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Vietnam Textile and Garment Group (Vinatex) has signed a strategic co-operation agreement with Itochu, a Japanese firm where Itochu is expected to help Vinatex make a change in textiles and garment production and business method from cut—make-trim to ‘Free on Board’ to develop a sustainable retail distribution network to enjoy long-term benefit.
Under the agreement, Itochu will assume the role of a consulting partner for Vinatex and its member companies in developing the textiles and garment supply chain from fibre to thread, fabric and sewing, retail distribution, co-operation and introduce domestic and foreign partners. Shuichi Koseki, Senior Managing Executive Officer and representative director said since Vietnam’s textiles and garment were an important part of Itochu, therefore, it wanted to develop this area with Vietnam, so that Vinatex could become its number one partner.
The two sides would discuss in detail the co-operation plan and implement actions immediately to make a change in Vinatex’s textiles and garment production and business method from cut—make—trim to Free on Board, developing a sustainable retail distribution network to enjoy long-term benefits. Itochu, is Japan’s leading economic group operating in areas like textiles and garment, has aligned with some 100 textiles and garment companies of Vietnam.
The trading company has signed a framework agreement to support several projects in dyeing and materials production in Vietnam, training in the country's dyeing sector and utilizing the capacity of Vinatex's dyeing factories in the central region in 2015. At that time, Itochu owned five per cent stake in Vinatex through a subsidiary company. In the near future, Itochu would boost co-operation between the two sides to develop textiles and garment products and supply them globally.
Vietnam hopes for a seven per cent growth in exports of textiles and garments this year. In 2016, Vietnam’s apparel exports were up 5.7 per cent year on year, lower than expected. However, Vietnam recorded higher growth than major competitors such as China, Bangladesh and Indonesia. Garment employees’ average income rose eight per cent over the previous year.
The industry gained strong results because enterprises focused on increasing productivity and ensuring deadlines on delivering goods. Reforms on administrative procedures for saving money and time improved the business environment and created great support for garment exporters by increasing their competitiveness and exports. Garment and textile enterprises have received enough orders to keep them busy through the first quarter of this year. The Vietnam-EU free trade agreement will come into effect in 2018. After the FTA is in place, Vietnam can compete with other countries exporting garments to the EU through the Generalised Scheme of Preferences, which allows developing countries to pay less or no duties on some exports.
Other bilateral and multilateral trade agreements are expected to bring in more opportunities in exporting textile and garment products to small and medium-size enterprises. However, enterprises still have to improve productivity, reduce the time needed to deliver cargo and strengthen distribution systems to international markets.
In the just third quarters of current financial year (till Dec 31) vis-à-vis the corresponding period of 2015-16 fiscal, exports of readymade garment from India have seen tepid growth in rupee terms and negative growth in dollar terms. This scenario (knitwear and woven combined) has left exporters in clusters like Tirupur with a daunting task in the ongoing fourth quarter to make up for the sluggishness and surpass last fiscal’s performance.
Statistics indicate exports from India stood at Rs 83,309 crores during first three quarters of the current fiscal (April 1 to December 31 in 2016), as against Rs 80,461 crores in the corresponding period last fiscal, growth of 3.54 per cent. This growth rate was much lower compared to 9.16 per cent achieved in the first three quarters of 2015-16, against the same period of 2014-15 fiscal.
In dollar terms, growth was negative till December 31 of this fiscal and stood at minus 0.15, as against 2.48 per cent during same period in 2015-16 fiscal. In Tirupur cluster, garments worth around Rs 16,600 crores were exported between April 1 and December 31 in the 2016-17 fiscal as against the annual exports of Rs 23,050 crores attained during the entire 2015-16 fiscal.
Tirupur Exporters Association president Raja Shanmugam is optimistic about surpassing last year’s performance by this fiscal end when. He says growth slowed a bit during the initial phase of this fiscal due to negative market sentiments that created purchase contraction in global markets following Brexit and also because of greater penetration in global market share by countries like Bangladesh, Vietnam and Cambodia. With more industry-friendly policies/ incentives, exports from the country will definitely scale higher.
Materials of technical textiles that are used for their technical performance and functional properties can benefit from some existing fiscal sops for the textile industry including the package for made-ups and apparels announced earlier this fiscal and the technology upgradation funds (TUF) scheme, Textiles Minister Smriti Irani has says. Responding to demands from the industry for fiscal incentives to promote the sector at a curtain-raiser for Technotex 2017, the sixth international exhibition and conference on technical textiles scheduled in Mumbai this April, Irani observed that her team could advise the industry on how to approach the government for benefits.
Like home textiles, technical textiles and clothing textiles would be eligible for benefits under the fiscal package for made-ups and apparels. The textile ministry can advise the sector on how to approach the government, the minister informed at the even organised by industry body FICCI.
There are 12 broad categories of technical textiles which include industrial textiles, eco textiles, geo textiles, home textiles, packaging textiles, protective textiles, sports textiles, clothing textiles, agro textiles and construction textiles. Although the domestic industry has been growing steadily from about Rs. 73,688 crore in 2013-14 to an estimated Rs. 1, 15,217 crores in 2017-18, India comprises just 4 per cent of the global technical textiles exports and 3 per cent of technical textiles imports.
Huntsman Corporation has announced that it has decided to retain the Textile Effects business and exclude it from its planned Pigments and Additives spin-off. Strong pricing recovery for titanium dioxide and the identification of business improvement opportunities representing more than $75 million in annual EBITDA are expected to significantly enhance the financial strength of Venator's business.
The $75 million in business improvements are incremental to current earnings and are expected to be completed by the end of next year. Huntsman also announced that the name of its planned spin-off will be called Venator Materials Corporation. Venator is the Latin word for hunter and is intended to acknowledge the Huntsman legacy.
Huntsman has formed a spin-off company named Venator. Venator is the Latin word for hunter and is intended, in part, to acknowledge the Huntsman legacy. Venator will be a premier pigments company. Strong pricing recovery for titanium dioxide and the identification of business improvement opportunities representing more than 75 million dollars in annual EBITDA are expected to significantly enhance the financial strength of Venator's business.
Venator shares are expected to trade on the New York Stock Exchange under the ticker VNTR after the distribution to Huntsman's shareholders, which remains targeted for the second quarter of 2017. Meanwhile Huntsman continues to improve its free cash flow generation and grow its downstream differentiated businesses. During 2016, it also repaid approximately 550 million dollars of debt and significantly strengthened its balance sheet.
Huntsman, based in Switzerland, is a dyes and chemicals company. It provides high quality dyes and chemicals to the textile and related industries, manufacturing a broad range of dyes and chemical products that enhance the color of finished textiles and improve performance characteristics, such as wrinkle resistance, lasting freshness and the ability to repel water and stains. The business currently serves over 4500 customers located in 80 countries. Its operating companies manufacture products for a variety of industries. Huntsman Textile Effects is a major innovator with more than 700 patents.
Though global fast fashion brands Uniqlo, Zara and H&M clocked in more than $600 million in sales from Australia's departmental stores and local fashion chains last year but weird weather and soft Australian dollar weighed on profitability. The international apparel giants are poised to take more sales from the likes of Target and Big W this year but margins are under pressure. And sales per store rate are dropping rapidly as the shine comes off these global outfits.
The Japanese fashion label and Zara accounted for about 6 per cent of apparel sales growth based on their 2016 performance or 0.9 per cent of cumulative clothing, accessories and department store sales in Australia and that doesn't even include H&M's sales, which doesn't release its financial results until later in 2017.
2015 sales at H&M, Zara and Uniqlo totalled about $460 million, which equated to about 1.1 per cent of total clothing, accessory and department store sales in Australia over the same period according to the Australian Bureau of Statistics. Uniqlo's sales grew by 247 per cent to $174.5 million in the full year to August as it reaped the benefits of six new store openings, taking its total store numbers to 12 in Australia however its losses for the same period blew out to $5.8 million up from $3.04 million a year earlier.
But the broking house said that this was unlikely to deter new international arrivals, keen to take advantage of shopper appetite for sharply priced, on-trend apparel - a trend that is adding to the pain for Australia's iconic discount department stores Target and Big W. Macquarie identified Myer, Woolworths' Big W as well as Wesfarmers' Target as the businesses with the most to lose from any new international arrivals. However, analysts from Macquarie said that apparel specialists were also likely to find themselves between a rock and hard place as landlords brought down the space allocated to the sector and increased leases to internationals.
Bangladesh will set up a wage board for readymade garment workers by 2018. The minimum monthly wage for garment workers in Bangladesh is $68, compared to about $280 in mainland China. In Bangladesh, 3.5 million workers in 4,825 garment factories produce goods for export to the global market, principally Europe and North America. The Bangladeshi garment industry generates 80 per cent of the country’s total export revenue. However, the wealth generated by this sector has led to few improvements in the lives of garment workers, 85 per cent of whom are women.
The majority of garment workers in Bangladesh earn little more than the minimum wage, far below what is considered a living wage, which would be the minimum required to provide a family with shelter, food and education.
The annual growth for Bangladesh’s readymade garment sector is predicted to be seven to nine per cent over the next five years. Still, garment exporters worry about profit margins being squeezed due to increased compliance costs in the wake of the 2013 Rana Plaza factory collapse and a push from buyers to further reduce costs. It’s estimated most of Bangladesh's garment exporters are operating with a profit margin of just three per cent.
The Tirupur dyeing industry has been sanctioned Rs 200 crores in a bid to help it recover. The move will help some 450 dyeing units. Following environmental concerns these units had collectively set up 18 common effluent plants at a total cost of a 100 crore rupees. The project had become a global standard and was appreciated by environmentalists and the processing industry the world over.
However, since it was the first of its kind, the project faced several technical challenges. Cost overruns put the units in a financial crisis.
Tirupur is a hub of the textile processing and knitting industry providing employment to over five lakh people and contributing 22 per cent to the total garment exports of the country. Tirupur is better known as the knitwear capital of India as it accounts for 90 per cent of India's cotton knitwear exports.
Limping back on a slow-but-promising western order recovery and robust domestic consumption, Tirupur is pursuing another growth cycle. The cluster sees protective wear, sports garments and defense-related businesses as obvious lines, given its huge spinning capacities.
Entrepreneurs want to wean themselves away from the fickle western apparel market to focus more on avenues of sustainable business like technical textiles or medical textiles and specialised products such as car upholstery.
The Financial Commissioner Agriculture Production Department (APD), Pramod Jain says cocoon production registered an increase of 3 per cent. Thus it recorded a production of 973 metric tons in the current financial compared to last year’s 147 metric tons.
Under the Institute Village Linkage Program (IVLP), Central Sericulture Research and Training Institute (CSR&TI) has adopted 100 cocoon farmers in the vicinity of the institute at Pampore. The projects planned for development of the Silk Industry in the state with the support of Central Silk Board (CSB). Director of Sericulture, Malik Farooq informed that the department of sericulture has taken various initiatives for the uplift of this vital sector. The reason behind this is to see that the silk industry is developed on sustainable basis. He also informed that two separate projects for SC/ST families associated with the sericulture sector are in offing.
