Metallik Flamez is just one of the American companies here at Colombia Moda. The design label isn’t here to walk the runway with their latest collection, however. Instead, they are here to take advantage of the opportunity to connect with Medellin’s textile manufacturers.
Re-shoring to the Americas
As part of a growing trend called ‘Re-shoring’, many American industries are looking to find their supplies here in the Americas versus China, Bangladesh or India. While several recent manufacturing tragedies like the 2012 Bangladeshi fire have made headlines, the reasons behind ‘re-shoring’ efforts have less to do with bad press than more practical reasons.
The distance between India, China, and other Asian nations and the United States is farther – so shipments of materials often take up to 12 weeks, which can significantly impact designers and the arrival of the latest collections.
Cost also plays a factor. A raise in the minimal wage for Chinese workers may be a win for human rights but it also affects the bottom line of American companies, everyone from mega-giants like Wal-mart to smaller start-ups like Metallik Flamez.
High overhead or overseas labor costs translate into higher material costs making optimal sales prices a dicey proposition. Price the item too highly and consumers will be discouraged from purchasing. However, deep price discounts cut into the profit margin and may make a creative venture like fashion, impossible to sustain.
New Trade Agreement prompts exploration
With the implementation of the U.S. – Colombia Trade Promotion Agreement, more American companies are willing to look south, to Colombia for supplies and sales. While the main benefit of this agreement for American companies is the removal of tariffs on exports to Colombia, it was also specifically written for companies like Metallik Flamez to encourage U.S. Textiles and apparel sales to Colombia. The previous import duty on American clothing and textiles was 14.6%. This tarif has been eliminated completely, which will allow companies like Metallik Flamez to export their wares to Colombian consumers at reduced costs.
The large number of Medellin textile manufacturers is an added attraction for American companies hoping to business with Colombia.
The designers behind the Miami-based Metallik Flamez report that this is their first year in Medellin at the Colombian Fashion and Textile exposition, Colombia Moda. They are optimistic about their prospects but remain cautious of embracing Colombian textiles. As one representative of Metallik Flamez explained, “we have heard stories about fabric samples that took over seven months to provide.”
But how will this caution among American businesspeople translate? It depends on whether Colombian textiles can deliver.