Home grown, home sewn

With increasing numbers of manufacturers moving production offshore, will the Australian labelling industry follow suit? Tracey McEldowney investigates how important having a local label manufacturing presence is to the future success of the Australian rag trade.

It is often said that from small things big things grow.
And never has that adage proved more correct than when applied to labelling and swing tags.
Vital from an apparel branding and communication perspective, the humble label has the potential to create a hugely inconvenient - not to mention expensive - fallout should something go wrong in the production process.
Steven Farrall, director of international sales and marketing for Victorian-based label and badge weaver Cash's, warns that from an operational perspective the wrong label or tag can lead to significant merchandising and processing issues at a retail level.
The aftermath is dramatically worsened if the problem occurs on the price ticket.
"At a garment manufacture level a delay or a problem with labels and tags can significantly delay shipment to store. If manufacturing occurs in Asia, from where most goods are sea-freighted back to Australia, this can mean a delay of up to two or three weeks if a schedule is missed or a need to airfreight the goods to meet merchandising deadlines.
"Therefore, a simple item with a cost that represents only a small fraction of the total garment cost - maybe five cents out of $20 - has the potential to become very expensive."
To help minimise the chances of this occurring, increasing numbers of Australian label manufacturers are looking to develop both a local and international presence.
The major players in the industry - Mpressive Label Creations, Image Label Systems and Cash's - have all retained their Australian production base while also sourcing manufacturing facilities offshore.
Mpressive Label Creations [head] Don Fowles says more than 70 per cent of his company's total production (printed labels, swing tags, barcode stickers and hanger tape) occurs in Australia. Only its woven labels are produced overseas and then only to allow the company to offer a more competitive price to its customers.
Fowles says economics play a major part in the decision by companies on where to source their labelling stock. However, cost is not their only consideration.
He says the local market has changed in that there are now many smaller manufacturers making targeted garments to suit a specific customer. Producing locally gives them the flexibility to produce smaller runs while also lowering their costs and helping keep them competitive, he says.
"Many companies that we supply that have made the move overseas will still buy their labelling locally to send over seas as it is cheaper and quicker. This also reduces the chances of the garments coming back into Australia with incorrect labelling and ticketing. The perception it is cheaper getting printed labels made overseas is not true. We are able in many cases to produce labels cheaper and quicker here without having to worry about freight duties and delivery times. Many labelling factories overseas still work with machinery that is not as cost effective as we have here. While they work with wet ink printers, we have made the change over to computer-generated printers and hot foil machines which are designed for both small and large runs."
Fowles says while there are obvious advantages to increasing the company's overseas manufacturing capabilities, moving all its production offshore would cause more problems than it would solve.
"Because of shorter turn around times, to keep up with fashion and retail buying trends, any labelling company must be able to supply its products when the customer requires them. With any item that is produced in another country, you are reliant on forces usually outside of your control, such as weather, the quality of the work force, freight companies and being able to source the base materials that you require for your production.
"The answer is simple. Most companies that import have experienced late deliveries to their warehouse through no fault of their own. You are reliant on a chain of events, mostly out of your control, to ensure you receive your delivery on time, every time. When it does not happen it can cost more than if the product was made locally through lost sales."
Cash's, which began weaving labels in England in the 1840s and set up in Australia in 1913, first began exporting into Asia in the late 1980s when apparel production started to move offshore.
Counting retailers such as the Coles Myer Group, Country Road and Sussan among its 2,000-strong local client base and 500-strong Asian base, the company now operates its own customer service and distribution office in Hong Kong and has a manufacturing partner that operates weaving and printing facilities in both Hong Kong and China with more than 1,500 employees.
Farrall says that with Australian labelling companies now able to offer customers lead times as quick as 48 hours, it is vitally important to the future of the labelling industry to have manufacturers with an Australian base.
He says that while there is a lot of change occurring within the industry, the one consistency is that apparel brand owners, buyers, developers and planners will always be based here.
"We see that what is left of the apparel manufacturing base in Australia is tyFarrall estimates this group accounts for between 10 and 20 per cent of overall demand.
"Certainly, some of our smaller clients prefer to run a fairly tight schedule an order at the last minute, perhaps to avoid building excessive inventories. However, more broadly, most of our clients are requiring the mix. Minimising their costs through the benefits of offshore manufacture whilst maximising their opportunities through a local quick response approach."