US company TradeCard Inc, is trying to tap the growing apparel and footwear trade in the South Asian region through a joint venture in Sri Lanka.
TradeCard Inc has gone into a joint venture with Sabre Technologies, a subsidiary of MAS Holdings, and has set up a new company called TradeCard Services. The new company is offering specialised electronic payment and procurement facilities for apparel and footwear companies in the region.
“This region, India, Sri Lanka, Bangladesh and Pakistan is a very fast growing area for footwear and apparel. From a few years ago we noticed a shift in business to the Indian subcontinent. More and more international buyers are starting to source from this part of the world. So we decided to establish our presence in the region,” said the CEO of TradeCard Inc, Kurt Cavano speaking at a press conference this week.
TradeCard already has about 4,000 clients using its electronic system globally and 400 are from South Asia, while about 100 are Sri Lankan companies. The company is expecting US$ 10 billion worth of apparel and footwear trade through its global TradeCard system this year. Out of this, about US$ 1.5 billion worth of trade will be from the South Asian region. But business in the region is expected to grow in leaps and bounds over the next years.
“The actual apparel and footwear trade in the region is much higher than US$ 10 billion. So the potential in the region is huge and growing. We are expecting at least a 10% growth in our business every year,” said Mr Cavano.
TradeCard says South Asia is a growing supply base for international apparel and footwear markets. The sector that shifted manufacturing to South East Asia, mainly to China, is now re-shifting to South Asia because of increasing labour costs in China and to spread the risk.
“There was a shift of business to China at one time, but this large inflow also increased China’s labour costs. So Chinese factories started shifting to countries like Vietnam and Cambodia because China’s labour charges went up. Now there is a clear trend of a shift into South Asia. This is mainly because of cheaper labour rates and also companies do not want to put all their work into China or one region,” said Mr Cavano.
TradeCard is hoping to grow its business by latching onto the growth trend in the South Asian region. The company says its TradeCard facility cuts supply chain management costs and time, and helps garment factories operate more efficiently. The TradeCard system allows apparel manufacturers, suppliers of fabrics and accessories, buyers, insurance companies, banks and other vendors, to conduct financial transactions online.
“TradeCard Services provides a secure system for the apparel and footwear sector to manage worldwide procurement payments. It allows companies to cut their costs and increase their efficiency,” said the Chief Operating Officer of TradeCard Services, Sharika Senanayake. |
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