Peru Country Report by Bri Young

Peru Country Report Briana L. Young Global Sourcing, FASM 420

Picture from: gallivance blog

Executive Summary The country of Peru is a Polychronic culture that focuses on relationship building first, insuring that who they are doing business with are the right people to do it with. Peru is dominated by the male population, and has a more feminine culture, which means that their dominant values in society are caring for others and having a quality for life. In a feminine culture, the quality of life is the sign of success in Peru. Peruvians often employ distributive and contingency bargaining. Often times their negotiations will be a long process, Peruvians hate when people try and rush the process of negotiations, so it is best to prepare to have several trips to the country.

In this country report, we, Comfort Act, will closely analyze Peru, it’s culture and the textile/apparel industry in the country. Our goal is to identify whether or not Peru is a suitable country to manufacture in. How we will aim to do this, is by researching Peru’s import/export requirements and how feasible it is to manufacture there. By analyzing and assessing this information, Comfort Act will be able to potentially develop a professional and successful business relationship with Peru manufactures. The following report will examine all things necessary to figure out if the country of Peru is great to do business with for our athletic wear. Examinations will consist of Peru’s economical and geographical standing, trade agreements and laws, business etiquette, pricing, and more.

Picture: from Jimdo

Table of Contents Introduction....7 Country Overview..........8-26 Trade agreements..........28-36 Business Etiquette.............38-45 Relationship Building...........46-47 Social & Cultural Elements.............48-59 Dining.....60-64 Sourcing Guidelines........66-71 Manufactures..........73-83 Costing............84-87 Import Classification.......88-89 Logistics & Importing.... 90-101 US Importing requirements.....102-119 Peru Exporting requirements....120-121 Conclusion... 122 Appendix... 124-172 Maps... 174-177 Tech Pack.... 178-192 Works Cited... 193-195

Picture: taken by Barry D. Kass

Introduction

The purpose of this report is to understand the social,

economic and political standing of Peru to determine whether Comfort Act should manufacture with the country. There are many factors that are to be considered when sourcing from a foreign country. Environment, laws, taxes, fees, the labor force, and much more, and they are to be analyzed prior to starting production in Peru. These factors, and more are crucial to the prosperity & longevity of Comfort Act. From the analysis of the country, and its manufactures as well as their guidelines, we, Comfort Act, will fully be able to see if Peru is the best fit for our company.

Country Overview Picture: from la vie and me blog

Introduction In this section, Social, Political, and Economic issues are examined for the country of Peru. Labor laws for employees, state of the Textile & Apparel industry, and associations are also covered.

Social: In 2012, the law Decree 22342 established a special regime that allowed companies to export non-traditional products to employ workers on short term contracts. The contracts usually went for six months, but often they went for three months and sometimes one month. The decree came to be over three decades ago, initially as a temporary measure to assist fledging companies in an irregular industry, now it protects the interests of some of the largest and most profitable companies in what has become a booming export industry. Because of the decree, average wages in the apparel industry are among the lowest in the country (Maquila solidarity). Since the signing of the Free Trade Agreements with the US and Canada, the use of short term employment contracts have increased. Peru has a booming garment industry that exports about $750 million in textiles to the US alone. At least 80 to 100 percent of Peruâ&#x20AC;&#x2122;s largest companies contract their workforce on a short term contract. The International Labor Organization has repeatedly asked the Peru government to amend this short term contract law, and President Ollanta Humala promised in his 2011 election that he would abolish this decree, but there has been to current change of him doing so yet. Unions have worked hard to continue to get the decree abolished, as well as see that the workers on the short term contracts receive the same benefits and pay as permanent workers (Maquila solidarity).

Based on the information collected from various reports, the insecurity from the possibly of workers seeing their contract potentially not being renewed, encourages contract workers to accept other decreases in their working conditions. The decreases in working conditions are longer hours working (mainly 14 hours a day) , mainly during peak times, low wages and not being able to have any contact with unions. Also, since most of the workers are in the garment sector of Peru, they also face discrimination in the form of being tested for pregnancy, lower wages, and sexual harassment (Maquila solidarity). The situation is also considered a concern by some international companies. Last March, a group of large retailers (including Nike, New Balance and the owners of brands such as Calvin Klein and Tommy Hilfiger) called directly upon the Peruvian government to modify this law and improve the working conditions in Peruvian factories. In their letter addressed to the Peruvian President Ollanta Humala, these brands claimed that the law “acts to encourage and condone violations of labor rights” and therefore “poses an obstacle to the proper application of [their] codes of conduct” on regular employment and freedom of association. They were later followed by the Fair Labor Association and the international union IndustriALL, who also issued separate statements against Law 22342 (Maquila solidarity). This provoked a backlash on the part of Peruvian companies. They saw the letter as a manifestation of ‘US imperialism’. Companies and export associations say the law is beneficial for the Peruvian economy and its workers, and that it allows for quicker recovery from international crises or abrupt changes in demand. Some have interpreted the international retailers’ initiative as an attempt to undermine Peru’s competitiveness on the international market (Maquila solidarity). *See Appendix for letter*

Economic: In Peru, the private consumption and government spending increased. According to the INEI, the private final consumption grew by 5.0% in the first quarter of year 2014. This growth was due to families having higher income, as a result of the higher level of employment (1.9%), and a increased average income of workers (4.8%). Although the growth of the economy is positive, it is still below the expected level, which could be due to the slowdown of the investments and exports. In the medium term, it is expected that the global economic recovery will boost the foreign sector of Peru (Latin America Trends).

Peruâ&#x20AC;&#x2122;s current fiscal policy has achieved some desirable results due to implements. It has been written that Peruâ&#x20AC;&#x2122;s current fiscal policies have been less aggressive, and more disciplined than any other country, such as the United States. Rather than spending big amounts of government funds on economic stimulus packages in the global economic crisis, Peru has received greater income from exports and has maintained a strong fiscal position. Taking full advantage the current high commodity prices in an effort to accumulate reserves has worked in Peruâ&#x20AC;&#x2122;s advantage, when many other countries rich in natural resources have failed to do so (Peru country analyst).

Political: President Ollanta Humala

has recently signed legislation Sept. 17,

2014, overturning a law that required independent workers under the age of 40 to contribute to a pension fund, making it instead optional to do so. This move ended a political fight over the countryâ&#x20AC;&#x2122;s private pension system, but now Peru faces a bigger problem of perhaps figuring out how to increase social security coverage for workers (monitor global outlook). Many seem to feel that the main reason for the vote may have been that the opposition wished to show Humala (Peru President), that Congress could thwart his plans. The debate is now over, however, and Finance Minister Alonso Segura, (who was appointed on Sept. 14), has said on state-owned TV that the government needs to find new ways to increase coverage. The new legislation will have a major impact on most of the Peruvian funds, but because the requirement for the independent workers are still new, it will complicate any future changes to increase the coverage. There are talks of giving incentives to get independent workers to contribute. The private pension funds have about $39.48 billion dollars under management, which has the equivalence to 19.5 % of th GDP. The Central Reserve Bank has talks of increasing the amount that can be invested abroad to 42 %, from 40%, and this is in said to be in effect January 2, 2015. The private pension system was instituted in Peru in 1993 as part of sweeping free-market reforms that helped Peru to become one of the fastestgrowing Latin American economies. The public sector pension system continues, but remains underfunded. It had 1.4 million contributors as of July 2014 (monitor global outlook).

Labor & Labor Laws

Although the standard of living has increased over the years, currently over 25% of its citizens are believed to live in poverty.

The numerous

multi-national employers who do business in Peru, or are planning to do so, should be aware not only of the protections afforded employees in Peru, but of the restrictions that exist regarding employing workers from outside of the country (Fisher & Phillips LLC.).

Employment Contracts Employers in Peru may hire workers under a fixed-term or an indefinite basis, depending on the circumstances regarding how a job is performed. In general, jobs such as those in the legal or financial fields may be performed under an indefinite employment contract.

Fixed-term

contracts must be in writing, and may only be used for a period of up to five years in total.

Employers are required to register fixed-term

contracts with Peruâ&#x20AC;&#x2122;s Labour Ministry.

There are numerous types and

subcategories of fixed-term contracts, including temporary, market needs and entrepreneurial reorganization agreements.

Employees may be hired

for a probationary period of three months to one year, after which time they become entitled to legal rights against unjust dismissal (Fisher & Phillips LLC.).

Special Issues Regarding Foreign Workers Employers who are considering hiring foreign employees must be aware that of Peru’s Law of Recruitment of Foreign Workers.

For example, no

more than 20% of an employer’s local workforce may consist of foreign employees.

Further, there are limitations to the amount of salary an

employer may pay to foreign employees.

Generally, the amount of the

salaries paid by an employer in Peru is not allowed to surpass, in total, more than 30% of the total amount of the compensation paid to all employees (with some exceptions, such as salaries paid to certain technical employees).

Further, there are generally different rules

regarding the maximum term length of a fixed-term agreement for a foreign employee as compared with similar rules pertaining to Peruvian employees (Fisher & Phillips LLC.). Outsourcing Arrangements Peru adopted rules in 2008 protecting Peruvian employees from “abusive” outsourcing arrangements.

Under these rules, employees of a contracting

or outsourcing company may bring a legal action to hold the client company jointly and severally liable for statutory labor obligations if the employees of the outsourcing company are working at the facilities of the client company.

These rules are similar to the “co-employment”

laws that exist in the United States and elsewhere (Fisher & Phillips LLC.). Employment Termination Unlike in the United States, where most workers are considered at-will employees, workers in Peru are entitled to many legal and procedural safeguards.

Employers, however, also have rights under local statutes

to take certain employment actions. employment termination are:

Some of the key issues related to

Objective grounds for an employer to terminate an agreement Peru’s labor laws provide several reasons for which an employer may terminate an employment contract on objective grounds, including: the employee’s resignation with thirty days’ notice; the completion of the task or service; the satisfaction of a condition leading to the termination of the contract; the expiration of the contract’s termination; mutual agreement; a worker’s permanent total disability; and the termination of employment on objective grounds, such as an unforeseen event (ex: a natural disaster or an employer’s bankruptcy). A worker whose employment is terminated for objective grounds is entitled to:

1) compensation based upon his or her length of service;

and 2) preference for reinstatement (Fisher & Phillips LLC.).

Collective dismissals The law in Peru specifically provides that an employer’s dismissal of its workers for economic, technological, or organizational restructuring reasons is considered an objective ground for termination.

Employees

dismissed for these reasons are entitled to a severance allowance, as well as preferential rights to be reinstatement within a year of the collective dismissal. An employer may terminate employment contracts solely on economic grounds where a minimum of ten percent of the total workforce is affected by a number of required procedures, including consultation with the workers’ representative and notification to relevant public authorities (Fisher & Phillips LLC.).

Other grounds for terminating an employment contract In general, where objective grounds as stated above do not exist, under Peruvian employment law there must be a valid reason for ending an employment contract which can be substantiated by the employer, such as an employee’s incapacity, inadequate productivity, or his or her unreasonable refusal to undergo an employment-related medical examination or to follow medical treatment or preventive measures. Employers are also allowed to dismiss a worker based on an employee’s conduct.

Some examples of valid reasons for this type of dismissal are:

-serious misconduct such as failure to comply with employment obligations, repeated opposition to work orders, the failure to observe work-related or occupational safety or health regulations, or the appropriation or attempted appropriation of an employer’s assets; -repeated attendance at work under the influence of alcohol or drugs; -violent acts, serious breaches of discipline, insults and disrespect addressed to the employer which take place inside or outside the workplace; -deliberate damage to an employer’s property; -failure to appear at the workplace for more than three consecutive days, unjustified absence for more than five days over a period of 30 calendar days or more than fifteen days over a period of 180 days; -repeated acts of lateness which have been brought to the employee’s attention, where disciplinary actions, such as a written warning, have already been provided to the employee; or -certain criminal convictions (Fisher & Phillips LLC.).

Illegal Dismissals Peruvian law lists a number of illegal reasons for involuntary discharge.

For example, it is illegal to discharge employees due to

their union membership or for being workersâ&#x20AC;&#x2122; representative candidates. Employees also may not be dismissed for submitting a complaint or taking part in an legal action against the employer, or on account of their sex, race, religion, political opinion, language, pregnancy, or within 90 days of childbirth.

There are also circumstances, such as

non-compliance with safety procedures and nonpayment of wages (except for force majeure reasons) allowing employees to bring actions for constructive discharge (Fisher & Phillips LLC.).

Statutory notice procedures Employees in Peru are entitled to certain notice procedures prior to separation.

Generally, an employer must provide an employee a

reasonable period of written notice of not less than six calendar days so that the employee can present a written defense to any charges against him or her, or 30 calendar days to prove the employeeâ&#x20AC;&#x2122;s performance capability or to correct any error.

However, an employer

is not required to provide notice if the employee has exhibited serious misconduct under which it would be unreasonable to require the employer to continue the employment relationship.

Further, the employer must

communicate in writing to the employee, or, as applicable, trade unions or other authorized representatives, its dismissal decision and the reason for the action (Fisher & Phillips LLC.).

Severance pay An employer in Peru generally does not owe severance to employees who have been separated due to their conduct or capacity.

An employee

terminated without cause is, in general, entitled to severance payments for a period of up to twelve months, depending upon the circumstances of the former

workerâ&#x20AC;&#x2122;s employment history. There is no specific redundancy

pay required under Peruvian law.

If a court determines a dismissal

to be unlawful because the employer has not provided a valid reason to the worker, or the reason cannot be legally substantiated, the employee usually will be entitled to a payment equal to the average monthly compensation for each year of service, up to a maximum of twelve months (Fisher & Phillips LLC.).

Textile & Apparel Industry Peruvian textile industry got its origin in the ancient cultivation of cotton and impressive textile dyeing and weaving techniques developed once by pre-Colombian cultures. Peruvian pima cotton is one of the finest cottons in the world and provides the industry with an exceptionally long fiber famous for its strength, luster and softness. Peruvian Alpaca fiber and especially Peruvian Baby Alpaca wool are recognized around the world. Many of Peruâ&#x20AC;&#x2122;s leading textile manufacturers are vertically integrated, which eliminates the need to import raw materials or outsource washing or sewing, which enables them to maintain quality and ensure better speed to market (Usembassy).

The growth of textile infrastructure in Peru is primarily due to textile production being recognized as a business opportunity for the country. Currently, textiles and garment manufactures account for more than 30% of the non traditional exports in Peru. With roughly 194 fashion, accessories, and textile factories. The textile and garment sector employs 150,000 workers directly and more than 500,000 total. In the garment sector, sales to foreign markets exceed $2 billion dollars per year. Exports of textiles and garments from Peru reached $272 million in the first two months of the year 2014, which was a 7 percent increase over the same period last year(2013) and most of that growth was owed to increased demand from the U.S. market. Peruvian textile products are being demanded by the most exclusive markets, due to their high quality of raw materials (Usembassy).

Since the growth of the textile/apparel industry, factories in Peru have invested in state-of-the-art technology. To include: automatic sewing machines, centralized dyestuff dispensing units, modern dyeing machines, hydro extractors, compacting machines, foulards and other finishing equipmentâ&#x20AC;&#x2122;s that ensure highest quality textiles (Usembassy).

According to Andina new agency, Peruvian cotton only meets 40% of the demand of

Peruâ&#x20AC;&#x2122;s textile and garment chain, and the remaining 60% is

being met by imported cotton from the US. The President of the committee of textiles, Jose Ignacio Llosa says that the production is limited by several structural problems that the Ministry of Agriculture and Irrigation is trying to resolve, but it has failed so far. Since the failed outcome of the MINAGRI trying resolve the structural problems of cotton production, Llsoa has requested that the Institute of National Defense of Competition and Intellectual Property Protection prepare an analysis on the possibility of applying countervailing duties on the imports of cotton from the US. From the countervailing duties, the affect would be potentially raising the local spinners cotton price, which would affect the entire textile and clothing chain (Usembassy).

INDECOPI suggested that the subsidies granted by the US on cotton produced in the country are the reason for the decline in cultivation of cotton in Peru. Llosa also believes that there are many other factors that have been affecting the cotton production of Peru: small farms, low production per hectares, the abandoned genetic development lack of funding, and the informality present in the sector. He also fears that the low domestic production will drastically affect the Peruvian spinning industry and endanger the textile chain that employed 450,000 workers directly and 1.5 million indirectly, in the year 2013 (Usembassy). Peru currently has support for its weavers, from the Cuzco Center for Traditional Textiles. Theyâ&#x20AC;&#x2122;re mission is to prevent the extinction of traditional Peruvian textiles. Thanks to a $37,500 grant from the U.S. Ambassadors Fund for Cultural Preservation, Peruâ&#x20AC;&#x2122;s Ministry of Culture is working to conserve and register these ancient textiles and other pre-Hispanic Andean artifacts (Usembassy).

Picture from: Cuzco Center for Traditional Textiles

Unfortunately, Peru’s government has not supported the textile industry in terms of their workers. Many of the workers are still under temporary contracts, and have been for years. These contracts range from 1-6 months, and have gone on for up to 25 years so far. The International Labor Organization (ILO) has repeatedly urged the government to repeal the law, but nothing has changed since 1978 (Usembassy). Raina and the global union movement also are urging the Peruvian Congress to pass a bill introduced more than a year ago(2012)that would ensure equal rights for textile and garment workers. The bill is stuck in a congressional committee. In 2011, a court ruled in favor of 129 textile workers whose contracts were not renewed, the judge found that some of the workers had worked up to 10 years on short-term contracts. In the ruling, the judge stated that Decree 22342 and its “exceptional” short-term contracting scheme were no longer necessary to support the growth of the country’s textile and apparel sector (Usembassy).

Picture from: Cuzco Center for Traditional Textiles

Future plans for Fashion in Peru:

Peru plans to double the textile and apparel industry exports by the year 2017. The country plans to invest $60 million dollars to promote it’s key designer brands in the international markets. The goal of this investment is to double exports in the fiscal period of July 2011-2016. The country of Peru is also looking to strike a free trade agreement with Australia, Brazil, and Russia in the near future as well. Value added exports account for $11 billion dollars within the last year (2013), of that $2.2 billion dollars are from the textiles of Peru, apparel and the footwear industry (Usembassy).

Peruvian Fashion – Claudia Jimenez – Maricio Zevallos & Renzo Cipolla

Peru has roughly 194 fashion, accessories, and textile manufactures.

Claudia Jimenez â&#x20AC;&#x201C; LIF Week S/ S 20132014 â&#x20AC;&#x201C; M. Zevallos & R. Cipolla Peru works to promote itself in new markets in the US, as well as in Europe, and in Asia. Exports in Asia have grown 15% within the last year, but Peru still has so much more work to do in Asia, to fully export there. Peru has plans with the designer investment plan, with which they want to internationalize their high end prima cotton, vicuna and alpaca brands. Their approach would be to invest and help the brands with their international presence, including the designers behind them. Peru wants to enter in new markets by participating in trade shows where designers will be able to showcase their work on the runways. It is also to strike commercial alliances with shopping malls to launch promotion campaigns enabling designers to show their best cotton, vicuna, and alpaca wears (Usembassy).

Trade Associations

ComexPeru is the private association that groups the leading companies involved in foreign trade in Peru. Its main purpose is to contribute to the improvement of competitive conditions within a free market environment that will make Peru an attractive destination for private investment (LimaEasy).

Peruvian Association of Technical Textiles ATT is a foreign association to any political, religious or nonprofit activity, consisting of people with technical, scientific and social. That

are engaged in work related to the textile and

related industries, to promote and encourage the study, research and dissemination of expertise derived from the textile industry.

The Sociedad National de Industrias (SNI) is the largest and the most capable textile association in Peru. Its services to Peruâ&#x20AC;&#x2122;s industry include: Certificates of Origin, Publications, Visaciones Textiles, Visaciones of Confections, Courses and Seminars, Legal Advice, Consulting in Foreign Trade, IEES, Legal Reporting and the Industrial Radar, which keeps its members apprised of relevant national and international developments. Consistent with the policy of promoting institutional and industrial development, the SNI responds to the demands of internationalization of the Peruvian industry. It participates in the mechanisms that facilitate the flow of trade between Peru and the world, and seeks to standardize criteria, procedures and processes that reduce administrative delays and reduce cost overruns for Peruvian businesses.

Conclusion Peru has great future expectations for the apparel and textile industry, and many associations that are there to assists them with whatever they might need. With the future plans for fashion, in conjunction with the future improvements of the social, economic, and political climates, Peru has a bright future ahead.

Picture: from khorra

Peru Trade Agreements Picture: from Cisneros Group

Introduction Peru currently has FTA’s with over 53 countries. Because of these FTA’s, Peru is able to export to 53 countries, with very little issues. The FTA’s have allowed the country to diversify it’s offer for non-traditional goods, traditional products still make up 78% of Peru’s exports.

Trade Agreements According to EY, Peru’s Business and Investment Guide, Peru’s development strategy is based on an economy open to the world and competitive in its export offer. It has been a successful strategy that has permitted the country to consolidate its foreign trade in goods and services as an instrument for economic development and the reduction of poverty. International trade negotiations, which have benefited from rigorous macroeconomic management and its consequent stability, have allowed the Peruvian economy to gradually tackle and reduce its external vulnerability in times of crisis such as in the current international situation. In recent years, Peru has negotiated Free Trade Agreements (FTA) with large and medium-sized markets (Peru’s Business and Investment Guide).

Nearly 95% of Peru’s exports are covered by Free Trade Agreements (FTAs) currently in force. This enables Peruvian products to enter, subject to the rules of origin of each trade agreement, under preferential conditions to 53 countries, including the United States, China, Canada, Japan, South Korea, Thailand, Singapore, and the member countries of the European Union, among others. This market openness and the trade agreements that Peru has signed have permitted an increase in the number of exported products and exporting companies, particularly in non-traditional exports (Peru’s Business and Investment Guide).

Despite the fact that exports of traditional products still represent 78% of the countryâ&#x20AC;&#x2122;s total exports, it is clear that the trade agreements have allowed the country to diversify its offer of non traditional goods. Additionally, these trade agreements are a valuable instrument for attracting direct foreign investment and boosting increased productivity in companies, as well as the transfer of technology through the lower cost of imports of capital goods and quality inputs. Trade agreements provide an incentive to the processes of convergence of international standards, which has enabled more Peruvian companies to improve their management and logistics practices (Peruâ&#x20AC;&#x2122;s Business and Investment Guide).

Graph: From EY

In Force Trade Agreements 1. Peru – China Free Trade Agreement (FTA) In economic terms, China has been the fastest growing economy worldwide over the past two decades (around 10% per year of sustained growth). The entry into force of this Agreement in March 2010 has opened up a market of 1.35 billion inhabitants, of which 350 million are consumers with high purchasing power. As of July 2012, exports to China had grown at an approximate average rate of 31% per year during the 2002-2012 period. Peru’s principal exports to China are copper, fishmeal, and iron ore, lead, and zinc. In exchange, China ships machinery, mobile telephones, and high technology products to Peru. Among the main Peruvian products benefiting from the trade agreement are giant squid, cuttlefish and squid, fresh grapes, avocado, mango, barley, paprika, tara powder, and fine wool yarn, etc. (Peru’s Business and Investment Guide). In line with Peru’s strategy to become the hub of Asian operations in South America, the FTA provides Peru with the opportunity to establish clear rules of the game, within a transparent and predictable framework through which it will not only contribute to increasing bilateral trade, but also boost Chinese investment in Peru, principally in the industries of mining, agriculture, electricity, wind power, petroleum and gas, and fisheries. (Peru’s Business and Investment Guide). 2. Peru - United States Trade Promotion Act Peru had access to certain unilateral preferential customs duties with the United States starting in 1991, granted by the U.S. Congress to Andean Countries through the Andean Trade Preference Act (ATPA) which remained in force until 2001. These preferential duties were renewed in 2002 with the enactment of the Andean Trade Promotion and Drug Eradication Act (ATPDEA) under which they remained in force until 2010 (Peru’s Business and Investment Guide).

In 2004, Peru initiated negotiations for a Free Trade Agreement (FTA) with the United States, and in 2009 the Peru – United States Free Trade Act entered into force. Just two years after entering into force, 418 new products were exported, of which 96% were non-traditional products, most notably in the areas of Metal-Mechanical (32%), Chemicals (20%), and Textiles (11%) (Peru’s Business and Investment Guide). 3. Peru - European Union (EU) Free Trade Agreement (FTA) The Trade Agreement with the EU is part of a business strategy to expand and develop the export supply of Peru. It became effective on March 1, 2013.The EU is one of the main destinations for Peruvian exports, with a 15.9% share in 2012. This Region represents a large market opportunity, with over 490 million inhabitants and per capita income levels which are among the highest in the world. With the entry into force of the Peru – EU FTA, custom duties were removed in 99.3% of Peru’s exports, benefiting 95% of custom duty lines for agricultural products. The main products of export interest to the European bloc are asparagus, avocados, coffee, fruits of the genus capsicum, (for example, paprika and chili peppers) artichokes, among others (Peru’s Business and Investment Guide). 4. Peru – Japan Free Trade Agreement (FTA) The Economic Partnership Agreement between Peru and Japan was entered into on May 31, 2011, and went into full force and effect on March 1, 2012. The Peru – Japan Economic Partnership Agreement (EPA) allows for preferential access to an established international market, which has a great capacity for consumption of products with high added value (Peru’s Business and Investment Guide). Under this Agreement, Peruvian products such as coffee, asparagus, sacha inchi, giant squid, fish oil, copper, lead, zinc, purple corn, giant corn from Cusco, swordfish, among others, enter the Japanese market with preferential access. The Agreement also gives Peru access to a market with a greater demand for consumer goods, raw materials, intermediate goods and capital goods

(Peru’s Business and Investment Guide). 5. Peru - South Korea Free Trade Agreement (FTA) The Free Trade Agreement (FTA) between Peru and South Korea was signed on March 21, 2011, in Seoul, Korea, and it became effective on August 1, 2011. In line with the Peruvian strategy to strengthen trade with Asia, South Korea was the third Asian country with which Peru signed an FTA. Among other characteristics of the Peru - Korea FTA, as is typical of a commercial agreement, a 10-year term was established, to eliminate custom duties on products that both countries share. However, there may be other measures which may be applied in the form of import duties on some agricultural goods which are specified in the Agreement (Peru’s Business and Investment Guide). Through this Bilateral Agreement, Peru reaches a 50 million people market with a per capita GDP of US$22,590. For Peruvian exports, this represents a larger number of potential consumers and a greater chance of placing its products, thanks to the preferential access that many products enjoy under customs duty headings. Peruvian non-traditional exports reap the most benefit from this Agreement, since,according to the Peruvian Ministry of Foreign Trade and Tourism (MINCETUR) the Korean market has a preference for high quality fresh products, such as agricultural and fisheries products from Peru (Peru’s Business and Investment Guide). South Korea was the ninth destination of Peruvian exports during 2013, with a total of US$1.524 billion, the bulk of which is represented by fisheries products and minerals, amounting to 94.4% of the total. In turn, it is the sixth country of origin of our imports, with a total of US$1.590 billion in 2013. The main products imported from Korea are television sets and vehicles, representing 44% of the total (Peru’s Business and Investment Guide).

6. Peru - Singapore and Peru – Thailand Free Trade Agreements (FTAs) In the context of the policy to approach the Asian market, Peru executed the Peru - Singapore Free Trade Agreement (FTA) on May 29, 2008, in Lima, which entered into force on August 1, 2009. Likewise, it signed the Protocol between the Republic of Peru and the Kingdom of Thailand which is in full force and effect as from December 31, 2011. Unlike Thailand and the case of most Asian countries, which import mainly minerals from Peru, Singapore is a very important nontraditional Peruvian exports destination (Peru’s Business and Investment Guide). According to the Peruvian Ministry of Foreign Trade and Tourism (MINCETUR), the main products exported to Singapore, which are already benefiting from this Agreement, are: cocoa, grapes, t-shirts, shirts, asparagus, shellfish, and other marine products. While the main products exported to Thailand are zincore, copper ore, flour, fishmeal and fish pellets, cuttlefish, and fresh grapes. The tariff liberalization agreed with Thailand covers about 75% of the subcategories of both countries. Sub-categories corresponding to Basket A had an immediate liberalization and those corresponding to Basket B have a five-year liberalization as from the date the Protocol entered into full force and effect. Singapore is one of the main ports of entry into East Asia, thus, the Agreement will enable Peruvian products to be admitted with better conditions throughout the Region (Peru’s Business and Investment Guide). 7. Peru – MERCOSUR Economic Complementation Agreement (ACE) Economic Complementation Agreement 58 (ACE 58) was signed between Peru and the MERCOSUR countries (Argentina, Brazil, Paraguay and Uruguay) on November 30, 2005 and became effective on January 2006. The purpose of this Agreement was to establish a legal framework for integration, to facilitate business trade between member countries,

Through the elimination of tariff and non-tariff measures affecting trade in goods and services. Therefore, since January 1, 2012, products exported to Argentina and Brazil enter these countries with a rate of 0% in customs duties (Peru’s Business and Investment Guide). 8. Peru - Mexico Trade Integration Agreement The Trade Integration Agreement was entered into by and between Peru and Mexico on April 6, 2011, and became effective on February 1, 2012. This Agreement opened up a 112 million people market, allowing our exports preferential access to over 12,000 products, such as canned fish, cookies, timber, shrimp, and other products. This Agreement will also make it possible for us to access a wider range of kitchen appliances (Peru’s Business and Investment Guide). 9. Andean Community of Nations (CAN) Peru is a member of CAN in agreements related to lower customs duties for goods, sub-regional liberalization of service markets, community regulations regarding intellectual property, land, air and water transport, telecommunications, etc. An important part of Peruvian trade regulations are governed by the commitments made under this forum. However, in its policy of trade liberalization with other countries and blocs, Peru deepened the liberalization of trade and the opening of its market to much higher levels, and with commitments that are broader in scope than those arising from the CAN (Peru’s Business and Investment Guide). 10. Peru – Chile Free Trade Agreement (FTA) This Agreement is effective as from March 1, 2009. It extends the Economic Complementation Agreement signed by Peru and Chile in 1998, together with its annexes, protocols and other tools. According to the schedule of lower duties of this Agreement, by 2016 there will be a total exemption in the trading of goods between the two countries (Peru’s Business and Investment Guide).

11. Asia Pacific Economic Cooperation (APEC) Forum Asia Pacific Economic Cooperation (APEC) is a forum to promote economic cooperation, economic growth, and the expansion of trade among its members. Unlike the World Trade Organization (WTO) and other multilateral forums, APEC does not yet comprise a trade treaty or agreement involving obligations. However, Peru is active in the work of this forum, and it participates in the definition of the work lines and its organization. As it was in 2008, in 2016, (Peru’s Business and Investment Guide). Peru will be the host of the APEC forum, the ministerial meetings, and the summit of leaders of the 21 economies making up the forum. According to the Ministry of Foreign Trade and Tourism (MINCETUR), APEC countries account for approximately 60% of the global GDP 50% of world trade, and around 50% of the world population. A trade agreement within this bloc (which, at a later stage, could be the agreement resulting from negotiations of the Transpacific Partnership Agreement or TPP) would further open more doors to the world’s largest market for Peru’s export offering (Peru’s Business and Investment Guide). 12. World Trade Organization (WTO) It is the world’s largest trading forum, where the rules governing trade in almost all the countries of the world are discussed. Peru has been a member of the WTO since its creation in 1995, and all commercial agreements reached at the WTO have been ratified by its domestic law (Peru’s Business and Investment Guide).

Conclusion Great relationships are of vital importance to sustain the development of a country. Because Peru is opening up new national markets, it is allowing them to achieve a more dynamic economy (EY).

Business Etiquette Picture: from Globase Blog

Introduction In this section, a close observation of the “Do’s” & the “Don’ts” of business etiquettes for doing business with Peru, are discussed.

Type of Culture: Masculine or Feminine?

Graph: from The Hofstede Centre According to The Hofstede Centre, If Peru had a high score of masculine in their country, it would mean that the country is driven by competition, achievement and success. Success would be defined by the winner or best in the field, this value system would be one that starts in school and continues throughout organizational behavior (The Hofstede Centre).

Since Peru has a high feminine culture, that means that their dominant values in society are caring for others and having a quality for life. In a feminine culture, the quality of life is the sign of success and standing out from a crowd is not admirable (The Hofstede Centre).

Initial Meeting

Picture: from YEC Initial meetings in Peru are highly suggested to include a enchufado (a local intermediary), according to Lothar Katz in â&#x20AC;&#x153;Negotiating International Business- Peruâ&#x20AC;?. Having a enchufado will help bridge the gap between cultures, the person allows a seamless process to doing business in Peru. To get in contact with getting a enchufado, Lothar Katz suggests reaching out to a trade organization, a chamber of commerce, or a local legal or accounting firm (Katz,2). Initial meetings in Peru are often times conducted in a lunch setting, by individuals or teams of negotiators. It is very important that the teams that are meeting are very well aligned and familiar with each other and their roles in the business meeting. If a team member needs to be changed, it may require for the relationship process to start over, so it is best to avoid it (Katz,2).

Ahead of time, it is best to schedule meetings at least two weeks in advance. Peruvians want to know who they are meeting, so it is best to provide details on titles, positions, and/or responsibilities for your company. When meeting with a Peruvian, it is best to be punctual, even though they are known to be over an hour late to meetings. It is suggested by Lothar Katz to not be more than 10-15 minutes late to a meeting, and if you will be, call the person you are doing business with. When meeting with a Peruvian for the first time, and the person is not familiar with their lateness, it is suggested that they do not show signs of impatience. Showing any signs of frustrations or impatience, will reflect poorly on the person doing business with Peruvians (Katz,2).

Negotiation Styles: Attitudes & Styles According to Lothar Katz in “Negotiating International Business- Peru”, Peruvians have a distributive and contingency way of bargaining. The buyer is normally in the superior position, but both sides in the business deal, own responsibility to reach the agreement. Peruvians expect long term relationships with their business partners, and want to focus on long term benefits with them. The primary style of the meeting is cooperative, but some may not be willing to agree with compromises, they only will if it is their only option to keep the negotiations from getting “stuck” (Katz,3).

Peruvians see negotiating as a way of building their relationship with their business partners, and they see it as a way to strengthen their relationships. Peruvians believe in the “win-win” concept, and they do want a person to return the same respect and trust they have given them. It is best to always avoid aggressiveness or confrontation, and to remain calm, polite, patient, and persistent (Katz,3).

Sharing Information After a business has built a relationship with a Peruvian business person, it does not mean that they will openly share any information with you. Many Peruvians believe that sharing information is a privilege, and it can create a bargaining advantage. In the business meeting, it may be times where information is said over and over, and it may seem irrelevant (Katz,3).

Pace of Negotiation According to Lothar Katz in â&#x20AC;&#x153;Negotiating International Business- Peruâ&#x20AC;?, business partners with Peruvians should expect the pace of negotiations to be slow and protracted. The people of Peru do not hurry and they really dislike people who does. Business partners should be prepared to take several trips to the country of Peru to fully achieve their objectives. Relationship building, information gathering, bargaining, and decision making will take quite some time when doing business with Peruvians (Katz,3).

Any attempts to rush the process of business with them will produce poor results, and might offend them. It is best to have quite a bit of patience, and to control any anxious emotions, as well as expecting delays. Most Peruvians enjoy a polycronic working style, that requires pursuing multiple actions and goals. (Katz,3).

In a meeting with Peruvians, often they will take a holistic approach and jump back and forth between the topics discussed, hardly ever do they follow conversations in any kind of order. In this situation, it is best to keep calm, and to keep track of the bargaining process, as well as highlighting areas that you guys have already agreed upon (Katz,3). If the Peruvian business partners seem a bit hesitate or appear to be stalling the negotiation, observe carefully to see if they are slowing down the process of moving forward with business because they are not interested (Katz,3).

Bargaining Peruvians are comfortable with hard bargaining and haggling. In the bargaining process, it can get very extensive. They are open to new ideas and concepts, but would rather stick to what they wanted, and one may find it difficult to change their mind. It is best to stay respectful and to re-address disagreements on ideas in any follow up meetings. Doing so, gives the business partners of Peru time to reconsider their thinking. When bargaining, Peruvians may want to move prices up about 25-35 percent between initial offer and the final agreement (Katz,4).

Although Peruvians generally prefer a straightforward negotiation style, they also use deceptive techniques, such as telling lies and sending fake non-verbal messages, pretending to be disinterested in the whole deal or in single concessions, misrepresenting an itemâ&#x20AC;&#x2122;s value, or making false demands and concessions.

Peruvians may play stupid or make other attempts to mislead you in order to obtain bargaining advantages. It is best to not take these tactics personally, but refrain from lying at or grossly misleading them, as doing so might damage business relationships. Even when you can see right through a lie, it would be a personal insult to state or even hint that the Peruvian is not telling the truth (Katz, 4).

Peruvians may use pressure techniques that include making final offers, showing intransigence, or nibbling. In Peru, final offers may come more than once, and it is rare that they are final when they say they are. It is best to be careful when trying to open with your companyâ&#x20AC;&#x2122;s best offer, because Peruvians may see this as inappropriate or insulting. If a Peruvian is silent, it may mean that they have rejected your offer, or they need to obtain more information. It is best in this time not to use pressure tactics, such as applying time pressure or making expiring offers, this could be seen to the people of Peru as a business person not wanting to build a long term relationship with them, which may result in them terminating the negotiation (Katz, 4).

Conclusion In Peru, it is very important to keep patience, and to always show respect when negotiating with Peruvians. They are not fond of being rushed, or doing business with someone they are not familiar with.

Relationship Building Picture: taken by Natasha Schmale

Introduction In relationship building, a close look at how Peruvians value relationships over anything else is studied. It is very important to get to know them and build a relationship before trying to conduct any kind of business.

n Peru, building lasting and trusting relationships is very important, Peruvians find it essential to establish strong bonds prior to closing any business deals. The people of Peru tend to like to do business with people they know, trust, and have become

familiar with. To establish a productive business partnership, it is best to have great cooperation, because doing business with Peruvians requires a long term perspective and commitment. It is suggested to proceed with business talk, only after the Peruvians have become comfortable with speaking about it, after they have gotten to know you. The relationship process can be very time consuming (Katz, 1).

Business relationships in Peru exist between people, and not normally between companies. If a Peruvian has established a trusting relationship with you, it is best not to bring others from the company you work for. Peruvians like to keep things unchanged, if something is changed, it will require a building process with them as well. Having a personal relationship with Peruvians may open doors and solve problems that, without having one would be difficult to master (Katz, 1).

Conclusion Building that strong relationship with a Peruvian before trying to negotiate or do business, is very important to the success and longevity of your business relationship.

Social & Cultural Elements Picture: taken by Shaman Jon Rasmussen

Introduction In this section, proper attire, introductions, presentations of business cards, and more are discussed to show the importance of them to the success of a business meeting with Peruvians.

Appropriate Dress

Picture: from Galleryhip

In general, business dress is professional but conservative. Men should wear suits and the women should wear dresses or suits.

Peruvians tend

to respect those who dress in business attire well (Peru Business Etiquette).

Introductions

Picture: from Oasis Law

Initial introductions in Peruvian business are informal. A handshake is the most standard greeting.

When the business relationship turns

into a friendship, Peruvians will then a kiss their business partners on the cheek or give a hug. This is done when they greet their business partners, and when they say goodbye to them (Communicaid).

Business Cards

El campeonato de fulbito COPA APTT 2014, organi zado por la Asociación 912-675-8948

Picture: from Promo popusti According to Communicaid, it is best to print your company business cards in Spanish, but also have the reverse side translated in English. Although some Peruvians have a working knowledge of English, anyone doing business with them should never assume this. It is also considered polite business practice to use Spanish when possible. It is best to show advanced degrees on your card and make sure that it clearly states your professional title, especially if you have the seniority to make decisions. When presenting your card, ensure that the Spanish side is facing the recipient. Smile and keep eye contact while accepting someone else’s card, then carefully examine it. Next, place the card on the table in front of you (Communicaid).

Titles/Names

Picture: from Entonces Peru Tambien Blog

In a business meeting with Peruvians, it is vital to know that they have two family names, first one from their father and second from their mother. It is best to use Mr.,Mrs.,Miss or Señor,Señora,Señorita, plus the first family name. It is important to know if the person you are doing business with in Peru has a academic title, if they do, it is suggested to say their academic title and then follow with their father’s family name (Katz,2).

Gestures

Picture: from Photo Elsoar

When doing business in Peru, do not use your index finger to beckon someone to come closer as this is considered rude. It is more polite to turn your palm downwards while using all fingers in a sweeping motion towards yourself (Communicaid). The American OK sign, with thumb and index finger forming a circle, can be read as an crazy gesture in Peru. Lightly tapping the head signals, â&#x20AC;&#x2DC;Iâ&#x20AC;&#x2122;m thinking (Lothar Katz,1-2).

Colors,numbers, & their meanings

Yellow= Optimism, promise for better days ahead Black= Mourning, Favored Color for Male Clothing

In Peru during New Years, yellow is associated with optimism and promise of better days ahead. Peruvians know that all too well and they hope that if they cover themselves in yellow, they will get great jobs, have money and love next year (Peru This Week). Wearing yellow to a business meeting could be a good sign to a Peruvian, they will more than likely see it as a meeting that will mean that the business partners are good people, and that the negotiations will be good ones.

Peruvians are not very fond of odd numbers, as they see this as a sign of bad

5,7,9...

luck. It is best that businesses conducts meetings on days that fall on an even day (communicaid).

Space

Picture: from Book Buddy Blog Do not be offended or surprised if your Peruvian business partners are in your personal space. Many Latin American cultures use a closer physical proximity than other Western cultures as a way of communicating with one another, it is not being rude to them, rather just who they are (University of Birmingham).

Gift Giving

Picture: from Eat my Beets Blog

It is best to not bring a set of knives as a gift or any gifts that come in odd numbers to your Peruvian business partners. Knives symbolize the severing of friendship and odd numbers are considered bad luck (communicaid).

Time

Picture: from Pioneer Land Library

In Peru, time is approached in a very relax and flexibly manner. Because of this, often times business meetings are delayed. Peruvians are known to come up to an hour late. It is best to plan several hours for business meetings, just in case they are late. It is also suggested that the people doing business with Peru are actually early to business meetings, even though Peruvians are not (University of Birmingham).

Joke Telling

Picture: taken by Anthony Cassidy

According to InterCultures, Peruvians have a great sense of humor, they love to laugh. Jokes are welcome, as long as it is not overly done during business talk, and it does not criticize the country of Peru or the people.

Business Entertaining

Picture: from Wedding Compass Peruvians are brilliant hosts, who love to have a great time with the people they are around and doing business with. They have late nights and early mornings with their entertaining, so it is best to keep that in mind. Most entertainment is in a restaurant setting, at this time discussing business is not done, it is all about having fun, with great food, and lotâ&#x20AC;&#x2122;s of drinks. Business talk is typically during lunch time (1pm-3pm) with Peruvian business partners (Culture Smart Consulting). Conclusion In Peru, since Spanish is the most commonly used language, it is best to either learn the basics of the language, or request to have an interpretor with you. It is vital to know how to hold a conversation with a Peruvian, and also important to keep in remembrance what they see as good luck, and what they see as bad.

Dining Picture: taken by Luiz Hara

Introduction In this section, dining and communication types are discussed. Peruvians take having great table manners seriously, and want their business partners too as well. Also, knowing what to talk about while having dinner is very important,

ccording to The University of Birmingham, when doing business in Peru, it is best to always keep your hands on the table at dinner functions, as it is seen as having bad manners to Peruvians if you have them in your lap. Proper uses of

utensils are when you do not switch knives and forks while eating. The knife is to remain in the right hand and the fork in the left at all times. Once you are finished eating, place your silverware parallel and horizontally across the plate (Etiquette Scholar).

According to the Etiquette Scholar, the dining etiquette for seating is the host and the honored guest usually sitting next to each other. Males to the right of the hostess and females to the right of the host, if there is a hosting couple then they will sit next to each other. When in a restaurant setting, it is proper etiquette to always tip the waitresses and waiters at least a 10% tip.

When Peruvians toast, they say â&#x20AC;&#x153;Saludâ&#x20AC;?, and everyone is to lift their glasses and drinks and take the first sip of the drink at the same time. It is very rude for a visitor to start drinking alone, for the first drink. Once a business deal has been achieved, the host may make a more formal toast to everyone, and the guest may respond with a brief speech or smile and say thank you. Peru has a national drink called Pisco Sour, this drink is typically the start of the meals, and one that is used for toasting (Etiquette Scholar).

When holding a conversation in a business meeting with Peruvians, it is best that a person is genuinely curious about the culture and asks them about it. Topics to talk about might be: Peruvian cultures, history, cuisine, and the national drink Pisco Sour. It is best to avoid conversations on politics or weather (university of Birmingham).

Picture: from Huffington Post

Communication Types

According to Lothar Katz in â&#x20AC;&#x153;Negotiating International Business- Peruâ&#x20AC;?. few Peruvians speak English well, so being able to speak Spanish is a clear advantage. Otherwise, it is often useful to engage with an interpreter. To avoid offending the other side, it is best to ask beforehand whether an interpreter should be present at a meeting. When communicating in English, speak in short, simple sentences and avoid using jargon and slang. It will help people with a limited command of English if you speak slowly, summarize your key points often, and pause frequently to allow for interpretation (Katz,1-2).

People in Peru usually speak softly. While they may occasionally raise their voices to make a point, they dislike loud and boisterous behavior. At restaurants, keep conversations at a quiet level. People may converse in close proximity, standing only two feet or less apart. It is best to never back away, even if this is much closer than your personal comfort zone allows. Doing so could be read as a sign that you are uncomfortable around them (Katz,1-2).

Normally communication in Peru is usually not overly direct. People may not get straight to the point when trying to get a message across and one may have to read between the lines to understand what is being said by the Peruvian. They may tell you what they think you want to hear rather than what they really think. It is beneficial to use a similarly indirect approach when dealing with Peruvians, as they may perceive you as rude and pushy if you are too direct. The communication may become more direct and frank once a strong relationship has been established between you and the Peruvians (Katz,1-2).

Gestures and body language can be very lively, especially if they help underline what is being said. There are insistences when frequent physical contact with others of the same gender happens. The American OK sign, with thumb and index finger forming a circle, can be read as an crazy gesture in Peru. Lightly tapping the head signals, â&#x20AC;&#x2DC;Iâ&#x20AC;&#x2122;m thinking.â&#x20AC;&#x2122; Eye contact should be very frequent, almost as if you are staring at them. This conveys sincerity to Peruvians and helps build trust with them (Katz,1-2).

Conclusion When conducting business in Peru, it is best to know what foods and drinks are the most popular in the country, and how close they communicate with others. Also, it is important to know what conversations are good to talk about and what are not, when at the dinner table.

Sourcing Guidelines

Introduction

Comfort Act has carefully thought of sourcing guidelines that reflect our company values. Our company strives not only in quality and comfort Athletic wear, but also in our ethical responsibilities.

Comfort Act values the Sourcing Guidelines as a foundation of ethical responsibility and excellence. Comfort Act sources products internationally, which means our suppliers, contractors, business partners and employees come from different backgrounds and principles. Comfort Act is committed to providing a humane and sustainable working environment among all aspects of the company. In order to pursue work or business with Comfort Act, employees must agree to terms of the Sourcing Guidelines and Code of Conduct. Suppliers shall communicate Comfort Actâ&#x20AC;&#x2122;s morals and requirements to all workers during training and evaluating periods. CHILD LABOR Children under the age of 15 or children who are of age to be in school are not permitted to work. Comfort Act suppliers and contractors should adhere to local laws and regulations in regards to child labor. FORCED LABOR Comfort Act suppliers and contractors should make certain workers are employed voluntarily. The use of forced, bonded, or prison labor is prohibited. Comfort Act generates an environment where workers are free from violence, threats, or financial consequences, as well as slavery, human trafficking, or indentured labor. COMPLIANCE WITH LAWS Comfort Act suppliers and contractors are required to work under local, national and international laws and industry standards in all business facilities. Adhering to these laws ensures the health, safety, and wellbeing of Comfort Act workers, as well as the environment.

ETHICAL STANDARDS Comfort Act will not tolerate business partners or workers who disrespect, hurt, deceive, or mistreat others. We value implementation of professional relationships and respectful decorum during and outside of business practices. Workers must adhere to all ethical standards in the code of conduct. DISCRIMINATION Differences in gender, sexual orientation, race, culture, religion, age, nationality, politics and ethnic origin are respected at Comfort Act. Suppliers and contractors are prohibited against discriminatory acts when hiring or working with employees. HEALTH AND SAFETY A healthy and safe environment shall be provided to workers. Comfort Act contractors and suppliers shall follow applicable laws and regulations that ensure access to potable water, sanitary areas, fire safety, lighting, and ventilation.

ENVIRONMENTAL STANDARDS Suppliers and contractors are required to adhere to applicable environmental laws and regulations throughout manufacturing, production and distribution facilities. Comfort Act incorporates lean manufacturing to maintain efforts toward sustainability. WAGES AND BENEFITS Comfort Act suppliers and contractors shall fulfill the legal requirements concerning wages and benefits. Workers are granted payment that is aligned with local industry policies or at the minimum wage amount. Suppliers and contractors will choose the higher amount. Overtime work always shall be compensated in its full rate according to legal standards.

MAXIMUM WORKING HOURS Comfort Act business partners shall not exceed local legal limits on work hours. Overtime should be compensated to all workers according to local policy standards. Comfort Act allows workers to conduct business no more than 60 hours per week, which includes overtime. It is the responsibility of suppliers to provide workers at least one day off per week. COMPENSATION Comfort Act enforces all compensation laws in regards to meals, transportation, health care, childcare and medial, family or religious leave. All workers must receive compensation of wages, overtime premiums and benefits. These payments should meet or exceed the rate according to legal requirements or shared agreements. FREEDOM OF ASSOCIATION Employees can freely join or form organizations and have the right to bargain collectively. Suppliers and contractors are forbidden from unlawfully interfering with these rights that the employees have. It is the responsibility of the suppliers and contractors to communicate with workers if the law does not enforce these rights. HARASSMENT AND DISCIPLINARY PRACTICES All employees must be treated with equally and respect. Comfort Act will never use or tolerate corporal punishment, physical and verbal abuse, sexual harassment or physical, psychological, and cyber bullying. Using monetary methods as a disciplinary practice is prohibited.

MONITORING AND COMPLIANCE TRANSPARENCY Comfort Act records should be complete, accurate, and open for suppliers and contractors. Comfort Act shall work with business partners in evaluating manufacturing and production processes. We are committed to improving the effectiveness of our business and quality of our product. INTERNAL Comfort Act will implement and maintain a system for continuously reviewing the ability of all parts of its supply chain to comply with the Comfort Act Ethical Standards. As part of this process,suppliers will be risk-assessed based on available information e.g. selfassessment questionnaires, sites assessments, Comfort Act audits as well as audits carried out on behalf of third parties. Other information such as quality and delivery performance will also be taken into consideration. Comfort Act will use this information to assess both suppliers and manufacturing sites. The outcome of these assessments will be communicated to the relevant suppliers (and agents where applicable) and will influence our commercial sourcing and purchasing decisions.

EXTERNAL Any issues a supplier may have with Comfort Actâ&#x20AC;&#x2122;s actions in relation to our Ethical Standards should immediately be reported to the Comfort Act Ethical Trade Manager at ethicaltrade@comfortact.com. All such emails will be confidential. Comfort Act will not permit or tolerate any retaliatory action against suppliers who report any such concerns or issues in good faith. Comfort Act will work with reporting suppliers to address any issues raised. It is the responsibility of suppliers at all times to monitor their own compliance with all of their obligations under Comfort Actâ&#x20AC;&#x2122;s Ethical Standards. If any supplier at any time is struggling to meet those obligations or discovers any breach or non-compliance with these Ethical Standards, that supplier is encouraged to immediately report that actual or likely non-compliance to the Comfort Act Ethical Trade Manager at ethicaltrade@comfortact.com as an urgent matter.

Manufactures Picture: from Peru exportable

Currently, Fashion & Apparel manufactures account for 30% of the country of Peruâ&#x20AC;&#x2122;s non-traditional exports, with roughly 194 fashion, accessories, and textile factories. In this section, 5 manufactures are selected based on their well known clients, quality of machines, turn around times, and sourcing guidelines.

Clients

Gap Dillards Life is Good Under Armour Lane Bryant Zumba Express Everlast The North Face

Topy Top S.A Location:Avenida El Santuario 1323, Urb Zarate, San Juan De Lurigancho, Lima 36, Peru

Website:http://www.topitop.com.pe/

Customers:Hugo Boss, Old Navy, Under Armour,and more!

Local Production: Inka Knit (10 year relationship w/Topy Top S.A)

Size of Production: Cutting 2.200,000 Sewing

2.050,000

Embroidery

200,000

Washing 1.800,000 Printing 1.600,000 Finishing

2.200,000

Length of being in business: 29 years

How they meet Comfort Actâ&#x20AC;&#x2122;s Requirements & guidelines: Provides quality assurance, and does business with companies that follow similar guidelines to Comfort Act.

Clients

Ralph Lauren Under Armour Express Hugo Boss Old Navy Victorias Secret New York & Company The Limited Kenneth Cole Calvin Klein BCBGMAXAZRIA Banana Republic

Teximax Location: Av. Huarochirí 151, Santa Anita, Lima 43 –Perú Website:http://www.textimax.com.pe/

Customers:Hugo Boss, Old Navy, Under Armour,and more!

Local Fabric Manufacture:Tejidos San Jacinto

Size of Production:34,986,187 kg (sent out)

Length of being in business: 23 years

How they meet Comfort Act’s Requirements & guidelines: Provides high quality standards, production volume, variety, and versatility, as well as rapid response, competitive prices, continuous personnel training, and does business with companies that follow similar guidelines to Comfort Act.

Clients

Vans nautica

Hilanderia Location:Av.Las Lomas 801-Zarate-San Juan de Lurigancho-Lima 36-Peru

Website: http://www.hialpesa.com/

Customers:Vans,Nautica,and more!

Length of being in business: 35 years

Size of Production: has the capacity to produce 550,000 pieces of cut & sewn garments, monthly

How they meet Comfort Actâ&#x20AC;&#x2122;s Requirements & guidelines: Provides high quality standards, production volume, variety, and versatility, as well as rapid response, competitive prices, duty free(USA,Europe),and does business with companies that follow similar guidelines to Comfort Act.

Clients

Chicos Ralph Lauren

Cotton Knit S.A.C Location: Calle Santa Sofia 165-171, Urb. Industrial La Aurora, Ate, Lima, Peru

Jr. Santa Sofia 137, Urb. Industrial La Aurora, Ate, Lima, Peru

Website:http://www.cottonknit.com/

Customers:Ralph Lauren Childrens Wear, Chicos, and more!

Length of being in business: 23 years

Size of Production:600,000 garments per month

How they meet Comfort Actâ&#x20AC;&#x2122;s Requirements & guidelines: Provides high quality standards, production volume, variety, and versatility, as well as rapid response, competitive prices, and does business with companies that follow similar guidelines to Comfort Act, as well as having Philanthropic Focus for their company.

Clients

Jcpenney Under Armour Nautica

Industria Textil Del Pacifico

Location: Av. Guillermo Dansey N° 1873, Lima 01 – Perú

Website: http://www.intexpac.com

Customers:JCPenney, Under Armour, Nautica and more!

Length of being in business: 20 years

Size of Production: 2,916,818 kg (sent)

How they meet Comfort Act’s requirements & guidelines: Provides quality garments, exhaustive audit control, advanced technology and culture of constant innovation and flexibility. Also,does business with companies that follow similar guidelines to Comfort Act.

Costing Picture: from Meridian Peak

Introduction In this section fabric, components, packaging, and more are identified, and sourced to provide the best price, at a good quality for us, and our customers.

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Comfort Act athletic wear crop top was carefully priced. By looking closely at our competitors, we were able to determine the prices listed below:

Retail: $45 Profit Margin: $42.07 Gross Margin %:93.50 Mark Up %: 1,438.46

Import Classification Flats: from Stylesight, Edited by: Tanisha Johnson, Print by: Briana Young

Introduction Comfort Act strives to provide quality support for the active voluptuous woman. We provide a variety of athletic tops that will leave our customer comfortable & satisfied.

HTS CODE: 61062020 BASE RATE: 32% PREFERENTIAL TREATMENT: FTA with the United States

Logistics & Importation Picture: from Fleet Owner

Introduction In this section, Peruvian freight companies are researched, and analyzed to see if they ship to the United States, and when they do.

Ease of transportation within Peru

ccording to a new report released by digital publication Latinvex, PerĂş has the second best infrastructure in South America. Chile was ranked as having the best infrastructure in South America, and Venezuela the worst. Peru21 reports that

Latinvex looked at a large number of factors in order to compile the ranking: quality of ports, air transport, railway and roads; cost, time and documents required to export and import containers; efficiency of customs and border management clearance, ease of arranging competitively priced shipments, competence and quality of logistics services, ability to track and trace consignments, frequency with which shipments reach consignees within scheduled or expected delivery times and percent of paved roads and airport runways (Perithisweek).

Although, the ranking is extended to all of Latin America, Peru is ranked number six. On the extended list, Panama is rated as having the best transportation infrastructure, and Haiti has the worst. Peru21 reports that Peruâ&#x20AC;&#x2122;s sixth-place finish on the extended list can be attributed to rising container costs in the country and lessthan-impressive logistics and tracking services. According to Peru21, the list was compiled using data from a number of Latin American governments, the CIA, the World Economic Forum, and the World Bank (Perithisweek).

Railways: Total-2,374km

Highways: Total: 85,900km Paved: 45,000km

Waterways: Navigable; 8,600km

Ports: Pacific Ocean: -Callao -Salaverry -Chimbote

Picture: from Creech St.Michael

-llo -General San Martin -Talara -Matarani -Paita Lake Titicaca: -Puno

Amazon Basin -Iquitos

Picture: from uncyclopedia

-Pucallpa -Yurimaguas

Airports with paved runways Total: 44

Airports without paved runways Total: 190 Picture: from how stuff works blog

Ports in the US

Picture: Supply Chain Observer

Ports used by Comfort Act Crop Top: Portland, OR Comfort Act Headquarter: Beaverton,OR

Ports in Peru

Picture: Ports.com

Picture: Intermodal freight systems

Mediterranean Shipping Company ABOUT MSC Mediterranean Shipping Company S.A. of Geneva, Switzerland is a privately owned shipping line, founded in 1970, which has rapidly grown from a small conventional ship operator to become one of the leading maritime transportation groups of the world. During recent years MSCâ&#x20AC;&#x2122;s maritime fleet has expanded substantially to consolidate its position as the second largest carrier in respect of container slot capacity and of the number of container vessels operated. Such spectacular growth has been achieved internally through organic growth rather than through acquisitions or mergers. MSC provides an unparalleled service network via dedicated own offices throughout the world and remains a truly independent and private Company able to respond quickly to market changes and implement long term plans, without unnecessary interference or delay. With a streamlined management structure in Geneva, MSC has become a leading customer focused and cost effective global transportation solution for many shippers.

Timeline

Schedules: from MEDITERRANEAN SHIPPING COMPANY

Timeline

Schedules: from MEDITERRANEAN SHIPPING COMPANY

Map

Map: from MEDITERRANEAN SHIPPING COMPANY

ZIM Shipping Company

ABOUT

ZIM Integrated Shipping Ltd was established in 1945, and has developed into one of the largest, leading carriers in the global container shipping industry. At ZIM, they are committed to providing their clients around the world with reliable, flexible shipping solutions based on expertise gained from over half a century of experience. We cultivate long-term partnerships with our customers to delivering a range of services adapted to meet their specific needs with the ZIM seal of quality. For ZIM’s highly skilled and professional staff, there is no cargo challenge that cannot be met. ZIM’s customers enjoy the peace of mind that comes from working with a carrier that offers proven shipping solutions, including out-of-gauge cargo, perishable goods, or hazardous cargo. ZIM remains at the forefront of the carrier industry by rapidly adapting to commercial developments and emerging markets. This approach is an integral part of ZIM’s working philosophy, and drives the expansion of our operations in established East-West trade routes, while they pursue the development of their carrier services in the world’s newest, most dynamic markets.

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Picture: from likonomics

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US Importing Requirements Picture: from Premier

Introduction Proper documents are needed to get products out of Peru, and products into the United States, it is vital to know what is needed, and who it is needed by.

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Buyer:

Power of Attorney

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Entry Summary

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Entry Summary

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Entry Summary

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Entry Summary

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Entry Summary

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Certificate of Origin

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Freight:

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Inland Bill of Lading

Ocean Bill of Lading

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Ocean Bill of Lading

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Insurance Certificate

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Arrival Notice

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Intermodal Bill of Lading

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Manufacture: Commercial Invoice

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Pro-forma Invoice

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Packing List

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Bank:

Letter of Credit

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Peru Exporting Requirements Picture: from flagstaff group

Introduction Proper documents are needed to get products out of Peru, and products into the United States, it is vital to know what is needed, and who it is needed by.

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Supporting Documentation Exporterâ&#x20AC;&#x2122;s Requirements An exporter or producer that issues a certification which serves as the basis of the importerâ&#x20AC;&#x2122;s claim for preferential tariff treatment, is required to maintain for five years from the date the certification was issued, all records demonstrating that the good qualified for preferential tariff treatment. Records to be maintained are those concerning: -the purchase of, cost of, value of, and payment for, the exported good; -the purchase of, cost of, value of, and payment for all materials, including indirect materials, used in the production of the exported good; and -the production of the good in the form in which it was exported (Export.gov). Filing a Correction An exporter or producer that realizes that it has provided a certification that contains or is based on inaccurate information is obligated to promptly notify in writing every person to whom the exporter or producer provided the certification of any change to the certification that could affect the validity and accuracy of the certification. If an importer made a claim for preferential tariff treatment based on an inaccurate certification issued by the exporter or producer, the importer may be liable for any applicable unpaid customs duties (export.gov).

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Conclusion

With a very extensive analysis of the country Peru, many

conclusions have been drawn from it. Peru as a whole, is a country that has decreased their inflation rates, made several FTA agreements with many countries, and worked hard to provide Peru’s population with the latest technology and resources to create wealth for the country as a whole. Textile and apparel in Peru is a booming industry, accounting for more than 30% of the non traditional exports in Peru. The growth of the textile infrastructure in Peru is primarily due to textile production being recognized as a business opportunity for the country. Despite Peru’s exceptional economic growth in the last decade, the country still lags other middle-income Latin American countries in terms of per capita income, productivity and innovation. The country as a whole can certainly grown in those areas, by actively working to ensure all needs are met to continue to boom in income. Peru is working hard to continue to keep itself as a booming country, a place everyone will want to manufacture from. From it’s many quality textiles, well known manufactures, and duty free taxes, Peru is an amazing country for textile/apparel production. According to Doing Business 2014, Peru ranks 42 out of 189 countries in terms of being easier to start a company and doing business. In Latin America, Peru is ranked 2nd.

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Picture: from ThisFabTrek

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Appendix Picture from: Cornerstone International blog

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Peru, with a population of 30.9 million (estimate since 2013), has a median age of 27 years old, with the male gender being an average of 26.3 years old, and women being 27.7. The Peruvian Nuevo Sol is the currency of Peru (exchange rate: 1.00 USD to 2.90099 PEN, as of October 6,2014) and it’s traditional food is Lomo Saltado. Peru’s location is on the western region of South America, bordering the South Pacific Ocean, between Chile and Ecuador. The countries main ethnic group is Amerindian, and mestizo (mixed Amerindian and white), with white, black, Japanese and Chinese as the third biggest race, and other as the least. Roman Catholicism is practiced by 81.3% of the population of Peru, with Evangelical being 12.5%, other 3.3%, and none 2.9%. In Peru. Spanish is the main official language, with 84.1% of the population speaking it. The second most spoken language is Quechua, with 13% of the population speaking it, Aymara, Asjaninka, and other native languages follows in a lower percentage (Peru’s Business and Investment Guide).

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Population

Graph: CIA

Based on the graph above, Peru has a large amount of 19-29 year

olds in their 30.9 million population. Of the total Peruvian population, 65.0% is between the ages of 15-64, while the Economically Active Population (EAP) as of 2012 was 72.8% of the total, giving Peru a “demographic bond” effect, which is simply explained as the structural benefit of its population being of an age to produce and consume.

It is estimated that the current high percentage of workforce will extend its maximum registration period for up to three and a half more decades, and the power of this “demographic bond” is that of fostering greater production,consumption, savings, and investment (CIA, The World Factbook)

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The most important aspect of this demographic, is that Peru has the advantage of just having begun its “demographic bond” period, which will provide it with the conditions to make the necessary public and private investments in order to cover the demands and opportunities that arise from the consumption of its “demographic bond” period (CIA, The World Factbook).

Graph: EY

Over the last four years, the population has grown by an

average of 1.13% annually (in 2013, it is estimated to have grown by 1.12%). As of 2013, it is estimated that the urban areas population will achieve 75.7% and the rural areas population will achieve 24.3% of the total national population (Peru’s Business and Investment Guide).

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Government Peru is a constitutional democratic republic with a multi party system. The countries chief of state is President Ollanta HUMALA Tasso, he has been in office since July 28, 2011. First Vice President is Marisol ESPINOZA Cruz, who has been the Vice President since July 28, 2011. In Peru, the President is both Chief of State and head of government. For the elections in Peru, the president is elected by popular vote for a five year term, with the eligibility of a nonconsecutive reelection. Voting is eligible for ages 18-70. The presidential election was last held on April 10, 2011, with a run-off election that was held on June 6, 2011. The next election is to be held in the year 2016, on the month of April.

Diplomatic representation in the US, is Chief of mission

Ambassador Harold Winston FORSYTH Mejia, who has been in the position since August 29, 2011 (CIA, The World Factbook).

Picture from: Rueters

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Executive branch: chief of state: President Ollanta HUMALA Tasso (since 28 July 2011); First Vice President Marisol ESPINOZA Cruz (since 28 July 2011); Second Vice President (vacant); note - the president is both chief of state and head of government (CIA). head of government: President Ollanta HUMALA Tasso (since 28 July 2011); First Vice President Marisol ESPINOZA Cruz (since 28 July 2011); Second Vice President (vacant)note: Prime Minister Rene CORNEJO (since 24 February 2014) does not exercise executive power; this power rests with the president (CIA). cabinet: Council of Ministers appointed by the president elections: president elected by popular vote for a five-year term (eligible for nonconsecutive reelection); presidential election last held on 10 April 2011 with run-off election held on 6 June 2011 (next to be held in April 2016)election results: Ollanta HUMALA Tasso elected president; percent of vote - Ollanta HUMALA Tasso 51.5%, Keiko FUJIMORI Higuchi 48.5% (CIA). Legislative branch: unicameral Congress of the Republic of Peru or Congreso de la Republica del Peru (130 seats; members are elected by popular vote to serve fiveyear terms) (CIA). elections: last held on 10 April 2011 with run-off election on 6 June 2011 (next to be held in April 2016)(CIA). election results: percent of vote by party - Gana Peru 25.3%, Fuerza 2011 23%, PP 14.8%, Alliance for Great Change 14.4%, National Solidarity 10.2%, Peruvian Aprista Party 6.4%, other 5.9%; seats by party - Gana Peru 47, Fuerza 2011 37, PP 21, Alliance for Great Change 12, National Solidarity 9, Peruvian Aprista Party 4; note - as of 10 March 2014, the composition

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of the legislature is as follows: seats by bloc party - Gana Peru 43, Fuerza Popular (formerly Fuerza 2011) 36, PP 10, Accion Popular-Frente Amplio 10, National Solidarity 9, Union Regional 8, Partido Popular Cristiano-Alianza Para el Progreso 7, Concertacion Parlamentaria 6, Independent 1; note - defections by members of the National Assembly are commonplace, resulting in the formation of new blocs and frequent changes in the numbers of seats held by the various blocks (CIA). Judicial branch: highest court(s): Supreme Court (consists of 16 judges and divided into civil, criminal, and constitutional-social sectors) judge selection and term of office: justices proposed by the National Council of the Judiciary or National Judicial Council (a 7-member independent body), nominated by the president, and confirmed by the Congress (all appointments reviewed by the Council every 7 years; justices appointed for life or until age 70 subordinate courts: Court of Constitutional Guarantees; Superior Courts or Cortes Superiores; specialized civil, criminal, and mixed courts; two types of peace courts in which professional judges and selected members of the local communities preside (CIA).

Picture:from CIA

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Culture: Arts Peru has one of the largest varieties of arts and crafts on Earth, and it can be seen from the growing network of exporters who each year exhibit the skill of Peruvian craftsmen in Europe, Asia and North America. The diversity, color, creativity and multiple functions of Peruâ&#x20AC;&#x2122;s folk art, are all ways that has made it a fundamental activity not just for Peruâ&#x20AC;&#x2122;s cultural identity, but also as a way of life for thousands of families and even entire communities, such as Sarhua and Quinua in Ayacucho (Embassy of Peru).

Picture: from Embassy of Peru

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Monuments

Picture: taken by Jérémy Rinaldi Machu Picchu stands 2,430 m above sea-level, in the middle of a tropical mountain forest, in an extraordinarily beautiful setting. Embedded within a dramatic landscape at the meeting point between the Peruvian Andes and the Amazon Basin, the Historic Sanctuary of Machu Picchu is among the greatest artistic, architectural and land use achievements anywhere and the most significant tangible legacy of the Inca civilization. It is recognized for it’s outstanding cultural and natural values, the mixed World Heritage property covers 32,592 hectares of mountain slopes, peaks and valleys surrounding its heart, the spectacular archaeological monument of “La Ciudadela” (the Citadel) at more than 2,400 meters above sea level. Built in the fifteenth century Machu Picchu was abandoned when the Inca Empire was conquered by the Spaniards in the sixteenth century. It was not until 1911 that the archaeological complex was made known to the outside world (UNESCO).

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Cuisine Peruvian cuisine reflects local practices and ingredients—including influences from the indigenous population including the Inca and cuisines brought in with immigrants from Europe (Spanish cuisine, Italian cuisine, German cuisine), Asia (Chinese cuisine and Japanese cuisine) and West Africa. Without the familiar ingredients from their home countries, immigrants modified their traditional cuisines by using ingredients available in Peru. The four traditional staples of Peruvian cuisine are corn, potatoes and other tubers, Amaranthaceaes (Quinoa, Kañiwa and kiwicha) and legumes (beans and lupins). Staples brought by the Spanish include rice, wheat and meats (beef, pork and chicken). Many traditional foods—such as Quinoa, kiwicha, chili peppers, and several roots and tubers have increased in popularity in recent decades, reflecting a revival of interest in native Peruvian foods and culinary techniques (Lima Easy). The mixing of cultures and the variety of climates differ from city to city so geography, climate, culture and ethnic mix determine the variety of local cuisine (Lima Easy). Coast Ceviche, a South American dish of marinated raw fish or seafood typically garnished with herbs and served as an appetizer. Many Peruvians believe that ceviche is a hangover cure and an aphrodisiac.

Picture: from Lima Easy

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Picture: from Lima Easy Papa a la huancaina (Huancayo-style potatoes), a dish consisting of sliced boiled potatoes, served on a bed of lettuce with a slightly spicy cheese sauce with olives (Lima Easy). Northern The cuisine of the northern coast offers a difference in style from the central and southern varieties. This is not only due to the coastal native Indian influence (less Andean), the Spanish influence, the African; but also to the warmer coastal seas, hotter climate and immense geographical latitude variety (Lima Easy). Shambar is a soup made with wheat, pork rinds, â&#x20AC;&#x153;Jamon Serranoâ&#x20AC;? (smoked ham), assorted beans, and green onions. It is served with toasted corn (cancha) and is made only on Mondays.

Picture: from Lima Easy

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The Andes In the valleys and plains of the Andes, the locals’ diet is still based on corn (maíz), potatoes, and an assortment of tubers as it has been for hundreds of years. Meat comes from indigenous animals like alpacas and guinea pigs, but also from imported livestock like sheep, cattle and swine (Lima Easy). The pachamanca is a very special banquet in and of itself. Cooked all over the Andean region of Peru, is made from a variety of meats (including pork and beef), herbs and a variety of vegetables that are slowly cooked underground on a bed of heated stones (Lima Easy).

Picture: from Lima Easy The Amazon Naturally, Amazonian cuisine is made using the products local to the Amazon rainforest (Lima Easy). Tucunare, prepared in variety of dishes such as “timbuche” (soup) or “patarashca” (grilled in vegetables) (Lima Easy).

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Economy Peru has rich deposits of copper, silver, gold, lead, zinc, natural gas, petroleum, and urea. It is classified a mega diverse country from it’s regions as well as natural and cultural resources. Peru has a economy that reflects it’s varied geography. The many resources are found in mineral deposits, in the mountain regions, as well as an extensive maritime territory traditionally yielding excellent fishing resources. Although the rest of the world has had a rough economy. Peru’s administration has resisted pressures for their fiscal spending and has used their savings generated by the high prices of commodities between the year 2006 and 2008, to invest in year 2011 to 2012 in the infrastructure, which paid off part of the public debt (14.9% of

$345 Billion GDP), and increased its assets

(Peru’s Business and

Investment Guide). Over the past decade, Peru has had one of the lowest annual average inflation rates in Latin America, 2.9%. With the great success of the inflation rate, Peru has also had an annual growth rate of 5.0% of it’s GDP in 2013. This success gives the country the privilege ranking of one of the fastest growing economies in the Region, with a growth rate of 5.6 over the past 14 years. These percentages have been achieved from the rise of commodity prices, market policies that benefit investors, and an aggressive free trade strategy.

It’s

expansions has contributed to the reduction of the national poverty rate by almost 18% in the last 7 years, bringing it down to 24.2% of it’s total population for 2013 (Peru’s Business and Investment Guide).

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Picture from: latam-investor

The countryâ&#x20AC;&#x2122;s economic growth has a lot to do with the monetary

and fiscal policies that were applied in the past two decades. From that, the country has been able to reduce the debt level of 32.3% of GDP in year 2006, to 18.1% in year 2013, with an estimate of reducing the percentage lower to 17.2% in year 2014. With this, the goods and labor markets have gotten better, and has opened up trade through multiple international trade agreements, direct foreign investments, and the maximization of the revenues resulting in its rich natural resources. Peru is also reaping amazing benefits from the increase in size of its market and domestic consumption, and the development of its financial sector (Peruâ&#x20AC;&#x2122;s Business and Investment Guide).

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In 2012 Peru had already exceeded Chile in the terms of purchasing power. The International Monetary Fund has projected that the size of Peruvian economy will surpass Chiles by year 2018 with a percentage of 10.8% more. This percentage is expected to rise above Chiles from the higher growth trend, that has been rooted in the greater size of energy sources Peru possesses (Peru’s Business and Investment Guide).

Peru has a number of Free Trade Agreements, that covers 95% of its exports since the year 2013. Peru has FTA’s with the United States, China, Thailand, the European Union, South Korea, Canada, Costa Rica, Chile, Mexico, Venezuela, Panama, Singapore, and Cuba. One of the most recent FTA’s has been with Japan in the year 2012. In addition to the FTA’s, Peru has also entered into the Framework Agreement for the Pacific Alliance in April 2011, it has a trading block that forms partially with Chile, Colombia, and Mexico. This Framework Agreement aims to encourage regional integration, growth, development and competitiveness of their economies, ad well as free circulation of goods, services, capital and people (Peru’s Business and Investment Guide). As a result of the U.S.-Peru Trade Promotion Agreement (TPA), 80 percent of U.S. consumer and industrial goods exports to Peru are no longer subject to tariffs. Tariffs on the rest of those products will be phased out by 2019. For agricultural products, tariffs have been eliminated on almost 90% of U.S. exports – remaining tariffs will be phased out by 2026. To be eligible for tariff-free treatment under the TPA, products must meet the relevant rules of origin (Peru’s Business and Investment Guide).

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The TPA also provides favorable access for U.S. service suppliers, as well as guarantees of protection to U.S. investors and U.S. copyrights, trademarks, and patents registered in Peru. In addition, Peru has opened up significant government procurements to U.S. bidders (Peru’s Business and Investment Guide). Peru’s main exports are: gold, copper, petroleum oil, natural gas, zinc, lead, iron, fishmeal, and coffee. With trading partners to: United States, China, Brazil, Chile, Argentina, Switzerland, South Korea, Japan, Canada, Germany, Spain, Mexico, and Italy (Peru’s Business and Investment Guide).

Graph: EY According to EY.com, as of December 31, 2012, the size of Peru’s economy exceeded that of Chile in the terms of purchasing power parity (PPP). The International Monetary Fund (IMF) has projected that the size of the Peruvian economy will surpass Chile’s by 10.8% by 2018.

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Graph: EY

In the end of 2014, inflation is expected to be near the target range set by the Central Reserve Bank of Peru (BCRP) at 1.5% to 2.5%. In the beginning of the year, January 31, 2014, the average interbank interest rate in local currency set by the BCRP was 4.00%, and the preferential corporate rate was 4.40% (Peruâ&#x20AC;&#x2122;s Business and Investment Guide).

Graph: EY In the year 2013, the non-traditional product markets with the most exports were livestock (30.9%), textiles (17.5%) and chemicals (13.7%). The principal non-traditional products exported in 2013 were fresh or refrigerated asparagus; natural calcium phosphates; refined copper wire; fresh grapes; and cuttlefish, stout bobtail squid, common squid, and giant squid, whether frozen, dried, or in brine. In terms of traditional products, the most significant were gold, copper, lead, zinc, gas, petroleum oil, coffee, and fishmeal (Peruâ&#x20AC;&#x2122;s Business and Investment Guide).

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Graph: EY

Principal industries in the different regions of Peru.

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Graph: EY

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Graph: EY The Gross Domestic Product (GDP) estimate for 2013 is US$210 billion. It is projected that at the end of 2013, total FOB exports came to US$41.221 billion, and imports totaled US$43.442 billion. The principal exports came from the mining, hydrocarbons, and agricultural and livestock industries (Peruâ&#x20AC;&#x2122;s Business and Investment Guide).

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Poverty in Peru

Graph: EY Peru has a goal to reduce poverty by 20% by the year 2016.

Doing Business in Peru

Graph: EY According to Doing Business 2014, Peru ranks 42 out of 189 countries in terms of being easier to start a company and doing business. In Latin America, Peru is ranked 2nd.

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Geography Peru’s location is on the western region of South America, bordering the South Pacific Ocean, between Chile and Ecuador. The country’s capital is Lima, Peru, and the main textile manufactures are located in the capitol. Peru has a number of natural hazards : earthquakes, tsunamis, flooding, landslides, and mild volcanic activity. The last volcanic activity in the Andes Mountain, last erupted in 2009, it is the country’s most active volcano. Recently in the month of October 2014, Peru has experienced two Lima tremors in less than 12 hours of each other, both of the earthquakes measured 4.0 on the Richter scale. Peru typically has a climate that varies from tropical in east to dry desert in west and with temperate to frigid climates in the Andes. Peru’s natural resources are: copper, silver, gold, petroleum, timber, fish, iron ore, coal, phosphate, potash, hydro-power, cotton, and natural gas (Peru’s Business and Investment Guide).

Picture: taken by Stanley Zimny

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Environment Issues

Soil erosion Peru’s topography makes in susceptible to soil erosion. The coast of Peru is subject to wind erosion and water erosion is dominant in Sierra. Erosion also occurs in the High Selva when vegetation is cleared and in Low Selva where they get much rain on areas under slash and burn practices. The use of contoured lines, cover crops and mulching can control erosion to some extent depending on the climate and the slope. Also, traditional methods can be used to prevent erosion like terracing and agroforestry.

Water pollution Water pollution sources in Peru include industrial waste, sewage and oil related waste. Peru has 1746 cu km of renewable water resources and 86% of this water is used for farming and 7% for industrial activity. In urban areas only 87% and in rural areas 62% of the population have access to clean water. In major cities 3.0 million tons of waste per year is created. Contamination and pollution of the lake seriously affects the health of those that depend on it because the monitoring and testing of the lake is primitive, underfunded and very polluted. According to the Oxfam report, more than half of Peru’s rivers are extremely polluted in the North the Chillón, Yauli and Mantaro in the central region; and the Chili River in the South.

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Air pollution Air pollution is a big Problem in Peru, especially in Lima, the capital city. Which is caused by industrial activity and vehicle emissions. In August 2006, air pollution in Lima surpassed the international standard by 122.1% The average concentration of PTS reached 166.57 micrograms per cubic meter, the international standard is 77 micrograms per cubic meter. In 2009, 1.5 tons of lead and 810 tons of sulfur dioxide, were emitted daily, which is four times the maximum allowed under Peruvian legislation.[4][4] The Peruvian government has created an alert system for high levels of pollution. There are three levels: watch, danger and emergency. During an emergency, children, pregnant women, the elderly and the ailing may be asked to stay indoors. Those who are healthy enough to continue with their lives outside are advised to cover their mouths and noses with scarves or handkerchiefs— but not facemasks, because according to government spokesperson Carlos Rojas “people don’t want images that further dramatize the situation.” Also Peru is using “super tree’ technology, created by Tierra Nuestra to try and fight the air pollution in the major cities. The super tree acts like 1200 real trees, purifying the air. It sucks the outside air, and under thermodynamic pressure it combines the toxic particles in the air with water, and then pumps out clean air. Unfortunately, there are byproduct to the process, which include mud and non potable water. The Super Tree cleans approximately 200,000 cubic meters of air per day, eliminating air pollutions like carbon dioxide.

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Deforestation Deforestation is a growing problem in the world today, especially concerning the amazonian rainforest. In recent years deforestation has increased and deforestation now causes about 18% of green house emissions. Peru has the fourth largest area of rainforest in the world, which covers nearly 60% of its territory (70 million hectares). Unfortunately, the deforestation rate in Peru is .35%.5%, which is approximately 250,000 hectares cut down annually. Deforestation in Peru is largely a result of subsistence farming resulting from migrant farmers exploiting the squatterâ&#x20AC;&#x2122;s law which allows citizens to get public land if they can prove that they have lived there for 5 years. More deforestation though, is caused by both legal and illegal logging, mining, petroleum drilling and road development.

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Labor: Unemployment & Labor Force

Unemployment rate in Peru has increased to 5.90% in August 2014,

recently the percentage was 5.705 in July 2014. The unemployment rate in Peru averaged 8.26% from 2001-2014, which reached an all time high of 13 % in year 2005 and a record low of 5.60% in December 2012. In Peru, the unemployment rate measures the number of people actively looking for a job as a percentage of the labor force as a whole (Trading Economics).

Graph: from Trading Economics

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Graph: from Trading Economics

Labor force in Peru as of August 23, 2014 is 16.16 million, with

individuals older than the age of 14 years old. The number of employed persons in Peru increased to 4697.48 Thousand in June of 2014 from 4577.23 Thousand in May of 2014. Employed Persons in Peru averaged 4037.75 Thousand from 2001 until 2014, reaching an all time high of 4726.45 Thousand in October of 2013 and a record low of 3401.71 Thousand in October of 2001. In Peru, unemployed persons are individuals who are without a job and actively seeking to work (Trading Economics).

In year 2013, new jobs were created in the textile industry,

totaling 63,700. The Peruvian textile and leather sector employment rate increase accounted for 18 percent of the total employment generated in the manufacturing sector of Peru in 2013. Of the total of the 63,700 people employed in the textile and leather sector of Peru in 2013, 60.5 were males, and 39.5 were females. Peru plans to continue growing in new jobs, with hopes in seeing a percent increase in employment (Trading Economics).

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Graph: from Trading Economics

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Short Term Contracts

March 4, 2013 President Ollanta Humala Tasso Palacio Nacional Lima Cercado Lima, Peru Dear Mr. President: On behalf of the undersigned companies, we would like to extend a cordial greeting and our warm congratulations on the economic and social progress that Peru has made during your administration. We are reaching out to you as global brands that contract with factories in your country. As international companies, we have a stake in the economic and political stability as well as the business climate of the countries in which we invest. An environment in which national laws and international standards are consistently enforced is critical to us, our consumers, investors and other stakeholders. In addition to monitoring our suppliers in order to ensure compliance with labor standards, we also look to governments to support and enforce the rule of law in order to ensure that business and workers can operate in a fair and safe environment. While we celebrate Peruâ&#x20AC;&#x2122;s success under your leadership, we are also concerned that Decree Law 22342, which allows â&#x20AC;&#x2DC;non-traditionalâ&#x20AC;&#x2122; exporting companies to employ workers on fixed-term contracts, acts to encourage and condone violations of labor rights and therefore poses an obstacle to the proper application of our codes of conduct. In that respect, we await the outcome of the congressional debate on the proposal to repeal articles 32, 33 and 34 of Decree Law 22342 and the corresponding article 80 of DS 003-97 TR. We believe this is an opportunity for your government to demonstrate its strong support for social inclusion and decent working conditions by supporting the repeal of the labor provisions of DL 22342.

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Peruvian Culture Language

The great culture of ancient Peru is also expressed by a legacy

of wide variety of native languages that co-exist in its territory. Spanish is the official language and is used in most of the country. Other languages have been recognized by the Constitution, such as Quechua, which is spoken in many Andean regions in different varieties, and Aimara, the predominant language of the southern Andes. Shipibo, Ashaninka and Aguaruna, used by Amazon communities, are just some of the country’s 43 native languages. Religion

Freedom of religion is a fundamental right in Peru’s culture,

although Catholicism is the main religion, another legacy of the Spanish. Religious festivals have strong Spanish influence, but they are also an example of how different beliefs and religions of Peru’s preHispanic cultures coexist. Customs

Festivals: The coming together of different creeds, customs and

experiences have created close to 3,000 annual popular festivals in Peru, including patron saint feasts, processions, carnivals and rituals, encompassing the expression of belief in God, respect for nature and the celebration of freedom. Peruvian festivals have a mystical side to them; most of them are the result of a fusion between Catholicism and preHispanic religious traditions. Repaying the earth is part of the main celebrations in all regions, and is about rewarding and recognizing the Pachamama (Mother Earth) for her endless generosity.

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Gastronomy

Peruvian cuisine is another expression of a national identity that

embraces multiple cultures co-existing in one territory; a unifying element in Peru that can be seen everywhere. Peruvians have become experts at experimenting with new flavors, harmonizing aromas and discovering new ways of cooking. The diversity of Peruâ&#x20AC;&#x2122;s agricultural production, micro-climates, geography, multiple cultures and the genius of its chefs have enriched the culinary nature of Peru to the point where it is now recognized as one of the finest expressions of the global cuisine (Peru travel).

Mistura is the main gastronomic fair in Peru. It is held every year

in Lima, bringing together the leading chefs and restaurants of Peru. The fair has been named the Gastronomic Capital of America and is one of the main events on international tourism itineraries in the region (Peru travel). Handicrafts

Ancient Peruvians were outstanding handicraft artisans with highly

developed technical skills. Pre-Hispanic Peruvian art has been dated back to ancient times through the discovery of weaving, gourds, wood, stone, gold, silver, pottery and even mud, which were used for day-today living. This ancestral heritage is still seen today in the coastal, mountain and jungle towns, in a variety of high-quality woven items. Silver filigree, carved gourds, Ayacuchan altars, Huamanga stone and wood carvings, Chulucanas pottery and MonsefĂş ponchos, among others, are highly valued around the world (Peru travel).

155

Music and Dances Since pre-Hispanic times, music and dance has always played an important role in Peruvian society. Ancient Peruvians used sea shells, reeds and even animal bones to produce sounds. It is said that the Peruvians of the Nazca culture were the most important pre-Hispanic musicians on the continent. Panpipes or zampoĂąas, terracotta trumpets and pututos were some of the most important musical instruments in ancient Peru. The music explored themes of religion, war and profanity (Peru travel).

Another result of its many cultures, Peru today has a rich and varied folklore and a wide diversity of both music and dancing, that combine indigenous genres and spirit with Hispanic influence, as well as modern styles that have adapted to the changes and tastes of societyâ&#x20AC;&#x2122;s larger social groups (Peru travel).

156

Idiosyncrasy

Peruvians are increasingly proud of the historical and cultural

wealth, both past and present. After turning its back on its Andean origins for centuries, modern Peru now fully recognizes the value of the Andes and the Amazon for all that they represent in terms of resources and ancient traditions. Peruâ&#x20AC;&#x2122;s civilization is the oldest in South America. Neighboring countries have been created from ancient Peruvian territory and empire. Peru was the political and productive center of the region with a privileged and special geographical location.

Modern Peru boasts entrepreneurs who have rediscovered their

capacity to create new wealth, businesses and services. The country has overcome difficult political and economic crises. Although Peru is still undergoing the consolidation of its institutions, the country has now seen over two decades of democracy.

Peruvians are a welcoming people who take pride in offering

incredible services and experiences to visitors that include traditional foods, celebrations and festivals. Peruvians are passionate about soccer, the national sport and a good excuse for family and friends to come together.

Peruvians are very religious. The Catholic faith has an important place in peoples lives, coexisting peacefully with other creeds.

157

Picture: from Bandetex

PESTLE Analysis 158

Political:

Innovation has been fueled by the R&D grants of the Peruvian

Government and the Inter-American Development Bank, awarded by their Science and Technology Program (FINCyT), which has been allowing companies and innovators to avoid the risk of investing in the research and development required to create innovative products and services. Also, the Ministry of Production of Peru increased the available resources with an additional fund to give more access to grants (FIDECOM). Both funds were structured with an incentive for the association and collaboration between companies, universities and researchers. These grants have been funding innovation in priority fields like agroindustry, fishing, agriculture, textiles and information technologies. With more funds to finance research, prototyping, trial and error and the resilience to failure, plus the inspiration of a few success stories, more entrepreneurs in the ecosystem are eager to venture and share their passion with the market.

In 2013, the government of Peru assigned a budget of $20 million

for the Startup Peru Program.

Startup Peru is a program of the Ministry

of Production in collaboration with FINCyT aimed at supporting highimpact entrepreneurs to venture and execute their tech-based innovative ideas.

159

Startup Peru offers grants of up to $20,000 for entrepreneurs as individuals with tech-based scalable ideas, and grants of up to $50,000 for tech startup companies with less than five years of operations. The Peruvian program was inspired by Startup Chileâ&#x20AC;&#x2122;s success, but it was designed after an extensive study of many innovation and entrepreneurship programs around the world. It is now structured so that the selected entrepreneurs work with the additional support of an incubator, following the Startup Brazil model.

160

Analysis

The government investing in spending more money for Peruâ&#x20AC;&#x2122;s

technology, is a very good thing. In order to keep up with the rapid growth of the textile industry, it is essential to have up to date technology. Comfort Act strives to provide quality to our consumers, and great technology is one of the many things needed to do so.

Picture: from 2cconsultinginternational blog

161

Economic:

The Government of Peru has made it very clear that they are not

in favor of granting subsidies for cotton farming, and instead they are willing to promote growing of other crops to remain competitive in the market.

The Government cannot and will not persist with eternal subsidies,

which are practiced in larger countries, Minister of Agriculture and Irrigation Juan Manuel Benites told reporters in Lima, reports andina. The Minister said they have to be more creative and the Government would support cotton farmers if they switched to growing other crops. He said that he understands that people are rooting for Peruvian varieties like Pima cotton, and also said that it requires being competitive and profitable to survive in a competitive market, and one cannot live only in memories.

In this regard, he said if farmers are facing difficulty in

cotton production, they can apply to the Compensation Program for Competitiveness (Agroideas) of the Ministry for change of crop. Agroideas would facilitate substitution for cotton and would also extend finance to the farmers through Agrobanco financing for sustainable production of their new farm crop.

The Ministry is ready to support producers who want to change their

crops and enter into more profitable markets, Mr. Benites said. However, Agrobanco would continue to support cotton farmers by extending credit for marketing, so they can effectively counter competition from foreign cotton that is subsidized by their governments, he added.

162

Analysis Peru has a very big issue with the government that will not grant subsidies to their cotton farmers;and in return are forcing them to farm a different crop, and if they decide to keep farming cotton, the government will give them a credit to market so they can counter competition from foreign cotton that is subsidized by their governments. Peru currently, is booming with textiles and garment manufactures, that account for more than 30% of the non traditional exports in Peru. In the garment sector, sales to foreign markets exceed $2 billion dollars per year.(Thimble.com). Since textiles account for such a high percentage of exports, having no funding for one of the main fabrics used in Peru (cotton), can lead the countries who have a FTA with Peru, to no longer manufacture in this country. Careful consideration has to be taken into account manufacturing in Peru, if the government does not subsidize itâ&#x20AC;&#x2122;s cotton farmers, then they will pay a higher price to produce other countries goods, which means in return, the other countries will have to pay a higher price. The higher Peru has to pay, the high other countries will as well.

Having no subsidies on cotton will leave the manufactures no

choice but to raise the prices for their buyers. Comfort will work very hard to negotiate with the manufactures to keep the cost down, with the same quality, so we can deliver our customers the best product.

163

Social:

The risk of infectious disease in Peru is considered to be

very high. Common ailments include waterborne bacterial diseases, hepatitis A, typhoid fever, dengue fever, malaria, yellow fever, and leptospirosis. In 2010, the World Health Organization collected data about the life expectancy of people living in Peru. The data found that, on an average, life expectancy for men from birth is 74 years, while for women it is 77 years old. These values are higher than the global averages of 66 and 71 years, respectively. The population under five years of age, have common causes of death that are: congenital anomalies, prematurity, injuries, pneumonia, birth asphyxia, neonatal sepsis, diarrhea, and HIV/AIDS. The mortality rate of this population has been decreasing steadily since 1990 and now stands at 19 deaths per 1000 live births.

Peru has a really big issue with sex slaves and child labor. About

34% of children ages 5-14 (mainly), are used to work in mines for gold, along side the streets to sell things, and various other places. Young boys are used to work in mines, while girls are used as sex objects to service the men that run the mines. Child labor in the textile industry is still prevalent today, where the children are used to harvest cotton and production for apparel.

164

Analysis

Peru has a very bad issue with health, most of the issues with

it are not near the textile manufactures or workers. Although it is not mainly a huge issue near there,it is still a risk. The many sicknesses can lead to death, and the auditors we send over to make sure things are running smoothly, could risk getting sick as well. Even some workers could live in an area that has a high amount of yellow fever, HIV, etc. Comfort Act will ensure that the proper vaccines are given, and medicine;to our workers, and auditors. We want to keep our workers healthy, and strong so that they are able to give quality productions, and will live a long life.

Picture: from galleryhip

165

Technological:

Despite Peru’s exceptional economic growth in the last decade, the

country still lags other middle-income Latin American countries in terms of per capita income, productivity and innovation. Its economy remains relatively homogeneous, with a large share in the primary sector (i.e., natural resources).

Factors hindering Peru’s growth include weak capacity in research

and innovation and low spending on science and technology (S&T) and research and development (R&D) compared to other countries at similar levels of development. The total budget for S&T executed by CONCYTEC in 2013 was US$17.4 million, and in 2012 it was only US$5 million. This level of investment is extremely low compared to peers in the region: Colombia’s budget for research (COLCIENCIAS) amounted to US$210 million in 2012, while Chile spent US$546 million for S&T (CONICyT) during 2013 alone.

Peru has an insufficient human capital base for innovation and

technological development, few graduates in S&T including engineering, too few researchers, and little collaboration between public research organization (universities and research institutes) and the private sector. Further, most science funding programs have long been designed to support individual, curiosity- and intellectual-driven research, emphasizing basic research. Private sector firms, in particular smalland medium-size enterprises (SMEs), invest little in innovation – technology adaptation, creation or adoption – squelching opportunities for productivity to increase and firms to grow.

166

The Government has decided to significantly increase investment

in research and innovation to foster productive transformation of the economy (more value added and increased industrial diversification) and enhance collaboration between researchers, universities and the private sector. The aim is to generate new competitive advantages based on innovation and thereby ensure new sources of growth in the long run.

Since the growth of the textile/apparel industry, factories in

Peru have invested in state-of-the-art technology. To include: automatic sewing machines, centralized dyestuff dispensing units, modern dyeing machines, hydro extractors, compacting machines, foulards and other finishing equipmentâ&#x20AC;&#x2122;s that ensure highest quality textiles.

Picture: from galleryhip

167

Analysis

Although other areas of Peru lack innovative and current

technology, it is a great thing to know that the textile industry is not suffering from that. Since the rise of the textile/apparel industry, Peru has been granted state-of-theart technology. This is a great incentive to produce in Peru, knowing that the products needed for Comfort Act will be taken care of with quality machinery.

Picture: from btsadventures

168

Legal:

Peru with itâ&#x20AC;&#x2122;s emerging economy, has approximately 18 million

workers in the major industries (mineral mining, textiles, construction, fishing, and tourism). With the rise in the standard of living in Peru, poverty is still an issue, with at least 25% of the population living in it. Employment laws afford protection of Peru and itâ&#x20AC;&#x2122;s workers, from the risks of being in the 25% of poverty percentage. Employment contracts in Peru occasionally hires workers on a fixed-term or indefinite basis, depending on the work needed. Fixed-term contracts must be in writing, and may only be used for a period of up to five years in total. Employers are required to register fixed-term contracts with Peruâ&#x20AC;&#x2122;s Labor Ministry.

There are numerous types and subcategories of fixed-

term contracts, including temporary, market needs and entrepreneurial reorganization agreements.

Employees may be hired for a probationary

period of three months to one year, after which time they become entitled to legal rights against unjust dismissal.

Peru is nothing like the United States, where most workers are

considered at-will employees, workers in Peru are entitled to many legal and procedural safeguards.

Employers, however, also have rights under

local statutes to take certain employment actions. Many of the rights for dismissal of employees are afforded to the employers, such as: repeated acts of lateness, damage to employers property, influence of drugs or alcohol,etc.

169

Analysis

It is crucial for Comfort Act to know the protections afforded

to the employees in Peru. With the knowledge, we are able to ensure that the workers are receiving the most fair treatment possible, and are able to come to us if there are any issues. We strive to create a working relationship with manufactures who take care of their employees, follow legal rules and guidelines, as well as being knowledgeable of the workers and their rights.

170

Environment:

The main environmental issues in Peru are: water pollution, soil

erosion and pollution and deforestation. Although these issues are problematic and equally destructive, the Peruvian Environmental ministry has been developing regulation and laws to lower the amount of pollution created in the major cities and also have been making policies in order to decrease the present deforestation rate.

Picture: from Save the Water Organization

171

Analysis

An issue with the environment that could potentially

stop production of Comfort Act athletic wear, would mainly be soil erosion. If it rains, the problem with erosion worsens. This issue could prevent the in and out of products in Peru, which in return could slow the turn around time needed for Comfort Actâ&#x20AC;&#x2122;s customers. While environmental issues cannot be controlled, Comfort Act will do itâ&#x20AC;&#x2122;s best to ensure the products are received to our consumers with no problems. Proper communication will be given to manufactures, and consumers if any environmental issues arise.

Picture: from Blue & White Magazine

172

Picture: from Blue and White Magazine

173

Tech PAcK

174

TECHNICAL SHEET

Athletic Crew Neck Crop Top COLORS:

FRONT:

Mixer Yellow

Lightning Grey

Rapid

Illuminating

BACK:

Designer Initials

Electric Lines

BLY SIZE RANGE: Small-XXL, **SAMPLE SIZE: MEDIUM**

CARE INSTRUCTIONS: Machine wash cold, using phosphate-free detergent, hang to dry.

GARMENT WIDTH: 32 inches GARMENT LENGTH: 15 inches MATERIAL Mixer Yellow COLORS PANTONE

130645TCX

Lightning Grey 150000CX

Rapid 190303TCX

Illuminating

Electric Lines

110601TCX

Pre-Made Fabric

*Sewing instructions: 3/4 seam allowance, 1/2 inch hem line

Page 1 of 14

175

DESIGN SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

SKETCH:

PHONE: 1-800-266-3678 E-MAIL: Comfortact@gmail.com GROUP NAME: Women’s Athletic Tops CLASSIFICATION:Women’s Knit Tops SEASON: Spring 2015 FRONT:

GARMENT LABEL: Comfort Act FABRIC CONTENT: 65% Polyester, 35% Spandex COLORWAY: Mixer Yellow,Lightning Grey,Rapid,Illuminating, Electric Lines

**SAMPLE SIZE:MEDIUM**

Date Created: 9/27/14

Specific Measurements: Collar Width: 1/2 inch Sleeve Length: 5 inch sleeve length Width: 32 inches Length: 15 inches (full length) Hem Line: 1/2 inch Date Modified:

Page 2 of 14

176

BACK:

Designer Initials BLY

Date Released:

DESIGN LABEL/CARE LABEL PLACEMENT SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

GROUP NAME: Women’s Athletic Tops

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

**SAMPLE SIZE: MEDIUM**

SKETCH:

CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

*Center Design Label 1/4 inch below neck seam * Care Label directly underneath design label * Both labels are centered in the middle of the top of the shirt

*For White Top, print black Care Label, all other colors, print white care label M 65% Poly/35% Spandex

Date Created: 9/27/14

Date Modified:

Date Released:

Page 3 of 14

177

HANGTAG PLACEMENT SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100 GROUP NAME: Women’s Athletic Tops

ADDRESS: Beaverton, OR 97005

CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

**SAMPLE SIZE: MEDIUM**

SKETCH: Crew Neck Crop Top

65% Poly/35% Spandex

MIXER YELLOW CAA 100

*Front Hang tag dimensions. *Text written horizontally* 3.5x2.5

$45

*Plastic tag fastener 2 inches *Back Hang tag dimensions *Text written vertically* 3.5x2.5

Date Created: 9/27/14

Date Modified:

Page 4 of 14

178

Date Released:

MATERIAL SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

GROUP NAME: Women’s Athletic Tops CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

COLORWAY: Mixer Yellow **SAMPLE SIZE: MEDIUM**

SKETCH:

SWATCH:

FRONT:

BACK:

FABRIC INFO Loyal Textile Mills Limited, Chennai No.83/41,First Main Road, R.A.Puram, Chennai - 600 028. India

Date Created: 9/27/14

Designer Initials BLY

STYLE#/THICKNESS

SIZE RANGES

Single Jersey with Spandex yarn (STYLE #3458). 80 - 380 GSM (weight), 180 CM WIDTH

S-XXL

Date Modified:

Date Released:

Page 5 of 14

179

MATERIAL SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

GROUP NAME: Women’s Athletic Tops CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

COLORWAY: Lightning Grey **SAMPLE SIZE: MEDIUM**

SKETCH:

SWATCH:

FRONT:

BACK:

Designer Initials

BLY FABRIC INFO Loyal Textile Mills Limited, Chennai No.83/41,First Main Road, R.A.Puram, Chennai - 600 028. India

Date Created: 9/27/14

STYLE#/THICKNESS

SIZE RANGES

Single Jersey with Spandex yarn (STYLE #3458). 80 - 380 GSM (weight), 180 CM WIDTH

S-XXL

Date Modified:

Page 6 of 14

180

Date Released:

MATERIAL SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

GROUP NAME: Women’s Athletic Tops CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

COLORWAY: Rapid **SAMPLE SIZE: MEDIUM**

SKETCH:

SWATCH:

FRONT:

BACK:

Designer Initials

BLY FABRIC INFO Loyal Textile Mills Limited, Chennai No.83/41,First Main Road, R.A.Puram, Chennai - 600 028. India

Date Created: 9/27/14

STYLE#/THICKNESS

SIZE RANGES

Single Jersey with Spandex yarn (STYLE #3458). 80 - 380 GSM (weight), 180 CM WIDTH

S-XXL

Date Modified:

Date Released:

Page 7 of 14

181

MATERIAL SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

GROUP NAME: Women’s Athletic Tops CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

COLORWAY: Illuminating **SAMPLE SIZE: MEDIUM**

SKETCH:

SWATCH:

FRONT:

BACK:

Designer Initials

BLY FABRIC INFO Loyal Textile Mills Limited, Chennai No.83/41,First Main Road, R.A.Puram, Chennai - 600 028. India

Date Created: 9/27/14

STYLE#/THICKNESS

SIZE RANGES

Single Jersey with Spandex yarn (STYLE #3458). 80 - 380 GSM (weight), 180 CM WIDTH

S-XXL

Date Modified:

Page 8 of 14

182

Date Released:

MATERIAL SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

GROUP NAME: Women’s Athletic Tops CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

COLORWAY: Electric Lines **SAMPLE SIZE: MEDIUM**

SKETCH:

SWATCH:

FRONT:

BACK:

*Fabric Info: Pre-made pattern Designer Initials

BLY FABRIC INFO Loyal Textile Mills Limited, Chennai No.83/41,First Main Road, R.A.Puram, Chennai - 600 028. India

Date Created: 9/27/14

STYLE#/THICKNESS

SIZE RANGES

Single Jersey with Spandex yarn (STYLE #3458). 80 - 380 GSM (weight), 180 CM WIDTH

S-XXL

Date Modified:

Date Released:

Page 9 of 14

183

ILLUSTRATION SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

GROUP NAME: Women’s Athletic Tops CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

COLORWAY: Mixer Yellow,Lightning Grey,Rapid,Illuminating, Electric Lines

SKETCH:

Designer Initials FRONT:

BLY

BACK:

FABRIC INFO Loyal Textile Mills Limited, Chennai No.83/41,First Main Road, R.A.Puram, Chennai - 600 028. India

Date Created: 9/27/14

STYLE#/THICKNESS

SIZE RANGES

Single Jersey with Spandex yarn (STYLE #3458) 80 - 380 GSM (weight), 180 CM WIDTH

S-XXL

Date Modified:

Page 10 of 14

184

Date Released:

LABEL/PACKAGING SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

GROUP NAME: Women’s Athletic Tops CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

**SAMPLE SIZE: MEDIUM**

Item-VendorCode-Origin

Content

Designer Label(Label-free Iron-On Heat Transfer Sticker)-ITHTAG_LA33Image-Trans Technics INC. Taiwan, ROC

High grade woven 100% polyester

Garment Paper Hang Tag - Dongguan AM Packaging Company Limited-Guangdong, China

White Card Stock, Glossy, 110lb. weight

Care Label(Label-free Iron-On Heat Transfer Sticker)-ITHTAG_LA33Image-Trans Technics INC. Taiwan, ROC Poly Bags - (Model: S-10901 )UlinePleasant Prairie, WI 16x16x16 (Model: S-4166) UlinePleasant Prairie, WI

Date Created: 9/27/14

High grade woven 100% polyester

Size-QuantityUnit or Measure 1 Per Top *see label placement sheet*

1 Per Top 3.5x2.5 1 Per Top *see label placement sheet*

Location

Colors

*see label placement sheet, for placement*

190303TCX 130645TCX 110601TCX

*see label placement sheet, for placement*

190303TCX 130645TCX 110601TCX

*see label placement sheet, for placement*

110601TCX(ALL OTHER COLOR TOPS)*190303TCX(ONLY FOR ILLUMINATING top)

Plastic

1 Per Top 16x16

*see garment folding direction sheet, for placement*

1 Color

100% Cardboard

16x16x16

Placed around Tops

1 Color

Date Modified:

Date Released:

Page 11 of 14

185

COMPONENT SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

GROUP NAME: Women’s Athletic Tops CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

**SAMPLE SIZE:MEDIUM**

Item-VendorCode-Origin Thread - A&E - Anecord PBT - Mt. Holly, NC Tag gun fasteners -(Regular 2” Tag gun fasteners) STD2”/5000Standard-Japan

Date Created: 9/27/14

Content Polybutylene Terephthalate (PBT) *Twisted Multifilament

Plastic

Size-QuantityUnit or Measure

Location

Colors

1,000 mt - 1 Spool as needed per top, Tex: 120

All Seams/hems

Pantone: 130645TCX

2 inch-1 per top

*see tag placement sheet*

Date Modified:

Page 12 of 14

186

Date Released:

Black

GARMENT FOLDING DIRECTION SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

GROUP NAME: Women’s Athletic Tops CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

**SAMPLE SIZE: MEDIUM**

SKETCH:

*Shirt folded (at 7.5 inches) horizontally.

*Shirt folded (at 7.5 inches) horizontally in poly bag *Poly bag 16x16

*Fold Crop top in half (at 7.5 inches) horizontally.

Date Created: 9/27/14

Date Modified:

Date Released:

Page 13 of 14

187

DESIGN/CARE LABEL SHEET COMPANY NAME: Comfort Act

STYLE#: CAA100

ADDRESS: Beaverton, OR 97005

GROUP NAME: Women’s Athletic Tops CLASSIFICATION: Women’s Knit Tops

SEASON: Spring 2015

PHONE: 1-800-266-3678

FABRIC CONTENT: 65% Polyester, 35% Spandex

E-MAIL: Comfortact@gmail.com

**SAMPLE SIZE: MEDIUM**

SKETCH: Crew Neck Crop Top MIXER YELLOW

*Design Label Details

CAA 100

*Front Hang tag dimensions. *Text written horizontally* 3.5x2.5

$45

M 65% Poly/35% Spandex Machine wash cold, using phosphate-free detergent, hang to dry. *Care label/logo dimensions *2x2.5

*Plastic tag fastener 2 inches

Date Created: 9/27/14

*Back Hang tag dimensions *Text written vertically* 3.5x2.5

Date Modified:

Page 14 of 14

188

*Care Label/logo Details

Date Released:

Works Cited “Peru.” Central Intelligence Agency. Central Intelligence Agency, n.d. Web. 06 Oct. 2014. Gibbons, Steve. “Precarious Contract Workers in Peru.” Ergon Associates Raquo. N.p., n.d. Web. 06 Oct. 2014. The Department of Labor’s 2001 Findings on the Worst Forms of Child Labor: Trade and Development Act of 2000. Washington, D.C.: U.S. Dept. of Labor, Bureau of International Labor Affairs, 2002. Web. 06, Margaret. “Eager to Double Textile Exports, Peru Looks to Asian Markets - Sourcing Journal Online.” Sourcing Journal Online. N.p., May 2013. Web. 06 Oct. 2014. “Politics & Political History of Peru.” N.p., n.d. Web. 06 Oct. 2014. Urteaga, Gary. “The Startup Ecosystem in Peru.” Startup Nations. N.p., 09 May 2014. Web. 06 Oct. 2014. “Peru Unemployment Rate 2001-2014 | Data | Chart | Calendar | Forecast.” Peru Unemployment Rate. N.p., n.d. Web. 06 Oct. 2014. “Short-term Contracts Undermine the Rights of Peruvian Garment Workers | Maquilasolidarity.org.” Short-term Contracts Undermine the Rights of Peruvian Garment Workers | Maquilasolidarity.org. N.p., 09 Apr. 2012. Web. 06 Oct. 2014. Berthon, Magali. “The Cuzco Center for Traditional Textiles | Maison D’Exceptions.” Maison DExceptions. N.p., 21 Nov. 2013. Web. 06 Oct. 2014. Freeman, Ivan. “Peru to Double Textile and Apparel Exports by 2017.” Peru to Double Textile and Apparel Exports by 2017. N.p., 22 Apr. 2013. Web. 06 Oct. 2014.

189

Works Cited

N.p., n.d. Web. 06 Oct. 2014.

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Cover Picture: from cynthia bellacero

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