Peru Moda to Focus on Expanding Market Horizons - third International Trade Meeting of Textile and Apparel Manufacturers to take place in Peru - Brief Article

Bobbin, May, 2000 by Olga G. West

The third International Trade Meeting of Textile and Apparel Manufacturers -- Peru Moda 2000 -- will take place May 22-24 at the Los Delfines Hotel in Lima, Peru. A networking event for international buyers and sourcing managers from North America and Europe, the show will highlight products from approximately 150 Peruvian textile and apparel companies.

Co-organized by the Commission for the Promotion of Exports of Peru (PROMPEX), the show, which is sponsored by the Bobbin Group of Miller Freeman Inc., will run concurrently with the second congress of the Peruvian Cotton Institute. Other co-organizers of the event include the Cotton Institute of Peru, the National Society of Industries, the Peruvian Exporters Association, the Foreign Trade Society and the Alpaca International Association.

In addition to the exhibits, organizers have scheduled speakers from different industry sectors to cover a wide range of topics including cotton and its properties, trade negotiations, manufacturing, distribution, market trends, and opportunities and challenges in the region's textile and apparel industry. There also will be a fashion show on the second day of the event highlighting Peruvian products.

Specifically, the show's educational program will include: a presentation on cotton varieties in the United States, by Dr. Richard Percy of the U.S. Department of Agriculture; a seminar on the incorporation of China into the World Trade Organization (WTO) and how it will impact the apparel industry, by Ray Bianchi, the international development manager for the Bobbin Group of Miller Freemen Inc.; and a presentation on yarn manufacturing by Louis F. Spalti of the Ghersi Textile Organization.

Industry Outlook

One of the most important sectors of the Peruvian economy, apparel and textile exports currently represent 8 percent of the country's total exports and 30 percent of its non-traditional exports. Cotton apparel represents 95 percent of Peru's total apparel exports and, of that percentage, 80 percent is knitted garments including cotton shirts for men and women, T-shirts and underwear. Woven apparel exports include denim trousers and sports shirts.

The apparel and textile sector in Peru, which employs 180,000 directly, is highly concentrated and has approximately 900 exporting companies. Of these companies, 30 are vertically integrated firms that produce 70 percent of all apparel and textile exports. In 1999, total apparel and textile exports reached US$575.2 million. Specifically, 18 large-sized companies (defined as having more than US$10 million in exports) produced 68 percent of the total; 47 medium-sized companies (with exports between US$1 million and US$10 million) accounted for 23 percent; and 857 small companies (with exports of less than US$1 million) manufactured 9 percent.

Like Mexico and Central America, Peru's proximity to the United States is an advantage. The main market for the country's exports is the NAFTA region, which accounted for 60 percent of Peru's apparel and textile exports in 1999 at US$341 million. Of this amount, the United States imported US$324 million. Other important markets for Peru include the European Union, which imported US$117 million in 1999, and the Andean Community, which imported US$46 million last year.

Executives at Prompex explained to Bobbin that the Peruvian industry's main challenge currently is competition for U.S. and European business from other textile and apparel manufacturing countries, including Pakistan, Hong Kong, Mexico, Guatemala, El Salvador and Honduras. However, because the volume of Peruvian textile and apparel exports is low compared with total world exports, Peru has fewer international market access restrictions than many other countries.

Additionally, Peru has vast natural fiber resources, including Pima cotton, alpaca and vicu[tilde{n}]a. During the past 10 years, international demand for these fibers has increased and, as a result, Peru's textile and apparel sector has experienced an annual growth rate of approximately 25 percent.

Prompex officials also added that individual companies and organizations in Peru have been very actively working to increase the country's presence in the global marketplace. For example, many companies in Peru are implementing new quality control programs and restructuring their production departments to increase efficiencies and reduce costs. Additionally, industry associations in Peru have been working with commercial offices abroad to promote company participation in the country's main textile and apparel exhibitions, buyers' missions and Peru Moda.