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Market Focus: Textiles

It is very difficult not to sound like a broken record when describing the used clothing and textiles market at the moment. I would like to say that everything is all right but that is not true.

Values for used clothing are continuing to decline. Some collectors are paying less than 30p per kilo for their charity shop-grade clothing, which is about half the amount that was being paid less than three years ago, and textile bank grades have experienced a similar-sized fall in value. If a charity or local authority is getting 25p per kilo from their textile bank partner, they are doing very well.

But it is not just the headline price that is of concern. In the past, because of the relatively high value of used clothing, collectors were able to offset some of the profits generated by these grades to collect lower grade textiles for recycling which generate little or no profit.

However, as profit margins are continuing to be squeezed, collectors are not only retracting their collection areas but also restricting the range of materials they collect. In addition, whereas a few years ago there was competition for collections across the UK, there are now areas where only one collector operates.

Where this is happening, the viability of collections under current market conditions is on a knife edge. If a collector cannot make the collection pay, they will either have to lower their prices further or withdraw from the area altogether.

Recently Draig Tex, a social enterprise in north Wales, announced that it was being forced to close due to a drop in the demand for used clothing overseas. The threat of further closures remains highly likely.

We have also seen a mattress mountain that has blighted a picturesque Kent village hitting the regional news headlines because the processor failed to secure a market for the recycled fibres. I understand there are several other mattress recyclers that are experiencing similar issues but as yet have avoided the attention of the media.

There are clearly severe market failures across the used clothing and textile recycling sector and, without a further injection of finance, the industry will not be able to deliver on the UK’s ambition to divert more textiles away from disposal and to make a significant contribution to the circular economy.

Furthermore, it seems unlikely that such finance will be realised through any turnaround in the market. Recently, for example, Zimbabwe banned imports of used clothing. In itself, Zimbabwe is a small market for UK exporters. But what is more worrying is that it is potentially setting a precedent for the much bigger East African Community (EAC) member states of Kenya, Uganda, Tanzania, Rwanda and Burundi.

At the last ordinary summit of the EAC heads of state, a decision was made to evaluate the possibility of banning imports of used clothing among all members and a report will be presented at the next summit in November. While some in the trade are saying “they have heard it all before”, others who are close to EAC ministers are saying that things are different this time.

The Textile Recycling Association is working with stakeholders to lobby EAC politicians in an attempt to keep this important market open. It is clear that we need to help them to understand that we need their business, and that stakeholders in the EAC countries are very important to our sector and are highly valued. Perhaps we have not been good at this in the past and now is the time to address this.

Even if we were to get a positive decision from the EAC, it is still unlikely to result in a reversal of fortunes for the sector. Numerous factors were already affecting the market before this issue came to light, and it could take many years to get back on track.

So if the market is not going to supply the additional finance needed to divert more textiles away from disposal, where is it going to come from?

Retailer H&M recently announced a €1m scheme (about £725,000) in an effort to engage innovators, technologists, scientists and entrepreneurs to find a solution to waste and pollution in the clothing industry. And C&A has launched its own €100,000 initiative which is seeking innovations for building a fairer, more sustainable textile industry.

It seems as though both these major retailers understand that they need to take more responsibility for the items they put on the market to improve their sustainability, which will not be delivered by the market itself.

Such voluntary initiatives are of course welcome. But in France they have successfully managed to introduce a legally binding Extended Producer Responsibility levy. More than 95% of retailers and manufacturers are now complying with the law, and with the levy set at an average of around 0.2 cents per garment, the impact for those that have to pay it is negligible. The smallest retailers pay a flat fee of €33 a year.

Yet the finance generated has enabled collection rates to shoot up and 18 new R&D projects – including open loop, closed loop and separation and preparation techniques – have been supported with funding of between €25,000 and €286,000.

It seems that if the UK is to improve the sustainability of its clothing supply chain, we may need to look at what other countries are doing in to see if there is anything we can learn.  

Alan Wheeler is director at Textile Recycling Association

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