Thank you.
I'd like to begin by expressing my gratitude for the invitation to appear today before the subcommittee. We have tremendous respect for the work that's being done by the committee and we're excited to contribute to the examination you're conducting with respect to human rights in Honduras.
My name is Peter Iliopoulos. I am the Senior Vice-President, Public and Corporate Affairs at Gildan. Today I am accompanied by Geneviève Gosselin, who is the Director of Corporate Communications within our company.
I'd like to start by giving you a brief overview of Gildan and our operations in Honduras. The company was founded in 1984 by the Chamandy family. We're a publicly traded company, listed on both the Toronto Stock Exchange and the New York Stock Exchange in 1999. Our headquarters are in Montreal. We have over 31,000 employees working for us worldwide, distributing our product in over 30 countries. We pride ourselves on our leading social and environmental practices and Canadian corporate governance profile.
In terms of our manufacturing, we're a vertically integrated apparel manufacturer. We have manufacturing hubs in Central America and the Caribbean basin. These are our two primary hubs that service our large replenishment markets and wholesale distribution and retail networks in North America and other parts of the world.
We also recently acquired a vertically integrated manufacturing facility in Bangladesh, which is intended to service the Asia-Pacific region and Europe. Over and above that, we also have our yarn-spinning operations, which are located in the United States.
We service our product into two primary markets. The printwear market sells T-shirts, sport shirts, and golf shirts on the wholesale distribution channel. We have the largest market share in Canada and in the United States, something in the range of over 70% in each of these countries.
A secondary market and newer market for us is selling our product into the retail channel: selling directly into a Walmart or a Target, for example. We've expanded our product line to encompass socks and underwear to service the retail channel as well.
With respect to our operations in Honduras specifically, we operate four textile manufacturing facilities in the country. We also have two integrated sock manufacturing facilities and four sewing facilities for all our activewear and underwear products. In total this represents capital investment of over $500 million, which we've done over the last five years alone. We have over 20,000 employees in the country.
Why did we decide to set up manufacturing operations in Honduras? It's strategically located to service our primary markets in the United States and Canada. In our experience there, we found they have a very skilled workforce, which has allowed us to develop a decentralized local management team to run our operations in the country. It also allows us to effectively leverage trade agreements.
The United States, which is our largest market, has a free trade agreement with Central America. Our operations in Honduras have allowed us to leverage that agreement. With Canada recently signing a free trade agreement with Honduras, we're looking forward to the ratification of that agreement, which will allow us to effectively service the Canadian market, particularly in competing against Asian imports.
I want to take a couple of minutes to talk about our corporate social responsibility practices, what we call our “Gildan genuine stewardship commitment”. It is based on four pillars: people, environment, community, and product. We really believe, particularly in the apparel industry, that we are leaders in each of these areas.
With respect to people, we have a very strong and strict code of conduct that's based on internationally recognized standards. We conduct a very thorough audit process, both independently and through third parties, auditing our social compliance program at each of our facilities. Audits have been occurring over the last eight years on a regular basis. Each of our facilities will be audited by third parties and through us in an independent manner.
Our labour compliance program has been accredited by the Fair Labor Association based in Washington, D.C. We were the first vertically integrated basic apparel manufacturer that was accredited by the FLA. Each of our sewing facilities has also been certified by WRAP, Worldwide Responsible Accredited Production. Gildan has been recognized by Jantzi-Macleans since 2009 as one of the top 50 best corporate citizens in Canada.
I'll talk a little bit about the working conditions that we offer our employees in each of the countries in which we operate, including our competitive compensation significantly above the industry minimum wage. Benefits that we offer include, for example, 24-hour access to medical clinics on site at our facilities staffed in Honduras. There we have 16 doctors and 28 nurses who are on the payroll to deal with any needs that our employees may have.
We offer free transportation to and from work for our employees, subsidized meals, and we're also in the process of implementing a “best in class” ergonomics program in collaboration with The Ergonomics Center of North Carolina, which right now has a five-level program, with five qualifying as world class. We're currently at level three and we expect to achieve, by working with them, level-five, world-class status by the end of 2014.
Most recently, in the past year, 2012, we've also inaugurated three schools for back health in Honduras. As I say, the working conditions that we offer our employees are of paramount importance to us.
Very briefly, from an environmental perspective, we have a strict environmental policy, an environmental code of practices, an environmental management system, the same as we do from a social compliance perspective. We have conducted environmental audits for the last 10 years.
There are two things to highlight. We have biomass steam generation at our facilities, which his allowing us to produce energy. It has resulted in a reduction of greenhouse gas emission intensity by 14% since 2010. We continue to reduce our reliance on bunker fuel consumption, with a reduction of 40% since 2010. I would say that over 35% of our energy comes from renewable sources.
The other area with respect to the environment that I would like to highlight is that we have also treated our waste water biologically since 2002. We have a Biotop system, a series of lagoons that treat the water that's discharged from our facilities to remove all dyes and chemicals over a 30- to 40-day process, so that the water that's ultimately discharged into the public river is clean. This year, for the first time, we've established environmental targets that we are looking to achieve over the next few years, and we will continue to update those.
From a community perspective, our emphasis really has been on training and developing our employees and on partnering in the communities where we operate to develop well-educated, highly motivated local management teams. That really has been the pillar of how we have been conducting our operations.
Our donation policy has been focusing on youth education and humanitarian aid. There is one thing to highlight here in particular. In 2005 we spearheaded the development of an industry-wide initiative for the creation of a technical school in Honduras, the Central American Polytechnic Institute. Gildan has invested over $1.5 million in the IPC since its inception in 2005. We've seen 6,000 students graduate from this school. Over 1,000 students have graduated from the full-year program. There are both short-term programs and full-year programs, with a 90% job placement rate resulting in the country. Since its inception, we've sponsored 320 scholarships at this school.
These are numerous examples of what we have done from a community perspective, and I'll throw one other one out there. Recently we've invested with the local community in Rio Nance, where our manufacturing complex is located, to create a police station to ensure the safety of our employees who are working in the area.
Finally, from a product perspective, essentially, we ensure all of our products are OEKO-TEX Standard-100 certified, by ensuring that they are safe, such that no harmful chemicals or materials are found in their composition. Essentially, all of the cotton that we use in our manufacturing operations is sourced from the United States. Mostly recently we acquired a company in the United States, Anvil Knitwear, which is one of the largest purchasers of U.S. organic and transitional cotton, and we've added an eco-collection line to our entire product line.
That's a brief summary of Gildan and our CSR practices.
I again want to thank the committee for this invitation to appear before you. I'd be happy to answer any questions you may have.