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Garment manufacturers still look at East Africa despite the fact that the potential is hindered by infrastructure and cumbersome Customs processes. Exports from Ethiopia, Kenya, Uganda, and Tanzania are expected to grow as they attract more investment.
According to McKinsey & Company, East Africa will remain a niche market for garment manufacturers over the next decade. However, its success depends on the existence of free trade agreements with the US and the European Union (EU). East Africa will comprise of only a small slice of the global sourcing market, but the industry’s impact will still be important for the region. This is when the annual exports over the next decade are slated to be $700 million. Ethiopia, Kenya, Tanzania, and Uganda comprise of 0.07 per cent of global exports, earning $337 million.
With investment rising, East Africa may be a new alternative for selected large players in basic categories. This would lead to annual exports to grow to $1 billion in five years and $1.7 billion annually in the next 10 years. East Africa may move beyond cut, make, and trim (CMT) facilities. This process however, may take several years before significant numbers of vertically integrated, domestic players appear in the region. Funds to upgrade facilities and skilled workers to become a major force in the apparel sector over the 10 years will be extended to the industry.
One of the drivers for this is duty-free access to the US provided by Africa Growth and Opportunity Act (Agoa). However, the region’s garment manufacturers are looking at the EU to diversify markets. McKinsey also informs that global buyers’ preferences indicate real interest in Kenya and Ethiopia.
In its 4th year Galleria Intima held on Aug 26 and 27, organised by the Intimate Apparel Association of India (IAAI), moved to the national capital this year. Following the ‘Make in India’ initiative launched by Prime Minister Narendra Modi, IAAI aimed at facilitating greater and meaningful collaborations across all the categories of the intimate apparel sector.
Elaborating on the show concept, Rakesh Grover, President, IAAI, says,“We want manufacturers to come and make in India and set up huge plants in the country in terms of garments and raw materials. We are open to knowhow tie-ups with other countries.This platform gives Indian manufacturers an opportunity to grow to world standards. In five years we hope to be on par with international standards.”
Lingerie industry gets a boost
The Indian intimate wear industry is changing with consumers now demanding styles prevalent in the foreign countries. “A delegation of our members visited Eurovet exhibition in Paris. We saw a different world of products there and realised that this is what people back home demanded. We felt the new generation had to be offered those styles, designs, colours. The major problem was how to source them and lack of knowhow to make such products. So we thought of doing a similar exhibition in India by inviting quality suppliers of raw materials from across the world as well as from India,” avers Grover, talking about the inspiration behind Galleria Intima.
The Galleria Intima exhibition on a small scale was organised in Goa. “We got a good response from manufacturers and evolved into a sourcing exhibition and a technology upgradation platform. We now exhibit new technologies of cutting and sewing, production, software management and computerized systems. We want to upgrade the industry as a whole. We have done seminars in Europe, China and presented the changing realities in India. We also aim to increase exports from India. Right now, we have a four per cent global share in intimate wear. We want that to go to 10 per cent,” he asserts.
This edition received a good response from international buyers and exhibitors from China, Hong Kong and other countries. IAAI also holds buyer-seller meets in different cities and plans to upgrade the scale of such events.
From Goa to Delhi, the show goes on…
The change of location from Goa to New Delhi was a deliberate move since latter is convenient for business and is more accessible. Says Grover, “Goa is more of a leisure destination and because of poor connectivity, Goa event didn’t get many visitors. Delhi is connected to the rest of India via road, rail and air. And people combine their schedules so that the exhibition becomes one of the parts of their plan. So we decided to move Galleria Intima to Delhi.”
According to him, the inner wear industry is the only one that’s growing and every brand is witnessing a growth of 25 to 30 per cent. “The share of organised players is growing. Right now organised market is 40 per cent and unorganised is 60 per cent. Consumers have grown and matured and their demands have grown. They want more styles and colours and they are ready to pay the price for a good product. This has opened up the industry. Multinationals have come in and widened the price points. And the young generation is open to new things,” Grover sums up.
www.galleriaintima.com
The state government of Maharashtra has decided to finalise the proposed textile policy drafted by Suresh Halwankar, BJP MLA from Ichalkaranji, after September 11. The policy is expected to attract investments worth Rs 80,000 crores in the form of new machineries, development of new clusters and infrastructure provision.
Halwankar says, the state government has approved the policy in-principle and it is now being discussed at the secretary level to deliberate on issues like selection of locations, available infrastructure, power requirement and its supply. Sighting lack of facilities to cater to the entire cotton to garment supply chain, Halwankar said that there is not a single industrial unit, which can convert cotton into finished garments. Vidarbha region in Maharashtra produces cotton but ginning mills are in Marathwada, primary processing is done in Ichalkaranji and then it either goes to Bhiwandi in Mumbai or Rajasthan or Kanpur or Tamil Nadu as per the requirement. And final stitched product is finally shipped from Bangladesh to India.
To eliminate this lengthy process and crate employment opportunities, the textile policy has suggested several steps. The policy document says, “The textile industry is second only to agriculture in terms of importance. It has the capacity to create maximum jobs/employment after agriculture. The object of the policy is to lay special emphasis on raising processing units at various levels for assured long-term development on priority basis in the cotton producing sector, expansion of the textile industry and growth of employment in the state.”
Mahatextile.maharashtra.gov.in
A global investors’ meet will take place in Tamil Nadu on September 9 and 10, 2015. The textile and clothing sector is likely to get a cumulative investment of Rs 4,500 crores during the event. These investments will primarily be on higher value chain. The investments are set to give a substantial fillip in employment generation and stimulate ancillary industries.
Inclusion of more new projects higher up the value chain will strengthen a sector that already has elements of the whole textile value chain, from cotton to garment making. The project could also help take up the slack in demand for yarn caused by China’s burning out. There had been a lot of investment in the spinning sector between 2005-10, driven by TUF but it slackened in the meantime.
Tamil Nadu a leading state in India in textiles. It houses the country’s largest spinning industry accounting for almost 40 per cent of the total installed capacity in India. It has a complete ecosystem of textile industry. Tamil Nadu is home to the knitting industry and has the biggest knitting cluster in India, Tirupur. The state ranks first in the apparel industry and is second in textile industry in India.
Textile industry body Cotton Textiles Export Promotion Council (Texprocil) has requested the Union government to extend benefits for garments exporters so that they can compete with players in countries with whom India has signed free trade agreements (FTA). R K Dalmia, Chairman of Texprocil feels, considering the infrastructural disabilities, cascading effect of un-rebated taxes, high cost of inputs and preferential benefits granted to competitors, the government has to play an important role by continuing the export benefits for some more time.
He further said that the emergence of mega trade agreements being promoted by United States and the European Union amongst themselves and other key trading partners like Korea, Vietnam and Japan poses fresh challenges to countries like India. It therefore, would be best if India takes an integrated rather than an ad-hoc approach while negotiating new FTA or re-negotiating old ones.
He had earlier asked the government to include cotton textiles under the three per cent interest subvention scheme, release of funds through TUF and recalibrating the product/country matrix under the newly introduced Merchandise Exports from India Scheme (MEIS).
Though overall exports of cotton textiles declined by 0.1 per cent in FY 2014-15, shipment of cotton fabrics and made-ups registered growths of 11 per cent and 5 per cent to $2.44 billion and $5.05 billion respectively.
www.texprocil.org
A Special Skill Development Center was recently introduced in the remote village of Chogawan besides engaging 52 Ludhiana-based clothing units to ensure direct placement of girls and boys belonging to border areas, under a Skill Development mission. The Amritsar administration in association with North India Technical Consultancy Organisation (NITCON), under Border Area Skill Development Program has set a target of providing skilled force of 1,932 youngsters to clothing ventures in Ludhiana. All of them will get confirmed placements in industries after completion of their skill development courses.
Veer Singh Lopoke, Chairman, District Planning Committee inaugurated the state of art Advance Cutting and Tailoring Center at Chogawan village. He was accompanied by Deputy Commissioner Ravi Bhagat. Singh stated that the fixed target will be accomplished by March 2016. Bhagat, while giving details about the centre said that this was the of its kind centre in border areas of state that had Japanese machines. Nearly 52 Ludhiana-based clothing industrial units were to be provide direct placements to skilled trainees of this centre. There will be three-months skill development courses in advanced cutting and tailoring to cater to the needs of Ludhiana garment industries at the centre. He added that this initiative would give a fillip to economic growth of three border blocks of district: Chogawan, Ajnala and Attari.
Bangladesh's garment exports to the US grew 8.51 per cent during January to July 2015. But it’s still lower than those of competing countries. In the same period apparel exports to the by Vietnam, India and Sri Lanka to the US grew by 14.94 per cent, 9.63 per cent and 16.10 per cent respectively. India exported garments worth $2.33 billion against $2.12 billion in the same period of 2014. Chinese apparel exports grew by 2.34 per cent.
The recent industrial accidents in Bangladesh and confrontational politics, have made US buyers wary and they are in a wait and watch situation before placing orders. But the safety initiatives undertaken by Bangladesh and improving political situation helped garment exporters regain buyers’ confidence resulting in a gradual increase in orders in recent times.
Accord and Alliance have completed their initial inspection and remediation work to fix the flaws is going on. The inspection program under the national initiative would end by next month. The US is the single biggest market for garment products made in Bangladesh. Bangladesh apparel exports to the US fell to $4.83 billion in 2014 from $4.94 billion in 2013. And prices of locally-made apparel items did not increase in line with rising production costs.
Readymade garment exports from Bangladesh in volume terms have increased over 58 per cent in the last fiscal year, but the value was affected by retailers’ low price offer and devaluation of euro. Export Promotion Bureau data reveals, the country exported 1.57 billion units of apparel products to global market in FY14/15 with 58.17 per cent rise from 993million units a year ago.
Of the total RMG exports, woven products were 757million units compared 485million in the previous year and knitwear products amounted to 815million units compared to 508.67million units a year ago. The value of total RMG exports last fiscal was $25.49 billion posting 4 per cent surge from the previous year’s $24.49billion.
Knitwear exports were valued at $12.43billion, up 3.13 per cent since the previous fiscal’s $12.05billion and the woven products $13.06 billion with 5 per cent growth over the previous year’s $12.44 billion.
A study by Mark Anner, Associate Professor at Penn State University, prices of men’s and boys’ cotton trousers exported to the US declined by 40.89 per cent over the last 14 years owing to companies cutting down the product prices sourced from Bangladesh. Bangladesh earns 60.28 per cent of its total RMG export figure from the EU market.
www.epb.gov.bd
The Bangladesh government is considering bringing festival allowances of workers including those of readymade garment sector under a legal framework to avoid unrest ahead of Eid-ul-Fitr and Eid-ul-Azha.
“To ensure two festival allowances in a year for the workers a guideline may be stipulated in the implementation rules under the labour act but it will not be possible to include separate clause for any particular sector as the implementation rules will be applicable for all industry,” state minister for labour Mujibul Haque informed at a press conference held in Dhaka on Sunday.
The state minister also said that the government was considering a fixed amount as festival allowances for RMG workers as per the demands of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA). After the delegation from Bangladesh visited Germany recently, the government plans to start the ‘Social Accident Insurance’ for the garment factory workers on a pilot basis.
www.mole.gov.bd
The Nigerian textile sector is addressing some of the constraints that have held it down from realising the potential in employment generation and capital flow. Adoption of new technology would not only help textile producers in cutting the cost of production, it would also make their products competitive in the global market. It’s imperative for operators in the sector to be innovative since the textile business globally has gone digital. The industry has to be up and doing in terms of embracing new technology.
Investment in new technology is needed. The textile industry has to be cost effective in the short run. New technology will enable textile producers to come up with product samples very quickly, come out with new designs just by operating the computer. A lot of computer-aided designs have gone into textile printing today and that is the challenge facing the industry. While over 1,21,100 jobs have been lost as a result of inactivity in the textile sector, only 39 out of the 143 textile mills across the country are still in operation.
In Nigeria, textile manufacturing is a key local industry, supported by a chain of suppliers such as cotton growers and natural dye makers. Nigerians have a love for naturally dyed fabrics, with many prints based on traditional motifs. However traditional methods of dying fabrics are threatened by cheap imports.
