The Italian holding United Colors of Benetton plans to transfer production from Asia and is considering the possibility of localizing production facilities in Serbia, Croatia, Turkey, Tunisia and Egypt. By the end of 2022, Benetton production in Asia should be halved.
Benetton CEO Massimo Renon announced this in an interview with Reuters. The group's decision is strategic and is aimed at strengthening control over the production process, as well as over transportation costs - "a shipping container, which previously cost $ 1200-1500, today can cost from $ 10 to $ 000 without an exact delivery date," the head notes. Benetton.
Renon told the publication that even if the cost of production in Vietnam and Bangladesh remains 20% lower than in the Mediterranean countries, this benefit is offset by the longer lead times due to logistics difficulties; Due to a shortage of ships, Asian countries are moving from an average lead time of 4-5 months to 7-8 months. In contrast, in Egypt, the delivery time can be two to two and a half months. In the case of wool products, production in Serbia and Croatia can take as little as 4-5 weeks. In these two countries, as well as in Tunisia, Benetton plans to develop production at its own sites, and in Egypt and Turkey, the company will place orders with third-party factories. The Benetton Group announced last week that it is implementing a new automation solution at its logistics centers in Italy to optimize processes.