FW
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.
Kraig Biocraft Laboratories, a developer of spider silk-based fibers, has opened a new facility in Quang Nam province, Vietnam. The facility will be used for the company’s Prodigy Textiles subsidiary due to its proximity to mulberry production, building layout, utilities and access to shipping ports. Kraig Biocraft also plans in the future to open a 124-acre campus near the site as part of its strategy to develop affordable spider silk materials.
The company has also been working in collaboration with a local cooperative to expand mulberry production. The project is a major element of Kraig Biocraft’s production expansion plans and marks a significant increase in capacity.
Last month, the company completed the production of its first roll of pure Dragon Silk fabric, marking the first time that its proprietary recombinant spider silk fibers were used to create a 100 per cent pure woven silk fabric. The material will be used to make ballistic shoot packs for the U.S. Army.
The massive drop in unit prices of garments has resulted in a stellar surge in clothing imports of the European Union, according to the data released by Eurostat.
Unit Value Realisation (UVR) in the period was € 17.05 per kg of fabric equivalent as against € 18.65 in the same period last year. The rebound of the euro from a year earlier boosted demand from European buyers and due to a fall of unit prices in euro terms by 8.58 per cent on the yearly note, value of imports plummeted by 1.09 per cent.
The shipments from Bangladesh continued to cover the larger chunk in the European market beating even China which is losing ground in its clothing exports to EU.
Bangladesh clocked € 1.44 billion in the April month while China’s exports could just hit € 1.15 billion in the month indicating Bangladesh is clearly pacing up to match the Chinese shipment values in EU.
Make it British, a campaign set up by Kate Hills to encourage more people to buy British and make in the UK, has announced that Make it British Live will take place next year at the prestigious Business Design Centre in London’s Islington in 2019 from 29-30 May.
Kate Hills, founder of Make it British says that the move to the Business Design Centre presents a great opportunity for UK manufacturers to showcase what they do in a beautiful venue that is filled with natural light and steeped in history.
Make it British began in 2014 and was originally called Meet the Manufacturer. The first trade show took place in a small warehouse at The Old Truman Brewery in East London with just 56 exhibitors. Next year, Make it British Live Expects to welcome well over 200 exhibitors from across the fashion and homeware sectors.
Kate, a former fashion buyer, founded a website called Make it British in 2011 as a platform for promoting UK manufacturers and British-made brands. Make it British now includes events, such as Make it British Live! and regional Make it British forums, along with an extensive Make it British membership and directory and online training.
Earlier this month, the Indian government announced a 28 per cent increase in the minimum support price (MSP) for important crops such as cotton and paddy to help support farmers.
While this support from the farm sector was welcomed by the agriculture and allied sectors, the textile sector did not welcome the move as the MSP increase will likely increase the price of domestic cotton and make the raw material relatively expensive, which will impact the textile sector.
The Indian cotton sector currently needs to focus on increasing its productivity, improving its quality, working on its contamination levels and diversifying its strength. It currently needs economically feasible and suitable projects that can attract both domestic and export markets.
The industry is likely to be benefitted by enhancing its product offerings, strengthening its downstream processing and developing value-added textile sectors such as technical textiles.
Several international clothing brands are planning to increase their retail prices in India due to the depreciation of the Indian rupee.
Amit Gugnani, Senior Vice President, Technopak Advisors stated that many international brands/retailers in India import a large part of their garments, and the depreciation of rupee has increased the import costs by up to 10-15 per cent. Hence, many global brands/retailers are planning to pass on this cost to the consumer.
The rupee has fallen by more than 15 percent in the past few months and it touched a record low of Rs. 69 to the dollar, surpassing its previous low of 56.52.
However, most of the brands do not have sufficient volume to justify local sourcing and also the competence of local vendors may not be up to the mark.
Most brands had increased their prices last year due to levy of excise duty on branded garments. However, this year excise duty impact on brands has been reduced and also cotton prices have declined substantially.
As per a report recently released by the National Bank of Cambodia (NBC), the country’s garment and footwear exports rose to US$ 4 billion in the first six months of 2018, reflecting an increase of 11 per cent and almost doubled the 6.9 per cent rise recorded compared to previous year.
The industry insiders opine that the robust growth could have been sparked by strong sales in the US market. Manufacturers have also attributed the strong growth to favorable global economic conditions, particularly in the US and the European Union (EU), the main destinations for Cambodia’s garment and footwear exports.
In a related development, in the first six months of 2018 Cambodia’s exports of travel goods to the US increased from US$ 50 million annually to US$ 160 million. Formerly, the US had reinstated its Generalised System of Preferences (GSP) program for Cambodian travel goods. However, the growth rate of travel goods to the EU have remained flat.
The EU has criticised the Cambodian government’s human rights record, and have stated that it is reconsidering Everything but Arms (EBA) program for Cambodia. An EU fact finding mission that had recently visited Cambodia is expected to submit its report in the coming days. Cambodian trade officials have discounted fears of possible repercussions for the country’s garment and footwear industry in the event that the EU scales back the preferential trade scheme for Cambodia.
Instead, soon the government officials have stressed on increasing exports to other markets such as Canada, Japan and China to cushion any adverse impact from a potential roll back of the EBA program.
