Colombian textile and apparel firms are striving to boost their fast-fashion and value-added capabilities as a soaring dollar fuels US demand while heightening competition. Artexil is one such firm. The Medellin-based textiles processing company has spent $2 million to boost dyeing and printing capacity by 25% to 480,000 kilos and 1.1m metres a month respectively, says general manager Carlos Andres Aristizabal. He adds that the expansion should help bolster revenues by 25% this year, up from a 10% jump in 2015. "We have bought new machinery and are expanding capacity," Aristizabal says. "The market is rising very strongly because of the dollar. Exports are going to surge and import substitution will increase production this year.”
Aristizabal spoke on the sidelines of the recent Colombiatex sourcing fair in Medellin. The four-day event drew 14,000 buyers seeking knit and warp-knit, denim and full package business. Foreign buyers rose 4% to 1,770, mainly from the US but also from Ecudaor, Peru and Mexico. Indian exhibitors led the exhibitor's space, followed by a big jump from struggling Brazilian firms looking for new business in Colombia.
Colombian companies are scrambling to raise capacity as local brands move to substitute increasingly pricey imports for locally-made items, especially basic wovens, cotton pants, jackets, dresses, and T-shirts, observers said. At the same time, they are rushing to step up production to hedge against the soaring US currency.
As Demand Heats Up, Does Colombia Stand Out?
Juan Carlos Ceballos, sales manager at textile chemicals firm Biotex, says Colombia has good fast fashion capabilities. "We have strong design quality, color variety and fast delivery for small runs," he says, adding that firms are rushing to improve their full-package services. Currently, several firms offer good full-packager services, making "high-value garments with special fibres like Lycra or Tencel," Ceballos says. The garments go to aspirational fashion brands that don't mind waiting longer for delivery by plane from Bogota or ship by the Barranquilla Atlantic port.
Brazil also has strong fashion with good quality denim and beachwear but its lack of proximity to North America poses strong challenges, making Colombia a more attractive sourcing partner, Ceballos adds. Brazil also has strong fashion with good quality denim and beachwear but its lack of proximity to North America poses strong challenges, making Colombia a more attractive sourcing partner, per Ceballos.
Suppliers face a string of challenges to raise exports, including a lack of specialized fabrics, outdates machinery, soaring energy costs and a dearth of financing. "The greatest delays come from a lack of raw materials like polyester/Lycra, nylon/Lycra, brushed cotton, peachskin or microfibres," says Diana Margarita Rivera, Supertex's sportswear director, adding that the gap can trigger delivery delays of up to 45 days.
Supertex, which supplies adidas, Under Armour, and Nike, plans to build a yarn factor in the near future, adding that it should help cut lead times to 60 days from 90 days currently. Colombia still needs billions of dollars to install more specialized and fashion-centric fabric capacity to win a bigger share of the global sourcing pie, she says.
One of the biggest game changer could come from further rule-of-origin and integration in the Pacific Alliance comprising Colombia, Mexico, Chile, and Peru. "We need to have one rile of origin to export between the four countries," Ceballos says. "Right now we have very strong and difficult rules of origin to export to Mexico. The competition is not between us but against Asia."