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The US domestic textile and apparel industry is on a positive growth trajectory as the sector has seen a good year until now. There’s support for macro-economic growth with the country’s gross domestic product expected to grow at more than three-per cent annually. What’s added to their optimism is the low interest rates spurred both by household and business spending, sharp drop in energy costs, big increases in net worth engendered by Wall Street and housing recoveries, and, improving consumer optimism as unemployment continues to edge lower is proof that the picture looks rosy enough.
Factors contributing to growth
Indeed general economic growth boosts textile and apparel industry.But, other factors such as a slowdown in import, rising overseas costs, growing interest in reshoring, enhanced innovation and marketing strategies, strong capital spending, rising profits, and a more level playing field too have contributed to the growth of this sector.
What’s more the subsectors too, help in benefiting the overall industry in many ways. Basic mill products such as fibres and fabrics are set to lead the increase, but highly fabricated items such as carpets, household furnishings and industrial products would also move up at a fast pace after seeing flat growth in 2014.
Non-woven fabrics, fabrics designed for active wear, the denim market have all done well. Besides, overall apparel shipments are likely to rise by another five per cent over the New Year. The US domestic producers would meet all demands, as industry capacity is more than enough to meet consumer demand. Also, the fact that overseas suppliers, need to remain both willing and able to fill any and all orders emerging from the US.
Imports though, aren’t the only reason for current excess capacity. Another key factor is the need for more efficient capacity to survive today’s strong international competitive pressures. Perhaps this explains US-based mills spent upwards of a billion dollars on new plants and equipment despite less-than-desired demand. Moreover demand and supply trends will be influenced by incoming shipments from abroad that will consist of the biggest share of US textile and apparel demand. Yet, it is believed that big domestic losses of the past years are over.
The cost of fibre, especially cotton, has dropped greatly through the years and according to studies, 2015 shall witness further dips. Current projections for 2014-15 marketing year point to another big global crop of 120 million bales. On the other hand, world usage is put at about 114 million bales. This supply-demand differential means that the current year’s ending stocks could rise to nearly 107.5 million bales.
Stable demand, supply, a positive factor
Another factor is China’s huge stockpile of cotton, the equivalent of a big 1.65 year’s supply. Such big collection hanging over the market could be a major factor in inhibiting the fibre’s recovery. Also, man-made fibres affect the market, but prices have remained stable lately. Man-made prices have a long history of not rising. In fact, they have inched up less than 1 per cent annually over the past three decades and there may hardly be any change in this pattern.
Labour too may not be a problem as pay hikes have remained modest and continuing productivity gains, mostly, are offsetting the impact of any higher pay rates. Worker efficiency has been rising. According to the National Council of Textile Organizations (NCTO), mills have increased their productivity by 24 per cent over the past decade, making textiles one of the top industries as far as boosting efficiency is concerned.
The bottomline is textiles and apparel industry in the US is headed towards a bright year.
Kitex Garments (KGL), aims to be the global leader in infant apparel segment 2018. Kitex had reported a turnover Rs 524.51 crores in 2014-15, up 15 per cent, and an increase in PAT to Rs 98.51 crores, 72 per cent higher compared to the previous year. The company has invested in modernisation, technology upgradation, right product mix and right talent to achieve its goal.
The company has an ability to manufacture 5.5 lakh pieces of infant wear per day, becoming the third largest player in this segment, globally. Kitex now plans to further invest Rs 102.50 crores from 2014-2018 to increase its production capacity from 5.5 lakh pieces per day to 1.1 million pieces by 2018. The goal is to increase capacity utilization from 65 percent in 2014/15 to 75 percent by 2015/16.
With leading brands like Mothercare and Carters expanding their market presence in developed and Indian market expected to create opportunities over the next two-three years, Kitex wants to emerge as the preferred supplier to these global brands. The company made an investment of Rs 30 crores in the last financial year to strengthen its production lines and plant modernization process.
Next on the company’s agenda is to improve profitability through backward integration of its operations right to the spinning segment along with acquiring related product companies.
A major part of Bangladesh's economy depends directly or indirectly on jute farming, trading and employment in jute manufacturing. Jute has been a vital sector for the country and remains so even today with about 45 million people depending on various aspects of the industry. Chairman of the Bangladesh Jute Mills Corporation (BJMC) had recently stated that the country's jute industry is going through a rough patch. As per reports, government-owned BJMC has lost Tk 450 crores during FY2014-15. This is larger than the losses incurred by it in the two previous years, which totalled to Tk 326 crores.
Besides, BJMC's 4,000 employees and 67,000 factory workers are yet to be paid for the last two months. Gratuities for its 5,700 retired employees and workers too, have not yet been settled. This alone totals Tk Tk 350 cores. In 2011, the government reopened five closed jute mills and allocated Tk 105 crores for this, besides recruiting 35,000 permanent workers through the BJMC. The BJMC report states that it can't purchase raw jute on time due to fund constraints and government's delay in releasing funds. Thus, it incurs losses up to Tk 700-800 million every year.
The BJMC, for the FY2015-16, planned to purchase raw jute worth Tk 1,000 crores, were provided with only Taka 1.0 billion just before Eid-ul-Fitr and was told to not expect any more funds. So, they can't clear arrears worth Tk 1.0 billion due to small raw jute traders and will have to purchase raw jute on loans once again. All this adds up to the cost and reflects in the company's balance sheet.
One of the largest eri producing cocoon states, Assam's artisans are withdrawing from their tradition of weaving eri cloth, a natural warm silk made of yarns derived from the cocoons of eri worms. This cloth is known to be wholly organic and thus has great demand in other parts of the country and abroad. The main reason why artisans are withdrawing from this tradition is lack of proper equipment to produce the weft yarn from silk cocoons. Now, a new charkha has been innovated to get rid of the problem of spinning the weft yarn of eri silk. The new invention is aimed at checking the massive flight of eri cocoon to other parts of the country.
The new charkha has been invented by former North Eastern Institute of Science and Technology (NEIST), Jorhat S N Choudhury and his mechanical engineer son KN Choudhury, at their workshop in Shreenagar. It is named Choudhury Eri Spinning Charkha-II. This charkha is expected to eliminate problems with spinning.
The charkha can be operated manually in both, right and left directions through an adjustable pedal, and weighs around 6.5 kg. The equipment is made of wood, brass and steel parts, bearing and bushings. About 250 grams of weft yarn of around 25 counts can be produced with the help of this equipment within eight hours.
Leading denim producer, Levi Strauss & Co, recently has announced the expansion of its clothing recycling initiative to all its mainline and outlet stores in the US. This expansion aims to help consumers recycle clothing and shoes. With this, the company takes its commitment to sustainability to a new high by reducing the volume of waste sent to landfills and creating an infrastructure that supports a circular economy by 2020.
Consumers can simply drop off any brand of clean, dry clothing or shoes in the collection boxes at their local Levi’s store. Anybody who brings an item of clothing or shoes to recycle will receive a voucher for 20 per cent off on a single, regular-priced Levi’s item in-store. Most people in the US are familiar with recycling bottles, cans and paper, but still throw away clothing. According to reports, Americans discard more than £28 billion of unwanted clothing, shoes and other textiles every year. Roughly 15 per cent of these items are collected by charitable organisations and others while the remaining 85 per cent end up in landfills.
Michael Kobori, Vice President of Sustainability at Levi Strauss & Co. said that they were thinking about sustainability across all facets of their business and how to shift consumer behaviour towards recycling clothing. He feels that collecting used clothing at Levi’s stores makes it simple and easy for consumers to do their part and also helps their commitment to do the right thing for the environment.
Vietnam's inclusion in Trans-Pacific Partnership (TPP) and the benefits there of, is likely to hurt other Asian textiles and clothing exporters including Bangladesh. With TPP, Vietnam will have easy access to US market. This trade and investment diversion in the textiles and clothing industry towards TPP members, particularly Vietnam, will also affect India, Pakistan, Sri Lanka and Cambodia negatively.
Deborah Elms, Executive Director, Asia Trade Centre feels the biggest winner will be Vietnam as foreign investors would flood the country. The TPP agreement covers 12 countries and 40 per cent of the global economy. The European Union, however, won’t be affected greatly by this. Non-TPP members though would bear the brunt.
Earlier, TPP talks have been stalled repeatedly due to various sticky issues, which also included generic drugs, agricultural subsidies and dairy exports. In Hawaii, trade representatives started talks recently and will work towards successful conclusion by the end of this week.
Vietnam would have the largest percentage income gains and export increases out of all countries at 13.6 per cent and 31.7 per cent, respectively, as per Peterson Institute of International Economics (PIIE).
The Bangladesh government and German retailer Aldi has been asked by global rights group, ‘Clean Clothes Campaign’, to immediately take steps to clear the dues of Swan Garments workers. Swan management in April had closed its two units, employing about 1,300 workers, following the sudden death of its Chinese owner. This caused payment issues among workers, as they have not been paid since that time, making them to hold protests in front of the National Press Club.
According to reports, the firm, engaged in manufacturing in Bangladesh for the last three decades, was producing for Aldi, Motivi and Piazza Italia. It began facing crisis last year, after many of its long term buyers stopped sourcing from it, as result factories became dependent on short term or subcontracting business deals. Going by the company’s website, it had Lidi, Next, Bestseller, Walmart and Dunnes as long term buyers.
The workers, who are demanding their unpaid salaries and resumption of factories’ operations, are on protest since April 19, and resorting to hunger strikes and permanent sit-down to make their demands accepted. Many protesters have been subjected to injuries following police’s attempts to disperse them.
The closed unit of Chandrapur Silk Basic Seed Multiplication and Training Centre (BSMTC) would soon be revived thanks to the Union Minister of state for chemical and fertiliser, Hansraj Ahir. The minister has initiated steps for the survival of the closed unit. Located on Ballarpur road on the outskirts of Chandrapur, BSMTC’s tussar seed production and seed cocoon generation was adversely affected because of coal mines and other industrial establishments in and around the tussar farms. Silkworm egg production fell drastically because of pollution and it became unviable to run the centre. Hence, the Central Silk Board closed the unit in September 2004.
Ahir, was an MP in opposition at the time, kept corresponding with the Central Silk Board (CSB) for revival of the unit. He argued that the location of BSMTC had no impact of industrial pollution. Now that he is the minister, he pushed for the revival of the unit. To strengthen his case, Ahir has given reference of good silk production at centres run by the state government in Pathri in Chandrapur and Armori in Gadchiroli. He has continued corresponding with CSB and textile ministers.
He even held a meeting with scientist KB Chavan from BSMTC, Bhandara, and silk development officer Zade, from the silk production centre in Pathri. As asked for details of the present status of the closed unit from two officers and directed the administration to prepare the proposal for the unit’s revival.
After the signing of nuclear agreement between Tehran and US and its allies, the world is looking to do business with Iran. In fact, every industry would be affected after the rollback of sanctions, certainly the textile and garment sector is no exception.
Import of fabrics set to soar
Iran had recently announced it would be importing fabrics from Italy and other countries that had earlier announced they would do business after the sanctions are lifted. For India its good news as Iran imported $1.29 billion of textiles and clothing from the world in 2014 of which textiles was $1,292 million and clothing was only $4 million. India’s share in the Iranian textile and clothing market was 11 per cent. Iran’s total import of cotton yarn from the world in 2014 was $51.63 million. And India was the largest supplier of all types of yarns to Iran with approx $35.35 million worth of exports. India ranked 2nd in supply of made ups which was around $2 million and 5th in cotton fabrics at $3.19 million.
Experts believe that the entry of foreign producers will benefit the domestic industry by creating a competitive textile market. Companies set to benefit most immediately from the rollback of sanctions are those that are already present in Iran believes Ramin Rabii, Head of Turquoise Partners Group, an investment firm in Tehran. Germany's BDI industry federation believes exports to Iran could rise four-fold to more than $10.9 billion in the medium-term, up from 2.4 billion in 2014, thanks to the need to modernise industry.
Iran, though does have a long history of producing fabrics, however, the quality has declined in the absence of foreign competition. The feeling is that boosting of trade ties with textile producers will improve the quality of domestic products. Indeed competition is important to encourage domestic textile producers to improve their quality to attract more customers and increase their market share.
Expert’s feel boosting trade ties with foreign textile producers is vital to enhance the quality of domestic products. Italy-based fashion and cloth designer Behnoud Javaherpour, and Majid Mozaffari, a producer of traditional embroidery cloth from Yazd reiterate that Iranians have been producing fabric for the last 6,500 years. Weaving and embroidery have also been a big part of ancient Iranian textile sector. However, the use of use of new designs will help revive the industry and introduce Iranian textiles to the world.
Once the industry gathers steam, Iran has great potential to become the fashion centre of the world as the country’s textile manufacturers are capable of producing unique apparels with traditional and attractive designs. Moreover, some countries are fascinated with Iran’s culture. Iranian designers need to learn sewing techniques, painting, and fashion designing simultaneously, to lead in the global market.
Mozaffari feels that Iran should participate in international festivals and exhibitions and hold training courses to update the knowledge of weavers and improve fields such as printing, fashion designing and textile weaving, to be a part of the global fashion industry.
Meanwhile, Iran is organising Irantex in Tehran from September 4 to 7, 2015. The three day fair will be held at Tehran International Permanent Fair Ground with the active support of Association Industries, Iran Textile Exporters & Manufacturers Association, and Textile Machinery Association of Iran. IRANTEX is a comprehensive international trade fair for textile machinery and textile products. It showcases latest range of textile products, and is a networking place for leading buyers. Manufacturers of knitting, sewing, embroidery, apparel and accessories machines will be present. Also on the list are men women and kids apparel makers, home textile makers, yarn, fiber, dyestuff manufacturers among others. India’s Texprocil too will put up a India Pavilion at IRANTEX.
Dohler is one of Brazil’s leading home textile producers. It has ambitious plans to double production within five years and is constantly seeking new technologies and solutions to further improve its production techniques. Döhler was founded in 1881. It’s a family concern. It produces curtains, upholstery, table cloths, bed linen, terry towels, kitchen towels, vertical blinds and mattress covers. It has fully integrated vertical operations.
The company has recently introduced Montex stenter which has increased production speeds and significantly reduced energy costs with wider fabric widths. It has made possible finishing on a wide range of fabrics including 100 per cent cotton, cotton/polyester, cotton/viscose, viscose/polyester blends, linen, plus aramide and polyamide for military uniforms and raincoats.
The Montex has introduced wider fabric working at faster speeds. It has already provided energy saving of around 18 per cent and increased production by as much as 30 per cent with fabric widths of up to 3.20 meters. While older stenters are virtually able to finish only one particular product, the Montex can carry out virtually every application required.
www.dohler.com.br/
