Take-aways from “Value chains in the global garment industry”
Presentation by Peter Lund-Thomsen
Peter Lund-Thomsen introduced the concept of global garment and textile value chains, presenting his views on the economic, social, and environmental implications of the placement of recycling hubs. He explained that modern value chains are global in nature because production capacity is primarily located in Asia, facilitated by the development of digital communication tools such as fax and email. Another contributing factor is the decrease in transportation prices over the last 30–40 years, as well as lower labor costs and more lenient environmental regulations in these regions.
Peter Lund-Thomsen explained that textile and garment production is “footloose”, meaning small wage increases could lead to the relocation of production. He cited China as an example, where wage increases in the last 10–15 years have led to production moving away to countries like Vietnam, Bangladesh, and Indonesia.
According to Peter Lund-Thomsen, it is financially unviable to establish large-scale garment and textile production in the Nordics due to high labor costs, strict environmental regulations, and the loss of production knowledge due to outsourcing.
Peter Lund-Thomsen argued for the utilization of well-established recycling chains in Asia instead of establishing new ones in the Nordics. Countries like Pakistan and India are seen as world leaders in mechanical recycling. However, chemical recycling in these countries is associated with increased environmental pollution due to insufficient facilities for water treatment.
The social aspects also need to be considered, as recycling provides employment for many women who earn their living in the informal sector. However, there is a need for improvements in labor and social conditions, including updates to machinery to avoid workers being exposed to fiber dust.
Peter Lund-Thomsen's final argument is that the Nordics should focus on supporting the development of new technologies to be implemented in Asia to create large-scale change in the industry. The Nordics should also support economic, social, and environmental upgrading of Micro, Small & Medium Enterprises (MSMEs), while limiting overall consumption in the Nordics.