FW
The Indian textile industry is facing tough challenge from China and Pakistan. Mills have been suffering from inadequate working capital and have been virtually pushed to a corner with raw materials becoming scarce. As cotton prices shoot up to Rs 5,800 a quintal, the textile industry is reeling under severe pressure and facing scarcity of raw material. The export market is not-so-favorable and cost of operations is rising.
The situation is virtually the same in all textile industry hubs in the country. Gujarat is somewhat better off but the situation in Telengana, Andhra Pradesh and Tamil Nadu is quite bleak.
Therefore, the industry demands an increase in export incentive to seven per cent from the present three per cent and finance at seven per cent in order to survive and remain competitive in international markets. The industry fears that if it fails to be competitive globally, the commodity will have to be sold domestically, triggering a glut. This could lead to huge losses for the industry and a drop in cotton prices in the ensuing season.
The textile industry wants a three per cent incentive for yarn, five per cent for fabrics and seven per cent for garments.
According to Roger Hubert, Chief Representative of Swedish retail giant H&M Group in Bangladesh, remediation or relocation of units will not take place in, if there is no guaranteed loan from the government. As of today, there is no such fund or guarantee provided to the commercial banks, so they can issue low-cost loans to small and medium factories under a covered risk, he added.
At the launch of ‘Remediation financing in Bangladesh's readymade garment sector’, he said 71 per cent of remediation work has been completed in more than 250 factories that H&M sources from. The International Labour Organisation (ILO) and International Finance Corporation (IFC) jointly launched the report, while retailers, garment makers, exporters and diplomats were present.
The rest 29 per cent of remediation work is in progress as the factory owners have opened letters of credit to import safety equipment, added Hubert. Owners of about 3,800 factories in the country are now remedying their units as per the recommendations made by the engineers of Accord, Alliance and government sponsored inspections, to strengthen workplace safety. So far, more than 60 per cent of the work is complete, according to data from the Department of Inspection for Factories and Establishments (DIFE). The relocation of factories from Dhaka to nearby areas is not an easy task, but it is possible, said Hubert.
Indian employees are more confident about the state of their economy than the Chinese. Nearly 50 per cent employees in India rate the economy good to excellent compared to 28 per cent Chinese employees rating their economy good to excellent. Employees in India are more optimistic about the next 12 months with regard to skill development and career progression. India and China are competing with each other to retain the fastest growing economy tag.
However, Indian employees are less satisfied about certain aspects of their job compared to their counterparts in China. They are less satisfied about salary, opportunities for promotion and job security. About 44 per cent Indian employees cite new skill development as the top reason for conducting a job search, while 43 per cent of employees in China seek work-life balance. In China, keenness to attain a healthy work-life balance is prioritised over new skill development, which seems to be of greater significance to Indians. Both countries showcase a willingness to explore working abroad.
Overseas employment is generally seen as an attractive option across both nations. In India it’s 64 per cent while in China it’s 59 per cent. Indians continue to be positive about the opportunity to develop new skills and the possibility of getting a promotion this year. In contrast, employees from China are slightly less confident.
Ram Singh, a Punjab Cadre IPS officer has been appointed the new secretary general of Apparel Export Promotion Council (AEPC). Singh is presently the director, Ministry of Textiles. He has been given additional charge, as the secretary general of AEPC.
Singh is a decorated 1994 batch officer and a graduate with ‘Institute Silver Medal’ for holding 1st rank from the Indian Institute of Technology (IIT), Delhi. He has worked in myriad departments like commissioner of police in Jalandhar & Amritsar, IGP/Border Zone, Amritsar & DIG/Border Range, Amritsar and Senior Superintendent of Police in various districts in Punjab.
His achievements include Police Medal for Meritorious Service in year 2011, two UN Medals for exceptional contributions to United Nations during his posting in UNMIK (United Nations Mission in Kosovo), DGP Commendation Disc for outstanding Service in 2011 and graded for “Outstanding-Exceptional Performance”, the highest possible grade in UN Annual Confidential Report during his posting with UNMIK (United Nations Mission in Kosovo).
About $929 million has been estimated to be needed for fixing the identified flaws in Bangladesh's readymade garment (RMG) factories assessed by the three initiatives, according to a report released recently. Fire, electrical and structural integrity in some 3,778 garment factories has been assessed by Accord, Alliance and National Initiative.
According to the report, the last two years have seen remediation activities begun in earnest, reducing the remaining remediation costs to around $635 million with $262 million in structural, $201 million in electrical and $171 million in fire related issues. It was estimated that over the last two years, remediation activities worth some $ 294 million have been carried out in Bangladesh's RMG sector through actions Accord, the Alliance and individual factory owners.
The study also included a review of Bangladesh's banking sector and the credit facilities recently developed by international organisations such as IFC, JICA, AFD and USAID, which have made available some $ 187 million specifically for RMG remediation.
The report titled ‘Remediation financing in Bangladesh's Ready Made Garment Sector: An Overview’ revealed that the total remaining financing gap for factory remediation is around $448 million. The report was jointly commissioned by International Finance Corporation (IFC) and International Labour Organisation (ILO) to assess the cost of safety remediation for structural, electrical, and fire safety work in RMG factories, as well as the ability of factories to finance these works.
High bank interest rates and a lack of financing are the major obstacles for remediation of the readymade garment factories in Bangladesh. Remediation involves correcting structural or procedural defects. Factory owners are unable to get finance due to high rates and complicated procedures.
An interest rate that ranges from 9 to 18 per cent is a barrier to carrying out remediation, while the rates are even higher, from 9 to 16 per cent, for larger enterprises. Readymade garment owners also need support to present audited balance sheets, profit and loss statements and cash flow projections to banks and prospective investors to avail of loan facilities, which is also another barrier to obtain financing.
Most factories complete 80 per cent of their remediation work on their own financing. However, these are factories working with renowned brands and they don’t face financing problem. Getting remediation finance is very difficult for small factories due to complex documentation.
Safety remediation for structural, electrical, and fire proof work in readymade garment factories involves a cost and the question is if factories have the ability to finance this mega task. About 75 per cent of factories in Bangladesh do not need large structural retrofitting work.
A denim expo will be held in Bangladesh on November 8 and 9, 2016 where about 8,000 visitors, including buyers and denim connoisseurs, from across the world are expected to attend. Around 100 exhibitors, including readymade garment manufacturers and denim fabric mills from Bangladesh and 17 other countries, will display their products.
Participants include entrepreneurs from the apparel sector, apparel traders, fashion professionals and industry stakeholders from Europe, US, UK, Germany, Italy, India, China, Pakistan, Vietnam, Singapore, Thailand, Turkey, Japan, Spain and Brazil.
The last edition of the denim expo held in April this year was attended by 4,000 trade visitors from around the world. A total of 50 participants, 37 foreign companies from 13 countries took part in the expo to display their products. Bangladesh Denim Expo, a non-profit and non-government organization, organises the international denim trade show in Bangladesh to promote Brand Bangladesh in the global denim industry.
On the backdrop of the huge response from exhibitors and visitors, the expo size has been doubled. This is the fifth edition. For the first time, the expo will be held in two halls. The expo acts as a hub for players on the international denim scene to mingle with colleagues, make new contacts and broker deals.
www.bangladeshdenimexpo.com/
Apparel Training & Design Centre (ATDC), with its affordable courses for skill development, has decided to empower the youth. To spread awareness regarding them a marathon ‘Run for Skills’ was organised by the Centre. The marathon started from ATDC Noida and culminated at the same place covering major parts of Noida, in-between stopping at Metro Hospital and Nehru International Public School. The marathon was flagged off by district magistrate Nagendra Pratap Singh. The event was put together to move one step closer to achieving the dream of ‘Skilled India’ by the team led by Lalit Thukral, Convenor, LMC, Noida Cluster, Darlie Koshy, DG & CEO, ATDC.
“The goal of Skill India is to create opportunities, space and scope for the development of talent of Indians and identify new sectors for skill development. It aims to provide training and skill development to 500 million youth by 2020, and ATDC should be well appreciated to move one step forwards towards Skill India goal,” said Singh. Added Koshy, “As a vocational training network, we at ATDC realise the importance of imparting skill to empower the unemployed youth. It is not just about skilling them; it is about making them self-confident and ready for the future. ” Over 150 students, volunteers and faculty members took part in the marathon.
With the vision of “Imparting skills and improving lives”, ATDC is the single largest vocational training provider for the apparel sector in India. Under the leadership of Koshy, it has got the ‘Best Vocational Training Provider (VTP) Training 2016-Gold’ by ASSOCHAM. The staff of ATDC has been working to train the youth and women for the last 25 years. This event reflected their goal of skilling as many people as possible and making them self-reliant.
The All Pakistan Textile Mills Association (APTMA) has strongly condemned media reports about Pakistan exporting cotton to India saying that it was the last nail on the coffin of the ailing textile industry in the country. In a statement, chairman APTMA, Tariq Saud said export of cotton from India in the absence of determination of crop size for the year 2016-17 is against the domestic textile industry. “The failure of local cotton crop in 2015-16 by about 35 per cent has already placed extra burden on the industry to import about 4 million bales of cotton to meet its consumption requirement,” he says.
He said cultivation of cotton this year is expected to decline by approximately 25 per cent which will ultimately decline the availability of cotton to the spinning industry. This will compel them to import cotton at 3 per cent custom duty at the import stage or otherwise exclude import of cotton from custom duty so that industry may remain competitive. Saud urged the government to provide level playing field and stop export of raw cotton till the determination of size of cotton crop for the next season or otherwise remove 3% custom duty on import of cotton.
"Asian fashion brands from South Korea, China and Japan are becoming serious rivals of their Western peers as Asian consumers become increasingly confident in their own style and take pride in buying home-grown labels. Most of these consumers are under 35, Internet-savvy and increasingly on the hunt for small, cool, original brands that will make them stand out from their parents, fashion executives and retailers say."
Asian fashion brands from South Korea, China and Japan are becoming serious rivals of their Western peers as Asian consumers become increasingly confident in their own style and take pride in buying home-grown labels. Most of these consumers are under 35, Internet-savvy and increasingly on the hunt for small, cool, original brands that will make them stand out from their parents, fashion executives and retailers say.
Fashion experts say, high quality is no longer the preserve of Western luxury brands and Asian brands are attracting attention as they experiment with new textiles and materials, facilitated by their local manufacturing base. Big luxury brands such as Prada, Kering's Bottega Veneta and Tod's, already suffering from plunging sales due to growing threat from East and are likely to face further problems. This also due to excessive price increases, over-exposure in certain markets such as China and mega-brand fatigue.
Asian brands riding high
Chinese fashion brands, such as Ms Min and Comme moi, are the fastest- growing contemporary labels sold at department store Lane Crawford, with outlets across China and Hong Kong, says chairman Andrew Keith. Lane Crawford also sells Korean menswear brands such as Woo Young Mi and expects to start selling Korean womenswear soon. Lane Crawford has seen its assortment of Chinese labels grow over the past four years to more than 30, from just four. Twenty per cent of Chinese-designed clothes bought online are shipped outside China mainly to Chinese nationals living abroad who want access to these brands, Keith said.
High on Asians' shopping list are Japanese brands, such as Sacai and Tsumori Chisato, many of them older and better established than South Korean or Chinese labels. Lady Gaga regularly wears Japan's Roggykei, created in 2006 by two graduates from Osaka College of Design.
New styles an attraction
Meanwhile, Seoul, Tokyo and Shanghai have fast-expanding fashion weeks, sponsored by local industrial groups, showing dozens of budding brands. Some labels have moved West and started showing at Milan and Paris fashion weeks and opened shops there. Guo Pei, the Beijing-based designer, whose yellow long cape dress was worn by Rihanna at the Met Gala last year, started showing at Paris Couture week in January, while Chinese shoe brand Stella Luna, whose stilettos cost more than €500, has three free-standing shops in Paris.
Another Chinese-born designer Yiqing Yin, whose creations are sold in China, New York and Paris, won several European fashion awards and has been hailed by the international fashion press as one of the most promising designers of her generation. Popular Korean brand SJYP, run by duo Steve Jung and Yoni Pai, sells in Europe and the United States, including at Selfridges in London and Opening Ceremony in New York and Los Angeles, while Chinese-born Uma Wang, a graduate of London's Central Saint Martins design school, sells in China and in Europe, including at l'Eclaireur in Paris. She also shows at Milan Fashion week.
Support from big businesses
Samsung C&T, affiliated to Samsung Electronics, maker of Apple rival Galaxy smartphones, is one of the biggest corporate investors in Seoul's up-and-coming fashion scene. Every year, it gives $100,000 to two or three designers to help them develop their collection and since 2005 has invested $2.7 million in 19 design teams through the Samsung Fashion & Design Fund. Samsung's fashion unit has a stable of brands, ranging from Korean brand Bean Pole to Belgian fashion label Ann Demeulemeester.
Koreans' self-esteem and self-confidence has been boosted by the power of 'K culture' and this is also why Korean and other Asian brands have started to become more popular, feels Sung-Joo Kim, one of Korea's most high-profile female entrepreneurs. She owns and runs German luxury leather goods brand MCM, known for its $700 studded logo-embossed canvas backpacks. Kim, who previously developed Gucci's Korean business, also pointed out that Asian brands cater better to Asian women's more petite shape
'Made in Asia, designed in Asia' has become cool, and the stigma that Asian brands had is disappearing fast. What’s more, Asian brands are also attracting interest from Western buyers.
