From raw and dyed yarns to knitted fabrics and woven fabrics, denim and garments, how do you ensure sustainability at every step of the way? How do Good Earth Cotton and FibreTrace fit into the scheme of things?
Fashion Enterprise only works with partner factories that follow sustainable and certified models. Our spinning, dyeing, woven, knit and denim partner factories are all Oeko-Tex certified. To now be able to include verified carbon positive Good Earth Cotton and the FibreTrace pigment into our supply chain ensures it cannot be contaminated or outsourced and adds sustainable value to our process and final product.
Even as the pandemic continues to blow hot and cold, the other major challenge that has come up is the Russia-Ukraine war. How is that impacting business, sourcing, supply chain?
Fashion Enterprise still relies on some raw materials and trims from China; so, the biggest impact for us has been around the logistics since the lockdown of the region. The price of raw materials has also increased which creates a knock-on effect throughout the supply chain. Fashion Enterprise is lucky to only work with mid to high end brands that enable us to absorb the extra costs. I think the big volume, mass market factories will find it much harder to sustain the increased costs.
Trade wars have been ongoing. Which key FTAs work well for Vietnam and what more are you looking for?
Since the sanctions imposed on China have been under way, Fashion Enterprise has used its position to impress upon customers, and our wider stakeholders, the benefits of manufacturing in Vietnam. As of June, Vietnam has officially joined 13 new FTAs and by signing these bilateral and multilateral agreements, it has enabled Vietnamese enterprises to expand and gain easier access to regional and global markets. The majority of the brands that we support are based in Australia; so, FTAs such as the AANZFTA, CPTPP and RCEP all contribute to the smooth flow of goods across boundaries.
How has Vietnam fared after/during the pandemic? What has been the pandemic story of Fashion Enterprise? How did you handle cancelledorders and worker welfare? Which are the best practices that you follow with respect to labour?
Fashion Enterprise actually did well during the COVID-19 pandemic. The main buyer, Cue, was really the key to keeping the business running. They worked closely with me to find a way that would be beneficial for us both. Like other fashion brands, Cue had to deal with the 4–5-month lockdown in Australia followed by the 3-month lockdown in Vietnam. Regardless of this, they did not cancel any orders. Instead, they just pushed out the delivery shipment until borders opened up again. Cue also revised the payment terms and paid a 30% deposit on all purchase orders with the balance on the shipping date. This arrangement gave Fashion Enterprise the cashflow to be able to continue paying workers a reduced rate during the lockdown. This in turn ensured 98% of the workers loyally returned to work when lockdown was over. When indeed we were able to reopen operations in August 2021, we had many new people coming to look for work at Fashion Enterprise as they could see we looked after our workers.
