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Garment Manufacturers Association in Cambodia (GMAC) claims falling productivity levels and rising infrastructure costs in the Kingdom’s garment sector could put the country at a disadvantage with its neighbouring competitors.
A statement released by the association said labour productivity in the garment and footwear sector fell 14 per cent between 2011 and 2014, according to March data from the International Labour Organization. GMAC then claimed the decline appeared to have continued into 2016.
When asked how GMAC reached that conclusion, Secretary General Ken Loo said that they don’t see any improvements or significant changes in the industry. But he acknowledged there was no data yet to show a continuation of the decline.
GMAC said it has been in talks with the Ministry of Labour and Vocational Training to launch a campaign to improve labour productivity in the sector, which employs roughly 700,000 workers.
Meanwhile, Miguel Chanco, lead ASEAN analyst for the Economist Intelligence Unit, said Cambodia losing business to its low-cost competitors was a threat. GMAC in its statement also said the sector continued to battle with rising infrastructure costs, such as electricity and transportation, forcing factories to look elsewhere.
Chinese investors are considering expanding their presence in the Russian textile industry. The move is expected to take place through Chinese financing of new production facilities within Russia and the relocation of existing China textile plants to Russia.
A key focus of the plant transfers would be Siberian and Russian regions bordering China – the two countries share a huge land frontier, the world’s sixth longest. One benefit for Chinese textile manufacturers is that they can escape tightening China environmental regulations, which have forced the closure of many non-compliant factories.
The interest of Chinese investors in the Russian textile industry is associated with huge benefits for Russia and will allow new technologies to be brought to the industry and an increase in the level of its productivity. The majority of workers at these plants will be Chinese.
Chinese investors plan to own plants producing a wide range of textile products in Russia. And they want to create backward and forward linkages through the acquisition of Russian companies, enabling them to make textile supplies and clothing within Russia, making use of Russian fiber and cotton processing capacity.
Chinese investors are acquiring textile plants and setting up industrial facilities not only in Russia but also in other countries of the world.
Bangladesh plans to end hazardous child labor by 2021 and all forms of child labor by 2025. There are 3.4 million children involved in various forms of employment around the country. Of them, about 1.7 million fall into the category of child labor.
Over the past few years, about 1,00,000 children, earlier engaged in hazardous labor, have been rehabilitated. A life-cycle approach with focus on childhood will be adopted. Employers are being motivated to stop child labor. The school system will be made more congenial and children will be given importance in social security programs. Right now parents feel educating a child is of no use and it is more profitable to put them to work. Though it would be difficult to remove child workers from the enormous informal sector, parents have to be rendered economically able in order to bring an end to child labor.
The media will be called upon to raise awareness in this regard. While there are people taking a stand against child labor, they have no hesitation in employing children to do their domestic work.
Budget allocations will be made for various programs aimed at ending child labor. Removing child labor will be a priority in the seventh five-year plan.
Asics Corporation has outlined its sustainability strategy till 2020.The company achieved its 2015 sustainability target of reducing Co2 emissions by 43 per cent, water consumption by 50 per cent, and solid waste emissions by 17 per cent per pair of shoes.
Asics is one of the first companies to adopt the Apparel and Footwear International RSL Management Restricted Substances List, a global standard used by brands and suppliers to help establish chemical management knowledge, set basic compliance levels, and provide a common base for analytical testing.
Asics is a global sporting goods company. Its targets for 2020 include five per cent absolute Co2 reduction from direct operations and 10 per cent reduction of Co2 impact per pair shoes made by Tier I footwear factories compared to 2015 levels.
Asics is a Japanese company. The name is an acronym from the famous Latin phrase Anima Sana In Corpore Sano, which translates as A Sound Mind in a Sound Body.
Asics shoes, apparel and bags are produced in a wide assortment to meet the needs of men, women and children. Asics products are filled with technological designs and features. Running is one focus for this brand as Asics produces products for training, volleyball, wrestling, track and field, cheerleading and field sports.
Global clothing brands must take responsibility for the millions of workers in Asia who are poorly paid by suppliers and ignored by governments, said a campaigner for higher wages in the region, ahead of an International Labour Organization (ILO) conference.
Asia accounts for more than 60 per cent of the world's garment production, with the industry employing more than 15 million people directly, most of them women.
Workers deserve a living wage because the minimum wage set by most Asian countries is inadequate to keep them out of poverty, said Anannya Bhattacharjee, a coordinator with the Asia Floor Wage Alliance (AFWA), a supply chain lobby group.
According to Bhattacharjee, the complexity of the supply chains is often used as an excuse for brands having no control over paying a living wage. But brands have so much leverage with governments and suppliers, and they have the power to set prices, she said.
Higher wages in China, the world's largest clothing exporter, are driving brands worldwide to seek cheaper alternatives in countries such as Bangladesh, India, Pakistan and Sri Lanka. Suppliers in these countries are under enormous pressure to reduce costs and produce garments as quickly as possible.
The textile industry in Surat has lost Rs 250 crores in two days following an indefinite strike called by transporters to protest a crackdown by the civic body on godowns in residential areas.
Over the past few days, the Surat Municipal Corporation has sealed 100 textile godowns in residential areas, and on Tuesday served notice to 70 others at Umarwada in the city.
Acting on complaints by the residents for causing nuisance and traffic problems, the SMC started a crackdown on godowns in residential areas of the city.
The transporters will have to find new godowns on their own.
Following the strike, over 350 trucks of the Surat Market Transporter Association have not left the city for the past two days. The association has also stopped taking bookings from textile traders. The strike is apparently being supported by parcel contractors and labor contractors.
The entire chain of the textile industry has been disturbed as finished products of saris and dress materials are stuck in transport godowns.
The textile industry is one of the oldest and the most widespread industries in Surat. The textile industry in Surat is mainly engaged in the activities of yarn production, weaving, processing as well as embroidery. Surat is mainly engaged in the production and trading of synthetic textile products. Nearly 30 million meters of raw fabric and 25 million meters of processed fabric are produced in Surat daily.
Global sales of personal luxury goods will rise this year, but only moderately, with higher spending in Japan and Europe compensating for flat trends in Asia and the United States.
The sector - including fashion accessories, home ware, jewelry and watches but not cars, yachts and fine art - will grow no more than two per cent this year.
Japan is expected to be the fastest growing market for luxury goods this year, with sales seen up five per cent, helped by spending from incoming Chinese tourists.
Sales in China are expected to rebound after three years of decline.
A strong dollar and uncertain consumer confidence ahead of presidential elections is expected to weigh on demand for luxury in the United States, while local spending will outweigh a slowdown in tourism in Europe on the back of security threats.
Cosmetics and leather, shoes and accessories will be the best selling product categories this year while so-called hard luxury, represented by jewelry and watches, will not grow.
In coming years, the luxury market is expected to keep expanding at an average annual rate of two to three per cent, mainly driven by growth in China.
At the end of 2015 the market was up 13 per cent. It grew one per cent at constant exchange rates.
Gap is closing all 53 of its Old Navy shops in Japan by the end of January next year. Just four years after entering the country, the chain has found itself in trouble, unable to attract shoppers with its low-end offerings. The blame goes to Gap, whose sole strategy for the chain seemed to hinge on low prices.
In a country where more than a decade of deflation has made many people take low prices for granted, Gap and other apparel companies need to come up with fresh ways to get shoppers to open their wallets.
Gap is the world’s third-largest apparel company. It had been expanding in Japan until recently. Its namesake brand hit the market in 1995, followed by its high-end Banana Republic label in 2005. Old Navy came in 2012, with Gap betting that the Japanese demand for low-price clothing would increase.
At first, customers responded well to Old Navy’s combination of the American casual aesthetic and attractive prices. But people gradually grew bored with the brand’s offerings. Despite that, Gap did not reassess its approach, and continued to simply import the same clothes that it sold in the US.
One problem is that Old Navy sizing is tailored to foreigners, and clothes from local brands fit Japanese people better.
The Shenzhen international trade fair for apparel, fabrics and accessories will be held July 7 to 9, 2016. Nearly 700 exhibitors are set to participate.
Exhibitors at the fair will showcase a wide range of high-quality fabrics for women’s wear, casual wear, lingerie and swimwear and suitings, jacquards, prints, wool, cotton, spun, denim and knitting fabrics as well as accessories, lace and embroidery, leathers and furs, yarns and fibers and design and testing products.
This year, a debut Fine Japan zone is joining the returning Taiwan and Korea pavilions as suppliers from these markets look to capture the abundant opportunities in the South China industry.
The brand new Fine Japan zone will be formed by a number of top Japanese suppliers. In addition, the returning Taiwan Pavilion expands 50 per cent in scale this year to cater to the growing interest in the South China textile market.
Taiwanese exhibitors will present a series of high end products from raw materials to fabrics, such as yarns for special fabric use, self-manufactured, -developed and -designed high-end jacquard fabrics; lace, print and knitted fabrics; computer embroidered items; fashionable jersey; high-end Tencel cotton, Tencel linen weaving and pure linen plain weave; and denim fabrics.
"Vietnam could become even more appealing to US through the Trans-Pacific Partnership, an expansive 12-nation trade deal that would phase out steep import tariffs on Vietnamese-made goods, but only if Congress puts its stamp on it. In campaign season that has ¬renewed public anxiety about US job losses to China, one Michigan shoe company stands as a stark example of how the economic -dynamics are changing quickly in Asia."
Vietnam could become even more appealing to US through the Trans-Pacific Partnership, an expansive 12-nation trade deal that would phase out steep import tariffs on Vietnamese-made goods, but only if Congress puts its stamp on it. In campaign season that has ¬renewed public anxiety about US job losses to China, one Michigan shoe company stands as a stark example of how the economic -dynamics are changing quickly in Asia.
Wolverine Worldwide exemplifies a sharp shift among American footwear and garment producers away from China toward an emerging manufacturing hot spot: Vietnam. During the past three years, the Rockford, Michigan-based maker of brands such as Keds, Hush Puppies and Saucony, has more than doubled its production in the Southeast Asian nation, taking advantage of the lower labour costs there. Vietnam now constituted nearly 30 per cent of Wolverine’s output, while China’s share had fallen from 90 per cent to 50 per cent, company officials said.
Favourite destination
Many other US firms have made a similar move, brightening the economic fortunes of Vietnam. The communist country will become even more appealing to US capitalists through the Trans-Pacific Partnership (TPP) if Obama has his way, an expansive 12-nation trade deal that would phase out steep import tariffs on Vietnamese-made goods.
The US president has touted the pact as a vehicle to help embed the United States in fast-emerging markets in Southeast Asia and exploit global economic trends to America’s benefit. Attempting its own economic transformation toward the service sector, China is pursuing a separate trade pact that includes Vietnam and other Southeast Asian nations. Congress has yet to ratify the accord, and lawmakers have been wary amid the anti-trade sentiment on the campaign trail.
A trade agreement that includes Vietnam, and that does not adequately protect domestic footwear manufacturers, will only accelerate this trend. For companies such as Wolverine, the deal could make an already lucrative business decision even more profitable. Said company officials said that eliminating an estimated $20 million in annual tariffs on Vietnamese-made products would reduce the cost of shoes for American consumers and boost sales. Furthermore, the officials said, declines in the company’s domestic manufacturing workforce had been offset by hiring in other departments.
Huge manufacturing boom
Under the trade deal, US footwear tariffs, which can be as high as 40 per cent, would be phased out over seven years in Vietnam. That would give Vietnam an advantage over China, Cambodia, Indonesia and the Philippines, which are not TPP members, and accelerate a manufacturing boom inside the country that is already under way.
From 2013 to 2015, US footwear imports from Vietnam rose by almost 50 per cent, growing from US$2.9 billion in 2013 to US$4.3 billion in 2015, according to an analysis by the US International Trade Commission. The study found that shoe company imports to the US would rise by another 23 per cent among TPP countries, mostly from Vietnam, over 15 years.
Matt Priest, president of the Footwear Distributors and Retailers of America, estimated that US companies in Vietnam stand to save $500 million in footwear import taxes under the trade pact. Incidentally, critics said the deal would deliver another blow to an industry that had been decimated in the United States. Former Democratic congressman Michael Michaud said in a letter to the Obama administration in 2011 that domestic footwear production fell by 75 per cent between 1999 and 2007 and that 28,000 US jobs were lost.
But Obama has received support from the industry’s heaviest hitters. Last May, he visited Nike’s headquarters in Beaverton, Oregon, to highlight a pledge from Nike to create 10,000 new domestic jobs in advanced manufacturing if the TPP accord is approved by Congress. That figure is dwarfed by Nike’s workforce in Vietnam, its largest manufacturing base. Obama emphasised that the TPP would require Vietnam to raise working standards, set a minimum wage and allow workers to form labor unions.
Surprisingly, Obama’s message also has not gone over well with one of Nike’s competitors, New Balance, which employs 1,400 manufacturing workers in the Northeast United States – the largest domestic workforce of any athletic shoe maker. This spring, New Balance formally announced its opposition to the TPP, citing broken promises from the Obama administration.
Matt LeBretton, a company spokesman, said the administration had agreed to set up meetings between New Balance and the Pentagon. The company has been lobbying the Defence Department to expand a congressional requirement that mandates military boots and dress shoes be made entirely in the United States to also cover athletic shoes.
Those meetings never materialised, LeBretton said, even though New Balance invested millions of dollars in new domestic machinery.
Obama administration officials said they tried to work with New Balance, providing longer tariff phaseouts than are required in other parts of the deal, and they noted that the company also makes most of its shoes in China and Vietnam. Still, Nike, with a far larger Vietnamese operation, stands to gain more from the trade deal.
