Reshoring is a hot topic in the post-Covid world – but will textile manufacturing really come back home?

The Covid-19 pandemic and other global events have exposed the vulnerabilities of supply chains across the textile and clothing industry, leading to much discussion about reshoring in the US and Europe. The emissions reductions could be huge, but can we really expect to see a major shift in manufacturing?

Published

June 9, 2023

Jonathan Dyson

Correspondent

Trending

Source: Unsplash

The transformative global events the world has experienced over recent years have propelled reshoring right to the forefront of decision-making across the textile and clothing industry. The Covid-19 pandemic, followed by the war in Ukraine and the global energy crisis, have all caused concerns about the resilience and effectiveness of supply chains within the industry, given the vulnerabilities exposed by an increased reliance on Asia and other cheaper destinations for manufacturing over recent decades.

At ITMA 2023, the first edition of the international textile industry showcase since the Covid-19 pandemic, which takes place in Milan on June 8-14, reshoring – which means bringing business operations, especially manufacturing, that was moved overseas back to the country where it was originally relocated – as well as nearshoring, which refers to relocating processes back to a nearby country – are set to be hot topics. Ahead of the show, Amy Bircher, board chair of the US-based Advanced Textiles Association (formerly the Industrial Fabrics Association International – IFAI), has shared some thoughts about reshoring in the States and globally and how it can help companies achieve greater circularity and ultimately reduce their emissions.¹

She notes that while the hints of a shift towards reshoring began to emerge prior to Covid as new digital concepts for small lot, just-in-time production and personalisation began to arise,

“what happened during the pandemic really changed the minds of many people in the USA.” Bircher explains that “when communities couldn’t even get PPE to protect their frontline workers and were relying on imports which were suddenly unavailable, the response was on a personal and emotional level.”
“As a result of that experience, a significant number of US companies have now decided that no matter how painful it is, they will not be held hostage to that purchasing model again,” she observes. “There remains a determination by many to create opportunities and new jobs in the USA or in neighbouring countries in Mexico and Central America.”
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Her own company, MMI Textiles, recently opened a new manufacturing plant in Lenoir, North Carolina. The business does a large amount of work with the US military, and for that part of the business, everything has to be 100% Made in the USA, as stipulated by the Berry Amendment. Bircher notes that a Berry-type Amendment is also now in the process of being implemented for PPE, which, she says, “when finally passed as a bill, will be a very big boost for US domestic manufacturing.”

Other regulations set to benefit companies bringing manufacturing back to the US include the FABRIC Act, which aims to enforce minimum wage standards and eliminate wage theft in US garment factories, and will incentivise reshoring with tax credits.² “The textile industry is certainly on a journey towards circularity, and reshoring or near-shoring will play a big role in that going forward, not just in the USA, but globally,” Bircher concludes.

The potential environmental benefits of reducing the length of supply chains were highlighted in a report published back in February 2020, in which the US-based Reshoring Institute examined the environmental impact of supply chains which are spread geographically widely.³“Ships are responsible for annually emitting more than one billion tons of CO2 and greenhouse gases, an estimate which is projected to increase by a value somewhere in between 50% and 250% by the year 2050,” it states. “To put this in perspective, if international shipping was treated as a country, it would have been the sixth largest emitter of energy-related CO2 in 2015.”

While it remains to be seen what potential impact reshoring or nearshoring could have on those figures, in other parts of the West, including Europe, the Covid pandemic also sparked concerns about the risks of relying on supply chains based overseas, and several textile and clothing manufacturers across the continent switched production to PPE to support the efforts to protect key workers during the pandemic.

The European Commission has since taken a number of steps designed to build more resilient and sustainable supply chains, such as promoting the development of European Value Chains (EVCs) to boost European industrial autonomy and the green transition.⁴In support of this, the Commission has established a range of policies and initiatives, including the Interregional Innovation Investments (I3), which aim to support the development of interregional innovation projects and value chains with an emphasis on fostering private sector involvement.⁵Leading on this, Interreg Europe, which brings regional and local governments together to share solutions to development challenges, has set up the BRIDGES project, which has developed a methodology to identify competitive advantages and interregional synergies through reshoring and nearshoring opportunities.⁶

The Helsinki-Uusimaa region in Finland has adopted the methodology to foster the growth of the renewable and recyclable textile industry. Two national textile recycling projects⁷, frontier research on cellulose-based textile fibre at Finnish universities, the access to raw materials with the forest industry, and a roadmap for the Finnish textile industry for 2035⁸“provided strong impetus for reshoring textile industrial activities,” Interreg Europe notes. It adds that the activities in Finland’s textile industry offer “valuable lessons for other regions looking to promote the reshoring and nearshoring of industrial activities,” such as anticipating forthcoming European innovation calls and changes in legislative and regulatory frameworks “to take advantage of windows of opportunity.”

Across the EU, it appears that while reshoring will continue to be much-discussed, efforts will concentrate on targeted projects such as those in Finland. As for the UK, there has been a push for more reshoring in the country for several years. Back in 2014, for instance, UK Trade & Investment (UKTI) joined forces with the Manufacturing Advisory Service (MAS) to launch Reshore UK, a new service to help companies bring production, including textiles, back to the UK.⁹The UKFT notes that after many years of decline, the number of UK garment manufacturers increased by 13% in the ten years to 2020 to 4,005.¹⁰

However, issues such as manufacturing and raw material costs, production capacity and the availability of skills continue to cause challenges in returning large amounts of textile and clothing production back to the UK. Post-Brexit, the extent to which this may change remains to be seen.

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