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COLOMBIA
SECTOR PROFILE
APPAREL
2003
COINVERTIR, foreign investment promotion agency in Colombia, performed this task aimed at
furnishing relevant information on the market structure for the Apparel sector, the sector’s relevant
indicators and the strengths and opportunities making the sector attractive for foreign investment.
I. Market Structure:
The apparel sector includes all clothing items, except for footwear. Its main product is women’s bathing
suits. This market has very high levels of competition in both prestigious brands (Jeans & Jackets,
Tenis, Azúcar, Armi, and Pronto) and mass-consumption brands.
According to the Ministry of Commerce, Industry and Tourism1, “Clothing manufacturing involves a
series of processes that belong to the Cotton – Textile – Apparel Chain, which starts with cotton
cultivation […] and the production of synthetic fibers, followed by fabric manufacturing, clothing
manufacturing, ending with the sale and marketing of the finished product”.
The wide variety of brands, designs, and qualities, together with the large number of buyers and sellers,
offer products for all tastes and budgets in a perfect competition market structure. Within this sector,
new efforts are aimed at strengthening external markets, gaining new markets and enhancing the range
of products.
As for the size of the sector’s productive chain, the country has 533 companies including fiber
producers, spinners, weavers, and textile manufacturers. 400 of these companies are small and medium
size businesses (PYMEs). The textile sector generates 52,000 direct jobs2.
The apparel chain comprises a large number of small support industries that make the integration
possible and make up what is known as the “complete package” with a higher value-added. The apparel
support industry is in tune with international market experiences and, besides attending to the internal
chain needs, exports items such as zippers, buttons, and brand-labels.
II. Relevant indicators of the apparel sector
Within the non-traditional products, the textile – apparel productive chain is one of the most important
contributors to the GDP3. The apparel sector accounts now for 3.8 % of the industrial value-added. In
1999 the sector accounted for 4.3 %, compared to 2.9 % in 1991. Apparel manufacturing activities take
29 % of the industrial labor force, whose production is equivalent to 16 % of the GDP.
In 2001, apparel exports accounted for 4.88 % of the industrial sector exports4.
1
Cotton Fiber Textiles and Apparel chain profile: Ministry of Foreign Trade, Competitiveness Division, 2002
2
Ibid.
3
Ibid
4
Ibid.
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SECTOR PROFILE
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2003
Main indicators of the apparel industry (2001)
Number of companies 348
Total sales (millions of pesos) 2,545,386
Total sales (dollars) 1 1,106,800,245
Total exports (dollars FOB) 357,878,103
Total imports (dollars CIF) 43,800,433
Direct investments of foreign countries (dollars)2 -224,312
1 Calculated based on average exchange rates (US$ 2,299.8/ COP$) - 2001.
2 Average investment from 1999-2002
Source: BPR, DIAN, Colombia’s Central Bank-Banco de la Republica.-
Sales
In 2000, sales showed a higher level of growth (33.3%) compared to 2.8 % level of growth in 1999.
Since 1998, 2001 is the year with the lowest level of growth (only 1.6%). This growth rate has decreased
due to a lower internal demand and to a reduction in exports to the United States and Venezuela.
However, prospects are promising as the Venezuelan situation and US demand are improving.
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Sales Growth
35,0%
33,3%
30,0%
25,0%
20,0%
15,0% 16,3%
10,0%
5,0%
2,8% 1,6%
0,0%
1998 1999 2000 2001
Source: BPR
According to the latest joint industrial opinion survey of the National Association of Industrialists,
ANDI (December 2001), the apparel sector grew by 0.8 % in 2001, compared to the previous year and
from January-February, 2002 and January-February 2003, sales increased by 6.7 %.
Most important apparel companies - in sales - 2001
(millions of pesos)
Manufacturas Eliot S.A. 224,882
Confecciones Leonisa S.A. 169,283
Vestimundo S.A. 151,276
Distribuidora de Textiles y Confecciones S.A. 136,155
Fabrica de Calcetines Crystal S.A 102,686
Hilacol S.A. en Concordato 83,608
Industrias Cannon de Colombia S.A. 73,775
Confecciones Colombia S.A. 69,142
Socks & Textiles Industriales S.A. 67,231
Comercializadora Internacional Expofaro S.A. 58,226
Source: BPR
According to the Ministry of Commerce, Industry and Tourism5, as of June, 2000, the apparel sector
increased 23.18 % in sales volume, and as of June, 2001, sales volume increased by 0.24 % compared to
the previous year.
5
Ibid.
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SECTOR PROFILE
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2003
According to the Annual Manufacturing Survey of the National Statistics Department (DANE),
employment opportunities in the apparel sector decreased by 0.79 % in 2000, and increased by 18.23 %
as of June 2001.
Other Indicators
Apparel sector indicators as of June, 2001
Industrial production annual accumulated growth (%) 5.42
% current production variation 0.24
% nominal production variation 7.69
% total employment variation 18.23
% workers employment variation 20.59
Source: Ministry of Foreign Trade. Based on the DANE’s Annual Manufacturing Survey
III. Potential of the apparel sector (strengths and opportunities)
Colombia is strategically located in the center of the American Continent between Central and South
America. This geographical location, and its access to the Atlantic and Pacific oceans, allows Colombia
to be a commercial link between the Central and South American markets, and a gateway to North
America, Europe, and other countries in the Pacific basin. Additionally, Colombia has an adequate
road, air, and sea infrastructure to support the sector’s imports and exports.
The sector’s supply chain is fairly well developed. Because of the dynamics of the productive processes
and the vertical integration, processes such as design, cutting, spinning, washing, embroidering, dying,
and printing, can be done jointly. Also, the production plants comply with the requirements and
parameters established at international level in relation to labor, environment, health, and quality
control aspects such as ISO 9000.
As a result of the technical training provided by the companies and by the National Learning Service,
SENA, one of the sector’s main assets is its human resource. The human resource is not only skillful
but also available at competitive rates in relation to other countries in the region such as Chile,
Argentina, Brazil, and Venezuela.
The sector also has strengths derived from the domestic production of raw materials like cotton, fibers,
threads, and fabrics (woven and sewn), among others. Particularly, cotton cultivation in Colombia has
been improving technically to achieve better quality and more variety. In fact, plans for plant
improvement; integrated pest management; and integrated management of crops, soil, and water, have
been implemented. Additionally, Farming Centers for Technology Development (CADET’s) were
created through technology transfer programs. As a result, Colombia, at a Latin American level, is very
competitive in products such as baby’s and children’s clothing, underwear, sportswear, and corduroy
pants, among others.
Thanks to the diversification of exports in Colombia, sectors like apparel have gained importance and
now have access to important international markets. In 1994, exports reached the amount of US$ 451
million, the highest amount of exports of the decade. In 1993, 2000 and part of 2001 (9 months)
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exports growth rates were positive: 16.9%, 20.9% and 12.3% respectively. In 2001, the main buyers
were United States (64.5%), Venezuela (14.5%), Mexico (4%), Germany (2.9%), and Costa Rica (1.8%).
Some of the most important products exported to the United States are cotton pants and jeans,
followed by men’s wool sweaters and bathroom clothing. Venezuela buys mainly t-shirts and
men’s/women’s underwear. Mexico buys brassieres, cotton shirts, and men’s suits.
Exports - 2002
2% 3%
4%
31% 5%
7%
7%
8%
10%
15% 8%
Leather and manufactures Ferroníckel
Paper and Manufactures Banana
Coffee Flowers
Food Textiles and Apparel
Coal Chemicals
Oil
The preferential duty rates for Colombian apparel products, the G-3 Group, the Economic
Complementary Agreement with Chile, and the Preferential Duty Rates with the Latin American
Integration Association –ALADI, have boosted exports to the Andean Community of Nations-CAN.
The possibilities of duty-free trade for Colombian apparel products is close to be a reality in all
American Countries.
Additionally, the Andean Trade Promotion and Drug Eradication Act (ATPDEA) became effective on
October 31 of 2002. This law includes 700 new products not covered by the previous Andean Trade
Preference Act (ATPA) of 1991. Certain apparel products, footwear and leather manufactures, are
some of the most notable products included in this law, that have preferential access to the U.S.
market. The new products included in the expanded ATPDEA have different restrictions depending on
the fabric and yarn composition and on the origin of raw materials.
Special access conditions:
Assembling – Tolling
,
Apparel articles sewn or otherwise assembled in one or more beneficiary ATPDEA countries, in
the United States, or both.
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May be sewn with threads of foreign origin.
All dyeing, printing, and finishing of the fabrics are carried out in the United States
Regional Fabrics/yarns
Apparel articles sewn or otherwise assembled in one or more beneficiary ATPA countries, or in the
United States, from yarns wholly formed in the United States or in one or more ATPA countries.
There is an annual quota of 2 % of total imports of the United States in square meter equivalents.
The quota starts as of October 1, 2002, and increases annually by 0.75 % up to 5 % in the last
period of 2006.
Llama, Alpaca, Vicuña
Apparel articles from fabrics formed in ATPA countries, from yarns produced in ATPA countries,
if such fabrics or components are in chief value of llama, alpaca or vicuña.
Short Supply
Apparel articles made with foreign yarns or fabrics, if the articles are considered as being in short
supply in the Unite States or ATPA countries.
Short supply: identified in annex 401 of NAFTA (silk, linen, velvet, some yarns, among others).
Apparel articles made with fabrics or yarns designated as not ready available in commercial
quantities in the United States.
Handmade articles made of handloomed fabric, or folklore textile
These products are being identified by the US Customs and will have quota and duty free access.
Special Rules for Brassieres
Brassieres have three rules of origin:
Assembling and Tolling.
Regional materials.
Special rule: Garments classified under subheading 62.12.10 will be eligible for preferential
treatment if the cost of the fabrics formed in the United States, excluding adornments and
accessories – is less than 75% (average) of the aggregate declared custom value, during the
preceding one-year period. The period starts in October of each year.
Other Rules
The law establishes other rules for certain products to be eligible for preferential treatment:
Accessories may have foreign origin, if the value of such product does not exceed 25% of the cost
of the components of the assembled article
Interlinings may not exceed 25 % of the cost of the components of the assembled article
Yarns not from ATPA countries, if the total weight of all such yarns is not more than 7 % of the
total weight of the article
Apparel articles with nylon filaments may be eligible for preferential treatment if they come from
Canada, Mexico, or Israel
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Textile luggage assembled from U.S. formed fabrics from U.S. yarns is eligible for preferential
treatment
Socks of all types (wool, nylon, etc.) are eligible for preferential treatment
With the approval of more favorable provisions in the new ATPDEA it will be possible to include
regional fabrics and yarns in apparel articles. This will double, in the short term, the exports to the U.S.,
which will reach more than $450 million. Due to this new law, the Colombian apparel industry is
evolving into a “Complete Package”: components are part of the offer because the idea is not only to
assemble pieces, but also to generate value added.
The main companies offering complete packages are:
Cali: C.I. Itacol Valle, Creaciones Billy, Leading Technologies.
Medellín: El Cid, C.I. Codintex , C.I. Jeans, C.I. Expofaro, Index Vestimundo, C.I. Iblu.
Barranquilla: ARC Internacional Barranquilla Industrial
Pereira: C.I. Nicole
Ibagué: Fatextol, Concalidad
Due to the apparel industry boom in Colombia, guild associations, marketing networks, export
promotion funds, among others, were created in order to support the industry trade activities. i.e. the
Export Competitiveness Agreement for the "Cotton, Fiber, Textile, and Apparel Chain ". This
agreement came out as a result of a joint effort by business leaders, ANDI’s textile chamber; the trade
associations Ascoltex and Conalgodon; the Government; the National Tax and Customs
Administration (DIAN); the National Planning Department (DNP), and the National Learning Service
(SENA). The agreement intends to identify the most important competitiveness barriers faced by this
sector and find solutions to these problems, which affect entities in the public, private, and academic
sectors.
The sector’s productive methods have improved in such a way that currently Colombia has clusters as:
- Textile and Apparel Cluster of the Coffee Growing Zone with representatives from the Risaralda
Government, City Hall of Pereira, the Technological University of Pereira - UTP-, the Coffee Growing
Zone Chamber of Commerce, Textile Chamber – Cotton Fiber - ANDI, Andean Area University,
CDP, ACOPI, Alianza Cosiendo Futuro and CI Ger, Dansa Internacional, Coats Cadena, Textiles
OMNES, Diseños con Estilo, CI Nicolle, Gente Bella, Confecciones Camelia, and Tejidos Única.
- Women’s Underwear Cluster of Antioquia created by the Coordinator Committee, composed of
representatives of CARCE de Antioquia headed by the Medellín Chamber of Commerce; Inexmoda,
the Ministry of Foreign Trade, Confecciones Laura, Bordados Cristal, Arte Intimo, Cintatex, Fahilos,
Invatex, Centro de Desarrollo Empresarial, Universidad Pontificia Bolivariana, Leonisa, Proelasticos,
and Coats Cadena.
Additionally, thanks to the efforts made in order to strengthen external markets, increase the
participation in new markets, and enhance the range of products, institutions such as INEXMODA
were created. These institutions perform divulging and research works about fashion concepts to
harmonize the sector in terms of color, textile bases, and silhouettes. All this was made with the
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SECTOR PROFILE
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2003
purpose of defining fashion concepts and sensibilities each year, so apparel and textile manufacturers
and dealers may work as an integrated group”6.
Based on these results, INEXMODA issued the “Fashion Concepts and Sensibilities Report” which
has become an international fashion consulting tool as countries such as Guatemala, Argentina,
Ecuador, Chile, Costa Rica, Panama, Peru, and Curacao are subscribers.
As for the promotion of new fashion designs, world class events such as Colombiamoda are held
periodically. Colombiamoda, which has been carried out annually since 1990, is the fashion’s heart and
brain in Colombia.. This year the event was held on August 12 - 14 in Medellín. The event showcases
Colombian apparel designers, home furnishings, machinery, and specialized services. It is an ideal show
for wholesalers, chain stores, department stores, boutiques, dealers, and distributors of finished
products, importers, and subcontracting companies. The event features 23,000 meters of exhibits and
services and draws an average of: 385 domestic and international exhibitors, 7,000 visitors and buyers,
800 international buyers, 250 domestic journalists, and 20 international journalists. Also, Colombiatex:
“the door of entry to the Americas” as a textile, components and machinery show. With Colombiatex,
the Colombian textile sector is the leader in specialized fairs in this field. This event offers everything
necessary to program a textile production line: fabrics in cotton, wool and blends; buckles, buttons,
zippers, threads, interlinings, brand labels, labels, technological development and services. The event
has been held annually (January) in Medellín since 1989. The event features 23.000 meters of exhibits
and services and draws: 350 exhibitors, 700 international buyers and 10.000 domestic buyers and
visitors.
IV. Sites of Interest
• COINVERTIR-Corporación Invertir en Colombia-
www.coinvertir.org
• Centro de Investigación y Desarrollo Tecnológico Textil Confección de Colombia
http://www.textil-confeccion.com.co/
• Inexmoda
http://www.inexmoda.org.co/
• Red Colombia Compite
www.colombiacompite.gov.co
• Cotton - Fibers - Textiles and Apparel Chamber of the National Association of Industrialists,
ANDI
http://www.andi.com.co/
• Colombia Moda
www.colombiamoda.com
• Exports Promotion Fund, Proexport
http://www.proexport.com.co/
• Emerging Textiles. Textile and apparel information.
6
Source: BPR
Last Update: July 2003 8
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http://www.emergingtextiles.com/
• Ministry of Commerce, Industry and Tourism
http://www.mincomex.gov.co
• Information ATPA - ATPDEA, Ministry of Commerce, Industry and Tourism
http://www.mincomex.gov.co/mincomexvbecontent/newsDetail.asp?id=752
http://www.mincomex.gov.co/mincomexvbecontent/categorydetail.asp?idcategory=82&Name
=Estados%20Unidos&IDCompany=16
• National Learning Service, SENA.
http://www.sena.edu.co
• Colombia Business
http://www.businesscol.com/
For more information, please visit our webpage or contact us at
www.coinvertir.org
info@coinvertir.org
Telephone: 057 13120312
Fax: 057 13120318
Last Update: July 2003 9
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