The Year of Social Accountability

in the Supply Chain?

A year in review of outsourced manufacturingand the quality control services industry.

ASIAFOODINSPECTION PRESENTS THE AI 2013 Q4 BAROMETER

SOCIAL ISSUES PLAGUE GLOBAL SUPPLY CHAINSSOCIAL ISSUES PLAGUE GLOBAL SUPPLY CHAINS

AsiaInspection,A leading quality control service provider

that partners with international Brands, Retailers and Importers to secure and manage their global supply chain.

AsiaFoodInspection,A leading food safety service provider

that partners with international Brands, Retailers and Importers to secure and manage their global supply chain.

ASIA MANUFACTURING LIFE AFTER RANA PLAZAASIA MANUFACTURING LIFE AFTER RANA PLAZA

Most notably the Rana Plaza tragedy in May, where a factory collapse in Bangladesh

2013 was a challenging yearfor brands and retailers worldwide in the face of supply chain social issues

2013 was a challenging yearfor brands and retailers worldwide in the face of supply chain social issues

1,129 people took the lives of 1,129 people

EX I T

54 workersinjured

119 peoplekilled

100 peopleescaped

The official media reported the fire had been ignited by series of explosions at Baoyuanfeng Poultry

when around 300 to 350 workers were on the site.

TRAPPED WORKERS IN JILIN FACTORY FIRETRAPPED WORKERS IN JILIN FACTORY FIRE

The official media reported the fire had been ignited by series of explosions at Baoyuanfeng Poultry

when around 300 to 350 workers were on the site.

Almost all the doors of the workshops were locked on the outside, and only a narrow side exit had been left open, which made escaping difficult.

The minimum wage in Bangladesh is half China and Cambodia is $80 per month.

Throughout the year in factories across India, Bangladesh, Cambodia and Myanmar:

Strikes Riots

Workers Demanding Higher Wages

The minimum wage in Bangladesh is half China and Cambodia is $80 per month.

Child labor back in the spotlight

in the Asia and Pacific Region*

* US Department of Labor. October 2013

78 Million Children Engaged in Child Labor

Child labor back in the spotlight

Figures for AsiaInspection reflect brands and retailers are taking action

in Asia for 2013 compared with 2012

While Bangladesh was in the spotlight, buyers took to securing their supply chain in all sourcing regions, year over year

+61% Audits increase

in Bangladesh+47% Audits

in China+58% Audits

in India+112% Audits

+61% Audits increase

+47% Audits +58% Audits+112% Audits

As a result of the tragic incidents in Bangladesh news emerged of buyers starting to look for alternatives in the region.

AsiaInspection ordered inspection figures further support this.

Largest exporter for apparel in volume after China

Inspections in Bangladesh

Inspections in India

Inspections in Vietnam

Inspections in Cambodia+114%

+71%

+44%

+36%

SOURCING POWER: CHINA VS. REST OF THE WORLDSOURCING POWER: CHINA VS. REST OF THE WORLD

November was upcompared with a year earlier

2013 showed an increase for the period of January to November

compared to 2012

This puts China on track to report

the largest annual trade surplus since 2008

Despite fears that China’s competitiveness would be eroded by the appreciation of the RMB and wage inflation,

China’s exports continue to set new highs.China’s exports continue to set new highs.

12.7% 9.3%

This puts China on track to report

the largest annual trade surplus since 2008

12.7% 9.3%

BANGLADESH

AsiaInspection

AsiaInspection

AsiaInspectionBANGLADESHCHINA

AsiaInspection inspection figures mirror this with a

+17% increase in ordered inspections in China in 2013 compared with 2012.

In 2013, China remained by far the largest sourcing region

used by AI clients.

Bangladesh exports amounted to a mere 1% to that of China.

In 2013, China remained by far the largest sourcing region

used by AI clients.

Bangladesh exports amounted to a mere 1% to that of China.

AsiaInspectionAsiaInspection

AsiaInspection

AsiaFoodInspection

with Africaseeing a 47% increase the second half of the year

Cambodia doubled despite protests over wage concerns

Vietnam was up by 71% increase

2013 confirmed the trend for new sourcing regions

2013 confirmedthe trend for new sourcing regions

AsiaInspectionAsiaInspection

AsiaFoodInspection

WHAT TO EXPECT IN 2014 GLOBAL SOURCINGWHAT TO EXPECT IN 2014 GLOBAL SOURCING

It’s obvious from the current statistics and tragic events in 2013 that transparency and accountability are in great need.

Western buyers do not actually know what’s going on in their factories

““““

Sebastien Breteau, CEO of AsiaFoodInspection

Western buyers do not actually know what’s going on in their factories

2014 will be a year of transparency2014 will be a year of transparency as was demonstrated when H&M published their entire supplier list.

FOOD SCANDALS CONTINUE TO ROCK CHINA SUPPLY CHAINFOOD SCANDALS CONTINUE TO ROCK CHINA SUPPLY CHAIN

China continues to be a breeding ground for food scandals led by the combination of

food suppliers eagerto cut costs

extremely limited government oversight

The increasing number of prosecutions hasn’t worked as a deterrent with

new scandals continuing to arise on an almost monthly basis.

Wal-Mart China’s own CEO, Greg Foran, recently had to issue a public apology for their

stores selling “other animal” meat, including fox meat, to consumers.

in 2013 compared with 2012, amidst the fear and increased sourcing from Asia

up 53% AFI food inspectionsup 53% AFI food inspections

Dedicated Account ManagerA supply chain partner offering adviceon your specific needs

Comprehensive Online ManagementUse your real-time dashboard to benchmark and identify your high performing suppliers

Silliker ExpertiseInternational network of accredited food testing & consulting labs: 70 locations in 18 countries.

MobileBook, check reports and make decisions on the go

Industry Leading TurnaroundOnsite within 48 hours. Reports the same day 80% of the time

FlexibleCancel or modify orders up to 4pmthe day before the inspection for free

Trusted and Truly Independent100% QC. AI is not involved in sourcingand protects your factory information

All-Inclusive PricingEasy to budget. No hidden costs

ABOUT ASIAFOODINSPECTIONYOUR EYES IN THE FACTORY™ABOUT ASIAFOODINSPECTIONYOUR EYES IN THE FACTORY™

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