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Willian A. Parrado (ACICAM): it is important to discuss the integration of processes in Latin America
On the occasion of the Latin American Footwear Forum, taking place in Colombia, we spoke with Willian A. Parrado, Executive Vice President of ACICAM, about the challenges and opportunities of the footwear trade in Latin America today
Perhaps there is no better occasion to take a snapshot of the footwear trade in Latin America than this one. The presence of representatives from Argentina, Chile, Brazil, Guatemala, Mexico, Ecuador, Paraguay, Uruguay, Peru, El Salvador, Venezuela, and Nicaragua in Cúcuta will certainly allow the share of “experiences and problems that affect the footwear sector” in each of them.
That is the opinion of Willian A. Parrado, Executive Vice President of the Colombian Association of Footwear, Leather and Leather Goods (ACICAM), representing the local organization this year. His “expectation is to achieve broad participation and generate a joint agenda to develop mechanisms that lead to solving the problems of the footwear sector”. In his view, strengthening the integration of footwear sector processes in the region is the right way to move forward.
Therefore, “we need to know our markets in-depth and thus generate the incorporation of processes throughout the value chain of the footwear sector. For this, it is necessary to know what each country offers and how we can adhere to this value offer in other markets”, he explained. “It is a path that involves several phases, and we believe that spaces such as the forum direct the Latin American markets to a greater gear. We consider it a good integration mechanism”, concludes Willian.
In the end, it gave the industry “a strong boost in intraregional trade, and proof of this is the market dynamics that international fairs that take place in Latin America have today”.
He shared that companies are now resorting to “process optimization and cost reduction by improving raw material negotiations”, “and have even decreased their profit rates”. Inevitably, though, the prices for the end consumer have definitely increased.
The truth is that, although at different speeds – with Brazil at the forefront, notes Willian –, this region is also taking steps to make its supply chain more sustainable. “In all the countries of the region, efforts are being made to apply sustainable processes, be it manufacturing production or the incorporation of more environmentally friendly raw materials”.
That is the opinion of Willian A. Parrado, Executive Vice President of the Colombian Association of Footwear, Leather and Leather Goods (ACICAM), representing the local organization this year. His “expectation is to achieve broad participation and generate a joint agenda to develop mechanisms that lead to solving the problems of the footwear sector”. In his view, strengthening the integration of footwear sector processes in the region is the right way to move forward.
Therefore, “we need to know our markets in-depth and thus generate the incorporation of processes throughout the value chain of the footwear sector. For this, it is necessary to know what each country offers and how we can adhere to this value offer in other markets”, he explained. “It is a path that involves several phases, and we believe that spaces such as the forum direct the Latin American markets to a greater gear. We consider it a good integration mechanism”, concludes Willian.
Footwear Trade
The footwear industry in the region is slowly changing, mainly due to the impact of the COVID-19 pandemic, which made the countries realise their dependence on the Asian market. “When finding themselves in difficulties to obtain these commodities [finished products and raw materials], the companies began to look towards the nearest countries to be able to demand materials”, pointed out the Executive Vice President of ACICAM.In the end, it gave the industry “a strong boost in intraregional trade, and proof of this is the market dynamics that international fairs that take place in Latin America have today”.
Challenges
But it’s not a journey without immediate challenges. Today’s high inflation is taking a toll on the region. “The footwear trade has been characterized by generating promotions from inventory rotation, but today the situation is different, and we can see how, for example, in Colombia, inflation has reached levels of 9.43% in the year 2023”, said Willian. “The above is caused by factors such as the increase in the prices of raw materials and the devaluation of the currency against the dollar”.He shared that companies are now resorting to “process optimization and cost reduction by improving raw material negotiations”, “and have even decreased their profit rates”. Inevitably, though, the prices for the end consumer have definitely increased.
Sustainability
Even so, looking to the future, sustainability will also be addressed with the inclusion of a series of conferences on how to incorporate these environmental issues “into production and value-added processes”.The truth is that, although at different speeds – with Brazil at the forefront, notes Willian –, this region is also taking steps to make its supply chain more sustainable. “In all the countries of the region, efforts are being made to apply sustainable processes, be it manufacturing production or the incorporation of more environmentally friendly raw materials”.
