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"With Gujarat government extending its textile policy for another five years, Maharashtra is also redrafting its textile policy for 2017-22, which expired in March 2017. The earlier textile policy aimed at attracting investments, especially in the Vidarbha region, and the government was optimistic about raking in investments worth Rs 40,000 crore and creating 11 lakh jobs. However, from 2012-17, the target has not been met."
With Gujarat government extending its textile policy for another five years, Maharashtra is also redrafting its textile policy for 2017-22, which expired in March 2017. The earlier textile policy aimed at attracting investments, especially in the Vidarbha region, and the government was optimistic about raking in investments worth Rs 40,000 crore and creating 11 lakh jobs. However, from 2012-17, the target has not been met.
State government analysts estimated investments in textile projects approved by financial institutions and in various phases of enforcement by March 2017 amount to Rs 16,371 crore, with the potential to generate 2.50 lakh jobs. But due to lesser government thrust, lack of interest from investors, poor state of infrastructure, growth targets were not been met. A comparative study of IEMs implemented in Gujarat and Maharashtra during 2014-15, revealed Gujarat implemented 19 textile projects comparatively in Maharashtra, no textile project were started during the year. In 2013-14, Gujarat received 20 projects, while Maharashtra got three.
Only a few big players like: Raymond, Siyarams, Suryalakshmi Mills and some public private partnerships, who have set up units in Vidarbha. Around 30 textile units of varying sizes have come up in the region during the policy period. The state has 16 textile parks, employing 23000 people. Another nine textile parks, announced by the state government, are in the pipeline. These haven’t been successful so far in enhancing production and employment. Most of the investments have gone to Gujarat, Tamil Nadu. To lure investments, the government taken various initiatives like: reducing the number of permissions required to set up units; cutting down bureaucracy. Yet other states are attracting more investments.
Initiatives taken
In January 2017, the Maharashtra government had announced plans to set up a garment park with an investment of Rs 300 crore at Solapur. This will generate employment for over 60,000 workers. The aim is to make the park a hub for uniform manufacturing. At present, Solapur has over 1000 garment units stitching uniforms worth Rs 1000 crore, employing over 60,000 workers. The government announced the setting up of a textile park in Sayane near Malegaon. The Maharashtra Industrial Development Corporation's (MIDC) regional office has acquired 113 hectares of land for the proposed textile park. But the progress has really been slow.
Maharashtra has attracted more than half of total FDIs in the country. The government has evolved an agro-industrial module for development of 20 districts along the Rs30,000 crore Nagpur-Mumbai Super-communication Expressway. Apart from constructing the 690-km stretch eight lane roads, the government has drawn up two major plans for development of metros and drought-hit districts.
The Centre and the state have taken decision on two dry ports at Jalna and Wardha. It is envisaged to make Nashik an industrial hub, Amravati a textile hub, and Aurangabad an industrial and tourism hub, through public-private partnership. Already, eight textile projects are under way in Aurangabad, according to government officials.
Vision 2025
By 2025, Maharashtra aims to be a $1 trillion economy, with investments mainly in infrastructure, IT, ICT and services sector. A report by FICCI-SPJIMR, highlights Maharashtra, with a GDP of $0.25 trillion, is the richest state in India, followed by Tamil Nadu ($0.17 trillion) and Uttar Pradesh ($0.16 trillion). Maharashtra reported a nominal gross state domestic product of $0.29 trillion in 2015-16. Thus, Maharashtra needs to grow by $0.71 trillion in the next nine years, i.e. over 2016-25, to achieve the $1 trillion-state status. The state would have to grow at a CAGR of 14.4 per cent in real terms to attain this mark by 2025. Compare this to the real rate of growth achieved in 2015-16 of 8.5 per cent, and the challenge becomes stark. The Handbook Of Statistics On Indian States reveals the investment rate in Maharashtra in 2014-15 was only 3.5 per cent. For Maharashtra to achieve 14.4 per cent growth by 2025, investment in the state will need to grow to at least 12.24 per cent per year from the current investment rate.
Shanghai Tex will take place from November 27 to 30, 2017. This will focus on the world’s latest innovative textile technology and high-growth application sectors, aiming at assisting industry players to overcome challenges and make full use of these new applications to breathe new breakthroughs and values to the textile industry.
The show will focus on latest fiber and technology with a wide range of production solutions to assist enterprises in industrial fabrics, automobile interiors, automobile parts, carpets, construction, electronics factory etc. so as to grasp the opportunities in the high growth market.
The printing, dyeing and finishing machinery zone will focus on the characteristics of a short production cycle, low-volume and on-demand production of digital printing. In order to provide solutions on increasing design flexibility, inventory problems and lowering manpower and other costs, Shanghai Tex 2017 will help textile and apparel enterprises stand out from the traditional printing industry. With high energy efficiency, precision and flexibility, digital printing has developed rapidly and made up for the many shortcomings of traditional printing technology.
Asia is now the world's fastest growing region for automobiles. Textiles are widely used in automobile production such as seat covers, carpets, roofs, heat/sound absorption materials etc. So automotive textiles have a huge market.
The newly launched Apparel Impact Institute (AII) is designed to work with brands and manufacturers to select, fund, and scale projects that dramatically improve the sustainability impact of the apparel and footwear industry.
This initiative has been put together by Target, PVH, Gap HSBC Holdings. Sustainable Apparel Coalition is providing industry support and access to Higg Index data. The Apparel Impact Institute will encourage joint action on scaling practices that have a positive impact on people, planet, and the whole industry, while simultaneously helping brands and manufacturers improve their Higg Index scores.
Despite widespread awareness of the environmental hazards within the apparel and footwear industry, few pilot projects designed to reduce impacts are operating at the scale needed to meet the critical environmental and social outcomes brands and consumers are seeking. AII will identify promising projects that are working in limited geography, for example, or are targeting a narrow problem yet show potential for broader application. By applying the appropriate resources, AII will help bring them to scale more quickly.
AII's first project will focus on mill improvement, one of the most environmentally impactful segments of clothing production. Future projects will include closed-loop recycling and worker well-being, for example, and will expand to include additional brands and manufacturers in the apparel and footwear industry.
Rising import of manmade fibers from China has upset Ludhiana knit manufacturers as these imports attract low duty. After the implementation of GST, the import duty on manmade fibers has fallen from a cumulative 28.5 per cent (including basic customs duty, countervailing duty, special additional duty, education cess) to about 15.3 per cent (including basic customs duty, education cess and Integrated Goods and Service Tax). Thus imports have become cheaper by about 13.2 per cent.
In addition to this, China, which is a major exporter of manmade fibers to India, provides a drawback incentive of 18 per cent on manmade textile exports. Hence, manufacturers in Ludhiana want a higher import duty on manmade fiber textiles so that the domestic industry doesn’t suffer.
Ludhiana is a hub of knitwear industry and has around 5000 units with a majority of them in the medium and small scale sector. Ludhiana knitters have suggested imposing a dumping duty on import of manmade fibers as a step to protect the domestic industry. There is a gap in the import tariff structure wherein there is a specific duty on most types of fabrics. But there is no such specific duty in chapter 60 which comprises knitted fabrics.
Kering’s Q3 consolidated revenue in 2017 is up 23.2 per cent. Acceleration in luxury sales was driven by Kering’s network of directly operated stores. Online sales expanded nearly 80 per cent and appeal for the group's luxury fashion houses was strong with both local customers and tourists from all nationalities and in all regions.
Wholesale distribution also saw robust growth of 21.7 per cent, with substantial contributions from Gucci, Yves Saint Laurent and Balenciaga. With new collections and reworked iconic lines, luxury jewelry brands also posted solid growth. Boucheron, Pomellato, Dodo and Qeelin performed well, both across their directly operated networks and in wholesale distribution channels.
Watchmakers enjoyed very encouraging growth over the quarter. The new models launched by Girard-Perregaux and Ulysse Nardin were very well received among customers, particularly in Western Europe and the Middle East.
Puma delivered another excellent performance for the quarter, with double-digit growth on a comparable basis across all key regions. Revenue for the brand rose 13.2 per cent as reported and by 17.3 per cent on a comparable basis. The brand also fared well in all distribution channels, with robust growth across all product categories, notably shoes and accessories.
The International Finance Corporation (IFC) is helping Uzbekistan in environmentally and socially responsible cultivation of cotton. The goal of the project is to increase the efficiency of cotton production by implementing the best world practices and minimize the risk of using forced labor in the cotton sector.
In the first phase covering 2017-18, IFC is implementing a pilot program, which involves the development and testing of a system of standards for sustainable cotton production in select areas. After successful testing, the system will cover 3,000 farms and agribusinesses that produce cotton in these areas. In 2019-22, it is plans to expand the application of the system of standards throughout Uzbekistan.
IFC’s project on the development of the cotton sector in Uzbekistan is aimed at accelerating the transformation processes in Uzbekistan and increasing the role of the private sector in the country’s economy. The introduction of best practices in the production of cotton is also expected to provide an opportunity to increase the global competitiveness of Uzbek cotton and textile products.
Uzbekistan ranks sixth in the world in terms of cotton fiber production and fifth in exports. The country yearly grows about 3,500 tons of raw cotton and produces 1.1 million tons of cotton fiber.
Himatsingka a vertically integrated home textile major that manufactures bedding, bath, drapery and upholstery, terry towel and bed linen is looking to enhance its manufacturing facility. Work has begun on an ultra-fine count cotton spinning facility. This facility, with an installed capacity of 2,11,584 spindles, will meet the cotton yarn requirements of the sheeting division. This will be the world’s largest cotton spinning plant under one roof. The integrated bed linen manufacturing facility, integrated ultra-fine count cotton yarn facility, and the integrated terry towel facility (proposed) are all located at Hassan in Karnataka, where as the drapery & upholstery manufacturing facility is located at Doddaballapur, Karnataka.
Himatsingka’s retail and distribution network caters to over 7000 points of sale at the global level. Armed with a strong portfolio of brands (both licensed and owned), the group is focused on strengthening its intellectual property portfolio across key global markets.
The portfolio consists of the most respected fashion labels as well as technology-driven brands that have led the industry. The group has been the leader in the branded cotton, track and trace space.
In fiscal year ’17, revenues from brands crossed Rs 1,000 crores and stood at approximately Rs 1,200 crores. Manufacturing revenues saw significant growth during the latter half of the fiscal. Himatsingka hopes to further improve utilization levels in the sheeting division. The new cotton spinning facility may be commissioned in the third quarter of fiscal year 2018. This will give the group greater control on the value chain and enhanced integration levels.
Global yarn production rose 11 per cent in the Q2, led by a 12 per cent gain in Asia and an 11 per cent increase in Brazil. Global fabric production improved nearly nine per cent in the quarter, with a 10.4 per cent increase in Brazil, a 9.8 per cent gain in Asia and a 9.2 per cent hike in Africa. Overall global fabric output rose four per cent compared to the second quarter of 2016.
Yarn stocks fell one per cent in the quarter, as Asia, Europe and Brazil saw their yarn inventories increase 0.7 per cent, 2.3 per cent and 11.5 per cent. But the world average was driven down by a 12 per cent decrease of yarn stocks in Egypt. The stocks’ improvement of 13 per cent compared to the year-ago period included decline of 40 per cent in Brazil and three per cent in Europe, balanced by increases of ten per cent in Asia and 112 per cent in Egypt.
Worldwide fabric stocks rose 3.3 per cent in the period, driven by a 23 per cent increase in Brazil. Global fabric inventories in the quarter decreased eight per cent compared to a year earlier.
Estimates for the third quarter indicate a stable trend in both global yarn and fabric production.
After seeing a fall for three months in a row, readymade garment exports from India rose by 25 per cent in rupee terms and 30 per cent in dollar terms in September. The increase is attributed mainly to the upcoming Christmas season in western markets. The other factor is inventories piled up due to GST are now being cleared.
Of the total readymade garment exports, 52 per cent is woven and 48 per cent is knitwear. The sector started the year in April with 27.60 per cent growth in rupee terms and a 31.65 per cent increase in dollar terms. But in the following month growth in rupee terms was only 3.84 per cent.
Garment exports this year are expected to surpass last year’s total exports as, generally, exports tend to grow in the second half. January to March are the crucial months for readymade garment exports. Around 30 per cent to 40 per cent of exports have taken place during these three months in the last few years.
Customers are sourcing from India as a part of a de-risking strategy. Customers have also started asking for a reduction in price after the rupee started strengthening against the dollar. Exporters have been under enormous stress in the last few months due to uncertainty over the duty drawback scheme which was brought down from 7.7 per cent to two per cent. Exporters were also hit due to the reduction in ROSL to one per cent from 3.5 per cent earlier. In addition to that the prolonged confusion over GST rates on knitwear and textile garments also cast a shadow on exports and overall the industry lost five per cent growth in the first six months. Tirupur saw a marginal growth in the first six months to around Rs 13,000 crores as compared to Rs 12,550 crores in the same period last fiscal.
Continued dependence on imports of raw and auxiliary materials will hurt Vietnam’s textiles and garment industry. It will prevent the country from taking advantage of the various free trade agreements and blunt the industry’s competitive edge further and reduce the value added component.
By the end of last year, 99 per cent of the cotton used in the textile industry was imported, a year-on-year increase of two per cent in quantity and 2.5 per cent in value. Each year, Vietnam earns of billions of dollars from textile and garment exports but businesses make modest profits because the garment industry spends more than half of its earnings on importing raw materials.
The textile industry is knotted in the middle i.e. highly productive in terms of making yarn and final products but stunted in the production of fabric and other materials. With the industry’s annual growth rate at about eight per cent, by 2025 the amount of fabric needed will double to 18 billion meters, meaning, without further investment in domestic production, Vietnam will have to import 15 billion meters.
It’s necessary for domestic businesses to invest in the dyeing process, implement a solid human resource training strategy and focus heavily on building an integrated value chain between domestic producers.
