(2020) Résultats de l'enquête 2020 : Comment la COVID-19 a-t-elle affecté l'industrie du vêtement en Haïti ?

[page 1] 8 N c s = = S : | "4 af À É 8 | pa #@ [ sé = EE “a YX res ee BTE ne a — _ a l 1 LS 100 ANATRPRNEL, IPRa 7 PRE Æ. EE — = — NN Far » nm "7 à FRE ie y 7 ARE ne Mr NX Perou s E JE Sn _, | «1 re. (A g 4 » _— OÙ Rs EL En. £< >» fl - — \ LA .. 8 L mn. : a A > 3 a) 2 8 * How Has COVID-19 Affected + 41 Haiti s Apparel Industry? Survey Results 2020 JT \ International : Ministry of Economy and Finance ASSOGATONDESNOUSTAIES D'HAM Creating Markets, Creating Opportunities [page 2] How Has COVID-19 Affected Haiti's Apparel Industry? Survey Results 2020 [page 3] Copyright and Disclaimer Notice © International Finance Corporation 2020. All rights reserved. 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 Internet: www.ifc.org The material in this work is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. IFC does not guarantee the accuracy, reliability, or completeness of the content included in this work or the conclusions or judgments described herein. It accepts no responsibility or liability for any omissions or errors (including, without limitation, typographical errors and technical errors) in the content. International & IFC | Finance Corporation WORLD BANK GROUP About IFC IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org. <27 ASSOGANON DES INOUSTRIES D'HAMI About ADIH The Association of Industries of Haïti (ADIH) is a non-profit employers’ association that brings together companies mainly engaged in industrial activities, whose mission is to promote and develop the Haitian industrial sector on a competitive basis at the global level. Founded in 1980 and officially recognized by the Government of Haiti (GoH) as a public interest institution since January 5, 1989, ADIH is one of the most respected institutions in Haiti. ADIH seeks to enhance, support, and develop the manufacturing and service industries for both export and domestic markets. It is committed promotion a climate of sustainable social peace, high labor productivity, and policies and practices that protect the environment. For more information, www.adih.ht. = THE FACILITY SERVICES About the Facility for Investment Climate Advisory Services (FIAS) Through the FIAS program, the World Bank Group and donor partners facilitate investment climate reforms in developing countries to foster open, productive, and competitive markets and to unlock sustainable private investments in sectors that contribute to growth and poverty reduction. The FIAS program is managed by the Equitable Growth, Finance & Institutions Practice Group of the World Bank Group and implemented by IFC Advisory teams. For more information, visit www.worldbank.org/fias. Cover photo: S & H Global [page 4] Contents Acknowledgments 2 Executive Summary 4 Purpose of the Survey 8 Profile of Haitian Apparel Manufacturers before the COVID-19 Pandemic 10 Effects of COVID-19 on Haitian Apparel Manufacturers 14 Lost Production Days 16 Cancelled or Reduced Orders 17 Lost Revenues 17 Lost Jobs 18 Profile of Firms after Reopening 20 Production Capacity 21 Efforts by Buvers to Assist Producers 24 Requests for Assistance 26 Surveyed Firms' Recommendations to the ADIH Textile Committee 30 Annex A The Questionnaire 32 [page 5] Fig ures Figure ES.1 Top five challenges identified by Haitian apparel manufacturers 5 Figure ES.2 Employment in Haïiti's apparel sector in March and April 2020, by type of firm 6 Figure ES.3 Revenue losses projected by Haitian apparel manufacturers for 2020 (percent of firms) 6 Figure 1 Main challenges identified by Haitian apparel manufacturers 15 Figure 2 Share and value of Haïitian apparel producers’ orders cancelled or reduced by mid-June 17 Figure 3 Revenue losses projected by Haitian apparel manufacturers for 2020 (percent of firms) 17 Figure 4 Employment in Haiti's apparel sector in March and April 2020, by type of firm 18 Figure 5 Types of products produced and orders received by Haitian apparel manufacturers after reopening following closure caused by COVID-19 21 Figure 6 Reduction in production capacity reported by Haïitian apparel manufacturers in May-June 2020 21 [page 6] Tables Table 1 Type of location of Haïitian apparel manufacturers surveyed 1 Table 2 Source of capital of Haitian apparel manufacturers surveyed, by type of location 1 Table 3 Jobs in Haïiti's apparel sector, by firm size and type of location 12 Table 4 Production by Haïitian apparel manufacturers surveyed between May and June 2020, by type of product 13 Tables Reported number of Haitian apparel manufacturers’ buyers, per firm 13 Table 6 Production days lost by Haïitian apparel manufacturers surveyed as a result of factory closures 16 Table 7 Capacity of Haitian apparel manufacturers surveyed to produce personal protective equipment and other products 22 Table 8 Monthly capacity of Haïitian apparel manufacturers surveyed to produce personal protective equipment products, by type of product (thousands of units, except where otherwise indicated) 23 Table 9 Number of Haïitian apparel manufacturers producing personal protective equipment, by type of garment 23 Table 10 Requests by Haitian apparel manufacturers for assistance 27 Table 11 Requests by Haitian apparel manufacturers for assistance in training workers to repair equipment, by type of machinery 29 Table 12 Requests by Haïitian apparel manufacturers for assistance in training workers in order to increase productivity, by type of worker 29 [page 7] Pr me on Cu me ue Me M ie ne UE UD Me Me ED Le me Me D à de © ut ue ie À + ne ns re ne ee ne ù e Fe Me vù 4 7 Que ne eg ee me er ie er me © © ve © © 0e en me © 0 © me on ie um mie ee le de um he cos MS de he ue rem qe nr ee Re ee De Me ne ven de amer v es ne Se de mr me ire ir 7 ME MEN ME mp eme mu de nf Von Fe le Ge je Me ot ee de Paume Et me me Eee 7 un die dote ie ide pe Mie Que mue we à ur Vue We Com Me Um Mur + ver me me me er Ce re de Mi ner ere re Se Me mt D ee ce me ME ue De mt où ee ue AU we + mu 0 # 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The survey was conceived by l'Association des Industries d'Haïti (ADIH) and the International Finance Corporation (IFC) of the World Bank Group. The report was prepared by Pedro Andres Amo, Ernesto Franco Temple, Martine Deverson, Daniela Yacaman, and Ji Woon Park, with the support of ADIH staff, especially ADIH's former president, Georges Sassine; executive director, Marie-Louise Russo; and administrative assistant Alexandra Erau. Barbara Karni edited the report, Carolina Gonzalez Ruiz provided invaluable support on logistics and publication planning, and Ambidiestra prepared the report layout and design for printing. The export-oriented apparel industry is a major source of formal jobs in Haïti, employing nearly 53,000 people in 2019. The sector's exports, which doubled since 2009, accounted for 85 percent of Haiïti's exports of goods in 2018. There is still room to grow, as the quotas for duty-free import into the United States have remained largely underutilized, and the Caribbean Basin Trade Partnership Act (CBTPA) is likely to be renewed before the end of 2020. The unprecedented global economic crisis caused by the COVID-19 pandemic has very negatively affected Haïti's garment sector, jeopardizing its viability in the medium term. The government ordered a month-long shutdown of the industry in March as part of its measures to guarantee the safety and health of all in the industry, allowing it to reopen a month later only under strict sanitary conditions that helped ensure the safety of the sector's workers. Production had to be organized by rotation to limit personal contact, reducing plant output capacity and financial sustainability. The situation worsened as raw materials became increasingly difficult to source and orders from the United States were drastically reduced and very few new orders were received. Firms are navigating structural shifts in the sector caused by COVID-19. A key factor is what types of apparel products from Haiti will be in demand moving forward. With supply chain disruptions and increased lead times, especially from China, executives are increasingly looking closer to home for their sourcing needs, as the crisis reinforces a near-shoring trend that began before the pandemic. Firms producing apparel can easily shift to washable personal protective equipment (PPE) to help meet the increasing global demand for masks, coveralls, surgical gowns, aprons, surgical caps, blouses, scrubs, and plastic PPE. We are grateful to the 33 members of the ADIH who took the time to answer the survey questionnaire. We would also like to thank Anouk Pechevy, Claudine François, Finn Holm-Olsen, Jennifer Fievre, Maria Soledad Requejo, and Mariana Vijil for comments on the questionnaire and an earlier version of the report. We appreciate comments by the report reviewers of the ADIH Textile Committee who participated in the validation meeting on July 14, 2020: Clifford Apaid, Fernando Capellan, Joseph Blumberg, Carine Felix, Dayana A. Villedrouin, Gina Coles, Mario Giovanni Jules, Nathalie Hermantin, Christian Aimé, Tammy Moon, Jason Lee, Minchul Hwang, Rachelle Jean, Lulu Yu, Hans-Josemy Fonrose and Tessa Jacques Antoine from CFI. This initiative benefited from support from IFC funding, the Facility for Investment Climate Advisory Services (FIAS), and the Korea-IFC Partnership Program (KIPP). 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EE Q — pentes, JS CE RÉ TESS Rte RS LENS LE re — A rETEEX, RCA ere Er “e °°: ee RE Se PTT IEEE = — res: ee TS =: X ns, PE PR RS ÉRRNPRTTRS ESS er =, de RE —. PT re LT RSS nes seu ER + + : se RP Te = = — > —:<e AT PES PE Tee RSI SE re ES Re —— RE LEE RS ne rare RSS Pre es El PER ESS A LEE — ESS ‘« M te <= &, Jen, EL EST ES ER E Re À SCA ré Pete, 2 ER PTT ELLES T ES 7 | LITE 5 STI RC Er, Sr LT 241% ( TELE EE DEEE RTE VS AE ARE ESS ZE 5 WC ES RE Le la RS RES DRE ES Praz e à = = + + RATIO re ASS RES Ion EEE Sn T ge EEE ETES ErS RAS ET PEL LS LIT ST En ES l VERS LE D | RE PETITS ETS ue = ACL SP SORTE [page 10] In May and June 2020, the Industrial Association of Haïitian (l'Association des Industries d'Haïti [ADIH]), in collaboration with the International Finance Corporation (IFC), conducted a survey to collect information on the impact on, challenges facing, and opportunities for the export-oriented garment sector in Haïti arising from the COVID-19 pandemic. Thirty-three firms from the West and the North of the country that produce apparel products responded to the survey. Haitian apparel manufacturers surveyed included both foreign-born and domestic companies. The participating firms collectively employed more than 50,000 workers in March 2020, 94 percent of all workers employed by ADIH members. Eighty-two percent of respondents operated in a public industrial park or private free trade zone, and 70 percent were established with foreign capital. Before the pandemic, these firms produced an average of 1.6 million pieces of garment a month, 83 percent of all pieces made with knit-only materials. According to the ADIH, seven firms produced personal protective equipment (PPE), including gowns, scrubs, and coveralls with hoods. The most pressing challenges respondents identified included uncertainty about global demand, government restrictions (which prevented factories from working at full capacity until July 28), lack of working capital, and difficulty accessing raw materials (figure ESA). Only 10 firms identified export restrictions as a key challenge. Among them, eight had had more than 20 percent of their orders cancelled. CHALLENGES .. Figure ES.1 Uncertainty regarding global demand 91 Top five challenges identified by Government mandate to reduce workers 82 Haïtian apparel manufacturers Reduction of production capacity due to 82 COVID-19 measures Lack of working capital 79 Difficulty accesing raw materials 61 o 20 40 60 80 100 Percent of respondents | How Has COVID-19 Affected Haiti's Apparel Industry? | 5 | [page 11] Employment by ADIH members plummeted between March and April 2020, falling by almost a third (figure ES.2). LU EMPLOYMENT m March 2020 B April 2020 Figure ES.2 i iti” 60.000 Employment in Haiti's 53.323 apparel sector in March and April 2020, Es by type of location 40.000 36.795 29.087 30.000 23.315 20.000 18-637 9.780 10.000 5.599 1.700 [e] Public industrial Private free Outside free Total parks zones and zones and industrial parks industrial parks Source: Data for March 2020 were collected from firms that receive government subsidies. Data for April 2020 were collected by ADIH from its members. Seventy-six percent of respondents expected at least a 30 percent loss in revenues in 2020 as result of the pandemic (figure ES.3). Twenty-eight respondents (84 percent) reported a total of 723 production days lost between March 20 and April 20. nu EXPECTED REVENUE LOSSES Figure ES.3 Revenue losses 30% or less losses . projected by Haitian CORRE ESS ESS EEE 24% apparel manufacturers 30% - 60% losses for 2020 (percent of LEE... More than 60% losses firms) 000000060000000000000000000000000000000! 24% | 6 | [page 12] At the time of the survey, in May-June 2020, only 22 percent of respondents were producing at least 6o percent of their previous capacity. All but one firm reported reductions in and cancellations of orders; and 52 percent of all firms saw reductions or cancellations of more than 50 percent. Twenty-eight firms (85 percent of respondents) reported that they could produce PPE, although only 20 had received orders for this type of products. Twenty-four firms reported being able to produce masks; 5 could produce gowns, 10 scrubs, and 2 coveralls with hoods. PPE production capacity appears to be underutilized, with only 67 percent and 39 percent of capacity used to produce masks and gowns, respectively. According to respondents, orders for masks and other PPE could help save these companies; exports should therefore not be subject to any restrictions. Firms reported the need for several types of assistance. In terms of financial assistance, they need working capital financing (n respondents) and both short-term (8) and long- term credit (7). Other requests include support for market intelligence and assistance marketing and selling PPE, regular meetings with ADIH and increased support to operations, including authorization to export masks, assistance in shipping products abroad, and help attracting more international investors. Firms also identified their desire for assistance in building the capacity of workers to repair equipment and in training supervisors, sewing operators, quality controllers, and auditors. | How Has COVID-19 Affected Haiti's Apparel Industry? | 7 | [page 13] Ney D, — \ EE + RE 2 nn ne 4 EE PURPOSE = — AT — Se — ——— Jen —+— - _- - = = = On March 19, 2020, Eee (n Re. . Haiti ordered the 2 [u ETS = = mandatory closure of = _ Il factories, in order ti MM sprecdof EP. æ COVID-19. - Photo: Santo du Jour Free Zone [page 14] On March 19, 2020, the government of Haiti ordered The survey aimed to measure the impacts the mandatory closure of all factories, in order to of the COVID 19 pandemic on Haiïti's export- contain the spread of COVID-19. The next day, oriented garment sector, including the impact of factories closed. On March 25, the government cancellations and reductions of orders and the closed the border with the Dominican Republic challenges facing firms when reopening. It also for the transit of people (merchandise traffic was sought to identify (a) opportunities based on permitted throughout the shutdown). On July 1, it firms’ capacity to produce personal protective reopened the border and resumed international air equipment (PPE) and (b) areas of needed support traffic. Between March 31 and April 20, the authorities for the sector, including technical and financial progressively allowed factory operations to reopen, assistance, worker training, and better services. but they imposed restrictions to slow the spread of COVID 19, limiting the number of workers in a factory to less than 30 percent of capacity, for example. On July 28, the government lifted the state of emergency, allowing production but retaining some safety requirements. | How Has COVID-19 Affected Haiti's Apparel Industry? | 9 | [page 15] SA. D PROFILE OF KI HAITIAN APPARELRM MANUFACTURERSESS BEFORE THE SE. COVID-19 PANDEMIC Lan oo ne es Te PS À, LE HSE RE | FENTE Fee re #7 ART MEN Lime 7 Se ASE Se) 7. © \* f f Ÿ , = > : PR + Ps | LÉ 4 NX Po a ! d L Photo: S & H Global f __ Ke | w | [page 16] Eighty-two percent of the firms surveyed are located inside industrial parks or free trade zones, which are physical areas benefiting from tax exemptions (table 1). Seventy percent were funded by foreign capital (table 2). Haïitian apparel manufacturers include both, foreign-born and domestic companies. LOCATION LE Table 1 Type of location of Haïitian apparel Location Number of firms Percent of total manufacturers Public industrial park 12 36 surveyed Private free zone or industrial park 15 45 Outside free zone or industrial park 6 18 Total 33 100 SOURCE OF CAPITAL " Table 2 Source of capital Domestic Foreigner of Haitian apparel , Number Percent Number Percent manufacturers Location of firm offirms oftotal offirms oftotal surveyed, by type of location Public industrial park 2 16.7 10 833 Private free zone or industrial park 2 13.3 13 86.7 Outside free zone or industrial park 6 100 o o Total 10 30.3 23 69.7 Source: World Bank Group Country Private Sector Diagnostic Mission, January 2020. | How Has COVID-19 Affected Haiti's Apparel Industry? | n | [page 17] The 33 firms surveyed represent 87 percent of ADIH membership and employed 94 percent of all formal sector workers in the sector declared to ADIH. The sample included 6 large firms (2,000 employees or more), 20 medium-size firms (500-2,000 employees), and 7 small firms (less than 500 employees). The largest firms are located mostly in public industrial parks (table 3). ne JOBS Table 3 Jobs in Haïti's apparel mie sector, by firm size and type of location ot 500 - MOLS yp Item than 2,000 than Total 500 , 2,000 Public industrial parks o 10,632 16,957 27,589 Private free zones and industrial parks 1,308 11,945 3,936 17,189 Outside free zones and industrial parks 943 4,656 o 5,599 Total 2,251 27,233 20,893 50,377 Percent of ADIH membership 97 90 100 94 ne, a pu Lee = À « m er Re nd. — dés 2 L & a RSR. nu Photo: Digneron - LISE PCR ONE ONNRL à >) *à en Le — Manufacturing S.A. ra 7 = 1 PV. eu CN. IS DES MER 2 2] —— J F en | c t / ==. De © À #! SE Be à = u… = à RE DE x SE 7/1 taie TR: ÆÆ À #1) x 7 ! à , TR D r- . . Nbr ser | | 12 | [page 18] Before the pandemic, almost half of the firms surveyed were using knit fabrics, 21 percent were using woven fabric, and 30 percent were using both. According to the ADIH, seven firms were active in the production of PPE and 6 specialized in large-scale production of t-shirts. Eighty-three percent of all units were produced by firms using only knit fabric. The average number of units per month per firm was about 1.6 million (table 4). PRODUCTION . Table 4 Number of units produced per month Production by Haitian apparel manufacturers Number Number Percent surveyed between Item of firms of pieces of total Total May and June 2020, by producing produced production type of product Knit 16 40,742,400 83 2,546,400 Woven? 6 1,719,000 4 286,500 Both knit and woven® 9 6,473,000 13 719,222 Total 31 48,934,400 100 1,578,529 2. Two firms did not specify the quantities produced per month. They are excluded from the table. Respondents collectively identified 44 buyers. About half of respondents had only one buyer; almost a third had four or more buyers (table 5). BUYERS .. = f = Tables Number o Number buyers per firm of firms Rep orted number of Haïitian apparel 1 14 manufacturers' buyers, 2 | 5 per firm 3 | 4 4 or more | 9 Note: One firm did not respond and one provided invalid information. | How Has COVID-19 Affected Haiti's Apparel Industry? | 13 | [page 19] EFFECTS OF 7° COVID-19 ON | mans Plis Kalite! | (a HAITIAN APPAREL : Re =MANUFACTURERS Se. De ts de as _ ] , : CL 0" S &. H Global f - | 14 | | [1 | [page 20] Surveyed firms reported five main challenges (figure 1): - uncertainty about global demand - government restrictions on the number of workers in factories - reduction of production capacity because of COVID-19 measures - lack of working capital - difficult accessing raw materials. Figure 1 x () Main challenges identified by (À) Haitian apparel © manufacturers | nn () nr) nn _ nÔ _ «mg x ©) = _(-) = _(:} 10 . . e e e e | How Has COVID-19 Affected Haiti's Apparel Industry? | 15 | [page 21] Other key challenges included difficulty accessing markets and the poor condition of public transportation. Ten firms highlighted export restrictions as a priority challenge. Among these firms, 8 had had more than 20 percent of their orders cancelled. Export authorizations and procedures have become difficult to manage since the ban on the export of masks, announced by the Customs Department on April 22, and the closure of the border with the Dominican Republic on March 25. Eighty-five percent of respondents planned to continue operations over the next six months. Among these firms, 22 (79 percent) planned to employ more than 60 percent of the workers they employed in early March; 3 (n percent) planned to employ less than 30 percent. If conditions remain unchanged, 42 percent of surveyed firms did not exclude the possibility of temporarily closing their plants. + Lost Production Days Twenty-eight of the surveyed firms (85 percent) reported reopening after closing. Together, they reported losing 723 production days (table 6). nu DAYS LOST Table 6 Production days lost Number of firms by Haïtian apparel manufacturers surveyed as a result of factory closures March 31 13 13 1 o 161 April 3 4 4 o o 108 April 10 5 4 o 1 85 April 20 T 9 1 o 369 Total 33 30 2 1 723 Note: Authorities allowed factories to reopen in phases, on the dates shown in the table. Two firms did not specify the date of resumption of operations. | 16 | [page 22] All but one firm reported having had orders cancelled or reduced. Among these firms, 52 percent experienced reductions or cancellations of more than 50 percent (figure 2). ORDERS m Less than 20% m 20% - 50% m More than 50% ne Number 35 Figure 2 offirms 30 Share and value LL 25 3 B of Haïitian apparel 20 14 producers' orders 15 nm cancelled or reduced 10 Ë ë by mid-June 5 7 6 o 5 5 3 Volume (pieces) Value (dollars) Volume (pieces) Value (dollars) Cancellation of orders Reduction of orders Lost Revenues Seventy-six percent of respondents forecast that they would lose more than 30 percent of their revenues in 2020; eight firms (24 percent) expected revenue losses of more than 60 percent (figure 3). EXPECTED REVENUE LOSSES nu Figure 3 30% or less losses és... EPA Revenue losses projected by Haïtian 50% 7 50% losses apparel manufacturers More than 60% losses © for 2020 (percent of | How Has COVID-19 Affected Haiti's Apparel Industry? | 17 | [page 23] Employment at the 38 ADIH members declined by 31 percent between March and April 2020, according to ADIH reports (figure 4). Small firms and private facilities outside public parks and private free zones were the most affected, with declines in employment of 59 percent and 70 percent, respectively. Le EMPLOYMENT m March 2020 m April 2020 Figure 4 Employment in Haiti's Number 60.000 pe : of workers 53-323 apparel sector in employed 50000 March and April 2020, by type of location 40.000 36.795 29.087 30.000 23.315 20.000 18.637 9.780 10.000 5-599 1.700 [e] Public industrial Private free Outside free Total parks zones and zones and industrial parks industrial parks Source: Data for March 2020 were collected from firms that receive government subsidies. Data for April 2020 were collected by ADIH from its members. | 18 | [page 24] ÿ qu | NA LAU A | FL | 1 | {| ll 11 * » a _ 207) : Aa PPS SSD =" ACER à A L 4 Tr : 2h 4 #1 > f 4 TIME Li. RCA ETS | a NS Photo: Palm Appare Û KE } 14] lu gr d d li di à | How Has COVID-19 Affected Haiti's Apparel Industry? | 19 | [page 25] dé ré r | PF + p' . 2 4 ILE | | ATANSYON KAB Rs — TT LR TÈT OU KA FRAPE ] . DS AFTER FPE L RTS Le [page 26] + + Production Capacity At the time of the survey, one firm remained closed. The remaining 32 firms were fulfilling existing orders, new orders, or both (figure 5). TYPES OF PRODUCT m Existing order m New order D Number 3° Figure s of firms Types of products 25 5 produced and orders received by Haïitian 22 29 apparel manufacturers LL K 6 ù after reopening following closure 10 2 caused by COVID-19 8 5 ES o 2 Knit Woven Mask Scrubs Gown Coverall with hood Material Type of Product More than half of firms (56 percent [18 firms]) were producing at less than 30 percent of their capacity after resuming operations (figure 6). PRODUCTION CAPACITY : Les ten 102 css 9% En e Figure 6 Reduction in EEE >> production capacity Above 60% SE reported by Haitian 10% - 30% apparel manufacturers . De » DR), 22% in May-June 2020 30% - 60% | How Has COVID-19 Affected Haiti's Apparel Industry? | 21 | [page 27] The data collected from the 31 firms that responded suggest that potential production capacity is 37.8 million units a month—59 percent PPE and 41 percent other garments (table 7). nu APPAREL PRODUCTION CAPACITY Table 7 Capacity of Haïitian apparel manufacturers surveyed to produce personal protective equipment and other Current products production of personal protective equipment (PPE) 19 | 12,648 50 658 1,424 | 14,779 800 | 15,579 Producing PPE but cannot give capacity 1 na. na. na. na. na. na. na. Has capacity to produce PPE but is not producing it 7 6,290 2| 1,050 65 | 7,407 600 | 8,007 Has capacity to produce PPE but cannot specify how much and is not producing it 1 o o o o o o o Not interested in producing PPE 3 na. na. na. na. na. 14,256 | 14,256 Total 31 | 18,938 52| 1,708 1,489 | 22,186 | 15,656 | 37,842 Note: n.a. Not applicable. | 22 | [page 28] At the time of the survey, the producers who declared that they had capacity to produce PPE were using two-thirds of their capacity (table 8). Of the 26 firms that specified the types of PPE they could produce, 23 reported being able to produce masks, 5 could produce gowns, 10 scrubs, and 2 coveralls with hoods. MONTHLY CAPACITY “ Table 8 Monthly capacity of Haïitian apparel i Masks | Scrub| Gown | Coverall Type of capacity Total manufacturers | surveyed to produce Current production 12,648 1,424 658 50 14,779 personal protective Capacity to produce additional equipment products, units 6,290 65 1,050 2 7,407 by type of product Total potential capacity 18,938 1,489 1,708 52, 22,186 (thousands of Current production as percent units, except where of total potential capacity 67 96 39 96 67 otherwise indicated) Only 20 firms reported producing PPE (table 9). Respondents did not provide information on production of surgical caps, shoe covers, and plastic face shields. A plastics manufacturer in Haiti (not part of the survey) has reportedly begun producing face shields, disposable boot covers, head caps, and gowns. PPE PRODUCERS Table 9 Number of Number of Haïtian Type of product (PPE) producers f apparel manufacturers Masks only 1 producing personal Masks and scrubs | 4 protective equipment, Masks, gowns, and scrubs | 1 by type of product Masks and gowns | 1 Masks, coveralls, gowns and scrubs | 1 Scrubs only | 2 Total number of firms producing PPE | 20 Note: All of these firms were also producing other garments. | How Has COVID-19 Affected Haiti's Apparel Industry? | 23 | [page 29] All respondents reported having enough resources and materials to comply with the obligations established by the authorities. These requirements include PPE for workers, handwashing stations, a chlorine carpet to disinfect shoes soles at the factory entrance, 1.5 meters between workers, and regular maintenance of facilities. Some respondents also reported taking additional measures, including the following: + temperature screening at the entrance - safe entry management - sanitization of equipment and hands (with disinfectant, paper, alcohol-based sanitizer gel, soap) + medical assistance and regular checking for respiratory symptoms * plan to evacuate confirmed cases. + Efforts by Buyers to Assist Producers Some respondents reported that buyers had offered them alternatives to simply cancelling their orders: 10 firms reported that buyers replaced their existing orders with different ones. +3 firms were asked to complete their orders, 2 of them obtained extensions of their delivery deadlines. *2 firms reported that buyers had authorized them to use the raw materials they had purchased to meet the buyers’ orders for other uses. 1 firm reported that its buyers temporarily suspended their orders. °1 firm reported having been given permission from a buyer to purchase fabric from other suppliers. One firm reported that it did not require mitigation measures, as its business did not suffer significant losses from the crisis. | 24 | [page 30] 1 All respondents L reported having enough resources and materials : to comply with the obligations ï established by the i authorities. | / fl | re v set, L æ à _ | ___—, ‘ f = È 1 D = A Æ , AT — #64 KT = ? Les x” : ‘ oi. Vo CE. À / A at … Pr #1 * AN À 2 ” J " Dr, . ” e NL 4 F ; mt ” |! a 22 il # (© Photo: S & H Global." dé D: Se Su, A *. 16\ 25" É D” n° 4 r A ? 2 va 1 | How Has COVID-19 Affected Haiti's Apparel Industry? | 25 | [page 31] ASSISTANCE - PTE > ! ne | son, + « L LT ER 7 - . P CC — A St Re DD up Vs PE Er he ; ALTER me EN Et © D NS eus PU. à Toys cel EN APS, (EN ü #2 ar - LL: LANCE LR) 1 À À k: “is \l a FE "A U IÉ À 7 L + br Fe ns 7 LA! . F à , | ie ns NEA 7. / | PONS UE | D: A { ‘1 1 | 2 Dés < ë 1 A1 4 É— = ; Eaue LRER PE b À v TRS ' Se - 4 a is out th (PF VERS 5 à ee. - ‘à : 2e KES y, EST VASE & Û 4 D: SR, É PSS MEET à MS æ *ù 7 \ Re Me £ Lonanav L'ET. < TS | * EU (S4}:Pho D: The Will Bes Haitia S.A. ù S HA le ter es nu ; \ N LRRENS LAPS DU EN AS NS RARE EE ES LS, L [page 32] The surveyed firms identified various needs for technical and financial assistance (table 10). REQUESTS FOR ASSISTANCE .. Table 10 Requests by Haïtian apparel manufacturers . Number of requests from Number of PP . f Type of bois producers of personal requests from for assistance requeste protective equipment (PPE) other producers Technical assistance PPE design | 1 | o PPE manufacturing | 1 | o PPE marketing and sale | 3 | 2 Market intelligence | 3 | 3 Financial assistance | | Working capital | 8 | 3 Investment capital | 2 | 1 Short-term credit | 2 | 6 Long-term credit | 4 | 3 Three firms requested assistance in obtaining PPE export permits and authorization, and one firm asked for support in implementing COVID-19 protocols in the communities of Ouanaminthe through education and social activities. Seventeen firms expressed interest in participating in a two-hour webinar that could include training and other relevant information. The Dominican Republic is a major source of equipment and materials. The closure of the border between the two countries in March therefore affected the preventive and scheduled maintenance of equipment. The surveyed firms requested assistance in training workers to repair equipment, especially air compressors, matter plotters, electronic motors, sewing machines, and embroidery machines (table 1). | How Has COVID-19 Affected Haiti's Apparel Industry? | 27 | [page 33] With the Dominican Republic under shutdown, mostof. Haïitian supply chain are under lock-down too. This’also affects Haitian preventive maintenance, scheduled maintenance, and even dealing with breakdowns, as the Dominican Republic is the one of the main source of this type of service for the Haïitian Industry. à L.d — + _— TS | Le dm A UT 4 im \ : e dés F di. * ; ss Lier CRUE e pes J = *\s= > 4 (4 "eu = — > ? * y | r 4 Eur . | # 7 xÉ | D - | —— Qu #1 : Né | ÿ h © , TT « a _ LL Po _ _ * | “1 h -e er” pr à À & — L 4 ue b pr —* + _: ‘ À . … ul 2. ‘ “af ’ « th E , à Le $ ä x » - =, . l Lu Es x Re n Photo: S & H Global se nn. Sr « h =, | ï % ; % | 28 | [page 34] REQUEST FOR TRAINING IN EQUIPMENT REPAIR .. Table 11 Type of Number of firms Requests by Haïtian machinery requesting assistance apparel manufacturers for assistance in Air compressor 8 training workers to Marker plotter | 6 repair equipment, by Sewing machines | 5 type of machinery Electronic motors | 5 Embroidery machines | 4 Specialized printing | 3 Desk printer | 1 Power generator (other) | 1 Maintenance (other) | 1 The surveyed firms also requested assistance in training for different types of workers. There were 46 requests in total. Their top requests were training for supervisors, sewing machine operators, quality controllers, and auditors (table 12). TRAINING REQUESTS BY PROFILE Table 12 Requests by Haïtian a pl apparel manufacturers training requesting for assistance in assistance training workers in order to increase Training of trainers and supervisors 16 productivity, by type Training of sewing operators | 9 of training Training of quality controllers and auditors | 8 Training of special sewing operation | 6 Training in mask production | 4 Training in PPE production | 2 Training of cutting-room controllers | 1 | How Has COVID-19 Affected Haiti's Apparel Industry? | 29 | [page 35] SURVEYED FIRMS' RECOMMENDATIONS TO THE ADIH TEXTILE COMMITTEE [page 36] Ten of the surveyed firms made specific suggestions for consideration by the ADIH Textile Committee: Conduct regular meetings with apparel Make Haiti more business friendly and inviting to manufacturers, rather than only during a crisis. international investors and buvyers, by improving Meeting regularly would help firms act proactively infrastructure, security, transparency, and and ensure that all firms are aligned with ADIH and governance. Such efforts would help prevent the government in fighting COVID-19. buyers that used to source from Haïti from shifting to more stable manufacturing destinations and [ 2] help Haiti attract investors who are leaving China. Support firms’ operations. Firms are facing [5 substantial losses as a result of closure, reduction or cancellation of orders, and lack of clarity on when Improve safety and government requirements: business will get back on track. Suggestions include - Optimize space. Decreasing the distance the following: between operators to one meter if barriers are - Authorize all firms to export masks and other placed between them would allow factories to PPE so that they can respond to inquiries they are employ more workers. receiving. + Extend the suspension period by another 60 days + Recognize that mask production is not the only to prevent factories from operating and provide way for firms to surmount their difficulties. Mask a direct subsistence subsidy to workers while production does not appear to be profitable for all factories are closed. firms, although it makes a valuable contribution to - Raise the restriction limiting the number of the survival of workers and firms. Alternatives need workers in a factory from less than 30 percent of to be sought. capacity to at least 6o percent. - Do not revise the minimum wage this year. - Extend the validity of the Quitus (the compliance * Provide government grants to factories to maintain document firms must obtain before they can operations and jobs. export) beyond the current one to three months. (In other countries, such a certification is usually Ô valid for one full year.) Meet human resource and training needs in English Ô and/or Spanish speaking, reading, and writing; computer skills; import/export or accounting-related Help factories ship products abroad. Improve trade experience; and medicine (doctors and nurses). and logistics service provision and infrastructure for companies to export efficiently. | How Has COVID-19 Affected Haiti's Apparel Industry? | 31 | [page 37] ANNEX A: TN x ADIH Textile and Apparel Survey are neo May 12, 2020 COVID-19 AND POST COVID-19 Losses, New challenges and Opportunities for the Apparel Industry in Haïti The health prevention measures adopted against the spread of the COVID-19 virus have hit the Textile and Apparel Sector very hard. New opportunities are emerging, offering solutions to protect the Haïitian industry and enabling it to get through the difficulties and uncertainties of this crisis. The purpose of this survey is to collect the necessary data so that the Textile and Clothing Committee of our association can establish a clear and precise roadmap to meet the new challenges we had already discussed during the past month. The treatment of your answers to this questionnaire will be confidential and will respect the principles of equity of ADIH. The final report will be presented and validated during a meeting to which all ADIH members will be invited. As a reminder, ADH/'S last similar exercise took place in 2017 and the data do not reflect the current profile of our members. We are expecting your response by May 16, 2020. Thanks for your collaboration. | 32 | [page 38] Name of the member: Name of the contact person Phone E-mail Before the CODIV-19 crisis Us. What was the production of your plant? UE ]Knit [_] Woven [_]Both [2.]) What was the capacity of your plant? number of units per month (3. Who were your principal buyers? Buyers name Percentage of your total order # Buyers name Percentage of your total order # Buyers name Percentage of your total order # Buyers name Percentage of your total order # After the March 19 Decision of GOH to shutdown factories and to reopen them [ 4.) Did you reopen after March 19, 2020? [| Yes [_]No [| Ifves, when? [5] What production capacity are you working with today? (in percentage of your normal capacity) Less than 10% | ] Between 10% and 30% | ] Between 30% and 60% | |] Above 60% | ] 6.) What are you producing now? Existing orders: | | Knit [_] Woven New orders: E_] Knit [_] Woven [_]Masks [_] Coverall with hood [_]Gown [_] Scrubs (blouse and pants) [_ ]Surgical cap [_] Shoe cover [_ | Plastic face shield [_] Other Q What is your capacity to produce (number of units per month)? [_]Masks [| Coverall with hood [_]Gown [_] Scrubs (blouse & pants) [_]Surgical cap [_] Shoe cover [_ | Plastic face shield [8] Will you register losses for this year because of the COVID-19 crisis? a. Cancellation of orders: In volume: Lessthan 20%! ] Between 20% and 50% | | More than 50% | ] In $: Less than 20% | ] Between 20% and 50% | | More than 50% | ] How many brands cancel their order? over a total of b. Reduction of orders: In volume: Lessthan 20%! | Between 20% and 50% | | More than 50% | ] In $: Less than 20%! ] Between 20% and 50% | | More than 50% | ] How many brands reduce their order? over a total of | How Has COVID-19 Affected Haiti's Apparel Industry? | 33 | [page 39] lo.) Do you receive new orders? From existing brands | ] and/or from new brands | | a. Type ofnew orders: Garment | |] Masks | ] Gown!| ] Coverall with hood | ] Scrubs (blouse& pants) | ] Surgical cap | ] Shoe cover | ] Plastic face shield [ ] b. New orders for when: Fall season 2020 | ] Winter season 2020 | ] Both seasons | ] © What measures have your buyers offered to mitigate the impact on your factory? a. Replacement orders By existing brands | | By new brands | | Type of products: Masks |] PPEs | ] Others! | b. Free use of their raw materials for other clients |] c. Other measures Un.) What are the most important challenges you are facing? Put a number in the square to show your priority: High Priority is 1; Low Priority is 2; No priority is o. a. Difficulty accessing raw materials C] b. Lack of working capital [] c. Access to market [] d. Uncertainty in global demand C] e. Need of new facilities and/or equipment for new orders C] f. Need of workers’ training for new orders [] g. Conditions of public transportation available for workers CU] h. Due to new government regulation: h1 Workers and staff reduction 30% or Less! | Between 30% and 60% | ] More than 60% | | h.2 Economic performance in terms of reduction of your regular production: 30% or Less! | Between 30% and 60% | | More than 60% | ] h.3 Export restrictions | ] h.4 Haïtian public procurement procedures i. Other challenges = [12 Do you plan to ask the Ministry of Labor to temporary close your operation? For 15 days! ] For 30 days [ ] For 60 days | ] [13.) Will you be able to continue your operation during the next 6 months? Yes |] No! | If ves, it will be with 100% of my employees | ] 60% ofthem! | 30% or less | | | 34 | [page 40] Fa What is the estimation of your revenues lost for this year? 30% | | Between 30% and 60% | ] More than 60% | | © Do you have enough resources and materials to comply with the guidelines for protection against CODIV-19? Yes | ] No! | 1fYes, please check, boxes below: PPESs for workers [ ] Hands washing stations | ] Chlorine carpet at the entrance | ] Industrial space to accommodate social distance (1.50 meters) | ] Regular maintenance of facilities | ] Other @ Do you require any assistance? © Technical: PPEs design| ] PPES confection | ] PPES marketing and sale | ] Market intelligence | ] Other @ Financial: Working capital | ] Investment capital | ] Short term credit |] Long term credit [ ] Other © Other type of assistance Workers Training @ Do you have equipment or machinery that you cannot find repair services for and that you think a service provider could potentially help with, in terms of training workers in equipment repair? Sewing machines! ] Electronic motors! | Air compressor | ] Desk printer | ] Marker plotter | ] Embroidery machines! ] Specialized printing [ ] Other © Which skills do you think are missing and could help you to produce more efficiently with better quality, lower your operating costs, and create a better work environment? Training sewing operators |] Trainers, supervisors [| Quality controllers and auditors | ] Special sewing operation training | ] Cutting room controllers | |] Producing masks | ] Producing PPEs [ | Other @ Are you interesting in participating in a Webinar? 2hours | ] More than 2hours | ] Not interested | | @ Please give your recommendations to the Textile and Apparel Committee of ADIH | How Has COVID-19 Affected Haiti's Apparel Industry? | 35 | [page 41] 4 «3 = . _ g 2. : | * : ! 4 = 2 | F p Ps à s . ee LL. . s 3-11 = AR Te — | vs... «| 12 1 + Er Le 0 | | 3 S : à, ä er i sÿ AL: À . _# Photo: UTE/Ministnyof Economysand re, Haïti W PTS | 36 | [page 42] International IF Finance Corporation ‘WORLD BANK GROUP Creating Markets, Creating Opportunities 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 www.ifc.org December, 2020