FW
Thanks to an ambitious program being fast tracked by value chain players, cotton farming in Kenya is well on the path of recovery. The program aims at filling gaps along value chain, equipping farmers with farm inputs, credit, and provision of extension services and linking them to the market.
Just a day before, various national government agencies, county government of Tana River County and stakeholders of the private sector signed a Sh32.9 million agreement with cotton farmers. And as Anthony Mureithi, Interim Director of fibres crops directorate under the Agriculture and Food Authority (AFA) says the initiative is part of other strategies being fast tracked to help farmers revive cotton farming. In 1970s and 1980s when cotton farming was second in the country in terms of employment after public service, Bura used to produce 30 per cent of the national production.
Under the programme, farmers will receive certified seeds sourced from Israel and other global market segments. Bura MP Ali Wario welcomed the new initiative saying farmers stand to gain after a long period grappling with grinding poverty among other miseries.
If local exporters are found guilty of dumping, Bangladeshi jute and jute goods may be subjected to 25 to 30 per cent duty upon entry to Indian market. This decision comes after the Directorate General of Anti-Dumping and Allied Duties (DGAD) concluded its probe into the matter last week, an official of Bangladesh Tariff Commission has reportedly said. The report is likely to be disclosed next week.
Negotiations will start with the Indian government once the official statement is received, he added. Currently, Bangladeshi jute and jute goods enjoy zero-duty benefit on export to the Indian market under the South Asian Free Trade Area agreement. Three years ago, the Indian Jute Mills Association had accused Bangladeshi exporters of selling jute products at prices lower than those in India's domestic market. Then in October last year, the Indian anti-dumping authority started its investigation into the matter.
As a part of the investigation, a team of DGAD visited some factories in Bangladesh and collected data including export prices of the shipped products to India and the sales prices in domestic market, say industry insiders. Officials of the tariff commission attended several hearings in India before the conclusion of investigation.
In many countries, forced labour remains to a problem with textiles and garments industry. Despite progress in the last few years due to rising awareness, forced labour still occurs in cotton fields and factories across the world. Forced labour is the use of coercion to force people to work for little or no pay. Mostly, it takes the form of modern day slavery but also perpetuates itself through less overt practices such as debt bondage where workers are forced to work to pay off high-interest loans with no other means to pay off their debt.
In the garment industry, forced labour can be seen in two areas. One is the beginning of the supply chain, labour-intensive crops such as cotton often require abundant work for cultivation and harvest. And forced labour is not uncommon in the fields. Forced labour happens in fields around the world, but one of the worst scenarios unfolds in Uzbekistan, a dictatorial country in Central Asia. The cotton harvesting season turns huge parts of the nation into vast forced-labour plantations with Uzbek cotton being exported to East Asia from where it is sent around the world.
Forced labour is also pervasive in garment factories, where fabrics are transformed into the countless pieces of apparel we wear every day. Few factories remain in developed, Global North countries these days, with cheap labour costs resulting in the mass migration of garment labour to Asia and Africa. It is generally easier to understand forced labour at this level.
In fact, advocacy groups have found countless instances of forced labor in factories, but the sheer complexity of the industry makes it hard to paint broad pictures. Factories that treat workers well can be found in the same regions as those using forced labour. And from the outside, it can be nearly impossible tell the difference. The problem is that, too often, products created from both good and bad factories end up in the same supply chain.
Cotton production, once considering a key culture for the rural areas of Azerbaijan, is now on the path of a revival following a gradual decline during several past years. In the ’70 and ’80s, cotton production was of crucial importance for the national economy accounting for approximately 25 per cent of agricultural revenue. Then, Azerbaijan harvested a million tons of cotton per year. Now, the country is struggling to be listed among global cotton growers. This year is expected to be a period of development of cotton growing in Azerbaijan as the government is keen to support cotton production to give a new life to this industry. As of October 17, the country produced 38,890 tons of cotton that was 1.7 times more than the same period last year. This year cotton was sown in 52,060 hectares and this was 2.8 times more than last year's crop area.
The largest volume of cotton was harvested in Saatli region. Moreover, cotton-growing is developing in the south western region Salyan this year.Experts claim that the sector brings great incomes both to people and the state. Development of cotton growing, along with the solution of economic issues, is also a social issue, says President Ilham Aliyev,. About 70,000 people will work on cotton fields of 24 regions this year. This would mean an increase in employment. He also added that next year, cotton production will lead to the creation of more than 100,000 jobs.
"What started as path breaking apparel category for India three decades ago, the denim charm is here to stay. It has been one of the most essential wardrobe element and a fashion statement. Globally, the denim industry is slated to grow at a CAGR of over 6.5 per cent during 2015-20, with market value expected to increase from $113 billion to $153 billion."
What started as path breaking apparel category for India three decades ago, the denim charm is here to stay. It has been one of the most essential wardrobe element and a fashion statement. Globally, the denim industry is slated to grow at a CAGR of over 6.5 per cent during 2015-20, with market value expected to increase from $113 billion to $153 billion.
Amid an apparent growth slowdown, the denim market is standing tall with consistent CAGR of 15 -18 per cent per year, registering the fastest growth in apparels. The installed capacity of almost 1,200 million meters is expected to increase to 2,000 million meters in next three to four years owing to the huge demand for the fabric. While India’s share in the overall denim manufacturing capacities is around 10 per cent, at present its share in the global jeans trade works out to 2.5 per cent. India, with its resource advantage of all types of cottons and MMF fibres, and thanks to the introduction of state-of-the-art technology, manufacturing plants, and the entry of top global brands, surely has the potential to grab a higher share in the global market.
Demand dynamics
India has 32 denim fabric mills with manufacturing capacity ranging from 10 MMPA to 110 MMPA. Though the market is dominated by men’s wear, other segments are also catching up fast. Growing demand in Tier II, III cities accounted for by unbranded denims. However, as market penetration increases and disposable incomes increase in semi-urban and rural areas, demand will shift towards premium quality products, thereby positing branded denims strongly across the country. Meanwhile, yarn manufacturers are innovating with blended cotton yarn and biodegradable yarn made from wood pulp to attribute unique properties like softness, flexibility, and comfort in denim wear.
Aalmost 85 per cent of the denim market is dominated by men, with 10 per cent contribution from women and the kids segment contributing about 5 per cent of the market. The major factors driving growth are: Variety as denim is made not just into jeans but also other items of clothing and accessories; purpose as denim denim serves almost all purposes. It comes in a range of colours and can be worn as formalwear as well as casual wear; convenience as denim wear is comfortable, low maintenance, and long lasting; change tastes among Indian women as the modern Indian woman now wears denim in daily life, thereby increasing demand for the product exponentially; e-commerce as demand is fuelled by the unprecedented increase in the number of shopping malls and rise of online shopping portals; denim is available at various price points as per demand dynamics. Prices depend on factors like quality of material, texture, comfort, cut, and wash; Global demand for denim is growing at a CAGR of around 6 per cent. With an abundance of raw materials, availability of trained manpower, and state-of-the-art technology, India has the potential to become a major denim exporter globally; the denim market is constantly redefining and reinventing itself with new designs, washes, cuts, and embellishments, which keep the masses interested and demand high.
Denim exports a money spinner
Besides the tremendous domestic potential, the Indian denim industry is also looking at expanding its share of exports pushing it up from the current 35 per cent. This can be augmented with the availability of cotton in abundance in the country. Experts believe a dedicated and focussed approach towards increasing export revenues can boost the otherwise lower share of exports in the total revenues. Considering the insignificant share that India commands in international trade of textiles and clothing, any new addition in denim manufacturing capacities is a welcome move. This increase in capacity along with encouraging textile policies and favourable exchange rate movements could help India achieve a significant export growth. While additional capacity is added to the existing manufacturing by 2020, the domestic and exports ratio is likely to change from 65:35 to 55:45.
The top 10 towns that account for less than 10 per cent of Indian population account for almost 50 per cent of domestic denim consumption. With almost 35 per cent of sales from the organised sector and 40 per cent from the branded segment, the denim trend is expected to penetrate the market further and register significant growth in the near future.
US-based Aurora Specialty Textiles is a leader in coating, dyeing and finishing of both woven and nonwoven fabrics. The company has opened a new high tech manufacturing plant in Illinois, spread over 1, 24,000 sq ft. This facility signals the company’s commitment to investing in state-of-the-art technology while moving into new global markets for wide width coating and finishing, including print media.
Aurora is known for industrial products that used in abrasive products, power transmission belting; specialty fabrics that serve a wide variety of markets including home furnishings, furniture construction, military, and outdoor recreation; and pressure sensitive adhesive tapes that serve the entertainment, medical, athletic, and automotive markets.
Founded in 1883, Aurora operated solely as a bleaching operation before adding finishing, dyeing and coating capabilities. As the global textile industry changed, the company saw the opportunity to move into ultra-wide-width coating of textiles and establish Aurora as a premier textile coater. That move required finding a larger manufacturing facility and investing in new equipment. Now it offers an extensive array of fabric based products.
The plant features the company’s new EHWHA ultra-wide-width coating and finishing line, which is said to work easily with a broad range of woven and nonwoven materials up to 134” wide.
With the advent of a new fabric that hit shop floors and popularised fleece wool from Australia, demand for medium micron wool is set to boost. The new product is a fur-like fabric that resembles the inside of a sheep-skin boot. It has succeeded in capturing the imagination of the international markets in a big way. Prices paid for 19 to 21 micron wool this season has strengthened in the Australian wool market. The new woolen product is made from 70 per cent Merino wool. The remainder comprises crossbred wool that weighs approximately 970 grams per square metre.
Northern hemisphere’s winter is driving demand for 25 to 27 micron wool this season. At present, China is the leading country that imports these fur-like coats and heavy skirts. A variety of greasy wool ranging from 19.5 micron to 27 micron is used to manufacture this product. However, bulk of it is made from 21 to 22 micron wool. The product is made resilient by using a small portion of comeback and crossbred wool to add weight and reduce cost. This also helps the product stand up once it is processed.
Shares of Hong Kong tycoon Victor Fung Kwok-king’s menswear retail unit Trinity surged 32 per cent after Shandong Ruyi Group, one of China’s largest textile firms, agreed to take control of the firm struggling to cope with fast shifting consumer behaviour.
Shandong Ruyi, 51 per cent owned by chairman Qiu Yafu, has agreed to buy 1.85 billion new Trinity shares at HK$1.2 each, totalling HK$2.22 billion. The deal, when completed, will give Shandong Ruyi 51 per cent control over Trinity, while Fung and his family members will see their combined stake diluted from 40.95 per cent to 19.79 per cent.
The selling price represented a 60 per cent premium to Trinity’s closing price of 75 cents on Wednesday before trading was suspended. Trinity operates retailing and licensing businesses in Greater China and Europe selling menswear brands. Over two years ago, Trinity signed soccer legend and fashion icon David Beckham in a five-year deal to be the face of the Kent & Curwen label.
It incurred net loss of HK$257 million in the year’s first half compared to a loss of HK$200 million in the same period last year, amid what it called a “depressed retail environment” in the mainland - its biggest market. Shandong Ruyi has grown from a modest textile factory set up 45 years ago into a major integrated textile empire spanning raw material cultivation, textile processing and design, marketing of brands and apparel. Operating 3,000 retail points of sale in Asia-Pacific, it has three listed subsidiaries in China, France and Japan.
Last year it acquired a majority stake in French fashion group SMCP - the parent company of Sandro, Maje and Claudie Pierlot. It plans to use the shares sale proceeds to retire debt, fund potential acquisitions and bolster working capital.
Indian apparel exporters are gearing up to re-negotiate terms and prices of their products with buyers in the UK to neutralise a decline in their realisations due to the sharp fall in the pound against the rupee. Exporters have started bypassing vendors in the UK for supplies to countries in the European Union. This would allow them to deal with importers there directly.
Indian exporters are also gearing up to raise prices of their apparel products in next year’s contracts to compensate for the fall in the pound. Thirdly, exporters are re-negotiating for receivables in dollars instead of pounds. They are convinced that the re-negotiated terms would protect them from any further fall in the pound without affecting their trade with the UK, which contributes nearly 11 per cent of apparel exports.
As the pound has fallen evenly against other major global currencies, exporters anticipate no problem in arriving at re-negotiated terms with importers in the UK. There has been a decline in UK’s share in India’s overall apparel exports from 11.04 per cent in 2015 to 10.62 per cent now.
Importers in the UK buy apparel from India not only for internal consumption but also for exports.
It’s tough times for Vietnam’s homegrown fashion brands as they are struggling while international brands are receiving a hearty welcome from customers. Zara, the Spanish fast fashion brand, opened its first store in Vietnam in September 2016 and received a tumultuous response. Many other moderate and budget fashion brands such as Mango, GAP, and Topshop are also in Vietnam and are opening new stores on a regular basis.
In contrast, many stores of domestic designers are struggling to attract and retain customers despite affordable prices and regular promotions. There is a clear segmentation of consumer fashion in Vietnam as younger generation of Vietnamese with an interest in fashion and a good income are more inclined to opt for international brands. Japanese casual wear designer, manufacturer and retailer Uniqlo is also looking for a local franchisee to enter the Vietnamese market in the near future.
With apparel products targeting all ranges of customers, men, women, teenagers and children alike, gathering at one single retailing area spanning thousands of square meters, such brands introduce between 5000 and 10,000 new designs every year on an average so they appeal to a very wide base of customers.
