FW
Alok Industries, the textile player whose net worth has been eroded, has approached lenders for fresh funds so that it can increase production. The highly indebted textile company, which owes bankers a whopping Rs 20,000 crores, believes it can boost production if given access to more funds. The company reported a consolidated loss of Rs 3,774.2 crores for financial year 2016 on revenues of Rs 13,040.9 crores, down 46 per cent over financial year 2015.
Alok Industries management is trying to convince the State Bank of India that if it is lent fresh funds, its performance can improve. The company says capacity utilisation at its plants in Silvassa went up by about 10 to 15 per cent in the first quarter of financial year 2017. Last month, a court stayed sale of assets and change in the company’s equity structure, keeping banks from converting any loans into equity. The court’s order followed a winding up petition filed by HSBC on behalf of a clutch of unsecured lenders including VTB Capital to settle outstanding dues worth 55 million dollars.
While the RBI doesn’t prohibit banks from extending fresh loans to a defaulter, bankers are generally reluctant to do so.
The Comptroller and Auditor General (CAG) has pulled up the Apparel Export Promotion Council (AEPC) for the tendering process adopted for leasing of a furnished office accommodation. CAG says the process was ‘flawed’ as it extended undue benefits to a private party, leading to a revenue loss of Rs 17.42 crores. The AEPC published advertisements (August/September 2007) in newspapers for leasing of furnished office premises measuring 23,382 sq. ft. at Bhikaji Cama Place, New Delhi.
Three bidders were short-listed and called for negotiation. The CAG said though Teesta Urja did not participate in the tendering process, their bid was considered one week after opening of bids. Meanwhile, E-Square International did not turn up for negotiations and IPM sought one day to give its best offer on September but finally they also did not turn up. CAG said it is clear the tendering process for leasing of furnished office accommodation was flawed as AEPC failed to maintain the sanctity of the process.
According to the Accord on Fire and Building Safety in Bangladesh, till July this year, 64 per cent of safety faults in the readymade garment (RMG) factories that produce cloths for Europe retailers have been corrected. In a recent progress report the Accord said most of factories remained behind schedule in their remediation. The pace of remediation at Accord-covered factories further increased over the last months and 64 per cent of all safety issues from initial inspections were verified as fixed, the platform said.
As per the report, the electrical remediation achieved the highest 80 per cent progress while the structural remediation witnessed merely 40 per cent progress. And 60 per cent fire-related issues were fixed. During the inspection the Accord found 19,790 structural faults in the factories and up to July only 3,854 issues were corrected while out of 33,613 electrical safety risks 23,403 issues were remediated, the report showed.
Meanwhile, 15 factories completed all remediation works from their initial inspections and 34 factories were terminated due to failure to implement the workplace safety measures. The Accord conducted initial inspection in 1,648 factories and out of them 1,402 factories remained behind the schedule in implementing the corrective action plan. More than 100 Accord-appointed engineers conducted between 400 and 500 follow-up inspections each month.
"The recently concluded Intertextile Pavilion Shenzhen wrapped up its 2016 edition with nearly 15 per cent increase in visitor figure, welcoming over 17,000 visitors from 37 countries and regions. The top 10 overseas visitors were: Hong Kong, the US, Canada, India, Russia, Singapore, Korea, Australia, Japan and Turkey. Moreover, a total of 675 exhibitors from seven countries took part this year."
The recently concluded Intertextile Pavilion Shenzhen wrapped up its 2016 edition with nearly 15 per cent increase in visitor figure, welcoming over 17,000 visitors from 37 countries and regions. The top 10 overseas visitors were: Hong Kong, the US, Canada, India, Russia, Singapore, Korea, Australia, Japan and Turkey. Moreover, a total of 675 exhibitors from seven countries took part this year.
Thriving demand in South China
The uncertain global economic situation didn’t dampen the enthusiasm of exhibitors who were keen to explore opportunities in South China market, with many opining that they experienced high demand in the fair. First time exhibitor WIG Korea has just begun to develop its business in the China market and chose Shenzhen as the entry point.
The organisers of the Taiwan and Korea Pavilions were optimistic about the South China market. As John Lee, Director of the Exhibition Project Division of DGTIA, Korea, pointed out Shenzhen is a fast-growing city being a Special Economic Zone. More than 3,000 garment factories are located here, which creates enormous demand for apparel fabrics and accessories. Korean exhibitors believe that this fair is the best platform for them to reach new buyers and develop their businesses in this favourable market.
Agreeing with Lee, Petra Peng, representative of the Taiwan Textile Federation said that this market contains ample opportunities. More than 75 per cent of fashion brands in South China are keen to purchase high-quality overseas products. To cater to Taiwan suppliers’ growing interest in the South China textile market, the pavilion organisers debuted a business-matching event on the first day. Peng introduced the strong buyer profile she saw in the pavilion business matching session, saying: “Over 20 domestic brands attended the events, and many of them have their own subsidiary brands or several product lines, and they have very high demand for quality as well as innovative products.”
Effectiveness and high-quality buyer profile
To tap the potential South China market, new overseas suppliers debuted at the event. Many reported they had exceeded their target result because of the high-quality trade platform and buyers. Toru Maekawa, General Manager of Toko Shoji’s Sales Department, explained: “Our target buyers – leading fashion brands from Hong Kong including Marc O’Polo, Ralph Lauren, DKNY and Givenchy – have already visited our booth and placed sample orders with us. In fact, we were surprised to receive other buyers that we weren’t expecting, such as garment manufacturers as well as mid-level fashion brands from Beijing and Shanghai who were also sourcing here. The overall result exceeded our expectation.”
Indian manufacturer Texorange Corporation debuted Indian lace and embroidery at the fair. Managing Director Vikas Jhawar was thrilled with the result. He said that they connected with a number of quality buyers in the fair. They had very serious business discussion with almost 20 Chinese retail brands and overseas buyers in the first two days.
High quality of products on offer
Buyers too expressed their appreciation for the high-quality sourcing options. One of the invited VIP buyers, Connie Chiu, Senior Manager (R&D) of Marc O’Polo Hong Kong, said she found several potential suppliers and discovered new materials in the international area.
For the first time, Hong Kong & Kowloon Spinning Weaving and Dyeing Trade Workers General Union (HKSWD) led a VIP delegation group to the fair. The delegation included product managers, sourcing officers and textile texting specialists, and all of them had very positive feedback on the quality of the products the fair featured.
Amongst the visitors were many top international fashion brand buyers, such as Brooks Brothers, Combi, Descente, Diesel, DKNY, Evisu, G2000, I.T, Initial, KINJI, Macy’s, Marc O’Polo, Pepe Jeans, Ralph Lauren, Zara and many more. In addition, the fair attracted a number of well-known domestic brands including 6IXTY 8IGHT, Bosideng, Canto Motto, Cosmo Lady, EITIE, Goelia, Lilanz, Septwolves, WSM and more.
The next Intertextile Pavilion Shenzhen will take place in mid-July, 2017 at the Shenzhen Convention & Exhibition Center again. The next Messe Frankfurt apparel fabrics and accessories fair in China is Intertextile Shanghai Apparel Fabrics – Autumn Edition 2016 which will be held in Shanghai from October 11-13.
At long last, there is hope of better working conditions in the global fashion industry that has often been accused of doing little to stop exploitation in its value chain. A number of fashion brands including American Apparel, Marimekko, Massimo Dutti, Pull & Bear and Zara are among more than 1,000 brands and retailers that responded to Fashion Revolution’s challenge to demonstrate commitment to transparency across the length of their value chains with a recently launched initiative #whomademyclothes?, a British website Creative Industry Hub has reported.
Over 70,000 fashion lovers around the world asked brands #whomademyclothes? during Fashion Revolution Week in April 2016. Of the 1000 companies that responded with #imadeyourclothes, 300 are global fashion brands, the report added.
The first edition of the Fashion Transparency Index, that was launched in April this year scored 40 of the biggest global fashion brands on how they communicate about what they are doing to improve social and environmental standards across their supply chains, and how much of that information they share with the public. The Index will be expanded to 100 for April 2017. Of the initial 40 brands, only 5 brands publish a list of the factories where their garments are sewn.
In 2016, citizens in over 92 countries took part in the annual campaign to show they cared about who made their clothes. Fashion Revolution Week achieved an online media reach of 22 billion over 156 million impressions of #whomademyclothes? in addition to seeing a series of over 1,400 global events and online initiatives through which fashion lovers were encouraged to be more curious about the stories behind the clothes they wear.
High profile fashion influences supporting the campaign included Amber Valetta, CutiePie Marzia Cameron Russell, food writer Melissa Hemsley, Caroline Issa, Mariah Idrissi, Eco Age founder Livia Firth and bloggers Susie Lau, Gregory Davalos, Jenny Ong and Rachel Nguyen, Kelly Slater and Alex James.
China's Ministry of Commerce (MOC) has requested the European Union (EU) to terminate an old practice of investigations of anti-dumping of Chinese products by the end of this year. The surrogate system adopted by the EU is set to expire in December, according to a protocol of the World Trade Organization (WTO) on China's accession 15 years ago, a MOC statement said.
All WTO members should abide by the protocol, regardless of their domestic standards or any other issues including industrial overcapacity, added the statement.
Under the current anti-dumping probe method, the EU uses costs of production in a third country to calculate the value of products from countries on its non-market economy list which includes China. The practice allows the EU to easily levy high tariffs.
The statement came after the European Commission held a second orientation debate on the treatment of China in anti-dumping investigations, considering the option to abolish the list and set up a new country-neutral method.
The Federation of Surat Textile Traders Association (FOSTTA) has opposed the fresh circular issued by the Central Excise and Customs department for bringing the saris, salwar suit and dress materials sold under a brand name and having retail prices above Rs 1,000 under the 2 per cent tax net.
FOSTTA had recently announced the formation of a committee headed by the FOSTTA president Manoj Agarwal to garner support from the textile traders and spread awareness on the 2 pre cent excise duty on saris and dress material having retail prices above Rs 1,000.
A meeting of textile traders from all markets was organized on August 1 to decide the next course of action against government decision. FOSTTA has decided to send a memorandum to the Ministry of Finance and the Ministry of Textiles stating that the saris, dress material and other fabrics manufactured in the MMF (man-made fibre) hubs should be kept out of the excise duty net as per chapter 54 of the Excise Duty Act.
Current global economic trends indicate by 2030, China would become the world's biggest market for apparel, replacing the US. And India will not be far behind, says The Cotton Incorporated Lifestyle Monitor said in its report. Although China's economy has slowed down in recent years, a report by Fung Global Retail & Technology shows consumers are optimistic and confident about their economy. They're willing to spend more in categories that include children's clothing and casual apparel.
Meanwhile, the Nielsen Global Survey of Consumer Confidence showed India's confidence is up three points from the previous quarter. These positive indicators bode well for apparel makers. GDP and apparel spending in both China and India are projected to more than double over the next 15 years, according to Euromonitor International. By 2030, China will be the world's largest apparel market, followed by the US and India.
Findings by the Euromonitor International show China's GDP is projected to be more than double from 68 trillion yuan to 144 trillion yuan by 2030. During the same period, India's GDP is projected to grow 159 per cent from Rs 137 trillion in 2015 to Rs 355 trillion.
In a country where outsourced workers represent 27 per cent (around 13 million) of the workforce in the formal sector, an IndustriALL Global Union Study of precarious workers in Brazil has highlighted the financial, psychological and physical costs of outsourcing on workers’ lives and families.
In-depth interviews were carried out with union leaders and 22 subcontracted workers in the states of Sao Paulo and Bahia. Six of the workers were women and three were migrant workers from Haiti and Bolivia. All the workers are employed by numerous subcontractor companies supplying services to seven different multinational or national companies in the chemical (plastic, cosmetic, personal care, pharmaceutical, ink), garment, and pulp and paper sectors.
The study describes the 22 subcontracted workers reported poorer working conditions and lower salaries than direct employees at their worksite. In one chemical company, they earn half the salaries of direct employees. They get also lower benefits, if they get them at all, notably lower social protection.
Many work longer hours than direct employees. In one case, subcontracted workers work 44 hours a week, compared to 39 hours by direct employees. Several have very irregular working hours, while direct employees benefit from fixed hours. Some work on Saturdays unlike their colleagues.
The study reveals that some workers said they have no access to the work canteen, and when they have; their meal voucher has a lower value than those of direct employees. They have no access to company transport services nor direct employees’ sport and leisure rooms.
The Bangladesh Textile Mills Association (BTMA) has urged the government not to raise gas prices again, saying that the proposed hike will negatively affect the country's textile and garment industry. BTMA leaders led by its vice president Fazlul Hoque met state minister for jute and textile Mirza Azam made this appeal. The delegation informed the minister that many mills will shut down if the proposed hike is implemented.
The sector will face further challenges due to recent global cotton price hike, the stimulus textile package worth rupee 60 billion by India, they expressed fear. Titas Gas Transmission and Distribution Company Ltd recently sent a proposal to Bangladesh Energy Regulatory Commission recommending 130 per cent and 62 per cent gas price hike in captive power producers and the industrial sector.
The textile sector has been passing through a hard time since the 100 per cent price hike in September last and is now facing tough competition with competitor countries, the statement added.
