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The weakening rupee against the dollar is expected to have a positive impact on the textile and clothing sector. As Sanjay K. Jain, Chairman, Confederation of Indian Textile Industry (CITI), noted, yarn exports to China increased 24 per cent between April and June. However, the Chinese yuan also weakened in the period and hence, Indian exports were affected.
As per Chandrima Chatterjee, Adviser, Apparel Export Promotion Council (AEPC), the weakening of the rupee this year compared to last fiscal will benefit garment exporters. The Centre is expected to reimburse embedded taxes and raise Reimbursement of State Levies, thus giving garment exports a push.
Apparel exports, which were almost stagnant for the last couple of years, are expected to do better. This will provide the garment producers cushion against increasing raw material prices. However, these producers will not benefit entirely as buyers are likely to demand rate cuts even in existing orders.
"Counterfeiting is a huge risk to fashion companies and is reportedly worth $450 billion. According to the UK’s Anti-Counterfeiting Group, counterfeiting and theft of intellectual property fuels drugs smuggling and cases of human trafficking. The Burberry statement says the company has careful processes in place to minimise the amount of excess stock produced. On the occasions when disposal of products is necessary, they do so in a responsible manner and continue to seek ways to reduce and revalue waste."
Luxury fashion brand Burberry is on a fast track to transform its business model, which redefines waste and embeds the circular economy into an industry pierced with fast fashion discrepancies. The announcement came just after the brand burned more than £28m worth of stock over the past 12 months. But it is not alone in burning its defective, unused stock. Industry giants such as H&M and Nike have been following such a practice in order to protect brand prestige and intellectual property.
Counterfeiting is a huge risk to fashion companies and is reportedly worth $450 billion. According to the UK’s Anti-Counterfeiting Group, counterfeiting and theft of intellectual property fuels drugs smuggling and cases of human trafficking. The Burberry statement says the company has careful processes in place to minimise the amount of excess stock produced. On the occasions when disposal of products is necessary, they do so in a responsible manner and continue to seek ways to reduce and revalue waste.
Burberry, which has been included in the Dow Jones Sustainability Index for three consecutive years, is keen to
lead this transformation. Pauline Bohl, Responsibility Programme Director, Burberry says the luxury fashion brand is turning to collaboration and innovation to kick start a journey that pushes Burberry and the industry towards a resource revolution that promotes closed-loop practices. One of the goals for 2022 is to revalue waste. Burberry recognises the need to address the issue of waste, which is a huge one for the industry and to invent new approaches that view waste as a resource. The company intends to foster business models that keep clothes in use. Luxury is quality, it is built to last and it’s the core of its products and customer expectations. The second area of work is creating renewable materials.
Prevailing situation
In the UK, an estimated 300,000 tons of clothing and fashion waste ends up in landfill each year. It is largely driven by fast fashion phenomenon; the accelerated production of cheap clothing that encourages consumers to purchase more items frequently. For luxury brands like Burberry, it is of paramount importance that counterfeit products of items don’t end up in this high-turnover cycle.
Ellen MacArthur Foundation’s report finds the UK economy loses £82 million through landfilling of clothing and textiles annually. Taking due cognizance of the situation, Burberry is keen to partner on solutions that make products more durable and reusable. The company is a core partner of the Make Fashion Circular initiative from the Ellen MacArthur Foundation, a project to create business models which will keep garments in use, utilise materials which are renewable and find ways of recycling old clothes into new products. Aforementioned companies Nike and H&M are also signed up to the initiative.
The Burberry Foundation, set up as an independent charity and awarded £3 million to the Royal College of Art to establish the Burberry Material Futures Research Group, the first of its kind in the world, and expand the Burberry Design Scholarship Fund. The Research Group is one of the first to utilise Science, Technology, Engineering, Art and Mathematics (STEAM) research to apply radical thinking to invent more sustainable materials. The ambition of the program is to inspire and get the industry to think about the circularity issue and potential.
Way ahead
Burberry is keen for its products to not only drive circularity but also improve sustainability of the supply chain. Another key pillar for the company’s 2022 goals is to ensure that 100 per cent Burberry products have at least one positive attribute. The attributes can range from using cotton sourced through the Better Cotton Initiative, leather from certified tanneries, or ensuring the person who made the garment is paid a living wage. To date, 14 per cent of Burberry products have more than one positive attribute while 28 per cent have one. Burberry is just starting out on this journey to promote circularity. Bohl says, all consumers are becoming more aware of the impacts of their purchasing decisions. There is an expectation that being in luxury means they are doing business in a responsible way.
"The Sustainable Apparel Coalition (SAC) has announced an update to the Higg Materials Sustainability Index (Higg MSI), a tool that enables the apparel, footwear, and textile industry to assess the environmental impact of materials used in global manufacturing. With the most recent update, businesses around the world can more effectively assess the environmental impact of materials as they design more sustainable products. The SAC, a global industry coalition that is standardising social and environmental sustainability performance measurement, is constantly improving and expanding the Higg MSI. Higg MSI users are encouraged to contribute material data to the tool’s growing library of materials. Once data is submitted, it is reviewed and verified and scored by third-party experts."
The Sustainable Apparel Coalition (SAC) has announced an update to the Higg Materials Sustainability Index (Higg MSI), a tool that enables the apparel, footwear, and textile industry to assess the environmental impact of materials used in global manufacturing. With the most recent update, businesses around the world can more effectively assess the environmental impact of materials as they design more sustainable products. The SAC, a global industry coalition that is standardising social and environmental sustainability performance measurement, is constantly improving and expanding the Higg MSI. Higg MSI users are encouraged to contribute material data to the tool’s growing library of materials. Once data is submitted, it is reviewed and verified and scored by third-party experts.
A reliable tool
The Higg MSI, the industry’s most trusted tool for accurately measuring and scoring a material’s environmental impact, now features 80 base materials,
including cotton, polyester, and silk. When blended, these account for the majority of all materials the industry currently uses. The update includes a new feature that enables suppliers to share sustainability performance information about their materials with brands and retailers. Such upstream communication promotes greater transparency and improved sustainability performance within the industry. Jason Kibbey, CEO, SAC says, “With the opportunity to play a key role in determining a product’s sustainability performance, being a designer today is really exciting. With the Higg MSI, product designers can access an incredible amount of information, and then use it to significantly reduce environmental impacts of materials production.”
Assessing process
Applying trusted metrics, the Higg MSI assesses a material’s environmental performance and scores the results. Calculations account for energy, water, chemistry, and additional impacts used in material production, giving designers greater insight in creating more sustainable apparel. For the apparel, footwear, and textile industry, this can help companies design products that will attract and retain key consumers, who increasingly demand knowledge of greater transparency in how their clothes and shoes are made. Using more sustainable materials will reduce the environmental impact of global manufacturing and help businesses stay relevant in today’s marketplace of increasingly aware consumers.
The Higg MSI originated at Nike about a decade ago. In seeing the benefit global collaboration would bring ongoing development and industry-wide use of the Higg MSI, Nike contributed the tool to the SAC in 2012. Now one of the six tools comprising the Higg Index, the Higg MSI is considered the leading materials assessment tool for the industry. “The Higg MSI has helped us make better choices to reduce our product footprint by providing critical insight and transparency into materials and processing decisions,” points out Joël Mertens, material technologies integrity engineer, MEC (Mountain Equipment Co-op).
Sean Cady, VP-Global Responsible Sourcing, VF Corp said, “Across VF Corp and our brands, we integrate material sustainability metrics into design decisions. The Higg MSI provides an objective, comparable metric, which informs our material choices and allows us to meet consumer expectation and brand promises.”
The SAC's global members have demonstrated the apparel, footwear, and textile industry already trusts the science-backed data the Higg MSI offers. Kibbey adds, “Other industries have approached us about how they could use the Higg MSI, making us realize there is an opportunity to expand the tool's application in the coming months.”
As reported by The Irish Independent, The District Court in The Hague has ordered Reebok to withdraw Conor McGregor apparel from the market. The ruling was made due to a trademark dispute with the Netherlands-based McGregor fashion line. McGregor’s Reebok hoodies, sweaters and shorts that bear his name in big letters will have to be removed from all sales outlets within seven days. Failure to comply would result in a €250,000 fine.
According to the fashion label’s lawyer Remco van Leeuwen, selling ‘The Notorious.’ Reebok apparel may cause confusion among consumers. The public would be confused into believing that the clothing made by Reebok for the Irish mixed martial artist and boxer comes from the McGregor fashion house.
Reebok is an American-inspired global brand which aims to inspire people to be their absolute best – physically, mentally and socially. Reebok’s “House of Fitness” addresses the diversity that fitness today brings, from activity to lifestyle: functional training, combat training, studio, running, walking and Reebok classics.
Cotton exports from the US in 2017-18 reached its highest level since 2005-06 and were the second highest on record. High exports were on the back of the largest cotton production in the US in more than 10 years and record global consumption.
Compared to 2016-17, US cotton shipments expanded to Vietnam, China, Indonesia and Pakistan. These are four among the US’ top five markets. However, expanding use in Southeast and South Asia has underpinned significant US shipments recently. For the third year in a row, Vietnam continued to be the top US market where shipments surpassed last year’s record, owing to the country’s record yarn production and robust yarn exports.
China was the second-largest destination for US cotton and served as the largest market for US Pima extra-long staple grade. Demand for Pima and Upland continues to grow as China pursues higher quality inputs and works domestic stocks down further.
US exports to Pakistan saw the largest year-on-year increase despite its larger domestic crop. The country’s yarn production continues to grow and is expected to expand into 2018-19, a promising sign for US export prospects. Shipments to Mexico and Turkey were down compared to the previous year, due to higher production in those countries.
Pakistan’s hosiery manufacturers and exporters are facing import restrictions. They are not allowed to make advance payments without bank guarantees from suppliers abroad. Generally, exporters import trims and accessories from buyers' nominated foreign suppliers through advance payments because foreign suppliers only start working after receiving the advance payment.
Export oriented units have to abide by buyers' requirements otherwise future orders would not be placed. Exporters want the provision withdrawn and say it would hinder the smooth process of future export orders, leading to a decline in foreign inflows. They say the withdrawal of advance payment facility will curtail imports for domestic needs. Pakistan is facing a huge trade deficit.
There are about 13,372 circular knitting machines, 10,646 flat knitting and 23,241 socks knitting machines in the country. Capacity utilization is around 70 per cent. Pakistan’s value added textiles in general and the apparel export sector in particular are under severe pressure due to hard competition in the international market being faced from competing countries like Bangladesh, Vietnam and Cambodia.
The new rule has withdrawn the facility extended to manufacturers to import even basic raw materials used in export items on advance payments up to 100 per cent of the value of the goods.
Chinese sportswear giant Li Ning is planning to launch products for its children’s wear brand Li-Ning Young and has collaborated with Disney for the venture. Li-Ning Young added 458 stores in China over the first six months of this year. The company also plans to grow its main brand’s network of 6,267 stores by 50 to 100 in the rest of the year while shutting down inefficient shops.
Li Ning posted a 42 per cent jump in first-half profit, bolstered by stronger apparel sales and e-commerce business. The firm’s net profit rose to 269 million yuan (US$39 million) for the first six months of this year from the same period last year, bolstered by stronger apparel sales and e-commerce business. Its revenue increased by 18 per cent to 4.71 billion yuan.
Apparel sale jumped by 31 per cent to 2.3 billion yuan, making up nearly half of the revenue. Meanwhile, sales on online platforms accounted for 22 per cent of the revenue, up from 19 per cent last year. International markets accounted for 1.6 per cent of the company’s revenue in the first half of the year, down from 2.3 per cent in the same period last year.
RSWM Limited, founded in 1960 as a small textile mill in Bhilwara, plans to expand by venturing into the knitting sector. The company has a turnover of around USD1.5 billion and a monthly production capacity of 10,000 tonnes of yarn per month with woven fabrics from denim for suiting and shirting. With 5,05,000 spindles and 202 looms, the group produces various blends of yarns including cotton, synthetic, corespun, zero-twist, hollow-core, greige, dyed and fancy, melange and eco-friendly, and green yarns.
With 10 state of the art manufacturing plants, 10,000 (MT/ annum) Cotton fibre dyeing capacity and 4,000 (MT/annum) Yarn dyeing capacity, the group offers a very wide range of yarns, fabrics and denims. It offers fabrics dyed with advanced techniques that use less water and chemicals.
The company also offers a premiere collection of shirting and suiting fabrics that range from high street fashion to industrial wear through its brand Mayur. Formerly known as Mayur Suitings, the brand offers classic fabrics in a wide range of fibre blends at an affordable price. These quality fabrics are available for export as well as fine domestic tailoring. Some of the fashion brands, including Kenneth Cole, Marks & Spencer, Perry Ellis, Ann Taylor and H&M are clients for the same.
Chinese companies are exploring investment opportunities in Kazakhstan. Their area of interest include: cotton production, raw material processing, clothing production, and logistics.
Kazakhstan and China have a border connected by mountains and rivers. In Kazakhstan, about 2,50,000 tons of cotton are collected annually. About a third of this is processed and the remaining goes as raw materials for export.
Seeking to attract more foreign investment from its prime position in China’s huge Belt and Road trade project, Kazakhstan has launched a new financial hub. The Astana International Financial Centre (AIFC), a self-styled mid-shore special economic zone, hopes to attract players ranging from Chinese state funds to Swiss private banks by offering tax breaks, easy entry and a Common Law court.
The move is part of Kazakhstan’s ambition to become a Luxembourg-style intermediary between larger nations and a gateway for foreign investment across Central Asia. Modeled on the Dubai International Financial Centre, AIFC wants to host all sorts of market players: family offices, private banks, brokers, asset managers, Islamic finance institutions and fintech companies.
Unlike DIFC, though, AIFC will not require that its members maintain a physical presence in the windswept Kazakh capital. It will also charge much lower fees than the established hubs and offer 50-year tax breaks.
Bangladesh’s export earnings in July were 21.72 per cent higher than in the the same period last year. Knitwear exports grew by 20.88 per cent and woven exports grew by 22.59 per cent. In the last fiscal, apparel sector contributed 83.49 per cent to the country’s total exports. Bangladesh’s export earnings from the apparel sector registered 8.76 per cent growth.
Eid vacations in June hindered production and shipment of goods. The pending shipments were sent out in July, which pushed export earnings up sharply. Improvements in safety standards and workers’ rights have raised buyers’ confidence in Bangladesh’s readymade garment sector, which is a contributing factor to the growth in exports.
Bangladesh has plenty of opportunities in the global export market. The duty on Chinese imports imposed by India and the trade war between China and the US may both help exports from Bangladesh.
Bangladesh’s overall export earnings rose 5.8 per cent in fiscal ’17 as compared to fiscal ’16. In August 2015, export earnings from the readymade garment sector grew by 32.45 per cent. However, the impending new wage structure and prices of gas may pose challenges in maintaining the growth rate in future.
