WFSGI Magazine 2016

MAGAZINE

WFSGI

OFFICIAL PUBLICATION OF THE WORLD FEDERATION OF THE SPORTING GOODS INDUSTRY

NEW TECHNOLOGIES:

SPORT GOES DIGITAL

CR & MANUFACTURING: BEYOND LEAN?

2016

HOW TO GROW CYCLING

WFSGI MAGAZINE 2016

WFSGI

© 2015 adidas AG

ENERGY TAKES OVER ULTRABOOST

YOUR GREATEST RUN EVER

© 2015 adidas AG

EDITORIAL

MESSAGE PRESIDENT Dear WFSGI Members Dear Readers Even without the major sports events, 2015 has been a very successful year for the sporting goods industry. To me, this is clear evidence that we can commercialize on our industry’s main raison d’être: providing people with products and services to reach their best in professional and leisure sports. This enormous field of play offers great chances and opportunities for all of us. Let me therefore touch on the following three topics: digitalization, the power of sport and sustainability.

Today, there is a lot of talk about the ‘internet of things’, although in real life and especially in the FMCG industry, there are not many ‘things’ around. Yet, the sporting goods industry is special: sensors, athletic performance measurement and tracking have already reached a highly advanced stage in terms of digitalization. Nevertheless, we will not stop here and we want to evolve, as our consumers’ expectations are constantly changing. The entire value chain is relevant: we need to holistically understand the consumer, we have to transfer this knowledge into product offers, and we need to deliver. Focusing on the consumer journey will be as important as investments in R & D or marketing. Digitalization will play a major role in bringing our industry forward. Let us be one of the first that can really turn the internet into ‘things’. With all our knowledge, capacities and power, we can drive this together and explore new business models. If we do not create and craft our future, the future will be crafted without us.

We all are innovators in terms of R & D, materials, manufacturing and retail. Looking beyond these business activities, together we positively promote physical activity by using emotions, our brand assets and sports events. Each child who starts to become physically active, every adult who rediscovers sport, turns into a new consumer. The power of sport will trigger economic benefits not only for our companies, but for our society. This is another reason why we stand for a world without trade barriers for sports products.

We must finally get rid of artificial duties on sports shoes and other sports products.

Sustainability has become an integral part of our business. Across the world, we are observing increased consumer acceptance and growing demand for sustainable products. For the stakeholders involved in our business activities, this is a rewarding signal that our investments are paying off.

2016 will be a year full of sports events on both a global and a local scale. I am more than confident that the sporting goods industry with all parties involved will have a bright future. WFSGI is now acknowledged as a serious voice among our stakeholders and beyond. Thank you all for your support over the past years, for your time, your commitment and your input. This ‘thank you’ is not only directed to my fellow Board members and the many active men and women in our committees, but to each and every member of our great Federation.

Finally, let me thank my dear WFSGI staff, who always successfully manage to connect the dots and bring our members together in this competitive yet inspiring business environment.

Very truly yours in sport

Frank A. Dassler President

WFSGI MAGAZINE 2016

1

SUSTAINING MEMBERS

The sustaining membership is a complimentary membership.

Companies that choose to be a sustaining member demonstrate a strong identification with the WFSGI and its objectives.

GOLD minimum spacing guide line

SILVER

BRONZE $3$&+( THE WFSGI THANKS ALL ITS SUSTAINING MEMBERS FOR THEIR CONFIDENCE AND SUPPORT!

EDITORIAL

© IOC

MESSAGE SECRETARY GENERAL Dear WFSGI Members Dear Readers In 2015 we initiated many exciting projects that will thrive in 2016. For our successfully growing membership and Federation, we invested in novel services.

We developed the “RSI – Responsible Sport Initiative”, a sustainable initiative that provides an audit-sharing tool that encourages audit sharing and reduces audit costs for both SMEs and larger companies. Sports federations and other sport industry sectors can also use the tool, and today we already see developments in specific sport areas, such as the bicycle sector. WFSGI successfully organized the third edition of our Manufacturers Forum 2015 in Hong Kong. With a visit to the races at the Hong Kong Jockey Club, we rounded up a successful forum with manufacturer and brand experts, discussing and debating the topics of lean and green manufacturing, factory planning and production optimization, sustainable packaging design and the reduction of labor-intensive production, workforce education and human-centered manufacturing.

On the sustainability side we advanced and worked on the communication project for critical CR issues, providing position papers to support our members in their own communication and implementation of CR activities. The following documents have already been drafted: Code of Conduct, UN Principles on Business and Human Rights, Non-financial Disclosure and Factory Closures/Downsizing. The CR Committee has already evaluated seven further topics that will be taken up in further position papers.

The past year was marked by unprecedented trade activities.

Besides engaging in various trade cases, the WFSGI was honored to represent the industry at the 5th WTO Global Review of Aid for Trade and also successfully hosted a session at the WTO Public Forum on the Rules of Origin.

I also wish to use the opportunity to thank the IOC on the progress we have been able to make on Rule 40 and Rule 50 of the Olympic Charter. The new interpretation will allow the industry, under conditions, to continue their generic

advertisement possibilities with athletes during the Olympic Games period. The increase in visibility of our brands and the further alignment of IOC rules towards international sport federation rules is making our contribution to the Olympic Games a lot smoother. We are particularly proud of the NOC support program that the IOC and WFSGI have put together. The aim is to provide NOCs and athletes who need support with compliant products for the field of play during the Rio 2016 Olympic Games. You can find more information about the NOC support program at the WFSGI Secretariat.

Please allow me to finish by thanking everyone who has contributed to the Magazine 2016! From my pre-reading, I can assure you that it is again exciting, interesting and representative of our activities. In particular, I wish to thank the WFSGI Board, the Committee Chairpersons and all our members who continuously drive the Federation and the industry forward.

I wish you interesting reading and good health and prosperity for 2016. We look forward to seeing you at one of our next WFSGI meetings.

With best personal regards

Robbert de Kock WFSGI Secretary General

WFSGI MAGAZINE 2016

3

24

© Nike, Inc.

16

18

TABLE OF CONTENTS Editorial: Message President and Secretary General

4

1–3

New Technologies: Sport Goes Digital • Digital Technology – Wearables and the Sporting Goods Industry • The Demographic Divide: Fitness Trackers and Smartwatches • Important Considerations for Athletes in the Boom of Wearable Sensor Technology • Product Authentication: Possible Benefits of a Joint Industry/WFSGI Solution to Fight Fakes • Nike+ Is Using Music as an Instrument of Performance Improvement • Technology Putting Performance and Fans First at Rugby World Cup 2015 • The Olympic Channel: A Win-Win for the Entire Sports Industry

6–7 8–9 10–11 12–13 16–17 18–19 24–25

How to Grow Cycling • The Sport of Cycling Evolves Hand in Hand with Technological Evolution • Road Pro Teams: “We Need to Shape the Future of the Sport of Cycling” • Women: The Key to Growing the Cycling Market • Time to Get Moving

26–28 30–31 32–33 38–39

CR & Manufacturing: Beyond Lean?

• KTC: The Best Made Better • Excellent Lean Production: The Way to Business Sustainability • Embedding Responsible Business in Global Supply Chains • Trade Bodies and Good CR Communications

44–46 48–49 54–55 56–57

Sourcing Myanmar • Sprinting Forward – Expanding Opportunities in Sportswear Sourcing in Myanmar • Myanmar: The Next Opportunity in Sportswear Sourcing?

• Myanmar’s Industrial Development: Catching Up in an Uphill Marathon

62–63 64–65 66–67

Joint Efforts in Trade • Why Rules of Origin Matter in International Trade • Joint Cooperation in Trade Remedy Investigations • What Does the ASEAN Economic Community Mean for Global Trade?

69–71 72–73 74–77

WFSGI MAGAZINE 2016

© AP Photo/ Michael Conroy

© Fuji

10

32

© MGMA

© Getty Images

62

The World Federation of the Sporting Goods Industry (WFSGI) • Legal Committee • Committee on International Sports Organizations • Bicycle Committee • Physical Activity Committee • Manufacturers Committee Report • Corporate Responsibility Committee • Trade Committee • Board of Directors • Members Directory

14–15 20–23 34–37 41–43 50–53 59–60 78–79 82–83 84–88

IMPRESSUM • Published by: WFSGI, Obere Zollgasse 75, P.O. Box 1664, 3072 Ostermundigen (Bern, SWITZERLAND), phone: +41 31 939 60 61, fax: +41 31 939 60 69, www.wfsgi.org, info@wfsgi.org • Layout: Republica AG, 360° Kommun­ ikation, 3000 Bern 13 / AST & FISCHER AG, Bettina Häfliger, 3084 Wabern (SWITZERLAND) • Printing: Print United (Germany) COPYRIGHTS • Cover: © 2015 Garmin Ltd. or its subsidiaries © Graham Watson © KTC LEGAL DISCLAIMER • All information provided in in this Magazine that is created and maintained by a variety of sources both internal and external to the WFSGI is provided for information purposes only. The opinion expressed in each article is the opinion of its author and does not necessarily reflect the opinion of the WFSGI. Therefore, WFSGI carries no responsibility for the opinion expressed thereon. Although WFSGI has taken every reasonable care to ensure that the information contained in this magazine is accurate on the stated date of publication or last modification, the WFSGI makes no guarantees of any kind. Hence it can not be entirely excluded that the information may be out of date, incomplete or solely the opinion of the author. In no event shall the WFSGI be responsible or liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of reliance on any such content, goods, or services, available on or through the WFSGI Magazine, its web sites or the WFSGI itself or its resources. This also applies for any damages caused by viruses contained within the electronic files or at the WFSGI site itself. This site contains also links to other internet sites. Such links are not endorsements of any products or services in such sites, and no information in such site has been endorsed or approved by the WFSGI.

WFSGI MAGAZINE 2016

5

NEW TECHNOLOGIES: SPORT GOES DIGITAL

DIGITAL TECHNOLOGY – WEARABLES AND THE SPORTING GOODS INDUSTRY

One of the next big opportunities and challenges for the sporting goods industry is to harness the potential of digital technology. Mobile technology and wearables are transforming sport and the sports business at a rapid pace. WFSGI interviewed wearable technology expert Christian Stammel, CEO of Wearable Technologies AG.

> What is the importance for WT devices? What does the market look like? Can you give an estimation of the WT sports sector? >> In the market for wearable technologies, we have seen a healthy growth over the past few years. The sports sector has always been one of the most important market segments for this market and was the first where real margins were achieved with consumer products. The latest research studies estimate the overall market in 2020 in a range of US$30 billion to US$173 billion (it will probably vary this much as the product groups taken into account might be different). For the sports sector, we are looking at a market size of a minimum of $5.4 billion by 2019 for fitness trackers only.

> Christian, what should we understand by the term “wearable technologies” (WT) and how would you describe this phenomenon – what many refer to as the “digital revolution”? >> We define wearable technologies as electronic devices worn close to the body, on the body or even in the body.

Also in wearables, we see a trend in storing more and more data digitally and with a stronger focus on the software side rather than on the hardware only. This is a smart move as it means that less memory space is required on a wearable, which in turn means that devices can be smaller and lighter and will require less energy. Also, the ability of wearable devices to interact with their smart surroundings will increase the value of the device for the user.

> What implications does this have for the industry? Wearables are not a classical sporting goods product: Will it lead to a further diversification of the sporting goods industry? >> The early sports wearables were targeted only at semiprofessional and professional athletes. Today, a much wider group of people is interested in using wearables to keep fit.

A challenging factor for the retail of these products is that

Smartphones Mobile Phones

THE CHASM

CROSSING

Wearable Technologies

Innovators

Early Adopters

Early Majority

Customers want technology and performance

© All images Wearable Technologies AG

6

WFSGI MAGAZINE 2016

Late Majority

Laggards

Customers want solutions and convenience

Source: G. Moore, Crossing the Chasm

© 2013 Wearable Technologies AG

NEW TECHNOLOGIES: SPORT GOES DIGITAL

idea of what you really have achieved. Today, devices can give guidance like a digital trainer and help people to reach their goals quicker and more effectively. Ideally, they don’t alter the actual experience, but just enhance your overall experience. For example, when taking environmental data into account, your wearable could tell you that the city smog is too high for running outside and recommend that you run inside on that specific day. This is just one example, but the power of contextual can be huge for the user and a really positive and helpful experience.

they need some more explanation at the POS and it might also be difficult to find the right space within a retail space.

As for the running wearables, it is clear they should be with the running gear. But where do you position the generic fitness tracker that may even look like jewelry. Best Buy is already doing a great job here and is a good example of how to do this right – even though it is not a sports retailer, retailer can learn a lot from it when it comes to selling wearables. However, the great thing is that wearables will drive new customer groups into the stores, as they have become a lifestyle accessory for a wide group of people today. > How can retail prepare for the digital shift? >> POS teaching is key, as well as great after-sales service.

For the latter, we see a lot of great potential in apps. But we will also see the actual retail business becoming more and more digitalized. All the big sporting goods companies are in preparation for this shift, as you can see from Adidas’ recent acquisition of Runtastic and Under Armour’s take over of MapMyFitness. > How does WT alter the sport experience? >> You actually know what you have done with less technology and fewer devices. Cheating becomes extremely difficult; even if you are training only for yourself, you get an

> Do you have any data in how far WT effects the engagement in physical activity? >> The social impact of fitness wearables is enormous and can achieve real lifestyle changes, especially for the non-professional sports person. However, studies have shown that people tend to wear their wearable only for three month and then they never put it back on again. That’s why contextual intelligence of the device is so important to keep the user interested. Several health insurance take a bet on fitness trackers now and while we are not sure if this is the right way to go for them, for the individual it can be a great personal gain to use such a product. However, as with everything in sports, the tracker will not do the hard work for you, like eating right and regular exercise… But it will definitely keep you more motivated. > The trend towards connectivity, what does that mean for the statistics available on mobile devices and data in general? >> The buzz word ‘big data’ is all over the place, including in the world of wearables. What is important here is to ensure certain standards to make interconnectivity between devices possible. As discussed above, contextual intelligence is important for the success of wearable products not only in sports. But if the devices and smart environments can’t talk to each other, this can not happen. We are partnering with TÜV SÜD to make this communication between devices easier and we’ll hand out the worldwide first and only WT mark to products that qualify for our standards.

WFSGI MAGAZINE 2016

7

NEW TECHNOLOGIES: SPORT GOES DIGITAL

THE DEMOGRAPHIC DIVIDE: FITNESS TRACKERS AND SMARTWATCHES ATTRACTING VERY DIFFERENT SEGMENTS OF THE MARKET

By Eddie Hold, Vice President, NPD Connected Intelligence

Age, income, and gender vary greatly among fitness tracker and smartwatch owners, according to the new NPD Connected Intelligence Consumers and Wearables Report.

Although we expect smartwatch ownership to grow more rapidly over the next year, there will remain a clear place for the fitness tracker due to its size, battery life, and focus on one specific use case – as opposed to the smartwatch, which is trying to be everything for everyone.

Fitness trackers, which have a strong presence in the wearables market, have gained a large mainstream following: 36 percent of fitness tracker owners in the US are 35– 54 years old, 41 percent had an average income of more than US$ 100,000, and 54 percent were women. One in 10 US adults now owns a fitness tracker.

US smartwatch ownership poised to catch up with, and potentially surpass, activity trackers Smartwatch ownership in the U.S. is forecast to reach 9 percent of the US adult population by 2016, closing in on activity trackers. According to The NPD Group Connected Intelligence Wearables Forecast, as smartwatch penetration grows, activity tracker penetration will begin to plateau. By the end of 2016 activity tracker ownership will have peaked at 32 million after growing significantly for four years.

Smartwatches haven’t caught on as quickly, with only 2 percent penetration, and appeal to a very different segment of the market. More than two thirds (69 percent) of smartwatch owners are 18–34 years old, skewed mostly towards the male population (71 percent).

The smartwatch will clearly begin to take a bite out of the activity tracker market moving forward. The fact that the health and fitness apps on smartwatches are a key marketing focus will help draw consumers away from the simpler trackers.

There is no average type of consumer for the wearables market; the fitness tracker and smartwatch target consumer are fundamentally different.

US wearable ownership by demographics 80% 70% 60% 50% 40% 30%

Fitness tracker

20% 10% 0%

Male

Female GENDER

8

WFSGI MAGAZINE 2016

18–24

25–34

35–54 AGE

55+

<$45K

$45K–$74.9K

$75K–$99.9K

INCOME

$100K+

Smartwatch

NEW TECHNOLOGIES: SPORT GOES DIGITAL

Activity tracker vs. smartwatch ownership 40,00,000 30,00,000 20,00,000 Activity tracker

10,00,000

’1 6

3

Smartwatch

4

Q

’16

Q

’1 6

5 ’1

’1

’1 6 2 Q

1 Q

5

4 Q

’1

5

3 Q

’1

’1 4

5

2 Q

1 Q

’1 4

The good news for activity trackers is that we are seeing a clear opportunity at the more sports-focused end of the landscape. There is demand for a more sophisticated class of activity tracker that supports GPS and heart rate monitoring, while also being a little more rugged and waterproof.

And while we see the simpler fitness trackers potentially hitting a wall, these advanced devices will continue to drive adoption.

4

’1 4

’1 4

3 ’1

’1

The activity tracker, however, is not just under threat from the smartwatch but actually from itself as well. Counting the number of steps taken on a daily basis is only a small part of the activity trackers’ appeal, therefore limiting the addressable market size for these devices. In fact, 40 percent of activity tracker owners stop using the device within six months.

Q

3 Q

2 Q

1 Q

3

4 Q

3 Q

’1

3

3

2 Q

’1 1 Q

’1

2

2

4 Q

2 ’1

’1 3 Q

2

1 Q

Q

’1

2

–

More than simply devices, both the smartwatch and the activity tracker markets will be defined by the available apps over the coming year. Third-party activity apps will be key to both the growth of the sport-related activity tracker market, and to the long-term stickiness of the smartwatch use.

While all of these new products will definitely help drive demand, the real test will be the apps for the smartwatches.

There will definitely be a demand for these devices and the use-case will follow, but smartwatch manufacturers and app developers need to make these products become need to haves rather than nice to haves.

WFSGI MAGAZINE 2016

9

NEW TECHNOLOGIES: SPORT GOES DIGITAL

IMPORTANT CONSIDERATIONS FOR ATHLETES IN THE BOOM OF WEARABLE SENSOR TECHNOLOGY

By Sean C. Sansiveri, Vice President of Business and Legal Affairs for the NFL Players Association and Sophie Gage, Paralegal for the NFL Players Association

The NFL Players Association (NFLPA) describes a series of best practices for athletes as the emergence of sensor technology infiltrates professional sports.

The NFLPA is the exclusive bargaining representative for over 2,300 active professional football players in the National Football League (NFL).

In the age of Big Data, the use of wearable sensor technology in professional sports has become commonplace.

Whether such use is intended to maximize athletic performance, manage patient healthcare, or simply measure a player’s biometrics – there’s a sensor for that. However, with limited regulation within this relatively new industry, the ultimate impact on individual athletes participating in the use of this technology is harder to measure.

Existing sensor technology is capable of collecting a broad range of complex data from its wearers; exertion, acceleration, body temperature, heart and respiratory rate, sleep and hydration are all relatively basic data points in the current landscape. This data is in turn aggregated, stored, analyzed, and shared almost instantaneously for use by coaches, medical staff and often the athletes themselves.

Regardless of the type of information collected, the actual uses of this data warrant close consideration.

Putting aside whether a particular device is scientifically validated and accurate, there are numerous challenges presented by the use of this quickly evolving technology. The same biometric data that can be used to monitor load and mitigate injury could foreseeably be used by team personnel on a longitudinal basis to make employment decisions or used by the device manufacturer for research and commercial purposes. Additionally, personally identifiable information collected from participants can, in some instances, be paired with other available information to reveal the identity of the individual athlete.

10

WFSGI MAGAZINE 2016

To prevent such secondary or unintended uses of sensitive data, the following protections can and should be established.

Athletic teams should have policies in place that ensure the confidentiality, privacy, and security of any and all data/ information collected via sensor devices. Specifically, teams should ensure that all those involved, directly or indirectly, in the use of sensor technology take appropriate steps to protect all personally identifiable information of the athlete-participants from unauthorized disclosure. Further, teams should consult with local counsel to determine whether or not their use of a device raises concerns under state or federal law, including, without limitation, the Health Insurance Portability and Accountability Act In the NFL The NFL Players Association is focused on supporting efforts to accelerate progress and innovation around player health and safety.

Protecting and advancing player rights is equally paramount. To address the apparent duality arising from use of wearable sensor technology in the NFL, the League and Union agreed to allow NFL Clubs to utilize sensors and other nonobtrusive tracking devices for during games and practices for purposes of collecting information regarding player performance (e.g., simple player movement through GPS). However, prior to using sensors for health or medical purposes (e.g., hydration, core temperature), NFL Clubs must obtain consent from the NFLPA.

Beyond sensors Technology advances are impacting the game beyond sensors, too.

In 2014, Microsoft signed on as an official NFL sponsor, and the company’s tablet devices became a sideline fixture. No longer do players and coaches have to wait for assistants to print black-andwhite images, assemble them in a binder and deliver them to the sidelines in order to determine what ocurred on a prior play. Now, full-color, high-resolution images are immediately sent directly to customized Microsoft Surface Pros on both the sidelines and in the coaches’ booths.

NEW TECHNOLOGIES: SPORT GOES DIGITAL

Innovative use of sensor technology could transform professional sport Real-time data that gauges a player’s fatigue and mechanical load can alert a sideline trainer of a player’s heightened propensity to injury and allow the player to be removed from practice before such an occurrence. This has the potential to favorably impact players if they can mitigate injury to extend their career and preserve longterm health.

For fans, sports leagues and sensor developers are finding creative ways to leverage sensor technology to enhance the spectator and in-stadium experience. For example, NFL’s Next Gen Stats platform, through the use of sensor devices embedded within player equipment, gives broadcasters instant access to real-time data, such as speed, distance covered and acceleration, from every individual NFL player.

(HIPAA) and the Health Information Technology for Economic and Clinical Health Act (HITECH), which regulate protected health information in the US. Teams should carefully consider any contractual agreements with third parties governing the use of sensor devices and data collected. Data ownership, limitations on the use, sale and/or dissemination of the data, and provisions regarding the security and storage of the data, are all considerations that should be specifically addressed by contract. Lower tier

Microsoft Surface tablets sit on the sideline during an NFL game on August 13, 2015 © AP Photo/David Richard

agreements (e.g. agreements with sensor manufacturers) should also include terms and conditions intended to protect the rights of the participating athletes and enforce the team’s legal obligations in connection with the use of such technology.

Finally, teams should explain to their players the intended uses and anticipated benefits of the sensor technology and data collected. All participating players should have the ability to access the individual data/information collected.

Players and player advocates, such as unions, agents and even parents, should be informed of the risks that can accompany the use of certain sensor technology and urge that the protections discussed above are established. As a best practice, sensor end-users should always consult local legal counsel regarding data privacy and security concerns.

The positions set forth in this article are intended to address some of the current risks associated with the use of sensor technology and should be re-evaluated as the industry evolves.

NFLPA President Eric Winston reviews a play with the Cincinnati Bengals assistant head coach using a Microsoft Surface tablet in a game on August 29, 2015 © AP Photo/Michael Conroy

WFSGI MAGAZINE 2016

11

NEW TECHNOLOGIES: SPORT GOES DIGITAL

PRODUCT AUTHENTICATION POSSIBLE BENEFITS OF A JOINT INDUSTRY WFSGI SOLUTION TO FIGHT FAKES

By Dr. Jochen M. Schaefer, Legal Counsel of the WFSGI since 1986, Legal Counsel of the European Federation of the Sporting Goods Industry and lawyer in private practice

The WFSGI has successfully established a service to fight illegal activities on online internet platforms (managed by cooperation partner Convey Srl.), which is used by more than 30 prominent WFSGI member companies (status 09/2015) with a strong focus on the bicycle sector. The time has come to explore a new option and initiative in terms of a collective brand approach and solution, i.e. in the field of product authentication, again spearheaded by our Federation’s bicycle brand members.

The global sporting goods industry and trade has undergone substantial changes within the last few years. It has become far more technology-driven and sophisticated in terms of new materials, customization, connectivity, the spread of wearables and the direct access to social media and targeted communities. Like the industry, the WFSGI as the world’s authoritative body has also changed and succeeded very well in keeping pace with such new developments and by being constantly at the pulse of the sporting goods sector. Nevertheless, the world is not perfect yet and there is plenty of room for additional creative collective

© Below: Private / Top: GraphicStock.com

12

WFSGI MAGAZINE 2016

brand approaches in related areas with potential positive effects for the whole industry, reaching well beyond purely legal areas and impact.

On 19 July 2015, the New York Times came up with an article titled: “Bicycle Makers Struggle to Swat Down Counterfeits” in the context of the Tour de France. Several company representatives from the bicycle sector were quoted therein and readers were, for example, told: “Unlike, for example, a fake Rolex watch that stops ticking, fake cycling products can have dangerous consequences, several manufacturers said. (…) ‘The wheels just kind of fall apart,’ said Chad Moore, the global brand manager for Mavic. (…) It really just becomes an enormous safety issue for consumers (…) ‘With carbon, a lot of it is how you build the products, whether it is a frame or a wheel,’ Moore said, adding, ‘When you take a deep-dish carbon wheel, put a sticker on it and put it on a website, it’s hard for a consumer to tell’ (…) There are no statistics on injuries related to counterfeit bikes and wheels. But this spring, Velo, an American cycling magazine, had an engineering lab compare fake and genuine versions of a Specialized S-Works Tarmac frame.

While the magazine said that the two frames were difficult to distinguish from the outside, the testing showed that the counterfeit varied in dimensions from the real bike – which can substantially affect handling – and had as little as onequarter of the genuine frame’s strength (…) ‘It’s unfortunate that helmets are put out there that bear only surface similarities without offering adequate protection,’ said Martin H. Nguyen, general counsel for BRG Sports, the parent company of the helmet brands Giro and Bell. ‘It doesn’t make sense.’ (…)”

NEW TECHNOLOGIES: SPORT GOES DIGITAL

Are safety issues and concerns confined to the bicycle sector? Certainly not. Does the sporting goods industry look good in such kind of newspaper article? Regrettably not!

The story conveyed a somewhat passive image of the industry in this area by not providing any information on specific countermeasures taken, such as the existing WFSGI anticounterfeiting project.

Consequently, it was decided and approved by representatives of several leading bicycle brands at executive management level at the Bicycle Steering Committee Meeting at Eurobike/Friedrichshafen in August 2015, to explore in an expert working group/new WFSGI bicycle committee, the opportunities, scope and possible content of a joint industry product authentication system/standard. This may cover the whole supply chain up to the PoS at retail/ consumer level, or at least certain segments thereof. Such tracing and tracking technologies and tools jointly applied by a number of sports brands (ideally, by the vast majority of the WFSGI members) could enable enforcement authorities, such as customs officers, and marketing partners, such as retailers, distributors and licensees, to distinguish genuine products from fakes. Ultimately, consumers, who want to be sure they are buying originals and not counterfeits, could also be in a position to authenticate – e.g. through apps and technology on their smartphones. Other benefits may include stopping the manufacture of overruns and aid to secure the supply chain of sports brands.

shipment modalities, substantial improvement of quality controls at production level and creation of a valid database, e.g. for product recalls, at individual company level.

To remain inactive and passive in the field of efficient combat of counterfeits may well expose not only the individual company, but also its management to significant liability risks – not to mention other negative factors, such as the considerable damage caused to the respective brand and the loss of trust and credibility vis-à-vis marketing partners, media and consumers. Finally, yet importantly, such new risk management and logistics project would, in my opinion, complement the ongoing WFSGI successful online anti-counterfeiting project very well, and could also form a bridge for new methodologies and solution-providing tools developed in the framework of the WFSGI’s Manufacturers Forum program.

Scalable and substantial cost savings could be generated by this collective brand approach. A unified tracing and tracking system and standard within the sporting goods industry may also have the benefit of facilitating the future integration of third parties in ERP systems, such as retailers. Sourcing and logistic procedures could be optimized, including

© iStockphoto

WFSGI MAGAZINE 2016

13

WFSGI LEGAL COMMITTEE

LEGAL COMMITTEE ACTIVITY REPORT 2015 With the revitalization process of the Legal Committee (LC) implemented at ISPO Munich this year, 2015 has reaped positive results. Synergies have been created between the LC members and a strong task force of motivated experts gave rise to fruitful discussions and concrete projects.

The last committee meeting held in Boston on September 29, 2015, provided the opportunity to report on these vibrant activities: A Compliant Labelling Requirements database (CLR) The importance of setting up a shared database on product labelling requirements was stressed for the following reasons: • A high need for global labelling information and no existing centralized global source on labelling requirements; • A difficulty to deal with the labelling “information jungle” in particular due to the fact that the labelling requirements differ significantly per region/country; • The importance of the consumer rights obliging the Sporting Goods Industry to provide more specific information to the customers; • The compliance failures drawing negative attention to the sporting goods sector and even resulting in criminal penalties for serious infringements.

The LC members recognized the interest to work cooperatively in this area specifically to benefit from economies of scale. For this purpose, the LC is currently in contact with an experienced company, which promises to deliver timely and accurate information via an innovative online tool.

Combat the intellectual property rights (IPR) infringements The WFSGI continues to collaborate closely with company Convey to combat online IPR infringements. 43 WFSGI brands, including the bicycle and the sports apparel sectors, are currently involved in this program. This WFSGI Online Anti-Counterfeit project covers all the internet environments on a worldwide scale: the web/domain names, the

14

WFSGI MAGAZINE 2016

social media/networks, the online marketplaces/e-commerce platforms, and the mobile applications. Since the onset of the partnership, more than 169.000 counterfeit offerings have been taken down, around 15.000 shops/websites/ accounts have been closed, and more than 268.000 sales have been blocked, corresponding to a turnover of around 10 million euros (status: October 2015).

Additionally, the LC members are presently working on a contact database which will put together trusty and recommended worldwide IPR specialists/investigators. The intention is to be able to get in touch rapidly with the right person on the ground when counterfeits or any other IPR infringements are detected somewhere around the globe.

Joint action on anti-bribery and corruption within the Sporting Goods Industry (SGI) The fight against bribery and corruption within the SGI is an issue of mutual concern for the WFSGI members and especially these days in the light of the scandal that rocked the Football World. Some tangible solutions have been put forward to pool efforts, share best practices to eliminate bribery and corruption within the SGI. Facing new legal challenges around the online sales In a more and more digital society where online sales become more democratic, new legal challenges have arisen. In this context and for instance, the LC members are at present exchanging views on the European Commission’s e-commerce sector inquiry.

Benefits of joining the WFSGI Legal Committee • To get informed of the latest news and current hot legal topics • To exchange information with your peers via a unique and neutral platform • To develop common strategies and conduct joint actions on subjects of common interests

WFSGI LEGAL COMMITTEE

CHAIR

VICE-CHAIRS

MEMBERS

Dr. Jochen Schaefer WFSGI Legal Counsel

Alex Junco Managing Attorney, Nike European Operations Netherlands B. V.

Rutger Oldenhuis Deputy Director Corporate Services, Shimano

Frank Dassler General Counsel adidas Group & WFSGI President

Paul Gauron Executive Vice President and General Counsel of New Balance Athletic Shoe, Inc.

Mark Granger Chair Legal Task Force, SFIA

Michael Gerrits European Product Compliance Director – Advocaat, Nike European Headquarters Netherlands

Alan Gofton Senior Brand Protection Counsel, Pentland Group

Karmen Koh Allen Legal Director, Pentland Group

Kingson Lai Legal Counsel, TSMA – Taiwan Sporting Goods Manufacturers Association

Richard Millington Umbro General Counsel, Iconix Brand Group

Hirotaka Miyaji Director General, JASPO – Association of Japan Sporting Goods Industries

EX OFFICIO

Megumi Ohta Executive Officer, Senior General Manager, Global Legal & Compliance Division

Cynthia Raposo VP Legal, Under Armour

Susan Rohol Global IP/Privacy Policy Director, Government & Public Affairs, Nike, Inc.

Dieter Schmitt Senior Director, Risk & Compliance Management, Corporate Security & Risk Finance, adidas Group

Robbert de Kock WFSGI Secretary General

Charlotte Giudicelli WFSGI Trade & Corporate Responsibility Coordinator

WFSGI MAGAZINE 2016

15

NEW TECHNOLOGIES: SPORT GOES DIGITAL

NIKE+ IS USING MUSIC AS AN INSTRUMENT OF PERFORMANCE IMPROVEMENT

By Sean O’Hollaren, Senior Vice President, Government & Public Affairs, Nike, Inc.

Music has long been used as a powerful tool for motivating athletes. Earlier this year, Nike and Spotify announced a plans to deliver a game-changing experience for runners that would unite the intelligence and utility of the hugely popular Nike+ Running App with the world’s largest music streaming service.

When it comes to running, music is motivation – ask any of the seemingly ubiquitous earbud-wearing athletes pounding pavements, tracks, treadmills and tree-lined trails day and night around the globe.

So the voice of the athlete has clearly said music is really vital to their motivation, but there is also a growing body of research that heralds music’s performance-enhancing effects.

“Since our launch as the original running app in 2006, music has always been core to the Nike+ Running experience,” says Adam Roth, Nike VP, Global Running Brand Marketing.

16

WFSGI MAGAZINE 2016

“Our partnership with Spotify takes that experience to a new level, leveraging personalized music as motivational fuel every run, for every runner, and also giving them functionality that can use music as an instrument to improve performance.”

What Nike and Spotify have already delivered to runners provides exciting insight into what’s possible with the powerful combination of music and athleticism.

Significant innovations in algorithm development and deep technical partnership between two of the world’s leading brands are clearly creating a new role for music in sports.

NEW TECHNOLOGIES: SPORT GOES DIGITAL

For instance, the Beats Per Minute (BPM) of a track can be used to manage the pace in a run and certain types of music have been shown to reduce a runner’s perception of exertion and fatigue, as well as increase happiness and excitement.

New ways to motivate more runners through music – Nike+ Running partners with Spotify to develop a game-changing experience that unites the tracking of the Nike+ Running app with the world’s largest music streaming service © All images Nike, Inc.

Nike+ Running’s newest app update was born from many of these research findings and builds upon the success of the Nike+ Run Club playlists already on Spotify. The goal being to enhance runners’ overall in-run music experience and help them become better athletes. Notably, the most recent app update introduced exclusive Pace Stations, which invite users to input their pace goals and musical preferences. This data then informs a target BPM, which in turn creates a personalized 100-song playlist designed to push the runner’s pace. The first-of-its-kind instructive experience then guides runners to their goals when they step in-beat to the prescribed songs. The update to the app also brought over 28 million users the ability to stream Spotify’s 30-millionsong catalog directly from the Nike+ Running app.

“Nike and Spotify combining forces to create the ultimate motivating experience for runners is really powerful,” Erin Clift, VP Consumer and Partner Marketing, Spotify. “Nike+ runners have access to millions of tracks through Spotify to help them use music to achieve their personal goals and find their fast!”

WFSGI MAGAZINE 2016

17

NEW TECHNOLOGIES: SPORT GOES DIGITAL

TECHNOLOGY PUTTING PERFORMANCE AND FANS FIRST AT RUGBY WORLD CUP 2015

By Dom Rumbles, World Rugby Head of Communications

Rugby World Cup is the showcase global event for the global rugby family and one of the world’s biggest and most successful major sporting events, attended by 2.4 million fans and enjoyed by a global television audience of nearly 4 billion.

The 2015 tournament in England and Cardiff is the biggest and arguably the best of the eight tournaments to date, a very special and record-breaking celebration of rugby that will reach and inspire new audiences around the world to get active and get into rugby.It has proven to be the bestattended, most viewed, most sociallyengaged, most competitive and most commercially successful Rugby World Cup ever, delivering a tangible and lasting legacy of financial and participation sustainability on a global scale.

Yet, rugby’s golden event has not lost sight of its mission to provide a truly special experience for teams and fans, and that is reflected in what will also be considered the most technologically advanced rugby event ever staged.

Technology driving player welfare and performance World Rugby’s number one priority is player welfare and Rugby World Cup 2015 has showcased the most extensive and advanced medical and welfare standards ever seen at a rugby event and arguably in any other sporting event.

Technology continues to be at the very heart of this evidence-based approach and the results at the tournament have been significant, reflecting World Rugby’s mission to provide the very best framework of care for players at all levels.

World Rugby has sanctioned the use of Athlete Monitoring Devices (AMDs) in competition and the teams use them to good effect. Teams are able to use the data to understand when a player is tiring on the field or has potentially picked up an injury, while training load can be monitored to ensure that the world’s top players are in peak physical form and not over-trained between matches, which is vital in a sixweek tournament.

This data, which is shared with World Rugby after the event, will be analysed to identify any significant injury or

18

WFSGI MAGAZINE 2016

game trends that can then be used to drive research-based enhancements to player welfare strategies.

Clear, accurate and consistent refereeing decisions Using wearable technology to manage training and playing load and enhancing performance is not just reserved for the teams, it is also central to refereeing performance with all physical efforts measured and analysed to ensure that the world’s top officials are meeting the exacting fitness standards required to make clear and accurate decisions under aerobic fatigue.

Referees have also benefitted from advances in wearable technology in other ways. With the millennial generation demanding multiple camera angles, audio feeds and information, all rugby referees wear neoprene communications vests that integrate the ref-cam with the communications devices that enable the match official decisions to be broadcast to the world. For Rugby World Cup, World Rugby has worked with the provider to develop a new vest that has been reduced in overall weight from four to two kilos, delivering a significant performance advantage to the referees.

A scrum between Samoa and USA at RWC 2015 where World Rugby is taking full advantage of the technological advancements in the game © Getty Images

NEW TECHNOLOGIES: SPORT GOES DIGITAL

Hawk-eye video replay technology debuted at Rugby World Cup 2015 and has proven to be invaluable to the integrity of the match officiating, disciplinary and player welfare processes. Famed for its ability to enhance match official decisions in cricket and tennis, the technology at Rugby World Cup 2015 ingests the 30 plus camera feeds from each match to ensure that the referee and television match official has the tools to speed up and enhance the accuracy of the decisionmaking process, which is great for the officials, teams, fans and the sport.

Split-screen replays and zoom technology mean that try and foul play decisions can now be made more efficiently, reducing the length of stoppages in the game and enhancing the fan experience. It is also used effectively to assist the disciplinary process by providing citing commissioners and judicial officers with multiple, simultaneous camera angles.

Recognising and removing players with concussion However, the most significant use of the technology aligns with World Rugby’s commitment to player welfare. The Hawk-eye technology is assisting medics to identify and remove any player with confirmed or suspected signs of concussion, further enhancing the care of players at the very top of the game.

In a social and digital era, World Rugby’s player welfare education is centred on online education modules delivered in multiple languages. World Rugby broke new ground in October, when it launched a concussion education application for the general public, aimed educating everyone in the game to recognise the symptoms of concussion and remove any player with confirmed or suspected concussion. In a drive to change culture, World Rugby is aiming for 50,000 downloads and online module completions by mid 2016.

Embracing technology for player welfare is important to World Rugby and it continues to work with research houses to evaluate devices and softwear that has the potential to further enhance the welfare of players. Underscoring its commitment to player welfare and inclusive sport, two years of research has delivered goggles that can be worn in competitive rugby, providing the chance for those who may otherwise have not been able to play owing to sight deficiencies, the ability to get active and enjoy a sport that is, at its core, for all shapes and sizes. The goggles were developed to strict criteria after significant testing and evaluation to ensure that they did not increase the risk of harm to the wearer or any opponent and is a real breakthrough for the sport.

Inspiring fans, inspiring participation Rugby has embraced technology in-stadia and in the armchair to ensure that a whole new audience is attracted.Integration of geo-targeted and personalised social and digital media has integrated the in-stadia experience with the broadcast experience, giving audiences a fully ­immersive and consistent rugby experience whether you are at Twickenham, in a fan zone or visiting a host city. The results have been impressive and #RWC2015 has proven to be the biggest social media event of 2015 with more than 80 million views of Rugby World Cup video across official platforms.

The balance between engaging, informing and inspiring new audiences, while not losing the interest of the discerning rugby fan, has been critical to the success of the Rugby World Cup 2015 fan engagement strategy. Technology has enabled the tournament to deliver three in-ear commentary options: the referee feed; the host radio broadcast feed and; a new rugby for beginners channel, which explains what is happening on the field to new fans, and has proven to be a hit.

In a crowded and competitive entertainment marketplace, sports need to reach, engage and inspire new audiences if they are to remain ­relevant, inclusive and thrive.

Innovative ‘school of rugby’ videos using ball tracking and statistical analysis has also introduced and explained to new fans the more intricate and tactical facets of the game, delivering legacy that has been supplied to broadcasters and rugby federations in multiple languages.

Combined with an inspirational and inclusive new brand, World Rugby is attracting and inspiring new and younger audiences in more nations and communities than ever before.

Rugby is reaching out Rugby has been building character since 1823 and is a sport that remains loyal to its heritage and rich history. Yet rugby is also progressive and forward-thinking and technology is playing an active and successful role in the international federation’s mission to grow the global rugby family, as the sport counts down to its Olympic Games return at Rio 2016.

WFSGI MAGAZINE 2016

19

WFSGI COMMITTEE ON INTERNATIONAL SPORTS ORGANIZATIONS

COMMITTEE ON INTERNATIONAL SPORTS ORGANIZATIONS ACTIVITY REPORT 2015 The Committee on International Sports Organizations (CISO) is the sporting goods industry’s consensus voice to all sports federations and organizations.

CISO maintains relations and involvement with International Federations (IFs) and sport organizations on all sporting goods-related issues including, but not limited to kit and advertisement regulations for Olympic Games and other major sport events.

• Footwear and sport equipment may carry the manufacturer Identification as generally used on products sold through the retail trade during the period of 6 months prior to the Games (instead of 12 months for the previous Games editions).

Details of the sport by sport situation can be found in the IOC Rule 50 Guidelines available in the Member Area on www.wfsgi.org.

In 2015, the CISO Committee focused its efforts on continuing to strengthen the WFSGI cooperation and constructive dialogue with the IOC on critical topics, resulting in positive changes for the 2016 Rio Olympic Games for the sports industry.

Rule 40 – progress towards allowing generic advertising during the Olympic Period: Following numerous and patient discussions with the IOC, Rule 40 for the Rio Olympics will open the door for generic advertising to be allowed during the Olympic Period, provided conditions set out by the IOC and NOCs are met. The IOC acknowledges the special contribution our industry provides to the Olympic Movement and we can be reasonably optimistic that Rule 40 will be less restrictive than in the past in most countries.

IOC Rule 50 Guidelines – Rio 2016 From the Rio Olympics, 3 key substantial changes for the General IOC Guidelines include: • 50% increase of the manufacturer identification maximum size from 20 sq cm to 30 sq cm on clothing; • One additional identification allowed on clothing for product technology identification with a maximum size of 10 sq cm;

Technical accreditations for the Rio Olympics The IOC is also taking action based on the WFSGI feedback post the London and Sochi Olympics. Among key points of our recommendation: ROCOG will lead the Technical Accreditation process and start it earlier, which should ensure a smooth outcome for our industry.

NOC Support Program The IOC President requested the WFSGI and its members to consider a support program for NOCs and athletes in the need for support to be compliant with Rule 50 on the field of play. As per WFSGI pledge towards the IOC to have “no athlete left behind at the Olympics”, the CISO Committee is in operational mode with the IOC to explore the details to equip Olympians of non-sponsored NOCs.

The founding members of the Aquatics Committee at the Pentland Headquarters in London on September 23, 2015. From left to right: Ben Hardman (Speedo), Hiroyuki Tanaka (Mizuno), Greg Steyger (arena), Christine Barth-Dakow (adidas), Hiroshi Sako (Mizuno), James Hickman (Speedo), Franck Horter (Tyr), Igor Bonnet (arena), Tom Toida (Descente), Ian Clarke (Orca) and Rob Johnson (Speedo).

20

WFSGI MAGAZINE 2016

New Aquatics Committee For several years the leading brands of the swimwear industry have united under the WFSGI to discuss industry-related issues around swimming. Up to date this has been happening on an ad hoc basis. During the last meeting, the

WFSGI COMMITTEE ON INTERNATIONAL SPORTS ORGANIZATIONS

participants officially formed an Aquatics Committee to work on a continuous basis as the industry representative body towards the governing body FINA, organizer of major sport events, standard institutions and to foster the general development of aquatic sports. Chair of the Committee is James Hickman, Global Sports Marketing Manager at Speedo and Vice-Chairs are Franck Horter, General Manager for EMEA at Tyr, and Greg Steyger, Global Category Manager at arena.

Relations with IFs The WFSGI Pledge for the FIFA Quality Programme for licensed soccer balls continues on a day-to-day-basis. The major football brands participated in consultations with FIFA on the revised FIFA Equipment Regulations. WFSGI would like to thank IOC, FIFA, FIS, IRB, ITU and UCI in particular for their good cooperation.

CHAIR

MEMBERS

Marc Pinsard Deputy Senior Gene­ ral Manager Global Brand Marketing Division, Asics

Johan Adamsson Global Director of Sports Marketing & Sports Licensing, Puma

Nadia Erni Head of Sports Marketing & Event, Odlo

James Hickman Global Sports Marketing Manager, Speedo International Ltd.

Franck Horter General Manager for EMEA, TYR

John Larsen President Emeritus, New Balance Athletic Shoe, Inc. & Director, New Balance UK & WFSGI Past President

Christina Li Public Relations Director, Li-Ning

Craig Masback Vice President, Sports Marketing Greater China, Japan & Global Business Affairs Nike, Inc.

Misa Maeshima Promotion Supervision Section Sports Promotion Department Competition Sports Division, Mizuno

Hamish Stewart UK and Ireland Country Manager, Brooks Sports, Inc.

Rachel St. Peter Senior House Counsel, Under Armour

Guenter Weigl SVP of Global Sports Marketing & Sport Relations, adidas Group

Jochen Schaefer WFSGI Legal Counsel

Stefanie Burkert WFSGI Senior Manager External Affairs and Strategy

EX OFFICIO

Robbert de Kock WFSGI Secretary General

WFSGI MAGAZINE 2016

23

NEW TECHNOLOGIES: SPORT GOES DIGITAL

THE OLYMPIC CHANNEL: A WIN-WIN FOR THE ENTIRE SPORTS INDUSTRY

By Mark Parkman, General Manager, Olympic Channel Services

As the members of the WFSGI know from first-hand experience, the rapidly evolving media landscape has had a profound impact on society and sport.

In fact it has changed so dramatically, and so rapidly, that it is easy to forget that some of what we now take for granted in terms of media and technology did not even exist a few years back. To make a comparison with the Olympic Games, during Beijing 2008, Facebook and Twitter had barely launched; tablet computers were not yet publicly available at the time of the Vancouver 2010 Olympic Winter Games; and the first Games to have truly global digital audiences, including on mobile devices, were London 2012 and Sochi 2014.

The IOC has been using new technology and new communications tools over recent years to draw young people to sport and the Olympic values.

Our use of social media tools has delivered phenomenal results in a very short period. The IOC launched its Facebook page in January 2009, shortly before the 2010 Vancouver Games. In a matter of weeks, we had enlisted more than one million Olympic fans. Today, we have more than 50 million fans across our social media platforms.

The Olympic Channel is taking the IOC’s ambition in this digital media era to new levels. In fact, the Olympic Channel may prove to be the single most far-reaching reform to emerge from Olympic Agenda 2020, the IOC’s strategic roadmap for the future.

So what exactly is it?

The Channel will be an “always on” digital platform to deliver compelling Olympic-related content to a global audience on their terms. It will use new communications tools to engage young people in the Olympic Movement in new ways.

The IOC President, Thomas Bach, had the nascent idea for an Olympic Channel as far back as 1994; and in his 2013 IOC Presidential election manifesto he detailed a proposal for the Channel, including three overarching objectives: • Provide a platform for the continuous exposure of Olympic sports and athletes, as well as the IOC’s rich patrimonial assets and archives, beyond the Olympic Games period.

• Continuously highlight the relevance of the Olympic Movement’s ideals to the challenges of today’s world.

• A s a matter of priority, engage the young generations around the world using methods that are relevant to them, building understanding, entertainment and education.

Interest in the Olympic Games is higher now than ever, and recent editions have attracted record broadcast audiences around the world. In fact, the biggest global broadcast audiences ever recorded are for the Olympic Games.

The Channel will harness this interest and extend it beyond the Games.

24

WFSGI MAGAZINE 2016

NEW TECHNOLOGIES: SPORT GOES DIGITAL

The Olympic Channel will allow us to put the Olympic sport and the Olympic values into the hands of millions of people every day, all year round. It is recognition of the fact that, while the Games do an excellent job of celebrating the Olympic values during 17 days of spectacular human achievement, Olympism is daily, 365 days a year, 24 hours per day.

The Olympic Games are perfectly suited to the digital age.

And by sharing our content through their social channels, they will help shape and activate the next generation of the Olympic Movement in ways that we simply cannot do alone. The Channel will continue to evolve as new technology, new social media platforms and communications channels emerge.

We will continue to work with our broadcast partners around the world to show live coverage of the Olympic Games. These partners are best placed to offer tailored coverage for their audience (and are very successful in doing this, as demonstrated by record audiences around the world for recent Games). The Olympic Channel will not be procuring sports rights; rather it will be a powerful platform designed to help the major sports organisations promote their sports.

Encouraging young people to participate in sport has been part of the IOC’s core mission since its founding more than a century ago. The Olympic Games provide inspiring role models for young people worldwide. It is extremely rare to meet an Olympic athlete who was not drawn to sport by watching the Olympic Games.

The Channel will ultimately become the place to discover, create and share content from all members of the Olympic family and its partners on any device, anytime, anywhere.

This is a channel about Sport, not a Sports channel in the traditional “sports network” sense. It will deliver a wide range of content targeted to specific audiences, age groups, and regions, including for example live sporting events and highlights; biographical profiles of Olympians and aspiring Olympians; conversations with sports heroes; documentaries on sports-related topics; Olympic history; and a wide range of content targeted to specific audiences, age groups and regions.

The recommendation to launch an Olympic Channel was unanimously approved as part of Olympic Agenda 2020 at the end of 2014. Since then, Olympic Channel Services, a new IOC group company, with headquarters in Madrid and Lausanne, has been working tirelessly to prepare the Channel for launch in 2016.

The Olympic Channel is an Olympic-sized project that will involve a wide range of stakeholders. The IOC will actively work in partnership with all the core constituents, including the International Federations (IFs), National Olympic Committees (NOCs), TOP Partners, Rights-Holding Broadcasters and Olympic host cities.

IOC President Thomas Bach at the Youth Olympic Games in Nanjing 2014 © All images IOC

We are building an Olympic Channel that serves the entire sports movement. The members of the WFSGI, all of whom work to support and promote sport and sports participation around the world, will be important for the Channel’s success and we look forward to working with you on this exciting project.

WFSGI MAGAZINE 2016

25

HOW TO GROW CYCLING

THE SPORT OF CYCLING EVOLVES HAND IN HAND WITH TECHNOLOGICAL EVOLUTION

By Brian Cookson, President of the Union Cycliste Internationale (UCI)

The equipment industry that runs alongside cycle sport has always innovated and looked at new and alternative solutions to existing challenges. From the earliest days of bicycle design, to the technological explosion in the early 1990s and on to the present day, there has been a constant evolution in the design and development of bicycles and bicycle components.

As cycling’s world governing body, part of the Union Cycliste Internationale’s (UCI) role is to encourage innovation. We work closely with the industry to ensure that any development is healthy, engages the public, and keeps riders and racers safe and comfortable.

Peloton at 2015 Amstel Gold Race © Graham Watson

26

WFSGI MAGAZINE 2016

We must strike the right balance between maintaining the essence of what cycling is all about, and keeping an open mind to the way in which manufacturers and engineers approach the design challenges presented by the bicycle, its components and its accessories.

All too often, the tendency when mentioning the UCI is to think road cycling. However, we govern a wide range of cycling disciplines and recently added BMX freestyle to our family of disciplines.

Cycling is not only a competitive sport, but a leisure activity that enjoys ever-increasing popularity. Working for the

HOW TO GROW CYCLING

good of cycling as a sport, a leisure activity and a means of transport provides challenges and benefits. Maintaining the integrity of the bicycle as something the general public will recognise, associate with and want to experience is fundamental. We have the responsibility to ensure that cycling, both as a leisure activity and as a sport, remains accessible. This is important across the world, but particularly in developing countries where disposable income is less readily available for sport and leisure.

The UCI continually strives to increase the number of its member National Federations and their athletes taking part in our wide portfolio of events across the world. Moving cycling from a mere utility activity to a leisure and sporting activity means more sales and greater revenues. This is beneficial for cycling, for the industry but also for those nations, and especially their athletes, where lives are enriched by being part of our sport. Our work with the UCI World Cycling Centre at our HQ in Aigle, Switzerland, is a good example of this: considerable investment is made to support developing riders from across the world and give them the best possible opportunity to succeed in their chosen discipline. We are very proud of what we do, of our facilities and coaches but also of the riders and the efforts they make to reach their goals. The UCI WCC’s track record is impressive and some high profile names have passed through the centre and benefited from the investment and efforts we put into helping them.

At the other end of the spectrum, we are also working hard within professional road cycling to ensure that this product is a fitting showcase for our sport. The UCI WorldTour has evolved over the past few years and needs to continue to do so. Having a product to which the fans connect, that reflects the geographical diversity of the sport, and at the same time respects its history is of course a challenge. We address this by working with stakeholders and taking an open and consultative approach. The future of cycling at this highest level is looking very positive with more nations than ever represented. Certain challenges remain and we are

Stage 16 at the 2015 La Vuelta in Spain © Graham Watson

keen to face these with our partners to help produce a concept that is sustainable and successful for all: organisers, teams, riders, fans and the industry.

We are constantly reviewing our technical and equipment rules to try to simplify them and ensure they are suitable and appropriate.

Any sport with a history as long and varied as that of cycling will always need to do this.

We are committed to working with industry representatives to review rules that may hold them back, while paying attention to the need to retain the sporting fairness and accessibility of our sport. A good example of this is the trial work we have recently carried out with the industry and teams with a view to a possible introduction of disc brakes to road racing. Disc brakes have been a proven element in off-road racing for over 15 years and the campaign to allow them on the road has been broadly driven by the industry.

As cycling’s governing body, the UCI must remain cautious and consider all aspects of such an innovative change. It

WFSGI MAGAZINE 2016

27

HOW TO GROW CYCLING

is not a simple procedure as there are many stakeholders involved that we must consult and take with us, as we explore the pros and cons. In August and September, we gave teams the opportunity to test disc brakes during two events of their choice. Depending on the results of these tests, a full trial season may follow in 2016.

This has required a great deal of collaborative work, taking on board the views of all stakeholders. Some organisers and riders have expressed concerns, and next year’s trial will allow us to further evaluate the situation. For the moment, it is obviously too early for us to predict what the conclusion of this trial year will be.

Whatever the outcome, we are committed to giving riders and teams a voice and to working with the industry and the sport to consider innovation without compromising the spirit of cycling or the safety of riders. Close collaboration with the industry is also a key element in our work on the safety standards for wheels. This project, which is a lot less visible, has been ongoing for the last 12 months and aims to ensure that wheels are safe and fit for purpose. This is also the direction we are taking with the industry for the large

Bike control at 2015 UCI Road World Championships in Richmond (USA) © Graham Watson

set of regulations that governs frame design. An in-depth consultation process is necessary if we wish to move designs forward while avoiding any detrimental impact on the DNA of a road bicycle. The utmost precaution is necessary in reviewing the regulations, with an emphasis being placed on safety and standards.

The UCI is aware of the need to stimulate the road bicycle buying market at the right time and we take this responsibility seriously. It is certainly not a question of the UCI working alone and dictating regulations. We take a very open, consultative approach in partnership with our stakeholders that will ensure that the sport, industry and everyone within it has a healthy future, based on sound decisions and shared success.

World Cycling Centre trainees © UCI

28

WFSGI MAGAZINE 2016

“MY SHIMANO STEPS EQUIPPED E-BIKE IS FAST AND EASY TO USE. I’M IN CONTROL AND I LOVE IT.” MARTIN BEKKER

THE NEW INTELLIGENT, SMOOTH AND SILENT E-BIKE SYSTEM SHIMANO STEPS is developed based on our philosophy of system engineering and finds its roots in our mission to provide tools for you to enhance your personal lifestyle. Go to www.shimano-steps.com and let the Life Cycle stories inspire you to create one of your own.

SHIMANO STEPS. ENERGIZE YOUR LIFESTYLE.

HOW TO GROW CYCLING

ROAD PRO TEAMS: “WE NEED TO SHAPE THE FUTURE OF THE SPORT OF CYCLING” WFSGI met Iwan Spekenbrink (IS) , President of the AIGCP (Association for all Professional Cycling Teams), one of the founding shareholders of Velon and CEO of Team Giant-Alpecin, and Graham Bartlett (GB), CEO of Velon, to explore how they want to create a new economic future for the sport and bring fans closer to the riders, races and teams. > What is needed to shape the future of the road cycling sport? >> IS: AIGCP is the official body that represents the UCI ProTeams und UCI Professional Continental Teams. We are in continuous discussions with different organizers and the UCI (International Cycling Union) to shape the future of the sport. First, cycling should regain credibility. Second, the

sport should modernize in order to be more competitive compared with other global sports. To achieve both objectives, the sport of cycling should offer more stability for event organizers and teams. Currently, the economic model is driven almost purely by sponsorship. More and different types of revenue streams create stability. In terms of how the sport is reformed for the future, you need a framework of sporting rules that potentially offer stability and stimulate to perform clean. > Cycling is a relatively accessible sport. Where do you see potential for the popularization of the sport? >> IS: I see a lot of growth possibilities for people who cycle not only to commute or in competition but also for fun and health. In many places cycling is booming, such as in the UK, Germany, the US and Australia. People are ready to invest in nice fashionable bikes and spend time on their bikes with their family or friends. It’s also seen as a social activity where you cycle to meet and talk, and it includes more and more women.

For viewers, the big cycling races are beautiful to watch with amazing scenery. If we can make visible details like tactics or performances in a very simple way to the viewers, the effects will be big. We will attract younger viewers in the traditional cycling countries, whose interest in watching the races is so important for the future of the sport, and expand that interest to other continents. > New technologies seem to revolutionize the sport experience. What influence do electronic devices have? >> IS: There’s this new generation of fans that want more technical and instant information. How is a team performing during the stage of a race? How much effort are riders of certain teams putting in an escape/chase, or which teams are not putting in the effort and are speculating on another tactical scenario? New technology will offer a whole new experience for viewers who follow the race on TV or other digital applications.

he exciting nature of the sport offers great broadcast opportunities – close-ups with n-board footage from Spain’s 2015 Vuelta © Velon

30

WFSGI MAGAZINE 2016

HOW TO GROW CYCLING

Speed, the power of the riders, etc. are important and riders should be immediately identifiable © Team Giant Alpecin

> How do you seize the potential of new technologies? >> GB: Velon is a joint business venture of 11 UCI WorldTour cycling teams. We want to create a new, better economic future for the sport, and are doing this by working together and in partnership with the UCI, race organisers where we’ve partnered with several to date – RCS Sport (Giro d’Italia and the Abu Dhabi Tour), Flanders Classic (Ronde de Flandre), and the ASO (Tour de France).

Velon was founded to make cycling a more exciting sport because the objectives can only be achieved by a group, not one team alone – one that delivers entertaining racing for the fans with a race calendar that tells a season-long story and is better understood by a growing international fan base – like the Formula 1 racing season does as every race builds to the championship finale. We have embraced new technology to bring the sport alive from the rider’s perspective – such as on-bike cameras and real-time race telemetry, our partnership with GoPro; all underpinned by sustainable, credible teams that fans can follow both now and for a long time in the future. The bedrock of what’s behind all this is a desire for a new economic model that allows the teams to flourish and plan long term, rather than from just race to race.

We need to change this to a more rounded model with fans at the heart of it. Investing in new technologies generates greater excitement, as it provides new opportunities for commentators and great insights from inside the peloton for spectators; it attracts new fans and brings the sport closer to all its supporters. What we’re trying to build will hopefully create a virtuous circle where it’s easier for fans to engage with teams and riders, and gives the teams greater incentives to maintain credibility.

> Velon is still a very young organization. Where do you see first results? >> GB: The introduction of on-bike video footage at the 2014 Tour de Suisse and the Tour de France were our first small but significant achievements – even before we’d publically launched Velon. Since then, we’ve continued to deliver on our promise of innovation by the delivery of firsts for the sport, including securing partnerships with the premier event organisers to capture and deliver on-bike and behind the scenes footage for evening TV highlights shows from every stage of this year’s three Grand Tours – the Giro d’Italia, Tour de France, and Vuelta Espana. All footage has also been shown on the Velon and Velon teams’ websites and digital and social channels.

Delivery of the first multi-team partnership and content capture deal in the history of professional road cycling in the form of the GoPro partnership, which sees Velon teams capturing all content on GoPro cameras.

We’ve also delivered the first ever live-streaming of on-bike footage during an international bike race for use by TV broadcasters on Stage 4 of the inaugural Abu Dhabi Tour.

Of course, the on-board cameras are just the start; there’s also position tracking, data and other developments we’re working on to make race presentation better for the races, the teams and the fans. And we partnered with ASO on its “beta tracking” system this year at the Tours – this is a longterm project and we hope to keep innovating and then share any upside revenue.

What we will do is to move as quickly as we can in a good way. The worst thing we could do is to promise to do everything tomorrow and then deliver a bad product. It is better to deliver stuff that we know is good, do it in the right way and then build on from there. > How can the cycling industry help to promote the sport? >> IS: The performance of a rider can not be done without equipment. Elite sport is a huge showcase for the market – although in competition it has to fit in with the rules. People riding their bikes for leisure like to have something new and are interested in new technologies, such as disc brakes, which are showcased by the pro riders. The industry is a natural partner and the link to bridge elite racers to a huge group of people that ride a bike.

WFSGI Senior Manager External Affairs and Strategy Stefanie Burkert interviewed on behalf of WFSGI.

WFSGI MAGAZINE 2016

31

HOW TO GROW CYCLING

WOMEN: THE KEY TO GROWING THE CYCLING MARKET

By Karen Bliss, VP of Marketing Advanced Sports International

What you should know about the women’s market and how it can help grow your cycling business. A look into the new Golden Age of Cycling.

I’ve been in the cycling industry for 30 years. I raced as a pro for 15 years before I put my marketing communications education to work in the industry. You might guess that I embraced the women’s market. You might even think I was a leader in the movement. But you’d be wrong.

For years I was a skeptic bike racer who thought womenspecific bikes were just marketing hype. After all, I did just fine racing on the same kind of bike my male counterparts rode. As a marketer, I couldn’t bring myself to buy into the message that women needed special bikes. Especially offputting was the whole “pink it and shrink it” idea. For a while, that movement, with its underlying notion that women are all the same, was all the rage (for some com­ panies, it still is).

“Let me tell you what I think of bicycling. I think it has done more to emancipate women than anything else in the world. It gives women a feeling of freedom and self-reliance. I stand and rejoice every time I see a woman ride by on a wheel … the picture of free, untrammeled womanhood.”

Susan B. Anthony, 1896 It’s only recently that I recognized the women’s market as truly viable. Not only viable, but the key to growing our business.

32

WFSGI MAGAZINE 2016

Bicycle manufacturers, suppliers and retailers know that the bike industry has been relatively flat over the past few years.

In the US, the market has been steady at about $6 billion in annual retail sales. I don’t have a good number for the worldwide market, but ask an executive in any of the more than 1,000 bicycle brands and they will confirm that the fight we are engaged in is for market share, not market growth.

As if that weren’t crazy enough, in the US for the past 30 years or so we have all been fighting over the same consumer: the cycling enthusiast. You know this guy. He loves high-performance products, technology and the latest features on a bike. He wants to beat everybody on the group ride, or bomb down the trail and get air a few times along the way. He live-streams the Tour while he’s at work, and closely follows the careers of Chris Froome, Alberto Contador and occasionally Marianne Vos. Sure, there are ardent supporters of women’s racing. I’m one of them. Many of us will continue to promote the sport and try to figure out ways to get more women involved in it. But let’s face it, women are not lining up on start lines any more than when I was racing 17 years ago. In the US, racing licenses granted to women are holding steady at 13%.

HOW TO GROW CYCLING

© All images Fuji

So, I’ve accepted that racing is not the part of the market that will help the bicycle industry grow. But where we can and should focus our efforts to grow the size of the pie – and stop focusing on ways to steal a piece of it – is at one of the most under-served and under-appreciated consumers in our industry: non-racing women. And we start by understanding who they are and what they do.

Who they are Women are influencers. Women are in charge of their family’s budget. Women’s activities influence their children’s choices in life, and women encourage their friends to try new things.

What they do Women use their bikes for transportation, for exercise, for sport, for spending quality time with their children and families, for stress relief, and, most importantly, for fun.

What we do Our goal is to persuade these women to want to ride bikes.

We want them to enjoy bike riding and to share their fun with their friends and family. We want them to be active participants, people who feel involved in and engaged by the bike industry.

How we do it We focus on three things: product, engagement and support.

1) What product does my potential customer need?

2) How do I engage my potential customer?

3) What support can I provide that will assure my potential customer that she can have that amazing and fun bike-riding experience?

Product: Where beauty and function must coexist I would argue that presentation is everything. You get only one chance to make a good impression.

I would also argue that no matter how beautiful, polished and expensive-looking your design – and no matter how well it suits a current trend – if it doesn’t

fit or function well, you will not get a repeat customer. The best manufacturers will make sure they offer expanded product lines that include bikes that fit and perform well, and accessories that their target riders will appreciate. Think to yourself: am I making something that will enhance the ride experience? Am I making it better/easier/safer/more fun for women who ride to work or who need a quick exercise fix?

Engagement: Create the environment Meet her where she is. She may be new to the whole concept of bike riding. Be open, be inviting, be encouraging.

Care about the things she cares about. Advocate for safer streets, for bike parking spaces, for cyclist-friendly facilities at work. Encourage her to set a goal. Sign up for a big ride and bring two friends. As a retailer, make sure you join in those rides as well. Getting involved in your community goes a long way in attracting women customers.

Support: Loudly and without reservation, and, importantly, without saying you are great at serving women; just be great at it.

Whether you are a retailer, a manufacturer, a rider, a coach, a politician, an NGO, or a journalist, you need to create opportunities to demonstrate your support of women. This means hiring more women, giving them leadership opportunities within your organization, supporting events and sponsors who support them, teaching them skills, and promoting positive achievements. Take to social media: the internet is the biggest connector of people, ever. Because it gets the word out, it has done more to help promote women’s cycling than anything else.

A new golden age Except, well, there was that time when the bicycle was invented, the Golden Age in the 1890s. This is after all a vehicle that famously freed women to break out of their confines, design better clothes, get out with their friends and really live their own lives. Today, we have so many more options and opportunities for women cyclists. Let’s bring about a new Golden Age. To paraphrase Susan B. Anthony’s famous quote and apply it to our new Golden Age creed: “Untrammeled womanhood is the freedom to ride on beautiful and functional bicycles, to engage with people who understand our needs and respect our purchasing power, and to rejoice in the positive contributions we make for the greater good of cycling!”

WFSGI MAGAZINE 2016

33

WFSGI BICYCLE COMMITTEE

BICYCLE COMMITTEE ACTIVITY REPORT 2015 The WFSGI Bicycle Committee continued its growth in 2015 and was able to foster its position as the main industry representative organization towards the world governing body, UCI. The record number of more than 100 participants at the committee meetings at Eurobike show in Friedrichshafen in August 2015 illustrated the importance symbolically. The fact that again new big players such as Trek, Decathlon and component specialists such as Knight Composites, Profile Design and Sapim have joined the federation also underlines the value of the committee.

The main achievement in 2015 in the collaboration with the UCI was definitely the first trials with disc brakes in professional UCI road races. In addition to the introduction of disc brakes, the finalization of a new wheel approval procedure and the start of the discussion about the modification of the 6.8 kg weight limitation and 3:1 ration regulation can also be considered highlights of the year.

Disc brake working group In spring 2015, the WFSGI working group on the introduction of disc brakes in road racing agreed with the UCI an introduction in three steps. It was agreed that all teams in UCI professional cycling could request two events in August and September 2015 to test the products on a voluntary

34

CHAIR BICYCLE STEERING COMMITTEE

CHAIR TECHNICAL COMMITTEE

Jeroen Snijders Blok COO, Accell Group

Bernhard Johanni Director Product Development Europe

WFSGI MAGAZINE 2016

base. The following year2016 will than be the official introduction season where all teams are allowed to test during the entire season and as of 2017 all rules will be changed to allow disc brakes officially in all races.

Wheel Committee A test proposal that was agreed within the WFSGI Wheel Committee was further analyzed and developed at a live testing session at DT Swiss in Biel, Switzerland, in January 2015. The testing session provided the group and also the UCI with further inputs to finalize the proposal which was put forward to the UCI’s Equipment Commission for approval at the meeting in October 2015. The Commission approved the proposal and therefore only a few steps need to be taken before the implementation as of January 2016.

Saddle Committee The WFSGI Saddle Committee made some great efforts in order to provide a proposal to the UCI to modify the existing saddle regulations within the boundaries given by the world governing body. The final proposal, which was carefully worked out and is based on a wide spectrum of medical information, will be put forward to the UCI Equipment Commission in October 2015. The Commission also approved the proposed rule changes, which are planned to be implemented as of January 2016.

VICE-CHAIRS TECHNICAL COMMITTEE

CHAIR SADDLE COMMITTEE

VICE-CHAIR SADDLE COMMITTEE

Claudio Marra Managing Director, FSA

Dave Schindler Technical Commander, ISM Seats

Piet van der Velde Product Director, Selle Italia

Mark Schroeder Specialized, Director of Engineering

The next generation of tubeless tires. 70 g lighter. Faster. Safer. Revolutionary new MicroSkin construction. Tubeless Easy. Patent Pending. 23-622 (235g), 25-622 (255g), 28-622 (275g) www.schwalbe.com/pro-one

WFSGI

Working group – aerodynamics and weight limitation The WFSGI has formed a working group in order to collaborate with the UCI on the modification of the 3:1 ratio regulation and the 6.8 kg weight limitation. The group, which discusses two of the most important regulations for the bicycle industry, met for the first time at the Eurobike show in August 2015 and will work on a proposal that best supports the bicycle industry to further increase innovation in the sport of cycling.

Bicycle Committee fights counterfeiters WFSGI started a project with the Italian brand Convey in 2013 in order to fight sales of counterfeit products on online platforms. The committee has now decided to further increase its efforts in the fight against counterfeit products and has therefore installed a working group to check possible approaches in the context of “authenticity protection”.

Liaison with ISO TC149 and CEN TC333 In June 2015, the WFSGI was granted the official liaison A status for ISO TC149 SC1. The collaboration with the standards organizations on a global and European level has become more important for the bicycle industry, as the UCI

36

WFSGI MAGAZINE 2016

intends to refer more and more towards these standards in the future. Therefore, the WFSGI has increased its involvement in the technical committees of these organizations in order to follow the developments closely and keep the industry updated.

Outlook 2016 The Bicycle Committee will continue its work in the development of UCI rules and regulations towards the best for the industry. A review of the races with disc brakes is planned as well as a close monitoring of the implementation of the new wheel approval procedure. The main topic from a working perspective for the committee will be the working group on aerodynamics and weight limitation.

Implementation of the CR monitoring system and the continued fight against counterfeit products will keep the Bicycle Committee busy from a non-UCI point of view.

EX OFFICIO Robbert de Kock WFSGI Secretary General

Jochen Schaefer WFSGI Legal Counsel

Yves Moeri WFSGI Communication and Bicycle Manager

WFSGI BICYCLE COMMITTEE

CHAIR WHEEL COMMITTEE

VICE-CHAIRS WHEEL COMMITTEE

MEMBERS

Tim Gerrits Product Manager, Shimano Europe

Paul Lew Director of Technology and Innovation, Reynolds Cycling

Pierre-Jean Martin CEO, Corima

Martin Walthert Vice President R & D, DT Swiss

Roman Arnold CEO, Canyon Bicycles

Francois-Xavier Blanc Head of Marketing & Communication, Mavic

Stefan Christ Head of Development, BMC Group

Stan Day CEO, SRAM

Pascal Ducrot VP Bike and Winter Sports, Scott

Ignacio Estelles CEO, Rotor Bikes Components

Rémi Gribaudo Logistics and R&D project manager, Lapierre Cycles

John Koo Vice President & Chief Staff Officer GGG Office Corporate Headquarters, Giant

Tony Lo President, Giant

Robert Margevicius Executive VicePresident, Specialized

Morgan Nicol AeroDesign

Scott Nielson Director of Engineering, ENVE Composites

Gervais Rioux President, Argon 18

Lorenzo Taxis Group Head of Marketing & Communication, Campagnolo

Jeremy Thompson Engineering Manager Wheels, Specialized

Scott Rittschof General Manager, Cycling Sports Group

Armin van Hoogstraten General Manager/Pres­ ident VP ASI Europe, Advanced Sports

Marc van Rooij President, Shimano Europe Holding BV

Phil White Cofounder, Cervelo

René Wiertz President & CEO, 3T Cycling

WFSGI MAGAZINE 2016

37

HOW TO GROW CYCLING

TIME TO GET MOVING

By Jason Torrance, Sustrans Policy and Partnerships Director

The world faces an epidemic of physical inactivity.

Over the last half century, we have simply stopped moving – in our schools, our work places, our towns, cities – and how we get between them. In all human history, we have never been so inactive. But the human body was designed to move, and this slowdown in activity has significant consequences for our health and economy.

Research published in the peer-reviewed general medical Journal ‘The Lancet’ – ‘Effects of increasing active travel in urban England and Wales on costs to the National Health Service’ calculated that that roughly £17 billion could be saved by an increase in cycling and walking over a 20-year period. This and countless other studies are part of a strong evidence base on the economic benefits of an increase in physical activity that also extends to evidence of the impact of decreasing levels of physical activity on our health.

Earlier this year, one of the largest studies in the world, the European Prospective Investigation into Cancer and Nutrition, in collaboration with the World Health Organization, produced a detailed analysis of the impact of physical activity levels on the health and deaths of people across Europe with shocking results. Of 9.2 million adult deaths in Europe during 2008, 676,000 may be attributed to physical inactivity.

The way we travel has huge impact on our environment as well as our health. More than 30% of car journeys in Europe cover distances of less than 3 km; 50% cover less than 5 km.

These distances can be covered within 15 to 20 minutes by

The work of Sustrans in partnership with business has demonstrated that for every 100 employees who are engaged as part of a wider programme: – reduction of 24 sick days – improved well being in 61 employees – increased productivity – 6% reduction in commuting by car – reduction of up to 38 tonnes of CO2

38

WFSGI MAGAZINE 2016

bicycle or 30 to 50 minutes by brisk walking. However, in most countries car travel is the norm and road conditions may prevent or are too dangerous to permit cycling or walk ing for short distances.

However, with sustained investment in the creation of environments where people feel safe and want to be active, things can change. The National Cycle Network, developed over the last 20 years, now extends 23,000 km across the UK. Investment in the creation of quiet onroad and traffic-free routes is assisting a change in local travel. The healthrelated benefits alone have saved the UK economy the equivalent of nearly £900,000 each day – the result of healthier people who walk and cycle for more of their everyday journeys.

In the last year, almost five million people have made more than 415 million walking and almost 349 million cycling trips on the quiet on-road and traffic-free routes. About half these users don’t currently reach the minimum recommended levels of physical activity (an hour a day for children, and 150 minutes a week for adults).

The science is clear that physical activity does more than create good health – it also contributes to leadership, productivity and innovation. It lowers depression and crime rates, increases educational achievement and income levels, and generates returns to businesses.

Absenteeism through ill-health, lack of productivity and employee turnover are major costs to organisations, as is the provision of car parking for employees and business travel.

By enabling employees to be more active, and with lower impacts in the ways they travel, it is possible to take strong steps to achieve improved health of staff and increased productivity for business.

HOW TO GROW CYCLING

Industry can play a crucial role in tackling physical activity not only in work places, but also in society at large. Running since 2003, the Bike Hub levy raises more than £350,000 each year from the majority of UK bike shops and suppliers to support cycling participation projects across the UK. This investment has fuelled a significant increase in participation in cycling events such as the Big Pedal, the UK’s largest inter-school cycling and scooting challenge, powered by Sustrans and supported by the Bike Hub. During the Big Pedal 2015, schools made an incredible 1.4 million journeys by bike or scooter – 300,000 more than in 2014.

What more, being physically active is something that a large number of people want to do as a part of everyday life, but feel deterred by fears of lack of safety. The biggest independent survey ever conducted on attitudes to cycling in the UK, commissioned by charity Sustrans and seven leading cities across the UK, revealed that of the 11,000 people questioned three quarters (75%) want national governments to invest more into making cycling safer.

The message from the public, scientists and academics couldn’t be clearer: the much reduced levels of physical activity means we have a health crisis, the solutions that exist through cycling and walking are cheap and readily available, and people overwhelmingly want politicians to act. All that is missing is the vision and bravery of elected leaders – the future depends on it.

WFSGI MAGAZINE 2016

39

Made to

inspire.

Whether you commute to work or enjoy nature on wheels, the brands of Accell Group have a bicycle that can boost your experience. â&#x20AC;&#x153;I thought of that while riding my bicycleâ&#x20AC;? said Einstein, who had his best inspirations for new ideas during his ride to work. We make it easy for you to find the motivation and inspiration to go that extra mile. We are 100% committed to offering the best and most beautiful solutions from our portfolio of international brands. www.accell-group.com

WFSGI PHYSICAL ACTIVITY COMMITTEE

PHYSICAL ACTIVITY COMMITTEE ACTIVITY REPORT 2015 The WFSGI Physical Activity (PA) Committee was formed in 2013 to coordinate the industry’s response to the global physical inactivity crisis. The Committee’s mission is to promote physical activity and sport as a sustainable solution for a healthier society. Its key areas of work include: • Supporting

global, regional and national level advocacy work to promote physical activity and sport

with the UN agencies and other multilateral or• Working ganisations to promote tackling of the physical inactivity crisis as a global political priority • Providing

a global forum for WFSGI members to share best practice on approaches that increase participation in sport and physical activity Physical inactivity has reached epidemic proportions and is growing at an alarming rate. It poses a major threat to the health, happiness and prosperity of individuals, communities and nations. We know that companies, governments and other organisations from across all sectors of the economy have to work together to turn this situation around.

The sporting goods industry has a unique role to play regarding increasing levels of activity and participation in sports.

The PA Committee coordinates this work and ensures that the sporting goods industry continues to be internationally recognised as a leader in the field.

In 2015 the Committee focused its work on three streams of advocacy: 1. Promoting

the importance of physical activity to the World Health Organisation. WFSGI presented oral and written evidence to the WHO’s Commission to End Childhood Obesity Hearing in Geneva and a regional hearing in Manila, Philippines. The Commission publishes its findings in 2016. The WFSGI also supported the WHO as it developed the Global Coordination Mechanism, setting out how governments can engage the private sector in the prevention and management of noncommunicable diseases.

2. Improving

the delivery of physical activity and sport in schools. WFSGI supported the redrafting of the International Charter for Physical Education and Sport. It has also informed the development of UNESCO’s Quality PE initiative to help governments improve the delivery of PE and sport in schools. The QPE initiative is being piloted in 10 countries in 2015–16, before being rolled out globally.

3. Exchanging

knowledge and best practice among WFSGI members. The WFSGI PA Committee organised a wellattended panel discussion at the 2015 ISPO Health Summit: “Get Moving: why physical activity matters to us all”. The panellists were Dr. Richard Bailey (ICSSPE), Frank A. Dassler (WFSGI President and adidas Group), Mandy Ayres (PA Committee Chair and Nike, Inc), Martina Jahrbacher (Reebok) and Christine Madigan (New Balance Shoes, Inc.).

WFSGI MAGAZINE 2016

41

WFSGI PHYSICAL ACTIVITY COMMITTEE

CHAIR

MEMBERS

Mandy Ayres Senior Director Access to Sport – Europe, Nike Inc.

Tom Cove President & CEO, SFIA – Sports & Fitness Industry Association, USA

Pat Cunnane President/CEO, Advanced Sport

Frank Dassler General Counsel, adidas Group

Tobias Gröber Head of ISPO Group/ Executive Director of Business Unit Consumer Goods, ISPO

Martin Künzi CFO, Intersport International Corp.

Christine Madigan Vice President Responsible Leadership, New Balance

Toshiaki Mizuno Senior Manager, Presidential General Affairs Office, Mizuno

Randy Neufeld SRAM Cycling Fund Director

Rutger Oldenhuis Deputy Director Corporate Services, Shimano

Marc Pinsard Deputy Senior General Manager Global Brand Marketing Division, Asics

Cynthia Raposo VP Legal, Under Armour

David Robinson President, Speedo Int. Ltd.

Lars Wiskum CEO, Sportventure

Alberto Zanatta President, Tecnica Group

Dr. Jochen Schaefer WFSGI Legal Counsel

Stefanie Burkert WFSGI Senior Manager External Affairs and Strategy

EX OFFICIO

Robbert de Kock WFSGI Secretary General

WFSGI MAGAZINE 2016

43

CR & MANUFACTURING: BEYOND LEAN?

KTC: THE BEST MADE BETTER

By Gerhard Flatz, Managing Director KTC Limited and Prof. Nick Lin-Hi, Junior Professor CSR at University of Mannheim (Germany)

KTC (Knowledge, Technology and Craft) is a manufacturer of quality performance clothing for several well-known brands, with its factory in the Pearl River Delta of the People’s Republic of China. And it’s on a mission to challenge the perception of what ‘Made in China’ means, as well as improving the conditions and treatment of its workforce.

Since its foundation in the 1970s, KTC has been following the motto “Business is People” – believing that it is only as good as the people who work for them. This is why the manufacturer strives to continuously enhance the wellbeing of its workers, as it is convinced that investing in the workforce is the foundation for long-term success. For KTC, being a quality leader in crafting premium functional clothes is the consequence of its strong performance in the CSR domain; i.e. of being a fair employer.

KTC and its management has always been committed to delivering supreme quality and exceeding standards. KTC recognizes that nowadays (and in the future) corporate social responsibility and sustainability need to be prioritized in order to minimize the impact and exploitation of the limited resources with which our planet can provide us. It also believes in creating a fair and safe working environment for everyone involved in the supply chain.

These aims spur on KTC to constantly chase the utmost it can offer to its customers and its workforce. It is KTC’s firm conviction that running any business successfully in the long term ultimately requires wellestablished and applied responsibility towards all stakeholders. Only the flawless and mutual interplay of the company and its customers, environment and workforce can guarantee the sustainable development and long-lasting success it strives for.

44

WFSGI MAGAZINE 2016

In the first place, KTC ensures a safe and healthy working environment. The manufacturer regularly invites experts to assess the working conditions and gather advice on how to improve them further. KTC is a transparent manufacture; for instance, it publishes all its audit documents and other CSR-relevant details – like its factories wage ladders – online. In addition, the manufacturer has established an online grievance mechanism that allows it to react immediately in case of any problems. The relevance that KTC attaches to the well being of its workers is also reflected in its memberships of the Fair Wear Foundation and the Fair Labor Association. KTC is proud to be currently the only manufacturer that is a member of both initiatives.

In addition, KTC provides a variety of financial and nonfinancial benefits to its workers. For example, the manufacturer offers free accommodation in the dormitories, meals for a symbolic price, basic health care provided on site by a professional nurse, free shuttle service to the city, and free sporting activities. Finally, KTC promotes the participation in the social security scheme with guaranteed participation

CR & MANUFACTURING: BEYOND LEAN?

© All images KTC

for all new employees, and commits to pay a fair living wage for a normal working week, currently achieving about 95 percent of the Asia Floor Wage benchmark.

In order to keep improving, KTC developed a partnership with Prof. Dr. Nick Lin-Hi, a German CSR expert, in 2013.

The idea of the partnership is to adapt the CSR framework to the conditions of a Chinese manufacturer with the aim of becoming the employer of choice. Since knowing what workers think, feel and need is the foundation for improvement, a specific survey for Chinese workers was designed and all workers were invited to participate. In total, more than 1,000 workers took part in the anonymous survey.

The survey allowed assessment of the status quo of the employer-employee relationship at KTC. In addition, worker interviews and experiments were conducted in order to identify workers’ most important needs. The results of the survey and interviews not only showed that KTC is on the right track, but also that workers value the factory’s engagement.

In a nutshell, the findings indicated that a sound CSR strategy improves workers’ performance and that workers particularly ask for a healthy working environment, fair

WFSGI MAGAZINE 2016

45

CR & MANUFACTURING: BEYOND LEAN?

behavior of supervisors, and career opportunities. Since there is always room for improvement, KTC will intensify the valuable collaboration with Prof. Dr. Lin-Hi in order to design and implement innovative CSR measures that are suited to enhance workers’ wellbeing. Starting points in this respect are, for example, onboarding programs for newly employed workers and coaching programs.

As experience and the studies of KTC and Prof. Dr. Lin-Hi have shown, the motivation and efficiency of the workforce can and has to be positively affected and increased by transparent and responsible operation.

CSR has tended to degenerate into a buzzword and marketing toy in too many cases and discussions over the last few years. However, KTC wants to abstain from focusing on colourful ‘doing good’, detached from where the actual problems occur, and prioritize the immense and very common place challenges encountered in the daily lives of the many people working in the industry. If KTC’s “Business is People”, its CSR strategy is delivering a very well-considered promise. It’s a great place to start.

46

WFSGI MAGAZINE 2016

RESPONSIBLE SOURCING SOLUTIONS

UL provides the intelligence and tools that businesses need to develop and implement sustainable business practices within their supply chains.

UL’s Responsible Sourcing group provides auditing and advisory services, which include supply chain monitoring, research and program development, and training in the areas of: · Social Responsibility and Accountability · Risk Identification and Management · Environmental Responsibility · Brand Protection and Supply Chain Security · Extractives and Raw Materials Sourcing · Capacity Building and Continuous Improvement

For more information, contact us at RSinfo@ul.com or visit ul.com UL and UL logo are trademarks of UL LLC © 2015

CR & MANUFACTURING: BEYOND LEAN?

EXCELLENT LEAN PRODUCTION THE WAY TO BUSINESS SUSTAINABILITY

By Carsten zur Steege, Managing Director of Bosch Automotive Thailand

Lean production approaches are widely applied across many industries, particularly automotive, but the results frequently fail to meet expectations.

This article outlines a novel and holistic approach to lean production – known as Excellent Lean Production (ELP) – which integrates established lean prin­ ciples and methods with the Excellence Model of the European Foundation for Quality Management (EFQM). The ELP framework provides concrete guidance for lean implementation that delivers real improvements to the bottom line.

Lean today and the Bosch approach to lean Many companies, particularly those in the automotive industry, use lean production systems. These systems share a similar structure. Targets are translated into lean principles which are then implemented using lean methods and tools.

The focus for improvement is the flow of materials and information within the order fulfilment process (or value stream). These lean production frameworks have proved that lean methods and tools increase efficiency (quality, delivery, costs) by waste elimination (overproduction, rework, motion etc.).

The global automotive supplier Bosch started its lean journey in 2002. It focused first on lean methods and tools. As the understanding of lean systems matured, so the need for

management-guided improvements and the problemsolving capability of all staff evolved. Lean was later extended to support processes (indirect areas) and to the product development process – developing a lean value stream at an early stage. The experience during these years at Bosch, and from lean transformations in other automotive companies, demonstrated that lean often does not contribute sufficiently or sustainably to business results. The main reason for this is that lean is often confined to the shop floor (production and logistics). The application of lean in a manufacturing plant remains limited and results in only minor efficiency improvements. Traditional and lean approaches often run in parallel. There is no single approach to lean, so lean approaches tend to disappear after a while, with companies falling back on the traditional way of doing things – leaving the sustainability of the business at risk. In addition, lean tools are often copied and applied on a large scale with little understanding of the impact on results. The strategy underlying today‘s lean implementations (what steps to take, when and where) is often unclear and in many cases is therefore ineffective.

The new way forward: Excellent Lean Production The European Foundation for Quality Management (EFQM) has developed a holistic management approach, including the EFQM Excellence Model, which is designed to increase effectiveness and achieve more sustainable

© EFQM 2012

Targets Lean Principles

48

Leadership

+

People

Processes, Products and Services

People Results

Strategy

Customer Results

Lean Methods / Tools

Partnerships and Resources

Society Results

Lean Production Framework

EFQM Excellence Model

WFSGI MAGAZINE 2016

Business Results

= Excellent Lean Production Framework

CR & MANUFACTURING: BEYOND LEAN?

Preparation Phase Management Process Sales & Marketing Process Product Development Process Order Fulfilment Process Support Process

Excellent Lean Production Framework

business results. The new concept of Excellent Lean Production (ELP) combines the strengths of the EFQM model – increased effectiveness (doing the right things), with lean – increased efficiency (doing things right).

Integrating these two approaches results in the ELP framework, providing a strategic plan to support effective lean implementation. It enables a more effective process by providing guidance on how to implement lean methods and tools more logically using of continuous improvement process (CIP) cycles.

ELP starts with management processes and then applies lean methods and tools across the whole process landscape.

This high penetration of lean ensures significant and sustainable increases in efficiency, resulting in real improvements to the bottom line.

The Excellent Lean Production Framework The ELP framework describes methods and tools that can be used to meet a production plant’s lean transformation requirements for every category of the EFQM Excellence Model. It starts by defining key performance results (KPRs) for the four EFQM results’ categories: Business, People, Customer and Society. Well-structured and detailed KPR definitions help to clearly link lean improvement measures to bottom line results.

The EFQM Enabler category Leadership clarifies the requirements of lean leadership and provides a set of management processes that are indispensable to leading a sustainable lean transformation: policy deployment, management review and continuous improvement. The category People outlines concepts for the involvement of people in the continuous improvement process, lean competence development and sustainable problem solving – key lean competences.

Process landscape

1 st CIP cycle

2nd CIP cycle

3rd CIP cycle

4th CIP cycle

…

1. Getting started: management leads the lean transformation in the plant 2. Lean in the order fulfilment process of the plant 3. Lean in the product development process 4. Lean in support processes

5. Extending lean to suppliers and customers

6. Lean in marketing and sales Time

Strategic plan for effective lean implementation

The EFQM Enabler category Strategy provides a deep insight into the ELP strategy required to realise a lean plant vision and achieve outstanding performance improvements. Detailed steps and concrete guidance to realise this vision are described in the strategic plan for effective lean implementation mentioned above.

The category Partnerships and Resources provides approaches for implementing lean collaborations with suppliers and customers. These collaborations aim to achieve winwin results and are essential to achieve the anticipated bottom line results.

Lean methods and tools for the order fulfilment process are described in the EFQM category Processes, Products and Services. The implementation follows a logical sequence, setting priorities in five phases: Motivation, Stabilization, Flow, Rhythm and Pull, Striving for Excellence. This enabler category also provides detailed steps for the design of a lean value stream in the product development process.

Bottom line results and conclusion The lean transformation at Bosch is evidence that a wellstructured and holistic lean approach can lead to satisfying, two-digit performance improvements in cost, quality and delivery. Traditional approaches may also bring about such results. However, ELP offers one important advantage over traditional approaches: a sustainable, step-by-step way to achieving a culture of continuous improvement across the entire manufacturing plant. This ensures the whole organization will continue to improve more rapidly than competitors who fail to embark on the lean journey. In the long run it will provide a decisive competitive advantage and encourage the mind set: Don‘t say if, but how!

For further inquiries about ELP, please contact Deutsche MTM-Vereinigung e. V. www.dmtm.com or email info@dmtm.com The book Excellent Lean Production (578 pages, EUR 89) can be obtained from MTM.

WFSGI MAGAZINE 2016

49

WFSGI MANUFACTURERS COMMITTEE

MANUFACTURERS COMMITTEE ACTIVITY REPORT 2015 Looking back on 2015, we have observed many emerging challenges confronting the sporting goods manufacturer: The conclusion of the Trans-Pacific Partnership (TPP) negotiation on 5 October has severely challenged long-standing sourcing strategies. TPP mandates that to be eligible for TPP preferred duty benefits, the goods need to be produced, from raw materials to final end product, in the TPP partner countries. This mandate will reshuffle the current fragmented supply chains to become more vertically integrated in the TPP partner countries. onvergence between end product manufacturers and their C tier-two material suppliers. Though material innovations are critical and generally welcomed in the sporting goods industry, more and more material innovations come in forms of preprocessed end products, which surely will erode the slim profit margins of the sporting goods manufacturers.

The rise of the labor rate and the fringe benefit costs in sourcing countries has further challenged the labororiented manufacturing paradigm. Discussions are now centering on optimizing, rather than minimizing, labor costs and productivity to gain long-term competitiveness.

China-based manufacturers have already been marching in this direction and we can foresee that manufacturers of other sourcing locations will also be forced to follow and alter their management of labor costs.

New manufacturing solutions have gained significant momentum. In the past few years, manufacturers have begun to understand that low labor rate strategies are not sustainable and started to adopt new automation and/or chemical innovations to revamp the manufacturing processes. The implementation of new solutions has kick-started a cost-­

saving merit cycle that has attracted more manufacturers to these new solutions and driven down the costs of new innovative solutions.

L EAN manufacturing has seemed to regain its deserved momentum among sport wears manufacturers. How to incorporate LEAN with the newly developed automation solution to control excessive Work in Process (WIPs) has become the next domino to tackle for the manufacturers. Automation is no longer the only answer in ordet to gain superb manufacturing efficiency, especially in the footwear industry due to its lengthy processes. High speed automation has created an imbalance among all manufacturing processes, along with excessive WIPs, which challenges the overall productivity gained through LEAN manufacturing.

This leads us to the theme of our 2015 Manufacturing Forum – BEYOND LEAN MANUFACTURING: The Forum focused not only on the more technically orientated topics, but also on corporate responsibility in its many aspects. The two-day conference held in Hong Kong in early December 2015 drew the attention of a multinational audience covering the entire sporting goods industry. The participants discussed in workshops and in intensive exchanges with the keynote speakers how circular manufacturing contributes to the use of less raw materials and processing, and how it may deliver greater customer value and produce benefits for consumers, producers and the environment.

They also debated how promotion of the well being of factory workers can turn into an investment in a factory’s longterm success and what lies behind terms such as compliance, corporate responsibility and sustainability used by manufacturers and brands.

The WFSGI thanks its hosts and partners for their generous support, which made the WFSGI Manufacturers Forum 2015 possible.

Host

50

Partner

WFSGI MAGAZINE 2016

Media Partner

China International Sporting Goods Show Fuzhou Strait International Expo&Conference Center

22nd(Fri)-25th(Mon) April,2016 Fitness Equipment Massage & Rehabilitation Equipment

www.sportshow.com.cn

Outdoor Fitness Utilities

Stadium Facilities & Construction Visitor services

Roller-skating & Outdoor Sports

Ms. LOU Danping +86-10-87182997(Overseas)

Running, Swimming, Combat & Leisure

Email:loudanping@sportshow.com.cn

Ballgames & Racket Games Equipment

INTRODUCING THE UNMETALWOOD. Engineered with multi-material construction, M1 gives every golfer unrivaled performance and personalization. By using an ultralight carbon-composite crown and a thinly cast titanium body, we were able to shift more weight low–where it’s needed most–and create the revolutionary T-Track System. This combination unlocks more distance and control than ever before.

© 2015 Taylor Made Golf Company Limited. #1 Driver in Golf claim based on combined 2014 wins and usage on the PGA, European, Japan Golf, Web.com, Champions and LPGA Tours, as reported by the Darrell Survey Co. and Sports Marketing Surveys, Inc.

WFSGI MANUFACTURERS COMMITTEE

During the event, guidance for lean implementation that delivers real improvements to the bottom line was outlined, and a strong theme was that manufacturing supply chains are no longer long hierarchical set-ups with one way communications, but a peer-to-peer dialogue interface that runs end to end.

During 2016, we expect to examine all of the above themes more deeply, with the support of the WFSGI Asia office in Hong Kong. The office opened in April 2015, with the strategic purpose of operating more closely with the manufacturers, brands, retailers and federations based in the Asia region.

CHAIR

MEMBERS

Charles Yang Head of Innovation Center, Pouchen Group

Nouman Butt Director Marketing & Development Capital Sports & SCCI The Sialkot Chamber of Commerce & Industry

Morgan Chiang Vice General Manager, Dean Shoes Company Ltd.

Tom Cove President & CEO, SFIA – Sports & Fitness Industry Association, USA

Jackson Hsiu CEO, Evervan Qingyuan Footwear Co., Ltd.

Bianca Lin Business Division Director, Fulgent Sun Int. Co., Ltd

Andy Liu General Manager, Chung Jye Shoes Co., Ltd

Randy Liu Vice Senior Manager, Chung Jye Shoes Co., Ltd

Hirotaka Miyaji Director General, JASPO – Association of Japan Sporting Goods Industries

Dr. Jochen Schaefer WFSGI Legal Counsel

Helen Ford Senior Executive ­Director, WFSGI Asia

Dhyana van der Pols WFSGI Head of Textile Innovation and Manufacturing

Hee Yung Lee Business Director, Jangchun Shoe Manufacturing Dalian Co. Ltd./ HSD, Hwaseung

Steve Lee Vice President, Pou Chen Group

EX OFFICIO

Johannes T. Rathmer Managing Director, Brands & More GmbH, Member of the Management Board, DDIM e. V.

George Wood Chairman, TBS Group & Honorary President TSMA – Taiwan Sporting Goods Manufacturers Association

Robbert de Kock WFSGI Secretary General

WFSGI MAGAZINE 2016

53

CR & MANUFACTURING: BEYOND LEAN?

EMBEDDING RESPONSIBLE BUSINESS IN GLOBAL SUPPLY CHAINS

By Angel Gurría, OECD Secretary-General

New generation sector-specific tools are helping enterprises apply risk-based due diligence to ensure responsible business conduct in their supply chains.

Sportswear brands hold tremendous value. This value stems from the brand association with a customer’s favourite activity or favourite team and manifests itself in real revenue gains. For the sportswear industry, this has also resulted in pressure on sportswear companies to live up to the values promoted by their brands by trying to ensure responsible supply chains. In the past two years, the sportswear industry has seen a boom in sales as customers demand that fashion be accompanied by function.1 As sporting goods companies ramp up their sportswear lines, they also need to consider how they can be prepared to meet expectations of responsible business conduct in their supply chains.

Over the past 25 years, expectations on how companies identify and address adverse impacts in their supply chains have evolved, but this evolution has not been accompanied by a convergence of expectations. Different stakeholders, whether they are governments, civil society, trade unions, or industry associations, often make conflicting demands on enterprises in relation to their responsibilities.

The 2011 update of the OECD Guidelines for Multinational Enterprises (OECD Guidelines) and the release of the UN Guiding Principles made significant steps towards clarifying the responsibilities of enterprises in relation to their supply chains. Both instruments incorporate the expectation of due diligence – the process through which enterprises can identify, prevent, mitigate and account for how they address their actual and potential adverse impacts. While the UNGPs focus on human rights, the OECD Guidelines extend this expectation of due diligence to other areas of potential business impacts. Forty-six countries accounting for around 75 percent of global investment flows adhere to the OECD Guidelines, which are supported by representatives

of business, worker organisations and non-governmental organisations.

The OECD has developed sector-specific tools to help enterprises apply risk-based due diligence in accordance with the OECD Guidelines. Each of these tools supports a framework for risk-based supply chain due diligence that includes: (i) the establishment of strong company management systems; (ii) the identification, assessment and prioritisation of risks in the supply chain; (iii) risk management and remediation; (iv) verification of risk mitigation; and (v) public reporting on supply chain due diligence processes.

How does risk-based due diligence differ from what we have seen before?

The garment and footwear sectors are unique in that they have been implementing some form of supply chain risk assessment and mitigation for over 20 years.

Traditionally, garment and footwear companies have focused attention on tier-one manufacturing. Risk-based due diligence, however, means that an enterprise should assess potential risks of adverse impact across the full extent of its supply chain. Resources should then be allocated to the stages and geographic locations in the supply chain which hold the highest risk of adverse impact.

This form of risk-based due diligence for the entire supply chain would likely be impossible if the responsibility for due diligence lay with brands and retailers alone, as has traditionally been the case in the garment and footwear sectors.

However, the principles of risk-based due diligence imply that all actors in the supply chain hold a responsibility to identify and manage risks, and those closer to the risk are expected to do more. In practice, this means that enterprises operating “downstream” – such as brands and retailers – may focus their due diligence efforts on mid-stream actors operating at so-called “choke points” to encourage them to take responsibility for risks of adverse impacts in

NPD Group, Active Wear Growth Sets Pace for Overall Apparel Market, accessed at www.npd.com/wps/portal/npd/us/news/press-releases/activewear-growth-sets-pace-for-overall-apparel-market/

1

54

WFSGI MAGAZINE 2016

CR & MANUFACTURING: BEYOND LEAN?

COUNTRIES ADHERING TO THE OECD GUIDELINES FOR MULTINATIONAL ENTERPRISES Argentina Jordan Australia Korea Austria Latvia Belgium Lithuania Brazil Luxembourg Canada Mexico Chile Morocco Colombia Netherlands Costa Rica New Zealand Czech Republic Norway Denmark Peru Egypt Poland Estonia Portugal Finland Romania France Slovak Republic Germany Slovenia Greece Spain Hungary Sweden Iceland Switzerland Ireland Tunisia Israel Turkey Italy United Kingdom Japan United States

Š All images OECD 2015

their supply chains. Choke points are stages in the supply chain that generally include relatively few actors that process a majority of the commodity.

Due diligence is not a static process; enterprises should establish systems to account for changing circumstances in their supply chains. This is particularly true in the garment sector where companies frequently shift sourcing from one country to the next, but is also relevant to the footwear sector.

The OECD is developing a Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sectors, which provides recommendations for companies to meet these new expectations. The Due Diligence Guidance also includes targeted recommendations for dealing with specific adverse impacts in the sector. In 2016, the OECD will support the implementation of the Guidance through: (i) pilot initiatives; (ii) analytical research; for example, on most

effective risk assessment, monitoring and assessment mechanisms; and (iii) peer learning.

Implications for regulation Industry can expect more regulations to emerge on responsible supply chains. Although the OECD Guidelines do not explicitly push for regulatory interventions, they have served to guide governments on regulatory approaches to supply chain due diligence. For example, the recent draft EU regulation on responsible mineral supply chains is based on the broadly supported OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

Experience shows that effective regulatory approaches for supply chain due diligence should use existing standards, where possible, and build on credible industry or multistakeholder initiatives. Regulations should also consider the impact of compliance on developing countries to avoid unintended consequences, such as the impact on workers or enterprises operating abroad. They should also include a package of incentives for compliance to support companies, in particular small and medium-sized enterprises, and aim to support responsible sourcing from high-risk areas.

Ultimately, due diligence for responsible supply chains should also be accurately positioned in any regulation as input-based rather than outcome-based, responsibility to be undertaken in good faith.

WFSGI MAGAZINE 2016

55

CR & MANUFACTURING: BEYOND LEAN?

TRADE BODIES AND GOOD CR COMMUNICATIONS

By Adam Garfunkel, Director of Junxion Strategy UK

The direction of travel in Corporate Responsibility (CR) is clear: reporting and communications are set to become increasingly mainstream activities – and not just for large companies.

A diverse range of stakeholders – from investors and pressure groups to governments and consumers – are looking for increasingly high standards of conduct from companies.

They expect businesses to be transparent about their impacts on society and their progress in tackling them.

Some level of CR reporting will become mandatory in more and more countries, and companies will need to sharpen the focus of their CR reporting and communications on the issues that make the most difference. Taking a leading role in promoting CR and supporting greater transparency by their members is increasingly part of a trade body’s remit.

The role of trade bodies in improving performance Trade bodies have an important role to play in proactively working with governments to ensure effective public policy

frameworks that both advance sustainability and allow companies to thrive. They can be instrumental in helping their members to be more sustainable and can act as the voice of the industry, demonstrating how the sector serves the public good.

By providing a forum for collaboration, trade bodies can help to create a sector’s response to important trends and issues. Acting as a clearing house, an association can take a lead in identifying and sharing best practice, raising standards across the sector.

Doing this well brings benefits both to individual members and the trade body as a whole. It can result in: • Increased trust in member brands, leading to a stronger collective reputation • Stronger relationships and better mutual understanding with stakeholders – including those who may hold very different positions • Improvements in performance, through integrating sustainability considerations into operations and identifying opportunities for efficiencies/ cost reductions • Achieving trade body goals to help members be more competitive and profitable.

Foster dialogue with stakeholders and give them a voice in your communications © iStockphoto

56

WFSGI MAGAZINE 2016

How one trade body has made a difference One industry group that has gone down this road is the International Council on Mining & Metals (ICMM). It insists that its members report their sustainability performance annually in line with the Global Reporting Initiative (GRI), long considered to be the leading standard in sustainability reporting.

CR & MANUFACTURING: BEYOND LEAN?

sporting goods company members are expected to meet.

The WFSGI also encourages its members to be transparent and communicate their performance on social and environmental issues.

In 2016, the WFSGI is introducing a regular biennial reporting mechanism that members complete to demonstrate compliance with the WFSGI Code of Conduct. WFSGI believes that this Communication on Action will provide an effective tool for demonstrating commitment to the code’s principles. This pooling of best practice will also drive ongoing sustainability performance improvement within the sector.

Some WFSGI members such as Nike, Puma and the adidas Group, have long established sustainability programmes with their own comprehensive communications activities, and the trade body serves as a forum for sharing their knowledge with members less experienced in CR communications.

Developing an effective CR communications strategy Before a company can tell a coherent and compelling story about its CR activities to external audiences, the first priority is to get key internal people on-board, including the CEO. Explaining the risks of inaction and showing how taking CR seriously adds value to the business will gain attention from senior decision-makers.

All ICMM members must also implement the industry body’s Sustainable Development Framework, which requires them to integrate ten principles and six supporting position statements into corporate policy. The ICMM itself conducts an annual assessment of each member’s progress against these commitments, and publishes the results in their Annual Review.

These measures have both improved performance across the sector and helped earn trust with stakeholders, ensuring their ongoing licence to operate.

The WFSGI Code of Conduct and Communication on Action Similar to the ICMM, the WFSGI has created a Code of Conduct, which provides a minimum set of CR standards

People charged with responsibility for CR need to identify the most important topics to communicate and determine the main messages. This will ensure that there is a clear focus and that everyone internally is pulling in the same direction. It will also make it clearer to those outside the organisation what you stand for and what your priorities are.

Companies that do this best show how their CR ambition is linked to their overall business strategy.

Indeed, with the help of far-sighted trade bodies, there is potential to go even further and demonstrate how their sector generates value for society at large.

Adam Garfunkel leads the London office of Junxion Strategy and is currently advising WFSGI on their corporate responsibility (CR) communications. Junxion is an inter­ national consultancy that works to catalyze progress on social and environmental sustainability through its stra­ tegic planning, branding, CR and communications services.

WFSGI MAGAZINE 2016

57

CR & MANUFACTURING: BEYOND LEAN? ADVERTORIAL

SIALKOT SOCCER BALL PROJECT CLEP – a project of the SCCI. The soccer ball industry of Sialkot-Pakistan has the exclusive distinction that Sialkot-made balls have been played in the World Soccer Cups besides supplying to top brands in the world.

The official FIFA ball of the Soccer World Cup 2014, the Brazuca ball, was made in Sialkot.

Child Labour Elimination Program (CLEP) was initiated in 1997 and has succeeded in eliminating child labour from Soccerball Industry of Sialkot-Pakistan to place the children in schools. We thank all our partners and supporters – i.e.

WFSGI, FIFA, ILO-IPEC, UNICEF, NGOs and other key stakeholders – for their benevolent cooperation to make the project successful.

Bill Clinton, former US President, highlighted this programme on 16 June 1999 at the International Labour Conference in Geneva, Switzerland, as a success story.

After phasing out ILO and UNICEF from the programme, in order to sustain achievements of the Atlanta Agreement, two independent institutions have been established; namely, Independent Monitoring Association for Child Labour (IMAC) and Child & Social Development Organization (CSDO). IMAC has been established to carry forward the workplace monitoring system and use it as a tool to combat child labour. CSDO has been set up to tackle the issues of

child labour, child protection, child rights and other social developments. Since its inception, CSDO has been executing various social development projects in collaboration with the United Nations (UNICEF, ILO) and the government of Pakistan for the protection of marginalised children, and the prevention and elimination of child labour in the soccer ball industry.

As part of its routine activity, CSDO has been fully facilitating Sialkot Chamber of Commerce & Industry (SCCI) and the member companies to manage CLEP and address CSR issues. CSDO has also maintained very cordial relations with the World Federation of the Sporting Goods Industry (WFSGI) for managing matters relating to CLEP and other social issues of the Industry. Perhaps there is no example of where the export-oriented industry has voluntarily taxed itself to prevent and eliminate child labour.

List of soccer ball manufacturers participating in CLEP as of 15 September 2015 1 ALBERTA SPORTS (PVT) LTD.

15 FINE GROUP INDUSTRIES

29 MOLTEX SPORTING GOODS (PVT) LTD.

43 SOCCER PROFESSIONAL ENTERPRISES

2 ALI TRADING CO. (PVT) LTD.

16 FIRCOS INDUSTRIES (PVT) LTD.

30 NADIA INTERNATIONAL (PVT) LTD.

44 SPACE AGE INTERNATIONAL

3 ANWAR KHAWAJA INDUSTRIES (PVT) LTD. 17 FORWARD SPORTS (PVT) LTD.

31 OLE SPORTS

45 SPORTICA GROUP

4 ASSAC SPORTS INDUSTRIES (PVT) LTD.

32 ORBIT GROUP

46 SUBLIME SOCCER (PVT) LTD.

18 H. WAHID SONS MFG CORP. (PVT) LTD.

5 AWAN SPORTS INDUSTRIES (PVT) LTD.

19 HOLA TRADING

33 ORPHEUS ENTERPRISES (PVT) LTD.

47 SW GROUP OF CO.

6 B.J SPORTS

20 J.S.D SPORTS (PVT) LTD

34 PETRA SPORTS

48 TAJ MAHAL SPORTS CO.

7 BOLA GEMA

21 KARAM INDUSTRIES

35 RATRA TRADING CO. (PVT) LTD.

8 BSM SPORTS

22 KHALID OVERSEAS TRADING CORPORATION 36 RECTO SPORTS (PVT) LTD.

50 TATA PAK INDUSTRIES 51 TEMPO ENTERPRISES

9 CAPITAL SPORTS CORP. (PVT) LTD.

49 TALON SPORTS (PVT) LTD.

23 KICKER SPORTS

37 REEMA GROUP OF COMPANIES

10 COMET SPORTS (PVT) LTD.

24 LALI INDUSTRIES (PVT) LTD.

38 ROZA SPORTS

52 TRAMONDI SPORTS (PVT) LTD.

11 CRAFTSMAN (PVT) LTD.

25 LASER SPORTS (PVT) LTD.

39 REEMAXE GROUP OF INDUSTRIES

53 VISION TECHNOLOGIES CORPORATION (PVT) LTD.

12 ELITE INDUSTRY

26 LEABROSE INTERNATIONAL

40 SETAS TRADERS

54 WEMBLEY SPORTS 55 WHIRL SPORTS INTERNATIONAL

13 ESTRELLA INTERNATIONAL

27 LEATHERWARE (PVT) LTD.

41 SILVER STAR ENTERPRISES (PVT) LTD.

14 EUREKA INDUSTRIES

28 MADRIGAL SPORTS (PVT) LTD.

42 SOCCER PLUS INTERNATIONAL (PVT) LTD. 56 YASIR INDUSTRIES

58

WFSGI MAGAZINE 2016

WFSGI CORPORATE RESPONISBILITY COMMITTEE

CORPORATE RESPONSIBILITY COMMITTEE ACTIVITY REPORT 2015 Sustainability and corporate responsibility continued to rank high on the global agenda in 2015. This was triggered primarily by new facts and figures about the planet’s health and global societal trends. It was further spurred by growing attention taken by supranational institutions and local governments that strive to provide more guidance to business in these matters.

Examples are the next generation of the UN Millennium Goals, agreements met during the G7 summit in Germany and additional guidelines as actually drafted by the OECD. Furthermore, there is a clearer trend within the global business community towards integrating sustainability practices in the overall business agenda. The CR Committee has acted on its commitment to provide substantial support and guidance to members in keeping a leadership position in corporate responsibility practices.

In 2015, the CR committee continued in focusing its activities and work on the following key areas: • observe CSR and sustainability trends • share knowledge and best practice approaches • join forces to drive collective initiatives • lead and represent the industry Strengthening information and sharing services As mandated by the WFSGI Board, the CR Committee developed a reporting mechanism for WFSGI members that mirrors members’ commitment and performance in advanced corporate disclosure practices on their sustainability strategies, programs and initiatives. This initiative, called ‘communication on action’, will be introduced in 2016 and will serve mainly as a transparency and reporting tool on a peer-to-peer level. The overall purpose in a first stage of the project will be to provide members with a template to report on actions and progress made in the field of corporate responsibility.

Strengthening the industry position on critical CR issues During the year, the CR committee significantly strengthened guidance and orientation to members by developing important position papers on critical CSR subjects.

In close engagement with a CR agency, two position papers were developed. These papers concisely summarize critical trends, outline the WFSGI’s position and highlight leadership initiatives driven by its members. The financing for a total of 11 position papers, including regular webinars to its members, was secured.

Provision of such position papers enables the WFSGI constituency to align and orient their own positions.

Promoting collective initiatives In 2015, the CR Committee continued to promote the New York-based not-for-profit organization Fair Factories Clearinghouse (FFC).

This action step supports the industry-wide goal to achieve greater audit harmonization and an enhanced sharing platform for all players in the sporting goods industry in order to avoid costly duplication of factory auditing and audit fatigue. The FFC provides software to help companies in collaborating on improving ethical sourcing and conditions in outsourced manufacturing. FFC’s goal is to optimize factory compliance by providing a common platform for collaboration and increased transparency.

The FFC has become a central tool for the bicycle industry under the lead of the WFSGI has set up a supplier auditing program – the Responsible Sport Initiative (RSI). The initiative allows bicycle brands to upload relevant social and environmental supplier information into the FFC and collectively work with other brands on remediation steps.

Assuring good practice – maturing the FIFA Pledge The WFSGI has continued to successfully cooperate with FIFA in order to verify the corporate responsibility of FIFA licensees’ manufacturers. The program is applicable to football manufacturers all over the world, which must prove their compliance with the principles set forth in the WFSGI Code of Conduct.

WFSGI MAGAZINE 2016

59

WFSGI CORPORATE RESPONSIBILITY COMMITTEE

CHAIR

VICE-CHAIRS

Frank Henke Global Director Social & Environmental Affairs, adidas Group

Zoe Cokeliss Head of Environment and Community Affairs, Pentland Brands

Christine Madigan Vice President Responsible Leadership, New Balance Athletic Shoe, Inc.

Michael Levine Senior Director of Corporate Social Responsibility and Senior Counsel, Under Armour

George Hong-Chih Liu Executive Director, Yue Yuen Industrial Holdings Ltd.

MEMBERS

Norman Cook Executive VicePresident, Kamik

Reiner Hengstmann Global Head Environmental & Social Affairs, Puma

Toshiaki Mizuno Senior Manager, Presidential General Affairs Office, Mizuno

Caitlin Morris Director of Integration and Collaboration CR Compliance, Nike, Inc.

EX OFFICIO Robbert de Kock WFSGI Secretary General Jochen Schaefer WFSGI Legal Counsel

Abel Navarette Director of Corporate Responsibility, Columbia Sportswear

Rutger Oldenhuis European Corporate Counsel, Shimano

Erik van der Hout R & D Manager, Accell Group N.V.

Today, the WFSGI no longer provides this service only for football licensees, but also for the FIFA turf manufacturers and the companies that provide FIFA with the goal line technologies.

Outlook 2016 Based on the achievements and successes reached in 2015, the direction 2016+ will address the following critical subjects:

60

WFSGI MAGAZINE 2016

George Yoshimoto General Manager Global CSR, Asics

Marc Magnus WFSGI Trade and Corporate Responsibility Manager

• Further completion of position papers on corporate responsibility subjects that present the sporting goods industry point of view and to drive engagement with supranational institutions shaping and influencing the global CSR agenda; • Roll-out of the ‘communication on action’ template to all WFSGI members, including respective guidance • Promotion of the commitment of members in driving continuous improvement and best practice approaches in meeting the WFSGI model code of conduct

WANT IT MORE THAN COUCH TIME

SOURCING MYANMAR

SPRINTING FORWARD – EXPANDING OPPORTUNITIES IN SPORTSWEAR SOURCING IN MYANMAR

By Khine Khine Nwe, Secretary General, Myanmar Garment Manufacturers Association and Jacob Andrew Clere, SMART Myanmar Project Manager at the Myanmar Garment Manufacturers Association

In 2015, Myanmar’s garment industry is resurgent.

Burma – as the country was once known – was one of the earliest manufacturers in Asia of textiles and garments, but this industry largely collapsed during the socialist era from 1962–1988. In the early 1990s, the military government began privatizing the garment sector and opening to some foreign investment.

Growth in the garment sector was exponential from 1993 until 2003, but collapsed again in a tragic fashion after the introduction of United States sanctions in 2003.

The strength of Myanmar’s garment sector from about 2003 until 2012 was in basic outerwear and structured woven jackets. In particular, padded jackets and woven trousers were two product lines popular with Japanese and Korean buyers, and hence widely produced by more than 100 garment factories in Myanmar.

Since Myanmar’s Foreign Investment Law was passed by the newly elected parliament in 2012, the industry has witnessed a surge in new investment from Hong Kong, mainland China and Taiwan, as well as a mix of investment from other origins (Thailand, Indonesia, etc.). Along with such investment, new production skills, management expertise and machinery investment have been introduced. Several new types of products have started to be produced, including sweaters, socks, sports gloves, performance skiwear, life jackets, medical gowns, babywear and lingerie.

Specifically with respect to sportswear, among the completely new product additions in the market, two factories are producing athletic socks for the European and US markets. There are also three new sports glove factories, specializing in various types of athletic gloves.

62

WFSGI MAGAZINE 2016

Skiwear is another new product type available for sourcing in Myanmar. Several factories have honed production skills in their manufacture for the European market and some will perhaps export to North American buyers in the future if market conditions are favorable. The MGMA registered five manufacturers of skiwear products in mid-2015. These manufacturers add to an assortment of other previously established manufacturers, which have strong competence and capacity in tape-seamed garments and structured outerwear.

Basic sportswear is produced by several dozen factories in Myanmar, including locally invested producers as well as foreign invested factories. Several produce simple running shorts, jogging suits, athletic jackets and jerseys. The product quality standards in the country are relatively high, but several of the factories capable of producing basic sportswear need support and diligence to improve their social compliance. Excessive overtime hours are a sourcing risk and occupational health and safety issues also persist in several factories to varying degrees.

With respect to footwear, two shoe factories in Myanmar are now producing international quality sports shoes.

Athletic footwear is being exported to the EU and US markets. Sandals and slippers are exported in higher volumes by about two dozen factories to the traditional stronghold export markets for Myanmar: Japan and Korea.

SOURCING MYANMAR

The raw materials situation in Myanmar presents difficulties. Nearly all production inputs are imported, the vast majority from China. Recently, with the opening of a new modern highway linking Myanmar with Thailand, some factories have begun trucking in input materials to reduce lead times. There are direct shipping options available from Shanghai, as well as cheaper indirect routes via Singapore and Tanjung Pelepas, Malaysia.

Raw production materials available in the market in Myanmar consist of polybags, carton boxes, hangers, poly padding, labels and hangtags. Several companies have been scoping and setting up representative offices. In 2014 and 2015, the first international brands began to launch representative offices in Myanmar. When considered alongside the approximately 30% annual growth in exports over the last three years, it is clear that Myanmar’s garment industry is growing up and reaching a critical mass. The MGMA expects network and scale effects, as well as density, to combine to accelerate the growth potential of the market.

Did you know?

2014 and 2015 six to seven new garment and footwear factories registered per month in Myanmar 225,000 = estimated number of employees at MGMA member factories (September 2015) 13 days = minimum transit time to ship goods from Shanghai to Yangon 2 days = approximate transit time to truck goods from Bangkok to Yangon 0% = tax on garment products exported to the EU under the Everything-But-Arms agreement 0% = tax on garment products exported to Canada under its GPT/LDCT procedures

For manufacturers interested in investing, strong opportunities exist in manufacturing the input materials for garment production (and lengthening the local value chain), such as elastic band manufacturers, high quality packaging producers, zips and buttons producers and many other production inputs and services for which local production is almost entirely absent. The Foreign Investment Law permits 100% foreign investment as well as joint venture investment. Investors are able to enjoy a complete five-year tax holiday on profits and three years for machinery imports, which is potentially partially extendable if profits are re-invested in the business. Since 2012, several dozen international investors have taken advantage of these benefits to launch successful manufacturing operations in Myanmar.

Garment producers wishing to set up in Myanmar are able to take advantage of the above-mentioned tax benefits. In addition, garment manufacturers benefit from zero percent tax when exporting to the 28 member companies of the EU under the EBA/GSP+ incentive scheme. Since March 2015, Canada also allows zero percent tax on imports from Myanmar via its GPT/LDC incentive scheme. Japan, Korea, Australia, New Zealand and China all also provide zero percent tax or reduced tax on garment imports from Myanmar.

For further inquiries, contact MGMA via: www.myanmargarments.org

Many garment factories in Myanmar are able to produce basic sports jackets of various kinds. Recently, several larger manufacturers have honed production expertise to produce higher level products, including technical hiking gear and skiwear © MGMA

WFSGI MAGAZINE 2016

63

SOURCING MYANMAR

MYANMAR: THE NEXT OPPORTUNITY IN SPORTSWEAR SOURCING?

By Leonie Barrie, Managing Editor at just-style.com

While there’s no doubt many international apparel and footwear firms are eyeing Myanmar as an exciting new sourcing destination, leading sportswear brands and retailers are also taking a cautious approach when it comes to extending their supply chains into the country.

“The potential and outlook affiliated to the country is very positive,” explains Bill Anderson, VP of social and environmental affairs, Asia Pacific, at adidas Group, although he warns: “This will require time, patience and support.”

Duncan Scott, vice president of external products at New Balance Athletic Shoe, agrees. While the company doesn’t currently source in Myanmar, “and most likely won’t in the immediate future,”, he believes the country will emerge as a strong source in apparel first, but will take longer in footwear – he suggests four to seven years – due to its need for more complicated machinery and skilled workers.

Indeed, Myanmar’s isolation from world trade for more than a decade means the country is now playing catch-up in key areas ranging from compliance and sustainability to infrastructure and energy. The country’s financial institutions are still in their infancy, and there is a need for more training resources to help bridge the industry’s skills gap. adidas has been one of the most high profile sportswear brands to explore Myanmar’s potential since the lifting of sanctions by the European Union and the US three years ago, with the country making its first appearance on the adidas Global Factory List in February 2015.

But it was not a move the company undertook lightly. The pre-screening process took nearly two years, covering specific issues like land acquisition (to prevent the problem of land grabbing), as well as structural evaluation of prospective factories to withstand earthquakes. adidas also worked closely to ensure suppliers were in full compliance with its health and safety guidelines.

64

WFSGI MAGAZINE 2016

Brands and retailers are taking a cautious approach when it comes to extending their supply chains into Myanmar © Jozef De Coster

Since then, production has been expanded to three footwear facilities located close to Yangon. “For now, the portfolio of products comprises simple designs and constructions, but our aim is to move towards more complex production operations, as we gradually increase our sourcing operations in the country,” Anderson.

Another business currently piloting production in Myanmar is Japanese sporting goods giant Asics. The company emphasises that it does not directly source sports clothing and footwear from Myanmar, but that one subsidiary recently placed orders for a limited volume of casual shoes.

It is also a priority for Asics to evaluate risks and workers’ rights and resolve any issues before the company moves into a new sourcing country. To this end, the factory “met Asics’ social responsibility requirements after [we conducted] our own audit,” explains Lillian Tseng, manager of the Asics CSR & Sustainability Department.

Challenges This caution is understandable given the scrutiny faced by the sector following recent tragedies in the Bangladesh ready-made garment industry.

SOURCING MYANMAR

There is a need for more training to help bridge the industry’s skills gap © Jozef De Coster

“Logistically, there are still some infrastructural issues to be overcome, such as the import of materials, lack of municipal water and frequent power cuts,” says Anderson. “Also, high initial [worker] turnover rates are to be expected, as always happens with new businesses. This means that factories will have to invest heavily in training, as rural migrants take up new jobs in the manufacturing sector.”

The speed of legislative improvement is also key to the future success of Myanmar as a sourcing country.

“The legal system has to be there to offer guidelines and support,” agrees Scott, adding: “That will take time and the lack of a system currently, and for the foreseeable short term, will most likely mean investors will move cautiously.”

One of the biggest concerns for Asics is the need for labour law reform. While work is underway to develop new labour standards and consolidate the country’s existing labour laws into a single code, this is likely to take several years.

Two key pieces of existing legislation – the Labour Organization Law (2011) and the Settlement of Labor Dispute Law (2012) – are, “from our point of view, insufficient to protect workers’ rights as well as handle labour abuses,”, explains Tseng, adding that amending old laws covering working conditions and social security because may not “reflect actual situations”.

Progress But there has undoubtedly been progress too. After more than a year of talks, the country’s first minimum wage of MMK3,600 (US$ 3.2) per day was confirmed on 1 September. “We view it as positive that the government has taken the necessary steps to establish a formal minimum wage for the country,” says Anderson, adding: “It forms part of their wider efforts to strengthen labour law regulation.”

Added to this, foreign investment is growing, there is more international support covering technical assistance, compliance and worker training, and as more North American and European retailers and brands commit to sourcing from Myanmar, the country’s apparel industry is set to continue its rapid growth.

Another major benefit of sourcing apparel and footwear products from Myanmar is that they enjoy GSP+ duty-free trade preferences into the EU, as well as zero tariffs for Japan and South Korea – historically, the biggest markets for Myanmar garment industry exports.

And for sportswear specifically, Myanmar is starting to carve out a production niche for medium to high quality skiwear and performance outerwear, building on the previous experience of many factories in seam sealing and the production of waterproof rain gear and padded jackets for general outerwear. Beyond this, there are many more factories making more basic sportswear such as jerseys, golf shirts and running shorts.

So while initial priorities for many sportswear brands and retailers are to invest in top-of-the-line factories, worker training and sustainability initiatives before they start shipping products, in the longer term Myanmar undoubtedly represents an exciting opportunity to build an apparel and footwear source for the future.

Myanmar’s first minimum wage was confirmed in September 2015 © Jozef De Coster

The Labour Organization Law, for example, makes it a difficult to form an industrial union – leading to a proliferation of up to 600 small factory-level unions over the past four years, forcing workers to organise demonstrations rather than legally protected strikes. Another issue cited is that many employers frequently disregard the rules and regulations in place to promote the peaceful resolution of disputes.

WFSGI MAGAZINE 2016

65

SOURCING MYANMAR

MYANMAR’S INDUSTRIAL DEVELOPMENT: CATCHING UP IN AN UPHILL MARATHON

By Monika Staerk, Delegate of German Industry and Commerce in Myanmar

Myanmar is back on the global economic map – but the country is still working to gain a profile as an investment location and production base.

Myanmar’s economy is developing at high speed, following the beginning of the political and economic reforms in 2011. But the country comes from a relatively low base after at least two lost decades and years of western sanctions.

Asian investors and suppliers have been around, but western products have been marginalized – together with the standards they require and promote. As the regional and global supply chains have been intensifying, while other Asian countries have gained competitiveness and have developed higher technical standards and while requirements of western buyers in terms of social and labor standards have matured, Myanmar companies have been working in dull isolation from these trends, most of them just struggling to survive in a very unconducive environment.

At the same time, the corporate base is much better than most western visitors would expect. Private sector activities have been possible since the beginning of the 1990s and a quite lively corporate landscape has developed besides the state-owned and military-owned enterprises. A number of companies are active in manufacturing, even though Myanmar for the moment remains a trade-driven economy. Myanmar’s industrial production focuses on light industries, above all garment, food and drinks, fast-moving consumer goods and other low tech manufacturing. A lack of diversification and underdeveloped value chains are one of the biggest obstacles for further development, together with bad access to finance. These are hurdles for local investors to develop supply chains and economies of scale, and be able to compete with imports from other Asian countries.

Government and businesses have begun to understand that besides attractive regulatory frameworks, effective supply chains are an important factor for investment decisions of foreign companies. Developing these might boost FDI, which have been growing significantly, but are not yet in

66

WFSGI MAGAZINE 2016

line with expectations, even if the financial year 2014/2015 has seen a record inflow of USD 8.1 bn (approved projects).

Asian investors still dominate by far. China is the biggest investor in terms of stock, but Singapore leads the way when it comes to current inflows. Western investors join in and in order to understand their business rationale, it is worth taking a structural look at investment sectors.

Following the lifting of the sanctions, resources are now a target of interest for the west, mostly with respect to oil and gas. Infrastructure is another topic, but with few western investments, spearheaded by Telenor’s license in mobile telecommunications and a forthcoming American investment in a solar power plant. Most of the western investors currently focus on less risky avenues: manufacturing of food, drinks and fast moving consumer goods to supply the domestic market. Coca-Cola, Pepsi Cola, Heineken, Carlsberg, Nestle, Unilever and Colgate-Palmolive have entered the market, mostly through joint ventures, and others will follow. They aim to position their brands and gain market share at an early stage of development. For this purpose, they are willing to accept the relatively high cost of land and make a big investment in marketing – a return on investment is a mid-term perspective. Investors in construction materials, another sector in the limelight due to the current construction boom, can expect quicker returns.

The picture is different, when it comes to export manufacturing. A number of western companies assess Myanmar as an alternative location to China. Here Myanmar is in competition with other south-east Asian countries and potential investors expect immediate profitability. While Myanmar is quite competitive in terms of labor cost, the picture is not so bright for land cost, driven by speculation of land owners.

Construction is rather costly as well and logistics cost are high due to the underdeveloped infrastructure.

That is why the development of Special Economic Zones is at the top of the agenda for the Myanmar government. The first of them, Thilawa SEZ, started operations in autumn

SOURCING MYANMAR

2015. Driven by a Myanmar-Japanese PPP joint venture, it is the first example of a state-of-the-art industrial zone with centralized management, standardized cost structures and efficient infrastructure, including an adjacent port facility.

Other SEZs are planned in the western and southern parts of the country, but Thilawa probably will be the most attractive location for years to come together with an industrial park that will be developed in Mandalay, central Myanmar. The Foreign Investment Law (2012), and the SEZ Law (2014) highlight the commitment of the Myanmar government to develop attractive frameworks for foreign investors. Today, most sectors are open to foreign companies, either as a WFOE or as a JV with domestic partners. Incentives like tax holidays are in place. A new investment framework is in the making, combining regulations for domestic and foreign investors, but will most likely be implemented only in 2016. A more level playing field is to be developed – with two exceptions: land ownership, which remains in the

Delegate of German Industry and Commerce in Myanmar UMFCCI building, 29 Min Ye Kyaw Swar Street, Lanmadaw TS, Yangon. Phone +95 1 2301823. Cell +95 9 2501 35833. Email monika.staerk@myanmar.ahk.de. Web http://myanmar.ahk.de/

hand of local companies, and access to import and distribution, which foreign companies these days will not be granted. A more flexible approach is emerging, but the government still tries to protect the trading sector, where most of the local companies have stakes to defend.

The parliamentary elections in November 2015 may be a game changer, but currently one can be confident that a future government remains committed to political and economic reforms, and that political stability, a major criteria for any western investor, will be safeguarded. Ethnic conflict and religious tensions are challenges to tackle – and any European aware of our historic and current problems should understand that this is not an easy task. Today political and media freedom in Myanmar is relatively well developed compared with neighboring countries, and about 80 political parties operate legally. Much progress needs to be made in terms of human rights and democratization. But one can hardly think of any country that within such a short period of time has made such dramatic progress – without any bloodshed.

Foreign direct investment 2014/2015 inflows: volume USD 8.1 bn (approvals), 211 projects from 27 countries: by sector 3.5

175

3

150

2.5

125

2

100

1.5

75

1

50

0.5

25

0

Oil and gas 3.22 / 26

Transport and communication 1.68 / 8

Manufacturing 1.5 / 141

Real estate 0.781 / 6

Hotels and tourism 0.358 / 5

Other services 1) 0.47 / 25

0

Volume in USD bn Projects

Foreign direct investment 2014/2015 inflows: volume USD 8.1 bn (approvals), 211 projects from 27 countries: by country 5

50

4

40

3

30

2

20

1

10

0

Singapore 4.3 / 43

Source: DICA (2015)

UK 0.0851 / 13 1)

Hong Kong 0.626 / 28

China 0.517 / 34

Netherlands 0.302 / 4

South Korea 0.3 / 24

Other services, energy, agriculture, livestock and fisheries, mining

Other 2) 0.79 / 36 2)

0

Volume in USD bn Projects

India, Vietnam, Thailand, Canada, Japan

WFSGI MAGAZINE 2016

67

Our philosophy is simple. The more you enjoy doing something, the more you do it.

We help you choose the equipment that will give you maximum enjoyment.

That is how INTERSPORT brings Sport to the People Visit us at www.intersport.com

JOINT EFFORTS IN TRADE

WHY RULES OF ORIGIN MATTER IN INTERNATIONAL TRADE

By Stefano Inama, Chief, United Nations Conference on Trade and Development

Rules of origin (RoO) determine the nationality of goods. This has several implications starting from the granting of preferential tariffs at the time of importation, the mark of origin of the good (“Made in …”) and application of trade defense mechanisms, such as anti-dumping.

Due to a lack of agreement at the World Trade Organization there is not a multilateral RoO instrument and every country can design rules of origin that are product-specific and trade instrument-specific. This makes RoO a technical subject, difficult to predict while having a high impact on business involved in international trade. People have passports when crossing borders, goods have origin rules.

Rules of origin determine whether the goods may be granted duty-free treatment at the time of customs clearance, whether trade defense measures, such as antidumping duties, may be applied or a product is labeled as “Made in …”

Origin rules are divided in two big families: non-preferential rules of origin and preferential rules of origin. Preferential rules of origin are applied in the context of regional trade agreements (RTAs) and unilateral trade preferences. Under RTAs, countries enters into an agreement to progressively lower trade barriers, including the most evident one, tariffs.

Example of these agreements are the new mega-regionals such as the Transatlantic Trade and Investment Partnership (TTIP) between Europe and the US, and the Trans Pacific Partnership (TTP) between US and selected Asian and Latin-American countries. Unilateral trade preferences are those arrangements granted to developing countries as a form of aid to stimulate their exports and economic growth, such as the “everything but arms” initiatives granted by the

EU to Least Developed African countries and the Growth and Opportunity Act (AGOA) granted by the US to African countries.

The issue at stake for business is how to comply with RoO to benefit from these tariff preferences. The main problem is that RoO vary depending on the arrangement and country and may be stringent, in the sense that they require a high value content or a rather complex manufacturing operation to be carried out. Developing countries beneficiaries of such preferential tariff arrangement have often complained that the rules are excessively stringent and argued for more liberal RoO. A valuable example of the trade effects of rules of origin is provided by Cambodian bicycle exports to the EU. The EU’s normal rate of duty for bicycles is 14%, while duty-free is granted if the bicycle originates in Cambodia. RoO for bicycles originating in Cambodia before 2011 meant compliance with a limit of 40% on the use of non-originating material with limitations on using components from other ASEAN countries (technically speaking called “cumulation“). After 2011, the limit of the use of non-originating materials was raised to 70% and ASEAN originating was not counted against that limit – thus, a great incentive for producers to move manufacturing operations to Cambodia.

Figure 1: EU imports from Cambodia and GSP utilization rates: bicycles 400

100%

350

87.5%

300

75.0%

250

62.5%

200

50.0%

150

37.5%

100

25.0%

50

12.5%

0

00.0% 2006

2007

2008

2009

Total Imports (left axis)

2010

2011

2012

2013

Utilization rate (right axis)

WFSGI MAGAZINE 2016

69

JOINT EFFORTS IN TRADE

Non-preferential rules of origin do not grant any form of preferential duty. They are used to allocate origin to a given country in the context, among others, of trade defense measures and, most notably, marks of origin and public procurements.

Pending agreement at WTO on a harmonized set of nonpreferential rules of origin, for almost two decades the common question has been: who decides on the non-preferential origin of a good? The answer is that the importing country, on the basis of its own non-preferential rules of origin, which differ from country to country, makes such a decision.

WFSGI hosted the session “Why rules of origin matter“ at the WTO Public Forum 2015 n 1 October 2015 in Geneva. Speakers included Edwin Vermulst (far left), WFSGI Trade ounsel, Stefano Inama (far right), Division for Africa, Least Developed Countries and pecial Programms, UNCTAD, Jeff Whalen, Senior Counsel, Customs and International rade, Legal Department, Nike Inc. and Jonathan O'Riordan, Expert Governmental Affairs, Puma SE. The session was moderated by WFSGI Secretary General Robbert de Kock (middle). © WFSGI

Figure 1 shows the progression of exports and the utilization of the EBA preferences of bicycles from Cambodia following the RoO changes in 2001. The utilization rate of bicycles exported to EU by Cambodia increased in 2011 to around 80% from the rate of 33% of the previous year.

Moreover, between 2010 and 2013, import values multiplied by a factor of 5.4, increasing from US$60 million to US$325 million (+442%).

This does not mean that it is all smooth sailing. Following changes introduced in the EU preferences in 2014, Singapore and Malaysia inputs (mainly gears) were counted against the 70% limit, tilting the result of the origin calculation. The producers and the government of Cambodia had to request a derogation that was finally granted by the EU. Meanwhile, orders and production suffered from the prospect of having to pay a normal duty of 14%.

Another potentially greater challenge also took place in 2014 when Cambodia bicycle producers were investigated for circumvention of anti-dumping duties levied on bicycles originating in China. If found guilty of circumvention, an AD duty of 48.5% was to be applied to bicycles produced in Cambodia. During the investigation, the majority of producers were able to demonstrate that the AD duties were not circumvented and that they met sufficient local content.

70

WFSGI MAGAZINE 2016

The second most common question is: what is the impact of such a situation on business? The reply is a) uncertainty and b) the impact depends on the trade issues at stake. For instance, given the lack of non-preferential rules of origin or multilateral rules, the US continues its practice of making ad hoc origin determination during AD proceedings, and the European court of justice may issue a judgment in a RoO case that is not in line with the EU practice on preferential rules of origin.

Perhaps the most telling example of the growing complexity of RoO and the challenges for business on RoO is provided by the example in Figure 2.

Figure 2: Example of the value chain for a sports shoe: cost breakdown Production: € 12

Brand: € 33

Distribution: € 55 Transport and taxes: € 5 Retail margin: € 32.6 VAT: € 17.4

Raw materials: €8 Wages: € 0.4 Other expenses: € 1.6 Profit for producer: €2

Concept and design: € 11 Marketing and branding: € 8.5 Profits brand: € 13.5

Total retail cost of the shoe: € 100

JOINT EFFORTS IN TRADE

The above example was also recently used by the LDCs in WTO negotiations to show that according to the different existing preferential rules of origin, the shoe in Figure 2 would have qualified under certain arrangements and failed under others.

When examining the cost breakdown of the shoe, the most striking point to note is the divide between the cost of manufacture and the other costs of branding and distribution.

The cost of branding and distribution represents by far the major portion of costs of the shoe, while manufacture represents a mere 12% of the value of the shoe.

Business life is faster than trade negotiations, and this holds particularly true for rules of origin where policy makers and negotiators still act under the belief of a vertical model of industrialization rather than a value chain approach. It is not too late to convey such a message to the trade negotiators.

Yet origin determination is based on the manufacturing costs of that €12, disregarding the other costs of branding and distribution. The label “Made in …”, which plays a considerable role in the branding policy of a firm, is governed in some jurisdictions, such as the US, by marks of origin that are applied on the basis of non- preferential rules of origin.

This carries the implication that a company may invest considerable amounts of money into a branding policy that may not be well served by a RoO that allocates origin based only on manufacturing costs. Thus, it is not surprising that an innovative company such as Apple has devised a new branding strategy on origin and labeling by marking its products as: Made in China, Designed In California.

*

*

*

Building a family of brands for the world to love generation after generation

Inserat Li Ning folgt!

www.pentland.com @pentlandbrands * Footwear Licensee

WFSGI MAGAZINE 2016

71

JOINT EFFORTS IN TRADE

JOINT COOPERATION IN TRADE REMEDY INVESTIGATIONS

By Edwin Vermulst, Partner VVGB Advocaten & WFSGI Trade Counsel

“We must, indeed, all hang together or, most assuredly, we shall all hang separately.”

(Benjamin Franklin) Global versus local Trade remedy investigations can have a huge impact on globalized industry players because their very purpose is to close domestic markets to international competition.

This is all the more so in the sporting goods industry where the globalized sporting brands and their suppliers are traditionally pitted against complaining local footwear and clothing producers that have failed to benefit from international supply chains and open markets, and thus are largely dependent on their local market to generate revenue. This means that they have nothing to lose and everything to gain by closing off their markets as much as possible.

Trade remedy investigations (whether based on dumping, subsidy or safeguard claims) by their nature require cooperation between the domestic producers. This means that as defendants in such cases, the sporting brands and their suppliers face a united and organized front (for example, Abicalçados in Brazil or ANCI and CEC in the EU) from the outset. In many cases, these industry associations have close relations with their governments that will help them to the extent legally – and sometimes illegally – possible to achieve their aims.

WFSGI natural leader The sporting brands are relatively well equipped to deal with such challenges through the WFSGI platform, which makes them natural leaders in mounting and organizing a defense. However, the outcome of trade remedy investigations primarily hinges on the successful cooperation of their suppliers, which are typically based in countries such as China, Vietnam, Indonesia, Bangladesh and Cambodia.

72

WFSGI MAGAZINE 2016

These suppliers are often not organized, lack experience and tend to be unwilling to spend much time, effort and money on properly defending their case.

Furthermore, investigations against China and Vietnam are extra complicated because they are treated as non-market economies by leading trade remedy users, such as the EU, Brazil, Mexico and the US. This means that support needs to be enlisted from producers in market economy or surrogate countries. As successful cooperation entails significant time and money and offers no tangible benefits, it is no easy task to convince surrogate country producers to support WFSGI efforts in achieving a positive outcome.

Risks and opportunities Trade remedy cases are typically aimed at low-priced imports in general and do not single out sporting goods. This results in both risks and opportunities. The risk is that other sectors, for example, brown shoes’ producers and brands in the case of footwear – which, contrary to the sporting brands, tend not to be organized – will not or insufficiently cooperate. This may lead to imposition of punitive duties on the product under investigation as a whole, as happened to footwear imports from China by Brazil and Argentina. On the other hand, it also offers the sporting brands the opportunity to play a leading role in the investigations and to achieve, for example, carve-outs of sporting goods from the scope of any protectionist measures. Thus, STAF (special technology athletic footwear) was excluded from the scope of the anti-dumping and safeguard measures imposed by the EU and Turkey respectively some years ago.

Strength in numbers Nevertheless, in trade remedy cases strength comes from numbers and the more stakeholders can be convinced to act together under the WFSGI umbrella, the higher the chances of success.

In recent years, WFSGI has managed to expand its membership to include some leisure/fashion brands, as well as leading Asian manufacturing groups. However, much is still to be done as the ‘free rider’ phenomenon remains a major

JOINT EFFORTS IN TRADE

problem in the industry sectors in which the WFSGI and its members operate. This is a pity for several reasons.

Consequences of failure to unite First, it prevents a coordinated approach and may even lead to counter-productive recriminations and infighting which benefit only the domestic industries that launched the cases. In the EU footwear case, for example, some brown shoe brands initially – and wrongly – argued that any injury suffered by the EU footwear producers was caused by sharply increased imports of sports’ shoes.

Second, the unavoidable financial and organizational burdens of cooperation will unfairly fall on the shoulders of the WFSGI brands that decide to proactively defend their interests, even though the fruit of their efforts will benefit all stakeholders.

Third, trade remedy investigations, particularly in sensitive sectors such as footwear and clothing, tend to quickly become politicized by the domestic industries clamoring for protection. A counterweight then needs to be provided by the governments of the countries that are the potential victims of any protectionist measures. Past experience shows that the higher the cooperation of and between exporting producers and the brands, the higher the chances of the exporting country government becoming actively involved

in the investigation and standing up for the rights and the interests of its producers. The best illustration of this has been China taking the EU to the WTO over the EU’s illegal imposition of anti-dumping duties on footwear originating in China and Vietnam.

For all of these reasons, WFSGI and its members will need to continue their efforts to convince their colleagues from the footwear and clothing industries to join WFSGI and its coalitions aimed at achieving the best possible results in trade remedy investigations.

There is no free lunch Experience in the on-going Brazilian expiry review investigation against Chinese footwear has painfully shown that free money leads to inefficiencies and irresponsible waste of resources. Thus, the relatively simple task of registering Chinese suppliers as interested parties in the review, financed by the leading WFSGI brands, led to thousands of emails between Chinese producers, WFSGI and the Brazilian lawyers appointed for the task, and more than triple the legal costs than initially budgeted. In the future, therefore, (token) financial contributions from the brands’ factory partners to deal with these kind of issues are highly recommendable to stimulate responsible use of resources.

© GraphicStock.com

WFSGI MAGAZINE 2016

73

JOINT EFFORTS IN TRADE

WHAT DOES THE ASEAN ECONOMIC COMMUNITY MEAN FOR GLOBAL TRADE?

By Dr. Alisa DiCaprio, Regional Cooperation Specialist, Economic Research and Regional Cooperation Department at Asian Development Bank

The objective of the ASEAN Economic Community (AEC) is to create an integrated economic region among 10 south-east Asian countries.

This goal, and the progress that has been made since 2007, has some interesting potential for global manufacturers.

While the official deadline of 31 December 2015 is unlikely to be met, significant progress has been made and negotiations are expected to continue through completion.

The potential of the single market is substantial. If ASEAN were one economy, it would be the third largest in Asia and the seventh largest in the world. In terms of per capita income growth, ASEAN has outpaced the rest of the world since the 1970s. With more than 600 million people, the potential of ASEAN’s market is larger than the EU and North America. So, what exactly is the AEC?

ASEAN: 10 countries with an economic agenda The Association of Southeast Asian Nations (ASEAN) is a regional forum for its 10 member countries. ASEAN itself is not a trade agreement (as per WTO definition). But as an organization of states, it enables members to create regional frameworks that can facilitate cross-border trade. The ASEAN Economic Community (AEC) is one such framework.

The objective of the AEC The AEC aims to transform ASEAN into a region with free movement of goods, services, investment, skilled labor and freer movement of capital. Negotiations have already resulted in tariff reduction, investment liberalization and trade facilitation (ADOU 2014). All of these elements contribute to ASEAN’s growing participation in global value chains (GVCs).

ASEAN covers 10 south-east Asian countries, 4.4 million square kilometers and a combined population of approximately 625 million people (8.8% of the world’s population) © iStockphoto

74

WFSGI MAGAZINE 2016

SOFTEN THE ROAD AHEAD NEW Mizuno Wave Enigma 5

With NEW U4icX (eu•phor•ic X)

Our softest and most responsive midsole cushioning

JOINT EFFORTS IN TRADE

ASEAN member countries: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam © iStockphoto

What does the AEC cover?

The AEC is designed around four pillars. Progress towards the completion of initiatives under each is varied. In the eight years that the AEC has been under negotiations, the region has achieved 77.5% of the targets due by March 2013 (according to the AEC Scorecard, which is ASEAN’s self-assessment mechanism). Most of the high priority goals have been met, but progress among the pillars is uneven.

Single market and production base Considerable progress has been made in tariff reductions.

Regional tariffs have been lowered to the point where more than 70% of intra-ASEAN trade is tariff-free, and less than 5% of trade is subject to tariffs above 10%. Various trade facilitation measures are being taken, including progress towards an ASEAN Single Window Gateway with working national single windows already working in Indonesia, Malaysia, the Philippines, Singapore and Thailand and planned in Brunei and Vietnam for 2015.

Competitive economic region Progress on establishing a competitive economic region includes various initiatives to improve infrastructure connectivity, such as the ASEAN Power Grid, and road connectivity projects. In addition, this pillar will involve improvements in competition policies and strengthening of intellectual property rights. These are difficult areas to reform and progress is ongoing.

Equitable economic development ASEAN comprises a diverse group of countries. Pillar 3 recognizes the disparities in development among the 10 members of ASEAN. It sets out to narrow the development gap particularly between Cambodia, Lao PDR, Myanmar and Vietnam, and the other six members of ASEAN. Integration with the global economy This topic has seen the greatest strides for the region. Progress can be in part measured by the number of free trade agreements (FTAs) that have been begun and completed.

As of 2013, there were 92 FTAs involving at least one ASEAN economy. ASEAN-wide FTAs have been concluded with Australia, India, Japan, New Zealand, People’s Republic of China and South Korea. Further, negotiations towards a Regional Comprehensive Economic Partnership (RCEP) Agreement have been ongoing for the past several years.

What’s left to do?

Negotiations continue, but progress is slower as the more difficult topics have come under discussion. The difficulties remaining include removing non-tariff barriers, and barriers in sensitive areas, such as agriculture and trade in services.

Both ASEAN and its trading partners are already benefiting from the progress that has been made. Beyond 2015, lower barriers to trade as well as smoother movement of goods and harmonization of standards and regulations will promote global value chain trade.

WFSGI MAGAZINE 2016

77

WFSGI TRADE COMMITTEE

TRADE COMMITTEE ACTIVITY REPORT 2015 2015 was an extraordinary eventful year in terms of international trade. Besides the usual internal information exchange on international trade issues affecting the sporting goods industry, the WFSGI succeeded in reaching out to a broader audience outside the sport sector, contributing to the Trade Committee’s continued endeavours towards “FREE & FAIR TRADE” of sporting goods worldwide.

Review of the trade barriers affecting the SGI Brazilian anti-dumping (AD) measures against Chinese footwear imports: the Committee has been actively engaged in organizing members to participate in the five-year sunset review that is being conducted by the Brazilian government.

The Trade Committee has been evaluating strategic options in an effort to find a fair resolution of the review. Furthermore, committee members had the opportunity to meet representatives of the Permanent Mission of the People’s Republic of China to the WTO in order to discuss future prospects for reinforced co-operation. The AD measure in Argentina against Chinese footwear was up for review as well this year. The Committee coordinated our members’ interest using a similar approach as with Brazil to secure a workable outcome. Finally, Colombia initiated an antidumping investigation against Chinese footwear imports in June 2015. The WFSGI has made submissions to advocate for the exclusion of technical athletic shoes, Indonesia as an appropriate analogue country, market economy status for Chinese suppliers, and the absence of injury to domestic manufacturers. By resolution of 22 September 2015, the Colombian authorities decided to continue with the administrative investigation without the imposition of provisional anti-dumping duties on imports of footwear from China.

Challenging trade defense measures by Turkey: With a joint effort under the lead of the European Federations, the Trade Committee supported challenges to the ongoing creation of market access barriers by Turkey. In addition to massive duty increases for footwear, Turkey expanded the product testing and certification requests.

Practical follow-ups on trade liberalization (FTAs): The Trade Committee continues toengage with governments involved in bilateral and regional FTA negotiations. The SGI

78

WFSGI MAGAZINE 2016

bears a disproportionate duty burden compared with other consumer goods, and these agreements offer the possibility of substantial duty savings. The conclusion of both the Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement, on acceptance of these agreements by the respective legislatures, will represent significant progress towards achieving our goal of free and open markets.

5th WTO Global Review of Aid for Trade: Reducing Trade Costs for Inclusive, Sustainable Growth WFSGI Secretary de Kock moderated the plenary session “Reducing Trade Costs for LDCs’ Merchandise Trade Development”. Amongst the panelists, the only private sector representative was Jeff Whalen, Trade Committee Chairman and Senior Counsel for Customs and International Trade at Nike. De Kock and Whalen successfully brought forward the positive impact on economic growth of the SGI. WTO Public Forum Plenary Debate: Making Trade Work for Business Our industry was used as a model to initiate and support the motto of this years Forum “Trade works”. Roland Auschel, board member of the adidas Group was invited to join the openingday panel discussion with WTO Director General Azevedo to explain the impact of our global distributed supply chain to the value creation in countries.

WFSGI session at the WTO public forum The WFSGI hosted for the third time a session at the WTO Public Forum 2015 Trade Works: “Why Rules of Origin (RoO) Matter”. Stefano Inama, Chief at the United Nations Conference on Trade and Development, spoke about the purpose of RoOs and their implications for business. Edwin Vermulst, WFSGI Trade Counsel and founding partner of VVGB Advocaten, discussed the interplay between RoOs and anticircumvention rules in the SGI. Jeff Whalen, Senior Counsel for Customs and International Trade at Nike Inc., spoke about the RoOs in the context of 21st century supply chains and examined the motivation for manufacturing origin decisions in the SGI. Jonathan O’Riordan, Team Head for Government and Affairs for International Trade and Customs at Puma SE, focused his presentation on the practical impact of RoOs in the garment sector. The conference was well attended and very positive feedback was received.

WFSGI TRADE COMMITTEE

CHAIR

VICE-CHAIRS

MEMBERS

Jeff Whalen Senior Counsel, Customs and International Trade, Legal Department, Nike, Inc.

Peter Bragdon VP & General Counsel, Columbia Sportswear Company

Karl Sedlmeyer VP Global Government Affairs, adidas Group

Alberto Bichi Secretary General, FESI – Fédération Européenne du Sport et de l’Industrie

Marina Carvalho President, APICE – Association for sporting goods industry and commerce

Tom Cove President & CEO, SFIA – Sports & Fitness Industry Association – USA

Frank Dassler General Counsel, adidas Group

Wilfried Hauenstein Director Global Logistic Distribution, Puma

Li Hua Vice-President, CSGF – China Sporting Goods Federation

George Hong-Chih Liu Executive Director, Yue Yuen Industrial Holdings Ltd.

Hideaki Kitahara Director Corporate Strategy, Asics

John Larsen President Emeritus, New Balance Athletic Shoe, Inc. & Director New Balance UK & WFSGI Past President

Michael Levine Senior Director of Corporate Social Responsibility and Senior Counsel, Under Armour

Andy Long COO, Pentland Brands

Hirotaka Miyaji Director General, JASPO – Association of Japan Sporting Goods Industries

Toshiaki Mizuno Senior Manager, Presidential General Affairs Office, Mizuno

Jonathan O’Riordan Expert Governmental Affairs, Puma

Patrisia Reyes Head of Legal and Government Relations, adidas Group

EX OFFICIO Robbert de Kock WFSGI Secretary General Marc Magnus WFSGI Trade and Corporate Responsibility Manager Hamish Stewart UK and Ireland Country Manager, Brooks Sports, Inc.

Jeff Tooze Director Global Customs & Trade, Columbia Sportswear Company

George Wood Chairman, TBS Group & Honorary Pres­ ident TSMA, Taiwan Sporting Goods Manufacturers Association

Charles Yang Head of Innovation Center, Pouchen Group

Edwin Vermulst WFSGI Trade Counsel

WFSGI MAGAZINE 2016

79

Connecting Global Competence

YOUR BENEFITS: • Advanced development possibilities through valuable feedback from consumers • Ideas for new product developments • Increase of brand awareness • Recruiting of potential brand ambassadors

ISPO.COM

Find out more: ispo.com/innovation

WFSGI ADVERTORIAL

ISPO OPEN INNOVATION Innovation is a prime prerequisite for staying competitive. How do companies gain creativity and success? How do they develop products that will satisfy consumer requirements perfectly?

An increasing number of companies work with strategies that help them open a qualified dialogue with consumers.

They trust in Open Innovation (input from external sources) or Crowdsourcing (collective intelligence) – tools that offer extraordinary opportunities and open up new perspectives.

Companies ask questions, consumers offer suggestions on how a product should work, look or could be improved.

Consumer feedback can also be used to influence product development. In addition, this creates exciting synergies as participants often base their responses on a diverse range of expertise and come from a variety of professional backgrounds. Companies end up with solutions they would not have found within their own organization. Furthermore, this process helps them avoid product flops and strengthens their brand.

What kind of features should a running shoe offer; what kind of haptic is the ideal for a technical performance shirt?

Sporting goods businesses will certainly find answers to these questions with the help of the independent ISPO OPEN INNOVATION platform. The year-round ISPO service allows companies to benefit from the know-how of the ISPO COMMUNITY, and develop and test products in cooperation with the consumers. Many renowned companies have already launched projects and gained considerable results. Undoubtedly ISPO has acted as a groundbreaking pioneer and set standards in the area of consumer communication.

Dachstein searched for the ideal hiking boot for its 2017 collection; the response was astounding. More than 450 participants provided distinct and useful suggestions, which will now be integrated into the development of the boot.

Ideas ranged from integration of an emergency beacon chip into the shoe to a year-round boot with exchangeable components. The prototype is anxiously awaited and will also be tested with the help of the ISPO platform.

Haglöfs and Toray dealt with a selected target group under exclusion of the general public. The ISPO OPEN INNOVATION project consisted of tests performed on a mid-layer jacket. The extremely lightweight jacket was said to be able to protect athletes in all weather conditions, thanks to an

Once again, you can see the latest ISPO OPEN INNOVATION ­projects at ISPO MUNICH 24–27 January 2016 © Messe Munich

innovative new insulation technology. Athletes, experts and journalists acted as testers. More than 1,000 applicants tried to gain one of the 70 available spots; the interest in the project was extremely high. The testers evaluated wear comfort, insulation function and design. Participants wrote 122 reports further illustrated with photos. Haglöfs and Toray both praised the valuable feedback, which will definitely be used in further development of the jacket.

These examples show how ISPO OPEN INNOVATION can provide precise and accurate answers to questions. To be successful, companies have to create a closer connection to consumers and take advantage of crowdsourcing. The potential of this tool has not nearly reached its peak, the process has only just started. Soon this strategy will become second nature for more than just the development of sporting goods. Additional information about ISPO OPEN INNOVATION is available at: www.innovation.ispo.com.

WFSGI MAGAZINE 2016

81

WFSGI BOARD OF DIRECTORS

BOARD OF DIRECTORS

2014 – 2017 PRESIDENT

VICE-PRESIDENTS

Frank Dassler adidas Group/ Germany

Tom Cove SFIA/USA Vice-President Americas

Andy Rubin Pentland/UK Vice-President Europe/Africa

Motoi Oyama Asics/Japan, VicePresident Asia/Oceania & Past President

Peter Bragdon Columbia Sportswear Company/USA

Killick Datta International Brand Partners LLC/USA

Sean O’Hollaren Nike, Inc./USA

Kevin Plank Under Armour/USA

Li Hua CSGF/China

Rajesh Kharabanda Freewill representing SGEPC/India

Hirotaka Miyaji JASPO/Japan

Hideto Mizuno Mizuno Corporation/ Japan

AMERICAS

Fernando Beer Alpargatas/Brazil

ASIA/OCEANIA

Nouman Butt Capital Sports representing SCCI/Pakistan

HONORARY DIRECTORS Anil Sharma, past representative SGEPC India Arthur Lin, Freesport Corp.

Benjamin Liu, past representative TSMA Giancarlo Zanatta, past representative Tecnica Group Henri Rossolin, past representative French Sporting Goods Federation and FESI Howard Bruns, past representative SFIA, former SGMA USA James Easton, past representative Jas. D. Easton, Inc.

82

WFSGI MAGAZINE 2016

George Wood TBS Company representing TSMA/Taiwan

John Riddle, past representative SFIA, former SGMA USA Klaus Uhl, past representative Uhl Sport Lindsay Stewart, past representative Nike, Inc. Liu Jun, past representative CSGF China Masato Mizuno, past President, Mizuno Corp.

Pashi Sondhi, past representative F.C. Sondhi & Co. (Pvt.) Ltd. Peter Martin, past representative Canadian Sporting Goods Industry Raul Hacker, past representative Brazilian Federation The late Armin Dassler, past representative Puma

WFSGI BOARD OF DIRECTORS

EUROPE/AFRICA

Martin Kuenzi Intersport International Corp./ Switzerland

ABOUT US

Jeroen Snijders Blok Accell Group/ Netherlands

Alberto Zanatta Tecnica Group/Italy

The World Federation of the Sporting Goods Industry (足W FSGI) is the world authoritative body for the sporting goods industry. Founded in 1978, the Federation is officially recognized by the International Olympic Committee (IOC) as the industry representative within the Olympic Family.

The WFSGI is an independent association with no objective of economic character for its own gain, and comprises sports and sports-inspired leisure brands, manufacturers, suppliers, retailers, national/regional federations, industry and trade associations and all sporting goods industry-related businesses. The WFSGI plays a strategic role in the support and promotion of the global sporting goods industry. www.wfsgi.org @WFSGI

EXECUTIVE NOMINATION

Klaus Dittrich Messe Munich GmbH/Germany

George Hong-Chih Liu Yue Yuen Industrial Holdings Ltd./Hong Kong

John Larsen New Balance/USA

Li Ning Li Ning/China

Michel Perraudin MP Consulting/ Germany

Jochen Schaefer Law Office Dr. Jochen M. Schaefer, WFSGI Legal Counsel

Klaus Uhl uc uhl consulting, WFSGI Treasurer

Wolfgang Schnellbuegel Sport 2000 International/Germany

EX OFFICIO

James Zheng Anta Sports Products Limited/ China

Robbert de Kock WFSGI Secretary General

HONORARY PRESIDENTS Stephen Rubin, Honorary President representing Pentland Group The Late Kihachiro Onitsuka, Honorary President representing Asics

HONORARY MEMBERS Manfred Wutzlhofer, Honorary Member, past representative Messe Munich

WFSGI MAGAZINE 2016

83

WFSGI MEMBERS DIRECTORY

FULL MEMBERS – INDUSTRY SUPPLIERS 3T Cycling Srl

Brasseur (Accell Group)

7 For all mankind (VF Corporation)

Breezer (Advanced Sports)

Accell Group Accell Bisiklet (Accell Group) adidas Group instead Advanced Sports Inc. AeroDesign Akay International Alberta Sports (PVT) Ltd. Ali Trading Co., (Pvt.) Ltd. Anta Sports Products Limited ApacheFootwear Ltd. Aravon (New Balance) Arena Italia SpA Argon 18 Asics Corp.

Atala SpA (Accell Group) Augusta Benelux BV (PON Group) Awan Sports Industries (Pvt) Ltd. Batavus (Accell Group) Bellwether Berghaus (Pentland) Bike Parts (Accell Group) Bladerunner (Tecnica) Blizzard Sport (Tecnica) BMC Switzerland AG Bontrager (Trek Bicycle Corporation) Boxfresh (Pentland)

84

WFSGI MAGAZINE 2016

Brine (New Balance) Brooks Sports Inc. Brunotti Europe BV Budget Sport (Intersport)

Currie Technologies (Accell Group) Cycling Sports Group (Cannondale, Dorel Industries) Dayton Industrial Company Ltd. Dean Shoes Company Ltd.

Forward Sports (Pvt.) Ltd. Freesport Corp.

Freewill Sports Pvt. Ltd FSA (Fullspeadahead) Fuji (Advanced Sports)

Decathlon

Fulgent Sun International (Holding) Co. Ltd.

Derby Cycle (PON Group)

Fuse Protection (CSG)

Descente Ltd.

Gazelle (PON Group)

Diamondback (Accell Group)

Ghost (Accell Group)

Dolomite (Tecnica)

Giant Manufacturing Co, Ltd

Canterbury (Pentland)

Dong Luc Joint-Stock Company

Gravity (FSA)

Canyon Bicycles GmbH

DT Swiss AG

Capital Sports Corp. (Pvt.) Ltd.

Dunham (New Balance)

Carraro Cicli (Accell Group)

Dynatour (Intersport)

Cervélo Cycles (PON Group)

Eagle Creek (VF Corporation)

Charge Bikes (CSG)

Eastpak (VF Corporation)

Hirdaramani Int. Exports (PVT) Ltd.

Chi Hung Co. Ltd.

Eclat BMX (CSG)

Horace Small (VF Corporation)

Chingluh Shoes Co Ltd

Elite International Ltd.

Hunter (Pentland)

Chung Ah Athletic Wares Fty.

Ella Moss (VF Corporation)

Chung Jye Shoe Co. Ltd.

Ellesse (Pentland)

Hurley International LLC (Nike)

Cicli Pinarelllo Spa

Emirates Sports Stores

Cobbhill (New Balance)

Energetics (Intersport)

Colnago Ernesto E.C. Srl.

Enkay (India) Rubber Co., (Pvt.) Ltd.

Bulwark FR (VF Corporation) Butterfly (Pentland) Caloi (CSG) Campagnolo SA Cannondale (CSG)

Columbia Sportswear Comet Sports (Pvt.) Ltd. Converse (Nike) Corima Cosco (India) Ltd. Craftsman Ltd.

Enve Composites

GT Bicycles (CSG) Haglöfs (asics) Haibike (Accell Group) Head Sport GmbH

HWA Seung I&I Srl (Agla) Iconix Brand Group IIC-Intersport International Corp.

Esprime Ltd.

International Brand Partners LLC

etirel (Intersport)

Iron Horse Bicycles (CSG)

Evervan International Limited.

ISM Saddles / Tampa Bay Recreation, LLC

F.C. Sondhi & Co. (Pvt.), Ltd. Firefly (Intersport)

Jansport (VF Corporation)

WFSGI MEMBERS DIRECTORY

Juncker (Accell Group)

Lapierre (Accell Group)

Madrigal Sports (Pvt.) Ltd.

Mizuno Corp.

Kamik-Genfoot Marketing Europe GmbH

Laser Sports (Pvt.) Ltd.

Majestic (VF Corporation)

Molten Corp.

Le DD (Lotto Sport)

Marathon Sports

Mongoose (CSG)

Leatherware (Pvt.) Ltd.

Mares (Head)

Montrail (Columbia)

Lee (VF Corporation)

Marker Völkl (International) GmbH

Moon Boot (Tecnica)

KangaROOS (Pentland) Kestrel (Advanced Sports) KÉZMŰ Nonprofit Kft. Khalid Overseas Kicker Sports Kickers UK (Pentland) Kipling (VF Corporation) Knight Composites LLC Koga (Accell Group) L&E International Lacoste Chaussures (Pentland)

86

WFSGI MAGAZINE 2016

Li Ning Sporting Goods Co., Ltd. LK International AG – Kjus Loekie (Accell Group) Lotto Leggenda (Lotto Sport)

Mavic SAS Mayor & Company McKinley (Intersport)

Mountain Hardwear (Columbia) Multisport Ind. Com. Repres.

Ltda Napapijri (VF Corporation)

Lotto Sport Italia SpA

MEC – Mountain Equipment Co-op

Lotto Works (Lotto)

Metropolis (FSA)

Nautica (VF Corporation)

Lowa (Tecnica)

Mikasa

Lucy let’s go (VF Corporation)

Mitre (Pentland)

New Balance Athletic Shoe, Inc.

Nationman Thailand Co. Ltd

Nike Golf (Nike)

WFSGI MEMBERS DIRECTORY

Nike, Inc

Reebok (adidas)

Nippon Takkyu Co., Ltd.

Reef (VF Corporation)

Nishi Athletic Goods Co.,Ltd. (asics)

Reema Group

Nishiki (Accell Group) Nitro (Tecnica) Nordica (Tecnica) Oakley, Inc. Odlo International AG Orbea S. Coop Orca (Orbea) Oval Concepts (Advanced Sports)

Reynolds Cycling LLC

Uhlsport GmbH

Rockport (adidas)

Splendid (VF Corporation)

Umbro (Iconix Brand Group)

Rollerblade (Tecnica)

Sport 2000 International GmbH

Under Armour, Inc.

Rotor Bike Components

Sportica Group

Union (PON Group)

Rustler (VF Corporation)

SRAM Corporation

Uvex Sports

Sakay Traders

Staiger (Accell Group)

Van Nicholas (Accell Group)

Salt BMX (CSG)

Starpak Martial Arts (Pvt) Limited

Vans (VF Corporation)

PF Flyers (New Balance)

Santa Cruz Bicycles (PON Group)

Phenix Co., Ltd.

Sapim NV / SA

PON Bicycle Group / Cervelo Cycles Inc.

Saucony, Inc.

Pro Touch (Intersport)

Tyr International

Speedo (Pentland)

Sanspareils Greenlands (Pvt.) Ltd.

Profile Design

Tunturi (Accell Group)

Ritchey Design Inc.

Pentland Brands plc

Prana (Columbia)

Sparta (Accell Group)

T-Shoes (Tecnica)

Riders by Lee (VF Corporation)

San-Ei Corp.

Poyang International Co., Ltd

Sorel (Columbia)

Trelock GmbH

Specialized Bicycle Components, Inc.

Penn (Head)

Petra Sports

Soccer (India) International Ltd.

Schwalbe – Ralf Bohle GmbH Schwinn (CSG) Scott Sports SA SE Bikes (Advanced Sports)

ProStar (Pentland)

Seattle Bike Supply (Accell Group)

PUMA SE

Selle Italia

Raleigh America Inc. (Accell Group)

Selle Royal Selle San Marco

Sugoi (CSG) Tae Kwang Industrial Co., Ltd. Taiwan Butyl Co., Ltd. Tajmahal Sports

Tyrolia (Head)

Vartex (Accell Group) Verve Cycling VF Corporation Vision (FSA)

Talon Sports (Pvt.) Ltd.

Vision Technologies Corporation

Tamasu (Butterfly) Co., Ltd.

Vittoria S.p.A.

TaylorMade (adidas)

Vivasports Co., Ltd.

TBS Group Corp.

Warrior Sports (New Balance)

Tecnica SpA

Wethe People (CSG)

TECNOpro (Intersport)

Winart Promotions Ltd.

Ted Baker Footwear (Pentland)

Winora (Accell Group)

Terry (Advanced Sports) Think Pink (Tecnica)

Wintex Exports Wrangler (VF Corporation) XLC Parts (Accell Group)

Selle SMP

The North Face (VF Corporation)

Sharma Exports

Timberland (VF Corporation)

Yamamoto Kogaku Co., Ltd.

Ranson Sports Industry

Shimano Inc.

Toa-Strings Co., Ltd.

Yonex Co., Ltd.

Red Kap (VF Corporation)

Silver Star Enterprises (Pvt.), Ltd.

Topper

Yuan Chi Overseas Ltd.

Torker (Accell Group)

Yue Yuen Industrial (Holdings) Ltd.

Raleigh Canada (Accell Group) Raleigh UK Litmited (Accell Group)

Red or Dead (Pentland) Redline Bicycles (Accell Group)

Skins International Trading AG Smartwood (VF Corporation)

Trek Bicycle Corporation

Xposure Products (CSG)

WFSGI MAGAZINE 2016

87

WFSGI MEMBERS DIRECTORY

FULL MEMBERS – INDUSTRY SUPPORTERS Anwaltskanzlei Dassler brands & more gmbh Granger Legal Consulting Klaus Uhl – UC Consulting

Law Office Dr. Jochen M. Schaefer Messe Friedrichshafen Messe München GmbH

MP – Consult Nash International BV SportVenture Wearable Technologies AG

FULL MEMBERS – NATIONAL OR REGIONAL ORGANIZATIONS APICE – Association for Sporting Goods Industry and Commerce ASGA – Australian Sporting Goods Association CSGF – China Sporting Goods Federation

FESI – Fédération Européenne du Sport et de l’Industrie

SGEPC – Sports Goods Export Promotion Co.

JASPO – Association of Japan Sporting Goods Industries

SRS – Ski Racing Suppliers Association

SCCI – The Sialkot Chamber of Commerce

Taiwan Textile Federation

SFIA – Sports & Fitness Industry Association

TSMA – Taiwan Sporting Goods Manufacturers Association

ASSOCIATE MEMBERS FIFA – Fédération Internatio­ nale de Football Association

The full Members Directory including contact details is available in the WFSGI Member Area.

Do you wish to become a WFSGI member and benefit from a powerful, industry-wide network that independently negotiates and is globally represented? Visit www.wfsgi.org/membership

88

WFSGI MAGAZINE 2016

WFSGI

WFSGI MAGAZINE 2016

89

WFSGI

90

WFSGI MAGAZINE 2016