Brazil exports promise hot retail prospect

NATIONAL: Australia looks set to witness a dramatic surge in Brazilian TCF imports in the wake of an export drive instigated by South America's largest economy.
According to the Council of Fashion and Textile Industries of Australia (TFIA) the Brazilian Textile and Apparel Industry Association (ABIT) and government organisation Texbrasil have been making "serious overtures" to Australia in recent months.
"ABIT has devoted a huge amount of time and resources into an apparel export program to increase Brazil's presence in the international fashion arena," confirmed TFIA economist Lachlan Caddy.
Caddy recently travelled to Brazil and visited more than 100 manufacturers as part of a project for ABIT, whose aim was to build a database of Australian retail clients for Brazilian product.
The association had pledged to fund trips to Brazil by interested Australian retailers, he said.
"The initiative provides an important prospect for specialist retail chains, boutiques and higher-end apparel retailers to view exciting new and different products that could potentially set them apart from the competition and give them an edge in the marketplace," he said.
"It is also a great opportunity for smaller to medium-sized retailers to visit overseas suppliers. This is often expensive and even unaffordable for smaller retailers and yet is a critical process when successfully sourcing international products."
Earlier this year ABIT made a debut appearance at the Sydney edition of Fashion Exposed, where labels showcased included swimwear, beachwear and fitness brands Bia Brazil, Biquini Brasil, Cantão, Fazendo Onda, Movimento, Pera Brasil, Poko Pano and Salinas.
Fashion Exposed organiser Australian Exhibitions and Conferences (AEC) described feedback on ABIT's exhibit as "very positive".
"ABIT's participation was so successful that they are planning to return to [the Sydney edition of] Fashion Exposed next year," confirmed an AEC spokesperson.
According to ABIT data, Brazil currently ranks as the world's sixth largest fashion textile producer, with Brazilian textile and fashion exports to Australia having grown by about 74 per cent between 2003 and 2005.
But while this heralded enhanced product diversity for Australian retailers and consumers, a recent report by accounting firm KPMG sounded a cautionary note.
It claimed the South American economy - led by Brazil and followed closely by Argentina and Chile - currently attracted more foreign direct investment than China, posing a serious threat to Australian manufacturing in the medium term.
The threat was twofold; firstly South America would increase pressure on manufacturing by selling products into the Australian market and secondly it would increase competition in export markets, particularly North America, the report claimed.
Such Caddy described such threats as "exaggerated".
"I don't think there is a real danger to onshore manufacturing because the kinds of products that come from Brazil are either very niche, with a cultural essence specific to Brazil or they are products not available in Australia anyway. I think gaining access to these products is actually good for boutique retailers or specialist chains.
"As for creating greater competition in terms of exports to North America, Brazil and South America are already big suppliers to North America, so Brazil would not push us out of the way any more than it already has."
TFIA executive director Ashley Van Krieken agreed, adding: "Australia's fairly prohibitive trade agreement with the US means there is not a lot of Australian product going that way anyway."
In terms of direct import competition the initial statistics did not hint at a threat although that could change as South American economies - particularly Brazil - continued to grow, he said.