1GLOBAL SOURCING STRATEGYCourtney GillJordan CauseyMadison White Picha Choopojcharoen Teng Ma2 3ABSTRACTSimplicity is the ultimate sophistication Leonardo da Vinci At Ecru, we strive to provide the high quality, cutting edge garmentstoourconsumers.Ourcompanyisbasedsolelyon socialresponsibilityandcodeofethics.Ourbasicslinewillbe available all year round and is perfect for the trendy customer lookingtomakeasmartadditiontotheirwardrobe,whilestill standing out of the crowd. Through much research in sourcing and manufacturing we have determined the values in what Ecru is specifcally looking for.Inordertomeetourmarginsandkeepourcostsdown wehavespentmuchtimeresearchingfacilitiesallacrossthe world in order to determine which will best suit our needs. These countriesinclude,India,China,SriLanka,ElSalvadorandthe Philippines. Asanupandcomingcompanyitisveryimportantto minimize our risks and ultimately increase our overall opportunities for both our company and our supplier. We have developed a placement strategy that includes many factors such as country and supplier analysis and ranking, costing, negotiations, and the evaluation and analysis of the strategy development factors. This strategy will aid us in our ability to make the best decision when it comes to the manufacturing of the Ecru Basics garments. 4 56 7TABLE OF CONTENTSINTRODUCTIONSTRATEGY DEVELOPMENT PROCESSCOUNTRY ANALYSISSUPPLIER ANALYSISCOSTINGCompany Profle 8Who We Are 10Our Products 12Target Market 14Why Develop a Strategy? 16Values 18Sourcing Guidlines 21Products, Volumes, & Seasons 22Sales Plan 24Countries Highlights & Textile Industies 27Sri Lanka 28El Salvador 42India 52Philippines 60China 72SWOT Analysis 79Country Ranking 84Suppliers Highlights & Textile Industies92Sri Lanka 93El Salvador 99India 104Philippines 108China 111Suppllier Ranking 116Preliminary Costing 122Initial Costs vsPreliminary Costs 124STRATEGY DEVELOPMENTSOURCINGSTRATEGY COMPARISON OF FINAL COSTING CONCLUSION APPENDIX Sales Plan 126China 128Sri Lanka 132El Salvador 135The Future of ECRU 139China 141Sri Lanka 144El Salvador 147Placement Strategy 150Preliminary Costing vs.Final Negotiatiated Prices 153Conclusion 157Cost Sheets 161Tech Packs 167Sourcing Guidelines 213Supplier Emails 220Bibliography 2348 9VisionEnhancing Life with Grace and SimplicityMissionTo be the ultimate house of simple sophistication and style through the creation of desire now and foreverValuesAestheticCompetenceCreativityDiplomacyCOMPANYPROFILEFairness Integrity PerseveranceTeamworkECRU is a high-end women sportswear retailer with its fagship boutique in SoHo, New York. We provide women high-quality sportswear with minimal, natural, and sophisticated aestheticsandstylestoourcustomers.ECRUalsohasan extensionlinecalledECRUBasicswhichprovidesbasic yet high quality garments throughout the year.

ECRU incorporates its values throughout the company anditsproductssincethemainproirityistoassureour customers receive the best quality and fashionable outfts that refect their lifestyles and identities. 10 11WHAT WE STAND FORECRUisaFrenchwordforunbleachedorraw.It alsomeansashadeoflightgreyish-paleyelloworbeige-like tones.Thistypeofcolorappearsonrawandnaturalyarns andfabrics.Thenamerefectsthecompanysphilosophy andcorevaluesinwhichweconsiderthepurequalityand rawnessthroughouttheproducts.Thatiswhyourdesigns andaestheticsarerathersimpleyetsophisticatedin craftmanship.Ecruisthesignaturecolorpalettethroughout our collections and packaging, which also makes us stand out anddistinguishesourcustomersfromotherleadingbrands. ECRUalsoconcernsaboutsustainabilityandcorporatesocial resposibility.Wetakeseriousagreementontransparencyand integrity with our partnerships from sourcing guideline to every process of the production.SInceECRUvaluestheimportanceofenvironment andsustainability,theproductsaremadeof100% naturalfberyarnsandfabricssuchascottonand linen.Thecompanyhasbeentryingtoreducecarbon-footprintbysourcingandutilsingfabricswithinthe samecountries.Ourcompanyisalsoworkingtoward moreeco-friendlyandorganicfabricsinthefuture. ECRUoffersbothfashionandbasiccollections.Our productsrangefromwovenandknittedtops,bottoms, dresses,andaccessories.ThoughECRUbasicscollections havelowerpricerange,westillmaintainandassureour customers the same level of quality of our products. ECRU basicsareofferedthroughoutthewholeyearwithnew severalpiecesaddedtothecollectionseachseasonto keepupdatedwithcurrentcolortrendsforeachseason. 12 13Style 1 - LatteRetail Price - $120Style 2 - BarleyRetail Price - $90Style 3 - IvoryRetail Price - $140Style 4 - BisqueRetail Price - $120Style 5 - Desert SandRetail Price - $180OUR PRODUCTSECRU BasicsWoven Tops Spring/Summer 201414 15TARGET MARKETECRUcaterstowardfemaleNewYorkerswithinagesof25-40.Our customers are considered as young digerati living in the urban and affu-ent lifestyles around Manhattan and Downtown Brooklyn. They are sophis-ticated,thoughtful,andstylish.Withhighlevelofeducationandcareer success,ourwomenareindependentandconfdentwiththeirlifestyles andfashionchoices.Theyareinnovatorsandexperiencerswhoalways look forward and keep up with new trends and styles, but yet dont want tooverdressthemselves.Theywanttodresswellenoughsothatpeople can appreciate their looks as well as their status. Their preference in styles is considered clean, minimal, yet unique in design and aesthetic. Our cus-tomer also value high quality and craftmanship.ECRU Basics line serves as fundamental pieces that our women must have and wear them in their daily lives no matter what occasions or plac-es they go.CUSTOMER PROFILE Family Income: $308,721 (Personal - $97,000) Education: MBA in Marketing at NYU Competitive Stores/Brands: Stella McCartney, Chloe, and Bloomingdales Fashion Cycle: Innovation StageVALS: Innovator/Experiencer Buying Behavior: Expect great customer service / Enjoy shopping experience Best quality products High brand loyalty Young Digerati Grace SmithAge: 27Marketing Consultant From Upper East Side, NYC16 17STRATEGY DEVELOPMENT PROCESSEcru, meaning pure, simple and clean, is a luxury womens ready to wear brand with a mission to be the ultimate house of simple sophistication and style through the creation of desire now and forever. Ecru has a goal to create sophisticated and timeless pieces of womens clothing whilevaluingaesthetic,diplomacy,fairnessandintegrity,aswellas giving back philanthropically.

These fve country profles from El Salvador, India, China, the Philippines andSriLankaismeanttooverviewthecountriesinallaspectsfrom theirculture,totheireconomytotheirmanufacturing,toultimately determinewhichcountryisthebestforEcrutosourcetheirluxury garments from. Whendeterminingwhichcountrytochoseforthemanufacturingof ourluxurywomenswoventopsEcruslookedfrstlyatthecodesof conduct for each of the manufacturers as well as the way the country doesbusinessoverall.Becauseethicsandoverallconductissucha strong value for Ecru, it is very important that the manufacturers share thesesimilargoals.Ourotherconsiderationsmustobviouslyinclude the overall cost of creating the garments, the export industry as well astheovertextileandapparelindustryofeachofthefvechosen countries. Why Develop a Strategy?ValuesSourcing GuidlinesProducts, Volumes, & SeasonsSales Plan18 19VALUESECRU is built upon several values we believe will allow our company to grow and be successful. We aspire to be a brand that is looked up to and respected by our competitors and customers alike. These same values helped build ECRUs sourcing guidelines as we are committed to producing quality garments that will be worn with pride.PerseveranceWe believe in our company and its products and we will work hard to overcome obstacles in whatever form they may take in order to deliver apparel that lives up to our standards. FairnessWebelieveinequalopportunityandrightsfreefromanyformof discrimination. DiplomacyWorking with foreign companies can bring its own set of challenges, but we are dedicated to resolving conficts and fnding common ground to beneft both ourselves and our manufactures as we wish to successfully grow our business as well as theirs. CreativityAt ECRU we know the best solution isnt always the most obvious and believe in the power of creative thinking and play to be innovative.AestheticWe strive to deliver garments that will be appreciated by our customer for both the care that was put into its design and creation and for its overalllook.Webelieveinsimpleluxuryandwantourcustomersto confdent whether they are wearing our basic line or our fashion line.TeamworkECRU is more than just a team; we are a family of people who all believe in our product and are committed to working effciently not only within ourcompanybutalsowithourmanufacturersinordertocreatethe best products.20 21IntegrityWe stand by our beliefs and values and strongly believe in transparency. We are dedicated to making sure that our employees are happy and beingtreatedfairly,especiallythosewhoaremanufacturingforus. We strive to give everyone a voice, free from worry, to ensure that our standards are being lived up to.CompetenceAt ECRU we strive to know our customer and her needs in order to meet them. We pride ourselves on every piece of merchandise that displays the ECRU name and go to great lengths to fnd manufacturers that are knowledgeable and reputable in the products they create for us. ECRUsCodeofConductisinlinewithvaluesthatarecore toitscompany.Fairness,teamwork,diplomacyandintegrityare some of the values that come across strongest in our code, as ECRU strongly believes in fair treatment of workers as they are more than just employees. They are people with their own families and needs, and we want to ensure their safety and well-being as we value them and theroletheyplayinourbrand.OurCodeofConductisapplicable toallsuppliers,theirsubcontractorsandotherbusinesspartnersthat conduct business with Ecru. Our code can be found in the appendix andstronglydetailsourrequirementsinregardstothehealthand safetyoftheworkenvironment,workersrightswithanemphasison basic rights, wages and restrictions on working hours, and monitoring and enforcement which outlines transparency requirements, our right to make unannounced audits in addition to our scheduled bi-annual audits, our right to appoint an external auditor, should we see it ft and the consequences of not taking corrective action should a violation come to light.SOURCING GUIDELINES*See full sourcing guidelines in Appendix22 23Products, Volumes, & SeasonsLook 1: Latte76,000 UnitsSeason: Year roundLoose ftting womens 100% pima cotton blouse with narrow, cowl neck and extended sleeve openings.Look 2: Barley 90,000 UnitsSeason: Year roundLoose ftting womens 100% pima cotton blouse with length folded sleeves. Look 3: Ivory 105,000 UnitsSeason: Year roundLoose ftting womens 100% pima cotton, sleeveless, collared button-down. Look 4: Bisque85,000 UnitsSeason: Year roundLoose ftting, wide neck womens 100% cotton poplin blouse with cutouts on sleeves.Look 5: Desert Sand 94,000 UnitsSeason: Year roundWomens long-sleeved, 100% pima cotton, high-low, button-down shirt with princess seam, back detailing and right breast pocket.Total Annual Volume: 450,000 Units24 25SALES PLANBecause we are a high-end luxury company, our margins, princes and sales are quite high. In the frst year after the Ecru Basics collection launches we are projecting to do over $59 million in sales. This number is derived from selling 450 units divided between 5 garments and sku numbers. Our retail prices are going to range from $90 up to $180, due to the fact that we are a luxury brand and retailer. We are selling these garmentsonlineandinourownfagshipstoresolelyatthiscurrent moment, which means will not have wholesale prices. This will refect highly on our margins, resulting in them being between 65% and 66% foreachgarment.Ouraveragecostforproductionisabout$5per garment, making our total production cost for 450,000 units, 2,250,000.26 27COUNTRY ANALYSISCOUNTRIESSri Lanka El Salvador India Philippines ChinaCountries Highlights & Textile IndustiesCountry SelectionRatings SpreadsheetSri LankaIndiaEl SalvadorPhilippinesChinaOur fve countries, China, India, the Philippines, El Salvador and Sri Lanka were selected by our professor, but have been selected for a reason. During the duration of the strategy we have made it our goal to determine which countries are the best sources of manufacturing for creating our luxury, woven womens tops. There are many determining factors, but most importantly we have looking into the business and textile climate and industry, the costs, the logistics as well as the manufacturers reliability and code of conduct. Each of these fve countries has something different and special to offer to the world of manufacturing and we have taken great time and detail in assessing which of the fve will rise to the top.28 29SRI LANKACountry IntroductionEndless beaches, breathtaking ruins, favorful food and teas, legendary temples and oodles of elephants packed into over 3000 years of history and culture on the island of Sri Lanka.Sri Lanka offers incredible experiences stretching from the mountains tothesea.Thecountryispackedwithrichhistory,diversewildlife,a varietyofclimatesandeco-systems,culturalandreligiousheritage, wide-spanning beaches and offers hundreds of ancient ruins to explore anddiscover.ItisSoutheastAsiashiddengemthatiswaitingtobe traveled and charted by tourists, nature lovers and history enthusiasts alike. (Data Monitor)With all that this country has to offer, it has even more in manufacturing andbusinesspracticesandhasbeenawardedinmanyareasof Greenbusinesspracticesfortheirmanufacturingfacilitiesand factories. This country is beginning to thrive and make a name for itself onthemapwithtouristsaswellasimportandtradebusinessesand manufacturers. (Data Monitor)Sri Lanka is an island country located of the southern most tip of India. The country has a rich history documenting back over 3000 years ago. Sri Lanka has a very strong Buddhist heritage. The country was very important during the time of the ancient Silk Road and has continuedtogrowandexpandtheirtradeandexports,making themthetopcontributorstoSriLankaseconomy.Eventhoughthe country is just starting to rebuild it self from a thirty-year civil war which endedrecentlyin2009,SriLankaisbeginningtothriveonceagain inmanufacturingandtourism,givingthemastrongandgrowing economy. (Data Monitor)30 31Sri Lanka, also known as, Ceylon, is an island in the Indian Ocean with a population of about 20 million people. The highest concentration of the population is located in the larger cities, particularly in Columbo, thecountriescapital,mainport,andindustrialcenterandhub.Sri Lankaisethnically,linguisticallyandreligiouslydiverse,withoverten differentlanguagesculturesandreligiousbeliefsbeingpracticed. (Data Monitor)ThefagofSriLankaisalsoknownastheLionFlag.Itdepictsa gold lion holding a sword in its front paw, a dark red background, four golden leaves, one in each corner and two vertical stripes, one green andoneorange.ThelionrepresentsthebraveryoftheSriLankan Nation,whiletheothersymbolsrepresentthecountriespasthistory, culture and religious beliefs. (Data Monitor)Socio-Economic-political Analysis:TheSriLankanpoliticstakeplaceinapresidentialrepresentative democraticrepublicframework.ThisiswherethepresidentofSri Lanka is both the head of the state and the head of the government. The political make up also includes legislative power, which act under both the government and the parliament. For many decades, politics inSriLankahavebeendominatedbytheSriLankanFreedomParty and the Conservative United Nation Party. (Datamonitor) The president Mahinda Rajapaksa was elected in November of 2005 andispartoftheFreedomParty.ThePrimeMinister,Disanayaka Mudiyanselage Jayaratne, who was elected in 2010, is also a member of the Freedom Party. The President is elected for six-year terms and has the power to hire and fre the Prime Minister. The day-to-day running of the government lies to the prime minister and his cabinet, which is drawn from the legislature. (Datamonitor)In July of 1983 the Sri Lankan Civil War broke out and began an on going confict all across the island. The government rose to fght against the rebellious Liberation Tigers of Tamil Eelam (LTTE), also known as the Tamil Tigers. The Tamil Tigers are a military organization that formed in order to break awayfrom SriLankaandform anindependent Tamil state called Tamil Eelam in the north and eastern region of the island. The war led on for 26 years when the Tamil Tigers were fnally defeated by the Sri Lankan military in 2009. (Datamonitor)ThiswarlastingalmostthreedecadesleftSriLankainasheerstate ofturmoil.Over100,000citizenswerekilledandevenmorewere injured. The country was hurt culturally as well as economically. Much damagewasdonetothecountryphysicallywhichhasdetracted tourists, investors and has damaged manufacturing facilities. With all that being said, in the 5 years that the war has been over, Sri Lanka anditscitizenshavedoneallthattheycantorevitalizethecountry and restore it to what it once was. (Datamonitor) 32 33The government fgures in Sri Lanka have been stable for many years as well as their representative democratic republic political system. The country is swiftly able to make decisions that beneft the communities and the people as a whole. However, the war has certainly affected the country signifcantly and even though Sri Lanka is making all efforts to restore and revitalize, it is still a potential drawback when looking at prospective manufacturing locations.Economic traits:Sri Lanka has a world ranking of 90 from the 2014 Index of Economic Freedomandarankingof16intheoverallSoutheasternAsian hemisphere.(IEF)Thecountryiscontinuingtoseestrongeconomic growthfollowingtheconclusionofthe26-yearCivilWar.Duringthe wartherewasmuchturmoileconomicallyandthecountrysuffered greatly. It is now that Sri Lanka is making all efforts to reconstruct and bring back one they once had. (CIA World Factbook)The Sri Lankan governments very high debt payments have contributed almost 100% to the countrys high budget and fscal defcit. However, the global 2009 recession and economic crisis actually caused a boom for Sri Lanka and nearly balanced their debt payment crisis. This has given Sri Lanka the ability to now focus on their greatest assets, being their trade and exports, and agriculture. (CIA World Factbook) The Sri Lankan governments very high debt payments have contributed almost 100% to the countrys high budget and fscal defcit. However, the global 2009 recession and economic crisis actually caused a boom for Sri Lanka and nearly balanced their debt payment crisis. This has given Sri Lanka the ability to now focus on their greatest assets, being their trade and exports, and agriculture. (CIA World Factbook)The country is constantly looking for new ways to expand and improve their most lucrative markets, apparel manufacturing and agriculture, which combined employ over two thirds of the population and bring inthemajorityoftherevenuesforthecountry.Becausethemain revenues and income for the country do come from trade and exports, particularlyapparelbutalsotea,rubberandtechnology,thereisa largeincentiveforthecountrytoconstantlykeepuptodateand advancedtobeatoutthecompetitionacrosstheworld.SriLanka is currently ranked at number four of the top apparel manufacturing countries in the world and hasgreatpotentialtoreachnumberoneintheupcomingyears. (World Factbook)SriLankascurrencyistheIndianRupee;andasofApril2014, theU.SDollarisvaluedat.0077of1Rupee.ThecurrentSriLankan unemploymentrateisat4%,ranking#49intheworld.Revenuesin 2013 reached $8.43 Billion, while expenditures were at $12.57 Billion. 34 35The Sri Lankan infation rate both increased and decreased signifcantly over the past 10 years. In the past 3 years the rate of infation has gone from6.11%in2012,to9.9%in2013andallthewaydowntocurrent 4.2%thatitistoday.Thisisveryunusuallyfortheratetofuctuateso drastically, but the country has been in a serious state of turmoil after thewar,whichdirectlyinfuencedtheireconomicstructure.Looking towardsthefuture,SriLankaismakingallthepossibleamendsto even out and steady the drastically changing infation rate. (Trading Economics)Due to these high rates of fuctuation in both revenues and the infationrate,SriLankadoesshowpotentialriskswhenlookinginto supply and manufacturing. The country is still in quite a high amount of debt and is spending signifcantly more than they are bringing in. This, and the drastically changing infation rate may cause serious problems and will be a great concern if Ecru business is done in Sri Lanka.Labor and Labor Laws:The Labor force in Sri Lanka is very strong and makes up a signifcant amountofthepopulation,ofbothmalesandfemales.About48.2% of the population works in labor, 67.2% being male and 31.3% being female.ThelabortasksinSriLankaincludeagriculture,industryand services. In 2012 30.7% of the population worked in agriculture, 26.6% worked in industry and 42.6% worked in services. (Labor Force Survey) Theunemploymentratehasseenasignifcantdecreaseinthepast ten years dropping from 8.4% in 2003 down to 4.0% in 2012. The rate of unemployment for men is at about half the percentage of that for women. This is a signifcant decrease in a short period of time and is all due to the ending of the Civil War and Sri Lankas ability to quickly start rebuilding the country.(Labor Force Survey)SriLankasmainexportsareapparel,rubberandtea.These threecategoriesmakeupalargepercentageofrevenuesforthe country. Sri Lankan apparel manufacturing supplies a wide variety of garments ranging from sportswear, lingerie, and lounge wear, to ready to wear, bridal, swimwear and childrens wear. This gives Sri Lanka the opportunity to supply to many different companies and with a wide variety of style, quality and price points. (Labor Force Survey)Since apparel manufacturing is such an important aspect to the economy in Sri Lanka, many laws have been put in place to protect the employees and their employers. Laws, codes of conduct and rules of ethics are made very clear to the employees and are 100% geared towards making their careers greater and more enjoyable. Companies in Sri Lanka have very in depth laws regarding workers rights, womens rights,employeelegalworkrightsandemployeeterminationrights and once again these laws and how they work are made very clear totheapparel-manufacturingworkers.SriLankaiscurrentlycloseto being the number one apparel manufacturing country in the world36 37andtheywillbechosensobecauseoftheirincredibleethicsand theamountofintegritywithwhichtheytreattheiremployees,their customers and of course, the environment. (Labor Legislations)SriLankaisconstantlymakingsurethattheyaretreatingtheir employees and their customers with the utmost respect and integrity. Because high integrity is one of Ecrus top values, the way that Sri Lanka manages their facilities is something that really resonates with us. The ability to have respect in the workplace is something Ecru is certainly looking for when reviewing countries and manufacturing facilities.current Textile and Apparel Industry:Sri Lankas textile and apparel export industry is the largest and mostsignifcantcontributortothecountryseconomy.Theindustry has seen sizeable growth over the past four decades and today the apparel industry makes up 52% of the countries exports and economic stimulus.Thisfastgrowingindustryalsoprovidesover300,000jobsto SriLankanmenandwomenacrossthecountry.The350garment factories and 16 textile and fabric manufacturers are privately owned entities but do manage well with the Sri Lankan government, seeing that they are bringing in the majority of the countries revenues. These technologically innovative factories play a key role in the advancement of the Sri Lankan apparel industry and are quickly paving the way to be the top supplier country in the world. (EDB) The apparel manufacturing industry is incredibly competitive, but Sri Lanka has many attributes that make them stand out. Each factory in Sri Lanka is 100% environmentally friendly and many have won incredible awards including the worlds frst LEED Platinum certifcation. They operate under strict ethical principles and guidelines that are made clear to the workers as well as the brands and companies. The manufacturing facilities are also highly focused on innovation, giving back to their country and maintaining a strong reputation all across the world. (EDB)Sri Lankas apparel categories include sportswear, lingerie, lounge wear, ready to wear, bridal, swimwear and childrens wear and the United States and the United Kingdom have been the largest apparel buyers for many years. Longstanding relationships with companies across the world, and a strong drive to make quality pieces, keeps buyers and brands coming back again and again to Sri Lanka. These relationships have made the apparel industry in Sri Lanka even more reputable, stronger and more prosperous. (EDB)Sri Lanka is a producer of Garments Without Guilt and the Made in Sri Lanka label, both of which are synonymous with high quality, reliability, social and environmental standards, code of ethics and accountability. Each of these standards is made present in each of the factories, the working environments, as well as how the garments are produced. Within the past three decades the country has evolved into creating high quality and sophisticated designs,38 39allowing the country to appeal to even more companies and brands. (EDB)Because the apparel industry makes up such a large percentage ofSriLankaseconomicstabilityandmakeup,allofthefactories andmanufacturingfacilitiesinthecountrytakepartingivingback tothecommunity.Thisisaveryimportantaspectofthesefacilities and shows a philanthropic side that will resonate with many different fashionbrands,againmakingSriLankaanidealcountrytosource from. Businesses and manufacturers are always looking to grow andexpandandcurrentlythereare10newfacilitiesbeingbuilt.Sri Lanka has recently been named one of the top three countries out of the top 50 most important suppliers and has promise of becoming the top supplier in the world in a few short years. (EDB)BecausethetextileandapparelindustryinSriLankaisone oftheirtopindustries,theyareconstantlylookingfornewwaysto improve and expand. With that being said, the manufacturers are still incrediblyfocusedonbuildingstrongrelationshipsandreputations withcustomers.ThisinturnhelpsSriLankakeeptheirbestcustomers coming back and gives them potential new customers for additional revenues. Ecru would be happy to manufacturer in a country that is focused on giving the customer exactly what they are looking for and making sure they have a great experience along the way.Logistics and importationExporting goods from Sri Lanka into the U.S. has become a very simple and quick task. There are many shipping and freight companies that service Sri Lanka and a large majority of the goods are going back to the Unites States. The routes are well established and there are multiple to choose from depending if the goods are being delivered to west coastortheeastcoast.Becausethemajorityofthemanufacturing facilitiesarelocatedinColombo,theportcitycapital,orveryclose by,gettingthegarmentsandappareltotheportisnotanissue. HundredsofshippingcompaniestravelfromSriLankatotheUnited States including ZIM Shipping Line, Maersk Line and Hapag-Lloyd. The majority of exporting and shipping out of Sri Lanka is done through sea and there are limited airfreight companies coming to Sri Lanka.ZIM Integrates Shipping Services ltd. was established in 1945 and has grown to be one of the largest container shipping companies in the industry. The company is committed to providing their customers with reliable shipping solutions around the world. An exporting container ship leaves from Colombo, Sri Lanka every two days and takes approximately 3 weeks to arrive in New York, United States. The container ship takes two routes: one from Sri Lanka through the Middles East and Mediterranean intosouthernEurope.FromthereitgoesontotheportinNewYork. (ZIM)40 41Maersk Line is one of the top leading cargo-shipping companies in the worldandhasbeenrisingtothetopofthemarketsince1928.Their strongcommitmenttotheenvironmentaswellascustomerservice keeps people coming back. The ship leaves the Colombo port every Friday at 12 pm and there is a one-day cut off period for canceling a shipment. The vessel takes about 3-4 weeks to arrive in New York. The line goes from Colombo to Rotterdam and then arrives in New York. (Maersk Line)Haypag-Lloyd is a container freight company operating in more than 300 locations across the world. The company has been in business for over165yearsandcontinuestokeeptheirvaluesofenvironmental protection,complianceandsustainabilityprevalentintheirwork. ExportingacontainerfromSriLankatoNewYorkwilltakeabout22 to 28 days on a Haypag-Lloyd ship. The ship leaves twice a week and sails through the Middle East and Mediterranean, making one stop in Halifax before then landing in New York. (Haypag-Lloyd)42 43EL SALVADORCountry OverviewEl Salvador is a small Central American Country that has been gaining footing in the textile and apparel industries and is the closest country toECRUsNewYorkheadquartersoutofthefvecountrieswehave been researching. This means that manufacturing in El Salvador gives theadvantageofashortlead-time.Itisalsotheonlycountrywe have researched which has established a free trade agreement with theUnitedStates,throughtheCentralAmericanTradeAgreement-DominicanRepublic(CAFTA-DR).ElSalvadorwasthefrstLatin American country to sign CAFTA-DR which was implemented in March 2006 and would allow ECRU to import any garments we manufacture theretariff-free,aslongasthelaborandallthematerialsoriginate fromoneofthecountrieswithintheagreement.Thisisnottheonly tie El Salvador has to the US, as El Salvador adopted the US Dollar in 2001 as its currency which gives control over its monetary policy to the United States (Coleman 63; Country Intelligence 7). This has helped tostabilizethecountrysinfationrateswhicharenowpredictedto increase steadily around a 2% change from the previous year in the nearfuture(CountryIntelligence5-6).Thedollarizationalsohas eliminatedtheneedtokeepaneyeonexchangeratesbetween the US and El Salvador. The United States is El Salvadors main trading partner, which receives half of El Salvadors exports. The United States has invested over $2.5 billion into the country to help boost industries and infrastructure. In addition, approximately 1 in 5 Salvadorans lives in the US, 1.2 million of which are immigrants (Meacham). 44 45PoliticalElSalvadorisaDemocraticRepublicthathasbeengainingstability since its 12-year civil war. It has a president who is elected for a single fveyearterm.CurrentPresident,MauricioFuneswillbesucceeded by his Vice President, Salvador Snchez Cern in June; both of which areleft-wingmembersoftheFarabundoMartiNationalLiberation Frontparty,orFMLN(Meacham).SnchezCernhasproposed expandingrehabilitationprograms,jobtrainingforconvicts,and increasing support for police in addition to adding welfare programs anddevelopmentprojectstohelpstrengthentheeconomyand reduce poverty (Meacham).Social and laborNearlyhalfofElSalvadorslaborforceisemployedinagricultural andcommercialactivitieswhilemanufacturingaccountsfor15.5% (Country Intelligence 15). Men make up the majority of the workforce; however, women have been gaining footing in recent years. As of 2010, therewere4.13millionpeoplewhoareofworkingagewithalabor force of 2.58 million (Country Intelligence 15). The population growth has been slowing but remains positive at 0.7% per year; however, the labor-force is predicted surpass the population growth rate until 2040 due to El Salvadors age structure, as there are more people entering the workforce then there are retiring (Country Intelligence 10). Both male and female children typically attend school for 12 years with an estimated 80.2% of the population over 15 years of age being literate (Coleman 115). El Salvador will not lack for intelligent employees in the years to come as literacy has been increasing and a strong amount ofthepopulationisyoung.ElSalvadorisoftenlistedasoneofthe most dangerous countries, having a murder rate over 40 per 100,000 peoplein2013,widespreadgangproblems(particularlywiththe Mara Salvatrucha and the Barrio 18), drug traffcking and corruption; however, it often ranks among the top ten happiest countries (Klahn; Meacham).EconomyEl Salvador has had a mixed economy since the 60s and 70s when expandedintomanufacturinganditiscurrentlyoneofthemost industrializedcountriesinCentralAmerica.Agricultureemployshalf ofthecountrysworkforceandincludesthegrowingofsugarcane, coffeeandcotton.CurrentlyElSalvadorhasasluggisheconomic performancewithimportsexceedingexportsalthoughthegrowth rate has been taking a turn for the positive and is predicted to remain so in the medium-term. The country has low investment rates resulting in slow capital accumulation that refect a low national savings rate, aweakinvestmentclimateandpoorhumancapitaldevelopment (CountryIntelligence10).AsElSalvadoradoptedtheUSDollaras itscurrency,itnolongerhascontroloveritsmonetarypolicywhich isdictatedbytheUnitedStates(CountryIntelligence7).Infationis 46 47clearance, port and terminal handling and inland transportation and handling(DoingBusiness).AcajutlaisElSalvadorsmajorcargo seaport, followed by Puerto de La Union Central. The Cutuco Port had been inactive since 1996 and underwent renovations in January 2005, making it the most important port infrastructure project in over 30 years as it would double the cargo holding abilities of Acajutla (Puerto). It was inaugurated Puerto de La Union Central on June 21, 2008.By ocean, ships can travel from one of El Salvadors ports through the Panama Canaland on to one of many U.S. ports where it can then travel by train or truck to its destination. Cargo can also travel across El Salvador to either Honduras or Guatemala as both countries have seaportsalongtheAtlanticcoast.Crowleyisashippingcompany headquarteredinJacksonville,Floridawithcapabilitiestotransport merchandisefromElSalvadortoECRUsNewYorkCitylocation. CrowleywouldtransportECRUscargofromElSalvadortoaportin Guatemala where it would then sail to the Fort Lauderdale Port (Port Everglades) in Florida. Next the cargo would ship via motor rail to New YorkCity.ShipstravelfromGuatemalatoFortLauderdale3timesa weekwithatransporttimeof5days.Trainssetoutdailyandcargo willreachNewYorkin4days.Crowleygaveaquoteof$5,755for the transportation of a flled 40ft shipping container of apparel from El Salvador to New York City (Phone Interview).predominantly driven by food, fuel and energy related wares and El SalvadorsadoptionoftheUSdollarhashelpedtostabilizeinfation which is expected to increase by 1.9% in 2014, a much lower rate than surrounding countries (Country Intelligence 5). Exporting ExportingfromElSalvadorrequires7documentsincludingabillof landing, a cargo release order, a commercial invoice, a customs export declaration,apackinglist,atechnicalstandard/healthcertifcate andterminalhandlingreceipts(DoingBusiness).Accordingtothe WorldBankGroup,ittakes13daysandaround$980topreparea container for export: this accounts for document preparation, customs 48 49Textile IndustryElSalvadorhasbuiltaverticallyintegratedsupplychainandisthe onlyCentralAmericancountrythathasdevelopedafullsynthetic cluster, producing nylon, polyester and microfber fabrics which ECRU maywishtoutilizeatalaterdate(SpecializedTextiles).Apparel productioncostperminuteinElSalvadoris$0.10;whichinlinewith manyofElSalvadorsneighborsincludingtheDominicanRepublic and Guatemala. Mexico and Colombia on the other hand are more pricywithcostsaround$0.12-$0.14perminute.ElSalvadorstextile andapparelassociation,theChamberoftheTextile,Clothingand FreeZonesofElSalvador(CAMTEX),makesitsmissionTopromote, represent and support the textile, clothing and free zones of El Salvador, to strengthen their competitiveness, and is a valuable resource when sourcing and learning about the industry (CAMTEX).TheapparelandtextileindustryinElSalvadorhasbeengrowing; production saw an increase of 4.1% in 2013, while exports grew by 9% to 2.394 billion (Melara). The industry accounts for 44% of the countrys exports;brokendownfurther,fabricsaccountedfor64%,followed bysyntheticgarmentsandfbersat25%andwovenappareland fbers at 11% (Melara). 73,795 direct jobs were created in the industry duringOctober2013:a3%increasefromOctoberoftheprevious year(CAMTEX).ElSalvadorsagencyforPromotionofExportsand Investments (PROESA) held a seminar in November of 2013 with aims to identify new opportunities in the textiles and apparel industry with a focus on how to utilize benefts of the CAFDA-DR trade agreement (Salvadoran Government). Due to the textile and apparel industry accountingfor16.3%ofindustrialGDP(2013)and44%ofexports, itwasidentifedasoneofthesectorswithstronggrowthprospects intheshortterm(SalvadoranGovernment;Melara).Asaresult,the government will develop training programs to shift human resources focus to identifying new business opportunities in this sector. Climate AvarietyofnaturaldisastersaffectElSalvadortypicallycausingthe evacuationofthousands,thedestructionofinfrastructure,homes, buildings and land. These natural disasters could result in the destruction ofmanufacturingbuildingsortheevacuationofemployeesthat would render them unable to work, affecting product production and the ability for goods to be transported.El Salvador experiences two seasons;therainyseasonoccurringbetweenJuneandNovember, andthedryseason,betweenDecemberandMay.Duringtherainy season, fooding and landslides have proven to be risky. Deforestation has been a problem in El Salvador which increases its susceptibility to these occurrences as roughly 85% of the countrys natural land-cover has been removed: making 65% of the country vulnerable to landslides (Disasters Risk 19). El Salvador has been called the Land of Volcanos andhasover20volcanoes,3ofwhichhavebeenactiveinrecent yearsandhaveresultedintheevacuationofthousands(Disasters 50 51Risk20).ElSalvadorisknownforitsvulnerabilitytohurricanesand tropicalstormsaswellasforearthquakes,asitislocatedononeof Earths most seismically active regions (Disasters Risk 18-19). 52 53INDIASocial India has the second largest population in the world with around 1.2 billion people in 2012. The social environment is very stable and people live together harmoniously since many are religious and live their lives underthedoctrineofkarma(over80.5%areidentifedasHindus) Indian cultures have been perceived as diverse and exotic. There are 18 major languages in India. However, many Indians can speak English since it is the second offcial language. Hierarchy is infuenced by the castesystemandstillimportantinIndiansociety.Youngerpeople respecttheelders,andlowerrankemployeesalsohavetorespect their bosses and higher executives. India is still a male-dominated society where women have lower priorities and wages than their male counterparts. Poverty and healthcare are still major problems in India. Many water resources are contaminated in India, and air pollution is almost the worst in the world. Many people have diseases and are unable to obtain adequate healthcare (only 7-8% of the central budget is allocated for healthcare). Even though thecastesystemwaseliminated,peoplefromlowercasteancestry are still regarded as unclean and are given less priority and benefts thanhigher-statuspeople.Therearestillissuesrelatedtothelarge wealthgapanddisparitiesinthesocietythatcannotbeimproved within the short period of time (Marketline).EconomicIn 2011, Indias estimated GDP was $1.843 trillion with 7.8% growth rate. India economy has been improving and growing steadily in the past few 54 55years. Middle class populations are increasing in numbers and earning higherdisposableincomes.Foreignportfolioanddirectinvestment infowsalsohaverisensignifcantlyintherecentyears.Proposalsfor direct foreign investment are supported by the government and are also considered by the Foreign Investment Promotion Board.US-Indiabilateralmerchandisetradein2008wasalmostnearly$50 billion.MajorUSimportsfromIndiaincludetextiles,ready-made garments,internet-enabledandITservices,gems,leatherproducts, andchemicals.TheUSisalsoIndiaslargestinvestmentpartnetwith a13%share.Indiaexportshavealsogrownataveryfastpace accounting for 23.9% of the country GDP in 2012 (Marketline)However,Indiaseconomicgrowthisconstrainedbyinadequate infrastructure(usuallyelectricity),acumbersomebureaucracy, corruption in service sectors and governments, regulatory and foreign investmentcontrols,andhighfscaldefcits.Therisingfscaldefcits, infation,andexternaldebthaveresultedindepreciationofrupee and negative credit rating (BBB-) Indias stage of economy has rather been a mixed between positive and negative aspects. PoliticalAccordingtoGlobaledge,theIndiangovernmentisconsideredas federal republic, however the central government has greater power in relation to its states and also has adopted a British-style parliament system; the parliament consists of Council of States (Rajya Sabha) and House of People (Lok Sabha). The President of Indian is elected by an electoral collage of elected members from both houses of Parliament and the legislatures of the states for a fve-year term (CIA). India has 28 states and 7 union territories. President Pranab Kumar Mukherjee is theChiefofState,andPrimeMinisterManmohanSinghistheHead of Government (Global Edge). The current diplomatic representative from US is Ambassador Nancy J. Powell (CIA). LaborIndia has the second-largest labor force in the world, which accounts around 487 million workers. In 2013, Indias unemployment rate was 8.8% with 29.8% of population below poverty line (CIA). Textile and apparel industry employs over 35 million workers and is also the second largest providerofemploymentafteragriculture.Manyunskilledworkers arewell-trainedintheirsectors.Thecurrentlaborcostinapparel manufacturing sector is $0.51 per hour; the overall wage is still higher than the same sectors in Bangladesh, Cambodia, Pakistan, Vietnam, SriLanka,andIndonesia(EmergingTextiles).Thegrowingnumberof young population in India implies the potential and active workforce in the world which looks positive for outsourcing for skilled and talented labors; more than 70% of population will be working age in 2025.Trade AgreementIndia has no Free Trade Agreement partnership with the US. However, 56 57the country has several bilateral trade agreements with other countries andwithinWTOsuchasAIFTA(ASEAN-IndiaFreeTradeArea)which allows tariff liberalization over 90% of products including textiles.The tradeagreementishoweverbenefcialtotheUScompaniesinthe way that they can gain beneft from cost reduction if they decide to use materials such as raw materials, fabrics, or components from one of the ASEAN countries, which will be delivered to India to be made into fnal garments. India also has SAFTA (South Asian Free Trade Area) and with the new government recently has agree to start on bilateral trade ties with the EU and Canada in the future. Risks ThoughIndiahasapotentialgrowthinmanufacturingandlabor force. There are still some problem associated with poor infrastructure andbusinessprotocolthatmightcreateriskstotheproductionand company such as punctuality and discipline issue.There are high risks associated with late inadequate shipment and time consuming process, which will tremendously cause the loss of proft in thebusiness.IneffcientimplementationofregulationsandCodeof Conduct is also another risk. Child labor, unhealthy and unsafe working environments, and unfair wages are still considered major issues. Many companies have a hard time identifying the transparency level of the suppliers since the production is done oversea. It is a huge risk in losing reputation of the company if any unlawful or inhumane practices are discovered at the partnered suppliersTextile and Apparel IndustryThedomesticapparelmarketinIndiawasworthabout$38billionin 2012. India is ranked as the sixth largest apparel exporter in 2013 with the total estimated value of $14.4 billion. The apparel sector accounts for almost 10% of the overall exports. India has been regarded as one of the best producers of cotton fabrics (especially hand-loomed) as wellasrawcottonexporters(ranking#2in2013)inwomenswear, blousesandIndianethnicwearcomprisethelargestsegmentwith 75% share of the entire segment. The market is expected to grow at 9%forthenextfveyearsatthevalueof22.3$billion.Themonthly wages of a worker in the Indian apparel industry was approximately $169.67 which was also the fourth lowest paying following Bangladesh, Cambodia, and Haiti.Theoverallapparelindustryisexpectedtogrowatacompound averagegrowthrateof9%overthenextdecade.In2012,there wasanintroductionof10%excisedutyonbrandedapparelwith anabatementrateof55%.Therearealsodifferencesintaxrates dependingonthestates;thegovernmentinDelhi,UttarPradesh, Punjab, and Rajasthan charge a VAT of 5% on apparel, while other statescharge4%.Theservicetaxwasalsoincreasedby2%in2012 (Gugnani) The rise in taxes resulted in increased average sales price of 58 59apparel by 5-6% Most retailers had encountered a negative growth of 4-5% in sales during the fscal year of 2012 (Gugnani). According to Indian Ministry of Textile, the textile and apparel industry inIndiahavestronggrowthindemandandpolicysupport,which hasresultedingovernmentinvestmentschemes(TCIDSandAPES) andcommitmentofbothdomesticandforeigninvestments($140 billioninvalue)(IBEF).TheTechnologyUpgradationFundScheme (TUFS) provides budget of $0.5 billion for modernization of the power loom sector and stress more on mechanization (IBEF). The FY14 union budget also provides infrastructure support and tax sops and fnancial packages that help reducing duty for imported textile and machinery and eliminate excise duty for the cotton and manmade garments as well (IBEF).Why we didnt choose India: Even though India is known for cheap labor costs (in general), ready-made apparel industry, woven and knitted cotton fabrics, there are some factors that made us had to eliminate India over other smaller countries like Sri Lanka and El Salvador. First problem is poor infrastructure, especially electricity and roads; losing power during the production process might create huge loss of time and profts, and might also delay the production. Poor road condition and environment also create problems with delivery as well. Second problem is poor atmospheric and working environment; India is known for having very high level of air pollution and contaminated water resource, water is needed in production and its vital that its clean before manufacturing into actual products. Dirty environment and poor air condition will also affect the workers health which might result with problems in the future. The third issue is about sourcing guideline in which many places in India still dont comply to the code of conduct honestly and child labors and unfair payments to the workers still happen everywhere. India also has no free trade agreements with the US which means it is automatically subjected to 15.4% tax over every product imported to the US. Though the suppliers that ECRU contacted are very professional and have higher rank scores on ECRU supplier ranking, their price quotes are very high compared to ECRU initial estimated costs.60 61PHILIPPINESINTRODUCTIONThere is more involved in the design process of apparel than sketches and swatches.After all of the designs and measurements have been made,itisrequiredtosourceamanufacturerwhowillbecapable offulfllingproductionneedsattherightprice,intherighttime, andincurringminimalrisk.Thepurposeofthisreportistoanalyze manufacturingopportunitiesinthePhilippinestodeterminewhere ERCUwillentrustitsdesigns.Wewanttokeeprationalfeasibilityin mindwhilealsonotcompromisingourcorevaluesandethicsinthe creation, distribution, and lifecycle of our proposed products. SOCIALThe total population of the Philippines as of June 2012 was 103,775,002, evenly divided between males and females with an average age of 23.1 years.According to philstar.com, about 40 million of these make up the labor force while the unemployment rate stands around 6.9% and the infation rate as of May 9, 2013, was at 3.2%. Because of their Spanish background, religion in the Philippines mostly consists of Roman Catholics (81%) and Protestants (12%), followed by Muslims (5%) and others (2%), which should not pose any serious restraints on conducting business.It is also convenient that in addition to speaking their native language,Filipino,thenationalsolistsEnglishastheirsecondoffcial language.62 63POLITICALInFebruary1987,thePhilippinesadoptedanewconstitutionthat instituted the presidential-style republican form of democracy, which resembles the U.S. model much more than the European parliamentary system. One key difference between the Philippines and U.S. systems is that the Philippines is a unitary republic, whereas the United States is a federal republic, with signifcant powers reserved for the states. In the Philippines,bycontrast;thenationalgovernmentisnotchallenged by local authority. The ratifcation of the 1987 constitutionthe fourth in the nations historyby national referendum signaled the countrys return to democracy following the autocratic rule of Fernando Marcos (196586). Politics in the Philippines is somewhat tumultuous. In February 2006,thepresidentdeclaredastateofemergencyafterquashing the attempted coup staged by the political opposition.The current presidentofthePhilippinesisBenignoAquinoandPhilipGoldbergis the current ambassador to the Philippines from the United States.ECONOMYTheeconomyofthePhilippinesisananomalyintheAsia-Pacifc regioninthatithaslaggedbehindothereconomies,suchasthose of Singapore, South Korea, and Taiwan. From a position as one of the wealthiestcountriesinAsiaafterWorldWarII,thePhilippinesisnow one of the poorest. Since the 1970s, which were a relatively prosperous decade,thePhilippineshasfailedtoachieveasustainedperiodof rapideconomicgrowthandhassufferedfromrecurringeconomic crises.Thispersistentunderperformancehasoccurredinspiteofthe Philippines rich natural and human resources.Thereasonsarerootedpartlyinhistory,partlyinpolicy.Asa legacyoftheU.S.colonialperiod,oligopolieshavedominatedthe economy,particularlyinagriculture,wherefarmlandcontinuesto be concentrated in large estates. In the post-World War II period, the Philippinespursuedastrategyofimportsubstitutionindustrialization, wherebydomesticgoodsaresubstitutedforimports.Thisstrategy requiredprotectionistmeasures,whichledtoineffcienciesand themisallocationofresources.Althoughsometradeprotectionist measures were relaxed in the early twenty-frst century, the Supreme Court continues to support restrictions on foreign ownership of land and other assets in effect since the constitution of 1935. These restrictions, pluswidespreadgraftandcorruption,havesuppressedinbound foreigndirectinvestment.Ahistoricallylowrateoftaxationonly about 15 percent of gross domestic product (GDP), partly as a result of widespread tax evasionhas led to underinvestment in infrastructure and uneven economic development.Althoughtradebarrierswerescaledback,industrialcartelssplitup, andlimitedreformmeasurestakeninthelatetwentiethcentury, political instability, continuing high levels of corruption, and resistance toreformsbyentrenchedinterestshavepreventedthePhilippines frompursuingaconsistentandeffectiveeconomiccourse.The 64 65industrial sector continues to decline relative to services, an economic bright spot in which the Philippines apparently enjoys a comparative advantage, although some argue that services represent an employer of last resort.As of April 13, 2014, one Philippine Peso (PHP) was equal to $0.023 (USD). In 2005 the services sector accounted for about 53.5 percent of GDP; industry, 31.7 percent; and agriculture, forestry, and fshing, 14.8 percent. GEOGRAPHYThe Philippines are made of about 7,107 islands located off Southeast Asia,betweentheSouthChinaSeaonthewestandthePhilippine Sea on the east.The major islands are Luzon in the north, the Visayan Islands in the middle, and the Mindanao in the south.The total area is about 186,411 square miles including about 185,168 square miles of land and about 1,243 square miles of water.The Philippines consists of volcanic islands, including active volcanoes, with mostly mountainous interiorssurroundedbyfatlowlandsandalluvialplainsofvarying widths along the coasts.Research on the Philippines by the Library of Congress indicates that the islands are also prone to foods, landslides, earthquakes,andtsunamis.Thisandthefactthattheislandsare located along the typhoon belt which experiences 15 to 20 typhoons a year, of which fve or six may cause serious distraction and/or death, makes the Philippines a very risky location to choose to manufacture ECRUs woven tops.TRADETheUnitedStatesandthePhilippineshavehadaveryclosetrade relationship for more than a hundred years. According to the Offce of the United States Trade Representative, the US meets regularly with the Philippines under the auspices of a Trade and Investment Framework Agreement(TIFA)signedinNovember1989.Severaladditional agreements have been signed under TIFA auspices, including a customs administration and trade facilitation protocol (2010), a memorandum of understanding to cooperate on stopping illegaltransshipments of textilesandapparel(2006),andamemorandumofunderstanding regardingtheimplementationofminimumaccesscommitmentsby the Philippines (1998). U.S.-Philippines Trade FactsThe United States is among the Philippines top trading partners, and it traditionally has been the Philippines largest foreign investor.Two-waygoodsandservicestradebetweentheUnitedStatesandthe Philippinestotaledto$22billionin2011.Exportstotaled$9.9billion; imports totaled $12.1 billion. The U.S. goods and services trade defcit withthePhilippineswas$2.2billionin2011.ThestockofU.S.foreign direct investment in the Philippines exceeded $5 billion.DatafromtheUnitedStatesEmbassyinManilaindicatesthatthe PhilippinesiscurrentlytheUnitedStates36thlargestgoodstrading partner with $17.6 billion in total (two ways) goods trade during 2012. 66 67Goods exports totaled $8.1 billion; goods imports totaled $9.6 billion. The U.S. goods trade defcit with the Philippines was $1.5 billion in 2012. Trade in services with the Philippines (exports and imports) totaled $5.2 billion in 2011. Services exports were $2.2 billion; services imports were $3.0 billion. The U.S. services trade defcit with the Philippines was $827 million in 2011. Exports and ImportsThe Philippines was the United States 33rd largest goods export market in 2012.U.S. goods exports to the Philippines in 2012 were $8.1 billion, up 4.6% ($355 million) from 2011, but down 8.3% from 2000. The top export categories (2-digit HS) in 2011 were: Electrical Machinery ($2.7 billion), Machinery($867million),Cereals(wheat)($618million),Flourand soybean meal ($511 million), and Aircraft ($453 million). U.S. exports of private commercial services (i.e., excluding military and government) tothePhilippineswere$2.2billionin2011,8.7%($173million)more than 2010 and 38% greater than 200 levels. The other private services (business, professional, and technical services) and travel categories accounted for most of U.S. exports in 2011.ThePhilippineswastheUnitedStates35thlargestsupplierofgoods importsin2012.U.S.goodsimportsfromthePhilippinestotaled$9.6 billion in 2012, a 4.8% increase ($436 million) from 2011, but down 31.3% from2000.Thefvelargestimportcategoriesin2012were:Electrical Machinery($4.0billion),Machinery($1.1billion),KnitApparel($617 million),Fats and Oils(mainlycoconut oil) ($532million),and Woven Apparel($531million).U.S.importsofagriculturalproductsfromthe Philippinestotaled$2.3billionin2012.Leadingcategoriesinclude: coconutoil($531million),rawbeetandsugarcane($107million), processedfruit($131million),treenuts($97million),andfruitand vegetablejuices($68million).U.S.importsofprivatecommercial services(i.e.,excludingmilitaryandgovernment)were$3.0billionin 2011, up 12.2% ($324 million) from 2010, and up 94% from 2000 levels. Otherprivateservices(business,professionalandtechnicalservices) travel and passenger fares categories account for most of U.S. services imports from the Philippines.InvestmentU.S. foreign directinvestment(FDI)inthePhilippines(stock)was$5.3 billionin2011,a1.1%decreasefrom2010.ReportedU.S.FDIinthe Philippines is mostly in the manufacturing sector.Philippines FDI in the United States (stock) was $114 million in 2011, up 10.7% from 2010. The distribution of Philippines FDI in the United States is not available. The Offce of the United States Trade Representative also indicates that sales of services in the Philippines by majority U.S.-owned affliates were $3.3 billion in 2010 (latest data available), while salesofservicesintheUnitedStatesbymajorityPhilippines-owned frms were $37 million. 68 69US & PHILIPPINES TRADE AGREEMENTThe United States and the Philippines have had a close trade relationship formorethanacentury.Thetwosidesmeetregularlyunderthe auspicesoftheTIFA,whichisthecoordinatingmechanismfortrade andinvestmentpolicydiscussionsbetweenourtwogovernments. TotalgoodstradebetweentheUnitedStatesandthePhilippinesis about $18 billion, up 41 percent since 2009.Services trade is growing rapidlyandexceeded$6billionin2012,alsoup41percentfrom 2009.U.S. foreign direct investment in Philippines is roughly $5 billion, concentrated in manufacturing.TheUnitedStatesandthePhilippinestodayconcludedatwo-day meetingundertheTradeandInvestmentFrameworkAgreement (TIFA), agreeing to a program of expanded engagement in coming monthsonbilateral,regional,andmultilateralissues.Themeetings werechairedbyAssistantU.S.TradeRepresentativeBarbaraWeisel and Philippine Undersecretary of Trade Adrian Cristobal.In addition, senior offcials from other agencies on both sides participated in the meeting, including Philippine Agriculture Department under Secretary SegfredoSerranoandEdgardoAlbon,ChairmanofthePhilippine Tariff Commission.Onbilateralissues,theUnitedStatesrecognizedtheconsiderable efforts the Philippines has made to strengthen its intellectual property regime and overall framework for protecting worker rights, two areas of focus of recent U.S.-Philippine cooperation.The two sides agreed toestablishanewworkprogramonlaboraffairsundertheTIFAto furtherourefforts.Inaddition,theUnitedStatesandPhilippinesheld detailed discussions of agricultural trade, including related to rice and meat, and these discussions will continue in the coming weeks.In response to Philippine interest in the Trans-Pacifc Partnership (TPP) agreement, the United States briefed the Philippines on the goals and objectives that the twelve TPP countries are seeking to achieve.The twosidesbeganaprogramoftechnicalconsultationstoprovide thePhilippinegovernmentthedetailedinformationitwillneedto consider whether to seek to join the TPP agreement.The Offce of the United States Trade Representative also found that the United States andPhilippinesalsoagreedtointensifycooperationonU.S.-ASEAN issues and on the trade and investment agenda for APEC, which the Philippines will host in 2015. 70 71CONCLUSIONThere are many benefts to come of manufacturing in the Philippines, however there are great risks, specifcally the unpredictable nature of their numerous natural disasters.The quality of their manufacturers is still unclear as far as meeting the standards of ECRU, however, I am very interested in the technology of creating eco-friendly and sustainable fber from pineapple and banana, which would certainly coincide with the ECRU values.In closing, the Philippines may not be a viable frst candidate in our search for a manufacturer, but it cannot be overlooked given its recent advances in technology and sustainability. Why we didnt choose Philippines: The Philippines was eliminated for many reasons.First, the political environment is not very assuring.More specifcally, the ease of corruption makes for a disheartening business climate.If the Philippines government is unreliable to their own business climate, they surely will not be fexible to foreign businesses.Also, the textile industry is not supported by the government and there are currently no trade agreements in place between the Philippines and the United States.In addition, the natural disasters in the Philippines are numerous and would not support ECRUs need to have a steady fow of product for our Basics line.There is a monsoon season that could be tolerable as long as we manage the amount of product being manufactured at that time, however there are also active volcanos, earthquakes, and tsunamis that could make product investment more of a risk than affordable for a small company like ECRU.Finally, of the fve countries researched, the Philippines had great potential in their manufacturing facilities, however there was little information to be found and contact was very diffcult to establish.The selection highlighted more disposable bag manufacturers, weavers, and sports bag manufacturers.Of the seemingly suitable manufacturers, none replied to ECRUs emails.The emails were either invalid or kicked back due to a full inbox.When phoned, the manufacturers failed to answer.Of those who had voicemails, none of the calls were returned - even when we provided our country code in the telephone number and spelled out our email address.All of these reasons, when compared to the other four countries, presented us with a situation where we saw it best to move on without the Philippines.72 73CHINAEconomic ClimateEconomy Structure and History Market socialism economic system GDP-real growth ranked 14 and GDP-purchasing power ranked 3 The economic development started since the economy reform in 1978Currency Use Yuan /RMB as currency unit Current currency 1 USD= 6.25 Chinese Yuan Currency rate is controlled by the governmentInfationInfation rate has a increasing tend Unployment Rate Current unemployment rate is 4.1% Stable near 4% since 2008Labor Cost Minimum monthly wage is $293, $0.085 per minute in Apparel Industry Rising minimum wage for couple times in past years Labor cost will continue in growthReform and Promoting Reform in 1978, joined WTO in 2001, Free Trade Zone in Shanghai 2013 Chinese governor state China rules out strong economy stimulus74 75Political ClimateVoice and Accountability Government controls over the freedoom of expression The Media is controled by the government as well Government lack of accountabilityPolitical Stability Taiwan and Tibet Indpendence issue Xinjiang Violence against governmentGovernment Effectiveness and Corruption Government effectiveness rated 60.7 (100 is highest) is at an acceptable level Goverment is corrupted Some companies violate the regulation and bribe the governors for avoiding punishmentCounterfeiting Chinese government lack of protection of Intellectual property Counterfeiting is a big isssue in Chinese Apparel industry China's Free Trade Agreements Name Effective Date Countries Textile and Apparel Related Regulation China-ASEAN FTA January 1st 2005 Indonesia, Brunei,Malaysia,Vietnam,Singapore, Burma, Thailand,Cambodia, Phillipines,Laos Using "negatvie list" method for FTAfor goods. Goods not on the negative list are regarded as regular goods.( woven apparel falls into the regular goods category) Tariff to the old members of ASEAN was removed since 2010 Jan 1st ( for regular goods) and Tariff to the new members of ASEAN will be removedin 2015. China-Pakistan FTA July1st 2007 Pakistan Most of the woven fabric falls in the list of "Zero Tariff to Pakistan"Detail on fta.mofcom.gov.cn -"zero tariff list to Pakistan" China-Chile FTA Apirl 13th 2008 Chile No tariff for apparel and textile China-New Zealand FTA October 1st 2008 New Zealand New Zealand will remove all the tariff for leather garment, knitting apparel, shoes in 2016 Jan 1st (part of them was removed in 2014 Jan1st) Since 2009 China has signed the preferential agreement for all wool and wool products imported from New Zealand and no tariff China-Singapore FTA January 1st 2009 Singapore No tariff for goods export from China to Singapore since January 1st 2009 No Tariff for 97.1% goods import from singapore since January 1st 2012 China-Peru FTA April 28th 2009 Peru The goods were divided into 5 different categories and most of the apparel and textile products fall into the first two categories and the tariff would be removed within 5 years after the FTAsigned.Mainland-Hong Kong Closer Economic and Partnership (CEPA)Arrangement 2003 Mainland-Hongkong "One country, Two system" No tariff Mainland-Macau CEPAArrangement 2003 Mainland- Macau "One country, Two system" No tariff China-Costa Rica FTA Nov-08 Costa Rica No tariff for 90% of the goods (both export and import) since August 1st 2011,Textile and Apparel falls into the 90% China-Iceland FTA April 15th 2013 Iceland No tariff for 99.7% of the goods export from china to Iceland, and no tariff for 81.56% of the goods import from Iceland to China. Textile and Apparel falls into these categories. China-Switzerland FTA July 6th 2013 Switzerland Reduced the tariff for textile and apparel that export from China to Switzerland The Asia-Pacific TradeAgreement (APTA) 1975 China,Bangladesh, India, Republic of Korea, LaoPeople'sDemocratic Republic and Sri Lanka 1767 Tariff lines originating from Bangladesh and the Lao People's DemocraticRepublic are given conventional tariff rates for exports to China. These countries are trading with a preferential tariff 0.5% to 5.0% lower than the applied MFN tariff for 50-63 HS Trade Agreeements76 77Textile Industry The Apparel/industry was one of the industries that Chinese government choicetostartfortheopendoorpolicy(thereformin1978)andit isoneoftheessenceindustrysincethen.Theindustryhadasignof continuinggrowthsince1979,theaverageannualgrowthrateof total value of textile and clothing output was 13.2%, the total industrial value increase about 7% every year from 1997 to 2002 (except the year Asian fnancial crisis,1998).And after 2002, the year China joined the WTO, most of the products in this industry grow even faster. (See detail in the image 4.7)Currently, China is the biggest player in producing apparel and textile including cotton, yarn, wool fber, cotton fabric, silk fabric,garments,chemicalfbersandknittedgoods.(Detaildatain the size section) It has a trend of reduced employment in the apparel/textile industry, however, it is a sign of development in productivity and effciency. The industry will be continuing in growth, and with the rise of labor cost and advancing technology it has a trend of entering the high-end market section.The Chinese textile market has a total value of 161.7 billion dollars (2012) andinthepastfveyearstheCAGRis10.8%.TheFabricsaccount 76.5% of the total and yarns account for 23.5%. In Asia-Pacifc industry, it accounts 41.0% of the total. (Marketline)Position in the CountryApparel and Textile industry is one of the pilar Industry in China since the release of open door policy. Since then, China gained a substantial marketshareintheinternationalapparelandtextiletrade.In1980, China was accounting for 4.6% of the worlds total exports, and ranked as number nine and then since 1995, it ranked number 1 in the world and the growth steadily continued. (Qiu) From China National Textile and Apparel Council statistics, the value of China exported garment and textile products worth $42.4 billion in frst two months of 2013 and it was 34.1 percent higher than the same period in 2012 and 8.3 percent higherthanthegeneralexportgrowthinthecountry.(Xinhua)All thesedatashowedevidenceoftheimportanceofapparel/textile industry in China and its steadily growing trend.Government Support &WTOTherearethreemajorsupportstotheapparel/textileindustryfrom government,sincethereleaseof11th5-YearPlanfortheTextile Industryin2006bytheStateDevelopmentandReformCommission. These policies are, develop the innovation and building Chinese brand totheworldmarket,andimprovethetechnologiesandequipment andrestrictingineffcientpolluting.(Qiu)Anotherimportantaction madebythegovernmentwasbeingmemberofWTO.SinceWTO allowMemberstoseekresourceinWTOorganization,itbenefted ChineseApparel/Textileindustrybecauseofthelimitationreduction on exporting.78 79Reasons for BusinessChina is known as the biggest manufacturer in the world especially in apparel industry. There are several reasons made China to be the frst choice of manufacturing for their garments. First, China has the biggest textileindustry,whichisthenatureadvantageformanufacturing apparel. China produces bulk amount of silk, cotton, and wool. Besides, China has Free Trade agreement with Australia (known for best quality wool) and could import wool from Australia without tariff and FTA with Peru for high quality cotton, Thailand for high quality silk as well. Second,Chinahasabundantexperienceofexporting.Chinaisthe biggest exporter and second largest importer. Since the revolution in 1979,Chinesegovernmentstartedtosupportinternationaltrading. Nowadays, they are really experienced in trading internationally and strong government support. Thirdly, Sophisticated logistic system and variouschoicesofsuppliersareotheradvantagesofmanufacturing our garments. China has more than 1500 apparel manufacturers and many of them also provide P.O service and clear customs for customers. This could bring convenience to us for avoiding extra process to bring the merchandise into U.SCOUNTRIES - SWOT ANALYSISSWOT ANALYSIS Strength- Green Conscious -Sufficient Labor Force- Strong Connections with Customers- High Standards For Quality and Craftsmanship

Weakness- 30-Year Civil War Ended in 2009 - Sri Lankan People Lost Trust in Government- Strict Business Etiquette to Follow When Conducting Business

Opportunity -Becoming Number One Apparel Exporter in World -Political and Economic Stability -Leaders in Green and Sustainable Manufacturing

Threat- High Amount of Debt - Losing Revenues After War- Much Competition Throughout the World- Monsoon and Typhoon Season 9 Months/Year SRI LANKA80 81SWOT ANALYSIS Strength-Dollarized -Close ties to the US -Stable labor force -$0.10 /min manufacturing cost -Government support for apparel and textile industry-Part of CAFTA-DR

Weakness-Gang violence-Corruption-Costly transportation-Weak accountability of government -Apparel focus is predominantly on knitwear and synthetics

Opportunity -Elimination of tariffs with CAFTA-DR -Government held conference to identify opportunities in Apparel sector -Close proximity could result in receiving product quicker -Recently rebuilt port may become a hub for transportation Threat-Prone to natural disasters -Political uncertainty with newly elected president

EL SALVADORINDIA SWOT ANALYSIS Strength - Skilled and specialized labors in apparel sector.- Second largest young workforce in the world- The largest cotton producer as well as cotton products.- Supportive foreign policy- Many English spoken professionals- Cost advantage

Weakness - Poor infrastructure- Inadequate discipline and management- Corruption- Weak implementation on compliance in code of conducts- Unclean environment- Uncertain time managementOpportunity - Ease of investment- New government supporting Free Trade Agreements and other policies- Improving economy- Readymade garments dominate exports- Rising incomes and growing middle-class- Increase in exports Threat - Low proportion of high technology exports- Increasing air pollution- Recent terrorisms discourage investors INDIA82 83SWOT ANALYSIS Strength-High growth potential-Young & growing labor force-Developing textile technologies -Logistic convenience

Weakness-Corrupt government -Long lead times- Limited product placement -No Trade Agreements with the U.S.

Opportunity - Free Trade Zone, remove trading barriers - Continuing trend for industrialization- Opportunity for investment Threat-Natural Disasters -High inflation rate-Currency manipulation allegation-Government Restriction

PhilippinesSWOT ANALYSIS Strength-High growth potential-Sufficient Labor Force-Leading position in the industry-Government support for apparel and textile industry-Logistic convenience

Weakness-Unstable government -Lack of Intellectual Property right protection- Weak accountability of government-High tariffOpportunity - Free Trade Zone, Remove trading barriers - Continuing trend for industrialization- Huge market for investmentThreat-Increasing labor cost -High inflation rate-Currency manipulation allegation-Government Restriction CHINA84 85 Thefactorswetookintoconsiderationtocomparethecountries for placing our products are listed in the chart. Overall, El Salvador hasthehighestscore,followbyChinaandIndia,SriLanka,and Philippines was rated to be the lowest. Webrokedown6factors,includingcommunicationconvenience, textileindustrycondition,laborcost,tradeagreement,overall atmosphere in trading apparel and location, to evaluate the benefts for each country. Based on this evaluation chart, we rated China, India and El Salvador to be the higher ones. China has the most sophisticated textile industry and FTA with many other countries could with the textile-supplying sources. India has the cheapest labor cost compare to other countries, and communication convenience. El Salvador is the nearest countrytotheUnitedStatesandhasassignedCAFTAwiththeU.S. Philippines and Sri Lanka have fewer benefts.COUNTRY RANKINGS86 87 Weevaluatedcountriesbusinessclimatebasedon5aspects,the logisticperformance,leadtimetoexport,easeofdoingbusiness, government support, opennes to foreigners.China and Sri Lanka were rated to be highest countries, India and El Salvador were slightly lower, Philippines has the lowest score majorly because apparel industry is not supported by government and people are more likely to make money in other industries.CostIndia has the lowest labor cost among these fve selected countries, whichis$0.080perminuteforapparelindustry,and$200dollarsper month for general minimum wage.China is the second lowest, $0.085 perminuteand$240/monthminimumwage,howeverbecauseof thecontinuinggrowthoflaborcostrecentyears,Chinawasrated thesameasPhilippinesandSriLanka(around$0.10perminute).El Salvador was rated slightly higher than China, Philippines and Sri Lanka because of the exemption of tariff that lower the total cost.Government Generally, these fve countries government overall are not in positive position, and each country has its own issues. The Chinese government has a lack of accountability, over control of media, lack of transparency and has some corruption issues as well.Sri Lanka just ended the Civil war in 2009, the government lack supports by citizens and has corruption issues as well. The Philippines government is heavily corrupted and has many embezzlement issues. El Salvador has a newly selected president withanti-USassociates,andthegovernmenthasforeseeninstability concerns. So, these four countries were all rated as 5. Comparatively, Indiahasamorestablegovernment.Indiahasanewgovernment with promising bilateral trade ties but some corruption issues still exist.88 89LocationIndia, Sri Lanka, and the Philippines are all located in southwest Asia and have long lead-times for shipping merchandise to the U.S. China is closer to the U.S and has a more sophisticated logistic system which made Chinas rating 1 point higher than the other three countries. El Salvador, located in Central America, has the advantage of having the shortest leading time. Thecomparisonfactorsofrisksforselectedfvecountriesarelisted inthechartaboveandevaluatedthreatsfromtheseaspects.Each country has its own issues and generally China, India and El Salvador have fewer risks for conducting business.Social Stability Factors such as, the happiness of people in the country, uprisings, war, gangviolence,populationgrowthweretakenintoconsiderationto evaluatesocialstabilityoftheselectedcountries.Chinasbiggest concernforsocialstabilityistheinternalterroristthreats,andthe Xinjiang violence. The Tibet independence issues are also infuencing 90 91theChinesesocietyinaverynegativeway.Indiahasinternaland externalterroristaswell.InSriLanka,citizensarenothappywiththe newgovernmentthatjustestablishedafterthecivilwar.Themajor concernforElSalvadorssocialstabilityisthegangviolence,and thecrimeandviolenceisthreateningthesocialdevelopment.The Philippines has a more stable society with no big threats compared to other four countries.Sourcing GuidelinesSriLanka,thePhilippines,andElSalvadorcompaniesallhave acceptable sourcing guidelines that match with ECRUs, especially Sri Lanka which known for green production. Chinas sourcing guideline isnotmatchinginternationalstandardandhadseveralissueswhile trading, but the latest news indicate the government is enforcing the labor laws and trying to improve the current condition. India has child labor issues but the overall sourcing guidelines control is not as bad as China.Textile IndustryAmong these fve countries, China has the biggest strength in textile industry with abundant raw materials like silk, cotton and wool. Besides, theChinesegovernmenthasalsoinvestedlargeamountsofmoney inpurchasinghighqualityfacilitieswithnewtechnology.Indiaisthe second strongest, it has abundant raw materials as well and the overall industry is in a high growth condition. The supply for raw material in Sri Lanka is not as strong as China and India, but they have many factories andtextile/apparelindustryistheirbiggestindustryinthecountry. El Salvador is specialized for producing knits and synthetic textile but lack of raw materials and versatile for production. The Philippines was rated to be lowest because of the textile and apparel industry, which is not supported by the government and in a slow development pace especially in infrastructure.Trade AgreementsEl Salvador is the only country that has a Free Trade Agreement with U.S. The CAFTA-DR gives free trade if all parts of product are sourced in a participating country. No quotas on imports to U.S.China has 12 FTA with other countries, like Australia, Peru, ASSEAN (south east Asian countries) that could bring benefts for sourcing materials from othercountries with lower costs. India only has FTA with ASSEAN and negotiation FTA with Canada and EU countries. Sri Lanka has FTA with Pakistan and India. Philippines has no trade agreement could beneft apparel and Textile industry92 93SUPPLIER ANALYSISSri Lanka Brandix Lanka Limited Pvt. Ltd. Hirdaramani International Export Pvt. Ltd. Eam Maliban Textiles Pvt. Ltd.El Salvador Industrias Merlet S.A. de C.V. Picacho S.A. DE C.V. Vexsal, S.A. De C.V.Supplier SelectionSuppliers Highlights & Textile IndustiesCountry SelectionRatings SpreadsheetIndia Karle International Ltd. Mira Exim, Ltd Eves Fashion Philippines Reliance Apparel & Fashion Manufacturing, Inc. Hamlin Industrial Corporation Excellent Quality Apparel Inc. China SC International Garment & Accessories Ltd. Jiaxiang Jingle Fashion Hangzhou Ourun Fashion Co. Ltd.Countries with Top 3 SuppliersSRI LANKA - SUPPLIERSSri Lankas apparel industry is the highest contributor to the Sri Lankan exports as well as the countries over all economy. The manufacturing industry has grown signifcantly in the past three years and now employs 600,000workers.SriLankabeneftshighlyfromitspositioningatthe intersection of the major trade routes between Africa, South and East Asia, Europe and the Persian Gulf. The manufacturers and factories in Sri Lanka have won numerous awards for their Green practices and are setting the bar very high for other top manufacturers in countries aroundtheworld.SriLankamanufacturesapparelforcompanies ranging from high end to low end, including Burberry, Fifth and Pacifc Companies, Ralph Lauren, Levi Strauss, Nike, Patagonia, Guess, Gap, Banana Republic and many more. (Panjiva)94 951) Brandix Lanka Limited Pvt. Ltd.409 Galle Road, Colombo 3Sri Lanka Phone: +94 11 4727222Fax: +94 11 2575485Email: info@brandix.comwww.brandix.comSpecialization: Woven, Knitted Garments, Intimates and Activewear BrandixisthelargestapparelexporterinSriLanka.Thecompany openeditsfrstplantin1972andtheynowoperate42plantsacross theislandandemployover47,000individuals.Thecompanysends about 80 shipments a month and they also create their own buttons, thread, fabric and hangers in house. Brandixs customers include Gap, Old Navy, Lands End, Banana Republic, Lucy Active Wear and Diesel USA. (Panjiva)The company has very strong ties to creating green, environmentally friendlyfactoriesandhavecreatedtheworldsfrstevenLEED Platinumratedmanufacturingfacility.Brandixvaluesintegrity, teamwork,customerservice,learninganddevelopment,ownership andcommitment.Thecompanysvaluesandcommitmenttothe environment match Ecrus company make up seamlessly. The fact that this company has worked with well known brands and goes above and beyond to make the customer, as well as their employees happyissomethingthatcertainlyresonateswithEcru.(Panjiva) (brandix.com)2) Eam Maliban Textiles Pvt. Ltd.261, Siri Dahmma, MawaathaColombo, Sri LankaPhone: +94 1268 6391Fax: +94 1269 9513Email: nelum@triburgsl.comwww.maliban.comSpecialization: Blouses, Shirts and BottomsEam Maliban Textiles opened 38 years ago in 1976. The factory delivers anywhere from 20 to 200 shipments each month and produced a total of 1200 shipments in 2012. Their customers include Gap, Lands End Joseph A. Banks, Banana Republic, Burberry, Brooks Brother and RalphLauren.ThecompanyispartoftheGarmentsWithoutGuilt Organizationandadherestoastrictcodeofethicalguidelinesand practices to develop their products economically. (Panjiva)Thismanufacturertakespartincorporatesocialresponsibility andmaintainssustainablelevelsofwater,chemicalandenergy usage, practices safe waste disposal and continuously acts to improve theircarbonfootprint.EamMalibancontributesmuchofitsefforts 96 97toimprovingthecountry,communityandlifestylesofitsemployees and offers them and their families many benefts outside of the work environment. (Panjiva)Eam Maliban is committed to producing world class products, andagaintheywouldbeagreatmanufacturerforustoworkwith. Theyhavesuppliedtotopretailers,onthesamelevel,qualityand price points of our garments. But, they also have a strong social, economically and philanthropic commitment to their country, their community and their workers, which is very important to Ecru. (Panjiva) (maliban.com)3) Hirdaramani International Export Pvt. Ltd.Level 23, West Tower, World Trade CenterEchelon Square, Colombo, Sri LankaPhone: +94 77 7744180Fax: +94 11 2446135Email: vinod@hirdaramani.comwww.hirdaramani.comSpecialization: Woven GarmentsHirdaramani International Export has been in business for 120 years and operates 28 factories in Sri Lanka, Bangladesh and Vietnam. The Sri Lankan Factory opened in 1954 and has grown to reach a capacity of 1 million garments per month. The facility delivers about 250 shipments each month. Their customers again range from high-end to lower end but the facility mainly specializes in woven garments. Their customers include,Levis,Patagonia,TheNorthFace,Guess,FifthandPacifc Companies, Liz Claiborne, Ralph Lauren, Nike, Eddie Bauer and many more. (Panjiva)Thecompanysmainfocushasalwaysbeenonft,styleandquality andtheyhavebeencalledthepioneersintheapparelindustry. Hirdaramanihasahighfocusoncorporatesocialresponsibilityand has become the frst carbon neutral factory in Asia. They are constantly lookingfornewwaystocutbacktoimprovetheircarbonfootprint and help the environment. Hirdaramani also adheres to a strict ethical code of conduct and standards. The company offers free healthcare to their employees and their families, they offer free training programs andleadershipopportunitiesforstaffmembersandareconstantly investing back into the community in local sports and schools to help further the country as a whole. (Panjiva)ThismanufacturerwouldbeperfectforEcru.Theiramazing sustainabilityactandtheirmotivationtocutbackonemissionsand help save the environment is something Ecru is very passionate about as well.Creating a business that has strong integrity and gives back to the community is what Ecru has made it our mission to do. Creating garmentswithsuchasustainableandphilanthropicmanufacturer likeHirdaramaniisexactlytherightpartnertohaveonourmission. (Panjiva) (hirdaramani.com)98 99EL SALVADOR - SUPPLIERSElSalvadorhas62suppliersthatmanufactureapparel,15ofwhich manufacturewomensapparel.Manyofthemanufacturerslacka website and several show inactivity in recent years on Panjiva. Although El Salvador produces both woven and knit apparel, the woven apparel is predominantly for bottoms, childrens wear and mens button down shirtingwhileknitapparelhasgreaterdiversityandisproducedin much larger quantities. 1) Industrias Merlet S.A. de C.V.Merlet was established in 1980 and specializes in knitwear, loungewear and active-wear but also produces women, misses and juniors blouses (Merlet).TheyarelocatedatIndustriasMerlet,S.A.deC.V.Calle Why we selected these manufacturers:When looking at these manufacturers it is clear that they are all very concerned with the quality and craftsmanship of their garments as well as their ethical standings in the workplace and with the environment. BecausebothSriLankaandEcruveryinvestedinkeepingthe environment safe, this country and its apparel facilities is a very strong contenders for manufacturers Ecrus womens woven tops. Due to the fact that not all of these manufacturers specialize in woven wear, we have narrowed down the selection to the top three; Hirdaramani, Eam Maliban and Trendy Wear. 100 101Circunvalacin,PolgonoA#3,UrbanizacinIndustrialLaLaguna, Antiguo Cuscatln, La Libertad, El Salvador, C.A. and can be found onlineathttp://www.imerlet.com/.MerletsVisionisTobecome aleadinginternationalapparelcompany,providingintegrated productioncapabilities,designandcommercializationserviceswith the highest quality standards; thus satisfying our customers demands in a prompt, effcient and reliable manner, which permits us to enhance and support the economic and social development of our associates andCountry(Merlet).Theyarewelldevelopedinknitapparel andcapabilitiesincludedesign,development,manufacturingand distributionoffabricsandapparel.CustomersincludeLeviStrauss, Tailgate Clothing Co. and Carhartt. Merlet has experience with over 1,754 shipments and is able to produce 400,000 units/week, while lead time varies between 2-12 weeks (Technical Profle). Merlets values appear to be in line with that of Ecrus as they practice nondiscriminationandequalopportunitiesandvaluesafetyand hygienethroughtheconductionofinternalandexternalaudits. Theydonotemployanyoneundertheageof18andabidebyall governmentlawsincludinghoursofwork,overtimecompensation, minimum wage and fringe benefts. 2) Picacho S.A. DE C.V. Picachoisawovenapparelmanufacturingcompanylocatedat Km.26.5CarreteraaSantaAnaLaLibertad,ElSalvadorwhichwas establishedin1992withamissiontobecometheregionalleaderin qualitydressshirtmanufacturing.In2006PicachomergedwithBVM whichhastheircorporateheadquartersinNewYork.Picachos website can be found at www.picacho.com.sv/home.htm and more information can be found at www.B-W-A.com under manufacturing. PicachoscustomersincludeBenWatcherAssociateswhichhas ordered over 900 shipments primarily of mens poplin shirts, Liz Claiborne, LLBean,Dillards,DKNYandIzod.Themajorityoftheirordershave beencottonshirtingalthoughproductsincludewovensportshirts and blouses, high end security uniforms, sleepwear and loungewear. Althoughtheirordersarepredominantlymenswear,theyproduce womensandchildrenswearaswellastheirmaingoalistobe fexible, to respond quickly and effciently, making sure that your order isprocessedpromptlyandaccordingtoyourexactspecifcations (ProductsandServices).Theircapacityis350,000unitsamonthand 50,000unitsperweekspecifcallyinwovenshirts(Manufacturing Specs). Lead times for garment production are 30 days from date of fabric received at the factory and garments are shipped FOB from El Salvador or LDP from BVM public warehouses in Miami Florida (http://b-w-a.com/manufacturing-2/ ).Productionfacilitiesincludeasewingroom,acuttingroom,a trims warehouse, a fabric warehouse, a product development offce and an administrative building. The company strongly believes in in the well-being of their employees and invests in them through the offering 102 103of a healthcare clinic where employees and their families receive free medical attention, a community school for the children of employees ages 5 through 17, a free daycare open to the community as well as employeesstaffedbytrainednannies,acafeteriaandbakeryand adiscountstoreinadditionathavingrecreationfacilitiessuchasa soccer feld and volleyball court (Social Responsibility).3) Vexsal, S.A. De C.V.Vexal is a manufacturing company which specializes in mens woven shirts. Of the 242 shipments that appear on Panjiva, 170 utilized cotton fabric,while53includedwovenshirts.ClientsincludeWal-Mart,Nu ImageFabrics,ParisAccessoriesIncandBenEliasIndustriesCorp. Vexal is located at Carretera Panamericana Ote Km 15 San Martin and although they lack a website, they were recommended to me by the Vice President of Pro Dept, Ali Gitomer. In speaking to Roberto Bonilla, Ilearnedthat Vexalhasbeen inbusinessfor 22yearsandproduces 60,000units/weekwitha2.5weekl