Employer promises, escalation, and resolution

Initial efforts to secure payment resulted in an employer promise to address the wage arrears, but WRC states that commitment was not honoured. After the closure became public, the WRC engaged SAE-A Global Trading, a Seoul-based apparel producer that had supplied Target from KOA Modas, to assume responsibility for the outstanding payments. Following extended discussions involving factory unions, SAE-A agreed to cover 95% of the total owed to workers; WRC said the remaining 5% may be recovered through the sale of KOA Modas’s remaining inventory and equipment.

The WRC characterized SAE-A’s action as the largest single-factory back pay settlement for garment workers ever recorded in Central America. WRC noted: “SAE-A has joined other leading apparel companies like American Eagle Outfitters, Gildan, and PVH, that have responded to violations documented by the WRC in their supply chains by using their own resources to pay workers money they were legally owed.”

Ongoing concerns

While the settlement addresses immediate back pay and severance violations, the WRC highlighted continuing concerns about social security contributions that were allegedly withheld from employees’ pay. The WRC warned that such withheld social security contributions could jeopardise pensions for many now-retired staff. The organisation added: “Sabrina Chang, the owner of KOA Modas, had a track record that long preceded the factory’s closure of stealing not only its workers’ wages, but also the social security contributions it deducted from their paychecks.”

Context and implications

KOA Modas continued to supply Target up until the factory closure, and SAE-A had acted as Target’s direct supplier for products manufactured at KOA. The case underscores issues raised by the WRC regarding employer accountability in the apparel supply chain, the impact of factory closure on workers, and the need to secure wage arrears and severance for affected employees.

Official figures show that the Uzbekistan apparel industry continued to expand between January and April 2026. During the period, major apparel manufacturers across the country generated total clothing production valued at UZS 12.9 trillion. The latest data points to steady growth in the country’s garment sector, with output rising 12.5% year on year.

Andijan Region Accounts for the Largest Share

The Andijan region remained the leading center of the Uzbekistan apparel industry during the reporting period. Large-scale manufacturers in the region produced clothing worth UZS 5.4 trillion from January through April, representing the biggest contribution to national output.

Among other leading contributors, the Tashkent region recorded clothing production of UZS 1.4 trillion, while Namangan region posted UZS 1.1 trillion. Fergana region reached UZS 1 trillion, and Tashkent city followed closely with UZS 999.2 billion in output.

Regional Clothing Production Figures

Several other regions made moderate contributions to the country’s overall garment sector performance. Samarkand region produced garments worth UZS 687.1 billion, while Bukhara region generated UZS 449.3 billion. In Kashkadarya region, output totaled UZS 431 billion.

In Khorezm and Navoi regions, industrial enterprises manufactured apparel valued at UZS 397 billion and UZS 326.2 billion, respectively. Syrdarya region contributed UZS 200.2 billion, while the Republic of Karakalpakstan recorded UZS 199.9 billion.

Lowest Output Recorded in Two Regions

Surkhandarya and Jizzakh regions posted the lowest manufacturing volumes in this four-month period. Surkhandarya contributed UZS 141.8 billion to national clothing production, while Jizzakh recorded UZS 132.8 billion.

The latest figures underline the continued scale of activity among apparel manufacturers across the country, with the Andijan region maintaining a clear lead in the Uzbekistan apparel industry.

“As the global apparel industry shifts toward more flexible production models, Jack Technology has moved beyond the traditional machine sales model,” said CEO Moli. “Drawing on extensive project experience, we have developed intelligent total solutions that can be adapted to different production environments and help manufacturers respond more effectively to changing market demands.”

During the event, Victor, General Manager of the Global Strategic Key Client Department, introduced the SmartLink Master. Built on the Polaris AI Intelligent System and Siemens’ Mendix platform, the solution integrates SkyFox AI Vision Technology, Spirit-Ape AI Kitting Technology, and Lightning AI Distribution Technology. The platform connects software, equipment, and production processes to create factory solutions tailored to different apparel manufacturing requirements. Jornt Moerland, Senior Vice President of Siemens Digital Industries Software for Asia Pacific, said the two companies will work together to develop digital twin-enabled production lines and pilot smart factories for the apparel industry.

Jimmy, President of Human Resources, introduced the URUS2. James, General Manager of the Southeast Asia Region, introduced the M6 Mold-Free Template Machine. Steve, CEO of Marketing Team, signed cooperation agreements with several leading global apparel manufacturers. Vu Duc Giang, Chairman of VITAS, said the solutions could help accelerate the modernization of Vietnam’s apparel manufacturing sector. With demonstration factories in Hanoi and Ho Chi Minh City, Jack showcased its intelligent total solutions in real production environments.

As one of Southeast Asia’s leading textile and apparel manufacturing hubs, Vietnam is accelerating the adoption of smart factory technologies. Through its integrated intelligent manufacturing and factory digitalization solutions, Jack Technology is helping apparel manufacturers improve flexibility, responsiveness, and production efficiency in an increasingly demand-driven market.

Italy’s textile machinery industry is widely recognised as a global benchmark for technology, innovation and quality. Italian manufacturers are known for delivering flexible, versatile and customised solutions that respond quickly to customer needs and create high value-added niches. The workshop placed particular emphasis on supporting Mongolia’s textile sector as it shifted toward more efficient, premium-quality production. Italian technology was positioned as a practical contributor to Mongolia’s industrial modernisation and sustainability goals.

The Italy–Mongolia technology partnership drew on Italy’s expertise in cashmere and wool processing two raw materials central to Mongolia’s economy. Data compiled by ACIMIT indicated that Mongolia had shown strong momentum in recent years, with a clear trend toward expanding trade and technology cooperation. The machinery most sought by Mongolian buyers was primarily spinning equipment, accounting for 35% of total Italian exports to the country, followed by laundry machinery (21%), accessories (19%), finishing equipment (14%) and weaving machinery (11%).

“Mongolia represents a highly promising market for our industry,” said Marco Salvadè, President of ACIMIT. “The participation of Italian companies in the Ulaanbaatar workshop demonstrates a strong commitment to consolidating a long-term technological partnership. Our highly specialized and flexible technologies are ready to support local operators in upgrading their production processes and increasing the added value of their textile exports. The workshop in Mongolia is also part of a broader program of initiatives aimed at promoting the Italian presence at ITMA Hannover 2027, the world’s leading exhibition for textile and garment technologies, where Italian companies will once again showcase the very best of textile machinery innovation.”

The initiative, promoted by the Italian Trade Agency and ACIMIT, with support from the Embassy of Italy in Mongolia, featured the participation of Biancalani, Bianco, Color Service, Cormatex, Fadis, Lawer, Mesdan, Cosmatex, Pinter Caipo Italia, Proxima, Stalam, Tecnomeccanica Biellese and Ugolini.

Italian textile machinery spans key categories including spinning, weaving, knitting, finishing and related equipment. Creativity, sustainable technology, reliability and quality have underpinned Italy’s global leadership in textile machinery.

Scaling Sustainable Fabrics through Strategic Partnerships

Bangladesh-based woven fabric manufacturer NZ Tex Group has formalized a partnership with Spinnova, a Finnish producer of cellulosic fiber. This collaboration follows extensive research and development where the two entities tested weaving, dyeing, and finishing processes for textiles containing the fiber. The partnership has identified a strong suitability for denim applications, with several of these developments scheduled for display at the Kingpins Show in New York this July.

Industrial Expansion and Market Reach

As NZ Tex Group integrates into the Spinnova ecosystem, the focus shifts toward scaling manufacturing. Saleudh Zaman Khan, chairperson at NZ Tex Group, noted that the partnership aligns with the company’s commitment to delivering innovative yarns and fabrics to the global clothing industry. The use of cellulosic fiber technology is expected to bring these specialized denim developments closer to commercial availability, enhancing the selection of sustainable fabrics available to international brands.

Advancements in Performance and Recovery Textiles

In the realm of wellness and recovery, Celliant and Dream Recovery have announced a collaboration to enhance weighted blankets using infrared technology. This design incorporates Celliant’s bioceramic minerals directly into the woven fabric. The technology functions by capturing body heat and reflecting it back as infrared light, which is intended to support circulation, oxygenation, and thermoregulation during rest.

Seth Casden, founder and CEO of Hologenix, LLC, stated that the synergy between deep pressure stimulation and infrared technology supports both bodily sensation and function during recovery periods. This innovation is targeted at athletes and professionals seeking optimized rest through advanced material science.

Innovations in Wool Treatment and Brand Evolution

I.S.T Corporation is expanding its partner network for IST Platinumwool, a treatment that polishes wool fibers to improve luster, hand feel, and elastic recovery. The company is launching “Platinumworld,” a collaborative platform for brands and designers, which will be introduced at upcoming industry showcases including Pitti Immagine Filati and Milano Unica.

Simultaneously, Asahi Kasei’s stretch fiber brand, Roica, has undergone a comprehensive rebranding. The update includes a new tagline, “Stretch Your Future,” and a redesigned digital platform. Takaaki Kondo, senior executive manager of the Roica division, emphasized that this evolution builds on 50 years of expertise while strengthening technologies and supply chain collaboration to reduce environmental impact.

Breakthroughs in Textile Recycling and Infrastructure

The sector is also seeing significant investment in textile recycling infrastructure. GR3N, a firm specializing in PET recycling, recently secured 15.5 million euros in Series B funding. These funds are earmarked for the construction of the “Modus” facility in Spain, an industrial-scale plant capable of producing 40,000 tons of PET chips annually from waste.

Microwave Assisted Depolymerization

The facility utilizes microwave assisted depolymerization technology to break down polymers into monomers. This process is capable of handling complex materials, such as colored plastic bottles and textile waste, converting them into new chips for textile fibers or plastic applications. By creating a circular stream, this technology aims to replace fossil fuel-based inputs in the production of sustainable fabrics.

In Hong Kong, the non-governmental organization Redress concluded its “Get Redressed Month” campaign, collecting 14.8 metric tons of used apparel. This initiative focused on textile recycling through redistribution, resale, and downcycling, supported by a “sort-a-thon” involving 400 participants to manage the collected merchandise.

Technological Hubs and Digital Printing Evolution

Durst Group is expanding its footprint by establishing Durst Como in Italy, a new research and development facility focused on digital printing. With an investment of approximately 20 million euros, the hub will concentrate on advancing inkjet applications for apparel and home textiles. This project is part of a larger 50-million-euro investment into the company’s textile business over the last decade.

The facility will also integrate technologies from the acquisition of Aleph, focusing on direct-to-fabric digital printing. Alessandro Manes, director of global sales for industrial textiles at Durst Group, indicated that the objective is to create a specialized technology hub that attracts expertise and generates new opportunities within the local textile production landscape.

Portable Resource Harvesting and Research Facilities

Engineers at the University of Texas at Austin have developed a jacket capable of capturing water from the air. The garment uses a biomass-derived hydrogel textile to absorb moisture, which then condenses into harvesting units when heated by sunlight. During testing in various climates, the jacket collected between 14 and 30 ounces of water daily. Guihua Yu, chair professor at the Cockrell School of Engineering, suggested that this rethink of water-harvesting technology opens new directions for portable water access.

Finally, the Advanced Functional Fabrics of America (AFFOA) has opened its new headquarters in Bedford, Massachusetts. The facility serves as a hub for fiber and fabric technology development, aimed at fostering collaboration between academics, government officials, and manufacturers to inspire future sustainable textile trends.

Premium technology “Made in Germany”

Together with Mayer Mümessillik, Mayer & Cie. Global presented two OV 3.2 QCe circular knitting machines. The machines have been among the company’s most successful models formany years and represent the premium interlock segment, which is in strong demand both in Turkey and internationally. With its trade fair appearance, Mayer & Cie. Global deliberately sent a signal of continuity.Development and production of its premium machines will continue to take place in Germany. Customers can therefore continue to rely on the quality and performance for which the Mayer &Cie. brand has stood for decades.

Clear positioning

The future direction of Mayer & Cie. Global and its cooperation with Huixing attracted considerable interest at the trade fair. The team used numerous discussions to explain the company’s positioning.

Mayer & Cie. premium machines will continue to be developed and manufactured in Germany. At the same time, the partnership with Huixing opens up additional opportunities: in future, customers will also be able to obtain suitable solutions from the Huixing portfolio for the middle and lower market segments. This enables Mayer & Cie. Global to serve a broader range of customer requirements without changing the premium positioning of the Mayer & Cie. brand.

Alton Xu, owner of Mayer & Cie. Global, explains: “With our new setup, we can now support customers across a much wider range of market requirements than before. At the same time, we remain fully committed to our premium segment and Mayer & Cie.’s promise of quality. Where budget constraints or specific applications require different solutions, we can now offer additional alternatives. This strengthens our market position and enables our representatives to support and retain customers within the Mayer & Cie. Global network in the long term.”

Exchange with international representatives

ITM also provided an important platform for personal exchange with international representatives. Delegations from Mexico, Uzbekistan, Russia and Iran used the trade fair to discuss further cooperation and to get to know Alton Xu and the Mayer & Cie. Global team in person. The direct exchange underlined the importance of the global sales and service network for the
ompany’s further development.

New requirements in the interlock segment

In addition to market and company topics, technological developments were also a key focus of the discussions. In the interlock segment, demand is currently increasing for so-called fivethread knitted fabrics. This special variation of a double-face fabric o􀆯ers additional design and performance options and is increasingly being used in sportswear and technical apparel.

Mayer & Cie. Global regards this development as an important future topic and is working to integrate corresponding solutions into its technology portfolio in the near future. The aim is to support customers quickly and practically, even when new market requirements arise.

Positive response to the restart

Overall, ITM 2026 confirmed the strong position of the Mayer & Cie. brand in the Turkish market. For many customers, reliable service and secure spare parts supply remain decisive factors alongside innovative technology – especially as Mayer & Cie. machines are used in many modern knitting mills throughout the country.

The positive response to the trade fair appearance shows that the restart of Mayer & Cie. Global is being closely followed by the market and is meeting with a high level of acceptance among customers and partners.

The International Apparel Federation (IAF) has published a new manifesto aimed at confronting what it describes as the industry’s most persistent drag on performance: systemic inefficiency across the apparel value chain. Rather than treating manufacturing as a race to the lowest unit price, the document argues that apparel manufacturing inefficiency visible in chronic overproduction, swelling inventories, perpetual markdown cycles and wasted capital is the deeper problem undermining profitability and sustainability.

The manifesto was developed by the IAF Business Innovation Committee and arrives as apparel businesses face a complicated mix of pressures: volatile consumer demand, accelerated digitalisation, stricter sustainability expectations and business models that increasingly reward speed and flexibility. In that environment, IAF is urging companies to move away from narrow cost-based sourcing logic and toward end-to-end productivity, stronger capital discipline and more resilient, better-coordinated supply chains.

IAF secretary general Matthijs Crietee said the competitive edge is shifting from cheap production to demand alignment and cooperation. “The future competitiveness of apparel manufacturing will depend on the ability to align production more closely with demand, reduce inventory risk and create value through smarter, more collaborative systems.”

“Smart flexibility” as the organising principle

At the core of the manifesto is the concept of “smart flexibility,” which the federation defines as the ability to synchronise planning, production, data and incentives so output tracks real demand more closely. The document argues that when incentives are misaligned when brands push volume while suppliers absorb volatility the system produces predictable outcomes: too much product, too little visibility and constant discounting that erodes value for everyone.

To counter this, the manifesto highlights a set of practical levers. It points to postponement strategies that delay final product decisions until closer to the point of sale, reducing forecast error and inventory risk. It also calls for technology adoption further upstream, tighter integration between textile production and apparel manufacturing, and commercial arrangements that ensure participants across the chain share incentives that reward speed, accuracy and sell-through rather than only throughput.

The document also reframes how it sees the role of manufacturers. Instead of positioning factories as transactional capacity providers, the manifesto argues manufacturers can become leaders in value creation contributing flexibility, operational intelligence and collaboration capabilities that help reduce waste and improve responsiveness.

A staged path from ideas to execution

To translate ambition into results, the manifesto proposes a three-step rollout. The first phase is establishing shared principles that can guide decision-making across markets and supply chains. The second is enabling pilots and experimental projects to test what works in real operating conditions. The third is standardisation developing common language, consistent metrics and widely adopted practices so successful models can scale.

IAF says its approach draws on the joint IAF–International Trade Centre (ITC) study Under the Banyan Tree: Buyers and Suppliers in Fashion. It also uses the federation’s 5C Framework Contracts, Capital, Capacity Building, Commons and Creator Market to structure industry collaboration and ensure efforts address both commercial and operational barriers.

A call for cross-industry participation

The federation is inviting participation beyond manufacturers alone, arguing that solving apparel manufacturing inefficiency requires coordinated changes in how product is planned, financed, sourced, produced and sold. It is calling on brands, textile producers, technology providers, investors, policymakers and industry associations to engage with the manifesto and help push the sector toward demand-led production and more sustainable outcomes.

The message is blunt: costs matter, but the biggest gains now sit in reducing waste, improving coordination and designing supply chains that create value through speed, accuracy and shared incentives rather than by simply chasing the cheapest needle price.

Vietnam’s textile and apparel sector delivered a solid start to 2026, but exporters are signalling that the second half could be more difficult as demand softens, freight costs rise and competition intensifies. State media figures cited by industry sources show Vietnam textile exports increased 5.6% year on year in the first five months of the year to about $18.8 billion, even as manufacturers operated in a weak global consumption environment.

The early-year performance keeps the industry broadly aligned with its 2026 ambition of roughly $48 billion to $49 billion in shipments, according to targets referenced by the Vietnam Textile and Apparel Association (VITAS). But executives say the path to that goal will depend on whether orders hold up through the remainder of the year, when retailers in major markets are expected to remain cautious on inventories and discretionary spending.

Cao Huu Hieu, general director of Vietnam National Textile and Garment Group (Vinatex), said part of the first-half lift was linked to a temporary opening created by US tariff developments. Manufacturers, he said, pushed production schedules forward and accelerated shipments to take advantage of a more favourable tariff window—effectively pulling demand into earlier months.

While that strategy supported near-term volumes, industry voices are increasingly wary about what comes next. Businesses report limited visibility for fourth-quarter orders, suggesting that brands and retailers are delaying commitments and keeping purchase cycles shorter. At the same time, exporters are facing a fresh cost headwind: container freight rates have increased by an estimated 30% to 40%, putting pressure on margins and raising the landed cost of goods for buyers.

Demand risks are also building in consumer markets. Industry observers point to inflation across the United States, the European Union, China, Japan and South Korea as a key factor squeezing household purchasing power. With everyday costs rising, consumers are spending more cautiously on apparel, pushing retailers to manage inventory more tightly and source more selectively.

Market performance has been uneven across destinations. Shipments to the United States have held up comparatively well, helping stabilise overall results. Elsewhere, some Asian markets have shown signs of weakening demand. Exports to the European Union have been supported by tariff advantages under the EU–Vietnam Free Trade Agreement, which has helped offset softness in other regions and remains an important competitive lever for Vietnam’s exporters.

In response to the shifting environment, manufacturers are focusing on financial discipline. Companies are prioritising stable cash flow, tightening inventory control and cutting non-essential operating expenses to protect profitability during a less predictable order cycle.

VITAS has also urged the industry to strengthen competitiveness beyond price. Rather than relying primarily on low-cost production, the association is encouraging firms to expand into higher-value operating models, including FOB (Free on Board) and ODM (Original Design Manufacturing). The aim is to improve positioning with buyers by adding services, speed and design capability—areas that can differentiate suppliers when demand is fragile and competition is rising.

For Vietnam’s exporters, the first-half results show resilience, but the outlook is becoming more complex. With Vietnam textile exports still tracking upward yet order visibility tightening and logistics costs climbing, companies are entering the second half of 2026 focused on efficiency, value-added services and market diversification to maintain momentum.

In the proposed budget for the 2026-27 fiscal year, the government suggested eliminating the 30 percent value-addition rule to streamline business operations. However, Showkat Aziz Russell, president of the association, argued that this measure could jeopardize approximately $23 billion in existing investments within the industry. He noted that maintaining the Textile Value-Addition Rule is essential for preserving national competitiveness as the country prepares for LDC graduation.

Economic Pressures and Industry Challenges

The primary textile sector is currently facing significant operational hurdles. According to data provided by the association, 114 out of 234 spinning mills owned by its members have ceased operations since 2019. The facilities that remain active are reportedly running at only 60 to 70 percent of their total capacity. These difficulties are attributed to inconsistent gas supplies and the increasing presence of Indian yarn imports in the local market.

Reports indicate that Indian yarn imports saw a 22.07 percent year-on-year increase, reaching a value of $1.79 billion in the 2024-25 fiscal year. This follows a previous year where imports stood at $1.48 billion. Russell highlighted that regional competitors benefit from substantial government backing, including capital investment subsidies and interest assistance, allowing them to offer lower prices that pressure local textile millers.

Strategic Importance of Local Production

Industry experts emphasize that relying on foreign supply chains poses a risk of disruption. There have been instances where exporters from neighboring regions prioritized other international markets without notice, leading to local shortages and price spikes. As the nation approaches LDC graduation, meeting double-transformation requirements will become vital to retaining trade benefits. This transition necessitates a robust domestic capacity for producing garment raw materials to ensure long-term stability.

Proposed Fiscal Adjustments for Growth

To bolster the industry, textile millers have proposed a reduction in the corporate tax rate. Currently set at 27.5 percent, the association is seeking a decrease to 12 percent, maintained until 2030. This adjustment is intended to attract foreign direct investment and address what the association describes as a discriminatory tax structure. Currently, export-oriented garment factories benefit from rates between 10 and 12 percent, while the primary textile sector faces higher obligations following the expiration of a previous tax benefit in mid-2025.

The association maintains that the Textile Value-Addition Rule must remain in place to safeguard the massive investments made in the country and to ensure that the domestic industry remains a cornerstone of the national economy during its upcoming developmental transitions.

Addressing Implementation Challenges in the Apparel Sector

The position paper highlights that for sustainable products to become the norm, the Digital infrastructure supporting them must be cost-effective. Ecommerce Europe expressed concerns that a rigid Product tracking system could impose significant administrative burdens, particularly on small and medium-sized enterprises. To mitigate these risks, the association suggests a phased rollout of the Passports system, allowing companies sufficient time to adapt their supply chains.

Recommendations for Data Transparency and Standards

To ensure data transparency without compromising proprietary information, the association recommends the use of versatile data carriers such as QR codes and RFID tags. This flexibility would allow the apparel sector to integrate Digital Product Passports into existing logistics more seamlessly. Furthermore, Ecommerce Europe maintains that any new Product requirements should align with international standards to prevent market fragmentation and ensure that sustainable products remain competitive globally.

The association concludes that the success of these Passports depends on a balanced regulatory environment. By prioritizing Digital efficiency and data transparency, the European Union can foster a robust circular economy that supports both environmental goals and the continued growth of the digital commerce industry.