FW
Mexico-based Global Denim’s collection for Spring/Summer ’17 focuses on ‘weight’. Stretch and rigid is no longer a ‘valid conversation’ in the world of denim believes the Mexican mill, as both have become a norm in women’s and men’s market. Global Denim is dividing its collection into fabric under 10 oz. and fabric 10 oz. or more instead. Heavier fabrics with a more masculine appearance are examined in the Hardcore collection for S/S ’17. Global Denim is digging deeper into sturdier, high-stretch denim with Lycra for extreme activities as well as new denim with warp-only stretch. This is along with classic rigid denim.
In under 10 oz, Global Denim’s lightweight line, Enlightened, represents spring itself with fun, light and airy fabrications. Breezy shirting weights are teamed with Tencel bottom weights by the mill. Fit and better recovery alongside comfort and softness are provided by constructions with a structured, high-stretch foundation.
For the season, there are strong themes in deep indigo, ink and black, while naturals make a comeback as a light option. To round out its spring line, ‘Old Blue’, which is a lighter shade of blue is being introduced by the mill.
Textile players in China are increasing looking at neighbouring countries to set-up their manufacturing units and Vietnam is emerging to be its most favourite destination. The reasons behind this are increase production and low labour costs in the country. And after the recent conclusion of Trans-Pacific Partnership (TPP) agreement, apparels produced in the Southeast Asian country for the United States market will be tariff-free.
One of the textile manufacturing firms of China, Huafang Co. – a textile business in Shandong Province, for instance, is planning to establish its first overseas unit, which will be engaged in producing high-end fabrics factory, in Vietnam with a $110 million investment. Around 150 million yuan will be invested into a research and development centre to explore new technologies covering the whole gamut of industry chain, including cotton, spinning, weaving and dyeing.
Recently, China-based textile manufacturer Keer too set up a production facility in Lancaster County, USA. Keer’s mill spins yarn from raw cotton to sell to textile makers across Asia. But it still spins much of its yarn in China, importing the raw cotton from America. Luen Thai International Group, Hong Kong’s largest clothing company, Sanshui Jialida Textile Co, from Guangdong Province, and Vietnam’s Vinatex Co. are also contemplating to build a textile industrial park.
www.hfgf.cn
Technical textiles, which represented 29 per cent of the global textile market value in 2014, are on a growth track as demand from end-use industries continues to soar. The global technical textiles market is expected to be worth $162 billion by the end of 2016, up from $148.5 billion in 2014, according to Future Market Insights’ latest research report, ‘Technical Textiles Market: Global Industry Analysis and Opportunity Assessment 2015-2020’.
According to FMI, the key challenges for the global technical textile market are high pricing of finished products and concerns about toxic waste production. Demand for e-textiles is growing in emerging economies, and FMI estimates this trend to become more pronounced in the near future. Key players are focusing on research and development (R&D) activities to enhance the wearability of this textile material. The technical textile industry is witnessing rapid innovations to meet the changing preferences of consumers. It is also expected that government support programmes will provide an impetus to the manufacture of technical textiles.
China is an important market for technical textiles, both in terms of value and volume. Domestic consumption and exports in China totalled 5.76 million tonnes in 2014. Demand for technical textiles in China is expected to increase at over 8 per cent annually till 2020. The technical textile market in India is expected to reach $13.3 billion in 2016, up from $11.2 billion in 2014.
In terms of domestic consumption, imports and exports, demand is set to reach 2.5 million tonnes by the end of 2016, up from 2.1 million tonnes in 2014. Key players in the technical textile industry are aware of the opportunities present in China and India. A majority of leading manufacturers have scaled up efforts to increase production in these two countries. For instance, London-based Low & Bonar announced plans to build a new manufacturing facility in Changzhou, Shanghai, China in 2014. Derbyshire, UK-based Baltex sources a majority of raw materials from China to offer competitive pricing to its end-users in Europe. Du Pont, a leading chemical manufacturing company based in Wilmington, US, recently collaborated with India-based Reliance Industries and Vipul Sarees to make eco-friendly ladies ethnic wear.
The report points out that China and India will continue to remain the most lucrative markets for technical textiles. By 2020, the market in these two regions will reach nearly $68 billion in terms of value, and 13 million tonnes in terms of volume.
www.futuremarketinsights.com
Gurgaon-based home-grown apparel manufacturer and exporter Pearl Global Industries Limited (PGIL) reported its second quarter and first half results for the financial year 2015/16. Second quarter revenues grew by 41.3 per cent driven by higher capacity utilization and robust demand. EBIDTA grew by 57.3 per cent in line with the growth in revenues. EBIDTA Margin improved by 34 bps YoY to 3.3 per cent.
Commenting on the results, Rajkumar Chawla, Chief Financial Officer of the company, stated, “The second quarter witnessed strong sales momentum driven by higher capacity utilization. Positive operating leverage led to expansion in operating margins. We expect to maintain this momentum even during second half of the financial year backed by good visibility on the order book front. Improving top-line performance will help up to improve our overall profitability over the next few quarters.
Q2 FY16 PAT increased 100.5 per cent majorly driven by improved operating performance and also due to lower finance costs. PAT Margin improved by 32 bps to 1.1 per cent. Pearl Global Industries with its well-diversified vertically-integrated manufacturing base spread across India, Indonesia and Bangladesh is the preferred vendor to leading global brands such as GAP, Banana Republic, Kohl's, Macy's, Ralph Lauren and Tom Tailor.
Dedicated in-house design team of 75 designers located in Hong Kong, India and Indonesia, provide superior market intelligence and focus on creating brand specific product designs to generate and accelerate business opportunities for the global brands and retailers.
www.pearlglobal.com
Ahmedabad-based denim fabric maker Nandan Denim has raised Rs 50 crores (over $7.5 million) through an issue of fully convertible warrants to UK-based foreign institutional investor Polus Global Fund, as per a stock market disclosure.
Nandan Denim has issued 2.5 million fully convertible warrants that will be converted into equity shares at Rs 200 per share within 18 months. In a disclosure to BSE in September, the company had said, “The conversion price of Rs 200 per share is at over 70 per cent premium to Friday, September 18, 2015, closing price of Rs 115.50 per share on BSE and 250 per cent premium to the book value of Rs 57 per share.”
Nandan Denim started operations in 1994 with textile trading and forayed into textile manufacturing in 2004. It is currently engaged in manufacturing of denims, cotton fabrics and khakis. As on September 30, 2015, the promoters of the company held 60.94 per cent equity stake, while the remaining is held by the public shareholders.
www.nandandenim.com
A further sharp downturn in emerging market economies and world trade has weakened global growth to around 2.9 per cent this year – well below the long-run average – and is a source of uncertainty for near-term prospects, says the OECD, the organisation of Economic Cooperation and Development.
In its latest twice-yearly, the OECD projects a gradual strengthening of global growth in 2016 and 2017 to an annual 3.3 per cent and 3.6 per cent respectively. But a clear pick-up in activity requires a smooth rebalancing of activity in China and more robust investment in advanced economies. Emerging market challenges, weak trade and concerns about potential output suggest higher downside risks and vulnerabilities compared with the OECD’s June Outlook.
Presenting the outlook in Paris on November 9, 2015, OECD Secretary-General Angel Gurría said, “The slowdown in global trade and the continuing weakness in investment are deeply concerning. Robust trade and investment and stronger global growth should go hand in hand. G-20 leaders meeting in Antalya need to renew their efforts to secure strong, sustainable and balanced growth.
” The outlook calls for greater ambition by OECD and G20 countries in supporting demand and pursuing structural reforms to boost potential growth and ensure that its economic benefits are shared by all. It calls for policies to support short-term demand, including on-going monetary and fiscal policy support in accordance with countries’ policy space. Collective action to increase public investment is essential and would increase growth without increasing debt-to-GDP ratios.
www.oecd.org
Better Cotton Initiative has announced the publication of ‘2014 Harvest Report’. The report details Better Cotton harvest data at global and field levels in 2014, and completes the second of two reporting phases for the year.
Important highlights of the report include - 1.2 million farmers participated in BCI’s programme - up 79 per cent from 2013, BCI farmers produced two million metric tonnes of Better Cotton lint - a 118 per cent increase on the previous year, Better Cotton made up 7.6 per cent of global cotton production, Better Cotton was grown in 20 countries worldwide, five more than in 2013.
As an example of country results, Better Cotton farmers in Pakistan used 15 per cent less pesticide, 19 per cent less synthetic fertiliser, 18 per cent less water and increased their profits by 46 per cent as compared to comparison farmers. The organisation said, this year’s results confirmed the underlying premise of its model: higher yields, reduced inputs of synthetic pesticides and fertilisers, resulting in much higher income for its farmers.
As the 2015 season continues, Better Cotton Initiative plans to make strong progress towards establishing Better Cotton as a more sustainable mainstream commodity.
www.bettercotton.org
US cotton scenario has undergone a change over the years. To remain competitive and relevant, stakeholders in the industry are looking at ways to reposition themselves. Of course, China is the biggest global player, however, market growth and export opportunities outside China exist and are growing.
Strong cotton supplying regions in the US
Cotton acreage in the Mid-south US has declined and become highly uncertain due to increased competition from corn and soybeans. The Mid-south, traditionally, has a strong source with good yields and fibre quality. Historically, around one-third of the US production was accounted for by this region. However, this is now about 25 per cent or less.
Meanwhile, the Southeast has the acreage to do more if yields were better and comprises about one-third of the US production. In recent years, fibre quality in the Southeast has improved substantially, and because of convenient access to mills and export terminals, it could be a reliable supplier of quality cotton. The Southwest continues to account for roughly 40 percent of US production and acreage too is stable.
For the US, India has emerged a strong competitor. Typically, world cotton exports are 35 to 45 million bales annually and the US is the world’s largest exporter which makes up around 35 per cent. However, its market share has dropped in recent years.
China, Turkey, Mexico, Vietnam, Indonesia and Thailand are the largest importer of US cotton and the US’ market share to China has dipped over the past six to eight years, though it was up in 2014 crop year. However, India and Brazil’s market share has increased, while that of the US has dipped. In fact, India’s cotton production has doubled since 2003. Around 20 to 25 million bales of cotton are used annually by India’s textile mill industry and India is able to supply its needs with own production.
In 2006, world demand for cotton peaked at 124.3 million bales and dropped 6 per cent from 2006 to 2011. However, it has improved slowly since 2011. Demand was 14 million bales below 2006 for the 2014 crop year and is expected to increase slightly (1.6 percent) for this year.
Demand for cotton dipping
China’s textile mill industry has declined and demand for cotton has dipped globally. This decline is not seen everywhere. In fact, China’s decline has been partially offset by increases in other countries. Demand peaked in 2006 and overall use of cotton dipped 10 per cent between 2006 to 2015. Demand in India has increased 41 per cent, Bangladesh has increased 77 per cent and Indonesia 35 per cent. Even Vietnam, has a 4.5 million bales a year mill industry. The cotton mill industry in former Soviet Union states Kazakhstan, Turkmenistan, and Uzbekistan has grown by 74 per cent. Though there are many concerns plaguing the US cotton industry, several of these can be addressed successfully. Cotton industry leadership is working to increase demand for US cotton and market share.
Demand for quality is high and the US has always been a reliable supplier of quality fibre and mills are willing to pay for it. However, demand for good quality US cotton has grown of late. Reason: China has 68 million bales of questionable quality cotton, and global mill business per se has undergone a change.
Textile mills in Pakistan are likely to reduce their cotton use this year. Spindles are being used at 25 per cent of their capacity. This is because the sector is being hurt by the high cost of doing business. Normally the textiles sector uses 400,000 bales of cotton a month but this is likely to see a substantial drop.
One the threats the industry faces increase in power tariff is a major one. This is affecting exports of yarn and fabrics. The capacity to convert cotton into exportable goods through basic textiles is reducing fast. Producing a surplus for exports has become difficult.
Pakistan faced a 30 per cent decline in fabric exports in September 2015. Textile mills fear if they reduce cotton consumption, cotton farmers and textile workers would suffer and foreign exchange earnings through merchandise exports would drop. The textile industry has been designed to consume 14 million bales of cotton and produce an exportable surplus but the industry finds itself unable to do this. Structural imbalances are affecting mill operations.
Mill owners have called for a regulatory duty on the import of manmade fiber yarns, which they say will give an impetus to the industry and make its operations viable.
Around 18 per cent of garment factories in Bangladesh have been found to be vulnerable to safety hazards. About 23 per cent of the factories have been asked to conduct detailed engineering analysis. An inspection program, which started in November 2013, assessed fire, electrical and structural integrity in some 1,475 garment units till October 31.
Some 26 Accord-inspected units out of 1,356 were closed, while eight were partially closed. Alliance inspected some 829 units, while eight were closed and 12 were partially closed. ILO will help build the capacity of Bangladesh authorities to put in place an effective system for all remediation and regulatory oversight once the support of partners ends.
The International Finance Corporation, an arm of the World Bank, will provide low interest loans to Bangladeshi factory owners for safety improvements so long as overseas customers of those factories guarantee the loans. The groups are working with Bangladeshi factory owners to promote safety and finance improvements, like fireproof doors or fire-sprinkler systems that are required for garment factories 75 feet or taller in Bangladesh.
While all that is needed at some sites is removing machinery and stored fabrics from overloaded floors, others will need sprinkler systems, automated alarm systems and the strengthening of support columns.
