FW
Compared to the last fiscal year, the Joint Apparel Association Forum (JAAF) foresees an immediate contraction of $1.5 billion in Sri Lankan apparel exports during the 3-month period ending in June.
The forum also expects further demand contractions that could result in reduction of apparel exports by an additional 30 – 40% after June. The situation further compounded when the effects of the current closure with no clear date of resumption are factored in.
The impact of the curfew may result in trade shift due to countries like Vietnam, Cambodia, and Indonesia, Lanka’s main competitors, being completely operational.
While most companies have pledged to pay March salaries, a vast majority of the industry will struggle to pay salaries from the end of April onwards due to the factors outlined above that have led to the evisceration of the industry’s working capital.
The forthcoming European Union Generalised System of Preferences (GSP) scheme does no favor Bangladesh, points out EuroCommerce, the European body representing retail and wholesale sectors. It says the safeguard measures proposed in the forthcoming GSP would severely affect Bangladesh. Currently, Bangladesh benefits from the ‘Everything but Arms’ arrangement of GSP for least developed countries (LDC's). With a per-capita income of $2,457 in 2021, Bangladesh is classified a low-middle income country. With new GSP Regulation coming in to effect next year, Bangladesh could be given the ‘Most Favoured Nation’ tariffs and have the zero custom duty which it currently enjoys, removed.
GSP is aimed at helping products originating from a select list of developing countries preferential access to the EU markets. The preferential treatment is usually in the form of zero or reduced Custom Duties. The current GSP regulation ends on December 31, 2023 and the new one starts on January 1, 2024 valid for the next 10 years.
Bangladesh set to lose LDC status
Bangladesh is expected to exit the group of least developed countries (LDCs) in 2024, the most important change that it is going to face will be associated with preferential market access for exporters, particularly in the EU. The implication is huge, as 58 per cent of the country’s exports are to the EU and UK and Bangladesh's exports could face average duties of 8.7 per cent as its status upgrades from an LDC. What’s more for readymade garments, it could be 12 per cent.
The safeguard measures proposed in the European Union’s new GSP regulation would severely affect Bangladesh’s overall economy, points out EuroCommerce. The platform has already requested negotiations on the new GSP regulation and fears hundreds of thousands of RMG workers are at risk of losing their jobs. Additionally, the proposed measures could jeopardise the sustainable development of the sector. It is estimated shipments would drop by 5.7 per cent per year. To mitigate these effects, Bangladesh needs to qualify for the GSP+ scheme to preserve its competitiveness in the export market.
GSP+ scheme is a 'special incentive arrangement for Sustainable Development and Good Governance' for 'vulnerable developing countries'. This system grants full removal of tariffs on over 66 per cent of EU tariff lines. To qualify for the scheme, Bangladesh has to ratify 27 international conventions and has to fulfill the 'vulnerability' criteria as set by the European Union. In order to address these concerns, amendments of the existing labour laws, elimination of child labour, registration of trade unions, elimination of backlog in cases of labour laws etc, have been given the most emphasis.
The government of Bangladesh, along with relevant stakeholders, has been actively addressing issues related to the international conventions for some time now. An indicative action plan for addressing all the issues has already been developed and shared with the European Union. However, it has been put on hold due to the pandemic. A tripartite committee has already been formed with six representatives from the government, three representatives from entrepreneurs, and three representatives from workers.
Over 50 per cent export to the EU a roadblock
One of the biggest obstacles is that as soon as Bangladesh crosses 37 per cent threshold of exports to the EU, the new GSP Regulations will kick in. It is now time for a tripartite discussion between the EU law makers, the EuroCommerce personnel and Bangladesh government to find a middle path that does not destroy the well-invested, revenue and job generating textile and readymade garment sector of Bangladesh, the backbone of its export-based economy.
Wide-format inkjet printer and cutter manufacturer Mimaki USA, an operating entity of Mimaki Engineering in Japan, is expanding its existing 3D printer offering with the new large-scale Mimaki 3DGD-1800 system, which complements the company’s full-color UV-cure inkjet 3DUJ-553 3D printer and 3DFF-222 desktop system. Due to its size, the new 3DGD-1800 is a great choice for 3D printing dimensional displays for multiple applications.
Mimaki USA develops and builds a full line of digital printers and cutters, and provides a total workflow solution for applications in the industrial 3D printing, art, sign graphics, and textile and apparel markets. Its new 3DGD-1800 3D printer, which offers a processing speed that’s three times faster than what conventional FFF and other extrusion-based systems can provide, creates large-scale prints using Gel Dispensing Printing technology, which sounds similar to Massivit 3D’s proprietary GDP method that combines FDM and SLA techniques.
Mimaki’s newest 3D printer offering, weighing in at 2,500 kg, is able to create a figure that’s 70.8″ high in only seven hours, with a maximum build weight of 150 kg and dimensions of 57” x 43.7” x 70.8”. The 3DGD-1800 has an assembly-based design, which allows users to print massive objects that, as Mimaki USA puts it, far exceed the size of the formation area. Additionally, because the system does not need to use support materials for internal structures, it can print objects with hollow interiors at a higher rate of speed than conventional 3D printers.
The postponed March edition of Chic Shanghai will shifted in Shenzhen in July alongwithr with Chic's Shenzhen debut event.
Due to the global Corona epidemic, the fashion and lifestyle fair could not be held as planned March 11-13 in Shanghai. Since the ongoing worldwide epidemic situation does not allow China's control and prevention measures to be relaxed, organisers did not see a chance to have a catch-up date of Chic's March edition to be held in Shanghai in the next weeks due to logistical reasons.
The originally planned event space for the premiere of Chic Shenzhen from July 15-17 will be expanded by 10,000 square meters to 40,000 square meters.
The China National Textile and Apparel Council's Greater Bay Textile & Apparel Expo will now combine a total of four trade shows in Shenzhen: Chic Shenzhen, Intertextile Shenzhen Apparel Fabrics, PH Value and Greater Bay Area International Trade Fair for Fibers and Yarns.
All Chic product areas will be realised in halls 9 and 11 of the Shenzhen World Exhibition & Convention Center including Tailoring, Urban View, New Look, Impulses, Kidz, Chic-Young Blood, Chic Worldwide (international participation) in Hall 9 and Denim World, Secret Stars, Bags & Shoes, Heritage, ODM in Hall 11.
According to the The World Trade Organization, overall global trade is likely to drop between 13 and 32 percent due to the crisis. World trade volume in goods, including apparel and textiles, is forecast to drop between 13 and 32 percent this year due to the coronavirus pandemic, the World Trade Organization said Wednesday.
The pessimistic scenario of a 32 percent or more drop assumes a steeper initial decline and a more prolonged and incomplete recovery. Regarding global trade in goods last year, the value fell by 3 percent to $18.88 trillion, with the world’s top exporter, China, registering no growth at $2.49 trillion, followed by the U.S. with a 1 percent contraction to $1.64 trillion and Germany with a 5 percent fall to $1.48 trillion.
In apparel, preliminary estimates by WTO economists indicate the value of exports stagnated in 2019, with almost zero growth from the $494 billion notched in 2018. In 2019, WTO data show, China, the world’s biggest apparel exporter, registered a 4 percent decline to $151.5 billion. In the first two months of 2020, China’s exports of apparel (according to customs data) were down around 20 percent year-on-year, the WTO said. Neighboring Vietnam posted a 9 percent increase in 2019 to $30.8 billion.
Jeanologia has repurposed its ozone based G2 technology, which it uses for the sustainable treatment of jeans into an innovative method for sanitisation and disinfecting face protection masks.
Considered an “essential” business by the Spanish government during the COVID-19 crisis, the company is making a great effort, working together with other technology centers and universities in coordination with the government, and acting altruistically. Enrique Silla, Jeanologia’s founder, has that “after Covid19 eco-sustainable production will become obligatory for everyone. Only the companies that have put people and planet before profits and have a purpose will be able to survive.
For the sanitisation process, Jeanologia takes the face protection masks to be disinfected and pust them into a hermetically sealed chamber – Sanitizing box – subjecting them to a determined quantity of ozone. Through advanced oxidation the bacteria is eliminated and the material is disinfected.
The disinfection protocol is certified by the Valencian government’s health authorities and complies with international health and safety specifications. The brand will continue working in this direction with its R+D team because the sanitisation of apparel and workwear is demanded by brands and consumers.
The Kingpins New York denim trade show originally scheduled for June 2-3, 2020, will not take place due to health concerns and travel restrictions related to COVID-19.
Kingpins has recently launched Kingpins24, a new online event for the denim industry that will debut on April 22/23 and represents its organisers' attempts to unite and inform the denim industry in these uncertain times. The next regular edition of Kingpins New York is scheduled for November 17-18.
Turkish Clothing Manufacturers Association (TCMA) has urged global brands to act in unity with their strategic partners, garment manufacturers, to get through tough times.
In the face of COVID-19, emerging threats to the global economy raise concerns for the ready-made garment industry in Turkey. This industry has sustained the retail operations of global brands for the past century by offering garments with the highest quality, paired with innovative collections and the fastest delivery. When governments declared lockdown for societies due to health and safety reasons, global brands' reaction was to close down retail stores all around the world due to the sudden decline in sales. As a result of losses in sales, volume and revenue, brands then turned to their suppliers with a number of defensive measures which have severely harmed the garment manufacturing industry employing over 1.5 million people in Turkey.
According to the hundreds of messages expressing concerns and complaints directed at “TGSD Coronavirus Help Desk” over the past four weeks, suppliers have drawn attention to some of these alarming actions taken by global brands and retailers:
A large number of brands declared to the manufacturers that there will be no future orders until further notice. This will oblige manufacturers to cover labor and overhead costs on their own for an indeterminate period of time. Some brands called for the suspension of production in the pipeline and yet in some rare cases, solicited discounts or cancellations for goods are in the pipeline.
Lastly, some brands request an extension on the payment terms for shipped goods that are on their way to distribution centers or already in the stores.
Hanzheng Street in Wuhan is home to 12,000 business shop owners running wholesale in 54 markets there with a total annual turnover for approximately 100 billion Yuan. The wholesale center for apparel brands is the cream of the crop, 60% of the annual turnover comes from the apparel wholesale in these famous sell-and-buy hubs. The center as wholesale for apparel brands is as large as 300,000 square meters with over 3000 brands apparel, in category mainly of menswear, women’s wear, kids wear, leisure wear and various kinds of apparel accessories.
Wuhan, the super-large metropolitan city in the midstream of Yangtze River, reopened on April 8, to the public after a 76-day- long lockdown for its epicenter of the novel coronavirus outbreak in China. As the capital of Hubei province, the city is also known in the country for high-speed railway transportations all for about 5 hours respectively to Beijing, Shanghai, Chongqing, Shenzhen and Hong Kong, in addition to its pivot in the central provinces for over 40 international direct air routes that cover four continents in the world.
Wuhan, recently known for being an epicenter of Coronavirus, was hit the hardest in China, perhaps in the world on a single city count. As on April 10, the confirmed cases of COVID-19 in Wuhan city added up to 50,007 since its first case was reported at the end of last year, accounting for 73.75% of Hubei Province where the aggregated confirmation of the disease infections amount to 67,803 cases, which has a lion-share at 81.39% of the country for 83,305 cases in total. This is only a historical trend of data in the course of the disease control and prevention footprints, and the city is being opened up on the grounds that there has been growing no new infections for nearly a month with 47,085 patients fully recovered after a tragic loss of 2575 lives, leaving the rest of 347 patients still being hospitalized for further medical care.
As now, incoming and outgoing transportation restriction has been lifted; the city is back to life step by step, leaving no loopholes for safeguarding the hard-won victory. Businesses start to tick up, shops are opened, retails and wholesales are attracting buyers in busy shopping streets, and the famous Hanzheng Street is on the headline of the press because it has been a time-honored business rendezvous, a cluster of retail and wholesale streets, buildings and thousands of shop windows offering everything but arms to sell or buy, textiles and apparel are the earliest known there, and perhaps the bulk of businesses as a whole.
Back to the early years of the 20th century, the foreign powers carved Hankou, one of the three river towns (China’s longest river Yangtze River has concurrent with its largest tributary here to split the central city into three towns) into concession and built up shopping street in the Foreign Settlement at that time, and Hanzheng Street gradually morphed into a shopping center. In 1979 when China started to practice economic development-centric reform and opening policy, this street got reinstated to be Retail and Wholesale Market for Small Commodities, the same market status as Yiwu market center in Zhejiang province, which international buyers seem to know better.
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| shop owners are welcoming business back to life in Hanzheng Street |
Hanzheng Street in Wuhan is home to 12,000 business shop owners running wholesale in 54 markets there with a total annual turnover for approximately 100 billion Yuan. The wholesale center for apparel brands is the cream of the crop, 60% of the annual turnover comes from the apparel wholesale in these famous sell-and-buy hubs. The center as wholesale for apparel brands is as large as 300,000 square meters with over 3000 brands apparel, in category mainly of menswear, women’s wear, kids wear, leisure wear and various kinds of apparel accessories.
According to the Textile and Apparel Retail and Wholesale Committee of China National Textile and Apparel Council, its latest report of market prosperity indicators shows that the March 2020 witnessed Market Managers Prosperity Indicator (MMPI) at 51.24, up by 35.11 percentage points over the figures in the survey all through January and February that were staggering at 16.13, and the Tenants Prosperity Indicator (retailer and wholesaler who rent the booths inside the textile and apparel shipping building) went well along with the former to arrive at 51.18, up by 14.78 percentage points over 36.40 reported in the first two months in the beginning of the new year.
CNTAC’s Retail and Wholesale committee issues an annual report for market prosperity analysis by keeping eye on 45 important bricks and mortar apparel-specific shopping centers or specific markets for understanding the textile and apparel markets in China. The Market Report 2018 shows the sale achievements in these 45 centers located in different areas of the country, for 996.299 billion Yuan in the east, up by 7.23% to take up overwhelming share of the totality by 82.39%, and for 145.036 billion Yuan in the central area to account for 11.99% of the total, up by 7.06%, and for 68.009 billion Yuan in the west of the country to represent 5.62% in cake share, with a drop by 3.32%.
Contributed by Mr. ZHAO Hong
He is working for CHINA TEXTILE magazine as Editor-in-Chief in addition to being involved in a plethora of activities for the textile industry. He has worked for the Engineering Institute of Ministry of Textile Industry, and for China National Textile Council and continues to serve the industry in the capacity of Deputy Director of China Textile International Exchange Centre, V. President of China Knitting Industry Association, V. President of China Textile Magazine and its Editor-in-Chief for the English Version, Deputy Director of News Centre of China National Textile and Apparel Council (CNTAC), Deputy Director of International Trade Office, CNTAC, Deputy Director of China Textile Economic Research Centre. He was also elected once ACT Chair of Private Sector Consulting Committee of International Textile and Clothing Bureau (ITCB)
Ramesh Poddar, Chairman, Siyaram
“Definitely there is an opportunity for India as everyone will look for an alternative source. Hence, if we are able to exploit this chance, then definitely there is a possibility for India to be the next sourcing hub. China on the other hand has the advantage of bulk production and to get that kind of advantage and to come to their cost structure will take time though our labour costs are comparatively the same and the advantage they have is of mass scale production. I feel India should take this challenge and fill the gap.”
What is the current status of garment and textile industry in India due to the lockdown?
The operations in garment and textiles industry are at standstill due to lockdown. There is very little scope of work from home in our kind of industry. We feel India is attempting a better control of situation due to delayed entry of Coronavirous in India and thoughtful leadership of our Prime Minister. We hope things will resume after the 21 days’ lockdown in most of the states however some states look concern. The times ahead will pose some tough challenges to every industry including us.
Are recent happenings an eye opener for all countries not to depend only on one source namely China? Does India have the capability to fill China’s space?
Definitely there is an opportunity for India as everyone will look for an alternative source. Hence, if we are able to exploit this chance, then definitely there is a possibility for India to be the next sourcing hub. China on the other hand has the advantage of bulk production and to get that kind of advantage and to come to their cost structure, we will take some time. Though our labour costs are comparatively lesser but they have advantage of economy of scale and some pro industry government policies. I feel India should take this challenge and fill the gap.”
What steps has Siyaram as a group has taken to overcome the current situation?
At present, like everyone else we are at a standstill. We have engaged our teams to prepare for future developments and planning. Fortunately, we have got some time for important but not urgent things as known to be the 2nd quadrant of TIME MANAGEMENT theory… we are utilizing this time in planning, strategising and skill building of our key resources for the future. We can only work for the future as everything else is at a standstill now.
What measures has Siyaram taken for its workers?
We have paid full salaries to our workers for the month passed, we expect the lockdown to release soon and we get going to create value for ourselves and for the country.
Do you feel, the government has done enough for the textile industry during this challenging time? What are your expectations?
In the present situation, the government is trying its best to give relief and the industry will want to get maximum package but we need to think of how much the government can give practically. Specifically, we cannot say what package the government should give but if they give a realistic deal that eases doing business it would be helpful. Our industry associations are taking up the matter suitably with the government.
What is your advice to the textile industry in this situation?
My advice is to utilize this important time in a positive manner with family.
Also utilising to upskill your key resources through dialogs and some good training contents. Keep the team engaged and interact on daily basis to be on the same page.
Work and think of the future as these 21 days will have a lot of stories in the times to come. During this period think positive, don’t watch negative news or spread negative forwards. Spend quality time with family and keep taking care of everyone’s well-being
