FW
In a significant development, new promoter Kumar Mangalam Birla sold off most of Kesoram's cross holdings in other B K Birla Group companies and also disposed stakes in own group outfits like Aditya Birla Fashion at one go, netting close to Rs 300 crores.
Market observers say these deals are believed to be part of Kesoram's ongoing restructuring exercise which would help B K Birla's grandson Kumar Mangalam to manage Kesoram efficiently, removing it from inefficient business units and group cross-holdings.
To trim its diversified business operations, Kesoram Industries hived off its rayon and transparent paper business to a wholly-owned subsidiary for Rs 480 crores. In September, it had sold truck and bus radial tyre plant at Haridwar to JK Tyre.
Recent transactions, carried out in the open market, reduced to zero Kesoram's holdings in several B K Birla Group companies like Century Enka, Century Textile, Mangalam Timber Products, Mangalam Cement and also in K M Birla's own group outfit Aditya Birla Fashion.
While the biggest deal in monetary terms is the sale of 2.46 per cent in Century Textile for Rs 142.86 core, the most important transactions have been those involving companies like Mangalam Cement and Mangalam Timber. These companies are being managed by Manjushree Khaitan's daughter Vidula Khaitan as per her grandfather's Will.
DuPont has unveiled a new Type 3 liquid-tight garment for personal protective apparel, DuPont Tyvek 800 J. This is a new limited-use Type 3 chemical protective garment that is both durable and light weight. The garment resists pressurized jets of low-concentration, water-based, inorganic chemicals while providing protection, and freedom of movement due to its novel Tyvek 800 J Fabric Technology.
The product is geared to be used in industrial cleaning applications including pressure washing and tank cleaning, food processing, petrochemical installations, environmental remediation, maintenance, and other pharmaceutical operations. Tyvek 800 J is also suitable for use in cleaning operations using spray guns where the operator may be exposed to liquid splash.
DuPont's earnings for fourth-quarter 2015 beat expectations, but currency headwinds due to a strong US dollar and weak results in its agriculture business dented both top and bottom lines in the quarter.
Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) and China Chamber of Commerce for Import and Export of Textile and Apparel (CCCT) have inked a memorandum of understanding (MoU) to promote and expand cooperation between Pakistan and Chinese textile and apparel companies. The MoU was signed during China Asia Textile Forum 2016 at Shanghai. Ijaz Khokhar, Chief Co-ordinator inked the MoU on behalf of PRGMEA while CCCT was represented by its chairman Jiang Hui.
The guest speaker from Pakistan side, Khokhar also made a presentation on Pakistan textile and apparel sector at China Asia Textile Forum. The forum was attended by major apparel associations and many leading Chinese garment companies from the whole Asia.
As per the MoU, PRGMEA will provide visa assistance to Chinese companies through invitation letters. In first phase, CCCT delegation is visiting Pakistan to attend Texpo Fair being held first time in Pakistan from April 7 to 10. PRGMEA will arrange factory visits for Chinese delegation, and B2B meetings with its members. PRGMEA also plans to arrange a trade delegation to visit China by the end of this year. It is expected that Chinese companies will establish their units at CPEC Economic zones through joint ventures of the local companies, with PRGMEA playing leading role after striking this deal with CCCT.
Both, PRGMEA and CCCT have also agreed to deal with managing business contacts, seminars, business meetings, presentations, exhibitions, fairs holdings and other arrangements to make potential partners and export possibilities available in the two countries.
Korean owned factories in Myanmar have been cited for labor violations. Workers are under pressure in Korean-owned garment factories. Many factories have been found to be non-compliant, particularly concerning laws on working hours and overtime. Most of these Korean factories supply to international brands.
Almost 30 per cent of the factories surveyed failed to abide by the maximum 16 hours weekly overtime limit. Nearly two thirds of workers surveyed (62 per cent) reported being unable to refuse working excessive hours. Almost two-third of workers (63 per cent) said their take home pay is not enough to live comfortably. About 30 per cent of workers are provided pay slips only in English or Korean, another direct breach of Myanmar law which requires pay slip information to be provided in Burmese.
Only 40 per cent of workers have signed employment contracts; many did not have their own copy. Despite a legal requirement that an employer with more than 30 employees should establish a Workplace Coordinating Committee, only 14 per cent of Korean garment factories – all of which had more than 30 employees – have one. Other findings cover discrimination against trade union representatives, medical leave, maternity rights, harassment, child labor and working conditions including fire safety.
The textile industry in Pakistan wants protection from the invasion of subsidised textile products. It wants a 15 per cent regulatory duty to be immediately imposed on synthetic yarns and fabrics meant for domestic consumption.
The textile sector in Pakistan makes up 57 per cent of the country’s total exports. It wants payment of refunds, drawback on local taxes and levies, product focus market schemes, export refinance, availability of all types of raw materials, cotton and manmade fiber at competitive prices and cotton research through a public-private partnership. Above all it wants investment to flow into the sector so that the objective of doubling exports can be reached.
Pakistan’s trade policy has identified four main points – product sophistication and diversification (research and development, value addition, and branding), market access (enhancing share in existing markets, exploring new markets, trade diplomacy and regionalism), institutional development and strengthening (restructuring, capacity building, and new institutions), and trade facilitation (reducing cost of doing business, standardization, and regulatory measures) to boost the economy.
A significant number of textile mills in key manufacturing hubs of the country have shut down because of their inability to compete with low cost rivals of the likes of Bangladesh and Vietnam.
Hong Kong’s Texhong Textile Group us one of the world’s largest core spun yarn suppliers. In the year ended December 31, 2015, Texhong Textile’s total sales increased by approximately 10.5 per cent, reaching a record high as compared with the same period last year.
Continuing its expansion strategy, Texhong is set to increase production capacity through self-development and mergers and acquisitions. It had a total of approximately 2.20 million spindles and 572 looms at the end of 2015.
The company plans to develop a textile industrial chain platform in Vietnam. It has also acquired part of a jeans wear manufacturing group’s workforce as well as equipment in China and Cambodia. This will help the company in the form of invaluable experience for setting up the jeans wear business in Vietnam.
With its two yarn projects in Vietnam and China expected to begin in the second and third quarters of this year, spindle capacity will further increase by approximately 28 per cent to 2.81 million spindles — 1.57 million spindles in China and 1.24 million spindles in Vietnam. The company is expected to begin its second phase of construction of a grey fabric factory, a dyeing factory and a garment factory in Vietnam.
www.texhong.com/home/home.htm?languageno=en
India’s denim is witnessing one of the fastest growth as an apparel fabric segment in India, up from 700 million meters in 2010 to 1.2 billion meters in 2015. Yet, there is a gap of 300 million meters in India for the denim industry to tap its full export potential. The denim industry is growing at a compounded annual growth rate of 13 to 15 per cent in a year when overall apparel growth rate is being pegged at three to five per cent this fiscal, down from 12 to 15 per cent for the past couple of years.
Denim makes up 35 per cent of total textile exports from India and is expected to rise to 45 per cent of total exports by 2020; production is also expected to increase to 1.5 billion meters by 2020. While the total denim capacity in the country is about 1.2 billion meters per annum, the utilisation is at around 900 million meters per annum, of which 250 million meters would be exports.
The Indian denim industry is gradually looking to increase its share of exports. As an apparel segment, denim’s growth has been more in the domestic market than in exports.
Welspun India expects 22 per cent Ebitda growth in Q4. Continued demand in the key US market, increase in towel or bed linen capacity and realisation gains from currency depreciation may help drive 14 per cent sales growth in the fourth quarter. Ebitda margin is expected to remain similar to third quarter levels at 27 percent (up180 basis points year on year) as higher input costs (in particular, cotton) are offset by gains from currency depreciation and operating leverage.
Welspun India is a home textiles player. Tailwinds from product innovation and new segments (entry into hospitality segment, foray into wearable technologies) may help drive CAGR over 18 per cent. Capacity addition in financial year ’18 through processing lines vs. fully integrated capacity may result in lower capex per unit addition.
Although gross margins would moderate from their third quarter levels due to higher cotton prices, Welspun expects 27 per cent Ebitda margin in the fourth quarter, similar to the third quarter, due to gains from currency depreciation. Increase in capacity utilization levels and likely capacity addition in financial year ’18 (contingent on demand remaining healthy) should aid sales growth. There may be a possible 20 to 25 per cent capacity addition in financial year ’18.
www.welspunindia.com/
Truong Van Cam, Deputy Secretary General of the Vietnam Textile and Apparel Association (Vitas) feels, many textile & garment companies are leaving the market because of unstable policies. Speaking at a workshop held by the World Bank (WB) and the Vietnam Chamber of Commerce and Industry (VCCI), he recalled how a garment company wanted to import a printer to make products for export and it took them six months to obtain import license.
Cam said on Thoi Bao Kinh Te Saigon, that this was because the Decree 60 stipulated that business owners must have junior college’s degree to be able to import printers. A business in Nam Dinh province, which employs 2,000 workers, said it has to pay VND40-50 billion additionally every month because of the required higher minimum wage and trade union fee. The State’s policies need to be designed in a way to encourage investors to do business and stay in the market, commented Cam.
Anther analyst speaking at the workshop observed that the government seems to be too optimistic about opportunities to be brought to the textile and garment sector by TPP.
Pakistan lags behind competitors in reliability, political stability and lack of diversity, despite low prices in most apparel product categories says a World Bank (WB) report. The report titled, ‘Apparel employment, trade, and economic development in South Asia,’ states many buyers avoid Pakistan because of the security situation and hence entrepreneurs have to travel to Dubai to meet them, which complicates sourcing.
The report observed that Pakistan is cost competitive in most product categories, but it is not a top performer in any of the export categories. One major problem is a lack of product diversity, with the country almost entirely dependent on cotton products and trouser exports. Other problems are reliability, compliance, and political stability and safety, especially Foreign Direct Investment (FDI). Pakistan also has a large labor pool, but productivity is hurt by the limited availability of good sector-specific training institutes and gaps in technical, design, and middle management skills.
The report maintains that Pakistan has a fast-growing apparel sector that accounts for 19 per cent of its exports, and firms are competitive with global exporters in terms of prices. The country ranks fourth in terms of value ($4.2 billion) with the same global market share (1.2 per cent) as Sri Lanka.
