Like many of his cohorts attending the annual World Economic Forum in Davos, Switzerland, Oliver Niedermaier is among thousands of political and economic leaders who believe they can change the world. But Niedermaier, CEO of New York-based Tau Investment Management, is one of the few who think they can do it by tackling inefficiencies in the global supply chain.
Niedermaier has teamed up with investor Alexander Soros— the son of billionaire financier George Soros— and the Global Emerging Markets group (GEM) to raise $1 billion in his mission to revamp the vast infrastructure that moves millions of products and materials around the world.
He said industries like electronics and toy manufacturing are full of inefficiencies and outdated equipment that can be upgraded for a nice profit. His Tau Investments has chosen as its first target textile and apparel manufacturing in emerging markets, a $1 trillion industry that has been in the headlines recently for such disasters as the Rana Plaza building collapse in Bangladesh last May that took 1,129 lives.
"Global supply chains are a huge turnaround opportunity," said Niedermaier, describing the garment industry as engaged in a "race to the bottom" as it cuts corners to keep costs down. By tackling a range of problems, from obsolete sewing equipment to inefficient lighting and poorly trained management, he believes he can turn a healthy profit for his investors while improving working conditions, creating a cleaner environment and boosting pay for employees.
Niedermaier described the typical garment factory owner in the developing world as: starved for capital; lacking the experience to scale up operations; thin in middle management to improve productivity; and suffering high staff turnover.
He added: "In addition, they don't have the means to deal with compliance requirements as there is more and more pressure on corporate buyers to clean up their supply chains."
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