COLOMBIA Alexandria Angel
EXECUTIVE SUMMARY Here at Aurora, we strive to deliver women top quality swimwear, guided by classic looks with a modern flare & style while understanding the female form. Our suits are the perfect combination of sexy and supportive silhouettes made of superior materials that not only shape the figure but help women feel confident and comfortable in their own skin while strutting down the beach and launching into the waves. Auroraâ€™s vision is to empower our customer in a fashionable and versatile swimwear led by quality and fit. Our focus is to make sure we are producing the highest quality product at the best price possible. We plan to explore each country in-depth in order to create the best price possible for our consumers. We will break down the countries by analyzing the differences in political, economical, social, cultural, and geographical characteristics. This research will allow our team to ensure that we are utilizing the top country to manufacture our product. Our company has high expectations and we endeavor to find manufacturers that meet those standards. We will also assess these manufacturers as well as trade agreements of the select countries to ensure the safety of our workers, as well as our business. In addition, we will evaluate all manufacturing costs to ensure that we are working with the best price and quality for our goods. This report serves to deliver the awareness of the risks and benefits of each country to our company in order to to plan a strategy that will benefit both our company and our consumers. Our customers drive our brand, so it is important that we put the best product forward, from the best country at the best price.
TABLE OF CONTENTS Introduction
Logistics & Importation
INTRODUCTION Colombia is a country in northwestern South America. It borders both the Caribbean Sea as well as the Pacific Ocean. Some of the nearby countries include Venezuela, Peru, Panama, and Brazil. The country’s geography varies from high Andes Mountains and flat lowlands. Colombia’s government system is a republic, wherein the executive branch dominates government structure. The president is the chief of state, as well as the head of the government. The country has a ‘pro-market’ economic system, in which the free price system determines the cost of goods and services.
The capital city of Colombia is Bogota.
The country has a population: 47,704,427
Out of 189 countries, Colombia is ranked 42 in â€˜ease of doing business with,â€™ and ranks 93 in trading across borders in 2013
The top 5 ports in Colombia are Cartagena, Barranquilla, Turbo, Port Drummond, and Buenaventura
The top 5 Suppliers are Cia Colombiana De Ceramica, Colombina S.A., C.I. Tecnicas Baltime De Colombia S, Alfagres SA, and Tecnoglass S.A.
$8,507,509 of articles apparel and clothing are imported from Colombia to the U.S.
Economic The 2012 enactment of the FTA with the US is expected to create 100,000 jobs per year, and enhance economic growth by between 0.5-1% of GDP. With the exception of 2000, Colombia has had a trade shortage from 1995-1012. In 2012, goods and service exports amounted to $73 billion, which created a trade deficit of $2.1 billion. The Santos administration has been promoting economic growth by pursuing free trade agreements with other South American as well as Asian countries, as well as the European Union, the US and Canada. In 2011, the average unemployment rate was approximately 10%. Despite many economic improvements, Colombia continues to struggle with their high poverty rate of 37.2% and one of the highest income disparity levels in the world. Colombiaâ€™s economic growth can be credited to an increase in security, economic reform, and export growth over the past decade.
Social Since 2012, 67.5% of the Colombian population fit the 15-64 age group, and 26.2% to the 0-14 group. In 2012 the median age was 27 years old, which meant that the country had a demographic advantage because of the number of people of working age. In Colombian society, 1% of the population holds almost 40% of the countryâ€™s wealth. Unfortunately, almost 34% of Colombians live below the poverty line.
Political In regards to political stability and the absence of violence, Colombia is ranked 12.3 in 2011. The existence of guerilla groups has always been a threat to the stability in the region. On several occasions, the election process has been disturbed, and contesting members killed. The current alliance of Juan Manuel Santos consists of six political parties and controls almost 90% of the congress. His major term highlight has been the peace talks with the FARC guerillas, which could potentially change the whole political landscape of the country.
Foreign Relations: In 1969, Colombia, along with Bolivia, Chile, Ecuador, and Peru, formed what is now the Andean Community. “In the 1980s, Colombia broadened its bilateral and multilateral relations. ”The country joined the Contadora Group, the Group of Eight (now the Rio Group), and was the chair-country of the Non-Aligned Movement from 1994 until September 1998.” In 2011, Colombia joined UNASUR, as well as CELAC. Colombia has traditionally played an active role in the United Nation. The country was elected to a 2011-2012 term as a non-permanent member of the UN Security Council. Colombia is also active in the OAS. Colombia has participated in all five Summits of the Americas. Finally, The International Labor Organization (ILO) elected two Colombian members to its Administrative Tribunal in June 2011.
RELIGION: Colombian religion is an expression of the heritages within their culture, which includes the Spanish colonization, the Native Amerindian, and the Afro-Colombian. Catholicism was the official religion of Colombia after the Spanish colonization till the 1991 inerent reform. Still, Catholicism is the primary main religion in the country Catholicism was one of the first Christian religions and was the most dominant religious force in the Christian world for years. Freedom of religion is imposed by the State and well sustained in the Colombian culture. Almost entire towns in the country have a church. There are also mosques, synagogues and temples, particularly in the largest cities. Religious Demographic: •81% Roman Catholic •13.5% Protestants •1.9% No religious beliefs •2.3% Jewish •3.6% Other
Body Language -Smiling is very important. -Never put your feet on furniture -Yawning is impolite and viewed as a sign of hunger or sleepiness. -It is considered demeaning to beckon someone with your index finger. Instead, beckon with your palm down, waving your fingers or your whole hand. Corporate Culture -Colombians are normally punctual in business, although they may be up to a half-hour late. The best policy for foreign businesspeople is to be punctual, but prepared to wait. -Colombians want to know you personally before they do business with you. You must develop a relationship with your counterparts before they will consider you trustworthy. -Always allow your Colombian counterparts to bring up the subject of business. Be aware that this may take awhile. Meetings may be slow, with quiet, deliberate discussions. -Follow up a meeting by sending a letter summarizing the main points and what was agreed upon. Dress -Dress conservatively and be well groomed. -For business, men should wear dark suits, white shirts and ties in the cities. In warmer areas, dress is less formal. Women should wear dresses and suits. Gifts -Gifts made in America are well-received. -Bring your hostess fruit, flowers or chocolates. -Give your colleagues fine wines, engraved pens, and gifts from your home region.
Colombia has been an important contributor to the fashion industry around the world for over 100 years. They have a strong history of manufacturing textiles and apparel for many fashion leaders within the industry. In 2011 Colombia exported to 139 countries. The country has a reputation for beautiful attention to detail, design and craftsmanship. Today, their textile and apparel industry contains over than 1,000 companies providing everything from simple notions to haute couture. â€œAs a result of its great connectivity, competitive lead times, resource diversity, and years of experience, Colombiaâ€™s textile and apparel industry has become a magnet for international buyers to find the best high-end competitive products.â€?
Labor Colombia continues to face labor rights challenges, it has devoted to sweeping reforms under the Labor Action Plan, announced by both Obama and Santos in 2011. The government has committed to doubling labor inspectors by hiring 480 within the next 4 years to help protect the rights of laborers. Also, new legislation establishes criminal penalties to employers that undermine these rights. In 2011, the government appointed a new labor minister as well as established a separate Labor Ministry in order to provide better institutional capacity to protect labor rights.
Aurora is committed to a standard of excellence in every aspect of our business, including legal, ethical and responsible conduct in all of our operations. We expect these same commitments to be shared by all factories, subcontractors and suppliers who are affiliated with the manufacture of Aurora goods. In addition, suppliers are also expected to share our commitment to quality and to maintaining the practices necessary to meet our quality standards.
Work Hours and Overtime: During our regular business hours, our factories should work toward a 60-hour workweek regularly. The maximum hours allowed per 24-hour period should not exceed 14 hours. Employees shall be permitted one full day off per week. In the case of overtime, workers shall be compensated at a premium rate according to legal standards.
Forced Labor: We do not use any form of forced, bonded or compulsory labor including prison labor and indentured labor.
Compliance with laws: Aurora suppliers must operate in full compliance with all applicable local laws, standards and regulations relevant to the conduct of their business.
Child Labor: No one will be employed if they are younger than 15. Workers under the age of 18 are not allowed to perform work that may jeopardize their health or safety.
Monitoring Supplier Conditions: The suppliers who manufacture our products are regularly inspected to monitor compliance with our Code of Conduct and related laws and regulations.
Harassment or Abuse: Workers will be treated with respect and dignity and shall not be subject to any physical, verbal, and psychological or sexual harassment and suppliers shall not use monetary fines as a disciplinary practice.
Subcontracting: Suppliers are not allowed to subcontract any portion of the manufacturing process without prior written approval from Aurora.
Discrimination: Our people should be employed and compensated based upon their abilities to perform their job rather than on the basis of gender, sex, race, religion, or beliefs. Wages and Benefits: Workers shall be paid at least minimum wage for all completed work, and must receive legally mandated benefits, as required by law.
Health and Safety: Aurora conducts its business activities in a manner consistent with applicable health, safety, and environmental laws and regulations. We are committed to ensure the health, safety and well being of our people by having mechanisms, resources and processes in place to monitor safety performance, identify threats and minimize risks
Why Source from Colombia? This industry offers over 100 years of experience in manufacturing fabrics and apparel for the fashion industry, locally and internationally. They produce quality and high end products. They have a competitive delivery time of approximately 28 days. Colombia has beaten Asian countries in pricing through shortening delivery times because of its near shore proximity to the U.S They have made huge investments in technology in order to become more efficient and flexible in order adapt to consumer demands and styles at any production level. Colombian producers offer Eco-green solutions made with organic textiles. This industry is committed to being socially responsible responding to the needs of the community by supporting several social responsible programs. Colombiaâ€™s industry has vertically integrated processes that include design, cut, print, and distribution. Colombia hosts specialized sourcing tradeshows annually: Colombiamoda (Colombiaâ€™s main platform for local brands and factories). and Colombiatex (their main platform for textile and raw materials for the apparel industry). Finally, as a result of the signed Free Trade Agreement between the U.S. and Colombia, American buyers can enjoy 0% tariff in a great number of textiles and apparel products.
U.S.-Colombia Trade Promotion Agreement This agreement has received noteworthy attention this year across several US media outlets. For this reason, it is imperative to understand what the agreement does, why the country’s businesses support it, and why some are opposed. It is also important to learn how it relates to other agreements between the United States and other countries in Latin America.
The approval of the US- Colombia TPA will result in more American jobs, an increase U.S. exports, and will enhance U.S. competitiveness. The economy in Colombia is the third largest in Central and South America. This broad trade agreement will abolish tariffs and other barriers to U.S. exports, expand trade between our two countries and promote economic growth for both. “The International Trade Commission (ITC) has estimated that the tariff reductions in the Agreement will expand exports of U.S. goods alone by more than $1.1 billion, supporting thousands of additional American jobs. The ITC also projected that the Agreement will increase U.S. GDP by $2.5 billion.” The two economies are quite complimentary when it comes to trade. For instance, Colombia is a huge importer of grains from the US, while it exports a number of fruits to our country. In addition, U.S. cotton, yarn and fabric exports to Colombia are used in many apparel items that Colombia exports to the United States. The agreement will remove major barriers to US goods entering the market in Colombia. More than 80% of exports from the US will immediately become duty free, while remaining tariffs are phased out over ten years.
Other Benefits of this Agreement:
-Expanded access to service markets -Greater protection for intellectual property rights -Comittment to protect labor rights
-Comittmments to protect the environment -More manufacturing exports to Colombia -Increased textile access for US apparel
“Colombia is an important market for U.S. textiles and apparel. The U.S.-Colombia Trade Promotion Agreement opens new market access opportunities for U.S. textiles and apparel manufacturers and strengthens customs enforcement mechanisms to verify claims of origin and deny illegal customs circumvention. Qualifying U.S. textile and apparel exports to Colombia would receive duty-free treatment immediately upon implementation of the Agreement.” Colombian textile and apparel tariffs average 18.3% currently. Qualifying U.S. textile and apparel exports to Colombia would receive duty-free treatment. The Agreement contains a “yarn-forward” rule of origin, meaning that qualifying textile and apparel products must be produced using U.S. or Colombian yarns and fabrics.
Trade Across Borders Local Textile and Apparel Industry Trade Associations in Colombia Asociacion Colombiana Productores Textiles - ASCOLTEX Textile Mills Association-Bogotá Asociacion Colombiana de Confeccionistas de Moda – ACOLMODA Association of Fashion/Garment Manufacturers- Medellin Asociacion Nacional De Distribuidores Textiles E Insumos Para La Confeccion - ASOTEXTIL Textile and Materials Distributors Association CASCONFECCION Apparel Manufacturers Association - Santafe de Bogotá Center for Technological Development for the Footwear, Leather & related Industries - CEINNOVA Distribuidora de Algodon Nacional (Diagonal) -Cotton Purchasing Agency for the Textile Industry
Following Mexico, Brazil, and Chile, Colombia is the fourth-largest export market in Latin America. U.S. exports to Colombia in 2011 were $13.1 billion, up 20% from 2010. Also, U.S. imports from Colombia were $20.9 billion, which was up 47% from the previous year, due to high crude oil prices and the weak dollar. The major exports from Colombia are petroleum, coal, coffee, nickel, cut flowers, and bananas. The US is the country’s largest trading partner, representing about 42% of Colombia’s exports and 26% of its imports. It takes approximately 14 days to export items from Colombia, and costs $2,355 per container.
Advantages Offered by the Textile and Apparel Sector in Colombia: Colombia offers wide variety, including: knits, outerwear and underwear, swimsuits and beachwear, jeans wear, sportswear and home textile. They have flexible production and fast reaction product lines across the board. The US has been Colombia´s main market for apparel, textiles and ready-to-wear products since the late 20th century. “Other benefits include: high quality products, social responsible companies, high knowledge and technology in garment and textile production, fashionable design and vertical integration within the sector.” Also, the FTA allows a 0% duty on goods like denim, and includes new tariff reductions by eliminating duties in products such as footwear. “More than 1.600 products that may enter the US market with 0% tariff: 93% of the apparel-textile and ready to wear categories, 90% for leather manufacturing goods, 73% of footwear and 76% of leather categories, will enter the American market with no duty.” Application to Swimwear In the clothing sector, Colombia has become a front-runner in undergarments and swimwear. “American buyers can enjoy 0% tariffs on a great number of textiles and apparel products, particularly in the swimwear industry, as a result of the Free Trade Agreement between the United States and Colombia. Since the signing of the FTA, a growth of 58% was reported totaling USD $ 4.1 million in Colombian swimwear brands exported to the US. “
Company Name: OndadeMar Swimwear Main markets: North America Product/Service: Swimwear About Us: We are a manufacturer of swimwear in Colombia. We are a high-end production company, specializing in beach cover-ups, swimwear, and accessories. Category: Apparel - Sportswear Address: Calle 14# 30-29, Medellin, Colombia Telephone: 57-4-3180410
Company Name: Azul Marino Lingerie & Swimwear Main markets: North America Product/Service: Swimwear, Panties, lingerie About Us: We are a Colombian manufacturer of lingerie and swimwear. We provide for the Colombian Brand “Leonisa International”, and also sell products in Colombia. Category: Apparel - Underwear Address: Calle 34 No 45-7, Medellin, Colombia Telephone: 57-4-2616572 Company Name: LEONTINA & CO Main markets: North America South America Western Europe Product/Service: Intimate Apparel And Designer About Us: Leontina & Co. is the premiere source for intimate apparel and designer swimwear from the top fashion studios of Colombia. The company represents what has been considered the best of Colombian designer labels, well-positioned to take the world’s fashion industry by storm Category: Apparel - Underwear Website: http://www.leontinacompany.com Address: 1230 Viscano Drive, Glendale, California, United States Telephone: 1-818-2448851
Company Name: PRODUTEX S.A. Main markets: North America South America Product/Service: Swimwear, Sportswear, Nightwear, Casualwear About Us: Our company is located in Medellin, Colombia, South America. We have our own Brand Called Corpo. We have been in the market for about 25 years. We produce the fabric and the garments for our brand and other brands. Category: Apparel, Fabric Website: http://www.corpo.com.co Address: Cra 43 A# 61 Sur 152 Int 121, Medellin, Antioquia, Colombia Telephone: 57-4-3012288 Company Name: AS Digital Ltda Main markets: North America South America, Europe Product/Service: Apparel, Swimwear, and Lingerie About Us: We are manufacturers and designers of apparel and textiles. Category: Apparel - Underwear - Swimwear Address: Calle 24 A# 15-40 La Pradera, Cali, Valle, Colombia Telephone: 57-2-5530112 Company Name: LB Enlace International Main markets: Western Europe Product/Service: Swimwear, Beachwear, Sportswear, and Lingerie About Us: LB Enlace International, is a manufacturing company specializing in both swimwear and lingerie. Address: Calle 77 No 51- 39, Barranquilla, Colombia Telephone: 57-5-3455521
Company Name: Fashion Monard C.I. ltda Main markets: North America, South America, Eastern Europe Product/Service: Underwear, Swimwear, Beachwear About Us: Fashion Monard is a Colombian company and an experienced, professional apparel and clothing manufacturer. The main production of our company is high quality underwear and swimwear. Category: Apparel - Underwear Address: Cra 96 D Bis No. 22g-07, Bogota, Cundinamarca, Colombia Telephone: 57-1-4044091 Company Name: C.I. Phax S.A. Main markets: North America South America Eastern Europe Southeast Asia Product/Service: Swimwear, Beachwear About Us: Our company is dedicated to designing, producing, and commercializing swimwear, beach clothing, and accessories for women who require a product characterized by design and fashion. Address: Carrera 51# 5 A Sur 20, Medellin, Antioquia, Colombia Telephone: 57-4-3600663 Company Name: Casa Colombiana De La Moda Product/Service: Swimwear, Beachwear, Accesories About Us: With our brand, we appreciate the beauty and sensuality of a woman who wants to be noticed. We offer the latest fashion trends in all our creations, combining vibrant colors, and high quality materials. Category: Apparel - Sportswear Address: cll 188 55 62, Bogota, cundinamarca, Colombia Telephone: 57-1-8004899 Company Name: Bienaventurada S.A.S. Main markets: North America South America Eastern Europe Oceania Western Europe Product/Service: Swimwear,Underwear,Lingerie About Us: We offer our swimwear collections with new design and color alternatives. Our products are designed for high and medium-high class markets in which women search exclusiveness, design and comfort in the clothes they wear. Category: Apparel - Sportswear Address: Cra 48 No 61 sur 115, Sabaneta, Antioquia, Colombia Telephone: 57-4-3010222
The currency used in Colombia is the Colombian peso (COP)
Exchange Rate: 1 Colombian Peso equals 0.0005 US Dollar
1 US Dollar equals 1988.62 Colombian Peso (as of 1/23/14)
Palermo Port Society Port of Barranquilla Port of Sociedad Portuaria Regional de Buenaventura Port of Sociedad Portuaria Regional de Buenaventura Port of Cartagena Port of Cienaga Covenas Offshore Terminal Port of Mamonal Terminal Maritimo Muelles El Bosque Port of Pozos Colorados Puerto Bolivar San Andres Island Harbor Port of Santa Marta Port of Tolu Port of Tumaco Port of Turbo
Harmonized Tariff Schedule (HTS Code) The Harmonized Tariff Schedule is a mechanism by which international tariffs are standardized. It is required to classify items according to this system when shipping overseas. The first six digits are the same for every country. The following digits are specific to each country, along with different rules for classification.
The coding system for global tariffs is a system of names and numbers for identifying products. Both exporters and importers must classify all goods moving across international borders using this system of the country of import. Each item that is sold must be given a code according to the customs tariff schedule of the country from which you are selling. Aurora will be importing swimwear from Colombia into the United States. In order to complete this process, each product needs to follow the classification system of a HTS Code for swimwear containing nylon lycra and polyester
Freight Companies Some of the top shipping companies based in Colombia are ZIM Integrated Shipping Services, Mediterranean Shipping Company, and Shipco Transport.
LOGISTICS & IMPORTATION
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