobs.
The company, said the closure of the Lucea factory was linked to the shutdown of its Cooleemee, North Carolina knitting facility, from which the Jamaica operation got its fabric.
The two plants are on the market for sale.
David Walker of Walker's Apparel Manufacturing Company has been in the apparel industry for 24 years. His company only produces for the domestic market. But Walker too says he caters to a niche market that keeps his company buoyant, supplying uniforms to stores, the transport sector and the security forces.
He sees China as the main danger to domestic garment companies, as well as access to affordable capital.
"The local manufacturer can't compete with them. When you bring in trailer loads of ready made goods, nobody can compete with Chinese goods," he said. "And then financing is a problem. Anybody in business has that problem - financing," he said.
Rhoden, however, says despite the challenges Rhoden, she believes the garment sector continues to add value to the economy.
"It could be one of the saving graces to re-employ women in the industry," she said. "You should look at it to see what can be done for local things."
dionne.rose@gleanerjm.com
