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The government’s decision to increase import duties on textile, apparels, fibres and related products has annoyed global apparel brands selling their products in India. This hike would make apparels costlier by 4-6 per cent for Indian consumers. It may also adversely impact investments in India by price-sensitive brands such as Hennes & Mauritz (H&M). Post hike, textile products being imported from countries like China, Bangladesh, Vietnam, Cambodia and Sri Lanka will face the heat.
Basic customs duty has also been hiked ranging from 10 to 20 per cent to protect textile industry and employment. Indian textile bodies Tirupur Exporter’s Association (TEA) and Confederation of Indian Textile Industry (CITI) lauded government for taking this commendable move to protect domestic players. RMG import increased from Rs 3,994 crore in 2016-17 to Rs 4,983 crore in 2017-18. Additionally, leading India retail stores also started importing from Bangladesh and other countries due to availability of cheaper products.
Nike will raise wages for its 7,500 employees. About 10 per cent of employees across all levels and geographies will receive pay adjustments. The company has about 74,400 employees worldwide.
The pay adjustment will begin in August and be annualised over the balance of the company’s fiscal year. Its mid-level managers at its Portland headquarters are paid about $40,000 to $1,20,000 dollars a year. Earlier the sportswear maker concluded a probe into workplace behavior that resulted in the departure of a number of top executives.
Fueled by a complete digital transformation of the company end-to-end, this year set the foundation for Nike’s next wave of long-term, sustainable growth and profitability. US-based Nike, is the world’s leading designer, marketer and distributor of authentic athletic footwear, apparel, equipment and accessories for a wide variety of sports and fitness activities. Subsidiary brands include Converse, which designs, markets and distributes athletic lifestyle footwear, apparel and accessories; and Hurley, which designs, markets and distributes surf and youth lifestyle footwear, apparel and accessories.
For the Q4 Nike’s revenue increased 13 per cent. Diluted earnings per share rose 15 per cent. Gross margin increased 60 basis points to 44.7 per cent.
Rana Plaza was a turning point in Bangladesh’s apparel history. Reforms have made the garment industry a safer place but have also resulted in huge job losses for women. Five years ago, the country’s clothing sector employed around four million people, of which more than 80 per cent were women. Now Bangladesh’s readymade garment factories have 3.5 million workers, 60.8 per cent of whom are women.
The clothing sector is Bangladesh’s largest export earner. Five years ago, working in a factory was considered a reliable source of income for women, who made up the vast majority of garment workers. Now, the number of women garment workers is on the decline. Some are keeping away from the industry by choice, afraid of another factory collapse. And thousands of others are being shut out of garment factory work by policies designed to keep them safe.
More than 78 per cent of the Rana Plaza survivors have never gone back to work in a garment factory. And more than 48 per cent of the survivors are still jobless. Women are less knowledgeable about the technology that the industry is bringing in, making it more difficult for them to participate in the garment workforce. This lack of knowledge has created more scope for male workers to enter this female-dominated industry.
The European Union’s import volume of T-shirts rose 6.06 per cent during January to April 2018. India’s export volumes of T-shirts to the EU rose 3.48 per cent. The rise in volume indicates India successfully caters to European buyers. However, to stay relevant and competitive, India dropped unit prices and, as a result, there was a fall of 0.55 per cent in T-shirt shipment value of exports to the EU in the same period.
Bangladesh’s export volume of T-shirts to the EU rose 10.81 per cent. But there was a 1.95 per cent drop in value terms. Vietnam was the only country among Asian manufacturing powerhouses which registered growth in both volume and value of T-shirt exports to the EU. Export volumes surged 4.20 per cent surge on a year on year basis, whereas shipment values were up 8.18 per cent during the review period.
Despite the fact that China remains a key global centre for the T-shirts, production is gradually shifting to other countries in Asia. Asian countries accounted for the highest dollar worth of exported T-shirts (inclusive of all materials) during 2017 and had a 56.7 per cent share of worldwide exports.
Nguyen Thi Tuyet Mai, Secretary General of the Vietnam Textile & Apparel Association (Vitas) says, Vietnam is one of the world’s leading destinations for investors in the textile & garment industry due to the bilateral and multilateral agreements that the country has signed. Vietnam joined 16 FTAs, of which the two new-generation FTAs – CPTPP and EU-Vietnam FTA — are expected to facilitate the development of the industry.
Taiwanese company Far Eastern Apparel recently received an investment certificate to implement a $25 million garment project in VSIP II-A IZ in Binh Duong province of Vietnam. The company also signed a contract for leasing more land to expand its investment in its cloth and chemical fibre project in Bau Bang IZ.
Similarly, Singapore-based Herberton launched a textile and garment project, Ramatex in the Nam Dinh, with total investment capital of $80 million. The project is expected to become operational the next year and generate 3,000 jobs. Meanwhile, Japanese Itochu has spent 5 billion yen ($47 million) to acquire 10 per cent of Vinatex’s shares more, raising its ownership ratio in the Vietnam’s largest textile & garment group to 15 percent.
Invista’s Cordura® brand and Cone Denim® are debuting their latest collaboration at Outdoor Retailer Summer Market in Denver from July 23-28, 2018. This new denim innovation - Cordura® S Gene® Denim offers an authentic look and feel with hidden performance and engineered stretch benefits.
The Cone Denim's® S Gene® innovation was originally introduced in 2007. The high performance dual-core technology S Gene® yarn provides exceptional stretch and recovery. These yarns are made with two core components which optimise stretch and maximise recovery, and the dual-core is wrapped in spun cotton to provide a soft cotton hand and natural appearance.
Cordura®’s Gene® Denims feature high-strength nylon 6,6 filament technology and are validated to meet the durability, performance, and quality standards required for Invista's Cordura® brand fabrics. Cone Denim offer authentic indigo and black Cordura® S Gene® Denims in a range of weights from 10.75 to 11.75, with varying stretch 14 to 32 percent.
In fiscal 2017-18, Bangladesh’s total apparel exports to UK was $3.71 billion – a rise of 3.9 per cent from 2016-17. British businessmen are now willing to invest in Bangladesh as there is a big demand for Bangladeshi products in Britain. UK remains the third top destination for Bangladesh’s apparel exports, beating Brexit fears.
Bangladesh has also sought GSP Plus facility from United Kingdom, its third biggest trade partner, following Britain’s exit from the European Union. This facility would be granted to Bangladesh when it graduates out of the least developed country (LDC) club.
Axel Drieling of the ICA Bremen recently visited the Brazilian Association of Producers of Cotton (ABRAPA) and its central laboratory Centro Brasileiro de Referencia em Analise de Algado (CBRA).
He provided consultancy to ABRAPA and CBRA in June 2017 on Brazil's Standard HVI Program (SBRHVI). His latest visit added more expertise in this area as well as examined the quality management and procedures of CBRA as it prepares for ICA Bremen International Laboratory Certification.
Drieling also delivered a tailored training workshop at ABRAPA to 15 participants from a range of laboratories involved in instrument testing of Brazilian cotton production. The workshop defined the best prerequisites for assuring valid test results for the Brazilian cotton –something which is a key focus for ABRAPA.
"Romania’s textile industry is struggling to make profits with stiff competition from Asian countries and its own high labour costs. And the situation has been augmented by Brexit resulting in many companies shutting shops. For example, Alin Benta, which operated in Romania’s second city of Lasi. After reopening in early 2017, Benta started producing upholstery for Swedish IKEA. Like many of Romania’s roughly 4,500 textile factories, employing more than 200,000 people in one of the EU’s poorest countries, Benta’s operation relied heavily on British clients who paid in pounds. As sterling started devaluing by as much as 20 per cent against the Romanian lei, the factory’s monthly earnings fell by 50,000 lei (£9,400). Benta had the courage to revive once again and find clients but other companies have been unable to do so."
Romania’s textile industry is struggling to make profits with stiff competition from Asian countries and its own high labour costs. And the situation has been augmented by Brexit resulting in many companies shutting shops. For example, Alin Benta, which operated in Romania’s second city of Lasi. After reopening in early 2017, Benta started producing upholstery for Swedish IKEA. Like many of Romania’s roughly 4,500 textile factories, employing more than 200,000 people in one of the EU’s poorest countries, Benta’s operation relied heavily on British clients who paid in pounds. As sterling started devaluing by as much as 20 per cent against the Romanian lei, the factory’s monthly earnings fell by 50,000 lei (£9,400). Benta had the courage to revive once again and find clients but other companies have been unable to do so.
Cut-throat competition
Workers at hi-tech car plants in Slovakia, Poland and Hungary have used their bargaining power to extract
higher wages from foreign auto giants, Romania’s garment factories have very little grip over the market. Mihai Pasculescu, Head of the Romanian Textile and Leather Federation says mass brands look for low prices. Similarly, Aurelian Ciobotaru, a factory owner in Lasi, added the one who sets the lowest price takes the order. Elena Stoica, President, Romanian Manufacturers Association and owner of two factories employing about 1,000 people in Vrancea County of eastern Romania, says negotiations went badly. Some (brands) agreed to support them but many didn’t.
Data from Romanian Ministry of Commerce and the British Romanian Chamber of Commerce demonstrates a steady decline in orders from British brands over the past years. The slump will be reflected in the statistics in the next couple of years, as factories try to switch clients. It takes 2-3 years to rebuild.
Governed by small industries
The Romanian market is dominated by small and medium-sized factories, accounting for about 95 per cent of units. They remain dependent on middlemen and have minimal bargaining power. Brands can simply take their business elsewhere, at little upheaval or cost. Bettina Mussiolek, Coordinator for Eastern Europe and Turkey at the Clean Clothes Campaign opines there is no way for the garment industry in these countries to upgrade. It’s a real trap both for the national economy and factories. And it’s a social disaster because only poor wages can be paid and workers face extremely bad conditions.
Big factories, which face outside monitoring of working conditions, frequently pass orders to smaller factories, even to tiny, apartment-based operations where oversight is minimal or non-existent. For smaller factories to grow, move up the hierarchy and secure better prices, they need to be certified. But many cannot afford the investment necessary to secure certification.
Pasculescu said that while Brexit indeed marked a tipping point in terms of forcing factories to look elsewhere beyond Britain, garment production in Eastern Europe was still competitive with increasingly expensive rivals in China with proximity to Western markets. The industry is not about to fold. But between 2007 and 2015, an estimated 3.4 million Romanians have left to work abroad, putting the country second to Syria in terms of migration rates. While that time, the industry could manage the downturn, the Brexit impact seems to be extremely unencouraging.
On the strength of the first quarter and the new lineup that helped boost major gains in first quarter net revenue, VF Corp raised its full-year forecast for revenue to between $13.6 billion and $13.7 billion, reflecting an increase of 10 percent to 11 percent.
By segment, the company’s revenue for Outdoor clothing is expected to increase from 6 percent to 8 percent, Active wear is forecast to increase from 13 percent to 14 percent, revenue for workwear is seen growing more than 35 percent, and revenue for jeans is expected to be flat compared to the prior year.
The direct-to-consumer revenue of the company is predicted to rise between 11 per cent and 13 per cent versus the previous expectation of an 8 per cent to 10 per cent increase. Digital revenue is expected to increase more than 30 per cent versus the previous expectation of a more than 25 percent gain.
