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Peru Textile Sector Keen to Compete with its Latin American Rivals

Although considerably smaller than many of its neighbours in the region, Peru has a long heritage in the textile sector and is keen to make its mark as an exporter of raw materials and an up and coming creator of bespoke clothing ranges.

Photo: Distinctive Peruvian prints up for perusal at ExpoTextil Peru.
Distinctive Peruvian prints up for perusal at ExpoTextil Peru.
Photo: Distinctive Peruvian prints up for perusal at ExpoTextil Peru.
Distinctive Peruvian prints up for perusal at ExpoTextil Peru.

With the yarn manufacturing sector on the up and bullish clothing exports, there was something of an optimistic mood at Expotextil Peru. The sentiment was further boosted by robust demand for yarns and fabrics on the part of Peruvian manufacturers, as well as increased interest in sophisticated knitting, sewing, embroidery and fabric-printing machinery.

For many, it seems as though the Peruvian textile and garment sector is finally catching up with its counterparts in the other, more developed Latin American countries. This is thanks, in part at least, to growing exports to both North and South America, as well as to tax-exemptions on some of its clothing exports to the affluent US market. On the other hand, a number of foreign exhibitors had concerns over the protectionist natures of Peru's import regime.

Overall, though, the event was dominated by the many manufacturing machinery brands vying for the business of the country's fast-growing number of textile factories. Among the most high-profile technologies on show were screen-printing, industrial scale printing, linear and circular knitting, embroidery, and individual sewing equipment. A separate hall at the event, meanwhile, focussed more on textiles, buttons, buckles, bows, yarns, fibres, zips, elastic and lace.

As well as the many domestic exhibitors attending the event, Colombia and Mexico both had national pavilions, while the Chinese delegation was clustered into a block of 28 small booths. The mainland companies were largely offering a variety of textile ranges, although a couple had less-expected items, including zippers, nylon and polyester yarns, buttons and sewing machines.

The sentiment among the Chinese exhibitors was clearly that the Peruvian market still represented plenty of opportunities for growth. According to Zoe Gong, General Manager of Jiangsu-bases Stars, many of the Chinese exhibitors had been to the event before, although it was actually her first time. She said: "Although Peru is a small market, our current focus is very much on Latin America, especially countries such as Mexico, where there are four times the number of consumers. Peru, though, is not quite so developed, and the government also seeks to protect the local industry by imposing large taxes on cotton imports."

This year, the company was showcasing its large range of fabric products, including polyester knitted blankets, quilts, bathrobes and curtains. Overall clearly optimistic about the company's prospects, Gong said: "I expect that we can sell polyester here as it is cheaper and isn't taxed. People here, though, tend to not have that much money."

For Eddy Xu, Sales Manager of Huzhou-based Changxing Xinsheng Textiles, this was his second visit to ExpoTextil Peru. Addressing his own company's experience, he said: "We are not really affected by the import tax restrictions. We already have three customers in Peru. We sell fabrics for garment linings, bedsheets, curtains and home furnishings across Latin America. Peru, though, is not a big market for us at the moment."

Xu aside, import taxes were a concern to a significant number of those attending the event. If the Peruvian government is seeking to protect its cotton-growing industry through the imposition of protective duties then, for many, it is policy that already seems to be failing. The government's own figures show that country's total level of cotton production fell by more than 60% between 2005 and 2015.

Overall, more than half of Peru's textile industry is dedicated to processing cotton, while – according to the country's own Ministry of Agriculture – 70% of that cotton is now imported, mainly from the US. In the case of yarn, this is sourced primarily from Pakistan, while fabrics are largely supplied by Colombia and China, with the latter also providing virtually all imported clothing.

Juan Galarza, Founder of Galarza International, a New Jersey-based manufacturer of label cutting and folding equipment, was attending the show to check out the prospects for his own company. Although bought up in New York, his parents were Peruvian, something he believes has given him a distinct insight into how the country does business.

He said: "The Peru textile industry is still growing. In fact, it has been growing for 10 years, but there is a lot of competition from Asia when it comes to machinery and textiles."

For Galarza, the majority of his potential customers used to be found in Gamarra, the one-time garment manufacturing district of Lima, Peru's capital city. Here the streets were lined with clothing stalls, all squeezed between the apartment blocks that housed not only local residents, but also provided work spaces for thousands of sewing shops.

Photo: China: Peru’s prime fabric supplier.
China: Peru's prime fabric supplier.
Photo: China: Peru’s prime fabric supplier.
China: Peru's prime fabric supplier.
Photo: An alpaca: Fleeced for generations.
An alpaca: Fleeced for generations.
Photo: An alpaca: Fleeced for generations.
An alpaca: Fleeced for generations.

Galarza said: "Gamarra used to be like parts of New York at the time when it was crammed with barely legal back street manufactures. Now it is mostly focussed on retail, with large-scale manufacturing moving to the edge of the city. There are, however, still thousands of mom and pop businesses making garments in a single room in Gamarra. Buyers come from Canada, the USA, and Mexico to visit and buy wholesale."

In keeping with the district's heritage, Maribel Gonzales was one of 18 finalists from Gamarra – whittled down from more than a thousand initial entrants – who had been chosen showcase her own designs in the Gamarra Small Business Incubator Zone at the show.

Gonzales was singled out thanks to the quality of her Magoki range of children's leisure wear. Explaining her own approach to fashion design, she said: "We use Peruvian cotton. Although it is more expensive than imported Indian or Egyptian cotton, the quality is better. Typically, Pima cotton is softer and has longer fibres.

"We also have a Certificado de Origen, which means we are exempt from certain US import taxes. Overall, we are selling on quality not on price.

"Thanks to the Ministry of Production's workshops, we have a lot of opportunities to learn about such things as quality standards and how to export. Again thanks to support from the Ministry, I will also be attending Peru Moda and Colombia Moda."

One of the more singular aspects of the Peruvian textile industry is its long association with the alpaca, a kind of small llama native to the country. For centuries, the people of the Andes region have herded the creature, with the animal hugely valued for the softness of its fleece.

Today, Peru still has the largest population of highland alpaca in the world and annually produces 4,000 tons of fine and highly-insulating fibre from their fleeces. Although almost all of this is now exported to China, a small number of Expotextil exhibitors processed it more locally.

One such exhibitor was Lima-based Peru Naturtex Partners, which had on offer a range of organic alpaca cotton yarns and fibre, as well as finished clothing. For James Vreeland, the Founder of the company and a former anthropologist, it is not just about running a successful business, but it is also a way of preserving ancient traditions.

Explaining his particular approach, he said: "Our alpaca fibre is from herds that range free on Andean pasturelands, some 4,000 metres above sea level in the Colca region. For our part, we use only natural insecticides and natural medicines to care for the animals. We get cotton from the coast and also from the moist eastern jungle.

"We tend to buy from communities rather than farmers and we don't want them to change anything. In fact, it's just the opposite – we want to preserve their farming methods and culture. We look to work with communities that have continued their traditional practices."

While this approach clearly helps support Peruvian communities, Vreeland also concedes that this does entail increased work compared to using less sympathetically-sourced fibres. He said: "There are higher costs, mainly with regards to the logistics of collecting from so many small producers. Our customers, though, have an appreciation as to why organic and fair trade goods cost more and as to why they are worth it."

A number of other companies similarly use alpaca as a component, while also attempting to meet the broader requirements of the international textile market. Lima-based Lancaster Yarns is one such company, while also claiming to be Peru's leading yarn producer. The company's range includes a variety of blended yarns, as well as several ranges of socks and stockings manufactured on behalf of a number of high-profile international brands.

Explaining how it meets these varying requirements, Claudia Caballero, the company's International Sales Executive, said: "We blend alpaca with other fibres from around the world, including wool, angora, cotton and silk. We also produce socks using alpaca and baby alpaca, cashmere, merino wool, Pima and Tanguis cotton and nylon. Whilst our roots remain in Peruvian alpaca fibre, over the last 60 years we have evolved into becoming quite a diverse exporter. Overall, 95% of our products are intended for export, largely to Europe, as well as to South and North America.

"What makes us different is our ability to combine different fibres and develop new yarns in order to satisfy our clients. At the moment, it's acrylic-polyamide mixes that everybody seems to want."

Photo: Winning designer Maribel Gonzales in the Gamarra Small Business Incubator Zone.
Winning designer Maribel Gonzales in the Gamarra Small Business Incubator Zone.
Photo: Winning designer Maribel Gonzales in the Gamarra Small Business Incubator Zone.
Winning designer Maribel Gonzales in the Gamarra Small Business Incubator Zone.

Expotextil Peru was held at the Jockey Exhibition Centre in Lima.

John Haigh, Special Correspondent, Lima

Content provided by Picture: HKTDC Research
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