FW
China's home-textiles export dropped remarkably by 18.1 per cent to $3.65 billion in this calendar year, says China Chamber of Commerce for Import and Export of Textile and Apparel. The reason: weak demand and high year-on-year basis compared to the over 20-per cent growth in same period of last year.
Export to the United States, Europe and Japan all saw double-digit decline. In January-February, China's export to the above-mentioned three markets presented a downward trend. The export stood at $1.02 billion, $670 million and $330 million, down 14.9 per cent, 10.9 per cent and 10.5 per cent respectively from a year earlier.
China's export of home-textiles to ASEAN markets and Latin America dropped significantly by 30.6 per cent and 40.3 per cent in the same period. While Guangdong Province remained the big player, inland provinces/municipalities have poor performance. The top five exporters are Zhejiang, Jiangsu, Shandong, Shanghai and Guangdong, but the exports from the first four declined, in which, Zhejiang, Jiangsu and Shanghai saw significant decline between 13 per cent and 22 per cent, while Shandong saw 4.8-per cent drop. Guangdong Province alone maintained steady growth despite unfavorable situation, but the growing pace slowed down to 9.4 per cent.
Exports from many inland provinces/municipalities such as Hebei, Anhui, Chongqing and Xinjiang saw over 20-per cent decline, Yunnan, Xichuan and Gansu even saw over 50-per cent decline.
The Bangladesh government has sought cooperation from the Institute of Chartered Accountants of Bangladesh (ICAB) for the implementation of 5 per cent profit sharing with the Workers Welfare Fund as per Labour Act. The meeting with the ICAB leaders held at Labour and Employment Ministry also discussed ways ICAB could help the government in implementing the Labor Act, which has a provision of 5 per cent profit sharing to the welfare funds for ensuring workers’ rights.
According to Labour Act, each company will have to pay 5 per cent of the net profit of the previous year at the proportion of 80:10:10 respectively to the Participatory Fund, Welfare Fund and Workers Welfare Foundation Fund established under a section 14 of the Bangladesh Workers Welfare Foundation Act, 2006.
If the auditors could raise questions about the law while preparing the audit report, the owners of the company will have to contribute to the fund as per the rules.
Bangladesh, India and Pakistan are expecting higher exports of readymade garment (RMG) to the United States (US) and European Union (EU) as the exports from the East Asian giant China and start-ups Cambodia and Vietnam are the on decline. The textile and apparel (readymade garments) exports from China, Vietnam and Cambodia to the US declined by 43.3 per cent, 22.4 per cent and 22 per cent respectively in March compared with February, according to the US Department of Commerce’s Office of Textiles and Apparel.
Incidentally, the decline in textile exports in March ’16 was 42.1 per cent for China, 22.6 per cent for Vietnam and 34.4 per cent for Cambodia against the same month in the last year. Meanwhile, textile and RMG exports from Bangladesh to the US recorded an increase of 7.9 per cent in March this year compared to the same month in the last year.
Whereas, textile and RMG exports from India to the US increased by 15.3 per cent in March compared with same month last year while RMG exports from Pakistan to the US increased by 8.8 per cent. However, in volume terms Bangladesh RMG exports to US continued to surpass exports from India and Pakistan.
Production of cotton in the US is anticipated to rise 15 per cent from 2015-16, based on 9.6 million planted acres as indicated in Prospective Plantings, combined with below-average abandonment, due to relatively favorable moisture, and average yields. A projected cotton crop of 14.8 million bales in 2016-17 in the US is expected to boost next season’s ending stocks, well above the beginning level. Domestic mill use is projected to be stable at 3.6 million bales, while exports are expected to rise to 10.5 million, on higher available supplies and more marketable qualities. Ending stocks are projected at 4.7 million bales, or one-third of total use. The preliminary range for the marketing year average price received by producers is 47.0 to 67.0 cents per pound.
During 2015-16, US cotton production increased marginally. Export forecast is reduced to 9.0 million bales, reflecting lower-than-anticipated export sales to date, with ending stocks raised accordingly. As per 2016-17 global cotton projections, a decline in stocks of more than 6.0 million bales is expected, as consumption exceeds production for the second consecutive season. Global production is expected to rise 5 per cent, despite marginally lower area, as yields recover from weather and pest pressures that affected crops in 2015-16. Production is forecast to rise mainly in Pakistan, United States, India, and Turkey, partially offset by a 1.3-million-bale reduction in China. Global consumption is projected to rise 1.6 per cent, as prices overall remain low and mills in China gain access to domestic cotton at more competitive prices.
Exporters in Tirupur say the proposal to fix the minimum wage for contract workers at Rs 10,000 will hurt the industry. Tirupur is the biggest knitwear hub in India and exports knitwear garments to more than 100 countries. In 2015-16, it recorded Rs 23,050 crores in exports as against Rs 21,000 crores achieved in 2014-5 and is currently providing employment to six lakh workers directly, out of which 70 per cent are women.
At the all-India level, the share of Tirupur has gone up from Rs 12,500 crores in 2011-12 to Rs 23,050 crores in 2015-16 i.e. from 19.1 per cent to 20.72 per cent. However, the sector is facing a tough proposition in the global market due to lower competitiveness in certain areas such as bank interest, infrastructure, transaction cost, and power cost including labor wages.
Competitors have forged ahead. Vietnam has already signed an FTA with EU, which will come into effect from 2017 and is one of the member countries of the Trans Pacific Partnership agreement. Likewise, being a least developed country, Bangladesh enjoys a duty free status in the EU and Canada.
India too has the potential to enhance exports to the EU. The EU accounts for a chunk of the total exports from India. Of the total exports of $17 billion, the EU accounts for $6.29 billion.
India is hopeful of signing the free trade agreement with the EU soon. This is expected to give an impetus to exports from the country. Talks have been broken for a while but now dialogues with the European Union have been revived. India is also taking steps to get the FTA with the United States ratified at the earliest.
Apparel exporters from clusters like Tirupur want FTAs with EU and the US as most of their exports are to these two regions. The country is encouraging garment exporters to explore new markets in South America and the Middle East, among other regions. Similarly, product diversification is being promoted so that apparel exporters can penetrate niche markets across the globe.
However, India’s share of apparels made of manmade fibers continues to remain low, even as 60 per cent of the shelf space in global markets is getting occupied with garments made of manmade fibers. Perhaps the use of manmade fibers is low due to the tax structure. So there has been a suggestion to reduce excise duty on manmade fibers from 12 per cent to 6 per cent.
Dalena White has been appointed the new secretary general of International Wool Textile Organisation (IWTO). She has had experience in marketing, retail and fashion and has worked as a designer and pattern maker in design studios. She knows about wool and the wool industry. She has curated exhibitions such as Design Indaba and Wool Week South Africa.
White has served as marketing consultant for Cape Wools, promoting merino wool among retailers and designers, building brand awareness and educating consumers among the unique properties of wool. She has served on the board of Sweet-Orr and Lybro, a leader in the protective clothing business, as merchandise director for men’s, women’s and children’s denim and cotton garments.
With a membership comprising 60 per cent of total wool production worldwide, encompassing the wool pipeline from sheep to shop, the IWTO represents the interests of the wool textile trade at the global level. It facilitates industry strategy and ensures standards in manufacturing and sustainability. IWTO fosters connection between members and all stakeholders through mutual support of opportunities for wool.
White was chosen through a competitive selection process from a strong set of international candidates. She will take up her role on May 17, 2016, at which time the current secretary general will step down.
Macy's same-store sales fell steeper-than-expected at 5.6 per cent in the first quarter while net sales declined 7.4 per cent. The retailer slashed its full-year forecast. The dismal forecast from the retailer pushed its shares down nearly 14 per cent to a more than four-year low.
Macy’s forecast cut reflects increased pessimism on the consumer's willingness to shop for apparel and accessories over the balance of the year. Apparel sales were also hurt by unseasonably cool weather in late March and early April, when retailers usually launch spring collections.
Macy's, profits have been shrinking for more than a year, and now it wants to intensify cost cutting and monetize unproductive real estate. About 40 per cent of Macy’s merchandise is exclusive, while the rest is available at competitors and at lower prices.
Macy's is working to boost sales by rolling out more of its backstage off-price stores and launching exclusive product ranges, including a clothing and accessories line in partnership with singers Elton John and Lady Gaga.
The intent is to bring the shopper into the store, have a product that's emotionally exciting to the consumer, a differentiated product that’s not available elsewhere.
Macy’s stock has lost 44 per cent of its value in the past 12 months.
India’s blended spun yarn export value was up 4.8 per cent year on year in March 2016 while volumes rose 10.6 per cent as compared to the same month last year. Polyester Cotton (PC) yarns were exported to 51 countries in March, of which Egypt and Bangladesh were the largest importers of PC yarn from India followed by Morocco. A total of 6.7 million kg of PC yarn was exported from India during the month.
Honduras, Spain, Sri Lanka and Germany were the fastest growing markets for PC yarns while Peru significantly reduced its imports of PC yarns from India. Oman and Panama were among the nine countries that did not import any PC yarns from India during March. Finland, United Arab Emirates and Djibouti were the major destinations among the 10 new markets found in March.
In March, PV yarns were exported to 37 countries from India with volumes at 5.4 million kg. Turkey continued to be largest importer of PV yarns from India followed by Pakistan with a total volume at 3.5 million kg. Honduras and Djibouti were the new major markets for PV yarn while 13 countries did not import any PV yarn during the month, including the major ones like China, Uganda and Brazil.
Sutlej Textiles and Industries a leading manufacturer and exporter of value added dyed yarns (synthetic and cotton mélange) with a presence in home textiles is creating new capacities in its Rajasthan textile mills for producing value added products and expansion of home textiles is progressing as per schedule. Once completed, these will enable the company to enhance its domestic as well as global footprint.
The company’s Board of Directors of the company has recommended the highest ever dividend in the history of the company at Rs 13 per equity share for the year ended March 2016.
Sutlej due to its strategy of focusing on operational efficiency, organic and inorganic growth through capacity expansion both in spinning and home textiles has reported increased revenues and profits during the year. Revenue is at Rs 558 crores. EBITDA is at Rs 77 crores. Net profit is at Rs 49 crores.
Financial year 2016 has been a challenging year due to the global economic slowdown and the stressed rural economy in the country. In spite of challenging headwinds for the sector with margins under pressure, Sutlej will continue to concentrate on enhancing its scale of operations which will ensure consistent performance coupled with growth.
