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Action plan will boost UK sector under pressure

Handbook clothes rack sign 2

2015 may go down as perhaps the worst year in a generation for the performance of the UK’s used textile industry.

We reached the top of a mountain in terms of prices around the end of 2012. We stayed at the summit for a few months to admire the view and, since starting our decent in early 2013, the pace picked up. But now fog has descended and we have taken a different route down, so it is difficult to tell when we will reach the bottom of the used textiles mountain.

If anything the fall in values has picked up in recent weeks, at the time of writing at the tail end of 2015. Warehouses are full when they should be empty, with the last shipments of used clothing just about to be sent on their way to export markets in time for Christmas. It does not bode well for the new year when, traditionally, the empty warehouses would be restocked as the public clear out their wardrobes to make way for the new clothing they got as gifts or in the sales.

The news from the export markets also does not look good. In Ukraine, an important export market for the UK, the Government looks set to replace current import tariffs with a hugely increased ‘entry price’, equivalent to 30% of the value of products if they were being sold as new. This is due to take effect from 1 January 2016.

We are also awaiting news of the decision by East African Community members on whether they will choose to ban imports of used clothing.

These governments believe their proposals will protect local jobs in textile production. This is unlikely to happen as the popularity of used clothing has no significant impact of the viability of textile producers in a particular country.

Textile producers have to compete on the global market and, if any government is serious about supporting their own industry, they need to address how their textile producers can compete with those in China or Bangladesh, where labour costs are often much lower and working conditions poorer.

There are a number of interesting developments taking place globally which, at some point, should lead to a significant breakthrough in new markets for recycled textiles. If this happens, then the opportunities to create sustainable jobs for any country that is engaged in our sector will be significant.

The currency markets have also not worked in our favour. Important currencies in Africa and eastern- Europe have more than halved in some cases. While this of course has an impact on all exporting countries in western Europe, it has hit UK exporters much harder for two simple reasons.

The first is that the value of the euro has continued its fall against the pound, so the value of UK exports has been more adversely affected than the eurozone. Second, British used clothing has traditionally been highly valued and perceived as being of better quality than that from the continent.

We are very good at buying new clothing and discarding hardly worn items, so there is some sound reasoning behind this. But all new clothing is coming from the same garment producers in the Far East and are being sold by the same global high street retailers.

As the global market is squeezed, importers look at the price differences between us and other countries and recognise the similar sources. In many cases they then make the commercial choice to source more goods from elsewhere in northern Europe.

In these difficult times, we urge local authorities and charities to be patient and refrain from conjuring up unrealistic expectations. A representative from a well-renowned textile bank operator recently told me that one council had expected to receive an income from its textile bank collections that was more than three times the market rate.

If the authority believed it had been quoted such a price, either it had misunderstood what it was being told or it was being taken for a ride. Many councils are mistakenly under the impression that the best indicator of profitability is the headline rate per tonne. In fact what is most important is service level.

By regularly negotiating realistic prices and service level agreements with textile bank operators, councils will be able to ensure that a wider range of materials are collected on a regular basis with realistic incomes being generated. This is a much better scenario for all concerned and is something that the whole sector should be seeking to achieve.

A group of stakeholders from across the used textiles supply chain is now working under the auspices of the Sustainable Clothing Action Plan to produce guidance on textile collection contracts, which should be ready in spring 2016. I am confident that this will help to assist councils to achieve the best outcome for them and their textile collection partner.

Will we get the bottom of the mountain in 2016 and will values start to pick up? Only time will tell.

Alan Wheeler is director of the Textile Recycling Association

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