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Pandemic issues are impacting the sweater segment in Bangladesh. As almost 80 per cent of man-made sweater yarns are imported mostly from China, lockdown in the country has slowed down the import process of raw materials into Bangladesh. Bangladesh sweater exporters are in a dilemma as from November till February is an offseason period for the sweater factories when exports fall below 50 per cent of its installed capacity. Peak seasons which start from March till October changes that trend completely as during this period our factories are running on 100 percent capacities with many factories engaging 2 or 3 shifts or even subcontracting from authorized and approved factories.
But just as exporters were approaching peak season with huge orders booked till June and July, then suddenly Coronavirus halted exports. It is predicted that at present situation sweater orders may be completely wiped and many sweater factories will be out of production for the entire peak season. The result of which will be a calamity collapse of hundreds of sweater factories in Bangladesh and tens of thousands of workers will lose their jobs.
As per Export Promotion Bureau (EPB) data, in the fiscal year 2018-19, Bangladesh earned $4.25 billion from sweater export, which is 15.82 per cent higher compared to $3.67 billion the FY18.
Sweater manufacturers and trade analysts have opined that technological upgradation has contributed a lot to increase the export earnings, while extended winter expedites the growth.
Taking a stand up to business as usual approach, renewable wood fiber producer the Lenzing Group outlined its commitment to sustainable practices in its recently released Sustainability Report for 2019. The company noted when it comes to climate change, business as usual scenarios have to be overcome; thus the company is committed to reducing greenhouse gas emission per ton of product by 59 per cent by 2030.
Lenzing also highlighted its focus on the circular economy. To address the issue of textile waste, the company developed its Refibra recycling technology, which enables garment production waste to be reprocessed into fibers. By recycling worn garments for the first time in the production of Tencel x Refibra fibers, Lenzing achieved a further milestone in 2019 in establishing this pioneering technology in the global market.
Lenzing’s vision is to turn the recycling of textile waste into a common standard process like paper recycling. This includes recycling fabrics and garments made of Lenzing materials. Transparency within the value chain was another issue highlighted in the report. Lenzing’s response has been a blockchain technology in cooperation with TextileGenesis that enables customers and consumers to trace the production of a garment to the raw material by scanning a barcode. In 2019, Lenzing presented its first pilot project during the Hong Kong Fashion Summit.
Additionally, Lenzing has identified seven core areas in which it has made direct contributions to the attainment of several sustainable development goals (SDGs) of the United Nations. These are: raw material security, decarbonization, water stewardship, sustainable innovations, partnering for systemic change, empowering people and enhancing community wellbeing.
The Federation of Indian Export Organisations (FIEO) has revealed that after sudden growth in February, exports are fast heading towards a lengthy period of contraction as buyers cancel major shipments in foreign-exchange (forex) earning sectors, fear exporters.
A string of order cancellations by major clients in the US and Europe — two major centres of the coronavirus outbreak — is expected to massively hit sectors like engineering goods and apparel. More than 40 per cent of India’s engineering exports land up in both markets, while Indian apparel is already under threat from cheaper Bangladeshi and Vietnamese alternatives in their primary export destination of Europe.
AEPC has demanded immediate relief in terms of faster clearance of banking and packing credit, late realisation of export bills, and raising of advance limit to 25 per cent without any collateral to ease working capital constraints. Also, the council has demanded cancellation of penalty on advance forex booking and deferment of equated monthly installments by six months to start with
Exports had caught a rare breather in February, rising after six months, leading to hopes of a recovery period beginning soon. However, policymakers are not convinced as yet.
In addition to large-scale contributions to COVID-19 relief organisations, Gucci and H&M are now donating their social media accounts to the World Health Organisation in need of bigger, more influential platforms with larger reach.
Dazed reports the World Health Organisation (WHO) will take over Gucci’s Instagram — which boasts 40 million followers — as well as the brand’s other social media channels. During the takeover, WHO will share official public service information, including methods for protecting the health, safety, and well-being of global communities.
Similarly, H&M freed up its accounts for any organisation looking to utilise its global social media reach of 120 million people. The brand has 35.1 million followers on Instagram, 8.3 million followers on Twitter account, and more on each country’s individual platforms.
Earlier, Kering Group, the parent company to Gucci, Balenciaga, and Saint Laurent, announced plans to purchase and donate three million surgical-grade face masks from a CDC-approved manufacturer in China. Kering’s donation will go directly to the French health service. Gucci, on its own, will temporarily halt production on fashion to instead produce one million face masks and 55,000 medical gowns for hospitals around its home country of Italy. The Milan-based label also announced a donation of 2 million euros to help fight the effects of COVID-19.
India has decided to go ahead with the ambitious Rs 1,480-crore National Technical Textiles Mission (NTTM) and has planned to implement it through a three-tier institutional mechanism. The mission, which aims at improving penetration level of technical textiles in the country, has a four year implementation period from 2020-21 to 2023-24.
As per the ministry notification, textiles minister Smriti Irani will lead a mission steering group that would be responsible to approve all financial norms and scientific and technological research projects.
The Mission Steering Group is fully empowered to approve all financial norms in respect of all Schemes, Components and Program of the NTTM. In addition, all scientific/technological research projects under the NTTM shall require approval of the mission steering group.
The next tier comprises an empowered program committee led by the textiles secretary to monitor the implementation of various components of the mission. It will also approve all projects within the financial limit of each program as approved by the mission steering group except research projects.
The third tier—the committee on technical textiles on research, development & innovation—would be chaired by a Niti Aayog member and will identify and recommend all research projects related to strategic sectors like defense, paramilitary, security, space and atomic energy.
Five more global fashion brands have assured Bangladeshi exporters they would receive readymade garments that had already been produced and were in the process of being made against their orders.
These brands include Spaanish clothing company Inditex, British multinational retailer Marks & Spencer, French retail company Kiabi and US companies PVH Corp and Target have come forward and have informed us of their decision to take the ready goods along with the goods in production. Earlier, Swedish clothing retail company H&M assured of taking delivery of the already produced garments as well as goods in production.
H&M also said that they would pay for the goods under agreed payment terms and the retailer would not negotiate prices on already placed orders. The retailer would pay for the raw materials which were not used as yet and the payment terms to be decided by end of this week
Rating agency ICRA has stated the COVID-19 outbreak is credit negative for India’s retail industry in the short-term amid shutdown of malls as well as closure of non-essential stores across most states in the country. With consumers forced to defer discretionary spends, revenues and profitability, will be adversely impacted in the short-term, which in turn affect credit profile of the Indian retail industry. While consumer sentiments are likely to remain weak in an adverse economic environment, uncertainty around employment prospects is also likely to result in lower purchasing power.
Lifestyle and fashion retailers, primarily those having higher contribution of apparels, consumer durables, jewellery, accessories and footwear, among others, will be impacted the most because of these restrictions and overall curtailment on the movement of people, resulting in demand pressures over the short-term. However, the food and grocery retailers have witnessed a sudden spurt in demand as consumers have started panic buying around uncertainties of stock-outs and closure of these stores as well,
This impact is however, expected to be mitigated in the long-term driven by healthy demand outlook for the industry supported by favorable demographics, rising disposable income and low penetration of organized retail, said the rating agency.
Many retailers may invoke major clauses in their agreements so that they do not have to pay rentals during this period of shutdown, limiting the impact on their profitability. The present scenario, however, provides a favorable opportunity for e-commerce food and grocery players. The outbreak of the Coronavirus has led to a sharp surge in online grocery retailing as consumers are wary of stepping out of their homes. These platforms are witnessing increased demand not only from the existing consumers, but also from new consumers. This could also possibly alter the way Indian consumers buy groceries and spruce up the adoption of online retailing for groceries.
Cornelia Buchwalder has been appointed the new Secretary General of Cematex, the European Committee of Textile Machinery Manufacturers. Buchwaldehas served on an interim basis since June 2019, following the retirement of Maria Avery, and was elected to the permanent position by the Cematex Board on March 12.
Buchwalder has a wide knowledge of the global textile equipment sector, having managed the Swiss Textile Machinery Association since 2013 and been closely involved in organising participation at the major global trade shows and various international events. Her experience takes in the ITMA exhibitions in Europe at Milan (2015) and Barcelona (2019), as well as three ITMA Asia + CITME fairs, in 2014, 2016 and 2018.
She will continue to combine the two posts as Secretary General of both Swiss Textile Machinery and of Cematex.
Order cancellation by Western countries due to the COVID-19 pandemic spells doom for the garment industry in Asian countries. The Textile Council of Hong Kong, recently has warned that the garment sectors in Bangladesh, Cambodia and China faced particularly grave risks of collapse.
Bangladesh, the second-largest clothing exporter in the world behind only China, has already seen garment orders valued at $2.6 billion cancelled or withdrawn, with more likely on the way. Bangladesh has more than 4,600 garment factories, employing at least 4.1 million people, mostly women, who toil to manufacture shirts, T-shirts, jackets, sweaters, and trousers which are shipped to retailers in Europe, the U.S. and Canada. Ready-made garments accounted for 84.2 per cent of Bangladesh’s total exports (valued at $40.5 billion) for the 2018-2019 fiscal year. Europe received nearly 60 per cent of Bangladesh's garment exports in 2018-19. Meanwhile, Bangladeshi factories are losing an estimated $100 million each day.
Cambodia is also a major garment exporter, has been faced with cancelled orders. More than 10,000 garment workers have already lost their jobs as factories closed. Up to 200,000 people could potentially be laid off. Cambodia's garment industry has about 1 million full-time workers. The EU accounted for about 45% of Cambodia's total garment exports in 2018. Now, not only are Cambodian factories dealing with vanishing orders from the west, but its Chinese textile suppliers have largely shut down operations.
Lesser known to the outside world, Myanmar (formerly Burma) also serves as an increasingly important garment exporter to the west. But, as with Cambodia and Bangladesh, order cancellations by the EU have led to the closure of many Myanmar garment factories.
Bangladesh’s Finance Minister AHM Mustafa Kamal has revealed the country expects to receive $750 million from the IMF and $200 million from the World Bank to support its people, businesses and industries suffering from the COVID-19 pandemic In all, the government expects $1 billion from both these institutions.
The coronavirus stands to wipe out 1.1 per cent of Bangladesh's gross domestic product, as per a projection of the Asian Development Bank (ADB), the minister said.
Remittance sent by migrant workers have kept the economy dynamic to some extent so far, but the flow would see negative impact soon as a significant number of migrant workers have returned to Bangladesh because of the outbreak.
