Supply Chain

Nike Forms Strategic Partnership for Apparel Manufacturing in the Americas

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Image credit: Nike, Inc

NIKE, Inc. has announced a new strategic partnership with private equity firm Apollo Global Management, LLC, aimed at building a transparent and ethical apparel supply chain in the Americas. Through the partnership, Nike aims to increase regional manufacturing capabilities, enable quicker delivery of more customized product to consumers and drive investment in sustainability.

To establish the partnership, Apollo has established a new apparel supply chain company that is acquiring existing apparel suppliers in North and Central America, and plans to invest in advancing their manufacturing operations and expertise to produce innovative, technical and customized apparel. This new company also expects to acquire additional textile and apparel suppliers in the Americas in order to broaden and diversify its capabilities and product offerings. This will create a more vertically integrated apparel ecosystem – from materials suppliers and apparel manufacturers to final embellishment, warehousing and logistics.

“We are excited to be working with Apollo to rethink a new supply chain model to revolutionize apparel manufacturing in the Americas,” says Nike COO Eric Sprunk. “The new company, under Apollo’s leadership, is committed to embedding sustainability and transparency into the business, investing in new technology, vertically integrating critical elements of the supply chain and delivering the best Nike performance product to our retail and sports partners.”

“We see a tremendous opportunity to meet the rising demand for responsive apparel manufacturing to serve increasing consumer expectations for products delivered when and where they want them. We intend to work with management to develop a regional supplier capable of servicing the needs of a wide variety of customers, and we are particularly enthusiastic to be working with such an iconic brand as Nike,” says Josh Harris, co-founder and Senior Managing Director of Apollo. “While Nike has not made a capital investment in the company, this strategic partnership is a testament to Nike’s commitment to increasing regional manufacturing capabilities, driving investment in innovation and creating long-term growth.”

While terms of the agreements were not disclosed, Apollo says the new supply chain company has already acquired two businesses to form the cornerstone of this strategy: the apparel manufacturer, New Holland; and the embellishment, warehousing and logistics operator,ArtFX. The investment is made by the Apollo-managed Special Situations I fund.

This isn’t Nike’s first move to create “the supply chain of the future”: In May, the sportswear giant unveiled the latest expansion of its European Logistics Campus in Belgium. The expansion will make Nike’s European operations more efficient, more responsive and more sustainable, enabling growth by serving consumers across, as well as its retail and wholesale partners in 38 countries, all from a single inventory location. Sustainable innovation informed all aspects of the facility – ex: it’s powered by 100 percent renewable energy, the structure was created to minimize its footprint from both an operational and a materials standpoint – emphasizing Nike’s vision for a low-carbon, closed-loop future as part of its growth strategy.

*This story first appeared on Sustainable Brands

IFC Partners with VF Corporation and Target Corporation to Promote Manufacturing Sustainability in Vietnam’s Textile and Apparel Industry

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Hanoi, Vietnam, March 15, 2016—IFC, a member of the World Bank Group, is partnering with global leading apparel and footwear company VF Corporation and consumer products retailer Target Corporation to improve resource efficiency at their supplier factories in Vietnam. Under the first phase of this program, energy and water efficiency assessments will be conducted at about 30 factories over the next 12 months to help them reduce operating costs and improve productivity while contributing to the country’s green growth and climate change targets.

The textile, apparel and footwear sector is a significant contributor to Vietnam’s economy. In 2015, the sector’s exports reached $39.2 billion and generated approximately three million jobs, most of which are for women. While this sector is energy and water intensive, there are opportunities for reducing resource consumption by 20% or higher by using latest technology and good operating practices.

“With Vietnam’s increasing participation in trade agreements, including the Trans-Pacific Partnership and the EU Free Trade Agreement, the local textile sector is poised for faster growth, creating increased demand for sustainable energy and water use practices,” said Kyle Kelhofer, IFC Country Manager for Vietnam, Cambodia and Lao PDR. “Vietnam’s textile enterprises stand to benefit from this IFC program by further access to global markets while implementing resource efficiency best practices.”

Factory assessments at VF and Target supplier factories across the textile value chain, including cut-and-sew, dyeing-and-printing and garment-washing operations, will identify and develop cost-effective measures to improve energy and water efficiency while helping suppliers improve productivity and competitiveness. In addition to providing advice for technical solutions, IFC will help facilitate financing through its partner banks in Vietnam, drawing on its substantial experience in other top textile export countries such as Bangladesh and China.

“The cooperation with IFC in Vietnam strongly complements Target’s global responsible sourcing strategy and our corporate sustainability goals for making supplier factories more resource efficient and environmentally friendly,” said Ivanka Mamic, Director for Responsible Sourcing at Target Sourcing Services, the subsidiary of Target Corporation leading sustainability efforts for the corporation.

“VF has a long history of manufacturing excellence centered on respect for the people and the environment, and we continuously explore opportunities to further scale these commitments across our global supplier base for greater impact,” said Brad van Voorhees, Senior Manager for Supply Chain Sustainability at VF Asia, a subsidiary of VF Corporation. “The collaboration with IFC and Target is a natural extension of our work and enables the collective exchange of knowledge and best practices to green the textile supply chain.”

This manufacturing sustainability initiative will promote resource efficiency by systematically assessing performance improvement opportunities, conducting benchmarking studies, sharing technology best practices, and raising sector-level awareness for broader uptake. Subsequent phases will evaluate opportunities for use of clean energy to meet captive power needs of the textile supply chain. This initiative is part of IFC’s multi-year Vietnam resource efficiency program that is implementing innovative aggregation approaches to scale-up impacts through engaging with leading global brands and their supply chains, and by intervening in selected industrial zones to promote circular economy concepts among co-located industries.

*This story first appeared on Sustainable Brands

Microplastics, Microfibers, Pollution and….the Outdoor Industry

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By Nikki Hodgson

Instagram @5gyres
Instagram @5gyres

Either you’ve been hearing a lot about microplastics lately or you haven’t been paying attention. The minuscule byproducts from cosmetics and clothing are causing big problems for the environment. Here’s a quick overview of what they are, why they’re problematic and what the outdoor industry is doing to mitigate their effects.

What are microplastics?

Microplastics are small plastic particles (generally between 1 and 5mm) that come from a wide variety of consumer products and sources, including cosmetics, clothing and industrial processes. Because of their size, microplastics can end up in waterways and marine ecosystems when clothing is washed or when cosmetic products are washed down the drain.

What are microfibers?

There is some evidence to suggest that one source of microplastics may be microfibers (also called microplastic fibers), which enter waterways when polyester and acrylic garments are washed.

Why is this a problem?

Microplastics, including microfibers, are showing up in the environment at high levels, particularly in marine ecosystems. In 2008, UNESCO estimated that around 245 metric tons are produced per year. These plastic particles persist in marine ecosystems for many years and attract toxins like DDT and BPA, which are ingested by smaller marine life, moving up the food chain and then found in the tissues of larger organisms.

Much of the environmental impacts and subsequent health effects of microplastics and microfibers are not yet completely understood, and research is currently underway to further investigate and better understand the impacts these may have on our ecosystems.

What is the outdoor industry doing to address this?

Since 2007, the OIA Sustainability Working Group has been working to address the environmental and social impacts of our global supply chains, utilizing a pre-competitive, collaborative model to convene industry stakeholders around important supply chain topics such as chemicals management, materials traceability and social responsibility. We are also now exploring the issue of microfiber pollution.Screenshot 2015-07-07 08.43.22

This is an emerging issue; robust data around the environmental impacts and the potential role played by the apparel industry and other industries is scarce at present. Our first priority is to seek out more data, in order to clearly understand the impacts and identify our best leverage points as an industry. We need to know exactly what we’re up against and where it makes the most sense for us to engage – where we can have the greatest impact and where other industries or stakeholders may have an important role to play. We also need to identify practices that we can adopt and scale across an entire industry. And we need to balance this issue against the many others that are critical to our industry, like phasing out hazardous chemicals, or protecting labor rights and fair wages of all those involved in making our products, or ensuring the ethical sourcing of animal products such as wool, down and leather.

In January 2015, Nicholas Mallos of the Ocean Conservancy spoke at the OIA Sustainability Insights Conference at Outdoor Retailer Winter Market. With over one hundred outdoor industry supply chain and sustainability leaders in the room, Nicholas provided an overview of some of the threats microplastics and microfibers pose to our ecosystems and discussed some of the research being done to better understand what industries can do to mitigate these impacts.

Screenshot 2015-07-07 08.39.56As a follow-up to our in-person meetings and conference at Outdoor Retailer Winter Market, we will be hosting another discussion around microplastics and microfibers during the Sustainability Insights Conference at Outdoor Retailer Summer Market on August 4th. Representatives from Patagonia and the Hohenstein Institute will discuss some of the existing efforts and challenges, from identifying data gaps to exploring solutions with the appliance and washing machine industry, in order to further continue the conversation around how industry can most effectively address and mitigate microplastic pollution.

The next steps for the OIA SWG on this issue will include:

  • Aligning with impartial, data-driven issue experts such as the Ocean Conservancy to help us better understand the impacts.
  • Promoting awareness of this issue within the outdoor industry community.
  • Identifying leverage points and convening an industry group to develop tools and resources around best practices.

What can you do?

**This article first appeared on the Outdoor Industry Association blog here.