Sustainable and fair supply chains thanks to committed start-ups and development cooperation

If you want to contribute to a sustainable change in the textile industry as an ordinary citizen, you quickly ask yourself how effective your own contribution really is. Does it help the manufacturers in any way if I put the fast fashion jeans back and visit the second-hand shop in the neighbourhood instead? Can I even dispense with inexpensive new clothes in the long term? Isn't there a lack of affordable products that are manufactured in a fair and responsible manner? At least that is the impression I get when I look at the never-ending list of “unsustainable” producing manufacturers and suppliers, in contrast to the manageable number of (rather unknown) fair producers.

The interview with my guest, Stefan Niethammer, founder of the textile company 3Freunde, gives on the one hand insights into how it is possible to enforce fair supply chains; on the other hand, he shares with us his experiences regarding cooperation between start-ups and development cooperation.

leverist.de: Hello Stefan, nice to talk to you, and thank you for taking the time for our conversation! You are the founder of the social enterprise 3Freunde from Berlin and already have some experience in collaborating with the development cooperation and GIZ. This is very exciting, and I am sure that your experience will be of great value to other interested start-ups. Perhaps you could start by telling us what exactly the company 3Freunde does?

Stefan Niethammer: We as 3Freunde produce T-shirts and other apparel from fair trade organic cotton. It is important to us that no one in the entire supply chain comes to harm just because we want to produce products. We promise our customers that our products will not cause any ecological or social harm.

leverist.de: This is a big promise! How do you make sure that you do that?

Stefan Niethammer: We try to ensure that the individual production steps located as close as possible to each other. This means that our T-shirts are produced where the cotton is grown. In addition, it was important to us to produce in a democratic place, and so the choice fell on India.

The reason why we produce in India and not simply in Europe, especially Western Europe, is that we want to transfer the added value to countries located in the global South. We are not interested in generating even more economic profit in Western Europe, but rather want to promote value creation, decent jobs and livelihood opportunities in countries of the South".

leverist.de: This is very noteworthy! Moreover, how and when did you decide to collaborate with the development cooperation?

Stefan Niethammer: Now that we know our goals and convictions, it is easy to see that development cooperation is an essential element. Both we, as social enterprises, and development cooperation, strive to improve the lives of people in developing and emerging countries, for example through trade and fair and sustainable value chains. It is certainly advantageous to have state actors on board, because this way you can unite powers with governments and other institutions to change the world for the better.

leverist.de: What could such a cooperation between start-up and development cooperation look like?

Stefan Niethammer: Our first contact with development cooperation was through “Engagement Global”. Our first cooperation with GIZ, however, was six years ago in a co-partnership within a DeveloPPP programme. Back then, the aim was to implement fair production steps along the supply chains.

GIZ wants to have a business plan that describes where a company wants to go with GIZ. A cooperation is therefore particularly suitable for start-ups that already have some experience. GIZ can then act as a co-financier, which is particularly exciting for sustainable project ideas that have a high probability of success but lack financial back up. Without the support from GIZ/development cooperation, these projects would not be feasible.

leverist.de: Yet, the DeveloPPP programme is not the only development cooperation tool that you have tried. leverist.de also has two opportunities from 3Freunde. In one of them, you are looking for suppliers of beeswax and jojoba oil from India, in the other you are looking for customers for several million medical face masks, also in India. How did you hear about leverist.de?

Stefan Niethammer: leverist.de was introduced to us by the secret weapon of GIZ. These are the EZ-Scouts, who are members of professional associations or are assigned to the Chambers of Industry and Commerce, for example. The development cooperation scouts act a bit like interpreters between the world of business and development cooperation.

leverist.de: You already got two matches for the beeswax business opportunity. How satisfied were you with them?

Stefan Niethammer: One of the matches was a project from the African continent, which I found very exciting in principle, but unfortunately was not suitable for us because we are specifically looking for partners in India. Overall, however, it is a very convenient way to look for certain partnerships and services internationally. It is easy to use, free of charge and fast.

leverist.de: You already explained in the beginning why you opted for India as a production country. Can you tell us a little bit more about the internationalization process for start-ups and which role leverist.de could play within that process?

Stefan Niethammer: We wanted to assure absolute transparency and decent wages along our supply chain – which is only possible with the right local partners.

Of course, you can proceed systematically, but part of our truth is that it was a series of coincidences that led us to the partners we still work with today. Back then, leverist.de still did not exist. We said that we wanted to go to India, because India was the second largest organic cotton producer in the world at that time and all stages of production could be implemented locally. We started with four test orders, two of which were okay, and one stood out. For example, he wanted to know what distinguishes organic cotton from conventional cotton. So, he asked questions that made us realize that he was not just interested in business, but in doing something that has a positive impact.

If you look at economy, I would always advise you to look at people. Business has a lot to do with trust, and that is not built up between machines, but between humans. Finally, in 2012, we set up our own sewing shop in India.

With regards to leverist.de: if back then there had already existed a platform that allowed matchmaking with pre-tested companies, it would have been an incredible relief at that time, of course.

leverist.de: Thank you Stefan. It was a very inspiring insight into your career, and good luck for the future!

From the conversation with start-up founder Stefan Niethammer I was able to draw many conclusions that can be summarized like this:

At the beginning, collaboration between start-ups and development cooperation must undergo a coordination process where both sides clearly communicate and coordinate their goals and conditions. Subsequently, young companies can benefit from GIZ as a co-partner. In addition, development cooperation provides a wide range of tools and projects for cooperation with companies, while not all of them are equally suitable for start-ups. Leverist.de, as a free and easy-to-use tool, is a simple and risk-free first access to business opportunities in developing and emerging markets.

In addition, the insights into 3Freunde's career have also resolved my initial questions and doubts. If 3Freunde manages to apply their convictions along their supply chain and succeeds in offering clothes produced in a fair and responsible way, then a sustainable turnaround in the textile industry is certainly possible.

Copyright Hero Image: Marianne Krohn onUnsplash, 2020

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