The 25 textile mill managers gathered at the Shang Lake Garden Hotel earlier this week buzzed with energy, shooting off orders to subordinates on their cell phones, exchanging name cards and then greeting each other like old friends.
A set of mostly self-made entrepreneurs with little formal education but an excellent business sense, they had come to learn new ways to improve efficiency, cut costs and increase profit at their mills.
But the speaker they were waiting for was not an expensive management consultant or corporate lawyer. Instead, it was Linda Greer, a scientist with frizzy hair and a PhD in environmental toxicology.
An expert with the Natural Resources Defense Council (NRDC), a New York-based non-governmental organization, Greer made the trip to the conference in Changshu, a picturesque city in Jiangsu province, to introduce the Responsible Sourcing Initiative - a best practice guide that textile mills can use to reduce their water, chemical and energy use.
If widely implemented, she argues that these techniques can transform the textile industry - and make it more profitable at the same time.
"Our experience showed that most mills did not even realize how much money they were throwing away. And when you waste water, energy, and materials, you are polluting the environment," she told the conference, which was jointly organized by the Changshu
government and the NRDC. "So that is the win-win we can get here: improving resource efficiency in a way that you can reduce costs and protect the environment at the same time."
There are roughly 50,000 textile mills in China - more than 100 in Changshu alone - producing everything from pillows and blankets to clothes, bags and even fabric used in car interiors. Despite a large drop in demand as a result of the economic crisis, China exported nearly $160 billion in textiles last year. Changing the way the nation's textile mills operate is clearly no easy task.
"Textile production is one of the most polluting industries in China," Greer told China Daily. "People don't think of this as being a heavy industry, but when you look at the energy and water consumption, it really is." In the process of making clothes, mills emit what she calls a "noxious brew" of chemicals, and use enormous amounts of energy and water - up to 200 tons just to make 1 ton of fabric.
Factory managers in China also still have many incentives to disregard "green" concerns. Local government officials often do not enforce environmental regulations in order to boost production and GDP figures. Relentless demands for cheaper prices from multinationals like Wal-Mart also leave factories reluctant to spend money on sustainability. After all, "there are a lot of ways to be more efficient that are not necessarily more environment friendly", said Meghla Bhardwaj, associate editor-in-chief at Global Sources, a consultancy that helps connect companies with potential suppliers.
However, fierce competition and growing consumer pressure are beginning to force suppliers to take environmental issues more seriously, said Bhardwaj. "More and more suppliers are realizing that eco-friendly measures such as recycling andwaste reduction can help lower their production costs and improve profitability."
"Factories in China are increasingly focused on efficiency," added Wang Hua, director of the ecology department at the Jiangsu Environmental Protection Bureau. "The government's environmental regulations are increasingly strict but factories are also looking for ways to reduce their costs."
The Responsible Sourcing Initiative began at the RedBud Textile Mill, a collection of grimy buildings that house fabric dyeing machines and water treatment facilities in Changshu.
In 2007, the mill was flagged as an especially polluting mill in a survey by the Jiangsu Academy of Sciences and the NRDC. The factory's owner, Frank Liu, realized this was as much a business problem as an environmental and regulatory challenge when he got a call from Wal-Mart, one of his major customers, suggesting he talk to the NRDC about ways to address the issue.
"We know that sustainable business practices in the long term cost all of us less," said Eleanor Wright, Wal-Mart's raw materials director, adding that suppliers who focus on efficiency and sustainability are more likely to get the company's business. Wal-Mart also recently launched a program with its top 200 suppliers to find ways to improve energy efficiency by 20 percent by 2012, the company said.
In response to the NRDC's recommendations, which included ways to reuse hot water and water used to wash dye residue off newly colored cloth, Liu spent about 500,000 yuan ($73,000) on efficiency improvements that he said reduced water use by 23 percent and coal use by 11 percent. As a result, he now saves about 5.7 million yuan annually.
RedBud has also become more attractive to potential customers concerned that their suppliers are in compliance with environmental regulations, he said. "We're a greener factory now, and we're more competitive," he declared proudly.
Drawing on its success at RedBud, the NRDC extended its efforts to several other factories, slowly developing the best practices presented at Monday's conference. Eventually, Greer hopes to expand the program to textile mills across China.
"We appreciate the fact that China has so many thousands of factories but they do not have a regulatory system that is to scale," said Greer. "So the only way to make this work is to have something that's self-reinforcing. If you come up with ways to save money that are good for production, that should be self-reinforcing."
Major multinationals including Gap, Levi Strauss, H&M, Nike and Hong Kong-based middleman Li and Fung, have also agreed to cooperate, and Greer hopes they will push their suppliers for efficiency improvements the way Wal-Mart did with RedBud.
"The biggest challenge is to go beyond the models and the pilots and get at something that's really at the scale of the problem," she said. "Bringing something to scale in a country like China is really a challenge."
If the reaction of those attending the conference in Changshu is any guide, it may not be insurmountable. As the meeting drew to a close, seven of the factory managers had already signed up with the NRDC to explore possible improvements in their mills.
