Jordan becomes the home for luxury apparel

December 16, 2021
Posted by: admin
Categories: Funding trends, Uncategorized

The acrimony and dust surrounding inhumane conditions under which garment workers of underdeveloped nations work, has begun to settle. Jordan is becoming a fancied destination for luxury apparel.

Jordan, a Middle Eastern country, has evolved into a textile hub. It is home to around 20 international brands. Jordan’s customers include brands and retailers such as Liz Claiborne, Calvin Klein, Tommy Hilfiger, Gap, J. C. Penney, Levi Strauss & Co., Columbia, Hanes, Eddie Bauer, Lands’ End, Macy’s New York Laundry, Walmart, Kmart, Limited, Sears and Victoria’s Secret. Textile and apparel factories produce a vast range including towels, fleeces, frilly knickers and t-shirts.

In control and charge

Jordan has earned a reputable name worldwide in textile outsourcing. Made in Jordan tags are making a wave in the United States of America. In 2014, Jordan exported garments worth US$ 1 billion to that country. Overall textile exports account for 20 per cent approximately of the country’s Gross Domestic Product. Jordan and the United States of America signed the Free Trade Agreement (FTA) in 2001, following which the country’s textile exports flourished.

Even though the country’s textile and garment sector has encountered several snags in its path to glory, production does not seem to be slowing down. According to Jordanian Department of Statistics, Jordan’s apparel and textile imports expanded to 12.43 per cent and reached US$ 202 million in early 2014.

Textiles and garments exports from Jordan grew by 9.87 per cent to 866.239 million Jordanian dinars (JOD) in 2013, against the exports of 788.417 million JOD in 2012. Knitted or crocheted apparel and accessory exports fetched the highest sum of 771.593 million JOD, followed by non-knitted garments with 38.112 million JOD. After the FTA, the country has easy access to markets of Europe, Arab world, Singapore and the United States of America. Low-cost and skilled workforce is another factor that goes in favour of the Jordanian textile industry. The Jordanian labour force has proved its versatility in the production of international branded couture and ethnic apparel. The market has shown its adaptability to demand.

In an interview to a leading fashion portal, Radhakrishnan Putharikkal, president of Classic Fashion, one of the leading garment manufacturing companies in Jordan said that he chose to set up shop in Jordan instead of Morocco or Tunisia, as that country provides a stable political and social environment.

Export is the buzzword

The Jordanian textile industry shifted its focus from natural fibre to man-made fibre so that it could face international trade liberalisation and survive competition from global textile industries that export to the United States of America.

Mohammad Khourma, chairman of the Jordan Garments, Accessories and Textile Exporters Association (JGATE) said, “Although man-made fibre production in Jordan entails higher costs, the FTA allows these garments in the United States of America at a lower price and, consequently, [Jordanian apparel is] more competitive and appealing to the consumers in the United States of America than other traditional clothing that floods the American market from so many countries.”

Khourma also mentioned that FTA gives Jordan an edge over production costs in Cambodia, Thailand, Vietnam, Bangladesh, India, Sri Lanka and China. So, several companies from other nations that intend to export textile or garments to the United States of America and enjoy duty and quota-free access prefer setting up manufacturing units in Jordan. The manufacturers’ chief source of profit is income from exports.

While the Jordanian textile seems to be in control of exports, the country also relies on import of yarns and fabrics from China and Pakistan.

Facing setbacks

Jordanian textile exports have substantially increased but the challenge is far from over, as the sector needs advancement in domestic demand. Farhan Ifram, chief executive officer of Madaba satellite project and a JGATE member said, “Further advancement is being hampered by domestic inconsistency, marked by frequent unsettling developments and counterproductive measures. Foreign investors examine Jordan’s economic environment from various perspectives and when they establish a business here, they do not expect changes to laws and regulations regarding investment, taxes, rents, energy prices, bank interest rates and minimum wages that went up from JD80 in 2000 to JD190 in 2014.”

The country is facing stiff competition from Egypt that earned the Qualifying Industrial Zone status from the United States of America in the late 1990s. Another major setback comes from the fact that the Jordanian textile and apparel sector is not technically forward compared to nations like Israel. These issues pose a major challenge in its further advancement.

The silver lining for Jordanian textile is the turbulent social and political scene in Egypt. The QIZ is more flexible for Jordan than for Egypt, so apparel can enter the United States of America custom-free only if 11.5 per cent Israeli input is confirmed.

“Authorities are under the illusion that textile industrialists generate high profits and therefore do not deserve support or incentives,” said Khourma, emphasising that the profit margin does not exceed 5 per cent. From the total exports of US$ 7 billion, the textile sector alone accounts for US$ 1.2 billion.

“A thorough, independent study conducted by an academic party (TAFT University) concluded that textile industries generate 36.7 per cent more value for the Jordanian economy,” Khourma added. Currently, the textile sector of Jordan contributes JD120 million annually to the state treasury in fees and taxes.

Jordanian textile industries need more support from the government, as the country’s reputation as the safest place in Middle East is at stake. The threat of destabilisation of the northern and eastern borders from Syria and Iraq is turning into a challenge for Jordanian authorities.

Workforce challenges

Another issue that needs to be addressed immediately is the poor working conditions in Jordanian textile factories. Labourers have accused some firms producing clothes for leading brands like Wal-Mart and Target of not paying wages for months. Workers from Bangladesh working in Jordan’s textile factories have alleged that their passports were confiscated.

New York-based National Labour Committee reported shoddy working conditions in at least 25 out of 102 Jordanian textile factories. It is difficult to control sweatshop-like conditions in Jordan, as new textile factories are mushrooming. Jordan’s monitoring system for garment factories is weak and practices like doctored wages, confiscated passports, forcing workers to work 20 hours a day have become part of its work culture.

Executive director of the National Labour Committee, Charles Kernaghan, clearly stated that he was shocked by what he discovered in Jordan. The condition in which workers from China and Bangladesh are working in Jordan is deplorable. The country needs to focus on employing locals, especially women, in garment manufacturing units. This will not only generate employment in the country, but will also address the issue of dismal working condition of foreign workers.

Of course, not everyone agrees with general allegations. As Jordan’s trade representative in Washington, Yanal Beasha said, “It would be wrong to think that problems at a few places are representative of the 102 apparel factories in my country.”

International Investors

Jordan’s textile sector still has a lot to boast of. Mounting labour problems and other setbacks have not discouraged some well-known brands to choose Jordan over other countries for textile and garment manufacturing.

The broad contours of Jordan’s textile sector present an encouraging face, but the country struggles to portray a reasonable picture as far as its textile workers are concerned.

The problems and challenges are many for Jordan’s textile sector, but the industries flourish as exports rise and well-known names in apparel sector continue to support and prefer Jordan over other countries.

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