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The devaluation of the yuan has caused jitters among garment exporters in India. Garment exports from China will get an impetus as more and more buyers will source products from there since they could become cheaper. Already, China is the leading exporter of textiles and clothing in the world.
In contrast garment exporters in India like the knitwear cluster face rising production costs and shrinking profit margins. Tirupur knitwear cluster imports large chunks of machinery, raw materials like knitwear printing inks and accessories that provide embellishments to the garments.
Rupee volatility has been a problem for the last few months. If the rupee continues to slide, it can upset the costing of end products as garment orders usually take a few months to execute. Since currency markets cannot be controlled, Indian exporters want incentives that will arrest any further widening of the trade deficit and help them remain competitive. They feel rates of duty drawback and interest subvention can be increased and more sops be given to increase exports to focus markets so as to enable exporters to increase their market share. China further devalued the yuan against the dollar a few days back, setting the daily reference rate to the lowest since 2011.
Korea’s Dongyang MirAcle successfully developed ‘Ultra High Molecular Weight Polyethylene (UHMWPE) yarn,’ one of the strongest among synthetic fibers which have led Korea's technical textile industry. It established the research center in 2007 to develop high tenacity fiber, new material fiber and automation facilities. An official of the Dongyang MirAcle explained that MirAcle which has been produced through gel spinning has specific strength 15 times higher than steel wire, and it has excellent UV resistance and chemical resistance. He added that since it has an excellent abrasion resistance and can be used in extremely harsh conditions, the scope of application will be widened.
Dongyang claims to be the only company in the world which can supply HDPE yarns in all range of tensile strength since it has developed not only gel spun UHMWPE yarn, MirAcle but also melt spun HDPE yarn.
Owing to the limitation of domestic technology, the UHMWPE yarn and melt spun HDPE yarn were all imported. Since the import volume was limited, the development of new applications using high tenacity HDPE yarns has been too slow. However, the MirAcle which has excellent quality compared to other companies was specialized in order to develop customized products by supplying excellent tenacity, creep characteristics, coating performance and customized specification.
The developed product can be applied to military supplies such as bulletproof jacket and bulletproof helmet, leisure and sports goods, and used for high performance rope, high performance fishing net, industrial safety gloves, protection gears, mountain bike frame, rock climbing rope, paragliding, fiber reinforced concrete, high performance motorcycle helmet, baseball stadium net, dental floss, gastro scope wire, industrial fabric, non-woven fabric, staple fiber and suture, etc.
Asia Apparel Expo will be held in Germany from February 24 to 26, 2016. About 250 companies are participating in the expo. Among the participating countries are: Hong Kong, China, Bangladesh, Pakistan, Myanmar, Thailand, India, Cyprus, Belgium and Poland.
The expo is designed to meet the demand from European customers for finished garments, contract manufacturing and private label development. The apparel products on show cover men’s, women’s and children’s wear, sportswear and work wear, fabrics and textiles, as well as trimmings and accessories from the carefully-selected factories.
For the fourth edition in February 2015, over 1,500 trade professionals attended, many of whom repeated their visits over the three days, reinforcing that the well-edited selection and variety of factories and suppliers is a convenient sourcing center for apparel buyers.
Asia Apparel Expo will continue to expand its role in providing European buyers with the opportunity to meet with potential new suppliers and learn of the most up to date sourcing and production information from Asia.
The event will feature a sustainable fashion design competition. The goal of the competition is to inspire emerging fashion designers and students from Asia and Europe to create high fashion pieces with minimal waste, utilizing zero-waste, up-cycling and reconstruction design techniques.
www.asiaapparelexpo.com/
Première Vision Paris will open its doors from February 16 to 18, 2016 in a complex and still unstable economic and political context. Facing continually weakened global apparel consumption, both in traditional as well as new markets, Premiere Vision Paris continues to demonstrate its strength, and the strength of its concept. With 1,720 exhibitions and six complementary activities, Première Vision Paris plays strength and a transversal approach to the global creative fashion industry.
The 1,720 exhibitors include: spinners, weavers, accessory makers, design studios, tanners and garment manufacturers. They are presenting their latest creative developments to the many buyers, stylists and fashion and accessory brand designers who come each season to Première Vision Paris to find inspiration and unearth innovative collections that will make a difference to their collections.
Following a record show in 2015, this time the number of global exhibitors is 4 per cent lower, down from 1,793 exhibitors in February 2015. This figure remains nonetheless quite high and is exceptional for the industry as a whole. Among the offers proposed at the various international shows targeting the upstream sector, the Première Vision Paris event is unquestionably the most complete, the most international and the highest in quality.
India is interested in signing a free trade agreement with the European Union. India and EU had started talks for the FTA, dubbed Bilateral Trade and Investment Agreement, in 2007 and the last meeting was held in October 2014. Till now, 16 rounds of negotiations have taken place. India has agreed on many issues such as permitting 49 per cent foreign direct investment in insurance sector, 100 per cent foreign direct investment in telecom and easing of foreign investments norms in the banking sector. A model bilateral investment treaty has been approved by India.
India has expressed her willingness to conclude a balances agreement with the EU. The trade in goods between India and EU was $98.5 billion in 2014-15. India has raised the issue of data security status, Mode-4 ceilings (movement of professionals), seamless intra-corporate movement and real market access in terms of sanitary and phyto-sanitary (norms related with plants and animals), and technical barriers to trade measures adopted by the union, while Europe wants a duty cut on automobiles, wines and spirits. However, discussions were stalled amid the downturn in Europe and the EU’s focus on concluding the transatlantic trade and investment partnership agreement with the US.
Bangladesh is aiming for sustainable growth of exports of textile and leather goods. A fund has been established for the purpose. Only borrowers who keep their factories green will be eligible for loans for the import of factory related capital machinery. The $200 million fund is called ‘Green Transformation Fund’. Export based textiles and leather industries need to maintain their factories environment friendly and conform to norms. They have to follow the criteria of water use efficiency in wet processing, water conservation and management, waste management, resource efficiency and recycling, renewable energy, energy efficiency, heat and temperature management, air ventilation and circulation efficiency, work environment improvement initiatives and other fields as identified may be included from time to time.
The loan period will be from five to 10 years with a one year grace period. Interest accrued for the grace period will be repaid in equal quarterly repayment without compounding. Many Bangladesh leather goods and footwear manufacturers and exporters already use solar panels, air ventilation and heat management. A leather industrial park will have an effluent treatment plant. Manufacturers feel the process of getting funds should come under fine tuning to make the process easier and less complex.
Denmark is going to launch a strategic sector cooperation project on improving the health and safety of workers in Bangladesh by strengthening labor authorities. The three- year cooperation between the two countries aims at supporting capacity development of labor authorities focusing in particular on occupational safety and health in the readymade garment sector.
Bangladesh hopes to become a middle income country by 2021 and for that it’s necessary to improve the framework condition and productivity of the readymade garment sector in Bangladesh. The focus of the agreement is to ensure a better and more sustainable production in Bangladesh.
The cooperation also includes building two specialised hospitals for treating occupational diseases workers suffer from. Currently, 60 Danish companies are in operation in Bangladesh. Denmark has a great trade deficit with Bangladesh and it is interested in investing in renewable energy and the water sector.
Denmark feels that for the last two years there has been a strong focus on Bangladesh’s clothing industry, and rightly so, but that there are also other industries that are contributing to Bangladesh’s economy like the leather and shipbuilding industries and that have great potential.
Denmark is one of Bangladesh’s leading development partners that currently works in areas like water, sanitation, agriculture, human rights, and development sectors.
"Adding to the worry of global brands and retailers, China’s textile and apparel companies are actively seeking business opportunities in the domestic retail market. Apparel retail sales in China reached 893.6 billion yuan in 2014 (around $137.5 billion), among which 30.77 per cent were sold online (up from 14.54 per cent in 2011). Although industry reports suggest apparel retail sales in China's Tier i and Tier II cities achieved almost zero growth in 2014, partially reflecting the negative impact of retail price increase on consumers' demand. But apparel retail sales in China's Tier III and IV cities and rural areas remain robust." opines Dr Sheng Lu."
China’s rising production cost and structural changes in the textile and apparel industry remain a major concern for global fashion retailers and brands. Although few other lower-wage countries can beat China in terms of industry integration, supply chain efficiency, and reliability however, it seems that the country’s production capacity remain unparalleled. As per 2014 statistics and information collated by Dr Sheng Lu, Assistant Professor at University of Delaware quoted in his blog, textile fiber production in China exceeded 50 million tons, accounting for 54.36 per cent of world share. By 2013, as much as 64.2 per cent of the world's chemical fibers, 64.1 per cent of synthetic fibers and 26.2 per cent of cotton were produced in China. Given China's vast production capacity, it will continue to be the top apparel sourcing destination for most EU and US fashion apparel companies for many years to come. Even Vietnam, the emerging sourcing hub also remains far behind with its apparel production recorded 2.85 billion units in 2015, which was only around 10 per cent of China's production.
Policy shift in China’s textile industry
Moreover, the global supply chain flow would also see the impact of China’s production policy shifting towards more value added and technology intensive textile products. Due to this structural adjustment, total industry output, the ratio of apparel, home textiles and industrial textiles has turned from 51:29:20 in 2010 to 46.8: 28.6: 24.6 in 2014. Further to overcome the pressure of rising labor and production cost, China's textile and apparel manufacturing base is gradually moving from the east coast to the western and central part of the country . Increasingly, China’s textile and apparel players are investing more on research and development shifting its focus from production volume.
Adding to the worry of global brands and retailers, China’s textile and apparel companies are actively seeking business opportunities in the domestic retail market. Apparel retail sales in China reached 893.6 billion yuan in 2014 (around $137.5 billion), among which 30.77 per cent were sold online (up from 14.54 per cent in 2011). Although industry reports suggest apparel retail sales in China's Tier i and Tier II cities achieved almost zero growth in 2014, partially reflecting the negative impact of retail price increase on consumers' demand. But apparel retail sales in China's Tier III and IV cities and rural areas remain robust, opines Dr Sheng Lu in his blog.
Companies following the traditional business model of manufacturing and exporting are facing their most difficult time since the 2008 financial meltdown. However, a number of apparel companies are now focusing on function upgrading. However, China's textile and apparel industry has witnessed slow growth specifically, output of China's textile and apparel industry grew only 7.0 per cent between 2013-2014, recording a significant drop from 10.3 per cent between 2009-2010. Experts believe given the downward pressure on China's economy and uncertainties in the world marketplace, such a slow-growth pattern are likely to continue in the years ahead.
The Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce, Government of India is organising ‘Make in India Week’ at MMRDA grounds, Bandra-Kurla Complex, Mumbai from February 13 to 18, 2016. The initiative will be help in association with all the Export Promotion Councils.
Led by Prime Minister Narendra Modi, ‘Make in India’ was launched as major national initiative for showcasing the potential of design, innovation and sustainability across India's focus sectors through a series of highly visible outreach initiatives in Mumbai.
The week-long event will cover key sectors including textiles, defence and aerospace, automobiles and auto components, chemicals and petrochemicals, construction equipment, materials and technology, food processing, infrastructure development, IT and electronics, industrial equipment and machinery, pharmaceuticals and micro, small and medium enterprises (MSMEs).
Dipp.nic.in
India should allow its currency to slide, says a Assocham study, else Indian exports will suffer at the hands of China and other emerging countries witnessing corrections in their currencies.
The RBI should use its foreign exchange reserves to defend the currency only if there is a rout situation. In the meantime, India must also ensure that its exports need to get back their competitiveness even in the midst of the global slowdown.
The major challenge is coming from China in various forms with a sizeable influence on currency valuation. Yuan devaluation will negatively impact Indian firms, which have export exposure to China in sectors such as tyres, pharmaceuticals, steel and organic chemicals textiles due to a volatile change in the terms of trade. The devaluation will make Indian exports expensive.
With a sharp reduction in the prices of primary commodities, which India ships out, export value is bound to decline in a disproportionate manner to imports since the inward shipments comprise capital, telecom and manufactured goods. In 2014-15, the trade imbalance increased by over a third from the previous year. This large trade deficit is essentially a reflection of India’s inability to penetrate the Chinese markets, a problem that seems to have aggravated over the past three years.
