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Shuttering down textile and garment factories and the relocation of manufacturing activities to neighbouring countries has been a trend in Thailand. As a labour-intensive industry, reasons for the downward trend of this industry revolve around high wages, labour scarcity and the end of Generalised System of Preferences (GSP) tariff privileges.
Thai garments are deemed as not competitive compared to those from neighbouring countries which still enjoy GSP privileges and where low-wage labour is still abundant. Textiles and garments are generally viewed as a sunset industry. A research team from Thailand Development Research Institute (TDRI), with support from the Commerce Ministry's Trade Policy and Strategy Office, has been exploring this issue, as this industry still hires many in the Thai labour force and can add value in the domestic market.
Experience from other countries such as Japan, Korea, and Taiwan that entered this industry before Thailand did, suggests similar kinds of problems during the transition period when their textile and garment industries made the transition from a labour-intensive to high-value industry. Higher labour costs and labour shortages compelled these countries to upgrade from labour-intensive, low-value-added garment manufacturing activities to capital-intensive, high-valued-added ones by moving upstream to textiles, fibres and machinery industries.
Countries like Taiwan, Japan and even Germany that are usually associated with high-technology, still manufacture textiles and garments. The industry in these countries is, however, quite different from the one in Thailand. Taiwan focuses on technical textiles such as fabrics that ventilate heat and moisture, fire-resistant textiles, or special fabrics for use in industries, construction and hospitals.
Some of these textiles have glow-in-the-dark or electricity-conducting properties, something that could be put to use in a wide variety of high-value final products. Japan, in addition to her dominance in automobiles, electronics and other high-tech products, has gone another step upstream, as one of the world's major exporters of weaving and knitting machinery for textiles. Germany, the world's foremost producer of world-class automobiles, is, perhaps surprisingly, the number one world exporter of advanced technical textiles for use in cars and for medical purposes.
Despite a squeeze on profit margins caused by Brexit, Primark, the Irish clothing retailer operating in Austria, Belgium, France, Germany, Ireland, Portugal, Spain, the Netherlands, the United Kingdom, the United States and Italy, has said that it will continue to provide affordable fashion to the masses. Associated British Foods plc (ABF), the parent company of the bargain superstore has said that uncertainty around the pound following the results of the EU referendum meant that their profit has dropped. Many of the goods sold in Primark’s three-storey shop in Coventry’s Broadgate are brought from the United States after paying in dollars. A weak pound against the dollar means Primark’s buyers have to pay more for those goods.
Primark pays insurance against currency fluctuations when they order goods. ABF recorded that Primark’s sales for the financial year up to September 17 would be nine per cent higher than last year. However, the unseasonably warm weather last winter and a cold spring has caused a slight drop in some sales as clothing lines failed to match up to the unseasonable climate.
In a statement, ABF said, ‘The transactional impact on Primark’s margins from the weakening of sterling against the US dollar, particularly since the EU referendum, will have no effect in this financial year as a result of our practice of taking out forward currency contracts when garment purchase orders are placed. However, at the current exchange rates, margin will be adversely affected in the new financial year.’ ‘Primark is committed to leading the value sector of the market with its on-trend product offering and maintenance of its price leadership position in clothing,’ the statement continued.
While ABF has been working to ensure customers of Primark don’t feel the pinch caused by Brexit, its staff with pensions won’t be so lucky. A trading update issued by the company has claimed that pension deficit would be around £200million. The statement further explained that this was due to a decline in bond yields.
The 8th Première Vision Fabrics were presented at the ongoing Première Vision Fabrics Forum. In all, six prizes were awarded, three for the fabrics category and three for the leather category. The PV Fabrics Grand Jury prize 2016 went to Ventures (India) for the most outstanding, symbolic and pertinent fabric of the season. The PV Fabrics Handle prize 2016 was collected by Luxury Jersey (Italy) for the fabric allying the most astonishing tactile and behavioural qualities. The PV Fabrics Imagination prize 2016 was given to Henri Portier/ Bennett (UK) for the boldest, most original, most amazing fabric in terms of decoration, technique, finishing, innovation or technology.
There were three new prizes for Premiere Vision Leather. The Le PV Leather Grand Jury Prize 2016 was given to Dileather (Italy) for the most exceptional, symbolic and pertinent leather of the season. The PV Leather Handle Prize 2016 was given to Sakamoto Corp. (Japan) for leather combining the most amazing tactile and behavioural qualities. And the Le PV Leather Imagination Prize 2016 was accorded to Anil Tannery (Turkey) for the most daring, original and amazing leather in terms of decoration, technique, finishing, innovation or technology.
Every year, the PV Awards prizes attribute prizes to the most inventive and innovative fashion textiles, chosen among the fabrics at Première Vision Fabrics. Since the last edition, and for the second time this year, the competition also included leathers presented by the tanners at the Première Vision Leather.
The 41st edition of Munich Fabric Start, the trade fair for premiers, profiles, positioning, innovations and impulses was held on August 30 to September 1. This time there was a three per cent rise in visitor number over previous year. There were over 1,000 suppliers—and 96 of these first-time exhibitors—with more than 1,700 collections across an expanded area from five to seven halls. The portfolio was extended to include unique product worlds and space for forward-looking and innovative developments and processes.
Visitors, experts and designers worked for two days in an intense and cooperative manner towards a common goal: the fundamental rethinking of production and value creation processes. People were increasingly on the lookout for individual collections and innovative fabrics.
People gathered information right at the start of the fair on the most important fabric and colors trends for the autumn/winter 2017-2018 season. This fair saw major changes and market-relevant extensions to include themes like future fabrics, heritage, sustainability, resources and future process developments, all against the backdrop of massively changing procurement concepts and marketing strategies. In increasing demand in the fabric segment were innovative items with a high quality standard. Demand focused on greater exclusivity.
The 120th edition of the China Import and Export Fair (Canton Fair), dubbed as the largest international trade fair in the world, will open in Guangzhou on October 31. The Fair will go on till November 4. As usual there will be a textile and clothing zone at the fair, which is also the highlight of the fair. Liu Quandong, Deputy Director General of the Foreign Affairs Office of the Canton Fair says, exhibition zones that had 6,778 booths and 3,345 exhibitors in the last edition would see an increase this time.
The exhibition zones of the 120th Canton Fair will feature men’s and women’s clothing, home textile, textile material and fabric. It is aimed to provide the most convenient one-stop purchasing experience for buyers who can find products they are looking for regardless of scale and categories. The exhibition zone in Area A will showcase men’s and women's wear, bridal wear, formal dresses and more. A special industrial presentation focusing on products with local characteristics will be set up in the central hall way of Area A during the phase to exhibit the textile and clothing products with local and regional cultural features from leading companies.
Global suppliers from Turkey, India and Pakistan are expected to display and sell their wares including home textiles towels, bathrobes, pillows and turfs. Home textile products such as bedding, home decorative textiles and textiles for bathroom, kitchen and dining room will be highlighted in Area C. This area will also focus on textile material and fabric. Garment accessory products like fabric, fiber, yarn and more will be featured. Leading companies will join the textile material and fabric exhibition. China Import and Export Fair, also known as the Canton Fair, is held bi-annually in Guangzhou every Spring and Autumn.
Hong Kong has been constantly wooing India to step up trade but the China bogey may come in the way of trade relations between the two, fear businessmen in that country. While HK businessmen have been lobbying with Indian government to consider Hong Kong and China as two separate countries instead, they are now getting to know that restrictions applied to Chinese companies in India are now applying to Hong Kong companies as well.
Raj Sital, Chairman of the Indian Chamber of Commerce Hong Kong is of the view that Hong Kong is the super connector that ties China with the rest of the world including India. But the glue is now losing its power as far as India is concerned due to New Delhi’s security concerns over China.
In February, CY Leung, chief executive of the Hong Kong Special Administrative Region had led a business delegation to India to discuss bilateral trade and iron out sticky issues. According to M H Arunachalam, immediate Past Chairman of the Indian Chamber of Commerce Hong Kong, who was part of the 200-member delegation, three areas that seemed problematic were discussed.
These are: A comprehensive double taxation avoidance agreement (DTA) that has been in discussions for over a decade and is yet to be signed; The fact that now Hong Kong based companies cannot open offices nor even representative offices in India automatically and directly, but need prior permission from the RBI, a process that sometimes can take over a year. Citizens of Hong Kong now cannot buy property in India without prior permission. Not only that, even properties that were purchased earlier can be sold but one cannot repatriate the money without prior permission.
Sital suggests India needs to recognize that Hong Kong and China may be one country but are actually two systems. Ironically, India has a double taxation treaty with China. The Indian government feels that it is a sensitive issue and needs thinking. For Hong Kong, the India push is important as its exports were down by 3 per cent in 2015. Major export items from Hong Kong to India are telecom equipment and parts which saw a jump of over 32 per cent from that of the previous year to $5,129 million. It also accounts for 39.3-per cent share of its total exports to India.
Century Textiles and Industries may merge its textile business with Aditya Birla Fashion & Retail (ABFRL). The aim is to bring the entire textile and fashion business of the Aditya Birla Group under one roof. In the past one year, ABFRL has undergone major restructuring under which the fashion business of Aditya Birla Nuovo - comprising Madura Garments - was merged with the company, making it the largest fashion retail player, with consolidated revenues of Rs 12,000 crores. Century earned about Rs 1,817 crores, or 8.6 per cent of total revenues, from its fabrics and denim business and is a supplier to ABFRL.
In the textile business, Century has two revenue streams: cotton fabric and denim units that can be integrated with ABFRL’s businesses. The company has a vertically integrated plant at Bharuch for manufacturing cotton fabrics. The cotton division of Century is one of the oldest players in India and manufactures a wide range of premium textiles and supplies to many international players, including Royale Linen, Ralph Lauren, DKNY, Belk and US Polo.
Century Textiles’ financial metrics have declined, mainly due to its high debt. Interest costs have corroded its profit after tax. Besides, due to falling demand and pressure on selling prices of cement, the financial performance of cement units has also suffered.
The 56th Annual General Meeting of the Textile Machinery Manufacturers’ Association (India) (TMMA) was held at Hotel Trident, Mumbai on September 2. Kavita Gupta, the the Textile Commissioner was the chief guest of the evening. Welcoming the gathering, R Rajendran, chairman before moving the Annual Report and the audited statement of accounts for approval of the members, he sought to enumerate the role of the Association that has been instrumental in transforming the textile engineering industry in the post-reform era. This, he said, was done by approaching governments for concessions and reliefs to initiating measures to revitalize the industries, market studies and exploration, expanding the horizon for accelerated modernization and R&D promotion.
Keeping the audience engrossed, Rajendran talked on various subjects like Indian economy, Goods and Services Tax (GST Reform) Bill, the Indian textile machinery sector, ‘Make in India’ programme, exports during 2015-16 and high tech shuttleless looms in India etc.
"In an effort to fulfil its High 5 mandate The African Development Bank (AfDB) has launched ‘Fashionomics’ the economy of fashion initiative during the Bank’s 2015 Annual Meeting to boost micro, small and medium-sized businesses (MSMEs) in the fashion and textile industry in Africa. The continent’s history of fashion and textile has a legacy of its own. From Aso Oke & Adire in Nigeria, Kente in Ghana, Shweshwe in South Africa, Kitenge in Kenya, Africa’s history of fashion and textile reflects the country’s ingenuity and creativity."
In an effort to fulfil its High 5 mandate The African Development Bank (AfDB) has launched ‘Fashionomics’ the economy of fashion initiative during the Bank’s 2015 Annual Meeting to boost micro, small and medium-sized businesses (MSMEs) in the fashion and textile industry in Africa. The continent’s history of fashion and textile has a legacy of its own. From Aso Oke & Adire in Nigeria, Kente in Ghana, Shweshwe in South Africa, Kitenge in Kenya, Africa’s history of fashion and textile reflects the country’s ingenuity and creativity. Africa currently accounts for 1.9 percent of the total estimated $1.3 trillion global trade. Africa’s entire textile/clothing market is already worth more than $31 billion and accounts for the second largest number of jobs in developing countries, after agriculture. In the next five years, the industry could generate $15.5 billion revenue.
Fashionomics to create a unique networking platform
The Fashionomics initiative will start off with creating a Business to Business (B2B) online platform by the first quarter of 2017. The dedicated website will be designed as a networking platform for all the links in the fashion and textile value chain- suppliers, brokers, designers, distributors and investors. It also acts as a place to share knowledge, tutorials and opportunities in the textile and fashion sector. The bilingual portal’s objective is to help members of the industry develop and boost their businesses. The Fashionomics Initiative will start off with Ethiopia and Cote d’Ivoire the two countries show the disparities and unique characteristics typical of the entire continent.
Initiatives to boost investment, employment
Africa’s fashion industry has already witnessed great growth and investments with AfDB’s initiatives. In Madagascar, AfDB is initiating an Investing Promotion Support Project (PAPI), investing about $10 million to boost the textile industry through the project. The Textile Sector Promotion Support Fund (FAPST) has been created under PAPI to support and improve the capacities of MSMEs within the textile sector. PAPI will also initiate the establishment of a Textile Special Economic Zone (SEZ). The fashion industry in Africa employs a large percentage of women. In Ethiopia, 78 percent of workers in the textile and apparel industry are women. Women own 80% of businesses in Cote d’Ivoire’s textile industry. Fashionomics will play a crucial role in creating the employment and empowerment opportunities for women. According to AfDB’s report, the clothing textile industry could generate 400,000 jobs in Sub-Saharan Africa and exports could double in the next 10 years.
In 2013, H&M, Swedish clothing retailer started sourcing for Ethiopian garment producers and the company has set up offices in Addis Ababa to get closer to suppliers. About 60,000 jobs have been created since H&M began chain operations in the country.
Challenges on the way
However, Fashionomics has a few challenges on the way. Africa has the lowest e-commerce penetration rate. In 2013, Africa and the Middle East accounted for only 2.2 percent of global business-to-business e-commerce. Textile production facilities are missing in most of the countries as they need more investment than apparel/clothing facilities. The huge capital requirement was one of the factors that led to the downfall of the textile industry in Nigeria. There is also constrained access to financing for entrepreneurs and SMEs as the cost of establishing a fashion business since electricity bills, labour costs, and taxes are high in Africa. Moreover, the cost of intra-African trade is relatively high as well. According to the World Bank, intra-African trade costs 50 per cent more in Africa than in East Asia. Also, Africa’s intra-regional trade costs are the highest of any developing region.
Regardless of these challenges, the regional governments need to foster the development of local suppliers, entrepreneurs, and regional value chains, ensure access to low-cost financing, build a more conducive business climate, buy from locally owned companies, invest in infrastructure and establish more educational institutions. Textile and apparel suppliers also need to improve productivity by investing in new equipment and training, upgrade and diversify product portfolio, and establish long-term partnerships with buyers thereby increasing their customer base. Along the way global recognition and strategic investments need to flow in the continent.
The spread of Zika virus has led to an increase in sales of apparels with built-in insect repellent. Now a supplier has recently unveiled a line of insect-repelling activewear in response to the concern. Since early 2015 when Brazil first notified the World Health Organization (WHO) of an illness characterized by a skin rash in its northeastern states, the Zika virus has been rapidly spreading across the Western Hemisphere. The virus is now present in almost every country from the United States, through Central America and south to Argentina.
So far, Florida’s Miami-Dade County is the only area with cases of Zika fever being passed via mosquito bite in the United States while all other US cases are travel-associated. In other words, this means that patients traveled to countries that had active Zika transmission, contracted it there and brought it back to the U.S.
Expert Brand has officially announced it has partnered with startup Nobitech to offer a line of insect-repelling activewear. The collection includes T-shirts, pullovers, hoodies and pants treated with Nobitech’s Skintex technology, which contains Permethrin, a synthetic insecticide that repels ticks, ants, flies, fleas, chiggers, midges and mosquitoes, including those carrying the Zika virus.
Other companies like OMNi Apparel Inc. and Gamehide offer apparels treated with Insect Shield that uses a formulation also containing Permethrin. OMNi Apparel has been a licensee of Insect Shield International since 2008 and manufactures and distributes Insect Shield/Zorrel Dri-Balance Moisture Management Tees.
The insect shield process involves binding a proprietary Permethrin formula, a registered EPA product since 1977 that’s proven effective in repelling insects, to fabric fibers, resulting in an odorless insect protection that lasts the apparel’s lifetime, the equivalent of 70 launderings.
