Introducing High Value Apparel Manufacturing in Haiti Radical Departure for Clothes Manufacturing As Haiti rebuilds its textile and apparel industry from the damage inflicted by the earthquake of 2010, the country is introducing a radical new business model: production of high-end apparel manufactured by skilled Haitian workers using sophisticated machinery. With support from a loan of up to $1 million from the Inter-American Development Bank’s Opportunities for the Majority Initiative (OMJ), Industrial Revolution II LP (IRII) will retrofit and equip a garment factory and train low-income Haitians from the base of the socio-economic pyramid. As they add value to Haiti’s economy, these local apparel workers will produce high-end fashion on the latest manufacturing technology while working for living wages in a safe and healthy environment. A New Philosophy for Added Value The textile and apparel industry is Haiti’s largest manufacturing sector, accounting for 80% of exports and around 10% of GDP in 2010, before the earthquake struck. Most clothes made in Haiti are exported to the US, which has given the impoverished country preferred access to its markets as a way to help boost Haiti’s economy. Yet, because Haitian labor costs are among the lowest in the world, American mass-market producers and retailers have to date only manufactured high-volume, low commodity clothes such as undergarments there. American fashion designers and retailers are looking for nearby suppliers to respond quickly to changing market needs with smaller runs of high-end apparel. In response, IRII brings a new philosophy to clothes manufacturing and Haiti’s image as a reliable supplier of quality fashion. As IRII fills a gap in the market, it will capitalize on an untapped development opportunity. It will import machinery to produce better quality goods in smaller volumes for higher
profit margins. And it will invest in workers; training up to 200 low-income Haitians living, as the vast majority of the country does, near the poverty line. Most will be women with basic sewing skills. IRII will allocate up to half of its profits into employee and community programs, an investment that will remain in country.
Empowered Team Manufacturing IRII will buy and import state-of the-art equipment to cut, spread, sew and embroider clothes, as well as top of the line digital printers. And the company will introduce new, teamwork manufacturing. Gone will be rows of workers at sewing machines stitching one part of a garment. All IRII employees will be trained extensively in Haiti, and some in the United States, to perform each task of a modular manufacturing process. Initially, IRII products will focus on upscale knit tops. Digital printing allows a wide range of designs and colors, so that the clothes meet fast fashion demands at competitive prices. IRII’s products will be co-branded with the brands of designers and leading retailers in North America. As IRII employees will be involved in the process from start to finish, they will be able to respond more quickly and efficiently to manufacturing changes. Also, they will have a stake in the company’s success; this higher degree of employee empowerment will result in more job satisfaction.
A Path to New Manufacturing IRII’s $4.6 million project to introduce high-end manufacturing in Haiti is sponsored by an investment group that includes a Haitian textile executive, a U.S. finance sector executive. It is headed by a Canadian fashion industry executive and founder of a foundation operating in Haiti. If the project is successful to retrofit an existing factory and train workers to make valuable apparel for export to the United States, it will be scaled up. IRII’s sponsors will then seek to finance the construction of an all-new, LEED-certified clothing manufacturing plant in Haiti.
For more information about the program, contact: OM-IDB@iadb.org Follow us @MajorityMarkets
Portfolio 2012