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The Union Ministry of Textiles has been urged to facilitate opening of common selling offices or facilitation centres in China by the Indian Texpreneurs Federation (ITF).
D Prabhu Dhamodharan Federation Secretary, in a memorandum to the Ministry Secretary S K Panda, said that in recent times, the Chinese yarn buyers and traders, collectively, have been crushing the Indian yarn manufacturers, making this move necessary.
Indian spinners could open and operate common selling offices or facilitation centres in China to counter the Chinese onslaught. This would encourage close interaction among Indian industrialists and prevent buyers from exploiting them. Besides, this would strengthen the Indian buyers’ position with constant market intelligence.
The Ministry only needs to facilitate it as industry stakeholders would bear all expenses. Dhamodharan feels that the Ministry should initiate textile-specific agreements quickly for untapped markets instead of waiting for mega trade agreements to be signed. He also said that a strong recommendation to the Commerce Ministry is necessary to speed up the process.
Rationalisation of duties on man-made fibre for Indian products to compete in the international market is another point mentioned in the memorandum. Dhamodharan believes that this was the only way to achieve the targeted growth in the export market. Continuous decrease in export of MMF goods and increase in imports of MMF-based products clearly indicate international trends. Intervention on duty rationalisation cannot be delayed any further, he stated.
Dhamodharan averred that interest subvention for export of yarn and fabrics will boost exports and support the domestic market.
www.itf.org.in
For the September quarter Welspun India’s profits rose by 32.7 per cent. Welspun India is the world's third largest home textile manufacturer.
The debt-equity ratio has been brought down to 1.8:1. The company wants to bring this down to 1.4:1 by the end of this fiscal year. Retail sales grew 35 per cent. Net sales rose 6.3 per cent. The lower sales were the result of high base effect in the year ago period, when it had the best sales turnover.
The company hopes to maintain a revenue guidance of 15 per cent rise and a profit guidance of over 22 per cent for the rest of the fiscal year. The ongoing vertical integration at the company’s Vapi and Anjar plants are expected to result in better realisations and margins.
Welspun India targets to reach an annual turnover of 2.5 billion dollars, more than double the current figure, by the turn of the decade. The company has a current capacity of 50,000 tons of towels per annum, 60,000 million meters of sheets, 15,000 tons of rugs and carpets per annum.
Welspun is a contract manufacturer for some of the world’s largest retailers and nets more than 65 per cent of its revenue from the US market.
www.welspunindia.com
All the apparel production units and stalls/sales outlets selling apparels have been asked by Mariam Baldev, Joint Commissioner of Commercial Tax to compulsorily obtain the registration certificate.
While interacting with the apparel manufacturers and traders recently, Baldev said that if at all any units do not have it, the officials in their department could assist them to get the registration certificates within 48 hours. However, this would be only if they have the requisite documents in their possession.
There was some minor friction between the commercial tax officials and the apparel manufacturers after the officials conducted inspections at units and sales outlets. This is when the discussions gained significance. The manufacturers alleged that the officials were asking for levy of extra/excessive amount from them and also harassing them.
Baldev said that anybody who had any kind of complaint could approach her in person and the grievances would be addressed on its merit. No one would stop the vehicles for a prolonged period, said the tax officials; however, this would be the case only when apparel manufacturers would keep all the papers ready while transporting the garments to the buyers’ destination.
India’s share in the global apparel trade is unlikely to increase significantly over the long term. Structural challenges which constrain the industry need to be addressed.
The fragmented nature of the industry, low levels of modernisation, high costs of production and a limited presence in man-made fiber apparels are the main factors which have constrained the growth in India’s apparel exports.
The share of India in the global apparel trade is just four per cent despite the fact that India is one of the world’s largest cotton producers with the world’s second largest spinning and weaving capacity. Countries with benefits of economies of scale and abundant availability of cheap labor, such as China, Bangladesh and Vietnam, have been able to garner a larger share in global apparel exports over the last decade.
India is the world’s sixth largest apparel exporter after China, Bangladesh, Italy, Germany and Vietnam. Downstream sectors in the textile industry like weaving, processing and garmenting have not been able to derive benefits from the government’s Technology Upgradation Fund Scheme.
When it comes to yarn, most spinning mills are facing a working capital crunch since they have yet to get subsidies and incentives under the focus market scheme have been withdrawn.
Popular denim players mark their presence
Some of the important global companies from the denim business such as Gap, Levis,Uniqlo, H&M, S.Oliver, Li & Fung, HEMA , Hermes , OTTO , O'stin, Inditex, Mondial , New Times, Next, Perry Ellis, PVH , Redpoint, Espirit among many others were among the visiting companies. Most of the reputed garment factories from Bangladesh also made their presence felt during the show.
First used as a fabric for workwear, denim is now facing a threat from the new-found ‘Athleisure’ trend, as experts point out. But denim has survived and triumphed many such challenges over decades and the challenge has continuously raised the bar of this versatile fabric pushing the denim players to continuously experiment and innovate. The more they stretched their imagination, the fabric evolved.
So the fourth edition of the event took inspiration from ‘Denim Players’, with the theme aptly selected as ‘Denim Playground’, where exhibitors from around the world showcase their sporty innovations. Exhibitors from 28 companies were quite happy with the results they achieved from the show, with many more exhibitors expressing their interest to participate. The playground theme of was well appreciated by the visitors and exhibitors.
Denim fashion show and seminars hook the audience
‘FASHIONIM’ - the denim fashion show was a huge success with about 400 invitees attending the same. The presentation of collections by Vicunha Brazil, Envoy Bangladesh and Bhaskar India were highly appreciated by the audience.
Various brain-storming sessions and seminars during the ‘Denim Playgrond’ included profitable and environmentally sustainable denim washing organized by technical partners GIZ. Another one ‘Bridging research in cellulose chemistry for denim applications’ by Christian Schimpher from Acticell, Austria and the ‘Re-definition of Denim’ by Zafer Bozdag , Turkey were also held during the show.
Denimsandjeans.com also announced the launch of their unique online initiative – ‘De-Brands’ online show at http://onlineshow.denimsandjeans.com/: the first of its kind online global denim show. The event also organized a competition among the students of Bangladesh fashion universities and students from three universities - NIFT, BUFT and SMUCT participated in the same. 10 finalist students came out with amazing designs considering that it was their first exposure to such products. Three of the students were awarded the trophies for the best designs.
www.denimsandjeans.com
There has been a 17.6 per cent overall decline in exports from India. Textiles initially appeared to buck the slowing trend in exports but it has now been dragged into the decline. Readymade garment exports in April had crossed Rs 10,000 crores but a gradual but steady decline through the April to September period brought down the number to Rs 7,545 crores.
India's bilateral trade with China is skewed in terms of having more imports than exports. The devaluation of the Chinese currency is expected to lead to an expansion of the deficit in bilateral trade with China.
The immediate task at hand for Indian players is to hold their ground in the trade scene with China. Rate negotiations in commodities such as cotton yarn take place in trade fairs. A recent one in China showed Tamil Nadu’s textile players the intensity of this imbalance. The yarn exhibition in China showed there is an immense pressure on pricing. Indian manufacturers struggled to get a good rate for their yarn.
It was then they realised they need a local presence. The idea of a common office in China has been mooted. The industry wants direct selling offices in China, with the industry funding the expenses and the ministry facilitating the setting up.
Spinning mills in Tamil Nadu say Chinese yarn buyers and traders are crushing Indian yarn manufacturers by forming a cartel. A cartel is an agreement between competing firms to keep prices under control or check any new competitor’s entry into the market. Under this sellers or buyers agree to fix prices of selling, prices of purchase, or to lower production.
Yarn manufacturers want to be allowed to open common selling offices in China. They say this would help avoid exploitation by buyers, besides strengthening Indian players with updated and constant market intelligence.
The industry wants textile-specific trade pacts with various untapped markets to be initiated. Exports of cotton yarn and fabrics showed a positive growth of five per cent in September. The industry feels that with a huge capacity within the country, a little push and coordinated efforts will beat the downtrend in exports, helping the spinning and garment sectors to come out of the current trend of losses.
India’s yarn exports to China have declined by 20 per cent. Exporters have tried to make up elsewhere and there has been a slight rise in yarn exports to Sri Lanka, Bangladesh and Vietnam in recent times.
According to the Ministry of Labour, Invalids and Social Affairs (MoLISA), across Vietnam, a pilot labour inspection campaign in the apparel industry uncovered 1,786 violations at 152 businesses in 12 cities and provinces.
MoLISA inspectors, in co-ordination with the International Labour Organisation (ILO), the Vietnam General Confederation of Labour, and the Vietnam Chamber of Commerce and Industry, conducted the inspections from May to September, 2015.
Huynh Van Ty, MoLISA Deputy Minister, said that because the apparel industry was chosen for the test inspections, it had been a key foreign currency earner for Vietnam in recent years. It brought in 13.6 per cent of the country’s export revenue and 10.5 per cent of total gross domestic product. Between 2008 and 2013, the sector posted an annual growth rate of 14.5 per cent.
In Vietnam, there are about 6,000 apparel enterprises that are operational and they employ more than 2.5 million workers, which comprises of about 25 per cent of the industrial workforce. Ty said that most employees were manual labourers with limited professional skills.
Nguyen Tien Tung, MoLISA Deputy Chief Inspector, said that the most common violation was overtime hours exceeding the stipulated excess time and he said that 60 companies committees the violation. Besides, 17 firms did not provide sufficient overtime or night shift pay, while salaries in 11 businesses were lower than the region-based minimum wage levels set by the State.
Moreover, many enterprises did not have safety and instructional signs, and did not give information about how to escape during an emergency. The regulations and escape route maps were also not posted in visible areas. Shortage of protective gear, not using the equipment correctly by labourers was also common. About 90 businesses lacked sufficient occupational safety training.
www.ilo.org
Before the Indian industry become uncompetitive the Free Trade Agreement (FTAs) with European Union countries (EU) and a pact with US should be signed, advocated the Apex Industry body ASSOCHAM.
The chamber has stated that the estimated $500 billion potential consists of domestic sales of $315 billion and exports of $185 billion, in a note submitted to the government.
An ASSOCHAM release stated that to achieve this huge target, great planning and action are required by both, the industry and the government. This looks ambitious but is not impossible as China, by introducing various pro-industry policies, has progressed in the same in the last 10-15 years. D S Rawat, ASSOCHAM’s Secretary General said that the domestic market has to grow at 16-17 per cent from the present $68 billion to around $315 billion.
The total cotton exports by 2025 would be around $ 55 billion and other textiles would be around $ 14 billion, assuming that cotton exports would grow about 10 per cent at CAGR. This would leave a target of $ 116 dollar, which MMF/ Filament Yarn only can achieve.
ASSOCHAM stated that exports of MMF/Filament Yarn were currently $ 10 billion and for MMF/Filament Yarn to reach the target level of $ 116 by 2025, this segment would have to grow at more than 25 per cent CAGR.
The industry body however said that for the last 10 years, they had been regularly failing to achieve our export targets again and again because our concentration remains high on cotton. The MMF/Filament Yarn industry, which could have given the much desired growth, has not been given its due attention. They said that the time had come that we give due focus on the MMF to attain our exports and desired growth for the Textile Sector.
www.assocham.org
Vietnam’s textile and garment exports to the US in January to September were up 13.6 per cent year-on-year. The country exported nearly 17 billion dollars worth of apparel in the first nine months of this year, with the US market accounting for almost half of it.
The US market was followed by Japan and South Korea. Japan’s apparel imports from Vietnam were up six per cent year-on-year and South Korea’s imports were up 0.6 per cent.
Vietnam’s apparel makers expect their exports to increase when free trade agreements, especially the Trans-Pacific Partnership, come into force. Vietnam’s apparel is currently subject to 17 to 30 per cent US tariffs but the rates will be gradually brought down to zero in the TPP.
Vietnam’s apparel exports to the US have inched up 12 to 13 per cent annually in recent years while US imports from other markets have risen by only three per cent on an average. Vietnam makes up just nine per cent of America’s total apparel imports, so there is room for Vietnamese apparel firms to boost shipments.
Foreign firms make up around 25 per cent of Vietnam’s 3,000 textile and garment enterprises but contribute over 60 per cent of the country’s apparel export turnover.
