WFSGI Magazine 2015

MAGAZINE

OFFICIAL PUBLICATION OF THE WORLD FEDERATION OF THE SPORTING GOODS INDUSTRY

FROM SOURCING TO RETAIL:

INSIGHT INDONESIA

WAYS TO ADVANCE MANUFACTURING

BICYCLE DEVELOPMENTS

2015

©2014 Oakley, Inc.

TABLE OF CONTENTS Editorial: Message President and Secretary General

3–5

From sourcing to retail: insight Indonesia • Sports apparel & footwear is out of the starting blocks in Indonesia • Sportswear retail to be a winner in Indonesia • Wave of optimism flowing over Indonesia • Schwalbe bicycle tires: developed in Germany, produced in Indonesia • Growing Indonesia’s Badminton • Eiger – an Indonesian brand inspired by the mountain

6–7 8–9 10–11 12–13 15–17 19

Ways to advance manufacturing • A designer’s view on lean manufacturing • The influence of material innovations on manufacturing efficiency • Agile and responsive supply chains

20–21 22–23 24–25

Self-accountability in CR practice • Next factory – big scenes from global manufacturing transformation • Paving the road to sustainability by enhancing self-responsibility • Chemicals management – a team sport • Sialkot soccer ball project

26–27 28–29 30–31 33

Bicycle developments • Breaking away for the future of road bike design • Evolution of bicycle saddles • Bike Channel Italy

34–35 36–39 40–41

Physical activity & early positive experiences • Give me the child: the importance of early positive sporting experiences • All talk and no action? We don’t think so!

42–45 46–47

Trade environment • Sport connects people – for a new generation of trade reforms • Customs in the front line in fighting the counterfeiting • Who wins the world cup of trade?

• Overview of global trade restrictive measures – footwear & textiles

48–49 50–51 53 54–55

Retail concepts • Navigating the next phase of digital retail • Getting in shape for the omni-channel consumer

56–59 60–61

The World Federation of the Sporting Goods Industry (WFSGI) • ISPO – full service for the international sports business • WFSGI Board of Directors • Committees and activity reports 2014 • Members Directory

63 64–65 66–83 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° Kommunikation, CH 3000 Bern 13 • Printing: Print United (Germany) COPYRIGHTS • © YONEX: Tommy Sugiarto, current Indonesian No. 1 ranked men’s singles Badminton player © van der Pols © ISM

WFSGI MAGAZINE 2015

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WFSGI MAGAZINE EDITORIAL

MESSAGE PRESIDENT Dear WFSGI Members, Dear Readers, It is an honor for me to address you with this President’s message. The WFSGI is in a perfect shape, and I feel truly privileged heading up this great federation and bringing our industry’s mutual interests forward. Working together with all our members, my fellow Board colleagues, the experts in our committees, the WFSGI staff or our stakeholders outside of our Federation is more than rewarding.

Global sports events such as the 2014 Sochi Olympic Games or the 2014 FIFA World Cup Brazil are important for our industry, because they are the perfect stage to showcase our innovations, products, and brands. They trigger consumers’ demand for desirable products.

Our sector receives enormous public attention, yet the economic dimension and impact of sport is not widely known.

For years, many sporting goods companies relied on manufacturing processes in their own facilities. Globalization has changed the game since the 1970s: Increased competition, new markets and access to material suppliers as well as manufacturing facilities have influenced the global supply and distribution chains. In our WFSGI Manufacturers Forum 2014 we discussed cooperation within the entire industry, focusing on the integration of design and manufacturing, and involving retailers, brands and manufacturers.

Let me emphasize the positive effects of globalization. Indonesia has experienced an impressive economic development. The focus country of this year’s Magazine has matured from a predominantly sourcing country to a retail market for sporting goods. Competitive labor costs and a skilled work force have been essential factors for the rise of a powerful manufacturing industry. Alongside, investments in education and science yielded benefits and economic wealth into society.

The WFSGI strives for free and global trade with no trade restrictions. Reality speaks a different language and we are approaching governments and institutions to eliminate

both tariff as well as non-tariff barriers. The sporting goods industry is the industry in the world which has to pay the highest duties and tariffs compared to all industries.

Physical activity is one of our priorities. As a Federation, we can support national governments and international institutions by offering consumer insights and an authentic communication channel to convey inspiring, emotional messages. We can make use of our sponsored assets, our athletes or teams – this lies in the vital interest of our industry. Every investment in sports is a healthy investment and expands our rather saturated markets.

This also holds true for corporate responsibility and sustainability, which we have always taken very seriously and strongly promoted within our industry. Individual companies cannot achieve what we can achieve collectively. Together with our stakeholders, with sports bodies and federations, we will further team up in our mutual quest for making sustainable sporting goods accessible to everybody, and to share the global principles of ethics and fair play.

The WFSGI is geared up for the future. I would like to express my sincere gratitude to my fellow past Presidents, who built the foundation and shaped our Federation. Let us build on our successes and continue in that spirit: Enabling athletes to achieve their best through sports.

Very truly yours,

Frank A. Dassler WFSGI President

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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!

WFSGI MAGAZINE EDITORIAL

MESSAGE SECRETARY GENERAL Dear WFSGI Members, Dear Readers, What a busy year 2014 was and how exciting 2015 will be!

Let me sum up: our membership has grown, we developed a sustainable initiative, booked victories in our IPR project, organized a successful second edition of our Manufacturers Forum 2014 at Porsche in Leipzig, negotiated new branding and advertisement regulations for the Olympics, set up a WFSGI Asia office in Hong Kong, hired a textile innovation and manufacturing expert to develop and support our textile members, and we accomplished many other things. Obviously we continued to invest in additional staff and new services and we hope to keep developing this in the coming years. WFSGI shall become the center of exchange, support and services. We want to be the hub where industry challenges, concerns, directions and actions are discussed and initiated. This doesn’t mean that we can solve all our industry problems but we want to be the neutral place where our industry can talk about it and decide on next steps.

Our Hong Kong office will further support the service to manufacturers and brands in the region and intensify the relation to our Asian and Oceania national and regional federations. It will further represent, in collaboration with our national industry associations, the global industry towards the regional government and sport associations such as the Olympic Counsel of Asia.

For 2015 we have some exciting projects coming along, and there are a few that deserve some extra attention. WFSGI will continue to invest in the LEAN manufacturing challenges and for this we will organize, besides our Manufacturers Forum 2015, also workshops around the world where we will dive deeper into specific topics around manufacturing such as water management, waste management, restricted substances, HR, supply chain management, but we will also organize workshops to motivate a mind shift for production/factory managers anchored in their long-time processes.

I wish you interesting reading and good health and prosperity for 2015. We look forward to seeing you at one of our next WFSGI meetings.

Also the launch of our sustainable initiative will further enhance the quality of our industry when it comes to social compliance and sustainability. The initiative can support SMEs with limited in-house sustainability expertise to take the right decisions and to work towards the future needs of social compliance and environmental needs.

I wish to thank every person who contributed to this Magazine 2015! It is exciting, interesting and representative for our activities.

Especially I wish to thank the WFSGI board, the committee chairpersons and all our members who are continuously driving the federation and the industry forward.

With best personal regards,

Robbert de Kock WFSGI Secretary General

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FROM SOURCING TO RETAIL: INSIGHT INDONESIA OUT OF THE STARTING BLOCKS

SPORTS APPAREL & FOOTWEAR IS OUT OF THE STARTING BLOCKS IN INDONESIA

By Magdalena Kondej, Head of Apparel and Footwear Research at Euromonitor International

A vast population of young consumers adopting increasingly healthy lifestyles is fuelling strong value growth in sportswear in Indonesia. As a growing number of Indonesians are taking up active pursuits and buying the appropriate sportswear to enable them to do so, sportswear registered 10% value growth during 2013 to reach US$869 million.

Football and futsal (indoor football) have long been popular, but it is gyms and health clubs that have seen memberships rise in recent years, in part spurred on by the many fitness clubs opening across the country. Marathon running is also growing in popularity; the Indonesian leg of the adidas King of the Road running championship, held across South -East Asia, attracted 3,500 participants in 2013, up from 2,500 in 2012.

This interest in health and well-being is, in particular, driving sales of performance sportswear, which registered the fastest value growth during 2013, at 12%; if consumers are going to run their first marathon or join their first gym, they need the proper gear to get started. Despite consumers becoming more active, sports-inspired apparel remains the largest category in sportswear, accounting for 20% of value sales in 2013. As is the case the world over, many fashionconscious Indonesian consumers – whether they are physically active or not – are opting to wear sports-inspired clothing as everyday wear. This combination of fashion and functional appeal is a win-win situation for sportswear manufacturers.

A young population with more money to spend Fuelled by robust economic expansion and a strong employment market, annual per capita disposable incomes in Indonesia have climbed US$781 since 2008 and, undoubtedly, this has played a part in the dynamism seen in sportswear.

With a total population of 247 million as of 2013, Indonesia is the fourth most populous country in the world. It is also a relatively young country, with a median age of 28.9 years.

This heady mix of youth and an extensive population, coupled with rising disposable incomes, makes a compelling target for sportswear manufacturers.

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Despite incomes rising, the country still has one of the lowest per capita disposable incomes in Asia Pacific; for this reason, local players continue to have a strong presence, catering to lower-to-middle-income consumers with their value offerings. Local company Global Fashion Indonesia accounted for 4% of sportswear value sales in 2013, just behind adidas. Global Fashion is known for its footwear brand Eagle and has a strong history in the country. It has a reputation for high-quality yet affordable footwear, which has allowed it to stay relevant, despite the arrival of foreign players in recent years. By offering value products to lowerincome consumers, local players should retain share in the short term, despite an inevitable increase in competition.

There is no doubt, however, that, as disposable incomes rise, Indonesia will become a stronger focus for sportswear’s major players, and they are well positioned to make gains by targeting the country’s middle- and high-income consumers.

As a rule, young, higher-income Indonesian consumers have strong brand awareness and enjoy the kudos wearing a high-end international name brings, whether they are working out or just spending a day shopping. As and when incomes allow, consumers will trade up to international brands, using the likes of Nike and adidas as a means of shouting about their social status.

Counterfeiting and overseas shopping present a risk Adidas leads sportswear in Indonesia, with a 6% value share in 2013. Brand awareness of adidas is strong and consumers associate the brand with quality products. As yet, Nike remains a smaller player, with 3% of the value share of sportswear in 2013, but as incomes rise, gains are certain to follow.

Nike, however, suffers more than its rivals from counterfeiting, which is a widespread problem in Indonesia. Counterfeiting of all brands is common, largely because of the prevalence of manufacturing plants, but Nike suffers because its products are priced slightly higher than those of adidas, meaning cheaper counterfeits have more appeal and a greater number of consumers are unable to buy the real thing.

FROM SOURCING TO RETAIL: INSIGHT INDONESIA OUT OF THE STARTING BLOCKS

While counterfeit goods attract lower-income consumers, it is the lure of overseas shopping that appeals to higher-income consumers, with Singapore and Hong Kong particular favourites because of their proximity. Here, they often find better deals in terms of price and product range. As travelling becomes more affordable, overseas shopping trips have the potential to impact on local retail performance, hindering growth of international brands. For manufacturers looking to target the country, strategic pricing with an eye on Indonesia’s geographic neighbours is a must.

Indonesia: sportswear sales vs growth 2009 – 2013 1 000

14

900

10

700 600

8

500

6

400 300

4

200

2

100 0

% year-on-year growth

12

800 Value Sales, US$ billion

Opportunities as sportswear becomes more sophisticated Despite the difficulties in Indonesia, with a young population and rising disposable incomes, the future of the sportswear category looks bright, with steady value growth predicted throughout the forecast period. Performance sportswear and sports-inspired apparel will continue to drive this value growth in the near term as these categories remain the focus of manufacturers’ attention. Brands and products catering to middle-income consumers offer the most immediate potential as, unlike the older population, this new and rapidly expanding group of young Indonesians is happy to spend on the big-name brands that are relatively new to the country.

Looking further ahead, outdoor wear remains a longer-term prospect; however, as the sportswear category becomes more sophisticated and awareness of outdoor activities grows, there will be opportunity for international brands to capitalise. Given the climate, outdoor apparel with cooling fabric technology could well prove popular.

International sportswear brands are only just in the starting blocks with regards to Indonesia, and the next few years will see the race for share fully get underway.

Magdalena Kondej manages the annual research programme for the global apparel and footwear industry at Euromonitor International, which she joined in 2005. Euromonitor International is the world’s leading consumer market analyst. For more than 35 years, Euromonitor has published internationally respected market research reports, business reference books and online information systems, providing strategic business intelligence for the world’s leading FMCG multinationals. In her current position, Magdalena has direct responsibility over the content and quality of Euromonitor’s Apparel and Footwear research, which provides strategic analysis of the global market for these industries and in-depth coverage for 46 countries worldwide. Magdalena is also in charge of Euromonitor publications in the apparel and footwear area, conference presentations and is working with the international client base of Euromonitor’s online Passport Apparel and Footwear database.

2009

2011

2010 Value sales

2012

2013

0

% y-o-y growth

% of total population

Indonesia: population age structure 2009 – 2024 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0

2009

2010

2011

2012

2013

2014

Population aged 0 -19

2015

2016

2017

Population aged 20 -54

2018

2019

2020

2021

2022

2023

2024

Population aged 55+

Source: © Euromonitor International

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FROM SOURCING TO RETAIL: INSIGHT INDONESIA SPORTSWEAR RETAIL TO BE A WINNER

SPORTSWEAR RETAIL TO BE A WINNER IN INDONESIA

By Lianna Plaut, Country Director at Global Business Guide Indonesia

Indonesia’s economic growth in recent years has relied predominantly on rising household spending, which is why consumer trends matter more in Indonesia than they do in many of the country’s more export-focussed neighbours.

One such trend is Indonesians’ increasing liking for sports and fitness, and it is a trend that the global apparel industry is watching with keen interest.

Ever more Indonesians embrace sports as a lifestyle choice, according to observers. This is happening today amid a proliferation of urban lifestyles and growing exposure to global sporting events like the FIFA World Cup and regional ones like the South -East Asian Games. Obviously, the country’s young population – where the median age is around 28 years – helps to make Indonesia an attractive market for sportswear producers.

Sports and fitness in urban lifestyles Well aware of how long shifts in the office affect their health, more and more city dwellers in Jakarta and around the country are signing up for gym memberships. Fitness First, Celebrity Fitness, Gold’s Gym and others are rapidly expanding as more Indonesians can afford this investment into their well-being. Bodybuilding, yoga, pilates and aerobics are all gaining in popularity. Outside the gym, football has pretty much replaced badminton as the national sport. Millions of

Indonesians keenly follow their favourite teams (including foreign ones like Manchester United or Bayern Munich), but they are also taking to the pitch themselves, as evidenced by the growing number of football academies. Football’s increasing popularity bodes well for sales of jerseys, footwear and FIFA-approved footballs.

Both running and cycling are finding dedicated followers, who often connect with one another through Facebook and Twitter and congregate to take over the streets of the capital on car-free Sundays, when vehicles are banned from some thoroughfares for a couple of hours. Running may well be the fastest-growing sports trend in Indonesia today, with running communities popping up across the country.

A dynamic market Athletic apparel is one of the most dynamic categories driving apparel sales globally. In Indonesia, sportswear posted current value growth of 10% in 2013.

The country’s attraction for the industry is evolving: once seen primarily as a place from where to source sportswear and equipment, the world’s fourth-most populous country is emerging as an important market in its own right.

Global Business Guide Indonesia is the leading business and investment portal on the country providing regularly updated market analysis and insights into the key trends in Indonesia’s most promising industry sectors for foreign investors. www.gbgindonesia.com A customer looking at badminton rackets in a store © Global Business Guide

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FROM SOURCING TO RETAIL: INSIGHT INDONESIA SPORTSWEAR RETAIL TO BE A WINNER

This is owed to an expanding middle class with rising disposable income as GDP per capita has risen from US$2,984 in 2010 to US$3,468 in 2013 and is projected to reach US$ 5,000 by the end of 2014 (World Bank). Within the Southeast Asian region, Indonesia is at the forefront of this trend, with a middle-income segment that is expected to double in size to 140 million people by 2020.

Sportswear brands, led by Adidas and Nike, are well aware of this opportunity. However, global players like Adidas, Nike, Puma and Asics are confronted with local competition in Indonesia. Jakarta-based SPECS Sports designs, manufactures and retails shirts as well as shoes, bags and equipment for popular sports including football, badminton, tennis and running. Its range extends to futsal, the indoor version of football played with smaller teams. Futsal’s recent popularity in Indonesia is something global brands need to adapt to.

Piero Indonesia builds on Indonesia’s craftsmanship in shoemaking, selling a range of casual to sportive shoes for skateboarding and other lifestyle activities, while Eigerindo Multi Produk, better known as Eiger, specializes in adventure sports, with products ranging from hiking boots and rugged sandals to climbing gear and backpacks.

Importing hurdles Importing sportswear to Indonesia is a cumbersome process that has been criticized for lacking clarity with complicated licensing procedures. Importers have to apply for a number of permits and renew them at regular intervals. In addition to the generally required Importer Identification Number (API) and Customs Identification Number (NIK), importers of apparel or footwear need a so-called Special Importer Identification Number (NPIK) or Registered Importer of Certain Products Number (ITPT). These are obtainable through the INATRADE system on the website of Indonesia’s Ministry of Trade, which aims to streamline the process.

Modern retail: challenges and opportunities New rules for retail in Indonesia have the potential to make life harder for importers in the future. Ministry of Trade Regulation No. 70/2013 mandates that at least 80% of the amount and types of goods sold in modern stores (as opposed to traditional markets or kiosks) be domestic products. The regulation fails to define precisely domestic products. Retailers were given two years’ time to comply with the rule. Exceptions may be granted, however, and as of August 2014, the Trade Ministry was reviewing the controversial regulation. It is therefore recommended to work with experienced local partners such as Mitra Adiperkasa Tbk through its Planet Sports retail outlets and Panatrade Caraka who distribute local as well as international brands such as Mizuno through their FISIK stores.

Online retail, while still in its infancy in Indonesia, has enormous potential for growth. Buying products at the click of a mouse should be readily embraced by Indonesia’s Internetsavvy generation of young consumers, the very generation that is on the radar of sportswear makers. A number of global and local companies already offer sportswear online.

While competition is set to intensify, the market is still underpenetrated and has ample upward potential. Sportswear is also likely to outperform overall retail sales in the future.

Imported goods are subject to import duty and value-added tax. Apparel and footwear also belong to a range of goods that require inspection in the country of origin before being shipped to Indonesia. Like in other industries, the authorities have designed the rules in the textile and footwear business to generally favour imports of intermediary and capital goods over consumer products in a bid to spur investment into local production. This is something that sportswear companies will want to be mindful of if they plan a long-time engagement in Indonesia.

Indonesian retail store © Global Business Guide

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FROM SOURCING TO RETAIL: INSIGHT INDONESIA WAVE OF OPTIMISM

WAVE OF OPTIMISM FLOWING OVER INDONESIA

By Matthijs Crietee, Deputy Secretary General of the IAF, the International Apparel Federation, and Dhyana van der Pols, CEO Nash international BV & WFSGI Head of Textile Innovation and Manufacturing

With the wave of optimism flowing over Indonesia resulting from the election of the new popular president Jokowi, the apparel world’s attention turns once again to Indonesia. For a poor country with a population of 250 million, a share of the apparel world market of only 2% is surprisingly low.

Also a share of 11% of total non-oil exports in terms of value is lower than one would expect from a country in this development phase. Due to a growing domestic market the industry is growing, from US$13.3 billion in 2013 to a projected US$14.4 billion in 2014. Apparel exports make up about 60% of this amount, or US$7.3 billion in 2013.

Indonesia’s apparel industry is notoriously two-faced. There are pockets of real excellence, where investments in the downstream synthetic fiber and fabric industries have led to much-appreciated manufacturers, especially in the sportswear industry. But on the other hand, infrastructure in Indonesia is weak and often this is what blocks development from really taking off. Logistics, electricity, schooling, rule of law and the financial system, all are often hindering development instead of supporting it. Logistics can be a nightmare, with blocked roads, and underequipped harbor.

Matthijs Crietee’s career is fully focused on the fashion industry.

After completing a Masters degree in International Economics and Economic Geography at the University of Utrecht he started with the Dutch fashion industry association FENECON to support their members with trade policy affairs. After a brief stint at the Ministry of Economic Affairs Matthijs returned to fashion to work with MODINT, as its deputy director. In the ten-year period from 2000 to 2010 he built up MODINT’s consultancy department. Starting 2012, Matthijs was named deputy secretary general of the International Apparel Federation, the global Federation for the fashion industry. Mr. Crietee has a long-standing experience in giving strategic advice to the fashion industry. His areas of expertise are sourcing strategies, logistics, innovation and CSR. He is now helping to build the IAF into a relevant global force in support of the fashion industry. He is a natural optimist and a firm believer in the importance of knowledge and true supply chain cooperation to make the fashion industry a better industry.

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Not surprisingly, these weaknesses form the agenda for the new president Jokowi. The Economist states that “Indonesia has survived the global financial troubles of the past half decade relatively unscathed, but infrastructure bottlenecks and regulatory hurdles hamper the country’s economic potential.” Corruption is often the cause of the lack of effective infrastructure building. Jokowi has a reputation for running a clean government and getting things done”, so real improvements to the system might come from his rule.

“More than anything else, that means tackling corruption.

He should start by filling his cabinet with capable technocrats not party hacks. He must sack corrupt or incompetent bureaucrats and judges. And he must overhaul the venal courts.

Only then will he be able to start to sort out the rest: weak government finances, rotten infrastructure, poor education and a ravaged environment” (The Economist, July 26th, 2014).

However, even if Jokowi delivers, quick fixes are not expected.

Even if corruption improves, the underlying weakness, a lack of entrepreneurship and over-reliance on government, will remain a problem. And, in the short run, necessary economic adjustments may actually hurt the apparel industry.

Most notably, the government is slashing energy subsidies, increasing the price of energy greatly. Also, more trust in good policies may cause the rupiah to appreciate further.

From a sourcing and manufacturing perspective Indonesia leaps behind. Ranked 12th in the list of “top sourcing markets” after Vietnam, Sri Lanka, Pakistan and Cambodia,

Dhyana van der Pols: global fashion production, sourcing and supply chain specialist. Recognized by many in the European fashion industry as the first person to contact for out-of-the-box, savvy sourcing solutions, Dhyana van der Pols has been consistently successful in bringing together the ambitions of suppliers and buyers from around the world for over a decade. In 2013 alone she trained 500 garment manufacturers from around the world for EU market entry, while saving big and small brands in Europe millions of euros through the pioneering sourcing solutions of her company, Nash International.

FROM SOURCING TO RETAIL: INSIGHT INDONESIA WAVE OF OPTIMISM

CONSCIOUS GLOBAL SOURCING

Indonesia, however simultaneously, is also geared with untapped potential. Confronted with a hike in electricity tariffs and 18% increase of minimum wages, Indonesia still managed to cut the production cost index (PCI) down with 5% through productivity gains in the period 2005-2013. Within the same timeframe this PCI swept up with 54% in Cambodia combined with disruption and unrest, with 27% in Vietnam hampered by anti-China protests and FDI issues even with the TTP (Trans-Pacific Partnership) in foresight and with 55% in Pakistan. Forecasted export growth for Indonesia is estimated at 1.5 to 2.7% till 2016.

Cost advantages and efficiency gains contribute to a nations status as strategic sourcing market. Future supply chain “winners” are those who offer “chain integration” and “fast track” supplies. Each week lead-time reduction to global markets is worth 0.25 basis points of margin with retailers and brands. Nations that specialize in product life cycle management (PLM) through shared product development and sourcing collaboration with their buyers are set out to become future’s most value-added supply chain partners.

To benefit from the prospects that Indonesia offers to the world’s apparel industry it needs to make quicker and bigger steps. A recent Italian initiative to support Indonesian textile and garment polytechnics is a good example. With the right push from government and foreign investments, Indonesia’s market share is sure to grow. Don’t forget about Indonesia, but don’t expect any spectacular developments.

REPUBLIC INDONESIA

CAPITAL : Jakarta POPULATION: 250 mili on LANGUAGE: Bahasa

Indonesia, Javanese, English, Dutch BUSINESS HOURS: MondaySaturday, 8.00a m- 6.00pm EXCHANGE RATE: IDR Indonesian Rupia IDR/EUR =12,445.41 TIME ZONE: GMT+7 RELIGION: Islam (90%) Hinduism, Buddhism, Christianity

PRODUCTION DATA

9,6%-12% WORKING 292 a year, 6 a week HOURS: 45 a week OVERTIME: 3 hours a day FACTORY SHIFTS: 1 per day WAGES: USD 120 - 200 INTEREST RATES: 1216% STANDARD ALLOWED MINUTE COST: 0,08 PRODUCTION COST INDEX: 17 KSA PRODUCTION TYPE: RMG PAYMENTS: LC at sight, TT, Down Payment FACTORY SIZE: SME 500-1500+

IMPORT DUTIES: DAYS:

PRODUCT GROUPS

TShirt, Polo-Shirt, Jacket, Ski wear, Night wear, Trouser, Blouses, dresses, Bermuda Shorts, Pullover, Cardigan, Jeans and Underwear MAIN FABRICS: Cotton, Polyester, Rayon, Acrylic, Wool, Nylon SOURCING PARTNER COUNTRIES: Taiwan, Korea and China LOCAL FABRICS: Available but still depending on imports

PRODUCTION CENTRES

Surabaya, Bandung, Tangerang, Bekasi, Solo, Yogyakarta SHIPPING: Vessel from Jakarta, Air MAIN IMPORTING NATIONS: Germany, UK, Italy, France, Spain, Netherlands, Belgium, Japan, Middle East KEY BRANDS/RETAILERS: Zara, H&M, C&a, Kiabi, Mark&Spencer, ONeil, Nike, Adidas, JC Penney, Wal Mart, Gap, Target, Columbia

WFSGI MAGAZINE 2015

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FROM SOURCING TO RETAIL: INSIGHT INDONESIA DEVELOPED IN GERMANY, PRODUCED IN INDONESIA

SCHWALBE BICYCLE TIRES: DEVELOPED IN GERMANY, PRODUCED IN INDONESIA

By Ralf Bohle GmbH

With its Schwalbe brand, German family enterprise Ralf Bohle GmbH, based in Reichshof near Cologne, is one of the world’s leading providers of high-quality bike tires for touring, mountain biking and road racing.

For 40 years, Ralf Bohle GmbH has maintained a close friendship and partnership with Korean bike tire manufacturer Hung-A. Production takes place in the joint plant in Indonesia.

At the end of the 1980s, production was relocated from Korea to Indonesia (Greater Jakarta) – closer to Frank Bohle, Managing Director Ralf Bohle GmbH the most important raw material, rubber – and also expanded considerably due to the rapidly rising demand for bike tires. The plant was commissioned in 1991 and was comprehensively expanded again from 2006 to 2011. Today, the joint venture with its approximately 4,000 employees is among the biggest employers in the region.

However, anyone who thinks of an “extended work bench” model is wrong. “Since our foundation in 1922, we first dealt with the exportation of bike parts, then with the importation of parts and only later did we begin to deal exlusively with bike tires. We have never produced in Germany,” explains Schwalbe Managing Director Frank Bohle. The success story of the Schwalbe brand began in 1973, when Ralf Bohle, father of the current Managing Director Frank Bohle, started the importation of bike tires of the Swallow brand (Swallow in German means Schwalbe) from Hung-A in Korea to Germany.

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Production partners for 40 years The success has bound both family enterprises closely together, right up to the present. In 2000, Bohle acquired an interest in the tire plant in Indonesia. “We manage the plant in Indonesia - in which we manufacture exclusively tires of the Schwalbe brand - in collaboration with Hung-A,” explains Frank Bohle. “We are inseparably connected, like two sides of a coin.” For other manufacturers, bike tires are a marginal business that often makes up less than one per cent of consolidated sales. “But for us, they are the main field of business! We produce approximately 2,000 different tire types, from BMX to wheelchair tires.”

In order to meet the increased demand for Schwalbe tires, construction for a significant expansion of production began in 2006. The company invested considerably in the approximately 80,000 square meter plant, integrated new processes such as the tubular tire production or the production of bead cores, and decided for insourcing instead of outsourcing.

Almost every production step in the plant was reviewed, reorganized and expanded.

A look at a tire production. Clearly recognizable: The numerous manufacturing machines © Ralf Bohle GmbH

FROM SOURCING TO RETAIL: INSIGHT INDONESIA DEVELOPED IN GERMANY, PRODUCED IN INDONESIA

The carcass threads for the tubular tires are brought together on the drum by hand © Ralf Bohle GmbH

Schwalbe is well known not only in cycling: with VfL Gummersbach (handball) and TTC Bergneustadt (table tennis), Schwalbe is the main sponsor of two local top league clubs.

The Schwalbe employees manufacture more than one million tires and tubes every month. “We unite all production steps under one roof, have short channels, are more independent of suppliers and have full control of each individual product,” summarizes Frank Bohle. “Anything with the Schwalbe lettering contains one hundred per cent Schwalbe.”

Support for orangutan project “As our tires are manufactured in Indonesia, we also commit ourselves socially in the region. We thus came across the Borneo Orangutan Survival Foundation BOS. The people benefit from their work, because jobs are created and the living environment is preserved. The orangutans are given a chance to survive. And when rain forest remains intact or is afforested that, of course, also benefits the climate,” says Frank Bohle.

In addition to its social commitments, the company is also strongly committed to sports sponsorship. For instance, numerous World Cup victories and Olympic medals have already been brought in on Schwalbe tires and at this year’s Tour de France a total of four teams put their trust in the tires with the distinctive Schwalbe lettering. However,

The individual parts of the tubular tire are sewn together by hand © Ralf Bohle GmbH

Global logistics center in Germany In Germany, Schwalbe is managed by Frank Bohle, Andreas Grothe (Finance) and Holger Jahn (Technology and Development). The company’s headquarters is the logistics center in Reichshof-Wehnrath near Cologne, where more than 140 people are employed for product development and marketing, sales and global logistics.

Approximately 70 further employees work at the subsidiaries in North America, the Netherlands, Great Britain, Italy and France.

Traditionally, Schwalbe products are sold exclusively via specialist retailers. The brand is now represented in more than 40 countries through the subsidiaries or through sole agencies.

More Information: www.schwalbe.com

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NOTHING STAYS THE SAME.

Two air chambers. Higher inner pressure prevents snake bites. Minimum outer pressure results in gigantic grip and perfect control. The tyres become the ideal progressive suspension. schwalbe.com/procore

FROM SOURCING TO RETAIL: INSIGHT INDONESIA INDONESIA’S BADMINTON

GROWING INDONESIA’S BADMINTON

By Badminton World Federation (BWF) with contribution from Persatuan Bulutangkis Seluruh Indonesia (PBSI)

Indonesia is a country with soil fertile for badminton’s growth so it is little surprise that its implementation of the Badminton World Federation’s schools programme ‘Shuttle Time’ is reaping positive results.

Shuttle Time is conducted in partnership with BWF’s member associations, continental confederations, government bodies, universities and equipment suppliers. It is designed to equip teachers with the skills and knowledge to deliver badminton lessons in a fun and safe manner to school children ages 5 to 15.

Although the country has a long and distinguished badminton history and has produced an abundance of Olympic and World champions, Indonesia’s national badminton federation – Persatuan Bulutangkis Seluruh Indonesia (PBSI) – has seen the value of implementing Shuttle Time to attract and develop young talent. It’s a great conduit for jointly reaching out to school-based audiences; both teachers and children.

The initial Shuttle Time courses were held for three days at several schools between August 2013 and May 2014. Seven cities across Indonesia – Cirebon, Kudus, Medan, Palembang, Pontianak Surabaya and Yogyakarta – were chosen and four tutors directed the lessons involving 217 teachers. The latter then conducted Shuttle Time lessons with their students.

This pilot programme involved 192 schools with more than 5,000 children expected to benefit.

Shuttle Time essentially comprises a model in which BWF provides teaching resources which are used by trainers and tutors from the respective continental confederation or member association. There is a co-ordinator in each country who oversees national implementation. Shuttle Time trainers handle the training of Shuttle Time tutors who are responsible for delivering the eight-hour Teacher Training Course.

Tutors are usually badminton coaches or physical-education teachers with badminton experience. The programme’s resources are available in 14 languages, with more to come and consist of a teacher’s manual, lesson plans (22 lessons for teachers including ten “starter” lessons of basics), over

90 video clips, the support and delivery of lesson content to teachers, badminton equipment and supplementary material on the BWF website.

In Indonesia’s case, trainers from Badminton Asia Confederation trained national tutors who in turn trained provincial tutors. The latter passed their knowledge on to primary physical education (PE) teachers who are now equipped to conduct classes for their students. Shuttle Time thus creates expertise among teachers to initiate generations of children into badminton.

“The response (of teachers and students) has been good,” said PBSI International Relations Manager, Bambang (Rudy) Roedyanto.

“A programme like Shuttle Time is important for young children.

We’ve made it interesting for them.

We are trying to attract their attention, to get them to watch and play badminton. Our aim is to reach between 7,000 and 9,000 schools in 2015.”

The Indonesian programme found support at the highest level, with an endorsement from the Minister of Education, while securing a number of partnerships with prominent corporate entities such as Coca-Cola, Djarum Foundation, Nestlé Company (Milo brand) and PBSI Province.

“Shuttle Time was designed for the less-developed badminton nations, but it’s great that Indonesia has implemented it because it is a role model as a badminton power,” said BWF Development Director, Ian Wright.

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FROM SOURCING TO RETAIL: INSIGHT INDONESIA INDONESIA’S BADMINTON

Trainee tutors (in red shirts) observe trainer, Eddy Prayitno (blue shirt), demonstrating Shuttle Time activities with the assistance of Indonesian school children © PBSI

“They didn’t have a schools programme of their own and they wanted to reach out to schools because the popularity of football has been hurting them.”

BWF started Shuttle Time in 2012 after realising only 54 of its then 174 member associations had badminton teaching materials for schools. The sport is ideal for schools as it’s suitable for both girls and boys; it’s an individual sport and a team sport; safe and low impact for schoolchildren; can be played outdoor or indoor; helps build physical and mental abilities and life skills; and is relatively inexpensive and suitable for people with disabilities. Shuttle Time activities meet the physical-education curriculum objectives of schools in aspects such as developing hand-eye co-ordination, catching and throwing, stability and balance, speed and agility, jumping and landing skills; and tactical awareness and decision-making.

looks really promising for badminton’s grassroots growth.

This scheme helps Shuttle Time by getting developed badminton countries to support the equipment requirements of less-developed members through public donations of rackets, shuttles, other badminton equipment and clothing for Shuttle Time. These donations are usually collected at tournaments hosted by the donor association.

As example, Badminton Denmark has adopted Kenya while Badminton Australia has started a donation drive for the Pacific Islands such as the Cook Islands, Kiribati, Tahiti and Tonga which are part of Oceania Badminton Confederation.

This goodwill gesture among the badminton family has propelled the goal of achieving Shuttle Time implementation in 50 per cent of BWF’s 180 members by early 2015.

“The Equipment Donation Project is playing a huge role in the further success of Shuttle Time globally,” acknowledged Wright.

“The project will particularly benefit those countries where there is a great interest to deliver badminton, yet a lack of equipment preventing hundreds of children from experiencing the sport. This year will see eight countries offering equipment-donation opportunities to the public during badminton events. We hope this number will rise in 2015 and beyond.”

In that way, Shuttle Time will continue flourishing and indeed give countless children a chance to play!

The rate at which this developmental initiative has mushroomed has surprised even its staunchest believers. Noting Shuttle Time’s slogan – Giving Every Child a Chance to Play – Wright stated the goal of making badminton the world’s most popular schools’ sport is realistic, especially with the level of interest from BWF’s membership. Bearing in mind this programme was designed to help lesser-developed badminton nations, interest from the likes of Indonesia and other more-developed countries has been a revelation.

“That’s the real surprise – the number of more-developed nations which have seen the potential of this product and have come on board. The demand has been amazing. It’s growing all the time.”

Add to that the contributions of various benefactors through the BWF Equipment Donation Project and the horizon

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Hendra Setiawan and Mohammad Ahsan participating in the launch of Shuttle Time Dubai in July © BWF

FROM SOURCING TO RETAIL: INSIGHT INDONESIA INDONESIA’S BADMINTON

Persatuan Bulutangkis Seluruh Indonesia (PBSI) is the governing body of badminton in Indonesia. It was founded on May 5, 1951. The PBSI joined the Badminton Asia Confederation in 1959 and later on also the BWF. Gita Wirjawan is the chairman of PBSI.

The BWF is the international governing body of the sport of badminton, recognised by the International Olympic Committee. The purpose and objectives of BWF include regulating, promoting, developing and popularising the sport of badminton throughout the world and organising, conducting and presenting international events at the highest level. The BWF has its headquarters in Kuala Lumpur, Malaysia, with 180 Members Associations worldwide. PoulErik Høyer is the BWF President.

Website: www.bwfbadminton.org Facebook: www.facebook.com/bwfbadminton

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www.pentland.com @pentlandbrands

* Footwear Licensee

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FROM SOURCING TO RETAIL: INSIGHT INDONESIA INSPIRED BY THE MOUNTAIN

EIGER – AN INDONESIAN BRAND INSPIRED BY THE MOUNTAIN

By André Rogalski, Managing Director Mountaintop Sports GmbH

The brand Eiger stands for high-quality mountaineering equipment and derives its name from the well-known Mount Eiger in the Bernese Alps of Switzerland.

Founded by Mr. Ronny Lukito in 1989, today Eiger is the most famous brand in the B&B Group of Bandung, Indonesia.

Year after year Eiger has grown continuously to become the market leader with a share of almost 50% of the Indonesian outdoor adventure sports market. During the last few years the economy in Indonesia has started to develop at great speed. In 2013 GDP growth was almost 6%. Indonesia is one of the world’s most important secondary emerging markets, having the largest economy in South -East Asia.

In line with its growing economy, the Indonesian retail market has significantly developed. Increased buying power is surely an invitation to the most well-known leading international outdoor brands to consider investing in the Indonesian market as well.

To prepare itself for a prospective rise in its competition Eiger needed to adapt its former marketing strategy, developed for local competitors, to a new strategy targeted at the international arena. In 2008 Eiger started to cooperate with the German Outdoor company Mountaintop Sports GmbH, today’s responsible Eiger distributor for Europe. The aim of this was to establish Eiger as a high-quality brand in the highly competitive European market.

Mountaintop Sports invested in market research, exhibited Eiger rucksacks at several consumer tradeshows in Germany, and supplied European mountaineers and hiking enthusiasts

with Eiger equipment in order to collect their feedback after using the products. During this time continuous exchange between both companies resulted in a need for investment in order to optimize products as well as infrastructure.

Cooperation with a French design team, known for the creation of outdoor equipment, was established. In addition, the Indonesian management involved a well-known expert for outdoor sports from the USA as a consultant to support its international approach.

In order to continuously improve and develop its products the Eiger Adventure Service Team (EAST) has been established so as to work hand in hand with Indonesian mountaineers and the local community. Expedition teams are testing newly developed products in extreme conditions either to prove their quality or to suggest important improvements.

The biggest project started in 2010: A team of experienced Indonesian mountaineers started to negotiate the famous Seven Summits. The alpinists in the expedition team used Eiger equipment and successfully reached the highest peaks in the seven continents of the world.

In 2014, the Eiger brand not only celebrated its 25th anniversary but also the achievement of its first major milestone: an Eiger exhibition at Europe’s leading tradeshow for outdoor sports, the OutDoor Show 2014 in Friedrichshafen, Germany.

The response to the products was fantastic. With a passion for developing products, for establishing a sustainable business and a heart for social and environmental responsibility, Eiger surely has great potential to be successful all over the world.

André Rogalski is the founder and Managing Director of Mountaintop Sports GmbH, located in Dortmund, Germany. Before establishing his own company he obtained a business degree and worked in his family business as well as in different projects for the University of Dortmund. Mountaintop Sports GmbH is the official distributor of Eiger in Europe.

Contact information: Eiger Europe: www.eiger-adventure.com Eiger International: www.eiger-international.com

In 2014 Eiger exhibited for the first time at the OutDoor Show 2014 in Friedrichshafen, Germany © Edmund Möhrle

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WAYS TO ADVANCE MANUFACTURING A DESIGNER’S VIEW

A DESIGNER’S VIEW ON LEAN MANUFACTURING

By James Carnes, Global Creative Director, adidas Group

In 1946 Charles and Ray Eames introduced a product called the LCW, which stood for Lounge Chair Wood. The LCW chair was the first to introduce a combination of modern aesthetics and natural craftsmanship, two consumer desires that were seemingly at odds with each other.

They introduced a new precision crafted design language that was so inspiring it would be copied for decades to come.

While the LCW has become an icon of modern design, it was the exploration and development of a new manufacturing process that made it a breakthrough.

Plywood had been around for over a hundred years as a material and had recently been used in advanced aircraft, but it was considered to look cheap and unattractive. What the Eameses did was to turn simple bent plywood into a visually inspiring product that looked expensive and could be made available to the masses. By embracing a new process and a yet unused but widely available material they were able to not only invent a unique product with a bold and elegant look, they were able to propel their industry forward into a new era of design thinking. They pioneered a mindset of utilizing new processes that would bring together competing consumer desires.

Today there are parallels to this scenario in the world of sport products. On one hand, consumers have begun to expect constant innovation in comfort, function and style. On the other hand they expect sports companies and manufacturers to take responsibility for the clean, safe, and sustainable production of those products. A recent study showed that consumers consider sustainability leaders in an industry

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to be 400% more innovative compared to those who are not seen as sustainable (DeLoitte 2012). The challenge of designing for these two desires alone is a daunting task.

When you add the fact that we can no longer rely on affordable hand labor as an unlimited resource as in the past, it becomes clear that we need to adapt to more automated processes in the future.

Adidas Primeknit technology simplifies the production process while reducing waste © adidasGroup

Born and raised in Detroit, Michigan, James Carnes graduated Magna Cum Laude from the University of Michigan in 1995. With a degree in Industrial Design, James began his career as a designer in the automotive industry but quickly changed fields to the sports industry. He started in 1995 working as a footwear designer on concepts like Feet You Wear, ClimaCool, and adizero and with highprofile athletes like Kobe Bryant, David Beckham, and Derrick Rose, and holds dozens of patents for new product innovations.

As Head of Footwear Design in Germany he created a design strategy for a new label called Y-3, building on a collaboration with Yohji Yamamoto. In 2006 he became Design Director in the United States working on high-performance products like the adizero crazylight and the world’s lightest uniforms for the NBA. In 2012 James moved to Germany to take on the role of SVP Performance Design to work with teams in the USA, Germany, England, Japan, and China to develop a global design strategy for adidas’ Sports Division. Some of his most recent projects include the adidas Primeknit, the introduction of Boost in 2013, and the 2014 WC Brazuca ball.

WAYS TO ADVANCE MANUFACTURING A DESIGNER’S VIEW

Now more than ever, it is essential that we integrate designers into the manufacturing process.

This should happen for two reasons. The first is to ensure that we develop a mindset of collaboration between designers and manufacturers that will optimize the use of available processes and techniques. Most designers already have sufficient knowledge of manufacturing, but they are driven more by their determination to provide a beautifully finished product. Getting them to think about how to design for more efficient or more profitable manufacturing is simply a matter of framing the challenge in a different way that appeals to their desire to improve every product for the consumer. For example, instead of trying to impose the limitations of computer stitching onto a traditional design to reduce cost and improve efficiency, it is far more promising to challenge a designer to create a shoe that uses computer stitching as the primary means of construction and value to the consumer. What you will likely end up with is a unique looking product with a competitive edge in the market. Similar thinking can be applied to seamless knitting in apparel, direct injected molding applications of components and midsoles, and stock fitting automations. Let’s turn the challenge around, and get manufacturing into the initial brief of the product.

While the sporting goods industry is in no risk of slowing down, it is time that we prepare for change beyond simply optimizing the current state of affairs. We need to reframe our challenge to designers to maximize the production capabilities that exist today, and establish a new mindset that inspires designers to explore the new capabilities that will be needed tomorrow.

The second reason that we should integrate designers into the manufacturing process is to leverage this newly established mindset of collaboration to explore untapped production methods in our industry. While designers hold the beauty of the finished product as a top priority, they hold an even more deeply rooted desire to make the world a better place through their work. It becomes very easy to motivate them with the prospect of a single product having a positive impact on progress. Knitting in footwear is one example of exactly this type of thinking. It was clear from the early development of adidas Primeknit, that we would be able to achieve several things at once. These achievements included a high-performance product integrating all functionality into a single layer, a handcrafted aesthetic using programmable automation, and a sustainable product with close to zero waste. Using the success of the Primeknit as an example, we can approach new techniques like robotic assembly, tailored fiber placement, 3D printing, and other additive manufacturing processes to define the future.

Processes like knitting are becoming more relevant by allowing all functionality to be integrated into one single layer Š adidasGroup

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WAYS TO ADVANCE MANUFACTURING MATERIAL INNOVATIONS

THE INFLUENCE OF MATERIAL INNOVATIONS ON THE ADVANCEMENT OF MANUFACTURING EFFICIENCY

By Young-Chin Chen, Consultant, R&D Center, Formosa Taffeta Co., LTD. (FTC), Retired Assistant Vice President, R&D Center, FTC

Advancing manufacturing efficiency is one of the key weapons to increase an enterprise’s competitiveness. To elevate the technical efficiency and to improve the allocative efficiency are the two major dimensions to accomplish the task.

Producing optimal output from minimal resources input is the primary goal of elevating technical efficiency. Meanwhile, through allocating resources efficiently to obtain the

• Material Innovations • Technical Efficiency • Manufacturing Efficiency • Eco-efficiency

most reasonable cost and best product also means the advancement of manufacturing efficiency. Materials innovation along with LEAN manufacturing become the fundamental tools to optimize manufacturing efficiency. This article deals with the impact of material innovation on manufacturing efficiency.

• Customer Satisfaction • Optimal Output • Best Product

Dry Test (Rct)

Thermal Sweating Manikin System

Im = K •

Wet Test (Ret)

Rct Ret Im = Permeability Index Rct = Dry thermal resistance Ret = Evaporative resistance K = constant

Simulation test: Advancing manufacturing efficiency through optimal material innovations is one of the key weapons to increase an enterprise’s competitiveness: taking the development of the high-performance breathable waterproof fabric as an example.

Material innovation and manufacturing efficiency For an enterprise, continuous material innovation leads to higher manufacturing efficiency and the enhancement of value chain performance.

Material innovation refers to the development of new material in raw material and end product. Here innovation refers to material source, functionality, performance, alternative material, lower-cost material, and material with minimal environmental impact. In its production process, material with minimal environmental impact produces least end-to-end environmental footprint. Combining textile material innovation with ecoprotection while striving for elevating manufacturing efficiency is an important direction for the textile industry.

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Raw material eco-efficiency and ecoproduct design Eco-efficiency is a concept all enterprise seeks to improve.

Both economical and ecological efficiency are aiming for sustainable development. By adopting the concept of “doing more with less,” an enterprise uses less energy and natural resources to produce more products and create higher value to products.

Eco-design, on the other hand, emphasizes environmental protection in the product design process by minimizing the ecological impacts of the entire product lifecycle. Financially, reducing wastes including waste water, solid wastes, greenhouse gases, harmful chemical substances, etc. leads to the reduction of cost for wastes treatment, which also

FTC was established in April 1973. At that time in Taiwan, the textile industry and export trading business was flourishing. The Formosa Chemical and Fiber Co., a member of the Formosa Plastic Group, in conjunction with a selected number of private investors, cooperated together to establish FTC. FTC utilized the most modern machinery and became a vital link in the middle-stream textile industry with its weaving, dyeing, printing and finishing process and gained the reputation of being a “faithful supplier”. The direction of FTC’s research and development is to accept new and updated concepts to face the challenges of the 21st century.

contributes to manufacturing efficiency. The keys to ecodesign are: • through the innovation of raw material or end product to achieve a balance between ecological and economical demands, • adopting the most efficient way to use energy and natural resources, • generating minimal waste emissions and by-products.

Eco-manufacturing is the production mode of eco-design, which emphases resource efficiency. The recent research and development of bionic materials, which shortens the production process and raises its efficiency is a good example.

Seeking for business development while taking sustainability into consideration, Taiwan’s textile industry has been making headways in the research and development of eco-efficient materials and products, as well as improving its carbon footprints.

Raw material innovation and manufacturing efficiency In the total textile supply chain, the dyeing and finishing sector is usually considered having low production efficiency.

From pretreatment to finishing, in this sector various production parameters often cause unstable color reproductivity.

Through the raw materials innovation, the production process can be shortened, cycle times trimmed, and resources loss reduced while manufacturing efficiency improved. In respect to functional textile development, material innovation to improve functionality is highly encouraged. The development of dope-dyed yarn, water repellent yarn and the bionic materials are some of the examples.

Low-temperature dyeable materials and finishing chemicals to improve manufacturing efficiency In the dyeing sector, efficiency can be achieved by shortening the dyeing process, reducing consumption of energy and resources, and improving color reproductivity. Various examples are water-saving machinery, dyeing methods and new fiber, such as various water-saving dyeing machinery, supercritical carbon dioxide fluid dyeing, low-temperature dyeable fiber and high amino end-group nylon fiber. In addition, low-temperature finishing chemicals reduce product quality problem, such as thermo-migration of polyester fabric. This low-temperature approach helps saving energy while lifting efficiency.

WAYS TO ADVANCE MANUFACTURING MATERIAL INNOVATIONS

Extending the development of a product elevates manufacturing efficiency Quite often a new textile product only has limited market lifespan. Manufacturing efficiency can also be advanced through creating extended life for current end product and changing the features or functionalities of the product.

Usually, these value-adding processes involve only the final finishing process, which, in turn, will shorten product development time, reduce development cost and enjoys higher manufacturing efficiency.

Optimized product design simplifies production process, enables production quality results in manufacturing efficiency Quite often, human labor, energy and resources consumed in the long production processes cause more problems than expected in the design phase. Complicated process takes longer lead time and creates more quality control issues and reworks. A basic principle for product innovation is to manufacture products with highest stability through most simplified processes.

Invest in advanced equipment could also improve manufacturing efficiency. However, the cost effectiveness of doing so needs to be considered. Comparatively, the optimized innovative product design is a better approach to raise production efficiency.

Bio materials, bio-degradable materials and recycled materials enhance the efficiency of textile supply chain Innovation on raw materials such as bio materials, bio-degradable materials and recycled man-made fibers reduce petroleum resource consumption, greenhouse gas emissions, and energy consumption. Assured from the analysis of product lifespan, the use of these materials is beneficial directly or indirectly to improve manufacturing efficiency. If these kinds of materials offer a function or multifunction, then the dyeing and finishing processing for functionality can be significantly simplified, and the production efficiency is therefore raised considerably.

Conclusion Manufacturing efficiency is a key factor in upgrade competitiveness of textile enterprises. An important path to achieve that goal is through the innovation of both raw materials and end products. To us, material innovation combining eco-sustainability elements, plus optimal production process design is the total solution for the advancement of manufacturing efficiency.

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WAYS TO ADVANCE MANUFACTURING SUPPLY CHAINS

AGILE AND RESPONSIVE SUPPLY CHAINS

By Thomas Stuchly, Senior Manager at Porsche Consulting’s Consumer Goods Practice

Agility and responsiveness are characteristics commonly associated with athletes, less so with supply chains… for the sporting goods industry this needs to change.

At a time when consumers are demanding products being as fashionable as functional, sporting goods manufacturers are having to rise to the ensuing challenges of supplying products with increased seasonality but subject to ever shorter lifecycles.

returns, overproduction…), not to forget the tied-up working capital in inventory.

‘Push’ supply chains try to anticipate demand and thus are not based on actual demand. Therefore, large production-run volumes of product are moving around the world with the unintended consequences of building inventory, hiding quality issues, and reducing overall responsiveness to changing market conditions.

Time-to-shelf – an important measure of the health of any supply chain – is at a time of fast-changing market trends no less important to delivering sporting goods to retail stores and e-commerce end-consumers, as the delivery of fresh products is to supermarkets.

This approach can be suitable for products where demand can be more accurately predicted and economy of scale is a main criteria. For the sporting goods industry, however, where the business is more dynamic and seasonally driven, supply chain management approaches that allow for greater flexibility and agility in responding to market conditions should be considered.

Considering the overall supply chain strategy, one important element is the ‘Push’ vs. ‘Pull’ approach for information and material flow.

What is clear is that the current ‘Push’ approach to supply chain management, while advantageous in terms of a volume-driven low production cost, hides the real ‘all-in’ costs per item once factoring in all non-distribution-related costs in delivery (ex: quality write-offs, discounted stock, Agility and responsiveness in the supply chain

Source: client example food industry, all values measured end-2-end after 15 month of supply chain optimizations ‘Pull’ of materials and finished goods from upstream process based on consumption

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‘Pull’, a supply chain management approach where production and replenishment of goods takes place based on point-of-sale (POS) consumer purchase data, enables businesses to be agile and responsive in reacting to changing market conditions, something not possible when pipelines are burdened with months of inventory built-up at different points in the supply chain.

Thomas Stuchly is Senior Manager at Porsche Consulting’s Consumer Goods practice. In his role he and his team help international FMCG companies and retailers to design and implement lean end-to-end processes - from product origination to production, distribution and wholesale/retail execution.

Thomas studied business informatics in Nuremberg and Barcelona and has held a number of consulting positions, starting his career at Accenture before joining Porsche Consulting in 2008.

Porsche Consulting GmbH, a wholly-owned subsidiary of sportscar manufacturer Porsche AG, is one of the leading management consulting companies for operational excellence in Germany.

The company has its headquarter in Germany and offices in Italy, Brazil, the United States and China. With a workforce numbering 380 Porsche Consulting advises around 200 clients worldwide from a wide range of industries, including automotive industry, space and aviation, service providers, mechanical and systems engineering, and trade but also construction industry.

WAYS TO ADVANCE MANUFACTURING SUPPLY CHAINS

Learnings from other industries The food industry, where companies can be put out of business by the authorities for supplying expired products, can serve as a supply chain excellence role model for manufacturers of sporting goods.

Food manufacturers know that only by keeping inventories throughout the supply chain low can lead times to stores be short enough to guarantee the ‘freshness’ consumers are looking for. These short lead times also help to keep to a minimum both the time needed to react to changes in the market and the quantity of products returned because it is beyond the best before date or no longer in season – both benefits makers of sporting goods should be looking to realize with their own supply chains.

Proven supply chain concepts in the food industry include: • Collaborative planning between suppliers, manufacturers and wholesalers/retailers includes the use of customer POS/ sell-through data as input to better forecast accuracy and is a critical step in moving towards engaging ‘Pull’. This requires sharing data along the whole supply chain through integrated processes, organization and IT systems to ensure complete supply chain transparency • The resulting improved forecast accuracy and actual demand transparency enables the lowering of inventory levels stored along the supply chain – interfaces along the supply chain can be designed with help of supermarkets that are characterized by defined stock levels, replenished according to real consumption (‘Pull’) • Full support and alignment with the manufacturing process – producing in such a way so as to maximize flexibility in reacting to fluctuations in customer demand – is a prerequisite to any successful supply chain optimization.

One approach to achieving greater flexibility in production is to adopt an Every Part Every Interval (EPEI) production sequence, meaning that production of each item takes place in smaller batches but with a higher frequency. The benefits of EPEI production can only be realized through improved machine changeover times and Overall Equipment Efficiency (OEE) The pursuit of an agile and responsive supply chain requires the joint effort and discipline of each and every stakeholder organization in the supply chain, but with each party enjoying a share of the benefits the effort in making the changes is worth the pay off:

Getting started in the sporting goods industry Adopting the proven learnings from other industries requires the assessment of each respective supply chain set-up and product portfolio individually through: • Strengthening collaboration and transparency from the retail channel’s point of sale all the way through to the most upstream of suppliers. Standardization of metrics from ‘end-to-end’, reflecting total process costs to identify inefficiencies and imbalances • Assess product portfolio and select approach for material supply; there is no ‘one size fits all’! Not all products will fit with a pure ‘Pull’ supply chain approach – assuming a mix in product portfolio of most sporting goods companies that contains both dynamic/individual (e.g. functional shirt with 3D print) and mass (e.g. white running shirt) products, material flow along the supply chain needs to be flexible enough to cope with both requirements.

Supplier development programs are a crucial enabler in ensuring quality, delivery service and production efficiency.

Where supplier development is hard to progress, increasing vertical integration should also be considered.

Partnering for success The rise in seasonality, customization, and quickshifts in market trend are not unique to the sporting goods industry and are becoming increasingly common across all industries as consumers are increasingly exposed to the influence of such factors as social media and are provided with ever more choice in how to spend their disposable dollars.

These ‘new market’ dynamics are outpacing the capabilities of traditional supply chain models and resulting in slow response times to fast developing market situations - the consequences are both inevitable and costly.

At Porsche we had to rethink and redesign our own end-toend supply chain approach in the early nineties and successfully made the transition from a business with a focus on surviving, to one that is thriving today.

At Porsche Consulting we support other businesses as they make the transformative changes necessary to become more agile and responsive in an increasingly consumer-centric market.

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SELF-ACCOUNTABILITY IN CR PRACTICE GLOBAL MANUFACTURING TRANSFORMATION

PRELUDE OF “NEXT FACTORY – BIG SCENES FROM GLOBAL MANUFACTURING TRANSFORMATION”

By Professor Ren-Jye Liu and Dr Kuo-Min Chen. Translated by Charles Yang, Executive General Manager, Apache Footwear Ltd. and Chair of the WFSGI Manufacturers Committee. The ideas and concepts expressed in this article are referring to the prelude of the presented book.

In the recently published “Capital in the Twenty-First Century”, french economist Thomas Piketty pointed out that return on investment and assets have greatly outgrown the speed of economic development. Disparity between the rich and the poor was fueled by the current free economy. The repercussion to his work was overwhelmingly discussed by major financial media all over the world.

The most significant transformation since the Industrial Revolution Starting from the global macro-economic evolution as the base to analyze the characteristics of emerging manufacturing economies and zooming into the interactions among enterprises, the book explores the context of the competitiveness of the manufacturing industries.

Published in Chinese the book “Next Factory – Big Scenes from Global Manufacturing Transformation”

by Professor Ren-Jye Liu and Dr Kuo-Min Chen sets out to explore competitiveness for manufacturers.

The highly visible drastic changes to the operating environment on the eastern seaboard of China and the long overdue movement of “reshore to the USA” by the American society symbolized the emergence of the transformation of the “World Factory”. Unlike the past, this new trend does not chase the low labor rate in the developing economies. Instead, it started a new movement of re-shoring to the developed economies (or the original investing countries) and ignited the largest scale of “World Factory” transformation since the Industrial Revolution.

We strongly believe that this new manufacturing economy will totally change the concept and the adaptability of the Original Equipment Manufacturers (OEM). It allows them

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to compete, simultaneously, with US and Japanese enterprises in this new value-creating manufacturing model and help abating the challenges toward the old low labor rate chasing manufacturing paradigm. From the production management standpoint, this new manufacturing economy will end the era of assembly-line based mass volume production economy launched by Ford Motor Company in manufacturing the “T model” automobile a century ago.

In these past three years, General Electrics, Ford Motor, Caterpillar have moved their offshore manufacturing back to the US. And Lenovo of China, Foxconn of Taiwan, Mitsubishi Chemical of Japan have largely increased their investments in the US market. America seems to become the new wonderland for global manufacturing investments. In high-end products, the specialized manufacturing processes along with the cost of quality, human resources turnover and intellectual property right infringement risks have become so high that they greatly neutralize the cost benefits offered by offshore low-cost production countries. However, comparing to the hassles experienced in the low-cost production base start-up, the reshore manufacturing would have to overcome much more challenges in the developed countries.

Since the focus of the re-shore operations will not be on the production cost, rather, it aims at creating values for the end consumers in addition to the original requirements on quality, cost and delivery. Rather than claiming “Customer First” as policy, leading manufacturers strive to understand the conditions of how end consumers appreciate their products.

Toyota Motors announced that it will maintain the production capacity of 3 million vehicles in its Japanese operations, 50% of which will be exported to the rest of the world. The exported vehicles will have to be competitive enough to win over the foreign market. There are two strategic implications, mentioned by Toyota’s Head of Manufacturing, Hirofumi Muta:

SELF-ACCOUNTABILITY IN CR PRACTICE GLOBAL MANUFACTURING TRANSFORMATION

Firstly, Toyota’s Japanese operation is the heart of its production activities. Any of the key learnings will be promoted and shared to all Toyota’s production sites around the world.

Secondly, due to its labor costs being higher than all other sites, the Japanese operation has very strong sense of urgency which drives Toyota to constantly maintain the lead in automobile industry.

Challenges of the new “Quality-centric Manufacturing Paradigm” For long, the Original Equipment Manufacturers (OEM) in electronics, footwear and apparel industries have been chasing low labor rates to maintain the growth of cost-driven mass volume production economy. In recent years, the rise of consumer value-adding a “Quality-centric Manufacturing Paradigm,” has gradually become their focus and reshaped the future of these manufacturing industries.

Hereunder are the five perspectives to explore this new manufacturing trend to build new operations not just in low-cost regions and to pursue more than the mass volume production model.

1. Understand the trend of reshoring and renounce the era of low-cost only manufacturing. Reshoring in the US, China investing in the future of Africa, or the ”ChinaPlus-One” strategy 1 all point to a new era of the “World Factory” transformation. The manufacturing economy has turned to embrace high-end manufacturing solutions.

2. Emphasize on end consumer values instead of price and study the new dynamics of outsourcing customers.

From the classic definition between values and trade to promoting close-to-the-market production and exploring the end consumer values will turn the manufacturing center into a service industry. The perception changes from outsourced work to outsourced customers. Product proposition needs to offer more than functionality, it needs to understand customers’ perception, conditions of application and its processes to provide total solutions.

The customer is always the eternal values creator.

3. The basic requirement for future manufacturers is to provide customer values through a “Quality-centric Manufacturing Paradigm”. The new manufacturing economy provides the values through LEAN production and understanding the essence of consumer value. Future manufacturers need to both understand the customer to 1

create values and eliminate waste to manufacture for the subsequent processes. The key questions are: “Doing what?” and “Who can do it?” The “Quality-centric Manufacturing Paradigm” focuses more on organizational ability especially devoted to product planning and human resource coordination than making smart decisions.

4. The customer decides the cost and value in the new manufacturing economy. Operation structure not only dominates the competition in the new economy but also impacts the transformation and the collaborations across the supply chains. The key to the reshuffle is to derive new values from the fragmented manufacturing value chains. Pursuing customer-oriented new manufacturing economy to foster interactions among suppliers and customers will create an operational competence hard to be imitated by competitors.

5.

Summarize the reflection of the new manufacturing economy toward capitalism. A sustainable manufacturing model usually is simple, wise and customer-oriented.

It is also a knowledge base to contemplate what future manufacturing requires. In another word, new economy appreciates “less is more.” Only through being tightly linked with all interest parties and processes, based on trust to provide solutions that customers really want we can create higher welfare for mankind.

About the authors of the book: Ren-Jye Liu is a professor in the industrial engineering and enterprise information department at the Tunghai University, Taiwan. He received his PhD degree in business administration from Kobe University, Japan, in 1991 and his BS in Industrial Engineering from TungHai University, Taiwan, in 1980. Dr Liu’s teaching and research activities focus on the areas of strategic alliance of Japanese and Taiwanese enterprises, the shifting of Japanese enterprises in Taiwan and China. He pays a lot of attention on supply chain managerial strategies of automobile and machine tool industries in Asia. Prof.

Liu has several publications in academic and practitioner journals in Japan, the US and the UK such as Journal of Economic and Administration, Technovation and Long Range Planning.

Kuo-Min Chen is a senior manager in a Taiwanese machine tool company and has 20 years plus working experience in this industry.

He received his Ph. D. degree of Industrial Engineering from TungHai University in 2004 and his Master degree in Mechanical Engineering from National Taiwan University, Taiwan, in 1991. He majored in machine design, production management and product innovation management. His research activities include business management and innovation strategies.

China Plus One: to exploit opportunities in other low-cost production countries to both hold down costs and reduce over-dependence on China.

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SELF-ACCOUNTABILITY IN CR PRACTICE PAVING THE ROAD

PAVING THE ROAD TO SUSTAINABILITY BY ENHANCING SELF-RESPONSIBILITY

By Dr. Christine Bortenlänger, Chief Executive of Deutsches Aktieninstitut e.V.

National and international standards of CSR-reporting are under an ongoing adjustment procedure in order to reflect the latest developments in environmental, social and governance issues. The requirement of materiality of nonfinancial information is essential in order to improve CSRreporting. Binding legislation rather impedes the reporting efforts of companies by curtailing much-needed flexibility.

Financial reporting has faced tremendous challenges during the past decades. The pressing global challenges for the society as a whole – from climate change to population growth, from an aging population to an increasing shortage of resources – have drawn the question on how companies deal with these challenges into the focus of public interest.

Accordingly, non-financial features have meanwhile become a significant layer in corporate reporting.

Corresponding to this development, a number of international organizations developed guiding principles for Corporate Social Responsibility (CSR) activities and their reporting respectively. Today, a vast range of internationally recognized CSR-programs and CSR-reporting standards exist. The UN Global Compact, the Global Reporting Initiative (GRI), the ISO 26000, the Carbon Disclosure Project, the EMAS as well as the sustainability frameworks from the OECD and the International Labor Organization (ILO) are just the most prominent ones to name.

In the pursuit of better reporting standards new standards are frequently being developed while existing ones are adjusted to new CSR-challenges. In February of this year the US Sustainability Accounting Standards Board (SASB) has released a new set of sustainability standards for the financial sector. Being part of a series of already existing environmental, social and governance (ESG) disclosure provisions relevant for the management of a company, those standards supplement SEC reporting rules and address a broad range of financial institutions including insurance companies and asset managers in addition to banks. Also last year the standard setter of the most popular reporting standard

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among international companies worldwide, the GRI, launched a new generation of its standard thereby shifting its reporting focus on the materiality of non-financial information.

At the beginning of this year also the European Union became active by enacting legislation on CSR-reporting. The European Parliament, Council and Commission substantially agreed on a reform of the European accounting directive. A non-financial reporting statement was added to the obligatory management report addressing relevant information foremost on policies, outcomes and risks concerning environmental aspects, social and employee-related matters, respect for human rights, anti-corruption and bribery-issues.

Companies with an average number of employees exceeding 500 during the financial year are in general to comply with this duty. The legislative process of the enacted reform thereby displays a certain level of flexibility inserting the principle of comply or explain regarding the statement. Also a few exemptions from the rule have been created. For example, companies already committing themselves to internationally accepted reporting standards and preparing sustainability reports according thereto may continue to draw up these reports separately from the annual report.

A vast range of internationally recognized CSR-programs and CSR-reporting standards exist © iStockphoto

SELF-ACCOUNTABILITY IN CR PRACTICE PAVING THE ROAD

While new reporting requirements by standard setters and legislators are being passed also the new reporting format “integrated reporting” is under consideration. In December 2013 the International Integrated Reporting Council published the first version of its ‘International Integrated Reporting <IR> Framework’. Integrated reports gain more and more international acceptance. The idea of better displaying interdependencies of financial and non-financial features is based on the concept of integrated thinking. Integrated thinking as a way of breaking down internal silos and reducing duplication within the company reports seems to lift CSR-reporting on a higher level.

Regarding all of these outlined developments it has to be acknowledged that the fundament of good CSR rests within materiality and voluntariness.

CSR-reporting will only fulfill the expectations of different stakeholders if the concept of materiality is followed.

Assessing whether the non-financial information in question has an impact on the company business must be at the heart of the materiality analysis of companies.

Confining or detailed requirements by law, on which CSRaspects companies have to report, will only result in a boxticking exercise. In addition, voluntariness as the main driver for CSR-activities and non-financial reporting should not be questioned by the legislator. The commitment to CSR is driven by the markets in the first place as the investors’ community has a constantly rising interest on how companies deal with the tremendous societal challenges of today as described at the beginning. Refraining from an active CSR policy hence is not an option for companies. In order to be attractive for investors, companies will meet their requirements as best as possible and thus have an own interest in promoting and pursuing identified CSR objectives.

The legislator should therefore refrain from additional legislative measures. Regulatory action will not enhance the industry’s acceptance of and commitment to CSR. On the contrary

How companies deal with pressing global challenges for the society as a whole is in the focus of public interest © David Niblack

it is capable of restricting the self-responsibility of companies and their management’s judgment for sensible and responsible economic behavior alike. The more the regulator determines the course of business the more it deprives company operators of the ability to independently and self-responsibly assess corporate decisions to be taken and the general impacts related thereto. The best guarantor for an active CSR policy and corresponding reporting efforts rests within the firm persuasion of individuals which simply cannot be prescribed by law but will rather emerge from the market climate and situation.

Since September 2012 Dr. Christine Bortenlänger is Chief Executive of Deutsches Aktieninstitut. After studying business economics and concluding her doctorate on “Stock exchange automation - efficiency potential and enforceability” she worked for a bank and a consultancy. In 1998 she started working as Deputy Managing Director of the Munich Stock Exchange. Between 2000 and 2012 Dr. Christine Bortenlänger was a member of the Executive Board of Bayerische Börse AG. Dr. Bortenlänger is member of the supervisory boards of ERGO, OSRAM, SGL Carbon and TÜV Süd. Additionally she is member of the Academic Senate of Deutsche Nationalstiftung, the Board of Trustees of ifo Institute, member of the Executive Committee of Wirtschaftsbeirat Bayern and of the Exchange Council of the Frankfurt Stock Exchange.

Economic reason and responsibility as a fundament for a sustainable economy cannot be created with the permanent development of new regulatory details constantly leaving less room for accountable entrepreneurial decisions. “Act only according to that maxim whereby you can, at the same time, will that it should become a universal law”, reads the first formulation of philosopher Immanuel Kant’s categorical imperative drafted almost 230 years ago. Perhaps his ideas can aid in approaching CSR.

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SELF-ACCOUNTABILITY IN CR PRACTICE CHEMICALS MANAGEMENT

CHEMICALS MANAGEMENT – A TEAM SPORT

By Peter Gregory, Global Sustainability Director, Huntsman Textile Effects

Season in and season out, chemicals management is a hot topic for the sporting goods industry. High-profile events provide a regular opportunity for pressure groups to spotlight the shortcomings of the sector and further raise the stakes for the world’s top brands.

Given this public scrutiny and the tightening of regulatory regimes worldwide, chemicals management has never been more important.

For this reason, chemicals management has to be a team sport. As in any sport, you need each player to first get the basic skills right. Only then can you move on to the finer points of tactics and strategy, working together to reach a common goal.

The challenges For close to two decades, most brands have provided their suppliers with a Restricted Substances List (RSL) that details the chemicals they want to avoid in their products. While this approach has helped bring about positive change, it is now problematic for two reasons.

The fundamentals A number of studies have found that basic chemicals management systems are missing from the vast majority of fabric processing mills. What fundamentals need to be in place?

• The role of the chemicals supplier As a minimum, the supplier should provide a comprehensive Safety Data Sheet (SDS) for every product, along with a Technical Data Sheet that explains how and at what concentrations the product should be used. Key information should be prominent on the product packaging.

First, fabric is assessed against the RSL post-production, when correcting mistakes is difficult and costly. Second, each brand’s RSL is unique, which adds complexity and significant cost to the supply chain.

There are other challenges, too. The way in which chemicals are handled and used is as critical to their safe use as the composition of the chemicals themselves. However, it is often difficult for mills to implement proper handling processes. They typically use a huge number of chemicals, although most in small quantities. Chemicals suppliers may closely guard detailed data about their products. And mill owners may view chemicals management as an expense, rather than an opportunity to save costs and demonstrate compliance.

Chemical supply manufacturing © Huntsman Textile Effects

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In short, while the responsibility for chemicals management stretches across the entire textiles supply chain, this supply chain is complex, global and frequently lacks transparency.

So what role does each player in the chemicals management team take?

• The role of the fabric mill Each mill needs to assess the potential impact of the chemicals and processes it uses and to introduce control measures to minimize or eliminate negative effects on workers and the environment. Mills should capture this information in a complete chemicals inventory. They need to select their suppliers carefully, even for the most basic chemicals.

• The role of the brand Connecting with the major fabric producers in the supply chain is the ideal for brands, but this may not be practical.

Even so, raising awareness around the need for good chemicals management and sharing even such basic guidelines as the above will help lay the groundwork for future engagement.

The tactical play Once the fundamentals are dealt with, what of the wider context?

SELF-ACCOUNTABILITY IN CR PRACTICE CHEMICALS MANAGEMENT

A number of multi-stakeholder collaborations have formed to address challenges in the textiles supply chain. Among the most influential are the Sustainable Apparel Coalition (SAC) and the Zero Discharge of Hazardous Chemicals (ZDHC) group. Both of these bodies recognized the need to engage the full supply chain, with Huntsman Textile Effects as a founding member of SAC and a key contributor to the ZDHC Joint Roadmap.

The recent publication of the ZDHC Manufacturing Restricted Substances List (MRSL) is a huge step forward for the industry. It sets limits on the permissible concentrations of a range of substances in commercial products supplied into the textile chain. Crucially, this indicates a shift in focus in chemicals management: from managing outputs to managing inputs.

If all brands were to adopt the ZDHC list as their MRSL, we could bring consistency and simplicity to an industry that requires mills and brands to satisfy a huge variety of chemical standards and certification schemes. To promote this, Huntsman Textile Effects has now released a list of dyes and chemicals that can be safely used to manufacture textiles for ZDHC-signatory companies.

• The role of the chemicals supplier The limits in the MRSL are challenging yet manageable.

Reputable suppliers will be capable of supplying products within the specified limits. However, to avoid inflicting new testing regimes on the supply chain, the system is based on self-declaration. Chemical manufacturers therefore need to have programmes in place to demonstrate their commitments and capabilities.

• The role of the fabric mill Mills need to select chemical suppliers that are truly committed to supporting them, as their reputation and that of the brands they supply are hugely exposed and closely scrutinized in this area. As a minimum, mills should seek declarations from each supplier regarding the suitability of their products. Consideration should also be given to formalizing these into supply agreements.

• The role of the brand We cannot overstate the power of a harmonized and simplified approach to chemicals management to transform this industry. The ZDHC MRSL represents a great opportunity, but brands can also protect their reputation and the

industry by choosing to do business with mills that are engaged with improving their capabilities in chemicals management. Bold statements set the framework, but commercial reality is what will truly deliver results.

The future We now have a chance to unite around a common goal for chemicals management in the sporting goods industry.

With SAC and ZDHC collaborating more closely, this is certainly possible. Such a goal would help us avoid expending our energy in chasing results that get us no further. We can refuse to hobble our team with players that lack the most basic of skills. And we will move ever closer to the cleaner supply chain that the public and the planet deserve.

ZDHC MRSL

Chemicals

BRAND RSL

Chemicals in Product

Input Controls FABRIC PROCESSING MILLS

Processes

Output Controls Effluent Treatment Plant

Chemicals in textile supply chain: This chart shows the fabric processing mills where chemicals enter the textile supply chain. Traditionally, chemicals in product (garments) have been managed via Brand RSL’s. The ZDHC MRSL moves the focus to the input chemicals to try to prevent unwanted substances from ever entering the supply chain. As the limits in the ZDHC MRSL are lower than legal requirements, the system will need to rely on self declarations from chemical suppliers. Therefore, the mills need to assess their suppliers very carefully. Responsible chemical suppliers need to be able to demonstrate their commitments and capabilities.

Chemicals must be considered together with the processes in which they are used to make sure they are used efficiently and effectively.

Peter Gregory was born in England and is a Chartered Colourist and has received the President’s Diploma of Honour from the Society of Dyers and Colourists. He also has a Masters degree in Chemistry from the University of Salford and a Management Diploma from the Open University in the UK. Before leading the Technology and Project Management group, Mr. Gregory was a Marketing Director at Textile Effects. Prior to this role, he also took on a variety of technical, marketing, product management and sales roles based in the UK.

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we are marathoners.

#better your best

SELF-ACCOUNTABILITY IN CR PRACTICE SOCCER BALL PROJECT

SIALKOT SOCCER BALL PROJECT Child Labour Elimination Programme (CLEP) â&#x20AC;&#x201C; a Project of SCCI being executed by IMAC and CSDO

Sialkot Soccer Ball Industry has been supplying balls to top brands of the world. Sialkot-made Soccer balls have been played in FIFA Soccer World Cups, Olympics, European Championships and other international events.

The Child Labour Elimination Programme (CLEP) was initiated in 1997. Due to its unprecedented success, Child Labour Elimination Programme has gained recognition and appreciation globally. It is a unique and role model project in the world. This project has succeeded to eliminate child labour from the Soccer Ball Industry of Sialkot-Pakistan to place the children in schools. We thank all our partners and supporter i.e. WFSGI, FIFA, ILO-IPEC, UNICEF, NGOs and other key stakeholders for their benevolent cooperation to make the project successful.

Mr. Bill Clinton, former President of the United States, appreciated this program on 16 June 1999 at the International Labour Conference in Geneva, Switzerland, mentioning it as success story which others could follow as a role model.

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 United Nations (UNICEF, ILO) and the government of Pakistan for the protection of marginalized children, prevention and elimination of child labour in 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 Child Labour Elimination Programme 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 such example where the export-oriented industry has voluntarily taxed itself to prevent and eliminate child labour from the industry.

List of Soccer Ball Manufactures participating in Child Labour Elimination Programme in the Soccer Ball Industry of Sialkot as on September 3, 2014 is as follows: 1

ALBERTA SPORTS LTD.

15

FINE GROUP INDUSTRIES

29

MADRIGAL SPORTS LTD.

43

SOCCER PROFESSIONAL ENTERPRISES

2

ALI TRADING CO. LTD.

16

FIRCOS INDUSTRIES LTD.

30

MOLTEX SPORTING GOODS LTD.

44

SPACE AGE INTERNATIONAL

3

ANWAR KHAWAJA INDUSTRIES LTD

17

FORWARD SPORTS LTD.

31

NADIA INTERNATIONAL LTD.

45

SPORTICA GROUP

4

ASSAC SPORTS INDUSTRIES LTD.

18

H. WAHID SONS MFG CORP. LTD.

32

OLE SPORTS

46

SUBLIME SOCCER LTD.

5

AWAN SPORTS INDUSTRIES LTD.

19

HOLA TRADING

33

ORBIT GROUP

47

SW GROUP OF CO.

6

BALLON DE SPORTS

20

ISRA SPORTS

34

ORPHEUS ENTERPRISES LTD.

48

TAJ MAHAL SPORTS CO.

7

B.J SPORTS

21

J.S.D SPORTS LTD

35

PETRA SPORTS

49

TALON SPORTS LTD.

8

BOLA GEMA

22

KARAM INDUSTRIES

36

RATRA TRADING CO. LTD.

50

TATA PAK INDUSTRIES

9

CAPITAL SPORTS CORP. LTD.

23

KHALID OVERSEAS TRADINGN

37

RECTO SPORTS LTD.

51

TEMPO ENTERPRISES

10

COMET SPORTS LTD.

24

KICKER SPORTS

38

REEMA GROUP OF COMPANIES

52

TRAMONDI SPORTS LTD.

11

CRAFTSMAN LTD.

25

LALI INDUSTRIES LTD.

39

ROZA SPORTS

53

VISION TECHNOLOGIES CORPORATION LTD.

12

ELITE INDUSTRIES

26

LASER SPORTS LTD.

40

SETAS TRADERS

54

WHIRL SPORTS INTERNATIONAL

13

ESTRELLA INTERNATIONAL

27

LEABROSE INTERNATIONAL

41

SILVER STAR ENTERPRISES LTD.

55

YASIR INDUSTRIES

14

EUREKA INDUSTRIES

28

LEATHERWARE LTD

42

SOCCER PLUS INTERNATIONAL LTD.

56

ZIA SPORTS LTD.

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BICYCLE DEVELOPMENTS BREAKING AWAY FOR THE FUTURE

BREAKING AWAY FOR THE FUTURE OF ROAD BIKE DESIGN

By Dr. Michael Kaiser, Head of R&D and Quality Management at Canyon Bicycles GmbH

The three-wheeled Benz Patent-Motorwagen was unveiled in 1886 as the world’s first production automobile. However, if you try to find similarities between that initial layout and any modern car, then you’re in for a difficult task. On the other hand, when you compare the very first bicycles from the same era and a modern road bike, then the essential formula remains unchanged: a diamond frame shape, two equally sized wheels and power provided by the rider via pedals, cranks and a chain connected to a rear sprocket.

The fact that so few of the fundamentals have changed is testimony to the simplicity and functionality of the original design.

In almost every other aspect though, our modern bikes are completely unrecognisable from their ancestors. These days, we have an array of cutting-edge materials available to us, from lightweight metals to complex carbon fibres.

High-performance road bikes are optimised to deliver maximum speed for minimal effort. The focus of their design lies in achieving absolute efficiency, whether by reducing weight, improving aerodynamics or increasing stiffness for better power transfer.

We are constantly working at the limit of what the current materials and technologies allow us to achieve. Manufacturers release new models all the time that provide clear and quantitative improvements against their predecessors, whether being X grams lighter, Y percent stiffer or Z watts more aerodynamically efficient. However, it’s often the case Projekt MRSC Connected is an interpretation of future performance road bikes © Canyon Bicycles

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that revolutionary changes only happen gradually, like little steps as opposed to giant leaps.

At Canyon, we commit ourselves to looking for the next big breakthrough. Each year, we set aside a team of developers to come up with exciting new concepts, known as the Canyon Project Studies. The purpose of these projects is to pave the way for the future of bike design. Our aim is to discover new ways of thinking, looking far beyond the current standards in an effort to answer one fundamental question: what next?

Projekt MRSC Connected The goal of our latest concept was to clearly define the next parameter where we see the most potential in performance road bikes beyond optimising weight, stiffness and aerodynamics. With Projekt MRSC Connected, we’ve targeted comfort and handling as two areas that will shape the way we design race bikes in the future.

In racing, the fresher a rider feels when arriving at the finish line, the greater his chances of winning. Put simply, more comfort equals more performance. Beyond the efforts of pedalling, the greatest contributor to muscle fatigue is constant vibrations from the road surface that get transferred to the rider’s body. Muscles in the back and legs are put under huge pressure in order to compensate for these impacts, which in turn has a detrimental effect on the rider’s pedalling power.

Vibrations not only reduce rider performance, but also that of the bike. As the mass of both bike and rider shifts when riding across rough surfaces, energy is essentially being wasted and forward momentum lost, while also making the bike more difficult to handle.

Magneto-rheological suspension control Projekt MRSC Connected uses an active chassis to significantly enhance these areas. We came up with an innovative carbon leaf spring suspension system using newly-developed

BICYCLE DEVELOPMENTS BREAKING AWAY FOR THE FUTURE

MR (magneto-rheological) fluid bearings connected to a series of sensors and a central processing “On-Board Unit”. We call the system, “Magneto-Rheological Suspension Control”, or put more simply, MRSC. The overall key lies in the magneto-rheological fluid construction of the bearings in the fork leg pivots and the seat tube. These provide a rotary damping effect that can be regulated as metal particles suspended in the fluid become polarised when subject to an electro-magnetic field. The result changes the viscosity of the fluid, rendering it solid and the pivot fixed.

What happens now?

With Canyon Project Studies, we don’t seek to create radical looking concepts that make unreal promises, but instead we want to create new ideas that can actually be pursued by our developers. Projekt MRSC Connected joins our collection of Project Studies, the vast majority of which inspire the bikes that we build today. In the end, trying to predict what the future will bring is anybody’s guess. What is certain though, is that after some 130 years of development the essential DNA of the bicycle may not have changed that much, but the resulting differences could not be any more profound.

Tying MRSC together is the On-Board Unit, which receives signals from sensors able to detect the riding style and surface conditions, and then regulate the chassis accordingly.

Sensors at the handlebars can tell how the rider is riding, for example sprinting on the drops or climbing on the hoods, while sensors located on the seat tube pick up the road conditions. Therefore, MRSC can adapt instantaneously by sending signals to the MR fluid bearings to either provide shock absorption or maximum stiffness according to riding style and surface conditions. All the riders have to do is focus on their own performance.

Connectivity With power metres to measure our performance and GPS cycling computers to track our routes, electronics are constantly changing the way we ride. Further to rethinking our approach to comfort and handling, we worked together with Deutsche Telekom on Projekt MRSC Connected to explore the potential of “intelligent” bike design.

The On-Board Unit incorporates a GSM module to “connect” the bike to the rider and the wider world via a new mobile app alongside M2M communication. The app can record the age and wear of certain components, such as the chain or brake pads, and then notifies the rider when replacement or maintenance is required. Integrated GPS also allows the riders to record their rides without an additional device, while also serving as a useful tracking tool if the bike is stolen.

Safety is also enhanced as the bike can send out an eCall to emergency services with a precise location if the rider does not respond after an incident is detected. M2M communication guarantees that even in remote areas with little network coverage, the emergency services will still receive the signal so they can respond quickly.

Suspension is provided by carbon leaf springs and the MR pivot bearing construction © Canyon Bicycles

Canyon Project Studies allow freedom to develop new concepts © Canyon Bicycles

Dr. Michael Kaiser (1974) studied at the Kaiserslautern University of Technology, graduating from their Institute of Composite Materials. In 2007 he became Head of Development at Canyon Bicycles.

His role since then has expanded to become Head of R&D and Quality Management, as well as being part of the Canyon Leadership Team.

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BICYCLE DEVELOPMENTS BICYCLE SADDLES

EVOLUTION OF BICYCLE SADDLES

By Steve Toll, Creator, Designer and Owner, Greg Kopecky, Brand Commander, and Dave Schindler, Technical Commander, ISM Saddles

It is undeniable that technology in sport has grown by leaps and bounds in the past several decades. We now have golf clubs made of titanium and carbon fiber, superlight tennis rackets, and computers integrated into every imaginable piece of equipment. While much has changed, much has also stayed the same. Those tennis rackets and golf clubs – while advanced, are still made in the same basic shape as the originals.

Another great example is the bicycle – a modern representation of a classic design. While carbon fiber has overtaken steel and aluminum as the material of choice for frames, modern bicycles share much in common with their ancestors.

Today’s bikes are lighter, faster, and more aerodynamic, yet still adhere to the basic double-diamond frame design and are powered by the human rider via an external drivetrain system.

The interaction between the rider and the bike has always been of concern, and has slowly followed a similar path of evolution. The bicycle saddle began by modifying a leather horse saddle. It is completely unique in that it must support the rider, allow reaching to the handlebars, and allow for free movement of the legs to power the bicycle. This design has remained relatively unchanged for over 100 years. Compared to early bike seats, modern designs are lighter in weight and use more advanced materials, but most still adhere to the same basic shape.

For many years, bicycle riding has been associated with discomfort and sexual health issues impacting both men and women. These problems include high amounts of pressure on the perineal area, arterial occlusion, genital numbness and discomfort, erectile dysfunction, loss of genital sensation or sensitivity, and perianal hematoma. Some doctors recommend avoiding bicycle riding altogether, while others suggest risk factors associated with traditionally shaped saddles can be minimized and even eliminated with new saddle designs that work with the human body and not to the detriment of the body, thereby maintaining the benefits of cardiovascular exercise.

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Looking at a traditional seat, it is clear that the rider is intended to sit towards the rear, where it is the widest. The seat then tapers down and becomes narrow at the front, to allow for the pedaling motion. In high-performance cycling applications (road racing, triathlon, time trial, cyclocross, or cross-country mountain biking), riders roll their hips forward for improved power production. Additionally, these types of riders also tend to position their handlebars very low in order to gain an aerodynamic advantage. Both of these factors cause the rider to put more weight on the nose of the seat, resulting in additional pressure to the perineal area. This extra pressure compresses the pudendal arteries and nerves which lead to the genitals.

Many riders experience numbness due to the nerve compression, and, according to many medical professionals, all riders experience loss of blood flow on traditionally shaped saddles.

This saddle is based on the traditional shape, but includes a small cutout area. Some of these designs can moderately improve blood flow, while others are ineffective.

accellerate is our name. innovate is our dna.

Whether you enjoy nature on wheels or having a workout in the hills, the brands of Accell Group have a bicycle that can boost your experience. Whether it is our 100% silence ION technology on your e-bike or our E:i shock technology in your intelligent suspension, we make it easy for you to enjoy your ride to the max. We are 100% committed to offering the best innovations from our portfolio of international brands. www.accell-group.com

BICYCLE DEVELOPMENTS XXX

WE ARE VERY PROUD TO INTRODUCE SHIMANO STEPS SHIMANO STEPS has been developed based on our design philosophy of system engineering and finds its roots in our mission to provide tools for consumers that enhances their healthy lifestyle. We have created the perfect life cycle.

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• Lightweight drive unit, 3,200 grams.

• Compact design for increased ground clearance • E-tube software allows quick setup, installation and adaption of the system • Di2 internal geared hubs for smooth & precise shifting • Battery Life: 1000 charge cycles without significant power loss • Optional: Down tube battery with sidewards release function for more options/freedom in frame design • Proven Shimano Service Network * SHIMANO STEPS can also be used with a standard mechanical IHG or a rear derailleur.

SHIMANO STEPS. ENERGIZE YOUR LIFESTYLE.

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www.shimano-steps.com

BICYCLE DEVELOPMENTS BICYCLE SADDLES

Medical technology confirms a reduction in blood flow by measuring blood gasses in the pudendal arteries while riding a bicycle. The presence and volume of blood gasses, PO2 and CO2, are an indicator of the arteries ability and effectiveness to allow blood to flow normally. Blood gas testing has shown that traditionally shaped seats cause a reduction in blood flow in excess of 90%.

A quick look at patent applications throughout the world shows various attempts at new and comfortable bike seats over the years. Interestingly, it wasn’t until scientific and medical testing came along that any significant changes started to be made. The 1960s and 70s gave us the banana seat and the hammock seat. The 1980s and 90s provided some of the first commercially available nose-less saddles, new internal gel material, synthetic leather covers, saddles with cutouts in the center, and others with lumbar support.

With the introduction of pressure mapping technology in the late 20th century, bicycle seats have slowly evolved in an effort to find a more comfortable solution for riding a bike.

Some of the modifications to traditional seat designs have resulted in moderately improved blood gas results.

Perhaps the most significant change in bicycle saddles since the first leather sprung saddle was the introduction of a

Built on a foundation of comfort and health, ISM™ stands apart as the Innovative SaddleMaker™. The ISM saddle design was conceived in 1997 and patented in 1999 by founder, Steve Toll. With their proprietary nose-less, split design and deep channel groove, ISM saddles do not put pressure on soft tissue areas, resulting in superior blood flow and no genital numbness. ISM saddles are available worldwide through their extensive network of distributors and retail partners.

Greg Kopecky has been in the cycling industry for over twelve years. Currently the Brand Commander for ISM Saddles, he has also worked in marketing for SRAM Corporation, and served as the Technical Editor for Slowtwitch.com and LAVA Magazine, while also racing as a professional triathlete. Kopecky resides in southeast Michigan in the United States.

Dave Schindler has been cycling, competing, and working in the bicycle industry for over 30 years since being inspired by watching the Los Angeles Olympic Games in 1984 at the age of 10. In his role as the Technical Commander for ISM Saddles, he is able to use his passion for cycling by bringing revolutionary technology to market for the improvement of the health, comfort, and performance for everyone who rides a bike.

Steve Toll is the creator, designer and owner of the ISM saddle brand. An avid cyclist and swimmer, Toll began creating nose-less and comfortable saddle designs in January of 1997 after an exhaustive search for the perfect saddle. Often criticized and ridiculed for his different looking designs, Toll stayed true to his mission of offering healthy and comfortable bicycle seats for all cyclists.

The patented shape of the ISM saddle completely removes soft tissue pressure, eliminating numbness and ensuring full blood flow.

saddle by ISM that did not follow the pattern of modifying a traditional seat shape. Instead, it was created in a shape mimicking the human body to support the bone structure.

This patented design removed the narrow nose of the saddle and instead uses two independent arms which allow the hips to rotate naturally while maintaining 100% blood flow and eliminating any numbness because there is no nerve impingement.

As science and the ability to collect data evolves and new materials and manufacturing techniques develop, the ability to create the most sophisticated anatomically correct bicycle saddles will also progress. The modern bicycle saddle, like modern iterations of other sports equipment, should aim to perform their functions properly, while also ensuring the health, safety, comfort, and performance of the athlete.

It’s not only casual cyclists that want comfortable seats - many professional road racers and triathletes are choosing ISM’s health-focused bike saddles. © ISM

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BICYCLE DEVELOPMENTS BIKE CHANNEL

BIKE CHANNEL ITALY

By Filippo Mori Ubaldini, President and Managing Director at Filmedia

A new media offer catering to the European cycling industry has arrived in Italy and is ready to take off in Europe.

The thinking behind Bike Channel originates from the important positive trend in cycle sales that is crossing the European continent. We decided to launch Bike Channel from Italy due to the historic heritage and massive cyclist population as well as the cycle industry’s support and it has paid off hence we are breaking even this year from 2 years from launch.

Bike Channel is targeting the amateur world of cyclists whether the Sunday racer or the cycle tourist who wants to discover Italy. We also broadcast our local productions that array from DIY shows to better get to know your bike or simply provide tips for a route and getting the best prepared for a mountain bike day out with family or friends.

Furthermore we produce cycle logs that show where to go and sleep through the Italian territory with local hosts.

Bike Channel was founded by former Discover Networks Italian Country Manager Filippo Mori Ubaldini and launched on TV in 2012. It has now become the mainstream reference of the Italian cycle and sportswear industry. Bike Channel is broadcasted on the Newscorp Sky Italia satellite platform that counts 4.8 million subscribers. The channel is completely dedicated to cycling 24 hrs 7 days a week.

Bike Channel broadcasts dedicated theme nights such as: race bike, live events (Tour de Romandie, Tour de Suisse, Cap Epic among others), documentaries and specific films (race across America) as vintage and biographies.

Bike Channel’s ambition is to be the home of cyclists on either TV and digitally with a large spectrum of articles to cater to the cycle passionates.

Italy has a population of 25 million bike users and hard core competition is quoted in 2 million users between race and mountain bike. Regions of Italy have started to invest heavily in cycle roads and cycle tourism is booming from Bolzano to Rome.

Enjoy cycling and get the most out of it: Every thing you need for a perfect day out on the bike © Filmedia

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BICYCLE DEVELOPMENTS BIKE CHANNEL

“Nothing is better to promote a territory than cycling through it“ quotes Renato di Rocco, president of the Italian cycling federation. A good example is the region of Trentino that has seen the bicycle users grow from 800 thousand to 2.1 million in few years.

The Piedmont area is now known for its off-road mountain bike parks from Sestriere to Pila and many bike schools have been created to intercept the passion and interest.

Another important region in Italy is Emilia Romagna, home to the legendary Marco Pantani which host an event called “Nove Colli“ – a race bike amateur competition with over 15,000 participants.

Italy has overall 3,227 kilometers of dedicated bike roads and is forecasting double-digit growth within the next 2 coming years but far away respects the actual 35,000 kilometers of Germany.

Former Italian road racing cyclist and winner of the 2002 and 2005 Giro d’Italia Paolo Savoldelli comments on Bike Channel © Filmedia

In 2013 the Italian E-bike sale has seen a +12% growth, and the whole Italian cycle sale has seen a growth of +22% with the historic surpass in sales of bikes versus cars (1.54 million bikes versus 1.3 million cars).

The recent win of Italian Vincenzo Nibali at the Tour the France has boosted visibility of the sport and demand of race bikes. This great success which followed Vincenzo’s victories of the Girio d’Italia last year and the Spanish Vuelta two years ago has created a sports idol.

We are planning to bring our channel which is commercially driven as a business model to other European territories within the next 2 years to create a dedicated cycle media network between a TV-dedicated channel and a digital online offer and are currently speaking with major European pay and free-TV platforms for distribution . Our model is to invest in the territories once the distribution with the platform has been agreed and invest into hiring a dedicated local team that will be heading marketing and sales as well as local productions.

On tour across the country: Bike Channel explores cycling routes, tests bikes and provides content to all sorts of bike-related content © Filmedia

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PHYSICAL ACTIVITY & EARLY POSITIVE EXPERIENCES GIVE ME THE CHILD

GIVE ME THE CHILD: THE IMPORTANCE OF EARLY POSITIVE SPORTING EXPERIENCES

By Richard Bailey, Senior Research, International Council of Sport Science and Physical Education, Berlin

The case for physical activity is stronger now than it has ever been. Which raises an important question: if the benefits of physical activity are now so clear, why are so many children inactive?

International consensus states that children should be active for at least 60 minutes every day, and at least three times a week to gain its benefits.1 Evidence from developed countries shows that only a minority achieve the recommended levels, and there is a gradual reduction in levels of physical activity from childhood through adolescence, especially among girls. Children, as a group, are not active enough, and their well-being will suffer as a result.

Children’s physical activity, and the lack of it, have become perennial topics in the media, among policy makers, educators, the sporting goods industry, and, of course, parents.

The case for physical activity as a necessary feature of a happy, healthy and longer life is now beyond doubt. The most authoritative review shows physical activity can be understood as an investment that yields benefits in a wide range of aspects of children’s lives: Emotional, Financial, Individual, Intellectual, Physical, and Social. These investments, especially when made in the early years, can lead to significant rewards, both at that time and for years to come.

THE HUMAN CAPITAL MODEL: The comprehensive benefits of physical activity, sports and physical education are underestimated today. This model shows the spectrum of benefits to an individual and economy. Each “capital” refers to a set of outcomes that underpin our well-being and success.

FINANCIAL CAPITAL

FINANCIAL CAPITAL Improvements in: Income, Job success, Productivity/ Job performance, Morale/Commitment/Turnover, Reduction in: Health care costs, Absenteeism, Presenteeism

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SOCIAL CAPITAL Improvements in: Social norms, Social network/Positive relationships, Social status/Social commitment, Social inclusion & acceptance, Trust/Teamwork/Collaboration, Civic participation, Gender equality, Equity for persons with disabilities, Crime, juvenile delinquency & gang participation reduction, Community cohesion, Peace/Understanding/Recovery, Bridging differences (socio economic status, racial, ethnic, disability, religious, sexual), Safety & support

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INTELLECTUAL CAPITAL Improvements in: Educational attainment, School engagement, Processing speed, Executive function/Inhibition/Mental flexibility, Memory, Academic performance, Brain structure and function, Concentration/Attention/ Impulse control, Learning, ADHD management, Age-related cognitive decline management

PHYSICAL CAPITAL Improvements in: General motor skills, Functional fitness/Physical appearance, Cardio respiratory fitness, Muscular strength, Adiposity/Body composition, Lipid profile, Bone health/Osteoporosis, Joint health, Maternal & infant health, Rehabilitation & recovery, Immune system function, Sleep patterns, Nutrition/ Diet, Prevention/treatment of: Metabolic syndrome/Type 2 diabetes, Overall mortality, Cardiovascular disease, Coronary heart disease, Hypertension, Stroke, Colon & breast cancer, Lung, endometrial, ovarian cancers, Back pain, Reduction of: Falls, Smoking, Teen pregnancy, Risky sex, Drug use, Addiction, Suicide

EM CA OTI PIT ON AL AL

INDIVIDUAL CAPITAL Improvements in: Activity knowledge and skills, Social skills/Life skills/Non-cognitive skills, Sportsmanship, Time management, Goal setting, Initiative/Leadership, Honesty/Integrity/Respect/Responsibility, Enthusiasm/ Intrinsic motivation, Commitment/Self discipline/Self control/Persistence, Assertiveness & courage

EMOTIONAL CAPITAL Improvements in: Fun, enjoyment, satisfaction, Feeling good, Self esteem, Self efficacy, Body image, Intrinsic motivation for physical activity, Mood, Prevention/treatment of: Stress, Depression, Anxiety Nike, Inc., American College of Sports Medicine, and International Council of Sport Science and Physical Education (2012). Designed to Move: A Physical Activity Action Agenda.

Bailey, R., Hillman, C., Arent, S., and Petitpas, A. (2013). Physical activity: an underestimated investment in human capital? Journal of Physical Activity and Health, 10(3), 289-308.

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For the first time in history, this generation may die five years younger than their parents.

Letâ&#x20AC;&#x2122;s give them those five years back. designedtomove.org

www.sport2000international.com

We keep the world in motion RETHINKING BOUNDARIES INTERNATIONAL EXPERTS COMMUNITY PERSONALLY CARING FOR CUSTOMERS EXPERTISE THROUGH PASSION We are the professional and passionate companion that enhances the individual capabilities of every athlete by understanding their personality and needs.

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Richard Bailey is an international consultant and researcher working in the areas of sport, physical activity and human development. Previously a University Professor, he now shares his time between running a specialist research company and working with the International Council of Sport Science and Physical Education in Berlin. He has worked with numerous groups and agencies around the world, including Nike, the English Premier League, Unilever, the IOC and UNESCO. He also writes a column for Psychology Today magazine called ‘Smart Moves - the intersection of sport and learning’, his own blog, ‘Talking Education and Sport’, and regularly Tweets on scientific aspects of sport, physical activity and science as ‘@DrDickB’.

There are many explanations for this situation. One aspect is the increase in car travel, and the resultant reduction in everyday exercise. Children walk less often to shops, schools and parks than at any time in recorded history. In addition, many countries have witnessed growing parental fears for children’s safety outdoors. The world is seen as a dangerous place, full of strangers, traffic and dangerous places. As a result, parents choose to keep their children close and out of harm’s way. Reduced opportunities are a predictable consequence: out of school, the average eight-year-old in the West goes no further than 100 yards from their home.

These factors clearly play a role in the rising tide of children’s sedentary behavior, but they do not explain everything.

They do not explain, for example, the low levels of membership of sports clubs in most countries. Nor why children are less active as teenagers than they are when younger. And they do not help us understand the common pattern of a gradual reduction of activity levels, especially severe among girls, from around 13 years of age.

Part of the blame lies with the ways physical activity is presented to children. The modern world are presented a dazzling array of recreational possibilities, including television, computer games and the internet, and it is no longer enough to simply assume that sports and games are the most attractive option. So everyone involved with children needs to think very carefully about the ways in which their activities are offered to children. We must confront the unpalatable thought that some of the ways sports are presented are actually putting children off.

Numerous studies report many children are put off participating by an over-emphasis on winning, and this effect is especially strong with girls. Children are too-often presented with a narrow and uninspiring range of opportunities in both school physical education and community clubs.

While many children love team games and athletic events, others find these traditional forms of physical activity either irrelevant or boring.

The ways in which physical activity is presented are proving to be significant with all populations, but there seems to be particularly compelling reasons to focus on first experiences as they start a pattern for all that follows. If the earliest

PHYSICAL ACTIVITY & EARLY POSITIVE EXPERIENCES GIVE ME THE CHILD

experiences of activity are uninspiring, boys and girls will not want to continue, and evidence suggests that inactive children are likely to become inactive adolescents, and inactive adults.

Probably the most important of all factors is fun. There is no doubt that the main reason why children play and carry on playing sports and games is that they are enjoyable. Yet well-meaning parents, teachers and coaches spoil sports by making them too serious too soon. As we have seen, sometimes inappropriate forms of competition are the problem.

Other times, it seems, children are unable to play the games they would choose.

Research suggests that children under seven or eight years of age are primarily motivated by pleasure, play and the sheer joy of movement. They do not want too serious games.

Instead, they want to run and jump and chase and hide because they feel good. By coincidence, these sorts of actions are good for the developing bodies and minds, but that is not why children do them. For young children, play is enough. As they get older, children enter their ‘skill hungry years’. This is the time when they have a drive to learn new skills. They continue to seek out the pleasure of movement, but they also need to have a greater sense of mastery.

Other factors have been found to be important, too. Variety is the spice of life. This is true for physical activities, too.

Some suggest early specialization in a sport is necessary for later success, but evidence shows that children who experience a range of activities are more likely to carry on playing, and they are also more likely to find the activity that becomes a lifelong passion. Even people who grow up to become champions tend to have sampled a range of activities as children, and only focused on one much later in life. So positive early experiences are as necessary for future sporting stars as the rest of us!

Problems arise when we forget the three fundamental rules of child development: • Children are not mini-adults; • Children are not mini-adults; • Children are not mini-adults.

Positive early experiences lay a foundation for a lifetime. It is easy to put children off physical activities; it is much more difficult to turn adults on to them. If we wish to make physical activities normal features of childhood, we need to ensure that the foundations are strong.

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PHYSICAL ACTIVITY & EARLY POSITIVE EXPERIENCES ALL TALK AND NO ACTION?

ALL TALK AND NO ACTION? WE DON’T THINK SO!

By Sarah Lewis, Secretary General International Ski Federation (FIS)

The International Ski Federation (FIS) is committed to the global promotion and development of recreational skiing and snowboarding. The vision of FIS is for skiing and snowboarding to be the first winter sport choice and recreational activity around the world. Research in the mid-2000s has shown that there was a decrease in the number of snow sports participants, particularly youngsters. Bring Children to the Snow is an initiative introduced by FIS to promote snow activities as a healthy and fun recreational activity for children and youth.

The campaign seeks to achieve this vision by encouraging newcomers to snow while adding value to those who are already participating in snow sports. The primary target group for the campaign is children between the ages of 4-14 and their families. Additionally, FIS hopes to motivate teenagers and young adults to stay involved with snow sports.

The campaign is not focused on generating competitors for any particular FIS discipline. ‘Fun in the snow, fun on the snow’ is the motto at its heart. Of course if youngsters show interest and talent, that’s a bonus.

FIS SnowKidz FIS SnowKidz was launched in 2009 and aims to encourage FIS Member National Ski Associations to promote snow sports within their country. It is a unique programme and communications platform that enables organisers around the world to share and showcase events to bring children to the snow. Events can occur at any time and in any place around the world.

For more information visit www.snowkidz.com World Snow Day The World Snow Day looks beyond the FIS membership to the wider snow sports community by encouraging all stakeholders to celebrate all things snow.

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World Snow Day is the biggest day on snow all year. It is staged annually on the third weekend in mid-January.

For more information visit www.world-snow-day.com Fast numbers In the last five years, the campaign has grown at a significant rate. All areas, from communications to events, have seen a minimum 80 percent growth in just the last 12 months.

• 6 events designed to benefit disadvantaged youth and children • 8 nationwide events taking place all over the countryduring the 3rd edition of World Snow Day • 8 global partners: Audi, Eurosport, European Broadcasting Union, Infront, Sanetta, Best of the Alps, FESI and WFSGI • 10 events in the Southern hemisphere across SnowKidz and World Snow Day. • 42 participating countries in the entire campaign • More than 150 resorts with free skiing and snowboarding for 3rd edition of World Snow Day • The largest percentage growth in the campaign has been for FIS SnowKidz events at 374 percent • 610 event organisers for the 3rd edition of World Snow Day • 1,270 World Snow Day events over three editions of World Snow Day • Highest Facebook reach with a single unpaid post 62,396 • 65,572 Youtube video views • More than 110,000 participants at the largest event.

• More than 549,000 participants in the 3rd edition of World Snow Day.

PHYSICAL ACTIVITY & EARLY POSITIVE EXPERIENCES ALL TALK AND NO ACTION?

Integration of WFSGI and promotion of the youth activity The WFSGI is an excellent partner for the FIS Bring Children to the Snow campaign. Since establishing the agreement in 2014 WFSGI has furthered the communication of the Bring Children to the Snow campaign through its communication platforms, provided constructive feedback to help develop it further, facilitated connections to sporting goods manufacturers and aided partnership discussions with brands wanting to associate with activities. These actions have all been very helpful in the continued growth of Bring Children to the Snow.

Bring Children to the Snow action plan FIS is continually striving to develop the services it is able to offer to organisers of Bring Children to the Snow activities.

These now include event planning materials, event management services, digital templates, marketing assistance and materials to help stage events.

WFSGI is a proactive organisation, in tackling the problem of youth inactivity as well as working with projects such as the FIS campaign to try to solve it. FIS looks forward to working with the WFSGI and its members further in the years to come.

As a next step in the campaign, FIS has worked with The Snow Hunter to compile a report of more than 700 resorts worldwide containing children’s lift ticket prices. It is published online and is accompanied by a children’s lift ticket search function to check the prices and see the various initiatives in place for children. The report will be updated with any new information that is communicated.

Through Bring Children to the Snow’s partnership with Audi a series of toolkits has been developed for organisers to help stage events. The materials are free of charge, can be delivered anywhere in the world and, best of all, organisers keep the material after the event for future activities.

Finally Bring Children to the Snow aims to grow even further in the future. The FIS SnowKidz project is well on its way to reach its first goal of 500,000 participants by 2015, and the World Snow Day is aiming to achieve 800,000 participants by 2017 to bring more children to the snow and working with great partners like WFSGI to achieve these goals.

What could be better? Snow, a medal and a bear. World Snow Day Astana (KAZ) © FIS

Sarah Lewis (*1964) has been involved with skiing on both a competitive and administrative level for over 30 years. She was a member of the British Alpine Ski Team from 1982 to 1988 and competed in the 1987 FIS Alpine World Ski Championships and 1988 Olympic Winter Games, as well as many FIS competitions including World Cups and Continental Cups. Sarah Lewis served as Secretary General of the Association of International Winter Sports Federations (AIOWF) from 2000 to 2004 and currently resides as the FIS Secretary General.

Contact: Andrew Cholinski FIS Coordinator Bring Children to the Snow Email: cholinski@fisski.com Phone: +41 33 244 6161 Websites: www.bringchildrentothesnow.com www.world-snow-day.com and www.snowkidz.com Kids were all smiles at SnowKidz in Valle Nevado (CHI) © FIS

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TRADE ENVIRONMENT FOR A NEW GENERATION OF TRADE REFORMS

SPORT CONNECTS PEOPLE – FOR A NEW GENERATION OF TRADE REFORMS

By Roberto Azevêdo, WTO Director-General

Sport connects people everywhere, irrespective of distance, language or culture. When a goal is scored at the Bernabeu in Madrid, the cheers (or groans) are heard around the world. But sport connects us in an economic sense too. A seemingly simple, everyday item like a pair of football boots may actually be the product of a complex, international production network, and be subject to a range of multilaterally agreed rules. Therefore the sporting goods industry – like other global industries – can provide a useful prism through which to view international trade, and to understand how the trading system is evolving.

An important trend in international trade is the expansion of global value chains which presents a number of challenges and opportunities for businesses, and for WTO members. These international production networks are not a new phenomenon, but in recent years further developments in transportation and communications have allowed them to expand and deepen significantly. Almost half of the world’s gross exports today are related to global value chains. Products that were once wholly produced in a single factory or country are now increasingly being assembled from components originating from different countries. This allows countries to develop export competencies by mastering certain tasks, or by manufacturing specific components instead of the entire final product.

Businesses have capitalized on this development, isolating the different tasks in their value chain, and shifting them to the most efficient location. This is commonplace in the sporting goods industry. For example, the research and

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development on those football boots I mentioned above might have taken place in Germany, with the leather sourced in Argentina, the sewing taking place in Cambodia, the laces brought in from India, before the final product is marketed and retailed all across the world. One leading sporting goods manufacturer reports that it has more than 1,200 factories in over 65 countries.

This transformation in manufacturing processes has presented an opportunity for economic development for a number of developing, and least-developed countries. Indeed, data show that developing countries are increasingly involved in international production networks, and SouthSouth global value chains are becoming more important.

While North-South trade through global value chains has remained stable, the share of trade in parts and components between developing countries increased from around 6% of total trade in 1988 to almost 25% in 2013. The sporting goods industry is of particular importance in this context since it is characterised by products such as apparel and footwear, which involve the kind of primary forms of manufacturing in which newly industrializing countries tend to be engaged.

However, access to global value chains is not automatic, and unlocking their development potential can pose a series of challenges for developing countries. For example, the narrowing of production capabilities can make

Ambassador Roberto Azevêdo is the sixth Director-General of the WTO. He began his career in the Brazilian Foreign Service in 1984 and has served in Washington, Montevideo and Geneva. From 2006 to 2008 he was Vice-Minister for Economic and Technological Affairs at the Foreign Ministry in Brasilia. In 2008 he was appointed Permanent Representative of Brazil to the WTO and other International Economic Organisations in Geneva, where he remained until being appointed WTO Director-General in 2013.

TRADE ENVIRONMENT FOR A NEW GENERATION OF TRADE REFORMS

countries more vulnerable to competition, and subsequent industrial relocation. In addition, when competing for the investments that many countries require in order to participate, developing countries can risk being drawn into a race to the bottom on regulatory standards and wages.

This gives you a sense of how complex global trade is, how it is evolving and the many issues involved. These global production networks are good for business and can be good for countries and people involved. Clearly the private sector has an important role to play in supporting developing countries to integrate into global value chains in a positive and sustainable way. But I think that these changes and challenges that I’ve described require a bigger response. I think we need a new wave of trade reforms. Trade supports growth and development around the world – and through the multilateral trading system we can take steps to facilitate trade and provide a more level playing field that helps poorer countries integrate into and benefit from global commerce. In this way the WTO can help to boost trade for the benefit of all.

The reforms to international trade rules which were agreed 20 years ago have played a major role in the broad economic expansion that we have seen since then. But over time the productivity gains from those reforms are gradually disappearing. We are living off the liberalization and reforms of the past. We need to update the rules and implement a new generation of trade reforms which would be so essential for growth and development around the world.

number of non-tariff barriers which affect the sector, increasing transit time and costs.

The first step we need to take is to implement the Trade Facilitation Agreement which was agreed by all WTO members in 2013, as part of the 10 decisions of the “Bali package”. Once implemented, this Agreement will help streamline border procedures across the WTO membership, reducing the time and costs involved in moving goods across borders. In a globalised industry – and one where seasons and the precise timing of collections matter a great deal – speedier border controls are extremely important. I encourage you to look at the potential benefits of this Agreement to your sector.

The Bali package has economic significance for business and for developed and developing countries alike, but it also opened a new chapter for multilateral trade negotiations. In this way the success of Bali created new momentum for further negotiations. It has the potential, still, to change the game. However, WTO Members are now facing a considerable challenge in implementing what they agreed.

The sporting goods industry stands to benefit from the implementation of the Bali package, and from the subsequent resumption of negotiations in other areas. Therefore your support – and the support of the private sector – will be key.

The sporting goods industry would stand to benefit from this – not just because it would help new producers and consumers to enter the trading system, but also because it would help lower barriers to trade. While this sector is economically successful and is a significant generator of employment, it is also the focus of unusually high tariffs. In one WTO member, athletic footwear and apparel comprises less than 2% by value of all imported goods but accounts for 17% of customs duties. Furthermore there are a

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TRADE ENVIRONMENT FIGHTING THE COUNTERFEITING

CUSTOMS IN THE FRONT LINE IN FIGHTING THE COUNTERFEITING OF SPORTING GOODS

By Philippe Vorreux, World Customs Organization – IPR, Health and Safety Programme

The counterfeiting of sporting goods is far from new. Of course, in the mind of the public and, to an extent, that of decision-makers, counterfeiting is generally synonymous with luxury goods and, more recently, pharmaceutical products. However, the diversification, professionalization and increasing scale of counterfeiting means it warrants special attention, not only because of what is at stake, but also because of the measures which can now be implemented to thwart the plans of professional counterfeiters.

By definition, quantifying the counterfeiting of sporting goods is a risky undertaking. Like any illicit trade, only the tip of the iceberg is visible (in other words, the part that has already been subject to checks), and we can only extrapolate, not always reliably, the trends and modus operandi.

However, it would be useful for all stakeholders on the anti-counterfeiting scene (individual States and the private sector) to have precise data so that they can fully understand the challenges and take informed decisions.

Even if it is not easily quantifiable, the impact has some easily identified facets: economic, political, health and social, for States, companies and consumers. Given the (direct and indirect) global costs of the fight against counterfeiting, States and companies have to find a solution to the delicate issue of allocating the few resources available. Sovereign functions or strategic investments are rejected due to a lack of resources. The public, meanwhile, is losing confidence in

a public service which is no longer protecting it and in brands it considers to be of poor quality (and for good reason, because they are fakes!).

These issues are well known, and there is no shortage of initiatives which all contribute to building the gigantic edifice of raising awareness and rationalizing resources.

One of the main players is the World Customs Organization (WCO). Its mission is to improve the effectiveness and efficiency of its 179 members while striking a – fragile! – balance between security and trade facilitation. The fight against counterfeiting clearly enters within its realm of activities.

The key role of the WCO is to carry out discussions at the global level (it would be wrong to consider the solution to be national or even regional), based on a holistic approach which consists of examining the phenomenon in its entirety in order to contribute relevant solutions, essentially in relation to raising awareness (of decision-makers, inspection agencies, companies and the public), coordination, Customs capacity building, and the use of tools and new technologies.

Taking different examples of activities carried out by the WCO to illustrate each of these areas and the holistic approach would be somewhat unsuitable and cumbersome (although the WCO website is extremely instructive). On

117 containers seized in the port of Hamburg, Germany: Counterfeit World Cup football seized © WCO mainly counterfeit sport shoes © German Customs

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Operation Tigre: check of imported sporting goods in Uruguay © WCO

TRADE ENVIRONMENT FIGHTING THE COUNTERFEITING

the other hand, operations to seize counterfeit goods carried out by the WCO provide a comprehensive overview in themselves.

These seizure operations consist of taking a snapshot, at a given time (generally over a ten-day period), of the flows of counterfeit products crossing borders in a given region (generally involving around ten countries), and of drawing the relevant information in terms of identifying counterfeit products, of course, but also, and above all, in terms of risk analysis. The principle here is to control less, but to control better. We can appreciate that it is impossible for a team of five Customs officers to control the millions of containers unloaded each year in a single port.

These operations, designed, organized and co-ordinated by the WCO, involve a strong political will on the part of the Customs administrations concerned and of Right Holders.

During the first three days, WCO experts shed light on the modus operandi of the counterfeiters (in particular the routes and ploys used), risk analysis methods and how they have evolved. Right Holders focus on the distinction between genuine and counterfeit articles. The following seven days are spent in the field (ports or airports) verifying the relevance of the suspect containers selected, interacting with front-line Customs officers, and finally counting and analysing the “positive cases”.

Operation Biyela, organized with co-financing from the International Institute of Research against Counterfeit Medicine (IRACM) took place in April 2013 in 23 African sea ports. The results are enlightening: more than one billion, one hundred million products intercepted, of which almost half are pharmaceutical products.

More recently, the partnership with the sports industry has also given rise to a specific operation dubbed “Gol 14” given the specific issues linked to the 2014 FIFA World Cup. In partnership with the European Commission, the Federation of the European Sporting Goods Industry (FESI) and the Federation of the Brazilian Sporting Goods Industry (MOVE), in March 2014 we worked in thirteen ports in seven Latin American countries, including Brazil, and intercepted more than 510,000 sporting goods in less than ten days. The extrapolations, even the most conservative, are dizzying…

These operations owe their success to the involvement of Customs and Right Holders, and to the use of WCO tools, including the Interface Public-Members (IPM). The beauty of IPM lies in its ease of use, by Customs officers and Right

Holders, and in the way it has evolved. Developed by the WCO in partnership with its future users, IPM was designed as a tool for communication, training and detection for the use of front-line Customs officers, with the ultimate aim of facilitating their task in the fight against counterfeiting (for instance, by providing them with valuable information about habitual shipment routes, contact points for each country, or how to distinguish genuine from fake).

Used by more than 80 Customs administrations worldwide, its Right Holders include users from many WFSGI members.

The mobile version incorporating the GS1 identification numbers now allows Customs officers in the field to use IPM even inside a container and, for instance, to scan the barcodes of a particular product to obtain the information needed to confirm their suspicions in real time. This is nothing less than a revolution which needs Right Holders in order to ensure its long-term viability.

In conclusion, counterfeiting knows no borders, and counterfeiting of sporting goods is unfortunately no exception.

However, it is coming up against Customs, which is committed to achieving its mission to protect society (in the wider sense). The sometimes terrifying results obtained by the WCO in its Customs capacity building activities prove in all cases that the battle is far from over. Victory cannot be achieved in isolation: tangible results cannot be achieved without collaboration from and co-ordination by all stakeholders. One hope remains, however: there is a desire to curb the phenomenon, and the range of possibilities opened up by the use of such tools is infinite. The WCO, small as it may be, is determined to back up its ambitions with resources.

The World Customs Organization (WCO) is an independent intergovernmental body whose mission is to enhance the effectiveness and efficiency of Customs administrations. The WCO represents 179 Customs administrations across the globe that collectively process approximately 98% of world trade. As the global centre of Customs expertise, the WCO is the only international organization with competence in Customs matters and can rightly call itself the voice of the international Customs community.

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TRADE ENVIRONMENT WORLD CUP OF TRADE

WHO WINS THE WORLD CUP OF TRADE?

By Edwin Vermulst and Simon van Cutsem, VVGB Advocaten, Brussels, Belgium

The 2014 FIFA World Cup Brazil ended in July with the cup being assigned to Germany. But which nations compete for the title of most open economy in relation to trade restrictive measures in the area of footwear and textiles? In this overview of developments of trade measures, we look at developments since last year and imagine that all countries participate in a tournament aimed at the fictitious “world cup of trade”.

least) a yellow card for initiating reviews of anti-dumping measures on polyester-textured yarn from China, Malaysia, Indonesia; on textured yarn of nylon or other polyamides, measuring per single yarn more than 50 tex from China; on woven fabrics of synthetic filament yarn from China, Korea, Chinese Taipei, Thailand and Malaysia; and on blankets and long pile fabrics of synthetic fibres and others of man-made fibres for blankets, from China.

This year’s tournament started with an overall positive development since, as expected, the transitional productspecific mechanism available against imports from China expired in December 2013. In addition, several countries made good progress in the game as they ended safeguard measures on products such as socks (Dominican Republic) and woven fabrics (Indonesia and Thailand). In the match opposing the EU and the US over an old WTO dispute concerning the disbursement of import duties (the so-called Byrd amendment), the EU made a good move by decreasing the import duty on women’s trousers from the US from 15% to 0.35%. Argentina played a good game as well and terminated the anti-dumping investigation on towels from Brazil. A lot of fair play was seen as well from Pakistan that did not impose definitive duties on polyester staple fibre from China. In addition the anti-dumping duties Pakistan had imposed on polyester filament yarn from Indonesia, Korea, Malaysia and Thailand expired on 3 December 2013, though the referee should have indicated an “offside” at Pakistan imposing definitive duties on polyester staple fibres from Indonesia, Korea and Thailand. Peru scored some points by terminating the anti-subsidy investigation into cotton fibre, not carded or combed from the US.

Unsporting behaviour was shown by Mexico which postponed an expected duty decrease on footwear by four years, imposed provisional anti-dumping measures on blankets of synthetic fibres from China and extended for five years the measures on short-fibre polyester from Korea. The referee should have whistled at Indonesia for increasing the import duties by 5% on certain footwear for importers that have a registration number; for extending until 2017 the safeguard measures on cotton yarn other than sewing thread; and, for initiating anti-dumping investigations into different types of yarn from China, India, Korea, Malaysia, Chinese Taipei and Thailand.

Argentina was given red cards by the WTO Panel in its matches against the EU, Japan and the US over its “Sworn Prior Import Statement” requirements. Turkey used a substitute and replaced the expiring safeguard measures on footwear by increased import duties. Turkey scored a home goal by extending for another two years the safeguard measures on travel goods, handbags and similar containers and by extending the anti-dumping duties on polyester synthetic staple fibres from China. Turkey also deserves (at

Faults were further committed by many countries, be it concerning footwear (e.g. Brazil), apparel (e.g. Argentina, Brazil, Peru) or raw materials such as yarns (e.g. Brazil, Korea, India).

Who wins the cup may be difficult to say since our list is not exhaustive but it is clear that Asian countries remain, as before, targets of trade defense measures, especially against their exports of raw materials and fabrics.

Contact: Edwin Vermulst: edwin.vermulst@vvgb-law.com Simon van Cutsem: simon.vancutsem@vvgb-law.com

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TRADE ENVIRONMENT GLOBAL TRADE RESTRICTIVE MEASURES

OVERVIEW OF GLOBAL TRADE RESTRICTIVE MEASURES IN THE FOOTWEAR & TEXTILES SECTOR* Updated November 2014

For more information visit the Trade Committee at www.wfsgi.org. WFSGI members go to the Member Area for the complete and regularly updated overview and background information.

Importing country

Argentina

54

Sector

Targeted countries of origin

Type of measure

Footwear

All

Sworn Prior Import Statement (DJAI), Prior information on planned imports, Sworn Declaration of Product Composition (DJCP), Increased import tariff on footwear parts, Reference values for several countries like India, Indonesia, Malaysia, Vietnam, China, Brazil, Pakistan, Laos and Cambodia

Raw Materials, Fabrics & Apparel

All

Sworn Prior Import Statement (DJAI), Prior information on planned imports, Sworn Declaration of Product Composition (DJCP)

Raw Materials & Fabrics

Certain groups of countries including China and Vietnam

Updated reference values

Raw Materials, Fabrics & Footwear

China

Anti-dumping

Apparel

Certain groups of countries including China and Vietnam

Reference values

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TRADE ENVIRONMENT GLOBAL TRADE RESTRICTIVE MEASURES

Footwear Brazil

Chinese Taipei Ecuador Egypt

Raw Materials & Fabrics

China

Anti-dumping

All

Import licensing & Public procurement

Indonesia

Anti-Subsidy & Anti-dumping

China, Korea, Thailand & Chinese Taipei

Anti-dumping

Apparel

All

Safeguard & Public procurement

Accessories

All

Public procurement

Footwear

China

Anti-dumping

Footwear

All

Tariff increase & Non-tariff trade barriers

Apparel

All

Tariff increase

Raw Materials, Fabrics, Footwear, Apparel & Accessories

All

Technical Barriers to Trade

Raw Materials & Fabrics

All, excluding some developing countries

Safeguard

China

Anti-dumping

China, Vietnam, India

Anti-Subsidy

EU

Raw Materials & Fabrics

India

Raw Materials & Fabrics

All

Safeguard

Footwear & Apparel

All

Non-Automatic Import Licensing & Tariff increase

Indonesia

Korea

All, excluding some developing countries

Safeguard

Raw Materials & Fabrics

China, Chinese Taipei, India, Korea, Malaysia, Thailand

Anti-dumping

Accessories

All

Tariff increase

Raw Materials & Fabrics

China, Malaysia, Chinese Taipei

Anti-dumping

China

Negotiated measure

All

Import Licensing & Tariff increase

Raw Materials & Fabrics

Korea

Anti-dumping

Apparel

All

Non-Automatic Import Licensing & Onerous labelling requirements

Accessories

China

Anti-dumping

Raw Materials & Fabrics

Indonesia, Korea & Thailand

Anti-dumping

Footwear

China & Vietnam

Anti-dumping

Raw Materials & Fabrics

China, India, Pakistan

Anti-dumping

Apparel

China

Anti-dumping

Footwear

All

Reference Price Mechanism (customs internal measure to secure a minimum customs value)

Raw Materials & Fabrics

All

Safeguard & Non-tariff trade barriers

Apparel

All

Non-tariff trade barriers

Footwear

All, excluding EU/EFTA, Israel, Macedonia, Bosnia and Herzegovina, Morocco, the West Bank and Gaza Strip, Duty increase Tunisia, Egypt, Georgia, Albania, Jordan, Chile, Serbia, Montenegro, Kosovo, South Korea, Mauritius

Raw Materials, Fabrics & Apparel

All

Tariff increase

Raw Materials & Fabrics

Egypt, Malaysia, Pakistan, Thailand, Vietnam, China, India, Indonesia, Korea, Chinese Taipei

Anti-dumping

Accessories

All, excluding some developing countries

Safeguard

Accessories

China

Anti-dumping

Footwear Mexico

Pakistan Peru

Russian Federation

Turkey

* Non-exhaustive list

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RETAIL CONCEPTS DIGITAL RETAIL

NAVIGATING THE NEXT PHASE OF DIGITAL RETAIL

By Keith Anderson, Vice President, Strategy & Insights, Profitero

Remember when technology was simply a “sector” — one of many discrete industries? Today technology is pervasive, embedding itself in all areas of commerce — including sports and fitness.

Sensor-enabled wearable devices have health and fitness at their core, promising better athletic performance and fewer injuries. Action-cam-equipped drones capture events from new angles, enriching the spectator experience. The merging of the physical and digital will undoubtedly change sport in profound, unexpected ways.

Technology is also transforming retailing, and perhaps at a greater pace. In many developed markets (like the US and the UK), total retail sales are growing 3 to 5% year-overyear; digital retail is outpacing this growth by three times at a run-rate of approximately 15% year-over-year. In some regions, breakout players like Amazon are outpacing total online sales growth by an additional 1.5 to 2 times, capturing unprecedented share and disrupting established channels with seemingly endless selection, dynamic pricing, and an economic model that thrives on paltry profits.

And according to data from Deloitte, the stakes are even higher: in the US, greater than 50% of all retail sales are estimated to be “digitally-influenced,” with decisions about where to shop and what to buy being researched digitally before or during a trip to a store.

No one can predict everything on the horizon. But candid, frequently calibrated assumptions and new ways of working can help leaders develop the agility to manage accelerating change. Here are several “working assumptions” to consider: • D igital will account for as much as 20% of retail sales in 2020. Precise forecasts vary by market, and their accuracy is often questionable. But consider that Millennials—digital natives who already make a disproportionate share of their annual purchases online — are just entering their peak earning, peak consumption

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life-stage. And that brick-and-mortar retailers are shifting capital from net store growth to enabling flexible online fulfillment options like click-and-collect and ship-from-store. Through this lens, digital commerce may still be in its adolescence.

• Stores will be re-imagined. Stores may never match the “endless aisle” of selection that pure-play online retailers boast. But they do benefit from proximity to where people live, work, and play; trained staff who can advise on purchase decisions; and physical product displays—enabling shoppers to actually see and feel a product before buying.

Still, the rapid growth of e-commerce will force repositioning. In many segments of the market, store networks will be “right-sized,” leading to fewer, smaller locations with tighter inventories. And these future stores will be reengineered to leverage their strengths efficiently.

Consider Hointer, a brick-and-mortar apparel chain founded by a former Amazon logistics executive, that uses automation to optimize labor and inventory. In a small showroom with a single display item for each style, the entire process of selecting, fitting, and paying for a product is automated.

• Transparency will increase. The threat of “showrooming” was overstated, but shoppers unquestionably have more information and power than ever before.

While shoppers research products’ prices, reviews, and other key information occasionally, retailers and brands are beginning to systematically monitor the online retail environment to put themselves on more even footing with both shoppers and competitors like Amazon, which pioneered the use of competitive online price intelligence to optimize prices dynamically.

With more than 5â&#x20AC;&#x2122;500 specialist sports stores in 44 countries, INTERSPORT has the worldwide leading position in the sporting goods retail market.

Visit us at www.intersport.com

RETAIL CONCEPTS DIGITAL RETAIL

Dynamic pricing hints at the data-driven future of retailing 120 %

100 %

100 %

88 %

80 % 60 % 40 % 20 %

13 %

0% Academy

Amazon

Amazon MP

3%

6%

DSG

Sports Authority

% of products with price changes (N = 100 products, Sep 1 - Sep 15, 2014)

In September 2014, Profitero monitored 100 sporting goods products’ prices at Amazon and several US online competitors like Dick’s Sporting Goods, Sports Authority, and Academy Sports. Amazon and its third-party marketplace changed prices much more dynamically than competitors, with 100% of the products on Amazon and 88% of the products on the third-party Amazon marketplace changing price over the 2-week period, versus 13% for Academy, 6% for Sports Authority, and 3% for Dick’s Sporting Goods.

So, how to navigate this period of accelerating change?

• Be present. Many leaders agonize over whether digital is incremental or accretive to earnings. It may not be in some cases, and caution is wise. But don’t lose track of upstart competitors with nothing to lose. If you aren’t present where shoppers expect to find you, competitors will be.

•

•

Establish a fact base. Despite the promise of better measurement, many companies are still “flying blind” without sufficient insight into how their products are priced, promoted, or displayed online—or how their competitors compare. Digital’s influence is too large to leave to chance.

Don’t mistake technology for strategy. Given the pace of innovation, it’s tempting to chase each shiny new object hyped by the press. Flashy experiments can serve a purpose for branding or publicity, but digital strategy that moves the needle has to be scalable and impact shopper behavior in a meaningful way.

•

Make someone accountable and everyone responsible. Given the pervasiveness of technology’s impact, all roles need a foundational digital vocabulary and competency. Plan to invest in broad-based training and development.

•

Pick your partners carefully. As Google, Apple, Amazon, Facebook, and other technology companies entrench themselves in retail media, payments, and logistics, only the largest companies will be able to build or buy their own proprietary capabilities (versus partnering). Carefully evaluate the economics and data governance of these partnerships to ensure the health of your long-term interests.

These are exciting and uncertain times in retailing. The companies with well-considered priorities, forward-looking cultures, and the right capabilities have much to gain.

Keith Anderson is vice president, strategy & insights, for Profitero, a leading global provider of online insights and e-commerce intelligence for retailers and brands.

An industry analyst and trusted advisor for global retailers and brands including Target, Best Buy, New Balance, Franklin Sports, Unilever, P&G, and Coca Cola, Keith’s insights on technology and retail have been featured in Financial Times, Forbes Magazine, Shopper Marketing Magazine, and Strategy Magazine.

He can be reached at keith@profitero.com or @KeithAnderson.

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RETAIL CONCEPTS THE OMNI-CHANNEL CONSUMER

SPORTING GOODS RETAIL – GETTING IN SHAPE FOR THE OMNI-CHANNEL CONSUMER

By Jörn Küpper, Director and Leader of McKinsey & Company’s European Consumer Practice

A young man stands in front of a sports shoe rack in a department store. A pair of basketball shoes catches his attention: he pulls out his smartphone and scans the barcode on the price tag. Within seconds, the display shows price results of hundreds of online retail sites for the particular shoe, with some prices significantly lower than the department store’s price.

As he is about to click on the lowest price, an app notifies him that he can buy a personalized version of the shoe directly on the manufacturers’ web shop. Intrigued by this offering, he follows the link to the mobileoptimized website, configures his customized pair of shoes using a picture from Instagram as a print motive, and purchases it online on the spot (accepting a higher price for the personalization feature). Finally, he clicks on the website’s Twitter link to share his purchase with friends.

While this scenario may have sounded like a “tech nerd” anecdote just five years ago, it has come to represent a very typical consumer decision journey in 2014. McKinsey iConsumer research shows that 44% of US apparel buyers use multiple channels in their purchase decisions, and 45% of apparel buyers have recently bought clothing online. In addition, multichannel shoppers are more valuable customers, having a monthly average clothing spend more than twice as high as that of offline-only shoppers (US$112 vs. US$53).

The latest-generation smartphones have sharply increased mobile’s influence on the purchase journey: 35% of US consumers regularly use their smartphones for product and price information, and 16% of them regularly turn to their mobile device for information when shopping in physical stores. Also, traffic from mobile devices already makes up to 40% of overall website traffic at some leading online retailers.

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Sporting goods as a “digital battleground” Apparel (and particularly sporting goods) is at the very center of this omni-channel consumer transition, in line with other categories currently forming the “digital battleground” – categories in which digital has not fully taken over the decision journey (yet), but where already a majority of purchases are digitally influenced in some form.

Sporting goods manufacturers and retailers must quickly get in shape to fully cater to these further increasing digital and omni-channel consumer needs – to both defend against aggressive online innovators and price breakers, and to fully leverage opportunities for sales growth and increased customer loyalty. There are four “must-haves” required to stay relevant and on top of the game in today’s omni-channel world: 1. Rigorously use data to improve customer experience: The explosion of data and analytics in the digital age can (and should) be leveraged to continually identify channel pain points and opportunities. For instance, customer and web analytics data provide insights on customer preferences that can be used for tailored CRM/CLM approaches. Furthermore, it’s astonishing how much competitive information you can get outside-in, from comparing on-site funnels with clickstream panel data to obtaining real-time price benchmarks with easy-to-use web-scraping technologies.

Amazon still sets the standard when it comes to a nearly fanatic use of data for optimization and customization of offerings. But offline retailers are also stepping up their data usage: US apparel retailer Hointer provides customers with real-time inventory transparency via mobile devices and runs a heavily automated store back-end, keeping inventory levels and staff per location at a minimum while providing personalized customer service. Not leveraging these data opportunities is simply not an option anymore if companies don’t want to get left behind in the race for customer access, attention, and loyalty.

RETAIL CONCEPTS THE OMNI-CHANNEL CONSUMER

2. Think “mobile first”: As our mobile price comparison anecdote showed, mobile is quickly moving toward becoming the dominant influencer of omni-channel consumer decisions. And the list of mobile innovations goes on – from virtual loyalty cards to mobile payment options, mobile should be a top priority in improving the customer experience.

Another key application area is geo-targeted marketing: with apps such as Shopkick, customers can receive rewards and promotion vouchers when they’re near or entering a retailer store, directly stimulating store traffic and conversion with perfect timing. Adidas used geo-targeting in India to boost awareness of new product launches, targeting not only customers close to its own stores, but also at youth “hang-outs” and sports activity areas.

3. Focus on omni-channel features that really add value: To date, “Click & Collect” is the one omni-channel feature that still stands out, with some fashion retailers having up to 30% of online orders picked up at their offline stores, providing the opportunity for additional offline sales during the pick-up visit.

Other omni-channel features, such as in-store terminals with web access, have often proven to be more of a marketing gimmick than a true business driver – but dynamics are changing here, too. Foot Locker significantly boosts conversion and online orders with digital in-store displays and handheld-equipped sales staff (particularly for sold-out items), and virtual stores, such as Comptoir-des-Cotonniers’ 10,000 additional touchpoints at public places in France, intelligently link the digital domain with the offline world.

Jörn Küpper joined McKinsey & Company, Inc. in 1997 and is a Director in McKinsey’s Cologne office. Mr. Küpper serves European consumer goods companies and retailers, with a focus on topics related to strategy, sales, and supply chain. He is the leader of the Consumer sector in EMEA. Prior to joining McKinsey, Mr. Küpper worked at an advertising agency, focusing on marketing and strategy. His recent engagements include:

• Leading the global transformation of a large apparel company towards a new operating model

• Supporting a leading multi-category retailer in developing a multi-channel strategy, including M&A and business building

• Developing a five-year strategy plan for a leading FMCG com-

pany, with a strong focus on momentum growth and capturing scale advantages

4. Live omni-channel from the top: Moving toward an omni-channel setup is clearly a top-management task that can’t be managed on the side. Especially in the transition phase, many companies successfully use a dedicated Center of Excellence for building key omni-channel services and features, directly reporting to top management and thereby overcoming internal cross-functional barriers and “channel silos”.

The introduction of targeted omni-channel KPIs and incentives, appropriate training of sales staff, and clear topmanagement communication of omni-channel targets and ambitions are additional key elements in getting a company ready for the new reality.

Taking all these aspects together, the move toward a true omni-channel setup often comes with fundamental changes to established ways of working – a significant challenge for traditional sporting goods retailers, but also one without alternative.

McKinsey iConsumer: sporting goods and apparel as ‘‘digital battleground’’ 70

Digital battleground

Gone digital

Researched online 1

60 50 40 30

Still in store

20 10 0

15

30

45 Purchased online

1

60

75

1

As percentage of those who bought a product in the respective category in the last 6 months

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Connecting Connecting Global Global Competence Competence

To be one of the top players in the sports business you’ll need to know where the top is. This means always being up-to-date on industry news and the latest trends, and having quick and convenient access to the right contacts. ISPO offers it all — unique services like ISPO OPEN INNOVATION (crowdsourcing platform), ISPO COMMUNITY (interactive voting platform) and ISPO ACADEMY (continuing education programs for the sports business). What are you waiting for? Benefit from these and many more services. Up close and personal at ISPO MUNICH, ISPO BEIJING and ISPO SHANGHAI and 365 days per year at ispo.com SPORTS. BUSINESS. CONNECTED.

WFSGI FULL SERVICE FOR THE INTERNATIONAL SPORTS BUSINESS

ISPO – FULL SERVICE FOR THE INTERNATIONAL SPORTS BUSINESS

By Klaus Dittrich, Chairman/CEO Messe München GmbH

Cooperation for the sports business: ISPO and the World Federation of the Sporting Goods Industry have worked together for a very long time and have always been a part of the development of the sporting goods industry. We are pleased to continue the joint work with WFSGI to support all industry participants and promote the global development of the industry.

With its multi-segment exhibitions ISPO MUNICH, ISPO BEIJING and – new as of next year - ISPO SHANGHAI, ISPO offers international presentation and networking platforms for all sports business professionals. At the same time, ISPO is a trendsetter, always keeping up with the times, analyzing social changes and supporting new developments. Currently, our society’s increasing awareness of healthcare and wellness, and the interaction of healthcare, sports and lifestyle offer a plethora of new opportunities for the sports business.

Therefore, in 2015, ISPO MUNICH will once again dedicate an entire exhibit hall to this sector, and also focus on Corporate Health Management and Wearables/Mobile Health.

The side event program with high-caliber experts offers information on topics such as the reasons why sports are able to improve physical and mental well-being. A special focus will be on how to actively involve children in sports, since a lack of physical activity at an early age can result in serious health and economical issues for our entire society.

Therefore ISPO is dedicated to supporting the WFSGI initiative for physical activity.

The crowd-sourcing platform ISPO OPEN INNOVATION actively integrates experts and consumers into companies’ development processes. As co-creators, customers are part of the new product development from the beginning and experts provide technical solutions. As product testers they evaluate the new products prior to market introduction and provide comprehensive feedback. This allows companies to consistently optimize product development and increase customer loyalty for products and brands.

The new ISPO BUSINESS PROFILE also fosters direct communication between companies and consumers. Companies use an individualized profile to represent their business online, and consumers provide the companies with valuable input. The direct contact with consumers provides companies with direct insight into their demands and wishes, and allows them to develop more closely targeted products and intensify customer loyalty programs.

Other ISPO services also focus on new products, trends and knowledge sharing. ISPO AWARD, ISPO BRANDNEW and ISPO TEXTRENDS, ISPO JOBS and ISPO NEWS always keep the industry up to date, and the ISPO ACADEMY offers industry-relevant continuing education – on a global level and all year long.

ISPO is the full-service partner for the international sports industry – not just during an exhibition, but 365 days per year. Early on, ISPO recognized the strong influence of digitalization on the entire industry, and designed its services accordingly. The most recent new services are ISPO OPEN INNOVATION and ISPO BUSINESS PROFILE.

For more information on ISPO and its services, please refer to www.ispo.com.

Healthcare, sports and lifestyle offer new opportunities © Messe München GmbH

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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.

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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

ABOUT US 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 formed by sports and sportsinspired leisure brands, manufacturers, suppliers, retailers, national/ regional federations, industry and trade associations and all sportinggoods-industry-related businesses. The WFSGI plays a strategic role in the support and promotion of the sporting goods industry worldwide.

www.wfsgi.org @WFSGI

EUROPE/AFRICA

Martin Kuenzi Intersport International Corp./ Switzerland

Jeroen SnijdersBlok Accell Group/ Netherlands

Christian Voigt Puma/Germany

Alberto Zanatta Tecnica Group/Italy

John Larsen New Balance/USA

Li Ning Li Ning/China

EXECUTIVE NOMINATION

Klaus Dittrich Messe Munich GmbH/Germany

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

Michel Perraudin MP Consulting/ Germany

Wolfgang Schnellbuegel Sport2000 International/Germany

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

Klaus Uhl uc uhl consulting, WFSGI Treasurer

EX OFFICIO

Charles Yang Apache Footwear/ China

James Zheng Anta Sports Products Limited/ China

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

Robbert de Kock WFSGI Secretary General

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

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WFSGI COMMITTEES AND ACTIVITY REPORTS 2014

WFSGI BICYCLE COMMITTEE ACTIVITY REPORT 2014 The WFSGI Bicycle Committee continued its growth in 2014. The election of a new management at the UCI described a challenge for the collaboration with the federation, but more over a unique opportunity to strengthen ties between the Bicycle Committee and its main partner.

The industry was granted since April 2014 with one seat in the UCI Equipment Commission. In an official election at the Steering Committee meeting at Taipei Cycle Show the WFSGI members elected WFSGI Secretary General Robbert de Kock to take this seat.

Bicycle Manufacturing Initiative In summer 2014 WFSGI together with EBMA (European Bicycle Manufacturing Association), Accell Group and Porsche Consulting started an initiative to keep flexible production close to markets. The collaboration was split in three successful meetings during the 3rd quarter of 2014. Starting with an on-site factory analysis, followed by a public information meeting at Eurobike show and finalized with a customized workshop at Porsche in Stuttgart. A follow-up program to this initiative is expected soon.

Disc Brake Working Group During the Technical Committee meeting at Taipei Cycle Show the Bicycle Committee decided to install a working group on the introduction of disc brakes in road racing. The group created a list of milestones which have to be achieved before the introduction. Performance, safety and usage in racing of different systems have been discussed and will help the group to decide on a final introduction date.

Outlook 2015 A finalization of the roadmap for the introduction of disc brakes in road racing is aspired just as an agreement on the wheel approval procedure. The newly established Saddle Committee will start its work together with the UCI to improve the regulations for bicycle saddles and to guarantee health and comfort in combination with the best performance while riding bicycles.

Wheel Committee The change in the UCI management involved a change in their intention for the new wheel approval procedure. The industry in collaboration with the UCI agreed on a new Failure-Onset Energy test proposal. In a life-testing at one of the WFSGI members laboratories both parties will determine detailed parameters early in 2015.

The Bicycle Committee not only gives you a voice towards the UCI on all technical topics, it also provides you with a unique network within the entire bicycle industry.

Saddle Committee The WFSGI created a Saddle Committee to support the UCI in their intention to renew the regulations for saddles in road racing. The group was compiled out of current WFSGI members, but also new ones joined to support the group with their specific know-how in terms of saddle design and manufacturing.

Bicycle CSR Project The pilot group for the Bicycle CSR project further proceeded their tremendous efforts in installing a CSR auditing system for the bicycle industry. The work progressed again during 2014 and a launch of the program is planned for 2015.

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Membership not only brings you directly to the source of valuable knowledge, but also the opportunity to participate and have influence on current and future hot topics such as CSR, IPR and manufacturing.

CHAIR BICYCLE STEERING COMMITTEE

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

Jeroen Snijders Blok COO, Accell Group

Yves Moeri WFSGI Communication and Bicycle Manager

WFSGI COMMITTEES AND ACTIVITY REPORTS 2014

MEMBERS

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

Tim Gerrits Product Manager, Shimano Europe

Bernhard Johanni Director Product Development Europe

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

Paul Lew Director of Technology and Innovation, Reynolds Cycling

Tony Lo President, Giant

Robert Margevicius Executive VicePresident, Specialized

Claudio Marra Managing Director, FSA

Pierre-Jean Martin CEO, Corima

Morgan Nicol AeroDesign

Scott Nielson Director of Engineering, ENVE Composites

Gervais Rioux President, Argon 18

Martin Schuttert Koga

Lorenzo Taxis Group Head of Marketing & Communication, Campagnolo

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

Marc van Rooij President, Shimano Europe Holding BV

Martin Walthert Vice President R & D, DT Swiss

Phil White Cofounder, Cervelo

René Wiertz President & CEO, 3T Cycling

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COMMITTEE ON INTERNATIONAL SPORTS ORGANIZATIONS (CISO) ACTIVITY REPORT 2014 CISO represents the WFSGI as the industry consensus voice to all sports federations and organizations. The Committee maintains relations and involvement with International Federations (IFs) and sport organisations on all sporting-goodsrelated issues including kit and advertisement regulations and other support programmes on topics such as: Corporate Responsibility (i.e. WFSGI Pledge for the FIFA Quality Program) and Physical Activity & Sport Promotion (i.e. FIS Bring Kids to the Snow).

Sochi 2014 Winter Olympics As the industry representative within the Olympic Family WFSGI was present during Olympic Games in Sochi and supported its members to mediate with the organizing committee, NOCs and/or other stakeholders in cases of uncertainty related to Manufacturer Identification. In the runup of the Games WFSGI provided its members with technical accreditations and tickets for hospitality programmes.

Rule 50 Guidelines Rio 2016 The industry is already looking ahead and working towards the next Rio 2016 Summer Olympic Games. After London 2012 the expectations are high and concerning Rule 50 a review may be expected. WFSGI has a good relation to the IOC, and important discussions between the Committee and the IOC took place in Q4 2014 (after the editorial deadline).

Rule 40 â&#x20AC;&#x201C; an industry challenger Since many years WFSGI has been lobbying for the unique position of the sporting goods industry at the Olympic Games. As personal outfitters of the Games the advertisement restriction during the Games period has a great negative impact on our industry; especially on the day-to-day business. New developments at the IOC are promising, and WFSGI is looking forward to the final outcome of the Rule 40 Working Group that has been installed at the IOC.

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IOC/WFSGI - MoU The effort continues to renew the Memorandum of Understanding (MoU) between the WFSGI and the IOC. A first meeting between the WFSGI President and IOC President Dr Thomas Bach took place in January that has set the tone and directions for further collaboration. The MoU shall comprise a full package and hopes are high that a document shall be signed in Q1 2015.

Industry support across international sport events 2014 was characterized by major international sport events.

Throughout the year WFSGI supports the exchange between members and international sport federations upon request. This year WFSGI has provided accreditations for the Asian Games 2014 that took place in Incheon, South Korea. WFSGI had first discussions with the organizing Asian Olympic Committee to foster relations. Last, but not at all least, WFSGI supported its members on Manufacturer Identification issues in relation to the Commonwealth Games and the FIFA World Cup Kits.

Relations to IFs The WFSGI Pledge for the FIFA Quality Program for licensed soccer balls continues on a day-to-day basis. WFSGI and its swimwear manufacturers are following up on their quest to seek standardization for the various product identification rules across international swimming events. With the IOC looking at changes to Rule 50 this will likely have an impact on this issue and the group will pick up and continue the project when the IOC position becomes clear. We especially thank FIFA, IRB, UCI, FIS and ITU for their good cooperation.

WFSGI COMMITTEES AND ACTIVITY REPORTS 2014

First-hand information & exchange The WFSGI is accepted by almost any International Sports Federation as the only legitimate voice of the sporting goods industry. Therefore, being member of WFSGI in general and this committee in particular is providing any brand not only the access to first-hand information from

federations and other stakeholders but also the possibility to share oneâ&#x20AC;&#x2122;s opinion with other brands. The WFSGI general meetings and committee sessions provide an ideal platform for networking and lobbying that can influence the way relevant topics are being treated.

CHAIR

MEMBERS

Wolfgang SchnellbĂźgel Chairman, SPORT 2000 International

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

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

Marc Pinsard Deputy Senior General Manager Global Sales & Marketing Division, Asics

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

Rachel St. Peter Senior House Counsel, Under Armour

Jochen Schaefer WFSGI Legal Counsel

Stefanie Burkert WFSGI Project Manager

Christina Li Public Relations Director, Li-Ning

Misa Maeshima Sports Promotions Division Event Promotions, Mizuno

EX OFFICIO

Christian Voigt Senior Head of Global Sports Marketing & Sports Law, Puma International Division

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

Robbert de Kock WFSGI Secretary General

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CORPORATE RESPONSIBILITY (CR) COMMITTEE ACTIVITY REPORT 2014 A high level of awareness and preparedness has never been more important than today for brands, retailers and manufacturers to be able respond to rapidly emerging and fast changing societal, social and environmental trends. Ignoring these trends can have tangible commercial impacts. In this spirit and mode the CR Committee acted and managed its collective work in 2014.

Examples for critical trends are tightening regulatory frameworks, changing expectations by stakeholders about the role of business, new scientific findings as well as technological innovations. These can pose many challenges but also opportunities for the sporting goods industry.

In 2014, e.g., we saw the growing impact and influence of social media campaigns on customers and consumers by spreading messages that form public opinions.

In 2014, 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 sharing services The CR Committee further strengthened its work in more frequently sharing information with other CR Committee members and provided regular updates.

One of these update tools are the regular publication and distribution of the “CSR Heads-up Report” that outlines important country-specific developments in major sourcing countries.

Specific update sessions at CR Committee meetings were related to: • most important developments as arising from the regulatory environment impacting the sporting goods industry like the EU Environmental Footprint, non-financial reporting and changes in the local labour law in key sourcing countries; • programs and approaches as managed by other industry alliances or individual companies in addressing corporate responsibility topics like the development of metrics for

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measuring the environmental footprint of products and manufacturing processes or the management of chemicals in upstream supply chains; • reviewing certain stakeholder/advocacy group activities impacting the sporting goods industry.

Promoting collective initiatives In 2014, the CR Committee continued to promote the New York-based non-for profit organization Fair Factories Clearinghouse (FFC).

This action step supports the industry-wide goal to achieve greater audit harmonization and 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 that under the lead of the WFSGI has set up a supplier compliance program. 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 from all over the world. As for the scope the manufacturers have to proof their compliance with the principles set forth in the WFSGI Code of Conduct.

Today the WFSGI is no longer only providing this service for football licensees but also for the FIFA Preferred Turf manufacturers and the companies providing FIFA with the Goal Line technology.

WFSGI COMMITTEES AND ACTIVITY REPORTS 2014

CHAIR

VICE-CHAIRS

Frank Henke Global Director Social & Environmental Affairs, adidas Group

Zoe Cokeliss CR Communications Manager, Pentland Brands

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

Minako Yoshikawa General Manager CSR, Asics

MEMBERS

Norman Cook Executive VicePresident, Kamik

Reiner Hengstmann Global Head Environmental & Social Affairs, Puma

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

Toshiaki Mizuno Senior Manager, Presidential General Affairs Office, Mizuno

Abel Navarette Director of Corporate Responsibility, Columbia Sportswear

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

EX OFFICIO Robbert de Kock WFSGI Secretary General Jochen Schaefer WFSGI Legal Counsel Rudger Oldenhuis European Corporate Counsel, Shimano

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

George Liu Yue Yuen Industrial Holdings Ltd./Hong Kong

Outlook 2015 Following a comprehensive review of the CR Committee strategy and related programs conducted in 2014, the direction 2015+ will address the following critical subjects: • Development of core positions for corporate responsibility subjects to present the sporting goods industry’s point of view and to drive engagement with supranational institutions shaping and influencing the global CSR agenda • Strengthening the profile and the visibility of the WFSGI CR program and best practices as operated by WFSGI members

Marc Magnus WFSGI Trade and Corporate Responsibility Manager

• Promoting the commitment of members in driving continuous improvement and best practice approaches in meeting the WFSGI model code of conduct The WFSGI CR Committee – your opportunities With the CR Committee the WFSGI offers a great opportunity and place for companies to learn and share about leading social and environmental practices as applied in the industry; through their collaborative work members develop common positions and utilize synergies in driving the sustainability agenda.

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LEGAL (IPR) COMMITTEE ACTIVITY REPORT 2014 A fresh impulse to the Legal Committee’s activities Since its existence, the Legal Committee (LC) has primarily dealt with intellectual property-related matters. Over time it was acknowledged the growing need for addressing new specific legal concerns. Following the role model of other successfully operating WFSGI committees such as the CSR Committee, it has been jointly agreed upon, during the last WFSGI meetings in Munich (January 2014), to change the LC’s membership structure and also to broaden the contents of the projects and tasks the Committee will be pursuing.

The reason for this move is notably to provide additional tangible industry-related valuable services and information for our members.

The new dynamics deployed by the Legal Committee An efficient member structure comprising in-house legal experts The world has become more complex and this applies definitely also for any legal issues and topics WFSGI member companies are confronted with not only in their own country, but increasingly at international, if not global level. In order to be able to provide quality service to our membership, it requires experts in diverse areas, who in their daily work are handling such matters and hence are familiar with the topics pertaining thereto. It therefore made a lot of sense to reach out to the WFSGI companies, to identify the in-house legal experts and to ask them to become members of the Legal Committee. In Summer 2014, we got the commitment of leading brands such as Adidas, Asics, New Balance, Nike, Shimano, the Pentland Group, Umbro, Under Armour and others represented by their respective in-house legal counsels, who are now forming the new Legal Committee.

Additional contents targeting even more directly the members’ needs While in the past the WFSGI’s Legal (IPR) Committee has been primarily focusing on intellectual property-related matters, time came to significantly broaden the scope of its work. Yet it seemed important that the new members of the Committee defined themselves, which areas were in their view and based on their experience of significant relevance for the sporting goods industry, and which the Legal

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Committee should handle. With the very active and professional assistance of the new WFSGI project manager in this area, Charlotte Giudicelli, a trained lawyer herself, a questionnaire was sent out to the new prospective committee members asking them to provide us with a list of topics they feel the Legal Committee should deal with.

Deriving from the conference call held on September 8, 2014, a list has been developed, which includes the following potential topics suggested to be covered in the near future by the Committee: • Product liability • Product requirements, such as labeling, country of origin rules • Companies’ data protection and privacy issues • Corporate governance such as bribery, sharing best practices • Specifics of online distribution and other distribution issues • Lobbying IPR issues including at World Customs Organization Level • Global compliance issues and other topics of relevance Coming developments: • Early October 2014: priorisation of the above subjects • February, ISPO Munich 2015: LC face-to-face meeting To keep up the momentum towards concrete solutions: The WFSGI Project to Fight Online Intellectual Property Infringements By using the specialized services of the WFSGI’s trusted cooperation partner, company Convey SRL in Torino, Italy, we have been able as very first industry federation to collectively combat intellectual property rights infringements on the World Wide Web by systematically screening the Internet and thousands of web pages in a split of a second to identify not only the misuse of brand names but also those logos, pictures, technology patents, designs, domain names and the like caused by illegal operators. The enforcement is then done by our service partner Convey by using electronic administrative means and leads to a delisting of such illegal operators on online platforms such as Alibaba or Taobao within a considerable short period of time.

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WFSGI COMMITTEES AND ACTIVITY REPORTS 2014

CHAIR

MEMBERS

Dr. Jochen Schaefer WFSGI Legal Counsel

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

Rutger Oldenhuis Deputy Director Corporate Services, Shimano

Cynthia Raposo VP Legal, Under Armour

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

Ohta Megumi Deputy Senior General Manager, Global Legal & Compliance Division, Asics

Richard Millington Umbro General Counsel, Iconix Brand Group

The leading bicycle brands and component manufacturers in particular have subscribed to this service at preferential WFSGI member rates and are very pleased about the concrete positive results it generated. In March 2014 WFSGI staged a press conference in Taipei in the context of the Taipei CYCLE Show, which received a very positive echo in the trade press and other media The valuable asset of the newly set up LC â&#x20AC;˘ The opportunity to exchange directly with your peers from the industry on legal matters via a neutral and unique platform â&#x20AC;˘ The elaboration of concrete and tangible actions to tackle the challenges you face

Karmen Koh Allen Legal Director, Pentland Group

EX OFFICIO

Robbert de Kock WFSGI Secretary General

Charlotte Giudicelli WFSGI Trade & Corporate Responsibility Coordinator

The WFSGI is very confident that the Legal Committee will prosper and that WFSGI members will soon be provided with new additional value-added information and services, which will be of tangible benefit for their day-to-day operations.

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MANUFACTURERS COMMITTEE ACTIVITY REPORT 2014 A hub for manufacturers and manufacturing issues WFSGI is working on joint approaches to tackle common challenges and to identify key issues. The aim is to promote the exchange of information on non-competitive issues within the sporting goods manufacturing industry, facilitate and support industry-wide solutions to common industry issues.

WFSGI Manufacturers Forum The WFSGI Manufacturers Forum 2014: “How can Design and Manufacturing embrace?” took place in Leipzig in November 2014. Keynote speakers from all around the globe arrived in Germany to foster profound discussions between Designers and Manufacturers on how to improve communication, strategic leadership and innovative future manufacturing processes between designers and manufacturers.

Representatives from shoe machinery, software, chemical and yarn production companies presented their views on how to accelerate the value chain and to deliver an innovative consumer experience, linking sustainability, design, functionality and manufacturing as well as technologies for the fast way from design to manufacturing. Many sectors have worked hard to better integrate their design and manufacturing activities, resulting in better, cheaper and fasterto-market products. Drawing from automotive, aerospace, food, electronics, furniture and other sectors almost 200 participants debated the most critical factors in ensuring that manufacturing and design can embrace successfully.

The journey of this successful conference will be continued during the WFSGI Manufacturers Forum which will be held in Asia in Q4 2015.

Textile innovation & manufacturing WFSGI hired Dhyana van der Pols as Head of Textile Innovation and Manufacturing. This new role shall create a competence centre on textile intelligence and provide the WFSGI members with in-depth knowledge on latest fabrics and technical development trends, machinery & automation, lean manufacturing as well as sourcing solutions and design assistance and pre-production.

Tailored industry support In September 2014 Accell Group conducted a pilot on-site factory analysis and in-depths workshop with Porsche Consulting – partner of the WFSGI. WFSGI will develop further workshops and event activities on a neutral platform, targeting the needs of multiple manufacturers, suppliers and brands.

WFSGI Asia office In 2014 WFSGI paved the way for an Asian office in Hong Kong to provide a better support for its growing manufacturer member base. Registration of the organization will be completed by the end of this year and is planned to be operational for Q1 2015 and WFSGI is hiring a Director for the office in Asia.

Your access to business opportunities The Manufacturers Committee is a unique platform to exchange and seize new opportunities. An excellent global network provides manufacturers the necessary insights and updates on the global economy trends and changes which helps to place investments. Collaboration creates positive synergies and facilitates collaboration between manufacturers and brands. Everyone can gain new inspiration from this Committee’s work.

The WFSGI thanks its hosts and partners for their generous support which has made the WFSGI Manufacturers Forum 2014 possible.

Host

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Partner

Media Partner

WFSGI COMMITTEES AND ACTIVITY REPORTS 2014

CHAIR

MEMBERS

Charles Yang Executive General Manager, Apache Footwear Ltd.

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

Stefanie Burkert WFSGI Project Manager

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

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PHYSICAL ACTIVITY COMMITTEE ACTIVITY REPORT 2014 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; • Working with the UN Agencies and other multi-lateral organisations to ensure that tackling the physical inactivity crisis is 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.

Advocacy work • Supported ISPO Health Forum, Munich, January 2014: with speakers from UNESCO, Designed to Move, German Olympic Committee, Lazytown and TechnoGym. • Formed agreement with International Ski Federation (FIS) and Federation of European Sporting Goods Industry (FESI) focusing on the Bring Children to the Snow Campaign, which aims to increase young people’s participation in snow sports.

• Presented at the China Sporting Goods Show in Wuhan • Presented at the World Health Summit (WHS) 2014 in Berlin.

• WFSGI represented the SGI at the WHO Commission on Ending Childhood Obesity Hearing.

Working with multi-lateral organisations • WFSGI hosted a multi-lateral PA Committee meeting with representatives from WHO, UNESCO, UNEP, IOC and WEF. • UNESCO is the UN agency with responsibility for physical activity and sports. During 2014 WFSGI has built a close working relationship with UNESCO. The UNESCO team presented at two PA Committee meetings. WFSGI accepted the invitation to become a member of the Permanent Consultative Council advising UNESCO’s influential Intergovernmental Committee for Physical Education and Sport (CIGEPS).

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• WFSGI has supported the World Health Organisation’s Regional Office for the Eastern Mediterranean on physical activity and was a temporary WHO Advisor at the high-level regional forum on a life course approach to promoting physical activity in Dubai, February 2014.

WHO representatives have attended a PA Committee meeting.

• WFSGI and other Designed to Move Champions hosted a conference call with UNOSPD, UNESCO, and IOC to discuss future activities and possible collaboration.

• WFSGI has fed into the IOC’s on-going review of youth sports. The IOC presented at a PA Committee meeting.

Global forum for industry • The Committee agreed to adopt Designed to Move (www.designedtomove.org) as the common framework which the industry uses to increase physical activity and participation in sport.

• The Committee agreed to focus its work on unified policy advocacy and improving youth sports.

• WFSGI joins Designed to Move Champions Hub and communication advisory board to support the new platform.

Future activities • WFSGI to submit evidence to WHO Commission on Ending Childhood Obesity.

• On-going advocacy work and support for multi-lateral organisations.

Reasons to join the PA promotion 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.

WFSGI COMMITTEES AND ACTIVITY REPORTS 2014

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

Marc Pinsard Deputy Senior Gen­ eral Manager Global Sales & Marketing Division, Asics

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

Rudger Oldenhuis Deputy Director Corporate Services, Shimano

Cynthia Raposo VP Legal, Under Armour

David Robinson President, Speedo Int. Ltd.

Wolfgang Schnellbügel Chairman, SPORT 2000 International

Lars Wiskum CEO, Sportventure

Alberto Zanatta President, Tecnica Group

Dr. Jochen Schaefer WFSGI Legal Counsel

Stefanie Burkert WFSGI Project Manager

EX OFFICIO

Robbert de Kock WFSGI Secretary General

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TRADE COMMITTEE ACTIVITY REPORT 2014 The year 2014 was marked by an abundant and prolific information exchange on international trade issues affecting the sporting goods industry. The significance of trade questions has been highlighted by the WFSGI Committee which continues to work with strong resolve towards “FREE & FAIR TRADE” of the sporting goods worldwide.

As has been noted during the last few years, Brazil where the football World Cup was played this year has presented challenges to our industry relating to customs clearance of product and other barriers to trade. The SGI—through MOVE—has been able to build strong relationships with the administrative authorities in the government. As a result, no major market access issues occurred during the event. The free flow of product both for players and for fans contributed to the overall success of the games.

A multiplication of constructive exchanges on international trade matters: reviewing the trade barriers in the SGI...

Brazilian anti-dumping measures against Chinese footwear imports: Trade Committee decided to request a price undertaking instead of an interim review. Furthermore, the committee members had the opportunity to meet representatives of the Permanent Mission of the People’s Republic of China to the WTO (on October 3, 2014, in Geneva) in order to discuss future prospects for reinforced co-operation in this regard. Mexico, tariffs on Footwear Imports: the Mexican government announced on September 5, 2014, that it intends to set out a package of measures to tackle footwear imports. The committee monitors any further developments in this regard.

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Turkey duty increase on footwear imports: At the expiration of the safeguard measure on footwear imports on August 2014, Turkey substantially increased the duties on all footwear imports by 30-50%. Exceptions for athletic footwear with special technology in the safeguard measures do not apply to the duty increase. EU product safety regulation and mandatory origin declaration: With the joint efforts for companies and the EU-located federations challenging clauses in the regulation proposal on product safety, such as penalties up to 10% of the company turnover in case of violations were guided into a more realistic proposal. In addition the idea to include a mandatory made in declaration scheme blocked the complete regulation as with industries’ recommendations the member states are divided. Positive is that EU commission proposed to include Philippines into the GSP+ regulation which will allow duty-free imports to the EU after final approval by the EU Parliament from 2015 onwards.

Related to non-tariff obstacles Trade Committee members address regulations around product specifications and test procedures, which are following rather non-scientific-based approaches and could lead to arbitrary decisions by import administrations.

Practical follow-ups on trade liberalization (FTAs) The Trade Committee continues to monitor and to engage with governments involved in bi-lateral and regional free-trade agreement negotiations. The SGI bears a disproportionate duty burden compared to other consumer goods, and these agreements offer the possibility of substantial duty-savings.

WFSGI successful session during the WTO Public Forum WFSGI Public Session, October, 2014, Geneva (Switzerland) The WFSGI hosted an interesting working session as part of the WTO Public Forum 2014 which was geared towards the global value chain of the sporting goods industry. More specifically, the aim of the session was to highlight how trade obstacles, including rules of origin, impacted the value and job creation for countries along the chain. The conference was largely attended and highly successful.

The WFSGI Committee, a value added for the WFSGI members 1. Possibility to closer collaborate with your peers to take common actions regarding the international trade issues affecting your industry.

2. Benefit from the WFSGI ’s network and privileged relationships that the committee maintains with key players within the trade area (notably with local authorities and governments worldwide).

3. Access to the expertise and knowledge of skilled professionals and share best practices on these technical trade topics.

WFSGI COMMITTEES AND ACTIVITY REPORTS 2014

MEMBERS

CHAIR

VICE-CHAIRS

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

Frank Dassler General Counsel, adidas Group

Wilfried Hauenstein Director Global Logistic Distribution, Puma

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

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

Marina Carvalho Move - Associação Brasileira de Artigos Esportivos

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

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

Hideaki Kitahara Director Corporate Strategy, Asics

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

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

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

EX OFFICIO Robbert de Kock WFSGI Secretary General Marc Magnus WFSGI Trade and Corporate Responsibility Manager Hamish Stewart SVP International and Apparel, Brooks Sports, Inc.

Leonid Strakhov Vice-President, RASIE – Russian Association of Sports Industry Enterprises

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 Executive General Manager, Apache Footwear

Edwin Vermulst WFSGI Trade Counsel

WFSGI MAGAZINE 2015

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WFSGI MEMBERS DIRECTORY

FULL MEMBERS – INDUSTRY SUPPLIERS 3T Cycling Srl

Brasher (Pentland)

Accell Group

Brasseur (Accell Group)

Accell Bisiklet (Accell Group)

Breezer (Advanced Sports)

adidas AG

Bremshey (Accell Group)

Advanced Sports Inc.

Brine (New Balance)

AeroDesign

Brooks Sports Inc.

Akay International

Brunotti Europe BV

Alberta Sports (PVT) Ltd.

Budget Sport (Intersport)

Ali Trading Co., (Pvt.) Ltd.

Campagnolo SA

Anta Sports Products Limited

Canterbury (Pentland)

ApacheFootwear Ltd.

Canyon Bicycles GmbH

Aravon (New Balance)

Capital Sports Corp. (Pvt.) Ltd.

Arena Italia SpA

Cervélo Cycles (PON Group)

Argon 18

Chi Hung Co. Ltd.

Dong Luc Joint-Stock Company

Ashworth (adidas)

Chingluh Shoes Co Ltd

DT Swiss AG

Asics Corp.

Chung Ah Athletic Wares Fty.

Dunham (New Balance)

Atala SpA (Accell Group)

Cicli Pinarelllo Spa

Dynatour (Intersport)

Awan Sports Industries (Pvt) Ltd.

Cole Haan (Nike)

Easton-Bell Sports

Colnago Ernesto E.C. Srl.

Ellesse (Pentland)

Columbia Sportswear

Emirates Sports Stores

Comet Sports (Pvt.) Ltd.

Energetics (Intersport)

Bladerunner (Tecnica)

Continental Chemical Industries Co., Ltd.

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

Blizzard Sport (Tecnica)

Converse (Nike)

Enve Composites

BMC Switzerland AG

Corima

Esprime Ltd.

Bosco Sport Srl.

Cosco (India) Ltd.

etirel (Intersport)

Hurley International LLC (Nike)

Boxfresh (Pentland)

Craftsman Ltd.

Etonic (Lotto Sport)

HWA Seung

Batavus (Accell Group) Berghaus (Pentland) Bike Parts (Accell Group)

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WFSGI MAGAZINE 2015

Currie Technologies (Accell Group) Cycles France Loire (Accell Group) Cycling Sports Group (Cannondale, Dorel Industries) Dayton Industrial Company Ltd. DCG Wheels LLC (DBA Mad Fiber) Dean Shoes Company Ltd. Derby Cycle (PON Group) Descente Ltd. Diamondback (Accell Group) Dolomite (Tecnica)

Evervan International Limited.

F.C. Sondhi & Co. (Pvt.), Ltd. Firefly (Intersport) Five Ten Footwear (adidas) Fortunate International Corp.

Forward Sports (Pvt.) Ltd. Franco Sarto (Pentland) Freesport Corp.

Freewill Sports Pvt. Ltd FSA (Fullspeadahead) Fuji (Advanced Sports) Fulgent Sun International (Holding) Co. Ltd. Gazelle (PON Group) Ghost (Accell Group) Giant Manufacturing Co, Ltd Gravity (FSA) GT Bicycles (Dorel Industries) Haglöfs (asics) Head Sport GmbH Hercules (Accell Group) Hirdaramani Int. Exports (PVT) Ltd. Hunat Kft. Hunter (Pentland)

WFSGI MEMBERS DIRECTORY

I&I Srl (Agla)

KangaROOS (Pentland)

Li Ning Sporting Goods Co., Ltd.

McKinley (Intersport)

Iconix Brand Group

Kestrel (Advanced Sports)

LK International AG – Kjus

IIC-Intersport International Corp.

KÉZMŰ Nonprofit Kft.

Loekie (Accell Group)

MEC – Mountain Equipment Co-op

Khalid Overseas

Lotto Sport Italia SpA

Kicker Sports

Lowa (Tecnica)

Kickers UK (Pentland)

Madrigal Sports (Pvt.) Ltd.

Koga (Accell Group)

Mares (Head)

Lacoste Chaussures (Pentland)

Marker Völkl (International) GmbH

InSTEP (Dorel Industries) International Brand Partners LLC Iron Horse Bicycles (Dorel Industries) ISM Saddles / Tampa Bay Recreation, LLC

Lapierre (Accell Group)

Jordan (Nike)

Laser Sports (Pvt.) Ltd.

Juncker (Accell Group)

Le DD (Lotto Sport)

Kamik-Genfoot Marketing Europe GmbH

Leatherware (Pvt.) Ltd.

Metropolis (FSA) Mikasa Mitre (Pentland) Mizuno Corp.

Molten Corp.

Mongoose (Dorel Industries)

Mavic SAS

Montrail (Columbia)

Mayor & Company

Moon Boot (Tecnica)

Mayor International Limited

Mountain Hardwear (Columbia)

WFSGI MEMBERS DIRECTORY

Multisport Ind. Com. Repres.

Ltda Nationman Thailand Co. Ltd New Balance Athletic Shoe, Inc. Nike Golf (Nike)

Raleigh Canada (Accell Group) Raleigh UK Litmited (Accell Group) Ranson Sports Industry Red or Dead (Pentland)

Silver Star Enterprises (Pvt.), Ltd. Skins International Trading AG Soccer (India) International Ltd.

Topper Tramondi Sport + Werbung AG Trelock GmbH T-Shoes (Tecnica)

Sorel (Columbia)

Tunturi (Accell Group)

Sparta (Accell Group)

Tyr International

Reynolds Cycling LLC

Specialized Bicycle Components, Inc.

Tyrolia (Head)

Ritchey Design Inc.

Speedo (Pentland)

Nitro (Tecnica)

Roadmaster (Dorel Industries)

Sport 2000 International GmbH

Umbro International Ltd. (Iconix Brand Group)

Nordica (Tecnica)

Rockport (adidas)

Sportica Group

Under Armour, Inc.

Oakley, Inc.

Rollerblade (Tecnica)

SRAM Corporation

Union (PON Group)

Odlo International AG

Rotor Bike Components

Staiger (Accell Group)

Uvex Sports

Orbea S. Coop

Sakay Traders

Van Nicholas (Accell Group)

Oval Concepts (Advanced Sports)

San-Ei Corp.

Starpak Martial Arts (Pvt) Limited

Nike, Inc Nippon Takkyu Co., Ltd. Nishi Athletic Goods Co.,Ltd. (asics)

Reebok (adidas) Reema Group

Sugoi (Dorel Industries)

Uhlsport GmbH

Vartex (Accell Group)

Pacific Trail (Columbia)

Sanspareils Greenlands (Pvt.) Ltd.

Penn (Head)

Saucony, Inc.

Taiwan Butyl Co., Ltd.

Vision Technologies Corporation

Pentland Brands plc

Schwalbe – Ralf Bohle GmbH

Tajmahal Sports

Vittoria S.p.A.

Petra Sports

Schwinn (Dorel Industries)

Talon Sports (Pvt.) Ltd.

Vivasports Co., Ltd.

PF Flyers (New Balance)

Scott Sports SA

Tamasu (Butterfly) Co., Ltd.

Warrior Sports (New Balance)

Phenix Co., Ltd.

SE Bikes (Advanced Sports)

TaylorMade (adidas)

Winora (Accell Group)

PON Group

Seattle Bike Supply (Accell Group)

TBS Group Corp.

Wintex Exports

Tecnica SpA

Yamamoto Kogaku Co., Ltd.

TECNOpro (Intersport)

Yonex Co., Ltd.

Selle SMP

Ted Baker Footwear (Pentland)

Yuan Chi Overseas Ltd.

Sharma Exports

Terry (Advanced Sports)

Shimano Inc.

Toa-Strings Co., Ltd.

Pou Chen Corporation Poyang International Co., Ltd Pro Touch (Intersport) ProStar (Pentland) PUMA SE Raleigh America Inc. (Accell Group)

Selle Italia Selle San Marco

Tae Kwang Industrial Co., Ltd.

Vision (FSA)

Yue Yuen Industrial (Holdings) Ltd.

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WFSGI MEMBERS DIRECTORY

FULL MEMBERS – INDUSTRY SUPPORTERS Anwaltskanzlei Dassler

Klaus Uhl

MP – Consult

brands & more gmbh

Law Office Dr. Jochen M. Schaefer

Nash International BV

GMN Marketing Consulting Granger Legal Consulting

Messe Friedrichshafen Messe München GmbH

Navispace AG SportVenture

FULL MEMBERS – NATIONAL OR REGIONAL ORGANIZATIONS ASGA – Australian Sporting Goods Association CSGF – China Sporting Goods Federation FESI – Fédération Européenne du Sport et de l’Industrie JASPO – Association of Japan Sporting Goods Industries

MOVE (Associaçao Brasileira do Mercado Esportivo – ABRAMESP) RAPSI – Russian Association of Sports Ind. Enterprises SCCI – The Sialkot Chamber of Commerce SFIA – Sports & Fitness Industry Association

SGEPC – Sports Goods Export Promotion Co. SRS – Ski Racing Suppliers Association Taiwan Textile Federation TSMA – Taiwan Sporting Goods Manufacturers Association

ASSOCIATE MEMBERS FIFA – Fédération Internationale de Football Association

KSPO – Korea Sports Promotion Foundation

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

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