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IndustriALL’s steering committee meeting of the ICT, held on 28-29 May 2018, discussed global industry trends; evaluated current activities and future strategies to strengthen union power and respond to challenges faced by the trade union movement. 24 countries that will come under the scrutiny of the Committee on the Application of Standards for alleged violations of international labour conventions. Algeria, Belarus, Brazil, Haiti, Mexico, Nigeria and the Ukraine are few of the countries where IndustriALL Global Union trade union affiliates are directly affected.
The Committee on the Application Standards (CAS), checks how International Labour Organisation (ILO) standards ratified by member states are being applied.
The CAS will examine cases on violations of the fundamental ILO Convention 87 on Freedom of Association and Protection of the Right to Organise in Algeria and Mexico.
Belarus will be inspected under Forced Labour Convention 29, whereas Brazil and Nigeria, will come under examination for breaching ILO Convention 98 on the Right to Organise and Collective Bargaining Convention.
The CAS will address violations of multiple Conventions on hours of work and weekly rest (Numbers 91, 14, 30, 106) in Haiti and the Ukrainian government will be invited to supply information on violations of labour inspection Conventions 81 and 129.
Export to China in the first six months of the Ethiopian Fiscal Year 2017-18, which started July 9, accounted for 17.3 per cent of Ethiopia's total export, overtaking Somalia, now accounting for 14.32 per cent.
Ethiopia's largest export destination in 2017 was neighboring Somalia, which imported 269.3 million U.S. dollars' worth of goods accounting for 9.26 per cent of Ethiopia's total exports.
According to the Ethiopia Ministry of Trade (MoT) Ethiopia exported 239.82 million U.S. dollars' worth of goods to China in 2017, accounting for 8.25 per cent of its total exports. The second largest export destination for the East African country. Ethiopia exported about 2.9 billion U.S. dollars’ worth of goods in 2017.
The revenue was earned from the exports of agricultural products, textile and garment, leather products, minerals, flowers and construction materials.
With Chinese firms located in Ethiopian industrial parks tentatively starting to export industrial goods to China. The volume of Ethiopian exports to China is expected to significantly increase in the coming years.
"For the past many years, two of the biggest global textile buyers, US and European, have been following the China + 1 or China + many sourcing strategies. Among these +1 or +many would be Asian countries, viz., Bangladesh, Vietnam, India, Sri Lanka. However, recent OTEXA statistics reveal even though US imports from these countries remain the highest they have not clocked in the highest growth rates. Rather imports have enhanced from Turkey, Myanmar, Cambodia, AGOA countries for mass apparel as well as from Italy, France, and Spain. The reason for this is the consumers’ growing thrust on high value clothing rather than mass produced low end commodities."
For the past many years, two of the biggest global textile buyers, US and European, have been following the China + 1 or China + many sourcing strategies. Among these +1 or +many would be Asian countries, viz., Bangladesh, Vietnam, India, Sri Lanka. However, recent OTEXA statistics reveal even though US imports from these countries remain the highest they have not clocked in the highest growth rates. Rather imports have enhanced from Turkey, Myanmar, Cambodia, AGOA countries for mass apparel as well as from Italy, France, and Spain. The reason for this is the consumers’ growing thrust on high value clothing rather than mass produced low end commodities.
China’s dominance stays
US apparel imports from China from January-March 2018, at $5802.021 million, were 0.87 per cent higher than in the same period of 2017. In volume
terms, Chinese exports to the US amounted to 2482.089 million SME, an increase of 3.74 per cent during the period under review. In 2017, China’s apparel exports to the US fell 3.17 per cent to $27030.289 million, which was still 33.67 per cent of total apparel imports of the US in terms of value, and 42 per cent in volume. In the first three months of 2018, China’s share remains the highest, but the share seems to be on downfall. In value, China's share in US apparel imports was 30.17 per cent, and in volume, 38 per cent. If experts are to be believed, Chinese imports are set to fall further owing to ongoing tariff and trade wars. Having said that even after an overall 25 per cent tariff increase by the US on imports of Chinese apparel, China will still be far more competitive than its counterparts. Vietnam, Indonesia and India will still remain costly affairs barring Bangladesh, which is set to boost the country’s exports in near term.
Other countries’ share
Vietnam is the second largest apparel supplier to the US. Apparel inports from Vietnam during January-March 2018 were $2858.357 million, an increase of 3.32 per cent compared to the same period in 2017. The US imported garments worth $1356.166 million from Bangladesh during January-March 2018, a drop of 0.92 per cent. In 2017, imports from Bangladesh were down by 4.46 per cent. The fourth largest supplier to the US market, Indonesia, has fell further 5.78 per cent to $1149.891 million. In 2017, imports were Indonesia were down 3 per cent. While India’s share remained stagnant. During January-March 2018, US imports of apparel from India at $1036.066 million, were marginally lower by 0.79 per cent, compared to CPLY. In 2017, India’s apparel exports to the US registered an increase of 1.17 per cent.
Emerging sourcing destinations
Latest statistics indicate Cambodia can emerge as an important apparel sourcing destination for the US. While it offers the lowest prices, it does not have the capacities to match the demand of the US buyers. US imports from Cambodia went up 12.52 per cent to $587.715 million. In volume terms too, imports registered a similar increase of 12.75 per cent to 262.845 million SME. US imports from Myanmar are quite negligible but growing at a fast pace. During January-March 2018, US apparel imports from Myanmar amounted to $33.785 million. Moreover, there has been an increased sourcing pattern from Turkey over the years. During January-March, US apparel imports from Turkey at $147.996 million were 21.75 per cent higher than in the CPLY. In 2017, the US imported apparel worth US$ 526.546 million from Turkey, which were 11.51 per cent higher than in 2016.
Egypt also indicated high demand. During January-Marcy 2018, imports from Egypt were up 15.78 per cent, to $203.355. In 2017, imports from Egypt at $726.547 climbed 5.13 per cent compared to 2016. Imports from Italy rose 20.52 per cent during the first three months of 2018. Imports from France recorded a growth of 11.24 per cent, to $41.756 million. Top exporting countries from AGOA include: Kenya, Lesotho, Madagascar, Mauritania, Morocco, Ethiopia and Tanzania. While most of these countries registered double-digit export growth to the US this year, Ethiopia’s apparel exports grew 101.58 per cent during January-March 2018. US buyers imported apparel worth $21.955 million from Ethiopia.
Currently estimated at $110 billion, the Indian textile industry is likely to grow to $250 billion in the next two years. The country currently exports textiles worth $40 billion every year.
The last two years have witnessed a new surge of optimism in the textile sector as the centre has announced capital investment subsidy in segments such as garment, weaving and technical textile to help the sector. Rebate on state levies have been introduced to promote exports and additional 10 per cent subsidy on made ups and garment segments, leading to home textile industry getting a 25 per cent capital investment subsidy on new machines.
Textile companies across India are expanding their operations by entering into knitted fabric, or diversifying into denim fabric segment or into allied categories. Others are enjoying good export growth, not impacted by Indian market conditions. Few others are creating a niche with their focused products or target market. The growing demand of polyester is another big reason behind this expansion. A look at some of these ongoing expansion plans of the companies:
Sintex Group: The Sintex Group is globally recognised manufacturer of structured fabrics for high-end fashion shirting. The group’s fibre-to-fabric facility 
at Kalol is one of the largest weaving units in India. It is setting up one of India’s largest compact yarn facilities with one million spindles, to be commissioned in a phased manner. The group commenced operations of Phase I comprising 3.06 lakh spindles spinning superior quality compact yarn for weaving and knitting operations during 2016-17.
Morarjee Textiles Ltd: Morarjee Mills has undertaken a backward integration project to integrate the manufacturing processes and reduce dependence on vendors of yarn and weaved fabric.The expansion project comprises expansion of the spinning facility by 40,128 spindles, weaving capacity increased by 112 looms, printing capacity enhanced by 78 lakh meters per annum, and installation of ‘Ready for Dyeing’ (RFD) machinery.
Nitin Spinners Ltd: Nitin Spinners is one of the leading producers of 100% cotton yarn and knitted fabrics at its plants at Hamirgarh in the Bhilwara district of Rajasthan. The company is setting up an integrated textiles unit with facilities from spinning to processing as a greenfield project. The unit will have the capability to manufacture all types of processed fabrics to meet the complete requirements of apparel manufacturers.
Sutlej Textiles and Industries: Sutlej Textiles and Industries is setting up a greenfield project to manufacture polyester staple fibre by recycling of pet bottles at Samba in Jammu & Kashmir. The company is setting up a recycled PSF plant of 80 MT/day capacity with product range of raw white recycle fibre & black recycle fibre. The project costing Rs. 110 crores is expected to be completed by the second quarter of 2020.
Sutlej has also invested around Rs. 51 crores in the first nine months of 2018-19 towards technology upgradation and debottlenecking. This will result in further improvement in efficiency and sustaining plant utilization.
Indian synthetic yarn exports haven’t grown substantially.
The industry is globally uncompetitive in terms of prices, compared to China, Korea, Thailand, Taiwan, Indonesia and Malaysia.
As the share of domestic sales in synthetic yarn is substantially more than exports, the industry has had much less of a benefit from a falling rupee.
The industry has become entirely global and prices are based on international market comparisons. This is also a period of slacker demand.
PTA/ MEG and benzene are crude oil derivatives and have seen a price rise of 25 per cent to 30 per cent and 30 per cent to 35 per cent respectively in six months. Demand has also been poor. Be it spinning, weaving or even finished products, the synthetic yarn value chain has been unable to forward the price rise to buyers.
Imports are turning unviable and have slowed. Also, the market has turned volatile.
An increase in crude oil prices has led to a great rise in its derivative petrochemicals, polymers, plastic-making raw material and feedstock like naphtha.
The price increase in the international market for all petrochemicals, solvents and polymers has been sharp since April.
India’s synthetic yarn exports grew in 2017-18 by about five per cent.
Must Garments is a manufacturer and supplier of high-quality garments.
It supplies products to some top brands like JC Penney, Walmart, Macy’s, Target, Ann Taylor and Amazon. It has manufacturing units in Bangladesh, Jordan and Oman that manufacture over 60 million pieces a year.
Must has invested heavily in RFID production technology and nanotech and foam dyeing for its wet processing. Some of these efforts have brought about as much as 98 per cent savings in water and huge savings in energy and chemicals that are used in the production of its garments.
In the face of inflation of wages, energy and food and commodities, automation and investment in technology has become the biggest opportunity and the need of the apparel industry considering how labor-intense the industry is.
Must manufactures goods in Bangladesh and the Middle East. The new US policies were helpful in some ways, but not in others. In the Middle East, there are no likely TPL extensions possible. Hence, the duty-free status will go away in a lot of the countries like Bahrain and Oman and now the company is moving to Jordan which has a more stable FTA. On the other hand, pulling out of TPP perhaps put the brakes on the possible duty-free status in Vietnam, which might assist the company in the long term.
The US has banned imports of cotton or products made with cotton from Turkmenistan after discovering the reality of state-orchestrated forced labor.
While direct trade between the US and Turkmenistan is relatively small, the Central Asian country exports cotton to Turkey, Pakistan, India and China.
Apparel brands producing garments from those nations will need to pay attention to their cotton sources.
Similarly when forced labor was discovered in cotton harvesting in Uzbekistan, nearly 300 brands and retailers, including Adidas, H&M and Fruit of the Loom, signed a pledge to eliminate Uzbek cotton from their supply chain.
Knowing the origin of a garment isn't as simple as taking a look at the Made In label. While a T-shirt may be manufactured at a factory in Asia, the raw materials could come from all over the world.
More than 80 countries worldwide produce cotton, and spinners blend a lot of their cotton and mix it together from several different countries to maintain consistency and quality.
The challenge for apparel brands is knowing the source of cotton in their products — or they risk having their products turned away at the border. Most brands don’t buy yarn. And they don't have the relationships with yarn and textile mills.
In addition to working with suppliers, brands need to assess risk. Nearly three quarters of cotton exports from Turkmenistan go to Turkey. If an apparel brand has a production facility in Turkey, there's a higher risk Turkmenistan cotton is in their products.
Turkey’s exports increased 12.2 per cent in May compared to the same month last year.
On a quantity basis, the country’s exports increased by 3.8 per cent year-on-year in the month.
The country’s 12-month exports also jumped 10.2 per cent year-on-year. Exports during the first five months of 2018 were up 9.3 per cent over the same period last year.
In May, 19.8 per cent of Turkey’s exports came from the automotive sector, up 7.9 per cent compared to May 2017.
Auto sector exports were followed by the clothing and chemical products sectors.
Turkey’s exports to Germany, Britain and Italy rose 9.76 per cent, 12.51 per cent and 23.32 per cent, respectively, year-on-year in May.
Turkey continued to receive results from the export and growth campaigns launched in 2016. The country is expected to see a growth rate of 7.5 per cent in the first quarter.
The euro/US dollar parity is higher than last year. The Turkish lira has gone through a period in which it experienced a very fast value loss.
Capacity utilization rates, investment incentives and the industrial manufacturing index look healthy. The country is taking steps to abolish the current deficit problem with its investments and exports.
Variant has launched a new eco-friendly knitwear portal, which ethically sources luxury material and also utilises 3D localised production to significantly reduce waste. The portal allows its users to design unique, custom, high-quality products that are ready to ship in days.
To use this portal Variant users have to simply log into the platform, upload their custom design, drop it onto a 3D virtual garment that they select from the Variant stock, then place their order. The request is then sent to one of Variant’s localised factories, where the garment is produced and shipped to the customer within ten business days.
Compared to traditional manufacturing methods, the portal reduces textile waste by 95 per cent by knitting each style off the machine. With Variant's platform, anyone can be a designer and everyone can have access to the highest quality production teams and tools while reducing their environmental impact,
The ILO committee recently denounced the Haitian government for its failure to uphold international standards and national laws on working time and freedom of association. Although on paper, Haiti’s garment workers work for only 9 hours daily, in reality however they put in several more hours off the clock to reach their production targets.
The government has failed to uphold international standards and national employment laws, which is giving employers and their multinational customers free reign to steal from the world’s poorest workers. To make matters worse, the government has introduced a new law on working time which repeals existing standards on overtime, weekly rest and Sunday pay and nightime rates.
In May of last year, workers at 22 garment factories went on strike to demand higher wages. Dozens of union leaders and members of GOSTTRA have yet to be reinstated, in spite of very clear recommendations following an investigation by the ILO’s Better Work programme. Not only were they not reinstated, they were also blacklisted.
