Transcript John Cheh, Vice Chairman & CEO of Esquel Group

The Making of a Green Shirt
– Sustainable Manufacturing through A Vertically-Integrated Supply Chain
Dr. John Cheh
Vice Chairman & CEO, Esquel Group
Oct 19, 2011
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The Making of a Green Shirt
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The Making of a Green Shirt
Esquel’s Vertically-Integrated Set Up
Cotton Farming
Spinning
Weaving/Knitting
Garment
Manufacturing
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Trims
& Packaging
Retail and Direct
Distribution
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The Making of a Green Shirt
Sustainability is at the Heart of Our Corporate Culture
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The Making of a Green Shirt
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The Making of a Green Shirt
Common misconceptions
about sustainable production:
• Add to the costs
• For public relations reasons
• Needs to be forced upon (by media,
customer or government)
• For large companies only
Successful companies are successful because they practise
sustainable production
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The Making of a Green Shirt
Embrace Technology & Modern management
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The Making of a Green Shirt
Sustainable Farming
Sustainable farming
methods and technologies
result in increase in cotton
yields and higher income
and quality of life for
farmers
Growing Organic
Cotton in Xinjiang,
Certified by Ecocert
Natural Pest
Control,
breeding
cotton pests’ enemy
to reduce pesticide
consumption
Drip Irrigation,
reduces water
consumption and
usage of chemical
fertilizer
Handpicking
Cotton,
eliminates
use of chemical
defoliant
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The Making of a Green Shirt
Sustainable Farming
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The Making of a Green Shirt
Water Consumption of Cotton Shirt
Energy Consumption of Cotton Shirt
Apparel
13%
Apparel
18%
Fabric
87%
Yarn
25%
Fabric
57%
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The Making of a Green Shirt
Energy Saving
Annual energy
consumption fell by
40% from 2005 to 2010,
equivalent to 160 M kwh
of electricity and
242,000 tons of
greenhouse gas
emission
Installation of
Frequency
Inverters to all
Machinery
reduces energy
consumption by
40%
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Installation of
Water Curtains,
better ventilation
and cooling save
up to 80%
electricity
Energy Efficient
Lighting:
replaced light
bulbs with high
efficiency
fluorescent light
tubes and
reflectors
Installation of
Skylights:
makes use of
natural light to
reduce energy
consumption
Steam Powered
Air-conditioning
System:
reduces heat and
saves
electricity
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The Making of a Green Shirt
Energy Saving
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The Making of a Green Shirt
Water Conservation
Reduction of water
consumption by
50% from 2005 to
2010, equivalent to
6.8 M tons of water
Waste Water
Treatment
Plant
neutralizes
waste water
from mills and
factories
Patented
Pulse Dyeing
Technology
consumes
less water,
electricity and
chemicals
Green
Washing
uses
ecologically
biodegradable
products for
treatment and
finishing
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Cold Pad
Batch Pretreatment
Technology
saves water
and energy
Wet
Processing
Centre
recycles
water in
garment
washing
process
Reuses
Soap
Water
reuses up
to 300 tons
of water
every day
Recycling
Condensed
and Cooling
Water saves
water &
steam
Heat
Exchange
System
saves 137
tons of
steam
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The Making of a Green Shirt
Water Conservation
Traditional Dyeing
Pulse Dyeing
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The Making of a Green Shirt
Emission Control
Desulfurization
of Waste Lye
reduces
sulfur dioxide
emissions
Uses Only
Clean Low
Sulfur Coal
which is cleaner
source of power
Thermal Power
Plant
supplies own
electricity and
steam to enhance
energy efficiency
and reduces
carbon dioxide
emissions
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The Making of a Green Shirt
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The Making of a Green Shirt
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The Making of a Green Shirt
Competitiveness of Suppliers
• Consolidation
• Cost containment (“It’s All
About Productivity”)
Suppliers need
to upgrade and
innovate
• Creativity and innovation
• Conservation
• Corporate social
responsibility
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Winning As The Industry Consolidates
Drivers of industry consolidation
• Abolishment of quota
• Stretched material & labor supply with surging
costs
• Buyers’ desire to simplify and optimize their
sourcing operations
• Flight to quality and stability
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Consolidation of Major Exporting Countries to US
(by Value of Total Apparel)
48%
45%
41%
38%
33%
32%
33%
56%
4%
3%
9%
10%
4%
4%
4%
3%
4%
4%
4%
7%
4%
5%
5%
22%
26%
2005
2006
4%
6%
4%
5%
6%
4%
6%
5%
6%
5%
5%
5%
6%
4%
5%
6%
6%
8%
8%
32%
37%
39%
2007
2008
2009
2010
7%
9%
7%
31%
5%
5%
7%
RoW
India
Mexico
Bangladesh
Indonesia
Vietnam
China
34%
14%
2004
Source: US Office for Textile and Apparel
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Compete through State-of-the-Art Equipment to
Improve Quality & Productivity
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Compete through State-of-the-Art Equipment to
Improve Quality & Productivity
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Creativity and Innovations
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Creativity and Value Adding Services
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Caring for People and Local Communities
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Caring for People and Local Communities
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Caring for People and Local Communities
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Caring for People and Local Communities
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“We Must Become The Change We Want To See”
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THANK YOU
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