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AsiaInspection Q3 Barometer: Southeast Asia Sees Staggering Growth, Food Violations Continue

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AsiaInspection Q3 Barometer: Southeast Asia Sees Staggering Growth, Food Violations Continue

  1. 1. SOUTHEAST ASIA SEES STAGGERING GROWTH, FOOD VIOLATIONS CONTINUE ASIAINSPECTION Q3 BAROMETER
  2. 2. HONG KONG, JULY 8, 2015 ASIAINSPECTION (AI) A LEADING GLOBAL QUALITY CONTROL AND COMPLIANCE SERVICE PROVIDER THAT PARTNERS WITH BRANDS, RETAILERS AND IMPORTERS AROUND THE WORLD TO SECURE, MANAGE AND OPTIMIZE THEIR SUPPLY CHAIN, today announces its 2015 Q3 Barometer, a quarterly synopsis on outsourced manufacturing and the quality control services industry.
  3. 3. While the economy of China may be growing at its slowest pace in six years, GLOBAL BRANDS ARE READILY EXPANDING THEIR SUPPLY CHAINS TO OTHER LOW-COST DESTINATIONS IN ASIA.
  4. 4. GROWTH WAS STAGGERING IN NEARLY EVERY OTHER SOUTHEAST ASIAN COUNTRY. The overall trend in Southeast Asia, and the rate of growth outside of China is unprecedented, While the upward trend has been present there in recent years, AI is seeing demand like never before. Two years ago, China represented 91% of inspections, and today its share is 78%. said Sebastien Breteau, AI CEO. “ ”
  5. 5. Inspections in Cambodia grew at an unprecedented +227% year over year; and even the less known Pakistan showed a +47% increase. Vietnam, +172% Myanmar, +133% Indonesia, +114% Thailand, +102% Bangladesh, +81%
  6. 6. MYANMAR’S GARMENT INDUSTRY CONTINUES EXPANDING FAST. In the last two years, 100,000 new workplaces have been created in the garment sector. Foreign investment increased from US$ 300 million to US$ 5 billion between 2009 and 2015, an annual growth rate of 75.5%. 1 RELAXED TRADE BARRIERS FUEL GROWTH IN MYANMAR
  7. 7. Acceptable quality tolerances failed in 22% of inspection. This was better than that of Cambodia at 25%, India 28%, China 32% & Bangladesh 37%. This is likely a reflection of recent investment, and hence new infrastructure, coupled with strict oversight as buyers err on the side of caution.
  8. 8. VIETNAM – GROWTH CONTINUES WHILE ETHICAL SCORES IMPROVE Vietnam is now the world’s 4th largest garment exporter,2 and is working to increase its share of exports with major expansion plans for its garment industry and several free trade agreements. Performed Inspections Growth (Y-O-Y) Average Ethical Audit Score (H1 2014 -H1 2015) 8,06,5+178%
  9. 9. Some of that improvement can be attributed to the RECENT PROGRESS MADE IN VIETNAM’S LABOR LAWS, better worker representation,3 and efforts to increase safety awareness.4
  10. 10. LACK OF FOOD SAFETY REGULATIONS 2.2 MILLION PEOPLE DIE EVERY YEAR AS A RESULT OF FOOD AND WATERBORNE DISEASES. The scale and complexity of food supply chains greatly increase the risk of contamination and spread of disease, with enormous health and economic consequences.
  11. 11. The importance of food safety regulations was once again thrown into sharp contrast by the recent food scandal, in which 800 TONS OF SMUGGLED FROZEN MEAT WAS CONFISCATED IN CHINA. China’s revised Food Safety Law, to come into effect this October, introduces tighter production, shipping, and storage requirements, as well as increased penalties for violations.
  12. 12. Performed Services Growth (Y-O-Y) AsiaFoodInspection Inspection Failure Rate (Q1 2015 vs Q2 2015) +49% 41% 37%
  13. 13. Environmental concerns are becoming increasing prominent as countries adopt and enforce more stringent environmental regulations. SOUTHEAST ASIA TIGHTENS ENVIRONMENTAL RESTRICTIONS
  14. 14. India closes 900 textile factories 5 Vietnam rejected a US$ 200 million proposal deeming it, “environmentally unsound” 6 China authorities warn of the imminent crackdown 7
  15. 15. The plan will require factories to reduce emissions and improve water consumption efficiency. In addition to that, under the Environmental Protection Law that went into effect in 2015, POLLUTING BUSINESSES FACE HIGHER FINES AND JAIL TIME. Chinese environmental authorities warn of the imminent crackdown on illegal discharges and falsification of monitoring data. 8
  16. 16. ASIAINSPECTION OFFERS ENVIRONMENTAL AUDIT PROGRAMS TO HELP BRANDS TO ASSESS THEIR ENVIRONMENTAL FOOTPRINT WORLDWIDE.
  17. 17. AsiaInspection (AI), a leading global quality control and compliance service provider that partners with Brands, Retailers and Importers around the world to secure, manage and optimize their supply chain. ABOUT ASIAINSPECTION YOUR EYES IN THE FACTORY!™
  18. 18. With unique web-based quality control management, AI OFFERS PRODUCT INSPECTION, SUPPLIER AUDIT PROGRAMS AND LABORATORY TESTING SERVICES for more than 4,000 clients worldwide.
  19. 19. The 2015 Q2 Barometer is a QUARTERLY SYNOPSIS ON OUTSOURCED MANUFACTURING AND THE QUALITY CONTROL SERVICES PERFORMED BY AI EACH YEAR (product inspections, supplier audit programs and laboratory testing).
  20. 20. ABOUT ASIAINSPECTION YOUR EYES IN THE FACTORY!™ DEDICATED ACCOUNT MANAGER A supply chain partner offering advice on your specific needs INDUSTRY LEADING TURNAROUND Onsite within 48 hours. Reports the same day 80% of the time COMPREHENSIVE ONLINE MANAGEMENT Use your real-time dashboard to benchmark and identify your high performing suppliers FLEXIBLE Cancel or modify orders up to 4pm the day before the inspection for free PRODUCT EXPERTISE Hundreds of off-the-shelf customizable product specific checklists TRUSTED AND TRULY INDEPENDENT 100% QC. AI is not involved in sourcing and protects your factory information MOBILE Book, check reports and make decisions on the go ALL-INCLUSIVE PRICING Easy to budget. No hidden costs
  21. 21. FOOTNOTES 1/ http://www.reuters.com/article/2014/09/16/myanmar-investment-idUSL3N0RH3EZ20140916 2/ http://english.vietnamnet.vn/fms/business/134130/vietnam-becomes-world-s-fourth-largest-garment-exporter.html 3/ http://www.politico.com/magazine/story/2015/06/tpp-will-help-workers-in-vietnam-pursue-their-rrghts-118720.html 4/ http://www.vietnambreakingnews.com/2015/05/fun-run-aims-to-raise-awareness-about-health-safety-in-vietnam-garment-factories/ 5/ http://www.ecotextile.com/2015051321470/dyes-chemicals-news/893-polluting-textile-units-order-to-close-in-india.html 6/ http://www.asiansourcinglink.com/en/news-detail?id=126 7/ http://www.marketwatch.com/story/inside-chinas-grand-plan-for-water-pollution-2015-05-04 8/ https://www.sourcingjournalonline.com/chinese-textile-mills-targeted-new-water-protection-plan-lm/

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