The Brazilian Textile Industry
– Could locally produced apparel be the answer to sustainable fashion?
Bachelor Thesis Textile Product development & Entrepreneurship
Authors: Esmeralda Persson Isabel Sjöholm Sara Rydén
Essay number: 2020.12.08
Title: The Brazilian textile industry -Could locally produced apparel be the answer to sustainable fashion?
Publishing year: 2020
Authors: Esmeralda Persson, Isabel Sjöholm & Sara Rydén Supervisor: Thorbjörn Magnusson
Abstract
The Brazilian textile industry has many years of experience in producing apparel within the country. Brazil is a country with a well developed supply chain, yet they import a big amount of manufactured textile products from Asia each year. Globalization has made fashion brands look outside of the country's borders to be able to deliver a good price to the end consumer.
In this study an investigation has been made to elucidate why the apparel companies import from Asia, what is imported from Asia and how the image of the companies would be affected by working more sustainably by utilizing the existing resources available in Brazil.
In order to learn why companies do import, semi-structured interviews have been made with people who work and have good knowledge regarding this subject. To put this matter into context a Brazilian apparel company named Cia.hering has been used as an exponent for this report. This to get a more clear view on how the company might be affected by producing more locally and if it would be possible. To learn about how the Brazilian consumers look at sustainable fashion and what they think of Cia.Hering as a company a survey has been conducted. The outcome of this study shows that the consumers have a big effect on how companies choose to produce but that it is up to the individual apparel company to choose how they want to produce their goods. Producing locally makes it a lot easier to control the full supply chain and to work as a more transparent company.
Keywords
Supply-chain, Sustainable fashion, Locally produced, Cia.Hering, Import, Apparel
Foreword
This is a bachelor thesis study for the Textile product development and entrepreneurship programme at the Swedish school of Textiles, Borås University. We would like to thank our supervisor Thorbjörn Magnusson who has been a great support and been giving us good ideas for this study. We would also like to thank our opponents for their constructive criticism throughout this work and the people that have been answering our survey. Furthermore we would like to thank our interview contacts Clarisse Leite, Ronaldo Jacobs and to David Bilsland and Susanne Edström that has provided us with the contacts necessary for this study.
Last but not least we would like to thank SIDA that has provided us with a scholarship necessary for our travels to Brazil for this study.
Abstract 3
Keywords 3
1. Introduction 7
1.1 Background 7
1.2 Problem background 8
1.3 Purpose 9
1.4 Research questions 9
1.5 Delimitations 9
1.6 Concept definitions 9
2. Method approach 11
2.1 Literature study 11
2.2 Interview 12
2.3 Survey 12
2.4 Sources and credibility 12
2.4.1 Method criticism 13
2.4.2 Response analysis 14
3. Method 15
3.1 Theoretical reference frame 15
3.2 Empirical study 15
3.2.1 Interviews 15
3.2.2 Survey 16
4. Theoretical reference frame 18
4.1 Apparel production and environmental impact 18
4.1.1 Fibre Production 18
4.1.2 Spinning 19
4.1.3 Fabric Manufacturing 19
4.1.4 Finishing Processes 20
4.1.5 Apparel Manufacture 21
4.1.6 Distribution and Retail 21
4.2 UN’s take on environmental and human rights impact in the textile sector 22
4.3 The effect of producing apparel locally 23
4.4 The effect of importing apparel 24
4.5 The consumer's view and image of a sustainable textile products 25
4.5.1 The effect of the brands image 25
4.6 Imports to Brazil today 26
5. Company description 30
5.1 Cia.Hering 30
6. Results of empirical study 31
6.1 Result of survey 31
6.2 Result of interviews 38
7. Analysis 40
7.1 Survey results 40
7.2 Interview analysis 41
8. Discussion 44
9. Conclusion 47
10. Further research 48
References & Annex 49
Attachments 53
1. Introduction
This study will address the Brazilian textile industry and how it works today. The main topic that is going to be discussed is how Brazil works with sustainability and how this can be developed primarily by using local producers instead of importing textile products from Asia.
The thesis will be written with the help of industry professionals who work with imports, including from the Brazilian apparel company Cia.Hering. In order to gain a better understanding of how Brazilian consumers view this problem, a survey will be conducted.
The study will further elucidate why the companies import, what is imported from Asia and how the image of the companies can be affected by working more sustainably by utilizing the existing resources available in Brazil.
1.1 Background
Brazil has a history of 200-years in the textile industry and does still have a complete textile chain. Brazil has everything from fiber production, spinning and weaving mills, processors, apparel manufacturers, fashion shows and strong retail segments. On the international market Brazil is a reference when it comes to design of beachwear, jeans wear and home wear. The textile industry is the second biggest job creator in Brazil and has 1.479 million direct employees and 8 million more if indirect employees and income effect are added, 75% of which are women (TexBrasil 2019).
Even though Brazil has a complete textile supply chain, Brazil imports approximately 60% of their garments from Asia. Brazil's import product share within textile and apparel to China is 8.40% while the export product share is only 0.81% (Wits 2020). Because of this, the Brazilian garment sector loses upwards of 2.5 BRL billion each year (Fujikawa Nes 2012).
The textile industry in Brazil is today worth 65 billion dollars and is employing millions of Brazilians. Their two most produced textiles are cotton and leather where Brazil is the fourth largest exporter of cotton in the world (Al Mahfuz 2019). Yet, the textile industry in Brazil is young compared to other countries.
The authors are studying Textile Product Development and Entrepreneurship at the University of Borås where the aim for a more sustainable world is a big part of the program and sustainability has been integrated in all courses. The authors spent six months in Brazil doing their exchange program and they got to know the country and saw the need for development. The exchange program was mainly about business and one of the courses was International Business with focus on the Brazilian economy. While learning about the gap between the companies and the textile industry they started to develop questions regarding this problem. During the time there they learned about Brazil's financial situation as they studied courses in business and management. Brazil is growing in many markets around the country and the Textile and Apparel Chain Revenue was 48.3 billion US$ in 2019. Their trade balance (excluding cotton fiber) was negative 3.1 billion US$. Average apparel
production was 8.9 billion pieces (apparel, socks and accessories, home textiles) (TexBrasil 2019).
1.2 Problem background
Brazil has a long history within the textile industry but has lately suffered from competition with the Asian apparel market mainly because of their low prices. The country has become to play an important role in the modern textile industry. Brazil was discovered in the 1500s century by a Portuguese diplomat named Pedro Álvares Cabral. Pedros fleet was on its way to India but instead it ended up in Porto Seguro which is a city between Salvador and Rio de Janeiro (Fonseca 2006). The portuguese colonization started and in the mid-sixteenth century, Portuguese people started to spin and weave in their homes. The production was limited to local consumption but in the seventeenth century the production scale grew dramatically due to industrialization. Fabrics were later on exported to Portugal and the globalisation of the Brazilian textile industry was a fact (Marx Delso 2010).
A lot have happened since Brazil put its name on the textile world map and today they are using different types of strategies to remain competitive on the market. Competitive advantage is an important issue as Asian products are competing with the Brazilian market.
To prevent this Brazilian apparel companies have customized their products through design and putting the products faster on the market to meet the customer needs. This is a way of using the strategy of product differentiation and this strategy has been adopted by developed country companies that are meeting the demand of higher income customer segments (Batista, Lisboa, Augusto & Almeida 2016).
A different angle of this issue is that Brazil has technological weaknesses in their industry such as lack of education within engineering and R&D (Research & Development). China on the other hand is a good example of a well-developed country on all these points and has therefore also a major competitive advantage (Batista, Lisboa, Augusto & Almeida 2016).
The textile industry is also facing a new era when the world has to pay a high price for cheap clothes. The Swedish clothing brand H&M is a good example of a company that wants to be seen as a climate hero, still their business model expresses the opposite. The core of H&M's business model is low prices, rapid consumption and fast changing trends. H&M is struggling to be a climate-committed company and still meet customer demand, which is difficult due to fast fashion. Consumers are more likely to dispose of cheaper, mass-produced products than items that are more expensive. Sustainability comes at a high price and even though H&M is trying to communicate the extra value that comes with working more sustainably it is hard to keep prices low (Gerretsen & Kottasová 2020).
1.3 Purpose
The purpose of this study is to explore the possibilities to use the local textile value chain in business operations instead of importing. It will also examine the consumers attitudes towards this. The study will revolve around a Brazilian apparel company that imports from other countries and therefore the apparel company Cia.Hering will be used as an exponent for this study.
1.4 Research questions
- What strategy does Cia.Hering have today considering imports?
- What does Cia.Hering think about the possibilities using local resources in business?
- Would this bring Cia.Hering added value from a sustainability aspect?
- What attitude do consumers have towards this?
1.5 Delimitations
In order to supplement the purpose and research questions, delimitations that had to be made were clarified. The study does not intend to create new working methods but to research for a more sustainable way of producing textile products.
The study will only focus on the transport issue when it comes to the environmental aspect. It will not take into consideration other environmental issues within the supply chain.
Continents and countries that produce clothes outside Brazil and Asia have not been taken into consideration when it comes to imports. The study will not discuss any exports of Brazil.
The survey used for this report will not include answers from people outside of Brazil. This study will exclude the exporters to Brazil´s point of view.
1.6 Concept definitions
● Supply Chain
A supply chain is the network between companies and suppliers. The supply chain is the whole process of producing a product or service, from start to finish. It includes all stages to get a product or service ready to be consumed by the final buyer. The process involves different activities, people, entities, information, and resources. To remain competitive on the market companies develop supply chains to reduce their costs (Kenton 2020).
● Sustainable fashion
Sustainable fashion is clothing, shoes and accessories that are being manufactured, marketed and used in the most sustainable way as possible. This involves both environmental and socio-economic aspects and can be implemented in all stages of the product’s life cycle. Sustainable fashion is everything from raw material, production, design, manufacturing, transport, marketing and final sale seen from an environmental perspective. Reuse, repair, remake and recycling are also important components that are being included and explains what sustainable fashion is (Green Strategy 2020).
● Locally produced
In this study locally produced is referring to making use of the local resources.
Localism is distinctive and has to be preserved but at the same it is important to make it grow. All products that are being locally produced inspire and challenge the community and are at the same time creating jobs. Producing locally creates a stronger society, welfare and is also one of the solutions of working more sustainably (Fletcher 2008).
2. Method approach
The data that has been used in this study are primarily primary data such as interviews and surveys. The study also contains secondary data. The textile apparel industry in Brazil will be studied with the help from the data mentioned above, the authors own knowledge, interviews and a survey. Therefore this study contains both qualitative and quantitative research. This is to get a deeper understanding of the country and its apparel industry from within but also from a consumer's behaviour and vision to make the study as valid as possible.
This study has been formed in both an inductive and deductive way to meet the purpose of this study. The methods for this study are mainly done in an inductive way except for the survey that is deductive. When the scientist can draw logical conclusions about the subject from developed facts which this study has done with a survey it is done in a deductive way.
When the scientists base their information from observations in reality and bring it to generalisation in a theoretical reference frame it becomes an inductive research (Holme &
Solvang 1997, s. 50-57).
Image 1: Chosen methods
2.1 Literature study
A literature study has been made to review previous research to get a better understanding of the subject. This to let the study show a deeper knowledge of the issue and see where the problem lies and where earlier research is missing. This information will be filled with the other methods of the study. The literature study also presents concepts that will permeate the study. This will also get a deeper credibility to the study (Bryman & Bell 2015).
2.2 Interview
The interviews for this study were made for the purpose of getting an insight of how the apparel company and the import company are working today. When semi-structured interviews are made the questions should be flexible in how they are asked and should also be adapted to the situation. This allows the informant to express their views in their own terms which provide qualitative data. Although it is also important that the questions are not asked in a too flexible way since this can be misleading to what the interviewer does actually want to know and can lead to misleading or un-necessary information for the study (Holme &
Solvang 1997, s. 80-81). For this study the interviews were only able to be answered through emails and have therefore not been recorded or transcribed. They have only been done in a written way.
2.3 Survey
A deductive survey was made in purpose of getting the consumers view of the chosen company in this study. When a method of this kind is made it is important to keep the survey short and consist. A survey should only include necessary questions asked in a language that makes it easy to understand for the questionnaire. If the survey has the purpose to have questionnaires within a wide range of age it is important that the questions are asked in a way that is easy to understand for everyone that participates. The questions should not have leading questions so that the questionnaire can answer quickly and therefore not lose their interest (Holme & Solvang 1997, s.173-176).
2.4 Sources and credibility
To make this study as valid as possible it got guidance from people in Brazil that have experience and are working within the textile field area. These people have work experience for the chosen textile company and within a company that imports textiles to Brazil. These are the people that have been interviewed.
Everyone that has participated in the interviews have been given the option of being anonymous and the survey was completely anonymous. It can be important for the study that the people participating can have the option to be anonymous so that they can express themselves sincerely. Otherwise they might not be comfortable to tell their honest opinion or the truth and will only answer what they believe they should or what the interviewer wants them to say (Recker 2013). For the background research and literature study the secondary data used comes from scientific and peer reviewed articles as well as other sources such as websites and articles. If the data is peer reviewed it means that the data has been reviewed via referent review. Which brings more credibility to the information and the study (Rienecker, Stray Jørgensen, Hedelund & Lagerhammar 2008).
2.4.1 Method criticism
There were a few risks in doing this study that could have been challenging. The cultural differences could be a risk of misunderstandings such as the fact that this study is written from a western world country perspective with different values and different ways of thinking. Brazil is a developing country and therefore it was important to have an open and professional mind when interacting with the locals and their environment.
Another challenge that this study faced was the language barrier especially with the survey.
Some of the surveys were answered face to face with the interviewer and if the respondent had any supplementary questions the interviewer was able to help out. Here the main issue was the language barrier but the interviewers were prepared with translations to make the process easier and faster. Most of the surveys were made through a link that was sent out on social media so the respondents were not able to ask any supplementary questions. The fact that the interviewer was not present when all of the surveys were made most likely shows that it would not affect the result as the interviewer was only available to translate.
The interviews could not be made in person due to the prevailing circumstances. Therefore they had to be done over email.
2.4.2 Response analysis
The total number of participants of the survey were 96 people and the survey was open for people to answer from April 27 2020 to May 19 2020. A 100% have answered all questions asked. Equal number from each age category should have an answer for the survey to be of high quality. This is unfortunately not the case for this study which makes the response rate somewhat lacking (Holme & Solvang 1997, s.199-200) . Since the survey shows results from less then a hundred people the survey can not represent a whole nation and it is only a cluster sample of the customers of Cia.Hering.
The following figure show the respondents from each age category:
Age Percentage (%) Respondents
12-17 1,04 1
18-24 31,25 30
25-34 56,25 54
35-44 9,38 9
45-54 2,8 2
Figure 2: Chart of respondents of survey according to age.
When it comes to gender the respondents were 48,96% women and 51,04% men. The respondents had the ability to choose Other as well but none of the participants chose to.
3. Method
In this chapter the purpose of the chosen methods used for this study will be further explained.
3.1 Theoretical reference frame
This research has been done with scientific and peer reviewed articles within the field. The articles used for the study have mainly been taken from the University of Borås database.
Articles for this study have also been coming from people that the authors have been in contact with during this study. These people have made this study possible and are people that are working within the field of the textile apparel business and industry of Brazil.
The literature study has been important for this study to get a full understanding of the background of the textile apparel industry in Brazil. To find out where the problem lies and why many companies do import and if they can instead use local producers and production.
The disciplines that have been mainly focused on have been the import of apparel goods and the existing industry in Brazil that produces apparel. Further studies have also been made within the disciplines of sustainable fashion and how this can be adapted to the industry.
Both primary and secondary data has been used during the formation of this study.
3.2 Empirical study
The inductive study takes part in the semi-structured interviews that were implemented to the chosen textile apparel company and the import company. The purpose was to get a better understanding on how the industry works with production both locally and abroad. This is to see where the problem lies today and be able to make a more sustainable industry by locating the possible changes for the future from the business point of view. The deductive study was made with a survey with the purpose to see the consumer's point of view. To get an understanding of how they see sustainable fashion, what sacrifices the consumers could be willing to do and how this could change the consumers point of view of Cia.Hering. The inductive study was applied on the company and the deductive study on the consumer to see how both sides aim for the issue of producing locally.
3.2.1 Interviews
The interviews used for this study have been made with people working at Cia.Hering. This has given an insight and information of how the company is working today in terms of import and how they would be affected by using local producers instead of importing from other
countries. Interviews have also been made with a Brazilian company that works with the import part of textile apparel goods from other countries to Brazil. These people are working within international buying and sourcing management.
The purpose of this is to get the perspective of the issue from both an apparel company and an import company. Important information that these interviews have brought the study, has been regarding the amount of imported fabrics and garments, transportation costs and how they work on environmental issues and sustainable fashion.
The interviews that have been made have been semi-structured interviews although different interview guides have been used for different companies. The semi-structured interviews have been done over email due to prevailing circumstances which has limited the possibility to meet in person.
Interview guide to Cia.Hering has been highlighting the following areas:
- Background of the interview respondent
- The amount and type of apparel import that the company imports.
- What amount and type of locally produced apparel in Brazil in being used - The company's view on sustainable fashion
- Futuristic view on the possibility of produce locally
Interview guide to import companies has been highlighting the following areas:
- Background of the interview respondent
- Reason for the import even though the expenses due to high import taxes
- What would have to be the change for the possibility to be able to produce in Brazil - Existing apparel production in Brazil
3.2.2 Survey
The survey that has been implemented is a quantitative survey to collect answers from Cia.Hering's consumers with no definite demographics. The Survey has been used to get a better understanding on how the consumers look at the textile industry in Brazil and what they think about different sustainability aspects within the textile sector. The goal with the surveys was to find out if the Brazilian market is ready to make adjustments in terms of sustainability. To find out what image they already have of the Cia.Hering brand and how it could change if the brand would become more sustainable and if they would start producing locally. It was also to get statistics over the consumers point of view. The questionnaire has been answering the survey anonymously except from age and gender. The age was to show consumers beliefs and generation and see if there was a connection. Also what target group
would be willing to see a possible change in the future. The survey was formed with ten questions for the questionnaire to answer and with one answer to choose. A total of 96 people answered and the survey was available to answer from April 27th to May 19th 2020.
4. Theoretical reference frame
In the chapter of the theoretical reference frame, theory of the topic of the study is presented to give the reader an understanding and overview. Here the concepts that the study will affect are described.
4.1 Apparel production and environmental impact
All textile products begin their life at the raw material extraction stage, for example the cradle stage. It then passes through various stages; manufacturing, distribution and use, before the cycle ends at the disposal stage. The supply chain is complex and includes many segments.
The first element of the textile supply chain is fibre production, followed by yarn and fabric production. It ends in the apparel manufacturing process and when becoming a finished product it is ready to be sent to the customer (Muthu 2014). Through all the steps in the supply chain which the product passes, it has a negative impact on the environment. This study has divided the apparel production in six processes and listed the most recognized negative impacts on the environment to consider for each process.
4.1.1 Fibre Production
The first step in the life cycle of textile products is the raw material preparation. The two main sources of textile materials are natural and man-made fibres. Natural fibres are either from a plant, vegetable or animal fibre. Plant fibre includes conventional and organic cottons, rayon, linen, hemp, jute, ramie and sisal. The animal fibre category consists of wool, silk, mohair, cashmere, angora and alpaca. The production process of the natural fibres begins with cultivation, followed by growth and harvesting. When the fibre is obtained from its source, it will be transferred to a textile mill for further processes (Muthu 2014).
There are three types of man-made fibres: regenerated cellulosic, synthetic and inorganic.
Viscose rayon, acetate rayon, lyocell and modal are regremerated cellulosic fibres that are produced from the formation of natural polymers. In man-made fibres of synthetic origin which includes polyester, polyamides, polyolefins and polyurethanes, the production process starts with a crude oil manufacturing process (Muthu 2014).
Negative impacts associated with natural fibres to consider:
● Amount of energy needed for production and the source of energy
● Amount of pesticides/fertilizers used
● Amount of water used and its source
● Amount of other chemicals and consumables used
● Amount, distance and type of transportation involved in the whole production process
● Amount of packaging materials used
● Type and quantities of pollutants released to air, water and soil
● Amount of land used and the yield
● Amount and density of waste produced (Muthu 2014).
Negative impacts associated with synthetic fibers:
● They are obtained from non-renewable resources (depletion of fossil fuels is one of the major threats posed to the environment by synthetic fibres)
● Require more energy in the production stage
● Considerably higher greenhouse gas emissions during the manufacturing phase
● Problems arising from the waste management
● Non-biodegradability
● Require a substantial amount of chemicals in the manufacturing process
● Emit toxic pollutants into different media across their life cycle
● Pose various health and toxicological threats (Muthu 2014).
4.1.2 Spinning
For the fibre to become a yarn it needs to go through a spinning process. The spinning process is different depending on the fibre. During the spinning process the following activities have a negative impact on the environment:
● The transportation from farm to ginning facility
● The transportation from ginning facility to spinning factory
● The types and distances of internal transportation between different spinning departments
● The energy use and sources in the various processes
● List of consumables used, such as lubricants, packaging materials and their disposal
● The amount of fibre waste created and its disposal
● Chemicals used and their disposal
● The amount of dust, short fibres and noise created (Muthu 2014).
4.1.3 Fabric Manufacturing
The manufacturing process includes either knitting, weaving or nonwoven and each process differences from the other. The environmental impacts for the fabric manufacturing stage may include the following:
● The transportation from the spinning facility to the fabric factory
● The means of internal transportation and the distance between different departments of a fabric factory
● The energy consumed in various processes and its source
● List of consumables used such as lubricants, packaging materials and their disposal
● Solid waste created and its disposal
● Chemicals used and their disposal
● Production accessories such as cone inserts, empty beam frames and their disposal (Muthu 2014).
4.1.4 Finishing Processes
The finishing process is the last step in the fabric manufacturing process and includes many different sections. There is no fixed finishing process for any of the fibres or types of fabric and varies depending on the end-use of the material. The most common ones are singeing, desizing, scouring, souring, bleaching, mercerizing, dyeing, printing, sanforizing and calendering. The water emissions are the most crucial part in the process due to the large quantity of chemicals used (Muthu 2014). Listed below are some points that are important when considering the environmental impacts of the finishing processes:
● Production of various chemicals and other auxiliaries
● Maintenance and safe disposal of dyes, chemicals and auxiliaries
● Quantity of chemicals and dyes used per unit weight of textile
● Transportation type and distances from weaving to finishing factory
● Internal transportation types and distances between different departments of the finishing factory
● Amount of water used for processing and its source
● Amount of effluent discharged to different media
● Treatment of effluents in wastewater treatment plants
● Energy used in various processes and its source
● Other consumables used in various finishing processes such as lubricants, packaging materials and their disposal
● Amount of solid waste created and its disposal
● Production of steam from boiler and its associated impact (e.g. procurement, storage and burning of firewood)
● Production of hot-air from appropriate sources and their associated impacts
● Quantity of hot air and steam used
● Production accessories for finishing processes and their disposal issues (Muthu 2014).
4.1.5 Apparel Manufacture
The apparel manufacture is the final process in the clothing production chain and contains various operations such as spreading or laying, pattern cutting, sewing and attaching interlining components to garments. This process also includes ironing and packaging (Subramanian Senthilkannan 2014). The considered impacts on the environment during these processes are:
● The transportation (different types) and distance from finishing factory to garmenting factory
● The internal transportation (different types) and distance between different departments of the finishing factory
● The energy used in the garmenting operations
● The procurement of different accessories – distance and means of transport
● Scraps of fabric from various operations, especially waste from cutting
● Rejected garments
● Other consumables such as lubricants, packaging materials, transportation and disposal issues
(Muthu 2014).
4.1.6 Distribution and Retail
This phase mainly involves the transport from the factory to the customer via the retailing process where the most crucial part is the distance involved. Long distance transportation, especially air freight (which is the most frequently used transportation) has a negative impact on the environment (Muthu 2014).
4.2 UN’s take on environmental and human rights impact in the textile sector
The United Nations was founded in 1945 and is an international organization working on action on issues confronting humanity in the twenty-first century (United Nations 2020). See below figure for the Agenda 2030 goals from the UN.
Figure 3: The 17 Global Goals by the United Nations.
(Global goals 2020)
Although it has for this study been hard to find a specific take on environmental and human rights from the UN that specifies their take on the Textile industry. UN still works hard on human rights, climate change and has a zero tolerance towards child labor. These three topics are big within the textile area. It has for many years been known that child labor was not uncommon within the textile industry. However child labor in environments that could be a hazard to a person's health, safety or morals has been banned as illegal from the UN since 1973. A person counts as a child until the age of 18 according to the UN (UNICEF 2020).
The textile industry and the parts of production are known to be a toxic environment that could be a hazard for a person's health.
The UN is one of the largest international actors in the field of human rights. One of the human rights aspects is no poverty. The textile and fashion industry is known for its low payments of the workers in the factories and the textile factories have to pay at least the minimum wage to their workers. The minimum wage is used to protect workers against unduly low pay.However the minimum wage differs depending on the country and could still be too small to actually make a living for the worker (ILO 2020a). For example today the minimum wage for textile workers in Bangladesh is about 570 Swedish krona per month and is one of the lowest in the world (Sigvardsson 2018). Today this problem is up to the
company's requirements on their cooperative or self owned factories. A good example of this is the Rana Plaza tragedy in 2013 when a textile factory in Dhaka, Bangladesh collapsed and 1134 textile workers died. The collapse was due to the poorly maintained building. After this consumers started to show a bigger interest in how their garments were produced and companies that had production at Rana Plaza got a huge amount of criticism (The true cost 2015).
Number 8 in the goals of Agenda 2030 which is “Decent work and economic growth”
explains how the progress to increase employment opportunities is needed. It is also important to reduce informal employment and the gender pay gap, to completely end modern slavery and child labor and instead promote safe and secure working environments to create decent work for all. UN states that economic growth should be a positive force for the whole planet. Financial progress should create decent and fulfilling jobs while not harming the environment (Global goals 2020).
The UN has dedicated the goal 13 of Agenda 2030 to climate action and that goal stands for
“Take urgent action to combat climate change and its impacts”.
This is what the UN states themselves have on the Agenda 2030 goal of Climate Action:
Climate change is a real and undeniable threat to our entire civilization. The effects are already visible and will be catastrophic unless we act now. Through education, innovation and adherence to our climate commitments, we can make the necessary changes to protect the planet. These changes also provide huge opportunities to modernize our infrastructure which will create new jobs and promote greater prosperity across the globe (Global goals 2020).
4.3 The effect of producing apparel locally
Producing apparel locally has a huge effect on not only the environment but on people and on the whole supply chain. All of this has to do with what the consumers know and what they choose to buy. If consumers do care about where their apparel is being produced they will most likely look on the label to see where it is made. Labels do not always tell the truth though since the products often are being produced in different locations. The label tells us where the product is made, but this is only the last step of production and this makes the whole supply chain hard to trace (Brown 2019).
When producing and buying products locally it is easier to produce made to order products. If one product is not selling you can easily stop the production so that fabric leftovers will not be thrown away. However consumers do throw away their apparel and this is due to the unreasonably low price. The price makes it easy to throw it away after just using it a couple
of times. Paying a higher price will make the consumers use the goods for a longer time.
Producing locally usually comes at a higher price but if the consumers are willing to pay a higher price for apparel that is being locally produced it is a win-win situation (Brown 2019).
One of the biggest contributors to pollution in the textile industry is the transportation. All of the international fashion brands use airplanes and ships to transport and this emits a lot of carbon dioxide. One of the biggest benefits of producing locally would be that the transportation would be reduced and rails could be used instead as this type of transportation is more environmentally friendly. More than 60% of the garments are being produced in developing countries as labor and production costs are cheaper than in developed countries and 32% of this is being manufactured in Asia (ILO 2020b). When manufacturing in developing countries the awareness of environmental and human rights are usually less developed which often leads to exploitation. Producing locally makes it easier to control the supply chain and the consumers will also be given more transparent information regarding the production (Brown 2019).
4.4 The effect of importing apparel
Importing apparel has a big effect on the environment since it has to be imported from somewhere and therefore transported. Importing also has an effect on economics and employment since fashion companies have moved most of their manufacturing abroad. This affects the industry since the companies are relying on imported goods, but the question is, is it good or bad?
Globalization has made fashion brands look outside of the country's borders to be able to deliver a good price to the end consumer. Sourcing of material and craftsmanship is a big process of finding the best quality and location. The textile supply chain has been through a change over the last years to be able to meet the demand of the consumers. Parts of the supply chain are still located in developed countries where wages are higher but according to tags on textile products it usually says it has been made where the actual products were manufactured. Many products lose some of their value when the tag says made in China, when in fact a big part of the product is made somewhere else in the world. The actual production of the physical product may be in China but design, marketing and other parts of the process can be made somewhere else (Danziger 2017).
The industry's independence on imports is huge but also very complex and it is hard to say what affects what. Rick Helfenbein, president and CEO of the AAFA (The American Apparel
& Footwear Association) thinks that products that are being produced on American ingenuity and imported to other countries in the world is actually very good for the American economy.
Almost all apparel manufacturing have moved from the United States because of globalization, innovation, automation and over-regulation and this have left people without
jobs. To create more jobs, the United States has to invest in education to be able to employ Americans to carry out the intellectual and informational side of the textile industry (Danziger 2017).
Consumers have an important role when it comes to importing and according to a study conducted by 1,500 American consumers, the majority (52%) answered that it is important to know if the product is being made in the USA and sees it as a criteria. 60% of the respondents were also willing to pay more for a product being made in the USA instead of an imported one. If the industry were to offer products that the consumers actually demand, in this case locally produced products, this is one way to make the market grow. The result would be good for the consumer, the industry and the economy (Danziger 2017).
4.5 The consumer's view and image of a sustainable textile products
Organic products and sustainable brands popularity are increasing and consumers are getting more interested in recycling and an environmentally friendly lifestyle (Vehmes, Raudaskoski, Heikkilä & Mensonen 2018). Consumers go through a decision-making process when buying a product. It is a process that begins with consumers recognizing their needs and tries to find ways to resolve these needs. The problem and needs are recognized by the buyer and the information search starts. After seeking information, then the evaluation and selection begins where they plan their purchasing decisions based on the information found (Hawkinds &
Mothersbough 2010).
The generations with the biggest purchasing power today are led by millennials and generation z (Janefalkar 2019). These generations expect more from their brands and put a bigger demand for sustainable products. According to Nielsen's 2015 Global Corporate Sustainability Reports, 66% of consumers say that they are willing to pay more for their products if they are produced and sold by sustainable brands. The 73% of the responders who were positive to paying more was the generation of millennials (Davidson 2020).
4.5.1 The effect of the brands image
Brand identity is important. According to Joy Miller (2015) a brand identity is a representation of the values and the personality of the brand in a visual representation.
According to Diane Martin and John Schouten (2012), to understand how sustainable marketing affects customer behavior, the concept of sustainable consumption needs to be clarified. It is when a person's needs become satisfied without compromising the ability of others to meet their needs, either now or in the future (Martin & Schouten 2012). Paula Oliveira and Andrea Sullivan (2008) explains that sustainability is a new way of doing business. Customer demand is important but it is also necessary for companies to make
products and services will help customers to change their behavior and lead them to live a more sustainable life. When a brand markets themselves as sustainable, it creates value. The company generates demand by developing a strong relationship with the customers because of its transparent offerings, which is leading to repeated purchasing. The company also reduces risk and secure future earnings for the business (Oliveira & Sullivan 2008).
Solitaire Townsend (2018) explains that people think they can make a difference for the environment on their own, but the brands also have a big responsibility. In a survey made by Futerra's 2018 where over 1000 people from USA and UK participated, 88% of the consumers wanted brands to help them live sustainably. In the same survey 43% answered that companies make it more difficult to be environmentally friendly and ethical in their daily life. This is because of the fear of buying something made in an unethical way. Labelling can be unclear but also the lack of trancpiricy on social standards in the supply chain (Townsend 2018).
For companies to be able to meet the needs of a sustainable future, innovations need to introduce change at the core of the business model to change the unsustainability within the company at its source, rather than as an add-on to counteract negative outcomes of business.
This must be with high ambition with focused business model innovations that maximise societal and environmental benefits and not only economical gain (Evans, Fernando & Yang 2017).
4.6 Imports to Brazil today
Brazil is importing a lot of textiles and finished garments from other countries today.
According to IEMI's (2020) report about textile and clothing imports and exports in Brazil, 68.4% of all imports of manufactured textile products had China as its origin. The second largest attendance was from India, with 4.3% and the third Indonesia, with 3.8% of the total imported. These numbers show that China is exporting a huge amount of manufactured textile products and for a value of 364.498 million US$ only during the first quarter of 2020.
Figure 4: Main countries of origin of imports of manufactured textile articles (in US$ thousand FOB).
The amount of manufactured textile products that Brazil is importing is huge even if they do produce and export manufactured textile products from Brazil as well. What is interesting is what type of textile products that Brazil do import. IEMI (2020) have listed the amount of each product that is being imported and the cost over the last three years during the first quarter of the year.
Figure 5: Brazilian imports by clothing products, first part. The first three columns show the result of Jan-Mar/ 2018, the next three columns show the result of Jan-Mar/ 2019 and the last three columns show the result of Jan-Mar/ 2020.
Figure 6: Brazilian imports by clothing products, second part.
Figure 7: Brazilian imports by clothing products, third part. The total result of imported clothes.
Looking at the types of products that are being imported to Brazil over the last three years in the first quarter of the year it is possible to see what products that are more popular than others. By reading the tables you can see how much of each product that is being imported, the cost and cost/kg. Looking at what is being imported in the first quarter of 2020 the numbers are lower than previous years. The most popular products that are being imported are knitted products with a total of 184.727.000 pieces, with a value of 263.507.000 US$.
One of the products that is the most popular one is socks and tights with 56.086.000 pieces imported in the first quarter of 2020. Other products which are high in the list of most imported products are pajamas, clothing for babies and gloves.
5. Company description
Below is a short description of the company that has been chosen for the study. The company has agreed to use their name in the study.
5.1 Cia.Hering
Cia.Hering is a Brazilian apparel company. Cia.Hering includes the brands Hering, Hering Kids, PUC and DZARM. Cia.Hering is a clothing brand for both men and women of all ages to a low price. Their clothing is casual and focuses on comfort combined with quality, tradition and style (Cia.Hering 2020). DZARM is a clothing brand for the urban younger woman. DZARM focuses more on trends with 5 annual collections and is more expensive than Cia.Hering (Dzarm 2020).
Cia.Hering was founded 1880 by two brothers from Germany named Hermann and Bruno Hering. The company by then was called Trikotwaren Fabrik Gebruder Hering, which was a recreation of Gebruder Hering, a company the Hering family had owned in Germany years before. The brothers were born in Germany in a family of weavers and decided to move to Brazil in their 40s for a better life. They bought a factory in Blumenau, Santa Catarina in 1889, where Cia.Hering have their Headquarters today. It started out as a family company, where the children were working in the production and in the early 1880’s the t-shirts Hering made received rewards and became well known. The company grew and by 1967 Cia.Hering was the largest knitting company in Latin America (Hering 2020). When Fabio Hering became CEO of the brand in the early 90’s he stopped producing cotton yarn in Brazil and started to outsource 80% of the textiles. Today Cia.Hering is producing 30% in their own factories, outsource 45% and import 25%, mainly from China (Iandim 2012).
6. Results of empirical study
In this chapter the results of the study will be described objectively. The empirical study consists of a survey and two different interviews.
6.1 Result of survey
Below the results of the quantitative survey are presented. The survey was answered by 96 people and the majority of the people responding to the survey were between 18-34 years of age. The people responding to the survey were Brazilians.
How old are you?
Figure 8: Diagram showing age of participants.
The diagram shows that the majority of the people that participated in the survey were between the age of 25-34. Thereafter 18-24 and a few ones were between the age 35-44 and 45-54. The smallest group of participants were in the age 12-17.
What is your gender?
Figure 9: Diagram showing gender of participants.
The diagram shows that there was almost the same amount of women as men that participated in the survey. None of the participants stated themselves as other gender.
Have you ever bought anything from Hering?
Figure 10: Diagram showing how many participants that have shopped at Hering.
The diagram shows that almost 80% of the participants have bought something from the brand and 20% has never done so. However this does not state if the people that have never bought anything from Hering were familiar with the brand before or not.
Have you heard of the term “Sustainable fashion”?
Figure 11: Diagram showing how many participants have heard the term Sustainable fashion.
The diagram shows that almost everyone participated in the survey had heard the term Sustainable fashion before. However this does not show if the people knowing about the term were actually familiar with what the term stands for.
Which of the following options explains most what sustainable clothing means to you?
Figure 12: Diagram showing what relations the participants had with the term Sustainable clothing.
While asked what Sustainable clothing meant to the participants they got seven different answers to choose between. None of the answers are incorrect. It was only a way to see what people think about mostly when the terms are being used. The alternatives were, in most common order of answer results:
- Recycled fabrics - Durable, long lasting
- Reduction in chemicals used - Fair labor practices
- Second hand - Locally produced - Overpriced
Do you care about where your clothes are being produced?
Figure 13: Diagram showing if the participant cared about where their clothes were produced.
The diagram shows that approximately one fourth part of the participants did not care about where their clothes are being produced.
Do you think of Hering as a sustainable company?
Figure 14: Diagram showing if the participant was thinking of Hering as a sustainable company.
The diagram shows that more than half of the participants could not tell if they were seeing the Hering company as a sustainable company or not. Only less than 30% are seeing the company as sustainable.
Would you be willing to pay more for your clothes if you knew they were locally produced?
Figure 15: Diagram showing if the participants are willing to pay more for locally produced clothes or not.
The diagram shows that the majority of the participants are willing to pay more for their clothes if the clothes were produced locally.
Would you consider Herings image more positive OR negative if they worked in a more sustainable way?
Figure 16: Diagram showing
The diagram shows that the majority of the participants of the survey would get a more positive view of the Hering company if they would work even more with sustainability.
Do you know that Brazil has the ability to produce garments locally?
Figure 17: Diagram showing if the participants were aware of Brazil´s ability to produce apparel.
The diagram shows that approximately 30% of the participants were not aware that Brazil has the ability to produce garments locally. The majority of the participants were aware of this fact.
6.2 Result of interviews
The company that has been interviewed is Cia.Hering which has been the chosen company for this study. Clarisse Leite has been the contact person at Cia.Hering for this interview.
Leite works as a Garment merchandiser. She is responsible for guaranteeing the good constructions on imported garments and national accessories inside Cia.Hering. She also helps to develop the garments solicited by designers of the Hering Brand.
The person interviewed regarding apparel import to Brazil in general is Ronaldo Jacobs.
Jacobs has worked as an international buying agent, helping Brazilian companies to import from Asia for many years and today he is working as a Sourcing Manager at Malwee Group, in charge of sourcing overseas. He has also worked at Cia.Hering for more than 10 years.
Below the results of the interviews are presented.
What apparel products are imported to Brazil and how does Hering work with imports today? What and why are you importing?
The garments that are the most common to be imported to Brazil today are woven garments such as shirts, jackets, dresses and Bermuda shorts. Other garments are sweaters and fitness clothes. Products that Hering is importing are ready garments as above but also fabrics and accessories. The reason for this import in general is that Brazil does not have the expertise or production capacity to produce it. It can also be because of lack of labor for producing those garments or that they do not have that fabric of low cost. When it comes to Hering they also import because they find that other countries than Brazil have better standards with different techniques and fabrics for more competitive prices.
The way Hering is planning their import is by first planning their collections and then meeting with the planning team and there it will be decided what will be imported and what will be produced internally.
Why do Brazil import so much textile from Asia even though the import taxes are high and Brazil already has an established industry?
According to Ronaldo Jacobs “As I have previously mentioned, Brazil is not competitive or does not have expertise/production capacity to make products like woven Bermuda shorts, woven shirts, woven jackets, woven dresses, sweaters, fitness products, etc”
What is produced in Brazil today?
Products that are produced in Brazil today are knit jersey garments mainly in cotton such as t-shirts, polo shirts, fleece and denim articles like pants and shorts. Hering are trying to produce garments and accessories locally if Brazil has the right labor available.
How is Hering working with sustainability today?
Hering extremely concerned with sustainability, some actions that they take are their commitment with the environment "Make choices that are always guided by eco-efficiency and that promote the circular economy." They have 4,2 millions o m² of preserved forest in Blumenau, re-utilizing more than 80 tonnes of rest of plain fabric and knit and 100% of all of their utilized water on tint process or print is treated with ozone technology, that reducing 70% of residue of the process.
We are going to do a survey on people in Brazil and what they think about a more sustainable Textile industry. Do you think Herings image will change in a positive way if they would use only local suppliers?
Clarisse at Cia.Hering - In my opinion, I think not much, because we bring good garments both inside and outside the country, and the clients most of the time, does not know where the clothes are produced.
Do you think it would be possible for Hering to start producing more in Brazil?
Hering has some barriers to start producing more products in Brazil. First and foremost to start to produce inside the country Hering would have to find some suppliers with specialized labor, because they have a very high quality exigency with all products produced by Hering and their partner suppliers. Second Herring likes to bring different products and does not have so many suppliers with labor in Brazil. The cost is so high to produce this type of product in Brazil.
What would have to happen so that Hering and other brands could be able to produce in Brazil? (Question of cost/labor/knowledge/improvements of the textile industry in Brazil/machines etc..)
All descriptions of above would be necessary to make local production happen. Within Hering they have their own internal production. Inside Hering they have a nacional sourcing supplier and they have international sourcing suppliers. What else that would need to happen for other brands and for Hering as well would be reduced taxes, as well as labor costs and productivity. Ronaldo Jacobs personally believes that Brazil has an updated and competitive knit jersey production chain, but it is not the same regarding woven items.
7. Analysis
In the analysis chapter, the different results from the empirical study are compared for the reader to get a better understanding of the result. The chapter describes in words what the result shows in the picture.
7.1 Survey results
The survey results are being analysed on what 96 brazilians answered on the survey;
Sustainable aspects on Cia.Hering. Of the 96 respondents 48.45% were female, 51.55% were male and 0% answered other. The age range was quite concentrated since 56.70% of the respondents were in the age between 25-34 years old. The second biggest response group was 18-24 years old with 30.93%. The rest of the respondents were 35-44 years old (9.28%), 44-54 years old (2.06%) and 12-17 years old (1.03%).
On the question if the respondents had ever bought anything from Hering, 79.38% answered Yes and 20.62% No. Hering is a well established store in Brazil so the result was not very surprising. With a high percent of respondents saying Yes, the survey was more likely to leave a fair result on the sustainable aspects of Cia.Hering. About the term sustainable fashion, 84.54% of the respondents had heard of it and 15.46% had not. The term has different meanings to different people but most of the respondents had still heard of it. When the respondents were to explain which of the options explained sustainable clothing the most Recycled fabrics received the majority of the answers with 42.71%. Second was Durable, long lasting (16.67%) and third was Reduction in chemicals used (14.58%). Thereafter came Fair labor practices (12.50%), Second hand (8.33%), Locally produced (4.17%) and last Overpriced (1.04%). All of the options are in one way or another sustainable fashion but the most picked one was the Recycled fabricsand the last picked one was Overpriced. What is interesting about this is the last picked one is Overpriced. People in general do not relate sustainable fashion with it being overpriced and indirect not with money. What people choose first of all is Recycled fabrics which is a common term that people talk a lot about today.
Recycled fabrics are being mentioned on social media, news and also by many apparel companies.
What this study focuses on is producing locally and in this survey Locally produced only got 4.17% when the respondents were to explain which of the options that explained sustainable clothing the most. Just because locally produced was not one of the more popular options does not mean that people do not associate producing locally with sustainable fashion. The next question was about if the consumers do care about where their clothes are being produced and 75% of the respondents said Yes and 25% said No. People do care and it is easy to say that you do, but it is harder to put it in action. One thing that proves that people might put into action is one other question that was being asked; Would you be willing to pay more for your clothes if you knew they were locally produced? 73.96% of the respondents
answered Yes and 26.04% answered No. This shows that producing clothes locally is something that people do care about and that they would be willing to pay more for the clothes if they knew that they were being locally produced.
About Cia.Hering as a company and the question if the consumers do think of Hering as a sustainable company the answers were a bit spread out. 54.74% of the respondents answered that they did not know, 29.47% answered yes and the last 15.79% answered no. The majority did not know and from what the interviewers understood this was because the consumers do not know how Hering do work and if they do work in a sustainable way. Still 29.47% of the respondents thought of Hering as a sustainable company which could be because that company has more than 140 years of experience in the industry. Because the company is still one of the biggest apparel companies in Brazil it can be seen as a sustainable company in that way. On the question if the consumers would consider Hering's image more positive or negative if they worked in a more sustainable way the survey got a lot of positive answers.
81.25% of the respondents would consider it positive, 2.08% negative and 16.67% did not know. Even if people did not know if they thought of Hering as a sustainable company most of the respondents would still consider Hering's image more positive if they worked in a more sustainable way.
The last question was about if the consumers know that Brazil has the ability to produce garments locally. 67.71% of the respondents answered Yes and 32.29% answered No. Most of the consumers answered that they know that Brazil has the ability to produce garments locally, still a big percent answered that they did not know. If an even percent of the consumers did know that Brazil can produce garments locally maybe the demand would grow. The consumers care of where the garments are being produced and are willing to pay more for locally produced garments and Brazil has the ability to do so. If the consumer demand would grow maybe Brazil would choose to produce more locally to be able to meet the customer demand.
7.2 Interview analysis
The people that were picked out to answer the interviews were to answer how Brazil as a country is working today within their textile industry but mainly to figure out how the company Cia.Hering is working with sustainability and import of garments today. To get to the bottom of why Brazil and Cia.Hering are importing today the interviews questioned what apparel products that are being imported and if it was possible to produce these products in Brazil instead. The products that are being imported to Brazil are mostly woven garments, such as shirts, jackets, dresses and bermuda shorts. Why Brazil is importing these specific products is because Brazil does not have the expertise or capacity to produce it locally.
Knitted garments are very common in Brazil, but why so many woven garments are being imported is because the woven fabric does not come at a low cost in Brazil, so the main
reason for this is economical. There is also a lack of labor for producing these kinds of garments so they are being produced where people have better knowledge. If you already pay a lower price for producing woven fabrics and garments abroad the need for educating people in Brazil is not a prior criteria.
Cia.Hering does imports for the same reasons and this is mainly because other countries have better standards regarding techniques and that the imported fabrics come at a lower price then producing it locally in Brazil. Not all of Cia.Hering's collections are being imported but many garments and accessories are. It is the planning team on Cia.Hering that is deciding on what is being imported and what is being locally produced. Even though Brazil has the capacity to produce locally it is not competitive with Asia due to their expertise and low prices and this is why woven products are being imported.
Brazil as a country on the textile market has a lot to contribute with regarding knitted garments and mainly jersey garments made in cotton. The garments that are overrepresented in this product group are t-shirts, polo shirts, fleece and denim articles like pants and shorts.
When Cia.Hering is deciding on where to produce their products they are looking on if Brazil has the right labor available. In terms of labor Brazil does have a lack of labor when it comes to producing specific garments or that they do not have that fabric of low cost. This makes it harder for Brazilian companies to produce all of their products locally.
Cia.Hering is working towards being a sustainable company today and one of their commitments is, "Make choices that are always guided by eco-efficiency and that promote the circular economy." This commitment says a lot about how they work regarding the circular economy which is a big and important issue today. Cia.Hering also has 4,2 millions m² of preserved forest in Blumenau and is re-utilizing more than 80 tonnes of rest of plain fabric and knits. Regarding their water consumption they are treating 100% of their utilized water that is being used in the tinting and printing processes and this reduces 70% of the residues. On many points they are taking their responsibility as a company but there is always more that could be done to be an even more sustainable company. It would also be interesting to see the company market themselves as a more sustainable company since many of their customers do not know about their sustainability work.
In the survey that was conducted by Brazilian consumers, they were being asked about if Cia.Hering's image would change in a positive way if they would only use local suppliers.
Clarisse who works at Cia.Hering thought that it would not change the consumers' view on the company that much because most of their clients do not know where the garments are being produced and the company brings good garments from both Brazil and other countries.
The answer that Clarisse stated was a little bit surprising since she is employed by Cia.Hering and the company likes to be seen as a sustainable company, but it was also a very honest answer. It is very easy to believe that the consumer's view would change if Cia.Hering were
