FW
At the Dalian International Garment and Textile Fair, manufacturers like Liang Zhouye's company – specialising in swimsuit fabric – are looking to avoid extra taxes on their US exports. Manufacturers like Liang Zhouye's company – specialising in swimsuit fabric are trying to relocate some of the production facilities to other countries and export the finished goods from there to avoid possible tax increases. However, products like furs and leather in China however still heavily rely on local materials.
The tit-for-tat trade war and possible expansion of trade barriers could result in some companies relocating their manufacturing bases to Vietnam, Bangladesh and elsewhere. And regardless of tariffs, for Chinese fashion and textile enterprises today, it's an uphill climb to the top of the food chain. Dayang Group in Dalian is negotiating with foreign partners to withstand the extra overhead caused by possible tariffs.
As per latest OTEXA figures, Vietnam saw an increase in exports of skirts, men & boys (MB) jeans and women & girls (WG) jeans and denim apparels. The WG jeans category contributed the most with an export value of $102.25 million, while MB jeans export fetched $43.29 million. Both these categories grew in terms of volume as Vietnam shipped WG jeans worth 956,969 dozens to the US, whereas shipment quantity of MB jeans was 386,506 dozens during the period under review.
Exports of denim skirts from Vietnam to the US escalated 269.41 per cent to hit $2.71 million. Percentage-wise growth is massive though the export value is just 8.66 per cent to that of total import value of US in this category.
In the first seven months of 2018, Vietnam exported denim apparels worth $148.67 million, registering a growth of 37.84 per cent over the corresponding period of prior year. The country registered highest percentage-wise growth in denim apparel exports among top ten exporters in this segment to the US. Further, in volume-terms, exports increased 21.16 per cent and, Vietnam shipped 1,373,085 dozen of denim apparels from January to July this year.
Tirupur’s exports of readymade garments fell by 12.12 per cent from April to August compared to the corresponding time period last year. The year started with a 22.78 per cent drop in April. But exports clocked in 5.03 per cent growth in rupee terms. Exports in August 2018 grew 5.08 per cent compared to August 2017.
GST, reduction in duty drawback, and remission of state levies were responsible for export trends. The trend is expected to reverse this financial year. Exporters fear if this doesn’t happen, buyers will turn to Bangladesh, Vietnam, Ethiopia, Myanmar and once this happens bringing them back will not be easy.
Meanwhile the rupee’s continuous fall against the dollar will help exporters’ as it will narrow the price difference between Made-in-India textiles and competing nations, including Vietnam, Cambodia and Bangladesh. The development comes at a time when exporters are going to finalise agreements for the next set of orders. The gap between Tirupur and competing countries would be reduced by around two or three per cent. Currently, the gap ranges between 10 and 15 per cent.
India topped among the countries exporting children’s wear to the US between January to July 2018. India’s export earnings in the period grew 1.50 per cent and volumes grew 19.87 per cent. During the seven-month period, US volumes of junior wear imports grew 3.07 per cent while values were up 1.76 per cent from the same period of the prior year.
India is the only country that saw a surge in both volumes and value terms, surpassing China, Bangladesh, Vietnam and Indonesia as far as percentage growth is concerned. Bangladesh and Vietnam, India’s close competitors in the children’s category, fell in value terms and grew in volumes but stayed far behind the growth tapped by India. While Bangladesh’s earnings were down two percent, Vietnam’s export value fell 1.90 per cent from the previous year.
While Bangladesh’s volume of children’s wear exports to the US grew by 1.83 per cent, Vietnam managed to witness a decent growth of 5.29 per cent in exports of children’s wear. China’s volumes fell by 1.74 per cent and values of exports dipped 2.74; Indonesia too drastically noted a decline by 8.29 per cent in value and 10.12 per cent in volumes of junior wear exports to the US.
India has surpassed Sri Lanka in underwear exports to the US, from January to July 2018, a growth of 10.77 per cent during the first seven months of the year. Sri Lanka, on the other hand, was able to ship just $149.86 million worth of underwear, a fall of 16.07 per cent.
In volume-terms, India clocked in a growth of 2.87 per cent and shipped 10.21 million dozen of underwear during the period, whereas Sri Lanka declined massively by 21.86 per cent and could just ship 6.58 million dozen underwear in the US market.
India’s unprecedented growth can be attributed to various factors. India and Sri Lanka both export high-end underwear to the US, however India’s advantage was less unit prices than Sri Lanka’s which helped the country in surpassing both in volumes and values.
India’s unit prices were $18.11 per dozen, whereas Sri Lanka’s was $22.77 and in the present era where cost-competitiveness is at all-time high, the country with ‘low cost and high quality’ combination emerges as victorious and the same happened with India.
Nigerian President Muhammadu Buhari has secured a $2 billion loan to establish cotton plantation and textile factories in Abia, Kano and Lagos states. The new investment commitments coming into Nigeria’s textile sector, of which Aba is a major beneficiary, will be actualised within the shortest possible time. The proposed investment will create thousands of jobs for the vibrant and creative youths in Aba.
The President recently attended Forum for China-Africa Cooperation where he met executives of one of the largest cotton and garment companies in the world who will soon establish operations in Aba.
In June 2018, the Nigerian Electricity Regulatory Commission granted an electricity generation licence as well as a distribution licence for the market. This will enable the generation and distribution of 9.5 Megawatts of electricity within the market.
The Apparel Export Promotion Council (AEPC) has joined hands with the Ministry of Textiles (MoT), Government of India (GoI), to spread awareness on the importance of cleanliness through the campaign Swachhata Hi Seva (SHS) from September 15 to October 2, 2018.
The council has kicked off the campaign with a camp at AEPC’s Okhla office. The campaign was inaugurated by
Union Minister of Textiles Smriti Zubin Irani in the presence of chairman of AEPC HKL Magu, heads of garment industry associations and industry members.
The Swachhata Hi Seva campaign stresses on shramdan. Towards this, a cleanness drive in the neighborhood of Okhla would be undertaken during this ceremony by the apparel industry.
"Apparel business from the US is gradually skewing towards Bangladesh. Recent OTEXA figures reveal, Bangladesh exported denims worth $507.90 million to the US in 2017, a 9.57 per cent surge over previous year. Mexico’s exports, on the other hand dipped 7.92 per cent to reach $793.46 million. During the first six months of the year from January to June ’18, Bangladesh exported denim worth $245 million, a 16.86 per cent growth, while Mexico, the second biggest denim apparel supplier to the US, reported a 2.73 per cent decline to reach $360 million. Rising wages in Mexico as well as trade negotiations on NAFTA is affecting Mexico’s growth. Bangladesh, on the other hand, has a growing denim fabric base, low wages and automation, which has helped it to manufacture more of value-added garments and beat Mexico in women’s and girl’s (WG) jeans category."
Apparel business from the US is gradually skewing towards Bangladesh. Recent OTEXA figures reveal, Bangladesh exported denims worth $507.90 million to the US in 2017, a 9.57 per cent surge over previous year. Mexico’s exports, on the other hand dipped 7.92 per cent to reach $793.46 million. During the first six months of the year from January to June ’18, Bangladesh exported denim worth $245 million, a 16.86 per cent growth, while Mexico, the second biggest denim apparel supplier to the US, reported a 2.73 per cent decline to reach $360 million.
Rising wages in Mexico as well as trade negotiations on NAFTA is affecting Mexico’s growth. Bangladesh, on the other hand, has a growing denim fabric base, low wages and automation, which has helped it to manufacture more of value-added garments and beat Mexico in women’s and girl’s (WG) jeans category.
Low unit prices, controlled supply chain driving growth
The key factor behind Bangladesh’s steep rise is its low unit price. The unit prices offered by Bangladesh were around $76.27 per dozen in H1’18, which is
much less than Mexico whose unit prices were $101.92 per dozen. High unit prices hurt Mexico’s denim exports despite having ‘zero’ duty rates advantage for jeans shipped to the US under the North American Free Trade Agreement (NAFTA).
In FY 2017-18, Bangladesh exported denim apparels worth $2 billion which is expected to cross $6 billion by 2021. This will be drive by new investments by Bangladeshi denim exporters both in fabrics and garments manufacturing which would increase capacity, push up export earnings, offer competitive prices, and take the lead in the global denim market.
Bangladesh has complete control on its entire denim supply chain and has also improved safety standards in apparel units. World’s top LEED certified factories in Bangladesh are producing denim fabric every year.
Challenges hindering investments
Bangladesh, which holds a large share in the US market, has an enormous opportunity to grow its exports, especially in premium denim jeans which is expected to grow at a CAGR of 12.23 per cent by 2020. However, there are numerous challenges on its growth path for example; expensive utility services are hindering new investment in the country’s denim sector. The country is still dependent on imported fabrics for 50 per cent of its production, which increases the cost of the product as well as shipping time. And even though manufacturers are opting for value-added products, it still needs to focus on how to stay ahead in the race.
Taiwan Textile Federation (TTF) and its sub-industries organised a trade mission from August 6 -10, 2018 that comprised six Taiwanese companies visiting nine Indonesian textile players. During this trade mission, Taiwan suppliers showcased their products in the athletic apparel and outdoor segment. The mission also dwelt on the possibility of collaboration between the two countries in the athleisure segment
The economic growth of Indonesia in recent years has relied mainly on rising household expenditure and growing inclination towards sports and fitness. The country’s changing lifestyle is expected to generate particularly strong demand h for athletic apparel and footwear, giving manufacturers in this segment an appealing alternative to exports. Considering Taiwan’s value and proposition in global textile market, it will be the best partner for the Indonesian textile and garment industry to comply with the athleisure trend.
The average North American throws away over 80 lbs. of clothing a year. Most of this clothing sits in landfills for decades, even though 90 per cent of those items could be reused or repurposed.
To make it easier to reuse or repurpose those items and also divert them from landfills, Kidney Clothes, in partnership with Peel Region, is promoting the repurposing of these textiles with a convenient home pickup program. All cloth and cloth-based items will be accepted including clothing, linens, curtains, accessories (purses, belts and wallets) as well as outerwear like shoes and coats.
Kidney Clothes hopes this program will also assist in public education about the importance of reducing textile waste and working toward a circular fashion industry, reducing the environmental impact of an item from production to the end of its life cycle.
UK-based retailer John Lewis has launched a pilot buy-back program in partnership with recycling specialist Stuffsr. The scheme will be made available to a small number of customers as a precursor to rolling out a full-scale version later in the year.
Similarly, fashion retailer Guess has announced a partnership with I:CO in an initiative which facilitates the collection, certified sorting, reuse and recycling of used apparel and footwear.
