FW
Nandan Denim (NDL), one of the largest integrated denim fabric manufacturers in India, reported revenue growth of 22.7 percent at Rs 1,096.53 crores for the year ended March 31, 2015 and a CAGR growth of 21.2 per cent over the previous five years ending FY15. During the same period, NDL reported EBIDTA of Rs 165.44 crores, up by 24.7 per cent as compared to FY14. Profit after tax grew by 30.7 per cent to Rs 51.37 crores with a CAGR growth of 31.2 per cent over the previous five years ending FY15. NDL reported healthy EBIDTA and PAT margin in FY15 at 15.09 per cent and 4.69 percent respectively.
Growth in revenue was on the back of better scale of operations driven by capacity expansion, penetration in export segment and product diversification into yarn dyed shirting segment. Profitability improvement was on account of cost rationalization coupled with improved sale realizations with higher proportion of value added products.
During FY15, export constituted 13 per cent of its revenue and going forward the company intends to increase its share in the international trade. NDL derived 11 per cent of its revenues from shirting business. The board declared a dividend of 16 per cent or Rs 1.60 per equity share including interim dividend of 6 percent.
NDL has earmarked a capacity expansion plan of Rs 612 crores. Capacity expansion will enable the company to strengthen its domestic market share, expand its exports business and have an increased focus on value-added segments.
African Growth and Opportunity (AGOA) Forum 2015 to be held in Gabon will focus on trade and economic issues. AGOA is a non-reciprocal and unilateral preference program that provides duty-free access into the United States for qualifying exports from eligible African countries in addition to the tariff preference.
The program is similar to the Generalised System of Preference (GSP), a US trade preference program that applies to over 120 developing countries, including sub-Saharan countries. AGOA, however, builds on the GSP by providing preferential access to the US market for more products, such as apparels, and sets out additional eligibility criteria. The GSP represents a set of formal exceptions from the WTO's Most Favoured Nation (MFN) principle which allows developed countries to offer developing countries preferential treatment on specific goods. AGOA's authorization expires on September 30, 2015, hence most African governments and some US Congress members, including trade associations, particularly the US Chamber of Commerce, have highlighted the success of the program and want an expedited re-authorization of the same.
AGOA Extension and Enhancement Act of 2015 has already been approved by the US Senate, awaiting approval by the House of Representatives and the US President. AGOA and GSP, when renewed, would help develop key industries and foster improvements in governance and policy regarding labour and human rights. The initial draft released on April 16, appears to settle on a 10-year re-authorization and a 10-year extension of the third-country fabric provision, which is essential to nurture the development of the textile and apparel industry on the continent.
Trade.gov/agoa
Cotton Council International (CCI) has launched its 25-year-old flagship brand, Cotton USA in India that promotes US cotton fiber and manufactured cotton products in more than 50 countries globally. The Cotton USA trademark promises purity, quality, and responsibility. CCI in conjunction with the National Cotton Council works to promote US cotton exports through Cotton USA in more than 50 countries globally. With offices in Washington, Memphis, London, Hong Kong, Seoul and Shanghai, and dedicated representatives in numerous countries, CCI plays the lead role in educating and strengthening the market for US cotton and US cotton products around the world. Since 1989, over 50,000 product lines and 3 billion products have carried the name Cotton USA.
Need for Cotton USA in India
The idea behind bringing the label to India was Indian textile industry is primarily cotton focused, with cotton accounting for nearly 54 per cent of total fibre consumption in 2014. However, the industry has inherent challenges like cotton price fluctuation, inconsistent quality of indigenous cotton and over-dependence on monsoons.
“The Indian textile and apparel market is now more than $100 billion and growing at a healthy rate, and it has potential to double its export share from present 5 per cent to 10 per cent in the next 10 years. We see a huge potential in this market and hence bring the best quality cotton to the Indian consumers,” opined David B Collins, Senior Advisor, CCI, commenting on the launch of Cotton USA in India.
Renu Aggarwal, India Representative for CCI goes on to add, “Consumers are well aware and conscious about what they are wearing and are looking beyond just the end product; they want superior quality fabric assurance. US cotton is seen by many as the best in the world, so when this premier cotton is combined with prestigious product developers, the result is truly top-of-the line, the best of the best.”
The brand’s logo design suggests that cotton is on a global journey. It’s the story of a fiber, born in the US, that travels around the world.
Results of the consumer research
As study reveals the percentage of Indian consumers shopping at organised retail outlets has more than doubled over the past 15 years. Online shoppers in India are not just buying clothes online they are researching clothes, comparing prices, browsing styles, and reading customer reviews to become better educated shoppers.
Indian consumers are not destination specific when shopping for clothing online, as the majority starts their shopping journey on search engines and a third start on social media sites. Almost 9 out of 10 Indian consumers say fiber content is important in their apparel purchase decisions and almost 9 in 10 Indian consumers say they prefer their clothing to be made from cotton. 8 in 10 Indian consumers are worried that brands and retailers are substituting manmade fibers for cotton in their clothing.
When it comes to describing cotton apparel, they find it comfortable, hypoallergenic, and durable compared to apparel made from manmade fibers. In order to meet the demand, there is a requirement of high quality cotton in the country. And such a situation can work well in favour of Cotton USA.
A legislation on textile waste is currently being drafted among member states of the European Union. With environment concerns growing in recent years there is greater scrutiny in all businesses to dispose off their waste with methods which do not damage the planet. Whether its fuel, paper or other forms of waste, corporations across the globe are taking an active role in making sure they are environmentally friendly.
The desired objective is to cut waste at landfill sites, which has been a growing problem throughout the continent. There is a realization, products must be manufactured from high-quality, durable materials, and that their reuse must be considered already at the design phase. Final disposal should merely serve as a conclusion for a lengthy lifecycle and not as a solution for textiles that have only served a single purpose.
Just under 23 per cent of the textile waste produced in Finland – 70 million kgs -- is recycled or reused. Also just six per cent of textiles donated to charities or for recycling is used again as raw materials. More needs to be done in the short and long term, to combat waste materials in the textile industry and beyond.
India’s textile and apparel exports are expected to grow at a compounded annual growth rate (CAGR) of 9 per cent from 2013 to 2023. While men’s wear contributes 42 per cent to the Indian apparel market, women’s wear contributes 38 per cent and kids’ wear 20 per cent. The Rs 21,160 crore domestic home textiles market is expected to grow at a CAGR of 8 per cent to reach Rs 43,970 crores by 2023.
Though garment and textile exports from India have fallen short of the $45 billion target, the government has set a 14 per cent higher export target for the current fiscal. Garment and textile exports grew just five per cent in the last fiscal.
As new garment industries are coming up in Uttar Pradesh, Bihar and the Northeastern states, millions of jobs are expected to be created within there. The government has also simplified guidelines for setting up textile parks. The global textile and apparel trade is expected to grow at a CAGR of five per cent over the next decade. China dominates global textile and apparel exports with a 40 per cent share of made-ups, 37 per cent of apparel, and 39 per cent of fabric.
India, Bangladesh, Vietnam, Turkey, and Pakistan are the other major textile and apparel exporters. The global fabric trade was worth $137 billion in 2013, while the global apparel trade was worth $428 billion. The US, EU, and Japan remain key apparel importers.
Ahmedabad was known as the denim capital with production of over 400 million metres per annum. Now neighbouring diamond city Surat, is catching up fast with four new denim plants having a capacity of about 100 million metres, developed over the last 18 months. The state would also witness many other textile companies extend or expand their denim facilities over the next few years.
Companies like Ultra Denim, R&B Denims, Anubha Industries and Srirajlakshmi Denim have finalized Surat as their denim production site. Surat is already the country's largest manmade fabric hub meeting over 40 per cent of the fabric demand annually.
While R&B Denims has developed a 20 million metres annual capacity at Palsana in Surat with expansion plans of 30 million sq. mt. in the pipeline, Anubha Industires has 10 million mt. capacity and plans to increase it as well. Rajasthan-based Sri Rajlakshmi Denim has a production capacity at Palsana. Ultra Denim has invested Rs 100 crores to develop a 30 million metres unit near Surat, which is expected to start operations in two months.
To boost industries in the state, the Gujarat government on has signed MoUs with a Chinese enterprise in Beijing attracting investments worth Rs 29,000 crores in the state. The MoUs, inked in Beijing during Chief Minister Anandi Patel's visit to China, would assist state in building the Smart City project and along with RS 10,000 crores for a textile park in Sanand, followed by an industrial park in Gujarat, an official statement said.
England will host ‘Meet the Manufacturer’ conference from June 3 to 4, 2015. This is a trade show to promote UK fashion and textile manufacturing. It will showcase more than 100 manufacturers and suppliers to the UK clothing and textiles industries. Confirmed exhibitors for the trade show include textile technology giants Toray and flatbed knitting machine manufacturer Shima Seiki.
In addition, the conference is hosting a fashion show in partnership with the Leicestershire Textiles Hub, which will aim to drive awareness of the work that the hub is doing to support the Leicestershire region’s textile and leather goods manufacturers.
The conference is organised by campaigning organisation Make it British and will have 24 leading industry figures who will be speaking over two days, trying to motivate bigger brands and retailers who are aiming to re-shore back to the UK, as well as smaller companies looking to launch and build great British brands.
Representatives from Marks & Spencer, Fashion Revolution, and the British Fashion Council are set to speak. There will be presentations from the likes of Simon Colbeck, head of innovation and quality at M&S, Orsola de Castro, co-founder at Fashion Revolution, Caroline Rush of the British Fashion Council, and Becky John, managing director at Who Made Your Pants?.
meetthemanufacturer.co.uk/
The textile industry in Pakistan has welcomed the reduction in interest rates. Mill owners say this is a positive and business-friendly measure which would help industrial productivity, business turnover and exports of the country.
Interest rate has been lowered by 100 basis points from 8 to 7 per cent. The intention is to further lower it to 6.50 per cent. This step would enable the business and industry to obtain essential investment capital at cheaper rates and would also cut down the cost of production in the country.
Representatives of the textile industry say the Pakistani interest rate should eventually be brought down to zero per cent. This would enable industry and business to make investments by obtaining working capital which bears no interest. It would ultimately help investors set up new industries, import the latest machinery, increase productivity and the volume of business and trade turnover. The rate cut would also reduce the inflationary rate in the country, will have a trickle down effect on other sectors of the economy as well which will ultimately provide relief to the common man and the low income sectors of the country. Further, essential food items and daily use items would also be positively influenced and become easily available for the people.
New Zealand, Australia and some European countries have brought down the interest rate drastically.
Garment accessories makers in Bangladesh are demanding cash incentives on exports in the upcoming budget, saying they are contributing to almost all export-oriented sectors. Accessories makers are not under the government’s incentive policy although the garment sector has been enjoying such benefits for a long time. Garment exporters now enjoy five per cent incentive on exports.
Accessories makers in the country have increased their capacities and are able to meet the requirements of garment exporters almost entirely. Previously the demand for such accessories was met through imports. In the plastic sector, accessories makers supply 39 kinds of materials; in the garment sector, they can supply 48 types of products such as poly bags, hangers, plastic clips, buttons, button tags and zippers.
They want the establishment of a packaging and accessories institution for skills development. They have also demanded a loan rescheduling facility, as the country’s exports have been affected by prolonged political unrest at the beginning of the year.
Accessories makers also want the government to maintain the current rate of tax at source at 0.3 per cent for the next five years so that the export-oriented sectors are not affected. They have urged the government to grant a down payment option in loan rescheduling for all export-oriented sectors.
Eight textile industry associations in India are demanding a relaxation of cabotage to help cut costs in transporting cotton from Gujarat to Tamil Nadu. This would help save hundreds of crores of rupees. Almost 50 per cent of the cotton used for textile manufacturing in Tamil Nadu is purchased from Gujarat. And the transit of cotton is done through three modes: rail, road and water.
Transit by seas is difficult because there are not enough Indian containers that carry the goods in the ship. By ship it takes 25 days for the cotton to reach mills, while mills have to pay ginners within 21 days. This forces them to transport cotton by road most often.
According to law, an Indian vessel will be given first preference for transport of goods from one port to another within the country. Only if an Indian vessel is unavailable, will a foreign vessel be allowed to transport the goods after receiving the license from India’s maritime regulator.
If the cabotage laws are relaxed, the industry would save almost Rs 250 a bale. Tamil Nadu purchases 70,00,000 bales from Gujarat every year. Relaxation would help the industry save about Rs 175 crores.
