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Seeking new sources after Bangladesh


POSSIBLE SUCCESSOR: Indonesia has better safety regulations


A search for new locations has taken on greater urgency for Western retailers, whose complex manufacturing needs already shrink the pool of potential locations.

Bennett Model helped pioneer the exporting of garments from China in 1975, the year before Mao Zedong died, and ever since, his New York fashion company has searched for other countries, from Guatemala to Vietnam to Indonesia, capable of supplying top retailers like Bergdorf Goodman and Neiman Marcus.

The relentless search for new locations has taken on more urgency after the deadliest industrial accident in the global garment industry's history, a multi-storey factory collapse in Bangladesh that left 1, 127 people dead. Buying from Bangladesh, said Model, "has been politically incorrect ever since problems started there, so a lot of major players had already been looking for alternatives. "

When a senior executive from one of the largest American mass-market retailers called him last week with worries about suppliers in Bangladesh and plans for a trip to Vietnam and Cambodia to seek alternatives, Model was ready with advice: "I told him to add a stop in Indonesia. "

Many Western executives are taking such trips this spring. A lethal factory fire in Bangladesh last November, 33 regional or national strikes there since January, hundreds of deaths in factional street fighting since February, and the Rana Plaza collapse in late April have left multinational corporations scrambling for other options.

"Right now, the name of Bangladesh just gives a bad rep to a company, " said Model, the dapper chief executive of Joseph Model Associates, which designs and distributes the Annabelle New York brand of high-end apparel and also makes privatelabel brands for various department store chains.

Western executives are checking on potential new suppliers in southern Vietnam, central Cambodia and the hinterlands of Java in Indonesia. Yet, safety problems could exist anywhere. The ceiling of a small factory that makes shoes in central Cambodia collapsed recently, killing at least two people and injuring nine, three of them severely.

The JW Marriott Hotel in Jakarta, a favourite of Western garment buyers, is nonetheless so full these days that it is hard to book a room on short notice. Indonesian garment executives say they have seen a steady procession of arrivals in recent weeks and months, always asking the same questions about political stability, labour laws, safety compliance and wages.

"At first it was because of China getting too expensive, then came the Bangladesh fire tragedy, and then there have been so many steps in Bangladesh's troubles, " said Ade Sudradjat, the chairman of the Indonesian Textile Association. "Some buyers feel uncomfortable placing orders in Bangladesh. "

Many multinationals are exploring their options in case street clashes and politically motivated national strikes worsen in Bangladesh, which is the world's second-largest garment manufacturer after China. A new faction in the country's Islamist movement has staged more violent protests lately that have sometimes resulted in the temporary closure of factories.

Dozens of impoverished countries make T-shirts and other very basic clothing. But only a few countries - really just China, Bangladesh, Vietnam, Indonesia and to some extent Cambodia and Pakistan - have developed highly complex systems for producing and shipping tens of thousands or even hundreds of thousands of identical, high-quality shirts, blouses or trousers to a global retailer within several weeks of receiving an order.

Model said that he had always refused to place orders in Bangladesh for his customers. He said that he and a couple of other suppliers of elite retail chains always worried about Bangladesh's reliance on high-rise factories, in which workers can be trapped on upper floors during a fire, instead of the single-story and two-story designs found in Southeast Asia.

Indonesia, for example, has had an industry code since the early 1990s that garment factories may not be more than two stories high so evacuation will be easier during fires, volcanic eruptions and earthquakes. Union leaders here say that only a few Indonesian garment factories are taller, because they predate the rule. Although there are other labour abuses in Indonesia, local union leaders said that the rule was scrupulously followed.

Model predicted that Bangladesh's lock on mass retailers' orders would erode. "It's going to take time, but it's going to eventually filter out all over the place, " he said. "It'll take two or three years. "



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